EXHIBIT 1.2
AMENDED AND RESTATED INDEMNIFICATION AGREEMENT
by and among
MBIA INSURANCE CORPORATION,
as Note Insurer
and
BEAR, XXXXXXX & CO. INC.,
as an Underwriter
and
XXXXXX XXXXXXX & CO. INCORPORATED
as an Underwriter
Dated as of November 8, 2001
AMENDED AND RESTATED INDEMNIFICATION AGREEMENT (the
"Agreement"), dated November 8, 2001, by and between MBIA INSURANCE CORPORATION
("MBIA"), XXXXXX XXXXXXX & CO. INCORPORATED ("Xxxxxx Xxxxxxx") and BEAR, XXXXXXX
& CO. INC. ("Bear Xxxxxxx" and, together with Xxxxxx Xxxxxxx, collectively, the
"Underwriters"). Except as otherwise indicated, capitalized terms used but not
otherwise defined herein shall have the respective meanings ascribed thereto in
the Indenture referred to below.
WHEREAS, MBIA and the Underwriters are parties to that certain
Indemnification Agreement (the "Existing Indemnification Agreement") dated
September 26, 2001, and the parties hereto desire to amend and restate the
Existing Indemnification Agreement in its entirety.
WHEREAS, as described in the Indenture, dated as of September
1, 2001 (the "Indenture"), between ABFS Mortgage Loan Trust 2001-3 (the "Trust")
and The Chase Manhattan Bank, as Indenture Trustee, (the "Indenture Trustee"),
the ABFS Mortgage Loan Trust 2001-3 Mortgage-Backed Notes Series 2001-3, Class
A-1 and Class A-2 (collectively, the "Class A Notes") will be issued by the
Trust.
WHEREAS, in connection with the public offering and sale of
the Class A Notes, the Trust has prepared a prospectus dated November 8, 2001
(the "Prospectus"), a prospectus supplement dated November 8, 2001 (the
"Prospectus Supplement") and an offering memorandum dated September 26, 2001
(the "Offering Memorandum" and collectively with the Prospectus and the
Prospectus Supplement, the "Offering Materials").
WHEREAS, MBIA is authorized to transact financial guaranty
insurance business in the State of New York and has agreed to issue to the
Indenture Trustee, for the benefit of the holders of the Class A Notes, the Note
Insurance Policy (the "Policy"), providing limited indemnity for, among other
things, certain shortfalls in required distributions on the Class A Notes.
WHEREAS, MBIA provided certain information to the Trust for
inclusion in the Offering Memorandum and the Prospectus Supplement. The
information presented in or incorporated by reference into the Offering
Memorandum under the captions "THE NOTE INSURER", "MBIA FINANCIAL INFORMATION"
and "THE POLICY", and the information presented in or incorporated by reference
into the Prospectus Supplement under the captions "THE POLICY", "THE NOTE
INSURER" AND "MBIA INFORMATION", constitute the only information furnished by
MBIA for inclusion in the Offering Materials. Such information is collectively
referred to herein as the "MBIA Information". MBIA has reviewed the Offering
Memorandum and the Prospectus Supplement and approved the presentation of the
MBIA Information therein.
WHEREAS, the Underwriters provided certain information to the
Trust for inclusion in the Offering Materials. The information presented in or
incorporated by reference into the Offering Memorandum under the caption "PLAN
OF DISTRIBUTION" and the information presented in or incorporated by reference
into the Prospectus Supplement under the caption "PLAN OF DISTRIBUTION"
constitute the only information furnished by the Underwriters for inclusion in
the Offering Materials. Such information is collectively referred to herein as
the "Underwriters' Information". The Underwriters have reviewed the Offering
Materials and approved the presentation of the Underwriters' Information
therein.
NOW, THEREFORE, in consideration of the premises contained
herein and other good and valuable consideration, receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. MBIA Agreements and Representations. MBIA agrees and represents as
follows:
(a) MBIA is a New York domiciled insurance company which is licensed under the
laws of the State of New York to write financial guaranty insurance and is
qualified or licensed to do business in all other jurisdictions in which such
qualification or licensing is necessary.
(b) MBIA has the corporate power and authority to execute and deliver
this Agreement and to perform all its obligations hereunder.
(c) The execution, delivery and performance of this Agreement has been
duly authorized by all necessary action (corporate and other).
(d) The MBIA Information in the Offering Memorandum on September 26,
2001 (the "Closing Date") and the MBIA Information in the Prospectus Supplement
on the date hereof, did not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(e) To the extent required by applicable law or regulation, the Policy
and any amendments thereto will be filed with the Superintendent of the New York
State Insurance Department within 30 days of their issuance, if not previously
so filed.
(f) The Policy is exempt from registration under the Act.
(g) Neither the execution or delivery by MBIA of the Policy or the
Insurance Agreement, nor the performance by MBIA of its obligations thereunder,
will conflict with any provision of the certificate of incorporation or the
bylaws of MBIA, result in a breach of, or constitute default under, any material
agreement or other instrument to which MBIA is a party or by which any of its
property is bound, or violate any judgment, order or decree or any law,
regulation or rule applicable to MBIA of any governmental or regulatory body,
administrative agency, court or arbitrator having jurisdiction over MBIA.
(h) The consolidated balance sheets of MBIA as of December 31, 2000 and
December 31, 1999 and the related consolidated statements of income, changes in
shareholder's equity and cash flows for the fiscal years then ended and the
interim consolidated balance sheet of MBIA as of June 30, 2001, and the related
statements of income, changes in shareholder's equity and cash flows for the
periods then ended, and furnished by MBIA to the Trust, fairly present in all
material respects the financial condition of MBIA as of such dates and for such
periods in accordance with generally accepted accounting principles consistently
applied (subject, as to interim statements, to normal year-end adjustments) and
since the date of the most current interim consolidated balance sheet referred
to above there has been no change in the financial condition of MBIA which would
materially and adversely affect its ability to perform its obligations under the
Policy.
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(i) MBIA will furnish to the Underwriters or the Depositor, upon
request of the Underwriters or the Depositor, as the case may be, copies of
MBIA's most recent financial statements (annual or interim, as the case may be)
which fairly present in all material respects the financial condition of MBIA as
of the dates and for the periods indicated, in accordance with generally
accepted accounting principles consistently applied except as noted therein
(subject, as to interim statements, to normal year-end adjustments).
2. Underwriters' Agreements and Representations. Each Underwriter
agrees and represents as follows:
(a) The execution, delivery and performance of this Agreement by such
Underwriter has been duly authorized by all necessary action (corporate and
other).
(b) The Underwriters' Information in the Offering Materials on the date
of the Prospectus and on the Closing Date (as defined above), did not and will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(c) With respect to the offering of the Class A Notes, such Underwriter
has not and will not use any prospectus or prospectus supplement containing
information relating to MBIA unless such information relating to MBIA has been
furnished by MBIA for inclusion therein and has been approved by MBIA in
writing, such approval not to be unreasonably withheld.
3. Indemnification and Contribution.
(a) MBIA agrees to indemnify and hold harmless the Underwriters and
each Person, if any, who controls an Underwriter within the meaning of Section
15 of the Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), any other
Federal or state statutory law or regulation, at common law or otherwise, as
incurred, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the MBIA Information included
in the Offering Memorandum and the Prospectus Supplement, or, to the extent
approved by MBIA in writing, in any amendment or supplement to the Offering
Memorandum or the Prospectus Supplement or arise out of or are based upon the
omission or alleged omission to state therein a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, and agrees to reimburse each such indemnified party, for
any legal or other expenses reasonably incurred by it, as incurred, in
connection with investigating or defending any such loss, claim, damage,
liability or action. This indemnification agreement will be in addition to any
liability which MBIA may otherwise have.
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(b) The Underwriters agree, severally and not jointly, to indemnify and
hold harmless MBIA against any and all losses, claims, damages or liabilities,
joint or several, to which it may become subject under the Act, the Exchange
Act, any other Federal or state statutory law or regulation, at common law or
otherwise, as incurred, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Underwriters' Information included in the Offering Materials or arise out of or
are based upon the omission or alleged omission to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and agree to reimburse MBIA, for any legal
or other expenses reasonably incurred by it, as incurred, in connection with
investigating or defending any such loss, claim, damage, liability or action.
This indemnification agreement will be in addition to any liability which the
Underwriters may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 3
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section 3, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party except to the extent the
indemnifying party is materially prejudiced thereby. In case any such action is
brought against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled, at its own
expense, to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party) and after notice from the indemnifying party to such indemnified party to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 3 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
of any such action other than reasonable costs of investigation. The
indemnifying person shall not be responsible for the settlement of any
proceeding made without its prior consent.
(d) If the indemnification provided for in this Section 3 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a), (b) or (c) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a), (b) or (c)
above (i) in such proportion as is appropriate to reflect the relative benefits
received by MBIA and the Underwriters from the offering and sale of the Class A
Notes or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
MBIA and the Underwriters in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or actions in respect
thereof as well as any other relevant equitable considerations. The relative
benefits received by MBIA and the Underwriters shall be deemed to be in the same
proportion as (i) the total net proceeds from the offering (before deducting
expenses) received by the Trust to (ii) (x) in the case of MBIA, the structuring
fees paid to MBIA by American Business Financial Services, Inc. on the Closing
Date and the total premiums received by MBIA and (y) in the case of the
Underwriters, the total underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference to among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by MBIA or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this Section 3(d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
Section 3(d). 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 is not guilty of such fraudulent misrepresentation. The obligations
of the Underwriters under this Section 3(d) shall be several and not joint.
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4. Representations and Indemnities to Survive. The agreements,
representations, warranties, indemnities and other statements of the parties
hereto in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any other parties hereto or any of the officers,
directors or controlling persons referred to in Section 3 hereof, and will
survive delivery of and payment for the Class A Notes. The provisions of Section
3 hereof shall survive the termination or cancellation of this Agreement.
5. Notices. All communications hereunder shall be in writing and,
If to Bear Xxxxxxx:
Bear Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Counsel
If to Xxxxxx Xxxxxxx:
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel, with a copy to Xxxxxxx Xxxxxx, Esq.
If to MBIA:
MBIA Insurance Corporation
000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Insured Portfolio Management, Structured Finance
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6. Miscellaneous. This Agreement is to be governed by, and construed in
accordance with, the laws of the State of New York; it may be executed in two or
more counterparts, each of which when so executed and delivered shall be an
original, but all of which together shall constitute one and the same
instrument. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns and the officers and
directors and controlling persons referred to in Section 3 hereof, and no other
person shall have any right or obligation hereunder. This Agreement supersedes
all prior agreements and understandings relating to the subject matter hereof.
Neither this Agreement nor any term hereof may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of the change, waiver, discharge or termination is
sought. The headings in this Agreement are for purposes of reference only and
shall not limit or otherwise affect the meaning hereof.
7. Amendment and Restatement. This Agreement amends, restates and
supersedes in its entirety the Existing Indemnification Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, all as of the day and year first above mentioned.
MBIA INSURANCE CORPORATION
By:
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Name:
Title:
BEAR, XXXXXXX & CO. INC.
By:
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Name:
Title:
XXXXXX XXXXXXX & CO. INCORPORATED
By:
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Name:
Title:
