EXHIBIT 1.2
INDEMNIFICATION AGREEMENT
Agreement dated as of December 14, 2001 among Financial Security
Assurance Inc., a New York corporation ("FSA"), Xxxxxx Xxxxxxx Xxxx Xxxxxx
Capital I Inc., a Delaware corporation (the "Issuer"), Xxxxxx Xxxxxxx Xxxx
Xxxxxx Mortgage Capital Inc., a New York corporation (the "Company") and Xxxxxx
Xxxxxxx & Co. Incorporated, a Delaware corporation (the "Representative") as
representative of the underwriters (collectively, the "Underwriters") named in
the Underwriting Agreement dated as of December 14, 2001 among the Issuer,
Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxxxx & Partners, L.P and Xxxxxxxx Capital
Partners, L.P.
W I T N E S S E T H
WHEREAS, the Issuer intends to issue approximately $311,085,000 initial
principal balance of Mortgage Pass-Through Certificates, Series 2001-NC4 Class
X-0, Xxxxx X-0, Class M-1, Class M-2, Class B-1, Class X, Class P and Class R
Certificates (the Series 2001-NC4 Certificates") pursuant to a Pooling and
Servicing Agreement dated as of December 1, 2001 (the "Pooling and Servicing
Agreement") (the Class A-2, Class M-1, Class M-2, Class B-1 Certificates are
collectively referred to herein as the "Offered Certificates");
WHEREAS, the Issuer has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (file number
333-59060) (the "Registration Statement") for the registration under the
Securities Act of 1933, as amended (the "Act") of Mortgage Pass-Through
Certificates of which the Series 2001-NC4 Certificates are a separate series;
WHEREAS, in connection with the public offering and sale of the Offered
Certificates, the Issuer will file a prospectus supplement (the "Prospectus
Supplement") dated December 14, 2001 together with a prospectus dated November
21, 2001 (the "Prospectus") with the Commission pursuant to Rule 424(b)(5) under
the Act;
WHEREAS, the Issuer has agreed to sell to Underwriters the Offered
Certificates pursuant to an underwriting agreement dated as of December 14,
2001;
WHEREAS, FSA has agreed to guaranty the Class A-2 Certificates (the
"Guaranteed Certificates") pursuant to a Financial Guaranty Insurance Policy
(the "Policy") to be issued by FSA to the extent specified in the Policy;
WHEREAS, FSA has provided certain information to the Issuer for
inclusion in the Prospectus Supplement under the caption "The Class A-2
Certificate Insurer" in the Prospectus Supplement (such information, together
with the documents incorporated by reference thereunder, the "FSA Information");
WHEREAS, the Underwriters have provided certain information to the
Issuer for inclusion in the Prospectus Supplement in the first sentence of the
last paragraph on the cover page and the
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first sentence of the third paragraph and the fifth paragraph under the caption
"Plan of Distribution" in the Prospecuts Supplement (such information, the
"Underwriter Information").
NOW, THEREFORE, in consideration of the foregoing and for good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto do hereby agree as follows:
1. INDEMNIFICATION AND CONTRIBUTION.
(a) FSA agrees to indemnify and hold harmless the Issuer, the Company
and the Underwriters, each of their respective directors, each officer of the
Issuer who signed the Registration Statement and each person, if any, who
controls the Issuer, the Company or the Underwriters within the meaning of the
Act against any and all losses, claims, damages and liabilities, joint or
several, to which they or any of them may become subject under the Act, the
Securities and Exchange Act of 1934 (the "Exchange Act"), any other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement of a material fact contained in the
FSA Information included in the Prospectus Supplement, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and agrees to reimburse each such
indemnified party for any legal or other expenses reasonably incurred by it in
connection with investigating or defending any such loss, claim, damage,
liability or action. The indemnity in this paragraph (a) with respect to any
amendment of or supplement to the Prospectus Supplement affecting the FSA
Information shall only apply if such amendment of or supplement to the FSA
Information has been approved in writing by FSA. This indemnity agreement will
be in addition to any liability which FSA may otherwise have. For the avoidance
of doubt, the indemnity of FSA shall apply to the information provided in the
Prospectus Supplement under the caption "The Class A-2 Certificate Insurer"
including the financial information concerning FSA's financial condition
included in the FSA Information and to any financial statements of FSA furnished
by it as contemplated by the Prospectus Supplement upon request of any investor
or prospective investor but will not include any statements made under the third
and fourth paragraphs under the subheading "-Incorporation of Certain Documents
by Reference".
(b) The Issuer and the Company jointly and severally agree to indemnify
and hold harmless FSA, each of its directors and officers, and each person, if
any, who controls FSA within the meaning of the Act against any and all losses,
claims, damages and liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act, any other Federal or state
statutory law or regulation, at common law or otherwise, 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 Registration Statement or in any amendment thereof, or in
the Prospectus or the Prospectus Supplement, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agree to reimburse
each indemnified party for any legal or other expenses reasonably incurred by it
in connection with investigating or defending any such
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loss, claim, damage, liability or action; PROVIDED, HOWEVER, that neither the
Issuer nor the Company will be liable in any such case to the extent that any
such loss, claim, damage or liability arise out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made in any of such documents in the information covered by the indemnity
agreement in paragraph (a) above or in paragraph (c) below. This indemnity
agreement will be in addition to any liability which the Issuer or the Company
may otherwise have.
(c) The Underwriters agree to indemnify and hold harmless FSA, each of
its directors and officers, and each person, if any, who controls FSA within the
meaning of the Act against any and all losses, claims, damages and liabilities,
joint or several, to which they or any of them may become subject under the Act,
the Exchange Act, any other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement of a material fact contained in the Underwriter Information included
in the Prospectus Supplement, or in any amendment thereof or supplement thereto,
or arise out of or are based upon the omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and agrees to reimburse each such indemnified party for any legal or
other expenses reasonably incurred by it in connection with investigating or
defending any such loss, claim, damage, liability or action. The indemnity in
this paragraph (c) with respect to any amendment of or supplement to the
Prospectus Supplement affecting the Underwriter Information shall only apply if
such amendment of or supplement to the Underwriter Information has been approved
in writing by the Representative. This indemnity agreement will be in addition
to any liability which the Underwriters may otherwise have.
(d) Promptly after receipt by an indemnified party under this Section 1
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 1, notify the indemnifying party in writing of the commencement thereof
and that the party intends to seek indemnification, and if indemnification is
not available as a remedy, contribution; but the omission so to notify the
indemnifying party will not relieve the indemnifying party from any liability
which it may have to any indemnified party otherwise than under this Section 1.
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 to appoint counsel satisfactory to such indemnified party
to represent the indemnified party in such action; PROVIDED, HOWEVER, that if
the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to appoint counsel to defend such action
and approval by the indemnified party of such counsel, the indemnifying party
will not be liable to such indemnified party under this Section 1 for the fees
and expenses of any other legal counsel subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by FSA in the case of
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paragraph (a) the Issuer or the Company in the case of paragraph (b) or the
Representative in the case of paragraph (c) of this Section 1, representing the
indemnified parties under, respectively, such paragraph (a), (b) or (c) who are
parties to such action), (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice or commencement of the
action or (iii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party; and except
that, if clause (i) or (iii) is applicable, such liability shall be only in
respect of the counsel referred to in such clause (i) or (iii). The indemnifying
party shall not be liable for any settlement of any claim or action unless the
indemnifying party shall (i) have consented thereto, or, if the indemnifying
party shall not have consented thereto, the indemnifying party shall only be
liable to the extent that any such settlement effected without its consent shall
not be prejudicial to the indemnifying party, or (ii) be in default of its
obligations hereunder.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) or (b)
of this Section 1 is due in accordance with its terms but is for any reason held
by a court to be unavailable from, respectively, FSA, the Issuer or the Company
on grounds of policy or otherwise, the Issuer, the Company or FSA, as
appropriate, shall contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) to which the Issuer, the Company or FSA,
as appropriate, may be subject in such proportion as is appropriate to reflect
the relative fault of FSA on the one hand and the Issuer and/or the Company on
the other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities. The relative fault of FSA on the one
hand and of the Issuer and/or the Company on the other 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 FSA or by the Issuer and/or the Company, and
the parties relative intent, knowledge, access to information and opportunity to
correct or prevent such information and opportunity to correct or prevent such
statement or omission. The Issuer's and the Company's obligations to contribute
pursuant to this Section 1 shall be joint and several.
(f) FSA and the Issuer and the Company agree that it would not be just
and equitable if contribution pursuant to this Section 1 were determined by PRO
RATA allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph.
(g) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (c) of this
Section 1 is due in accordance with its terms but is for any reason held by a
court to be unavailable from, respectively, FSA or the Underwriters on grounds
of policy or otherwise, the Underwriters or FSA, as appropriate, shall
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) to which the Underwriters or FSA, as appropriate, may be subject
in such proportion as is appropriate to reflect the relative fault of FSA on
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the one hand and the Underwriters on the other in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities. The
relative fault of FSA on the one hand and of the Underwriters on the other shall
be determined by reference to, among other things, whether the untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by FSA or by the Underwriters, and the parties relative
intent, knowledge, access to information and opportunity to correct or prevent
such information and opportunity to correct or prevent such statement or
omission. The Underwriters obligation to contribute pursuant to this Section 1
shall be joint and several.
(h) FSA and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 1 were determined by PRO RATA
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
(i) Notwithstanding anything in this Section 1 to the contrary, no
Underwriter shall be required to contribute an amount greater than the total
discount received by it from the Issuer in respect of the Offered Certificates
underwritten by such Underwriter.
(j) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11 (f) of the Act) shall be entitled to contribution from any
person which was not guilty of such fraudulent misrepresentation. For purposes
of this Section 1, each director and officer of FSA, each person which controls
FSA within the meaning of the Act shall have the same rights to contribution as
FSA, each person who controls the Issuer or the Company within the meaning of
the Act, each officer of the Issuer who shall have signed the Registration
Statement and each director of the Issuer and the Company shall have the same
rights to contribution as the Issuer or the Company, each director and officer
of each Underwriter and each person which controls such Underwriter within the
meaning of the Act shall have the same rights to contribution as such
Underwriter as the case may be, subject in each case to the first sentence of
this paragraph (f).
(k) FSA acknowledges that, as among the parties hereto, it is solely
responsible for the FSA Information. The Underwriters acknowledge that, as among
the parties hereto, they are solely responsible for the Underwriter Information.
The Issuer, the Company and the Underwriters acknowledge that, as among the
parties hereto, FSA is not responsible for any information other than the FSA
Information included in the Prospectus Supplement, or an amendment thereof or
supplement thereto if such amendment thereof or supplement thereto has been
approved in writing by FSA. FSA acknowledges that, as among the parties hereto,
the Underwriters are not responsible for any information other than the
Underwriter Information included in the Prospectus Supplement, or an amendment
thereof or supplement thereto if such amendment thereof or supplement thereto
has been approved in writing by the Underwriters.
2. INDEMNITIES TO SURVIVE. The respective indemnities of the parties
hereto set forth 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 1 hereof, and
will survive delivery of and payment for the Offered Certificates and the
Policy. The provisions of Section 1 hereof shall survive the termination or
cancellation of this Agreement.
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3. NOTICES. All communication hereunder shall be in writing and, if
sent to FSA, will be mailed, delivered or telegraphed and confirmed to it at 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Surveillance Department; if
sent to the Issuer, will be mailed, delivered or telegraphed and confirmed to it
at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000; if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it at 0000 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Securitized Products Group, with a copy to 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Xxxxxx; if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to it at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Securitized
Products Group, with a copy to 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxxx Xxxxxx or in the case of any party, at such other
address as such party may hereafter specify for the purpose by notice given
pursuant to this Section 3.
4. GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York.
5. COUNTERPARTS. The Agreement may be executed in counterparts. Each
counterpart shall be deemed an original instrument, and all counterparts
together shall constitute one and the same instrument.
6. AMENDMENT. No supplement, modification, or amendment shall be valid
or binding unless contained in a written instrument executed by all of the
parties hereto.
7. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by any
party hereto without the prior written consent of all of the other parties
hereto. This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by and against the parties hereto and their respective successors
and permitted assigns.
8. EFFECTIVENESS OF AGREEMENT. This Agreement shall take effect only
upon the issuance of the Policy.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the date first written above.
FINANCIAL SECURITY ASSURANCE INC.
By: ______________________________________
Name:
Title:
XXXXXX XXXXXXX XXXX XXXXXX CAPITAL I INC.
By: ______________________________________
Name:
Title:
XXXXXX XXXXXXX XXXX XXXXXX MORTGAGE
CAPITAL INC.
By: _____________________________________
Name:
Title:
XXXXXX XXXXXXX & CO. INCORPORATED,
as Representative on behalf of the
Underwriters
By: _____________________________________
Name:
Title:
