Exhibit 10.1
EXECUTION COPY
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MBIA INSURANCE CORPORATION,
as Insurer
RESOURCE BANCSHARES MORTGAGE GROUP, INC.,
OCWEN FEDERAL BANK FSB,
as Sub-Servicer
RESIDENTIAL ASSET FUNDING CORPORATION,
as Depositor
FIRST UNION CORPORATION
and
FIRST UNION CAPITAL MARKETS CORP.,
as Underwriter
INDEMNIFICATION AGREEMENT
$125,030,000
RBMG Funding Co. Mortgage Loan Trust 1999-1
Asset-Backed Notes
Series 1999-1, Class A-1 and Class A-2
Dated as of June 1, 1999
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TABLE OF CONTENTS
Page
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Section 1. Definitions..........................................................................................1
Section 2. Representations and Warranties of the Insurer........................................................3
Section 3. Agreements, Representations and Warranties of the Underwriter........................................4
Section 4. Agreements, Representations and Warranties of RBMG...................................................4
Section 5. Agreements, Representations and Warranties of the Sub-Servicer.......................................5
Section 6. Agreements, Representations and Warranties of the Depositor..........................................5
Section 7. Indemnification......................................................................................5
Section 8. Notice To Be Given...................................................................................6
Section 9. Contribution.........................................................................................8
Section 10. Notices............................................................................................10
Section 11. Governing Law, Etc.................................................................................11
Section 12. Insurance Agreement; Underwriting Agreement; Servicing Agreement...................................11
Section 13. Limitations........................................................................................11
Section 14. Counterparts.......................................................................................11
Section 15. Non-petition.......................................................................................11
TESTIMONIUM..........................................................................................SIGNATURE PAGE
SIGNATURES AND SEALS.................................................................................SIGNATURE PAGE
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INDEMNIFICATION AGREEMENT
This Agreement, dated as of June 1, 1999, is by and among MBIA
Insurance Corporation, as Insurer, (the "Insurer"), as the Insurer under the
Financial Guaranty Insurance Policy (the "Policy") issued in connection with the
Offered Obligations described below, Resource Bancshares Mortgage Group, Inc.
("RBMG"), Ocwen Federal Bank FSB, as Sub-Servicer, (the "Sub-Servicer"),
Residential Asset Funding Corporation, as Depositor (the "Depositor"), First
Union Corporation ("First Union") and First Union Capital Markets Corp., as
Underwriter (the "Underwriter").
Section 1. DEFINITIONS. As used in this Agreement, the following terms
shall have the respective meanings stated herein, unless the context clearly
requires otherwise, in both singular and plural form, as appropriate.
Capitalized terms used in this Agreement but not otherwise defined herein will
have the meanings ascribed to such terms in the Indenture (as described below).
"ACT" means the Securities Act of 1933, as amended, together with all
related rules and regulations.
"AGREEMENT" means this Indemnification Agreement by and among the
Insurer, RBMG, the Sub-Servicer, the Depositor, First Union and the Underwriter.
"COMPANY" means RBMG Asset Management Company, Inc., a Nevada
corporation, or its successors in interest.
"CONTRIBUTION AGREEMENT" means the Loan Contribution Agreement dated as
of June 1,1999 between RBMG and the Company.
"DEPOSITOR PARTY" means the Depositor and its respective parents,
subsidiaries and affiliates and any shareholder, director, officer, employee,
agent or any "controlling person" (as such term is used in the Act) of any of
the foregoing.
"INDEMNIFIED PARTY" means any party entitled to any indemnification
pursuant to Section 7 below, as the context requires.
"INDEMNIFYING PARTY" means any party required to provide
indemnification pursuant to Section 7 below, as the context requires.
"INDENTURE" means the Indenture dated as of June 1, 1999 between the
Issuer and the Indenture Trustee.
"INDENTURE TRUSTEE" means The Bank of New York and its permitted
successors and assigns.
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"INSURANCE AGREEMENT" means the Insurance Agreement, dated as of June
1, 1999, by and among the Insurer, RBMG, in its individual capacity and as
Servicer, the Sub-Servicer, RBMG Funding Co., as Funding Co. and as residual
holder, the Company, the Issuer, the Depositor, First Union and the Indenture
Trustee, as indenture trustee.
"INSURER PARTY" means the Insurer and its respective parents,
subsidiaries and affiliates and any shareholder, director, officer, employee,
agent or any "controlling person" (as such term is used in the Act) of any of
the foregoing.
"ISSUER" means RBMG Funding Co. Mortgage Loan Trust 1999-1.
"LOSSES" means (i) any actual out-of-pocket loss paid by the party
entitled to indemnification or contribution hereunder and (ii) any actual
out-of-pocket costs and expenses paid by such party, including reasonable fees
and expenses of its counsel, to the extent not paid, satisfied or reimbursed
from funds provided by any other Person (provided that the foregoing shall not
create or imply any obligation to pursue recourse against any such other
Person).
"OFFERED OBLIGATIONS" means the RBMG Funding Co. Mortgage Loan Trust
1999-1, Asset-Backed Notes, Series 1999-1, Class A-1 and Class A-2, issued
pursuant to the Indenture.
"PERSON" means any individual, partnership, joint venture, corporation,
trust or unincorporated organization or any government or agency or political
subdivision thereof.
"PROSPECTUS" means the form of final Prospectus included in the
Registration Statement on each date that the Registration Statement and any
post-effective amendment or amendments thereto became effective.
"PROSPECTUS SUPPLEMENT" means the final Prospectus Supplement dated
June 2, 1999 with respect to the Offered Obligations and filed with the
Securities and Exchange Commission on June 7, 1999, and any amendment or
supplement thereto.
"RBMG PARTY" means RBMG, each of its parents, subsidiaries and
affiliates and any shareholder, director, officer, employee, agent or any
"controlling person" (as such term is used in the Act) of any of the foregoing.
"REGISTRATION STATEMENT" means the Registration Statement on Form S-3
of the Depositor (No. 333-64775) relating to the Offered Obligations, and any
pre- and post-effective amendment thereto, including the Prospectus, the
Prospectus Supplement and all exhibits thereto.
"SUB-SERVICER" means Ocwen Federal Bank FSB, as Sub-Servicer.
"SUB-SERVICER PARTY" means the Sub-Servicer, each of its parents,
subsidiaries and affiliates and any shareholder, director, officer, employee,
agent or any "controlling person" (as such term is used in the Act) of any of
the foregoing.
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"UNDERWRITER PARTY" means the Underwriter and its parent, subsidiaries
and affiliates and any shareholder, director, officer, employee, agent or
"controlling person" (as such term is used in the Act) of any of the foregoing.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement by and
between the Depositor and the Underwriter, dated June 2, 1999.
Section 2. REPRESENTATIONS AND WARRANTIES OF THE INSURER. The Insurer
represents and warrants to the Underwriter, First Union, the Depositor and RBMG
as follows:
(a) ORGANIZATION AND LICENSING. The Insurer is a duly
incorporated and existing New York stock insurance company licensed to
do business in the State of New York and is in good standing under the
laws of such state.
(b) CORPORATE POWER. The Insurer has the corporate power and
authority to issue the Policy and execute and deliver this Agreement
and the Insurance Agreement and to perform all of its obligations
hereunder and thereunder.
(c) AUTHORIZATION; APPROVALS. The issuance of the Policy and
the execution, delivery and performance of this Agreement and the
Insurance Agreement have been duly authorized by all necessary
corporate proceedings. No further approvals or filings of any kind,
including, without limitation, any further approvals of or further
filings with any governmental agency or other governmental authority,
or any approval of the Insurer's board of directors or stockholders,
are necessary for the Policy, this Agreement and the Insurance
Agreement to constitute the legal, valid and binding obligations of the
Insurer.
(d) ENFORCEABILITY. The Policy, when issued, and this
Agreement and the Insurance Agreement will each constitute a legal,
valid and binding obligation of the Insurer, enforceable in accordance
with its terms, subject to applicable laws affecting the enforceability
of creditors' rights generally.
(e) FINANCIAL INFORMATION. The consolidated financial
statements of the Insurer as of December 31, 1998 and December 31, 1997
and for each of the three years in the period ended December 31, 1998
incorporated by reference in the Prospectus Supplement (the "Insurer
Audited Financial Statements"), fairly present in all material respects
the financial condition of the Insurer as of such date and for the
period covered by such statements in accordance with generally accepted
accounting principles consistently applied. The consolidated financial
statements of the Insurer and its subsidiaries as of March 31, 1999 and
for the three-month periods ending March 31, 1999 and March 31, 1998
incorporated by reference in the Prospectus Supplement (the "Insurer
Unaudited Financial Statements" and, collectively with the Insurer
Audited Financial Statements, the "Insurer Financial Statements")
present fairly in all material respects the financial condition of the
Insurer as of such date and for the period covered by such statements
in accordance with generally accepted accounting principles applied in
a manner consistent with the accounting principles used in preparing
the Insurer Audited Financial Statements, and, since March 31, 1999
there has been no material change in
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such financial condition of the Insurer which would materially and
adversely affect its ability to perform its obligations under the
Policy.
(f) INSURER INFORMATION. The information in the Prospectus
Supplement as of the date hereof under the caption "THE INSURANCE
POLICY AND THE NOTE INSURER" (other than the information under the
sub-caption "--CREDIT ENHANCEMENT DOES NOT APPLY TO PREPAYMENT RISK" as
to which the Insurer makes no representation or warranty) (the "Insurer
Information") is limited and does not purport to provide the scope of
disclosure required to be included in a prospectus for a registrant
under the Act, in connection with the public offer and sale of
securities of such registrant. Within such limited scope of disclosure,
the Insurer Information does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(g) NO LITIGATION. There are no actions, suits, proceedings or
investigations pending or, to the best of the Insurer's knowledge,
threatened against it at law or in equity or before or by any court,
governmental agency, board or commission or any arbitrator which, if
decided adversely, would materially and adversely affect its condition
(financial or otherwise) or operations of it or would materially and
adversely affect its ability to perform its obligations under this
Agreement, the Policy or the Insurance Agreement.
Section 3. AGREEMENTS, REPRESENTATIONS AND WARRANTIES OF THE
UNDERWRITER. The Underwriter represents and warrants to and agrees with RBMG and
the Insurer that the statements in the Prospectus Supplement made in reliance
upon and in conformity with written information relating to the Underwriter
furnished specifically for use in the preparation of the Prospectus Supplement,
it being acknowledged that the only such information is that set forth under the
heading "UNDERWRITING" and any information relating to market making (referred
to herein as the "Underwriter Information"), are true and correct in all
material respects.
Section 4. AGREEMENTS, REPRESENTATIONS AND WARRANTIES OF RBMG. RBMG
represents and warrants to and agrees with the Insurer, the Sub-Servicer, First
Union, the Depositor and the Underwriter as follows:
(a) REGISTRATION STATEMENT. The information in the Prospectus
Supplement, under the headings "SUMMARY--PARTIES--RBMG or Resource
Bancshares Mortgage Group, Inc.," "SUMMARY--MORTGAGE LOAN POOL,"
"DESCRIPTION OF THE MORTGAGE POOL," "RBMG," "RBMG FUNDING CO" and
"SERVICING OF THE MORTGAGE LOANS" (other than information under the
sub-heading "--THE SUB-SERVICER") (collectively, the "RBMG
Information") is true and correct in all material respects and does not
contain any untrue statement of a fact that is material or omit to
state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(b) ORGANIZATION. RBMG is duly incorporated and existing under
the laws of the State of Delaware and is in good standing as a foreign
corporation in each jurisdiction
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in which the nature of its business, or the properties owned or leased
by it, makes such qualification necessary.
(c) CORPORATE POWER. RBMG has the corporate power and
authority to execute and deliver this Agreement, the Contribution
Agreement and the Insurance Agreement and to perform all of its
obligations hereunder and thereunder in all material respects.
(d) AUTHORIZATION; APPROVALS. The execution, delivery and
performance of this Agreement, the Contribution Agreement and the
Insurance Agreement by RBMG have been duly authorized by all necessary
corporate proceedings. No further approvals or filings of any kind,
including, without limitation, any further approvals of or further
filing with any governmental agency or other governmental authority, or
any approval of RBMG's board of directors or stockholders, are
necessary for this Agreement, the Contribution Agreement and the
Insurance Agreement to constitute the legal, valid and binding
obligations of RBMG.
(e) ENFORCEABILITY. This Agreement, the Contribution Agreement
and the Insurance Agreement will each constitute a legal, valid and
binding obligation of RBMG, each enforceable in accordance with its
terms, subject, as to the enforcement of remedies, to bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting
the enforceability of creditors' rights generally applicable in the
event of the bankruptcy, insolvency or reorganization of RBMG and to
general principles of equity.
(f) NO LITIGATION. There are no actions, suits, proceedings or
investigations pending or, to the best of RBMG's knowledge, threatened
against it at law or in equity or before any court, governmental
agency, board or commission or any arbitrator which, if decided
adversely, would materially and adversely affect its condition
(financial or otherwise) or its operations or would materially and
adversely affect its ability to perform its obligations under this
Agreement, the Contribution Agreement or the Insurance Agreement.
Section 5. AGREEMENTS, REPRESENTATIONS AND WARRANTIES OF THE
SUB-SERVICER. The Sub-Servicer represents and warrants to and agrees with RBMG,
First Union, the Depositor and the Underwriter that the information in the
Prospectus Supplement set forth under the heading "SERVICING OF THE MORTGAGE
LOANS--THE SUB-SERVICER" (the "Sub-Servicer Information") does not contain any
untrue statement of a material fact and does not omit to state a material fact
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
Section 6. AGREEMENTS, REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
The Depositor represents and warrants to and agrees with the Insurer that the
information in the Registration Statement, other than the Insurer Information,
the Sub-Servicer Information, the Underwriter Information and the RBMG
Information (the "Depositor Information"), is true and correct in all material
respects and does not contain any untrue statement of a fact that is material
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or omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Section 7. INDEMNIFICATION. (a) The Insurer hereby agrees, upon the
terms and subject to the conditions of this Agreement, to indemnify, defend and
hold harmless each RBMG Party, each Depositor Party, First Union and each
Underwriter Party against any and all Losses incurred by them with respect to
the offer and sale of any of the Offered Obligations which result from the
Insurer's breach of any of its representations and warranties (including,
without limitation, with respect to the Insurer Information) set forth in
Section 2 of this Agreement.
(b) The Underwriter hereby agrees, upon the terms and subject to the
conditions of this Agreement, to indemnify, defend and hold harmless each
Insurer Party against any and all Losses incurred by it with respect to the
offer and sale of any of the Offered Obligations which result from the
Underwriter's breach of its representation and warranty with respect to the
Underwriter Information set forth in Section 3 of this Agreement.
(c) RBMG hereby agrees, upon the terms and subject to the conditions of
this Agreement, to indemnify, defend and hold harmless each Insurer Party and
each Sub-Servicer Party against any and all Losses incurred by them with respect
to the offer and sale of any of the Offered Obligations which result from RBMG's
breach of any of its representations and warranties (including, without
limitation, with respect to the RBMG Information) set forth in Section 4 of this
Agreement or resulting from the Depositor's breach of any of its representations
and warranties set forth in Section 6 of this Agreement with respect to
information in the Prospectus Supplement under the headings
"SUMMARY--DESCRIPTION OF THE NOTES," "RISK FACTORS" (other than information
under the sub-headings "--Book-Entry Registration May Reduce the Liquidity of
the Notes," "--An Investment in the Notes May Be an Illiquid Investment," and
"--Year 2000 Issue May Adversely Affect The Distribution to Noteholders"),
"DESCRIPTION OF THE NOTES" (other than information under the sub-heading
"--BOOK-ENTRY REGISTRATION AND DEFINITIVE NOTES") and "CERTAIN PREPAYMENT AND
YIELD CONSIDERATIONS" (other than information under the sub-heading "--WEIGHTED
AVERAGE LIFE OF THE NOTES").
(d) The Sub-Servicer hereby agrees, upon the terms and subject to the
conditions of this Agreement, to indemnify, defend and hold harmless each RBMG
Party, First Union, each Depositor Party and each Underwriter Party against any
and all Losses incurred by it with respect to the offer and sale of any of the
Offered Obligations which result from the Sub-Servicer's breach of any of its
representations and warranties (including, without limitation, with respect to
the Sub-Servicer Information) set forth in Section 5 of this Agreement.
(e) First Union hereby agrees, upon the terms and subject to the
conditions of this Agreement, to indemnify, defend and hold harmless each
Insurer Party against any and all Losses incurred by it with respect to the
offer and sale of any of the Offered Obligations which result from the
Depositor's breach of any of its representations and warranties set forth in
Section 6 of this Agreement other than Losses for which RBMG has agreed to
indemnify the Insurer Parties pursuant to Section 7(c) of this Agreement. First
Union, the Underwriter and the Depositor shall
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not be liable hereunder with respect to the Insurer Information, the RBMG
Information and the Sub-Servicer Information.
(f) Upon the incurrence of any Losses entitled to indemnification
hereunder, the Indemnifying Party shall reimburse the Indemnified Party promptly
upon establishment by the Indemnified Party to the Indemnifying Party of the
Losses incurred.
Section 8. NOTICE TO BE GIVEN. (a) Except as provided in Section 9
below with respect to contribution, the indemnification provided herein by the
Indemnifying Party shall be the exclusive remedy of each Indemnified Party for
the Losses resulting from the Indemnifying Party's breach of a representation,
warranty or agreement hereunder; provided, however, that each Indemnified Party
shall be entitled to pursue any other remedy at law or in equity for any such
breach so long as the damages sought to be recovered shall not exceed the Losses
incurred thereby resulting from such breach.
(b) In the event that any action or regulatory proceeding shall be
commenced or claim asserted which may entitle an Indemnified Party to be
indemnified under this Agreement, such party shall give the Indemnifying Party
written or facsimile notice of such action or claim reasonably promptly after
receipt of written notice thereof.
(c) Upon request of the Indemnified Party, the Indemnifying Party shall
retain counsel reasonably satisfactory to the Indemnified Party to represent the
Indemnified Party and any others the Indemnifying Party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. The Indemnifying Party may, at its option, at any time upon
written notice to the Indemnified Party, assume the defense of any proceeding
and may designate counsel reasonably satisfactory to the Indemnified Party in
connection therewith provided that the counsel so designated would have no
actual or potential conflict of interest in connection with such representation.
Unless it shall assume the defense of any proceeding, the Indemnifying Party
shall not be liable for any settlement of any proceeding, effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Party agrees to indemnify the
Indemnified Party from and against any loss or liability by reason of such
settlement or judgment. The Indemnifying Party shall be entitled to participate
in the defense of any such action or claim in reasonable cooperation with, and
with the reasonable cooperation of, each Indemnified Party.
(d) The Indemnified Party will have the right to employ its own counsel
in any such action, but the fees and expenses of such counsel will be at the
expense of such Indemnified Party unless (1) the employment of counsel by the
Indemnified Party at the Indemnifying Party's expense has been authorized in
writing by the Indemnifying Party, (2) the Indemnifying Party has not in fact
employed counsel to assume the defense of such action within a reasonable time
after receiving notice of the commencement of the action or (3) the named
parties to any such action include the Indemnifying Party on the one hand and,
on the other hand, the Indemnified Party, and representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense
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of the Indemnifying Party, the Indemnifying Party shall not have the right to
assume the defense of such action or proceeding on such Indemnified Party's
behalf), in each of which cases the reasonable fees and expenses of counsel
(including local counsel) will be at the expense of the Indemnifying Party, and
all such fees and expenses will be reimbursed promptly as they are incurred. In
the event that any expenses so paid by the Indemnifying Party are subsequently
determined to not be required to be borne by the Indemnifying Party hereunder,
the party which received such payment shall promptly refund to the Indemnifying
Party the amount so paid by such Indemnifying Party. Notwithstanding the
foregoing, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, the Indemnifying Party shall not be liable
for the fees and expenses of more than one counsel for all RBMG Parties, more
than one counsel for all Underwriter Parties and more than one counsel for all
Insurer Parties, as applicable.
(e) The Indemnified Parties shall cooperate with the Indemnifying
Parties in resolving any event which would give rise to an indemnity obligation
pursuant to Section 6 hereof in the most efficient manner.
(f) No settlement of any such claim or action shall be entered into
without the consent of each Indemnified Party who is subject to such claim or
action, on the one hand, and each Indemnifying Party who is subject to such
claim or action, on the other hand; provided, however, that the consent of such
Indemnified Party shall not be required if such settlement fully discharges,
with prejudice against the plaintiff, the claim or action against such
Indemnified Party.
(g) Any failure by an Indemnified Party to comply with the provisions
of this Section shall relieve the Indemnifying Party of liability only if such
failure is materially prejudicial to any legal pleadings, grounds, defenses or
remedies in respect thereof or the Indemnifying Party's financial liability
hereunder, and then only to the extent of such prejudice.
Section 9. CONTRIBUTION. (a) To provide for just and equitable
contribution if the indemnification provided by the Insurer is determined to be
unavailable for any Underwriter Party (other than pursuant to Section 7 or 8 of
this Agreement), or if the indemnification provided by the Underwriter is
determined to be unavailable for any Insurer Party (other than pursuant to
Section 7 or 8 of this Agreement), the Insurer and the Underwriter shall
contribute to the aggregate costs of liabilities arising from any breach of
their respective representations and warranties set forth in this Agreement on
the basis of the relative fault of all Insurer Parties and all Underwriter
Parties.
(b) To provide for just and equitable contribution if the
indemnification provided by the Insurer is determined to be unavailable for any
RBMG Party (other than pursuant to Section 7 or 8 of this Agreement), or if the
indemnification provided by RBMG is determined to be unavailable for any Insurer
Party (other than pursuant to Section 7 or 8 of this Agreement), the Insurer and
RBMG shall contribute to the aggregate cost of liabilities arising from any
breach of their respective representations and warranties set forth in this
Agreement on the basis of the relative fault of all Insurer Parties and all RBMG
Parties.
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(c) To provide for just and equitable contribution if the
indemnification provided by RBMG is determined to be unavailable for any
Sub-Servicer Party (other than pursuant to Section 7 or 8 of this Agreement), or
if the indemnification provided by the Sub-Servicer is determined to be
unavailable for any RBMG Party (other than pursuant to Section 7 or 8 of this
Agreement), RBMG and the Sub-Servicer shall contribute to the aggregate cost of
liabilities arising from any breach of their respective representation and
warranties set forth in this Agreement on the basis of the related fault of all
RBMG Parties and all Sub-Servicer Parties.
(d) To provide for just and equitable contribution if the
indemnification provided by Insurer is determined to be unavailable for any
Depostor Party or for First Union (other than pursuant to Section 7 or 8 of this
Agreement), or if the indemnification provided by First Union is determined to
be unavailable for any Insurer Party (other than pursuant to Section 7 or 8 of
this Agreement), the Insurer and First Union shall contribute to the aggregate
cost of liabilities arising from any breach of their respective representation
and warranties set forth in this Agreement on the basis of the related fault of
all Insurer Parties on the one hand, and First Union and all Depositor Parties
on the other hand.
(e) To provide for just and equitable contribution if the
indemnification provided by the Sub-Servicer is determined to be unavailable for
First Union (other than pursuant to Section 7 or 8 of this Agreement), First
Union and the Sub-Servicer shall contribute to the aggregate cost of liabilities
arising from any breach of their respective representation and warranties set
forth in this Agreement on the basis of the related fault of First Union and all
Depositor Parties on the one hand, and all Sub-Servicer Parties on the other
hand.
(f) The relative fault of each Indemnifying Party, on the one hand, and
of each Indemnified Party, on the other hand, shall be determined by reference
to, among other things, whether the breach of, or alleged breach of, any of its
representations and warranties set forth in Section 2, 3, 4, 5 or 6 of this
Agreement relates to information supplied by, or action within the control of,
the Indemnifying Party or the Indemnified Party and the Parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such breach.
(g) The Parties agree that the Insurer shall be solely responsible for
the Insurer Information and for the Insurer Financial Statements, that RBMG
shall be solely responsible for the RBMG Information and the Depositor
Information for which RBMG has agreed to indemnify the Insurer Parties and the
Sub-Servicer Parties pursuant to Section 7(c) of this Agreement, that the
Sub-Servicer shall be solely responsible for the Sub-Servicer Information, that
the Underwriter shall be solely responsible for the Underwriter Information and
that the Depositor shall be responsible for all other information in the
Prospectus Supplement.
(h) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(i) The indemnity and contribution agreements contained in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation made by or on behalf of the Depositor, any Underwriter Party,
any RBMG Party, any Sub-Servicer Party or any
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Insurer Party, (ii) the issuance of any Offered Obligations or the Policy or
(iii) any termination of this Agreement.
(j) Upon the incurrence of any Losses entitled to contribution
hereunder, the contributor shall reimburse the party entitled to contribution
promptly upon establishment by the party entitled to contribution to the
contributor of the Losses incurred.
Section 10. NOTICES. All notices and other communications provided for
under this Agreement shall be addressed to the address set forth below as to
each party or at such other address as shall be designated by a party in a
written notice to the other party.
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If to the Insurer: MBIA Insurance Corporation
113 King Street
Armonk, NY 10504
Attention: Insured Portfolio
Management--Structured
Finance (IPM-SF)
If to RBMG: Resource Bancshares Mortgage Group, Inc.
7909 Parklane Road
Columbia, SC 29223
Attention: Larry Reed
If to the Underwriter: First Union Capital Markets Corp.
One First Union Center
301 South College Street
Charlotte, NC 28288
Attention: Evan Peverley
If to the Sub-Servicer: Ocwen Federal Bank FSB
1675 Palm Beach Lakes Blvd.
West Palm Beach, FL 33401
Attention: Secretary
If to First Union: First Union Corporation
301 South College Street
Charlotte, NC 28288
Attention: Shanker Merchant
If to the Depositor: Residential Asset Funding Corporation
c/o First Union Capital Markets Corp.
One First Union Center
301 South College Street
Charlotte, NC 28288
Attention: Evan Peverley
Section 11. GOVERNING LAW, ETC. This Agreement shall be deemed to be a
contract under the laws of the State of New York and shall be governed by and
construed in accordance with the laws of the State of New York without regard to
its conflicts of laws provisions. This Agreement may not be assigned by any
party without the express written consent of each other party. Amendments of
this Agreement shall be in writing signed by each party. This Agreement shall
not be effective until executed by each of the Insurer, RBMG, the Sub-Servicer,
the Depositor, First Union and the Underwriter.
Section 12. INSURANCE AGREEMENT; UNDERWRITING AGREEMENT; SERVICING
AGREEMENT. This Agreement in no way limits or otherwise affects the
indemnification obligations of RBMG, the Underwriter, the Depositor, First Union
or the Sub-Servicer, as applicable, under (a) the
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Insurance Agreement, (b) the Underwriting Agreement (c) the Servicing Agreement,
or (d) the Sub-Servicing Agreement. To the extent that this Agreement conflicts
with or does not address the relative rights of the Underwriter and the
Depositor as between themselves as set forth in the Underwriting Agreement, the
Underwriting Agreement shall govern.
Section 13. LIMITATIONS. Nothing in this Agreement shall be construed
as a representation or undertaking by the Insurer concerning maintenance of the
rating currently assigned to its claims-paying ability by Moody's Investors
Service, Inc. ("Moody's") and/or Standard & Poor's Ratings Services, a division
of The McGraw-Hill Companies, Inc. ("S&P") or any other rating agency.
Section 14. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall together constitute but one and the same
instrument.
Section 15. NON-PETITION. So long as the Insurance Agreement is in
effect, and for one year and one day following its termination, none of the
parties hereto will file any involuntary petition or otherwise institute any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding or
other proceeding under any federal or state bankruptcy or similar law against
RBMG Funding Co., RBMG Funding Co. Mortgage Loan Trust 1999-1 or RBMG Asset
Management Company, Inc.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK
12
IN WITNESS WHEREOF, the Parties hereto have caused this Indemnification
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized, all as of the date first above written.
MBIA INSURANCE CORPORATION
By /s/ ANN D. MCKENNA
------------------------------------
Title: Authorized Officer
RESOURCE BANCSHARES MORTGAGE GROUP, INC.
By /s/ JORDAN D. DORCHUCK
------------------------------------
Name: Jordan D. Dorchuck
Title: Senior Vice President
OCWEN FEDERAL BANK FSB
By /s/ RONALD M. FARIS
------------------------------------
Name: Ronald M. Faris
Title: Executive Vice President
FIRST UNION CAPITAL MARKETS CORP.
By /s/ SHANKER L. MERCHANT
------------------------------------
Name: Shanker L. Merchant
Title: Senior Vice President
RESIDENTIAL ASSET FUNDING CORPORATION
By /s/ SHANKER L. MERCHANT
------------------------------------
Name: Shanker L. Merchant
Title: Senior Vice President
FIRST UNION CORPORATION
By /s/ CAROLYN ESKRIDGE
------------------------------------
Name: Carolyn Eskridge
Title: Senior Vice President