EXHIBIT 1.3
[Execution Copy]
INDEMNIFICATION
AND
CONTRIBUTION AGREEMENT
THIS INDEMNIFICATION AND CONTRIBUTION AGREEMENT dated January 23, 2004
(the "Agreement") among Xxxxxx Xxxxxxx ABS Capital I Inc., a Delaware
corporation (the "Depositor"), Xxxxxx Xxxxxxx Mortgage Capital Inc., a Delaware
corporation (the "Seller"), and Washington Mutual Bank, FA, a national banking
association ("WAMU").
W I T N E S S E T H:
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WHEREAS, WAMU and the Depositor are parties to the Washington Mutual
Servicing Agreement (as defined herein);
WHEREAS, WAMU stands to receive substantial financial benefits in its
capacity as servicer under the Washington Mutual Servicing Agreement;
WHEREAS, the Depositor and the Seller stand to receive substantial
benefits from WAMU performing in its capacity as servicer under the Washington
Mutual Servicing Agreement;
WHEREAS, each of the Depositor, the Seller and WAMU wishes to provide
for indemnification and contribution on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the foregoing and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Certain Defined Terms.
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The following terms shall have the meanings set forth below, unless the
context clearly indicates otherwise:
1933 Act: The Securities Act of 1933, as amended.
Agreement: This Indemnification and Contribution Agreement, as the same
may be amended in accordance with the terms hereof.
Offered Certificates: Xxxxxx Xxxxxxx ABS Capital I Inc., Series
2004-SD1, Mortgage Pass-Through Certificates, Class A, Class M-1, Class M-2 and
Class B issued pursuant to the Pooling Agreement.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pooling Agreement: The Pooling Agreement, dated as of January 1, 2004,
among the Depositor, the Seller and Deutsche Bank National Trust Company, as
custodian and trustee.
Prospectus Supplement: The Prospectus Supplement dated January 23,
2004, relating to the public offering of the Offered Certificates.
WAMU Information: All information in the Prospectus Supplement
contained under the headings "The Servicers--Washington Mutual Bank, FA" and
"WAMU Underwriting Guidelines".
Washington Mutual Servicing Agreement: The Washington Mutual Servicing
Agreement, dated as of January 1, 2004, among the Depositor, WAMU and Deutsche
Bank National Trust Company, as trustee.
1.2 Other Terms.
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Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Washington Mutual Servicing Agreement.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
2.1 Each party hereto represents that:
(a) it has all requisite power and authority to execute, deliver
and perform its obligations under this Agreement;
(b) this Agreement has been duly authorized, executed and
delivered by such party; and
(c) assuming the due authorization, execution and delivery by each
other party hereto, this Agreement constitutes the legal, valid and binding
obligation of such party.
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2.2 In addition, the Depositor represents to the other parties
hereto that a registration statement on Form S-3 (File No. 333-104046),
including the Base Prospectus (the "Registration Statement"), has been filed
with the Securities and Exchange Commission (the "Commission") and has become
effective under the Securities Act of 1933, as amended (the "Securities Act"),
and no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been initiated, or to the
Depositor's knowledge, threatened, by the Commission.
ARTICLE III.
INDEMNIFICATION
3.1 Indemnification.
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(a) WAMU shall indemnify and hold harmless the Depositor and the
Seller and their respective directors, officers and each Person, if any, that
"controls" the Depositor or the Seller, within the meaning of Section 15 of the
1933 Act (each, a "Depositor Indemnified Party"), against any and all losses,
claims, damages or liabilities to which such Depositor Indemnified Party may
become subject, under the 1933 Act or otherwise, to the extent that 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 any material
fact contained in the Prospectus Supplement, but only to the extent that such
untrue statement or alleged untrue statement relates to information set forth in
the WAMU Information and WAMU shall in each case reimburse each Depositor
Indemnified Party for any legal or other expenses reasonably incurred by such
Depositor Indemnified Party, in connection with investigating or defending any
such loss, claim, damage, liability or action.
(b) The Seller shall (A) indemnify and hold harmless WAMU and its
directors, officers and each Person, if any, that "controls" WAMU within the
meaning of Section 15 of the 1933 Act (each, a "WAMU Indemnified Party"),
against any and all losses, claims, damages or liabilities to which such WAMU
Indemnified Party may become subject, under the 1933 Act or otherwise, to the
extent that such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement,
the Prospectus or any amendment or supplement thereto, other than an untrue
statement of fact contained in the WAMU Information or (ii) any omission or
alleged omission to state in the Registration Statement, the Prospectus or any
amendment or supplement thereto a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading, but only to the extent that such untrue
statement or omission is other than a statement or omission arising out of or
based upon the WAMU Information, and (B) reimburse each WAMU Indemnified Party
for any legal or other expenses reasonably incurred by such WAMU indemnified
Party in connection with investigating or defending any such loss, claim,
damage, liability or action.
(c) If the indemnification provided for in this Section 3.1 shall
for any reason be unavailable to an indemnified party under this Section 3.1,
then the party which would otherwise
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be obligated to indemnify with respect thereto, on the one hand, and the parties
which would otherwise be entitled to be indemnified, on the other, shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated herein and incurred by the parties hereto in such
proportions that are appropriate to reflect the relative benefit to the
Depositor, the Seller and WAMU from the issuance and sale of the Offered
Certificates or, if such allocation is not permitted by a court of competent
jurisdiction, then on a basis appropriate to also recognize the relative fault
of the Depositor, the Seller and WAMU in connection with the applicable
misstatements or omissions as well as any other relevant equitable
considerations. Notwithstanding the foregoing, no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any Person that was not guilty of such fraudulent
misrepresentation. For purposes of this Section 3.1, each director of a party to
this Agreement and each Person, if any, that "controls" a party to this
Agreement within the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as such party.
(d) Each of WAMU's and the Seller's liability set forth in this
Section 3.1 will be in addition to any other liability that WAMU or the Seller
may otherwise have.
3.2 Notification; Procedural Matters.
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(a) Promptly after receipt by an indemnified party under Section
3.1 hereof of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party (or if a claim for contribution is to be made against another party) under
Section 3.1 hereof, notify the indemnifying party (or other contributing party)
in writing of the commencement thereof and the nature of the claim; but the
omission so to notify the indemnifying party (or other contributing party) shall
not relieve it from any liability it may have to any indemnified party (or to
the party requesting contribution) otherwise than under Section 3.1 hereof
except to the extent that it has been materially prejudiced (through the
forfeiture of substantial rights or defenses) by such failure. In case any such
action is brought against any indemnified party and it notifies the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that, by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, the indemnifying party elects to assume the defense thereof,
it may participate with counsel reasonably satisfactory to such indemnified
party; provided, however, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party or
parties shall reasonably have concluded (i) that there may be legal defenses
available to it or them and/or other indemnified parties that are different from
or additional to those available to the indemnifying party, (ii) a conflict or
potential conflict exists (based upon advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (iii) employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assert such legal defenses and to otherwise participate in the defense of 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
assume the defense of such action and approval by the indemnified party of such
counsel, the indemnifying party shall not be liable to such indemnified party
under this paragraph for any
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legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof (other than reasonable costs of
investigation by the indemnified party undertaken with notice to and approval by
the indemnifying party), unless (i) the indemnified party shall have employed
separate counsel (plus any local counsel) in connection with the assertion of
legal defenses in accordance with the proviso to the immediately preceding
sentence, (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 of commencement of the action or (iii) the
indemnifying party shall have authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. Each indemnified
party, as a condition of the indemnity agreements contained in Section 3.1
above, shall use all reasonable efforts to cooperate with the indemnifying party
in the defense of any such action or claim. No party shall be liable for
contribution with respect to any action or claim settled without its consent,
which shall not be unreasonably withheld. In no event shall the indemnifying
party be liable for the fees and expenses of more than one counsel (in addition
to any local counsel) separate from its own counsel for all indemnified parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall be liable for any settlement of any
such action effected without its written consent, which shall not be
unreasonably withheld, but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against all
loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party (which
consent shall not be unreasonably withheld), effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnification could have been sought hereunder by
such indemnified party unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such proceeding.
ARTICLE IV.
GENERAL
4.1 Survival.
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This Agreement and the obligations of the parties hereunder shall
survive the purchase and sale of the Offered Certificates.
4.2 Successors.
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and the officers, directors and
controlling Persons referred to in Article III hereof and their respective
successors and assigns, and no other Person shall have any right or obligation
hereunder.
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4.3 Applicable Law.
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This Agreement and all matters arising with respect to it shall be
governed by and construed in accordance with the laws of the State of New York
(including, without limitation, sections 5-1401 and 5-1402 of the General
Obligations Law of the State of New York) without otherwise giving effect to
conflict of laws principles thereof.
4.4 Miscellaneous.
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Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated except by a writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. This
Agreement may be signed in any number of counterparts, each of which shall be
deemed an original, which taken together shall constitute one and the same
instrument.
4.5 Notices.
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All communications hereunder shall be in writing and shall be deemed to
have been duly given when delivered to (a) in the case of the Depositor, Xxxxxx
Xxxxxxx ABS Capital I Inc., 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxxx Xxxxx, (b) in the case of the Seller, Xxxxxx Xxxxxxx Mortgage Capital
Inc., 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxxxxx
Xxxxx, Esq., and (c) in the case of the WAMU, Washington Mutual Bank, FA, 0000
Xxxxxxx Xx, (mail stop N070205), Xxxxxxxxxx, XX, 00000, Attention: Vice
President, Investor Reporting, with a copy to Washington Mutual Bank, FA, 0000
0xx Xxxxxx, XXX0000, Xxxxxxx, Xxxxxxxxxx, Attention: General Counsel.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
XXXXXX XXXXXXX ABS CAPITAL I INC.,
as Depositor
By:
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Name:
Title:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.,
as Seller
By:
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Name:
Title:
WASHINGTON MUTUAL BANK, FA,
as Servicer
By:
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Name:
Title:
[Signature Page to the Washington Mutual Indemnification Agreement]
