INDEMNIFICATION AGREEMENT
XXXXXX XXXXXXX ABS CAPITAL I INC.
IXIS REAL ESTATE CAPITAL TRUST
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-HE3
WHEREAS, Xxxxxx Xxxxxxx ABS Capital I Inc. (the "Depositor") is
acting as depositor with respect to (i) the Free Writing Prospectus, dated
August 21, 2006 (the "Free Writing Prospectus"), (ii) the Prospectus, dated
August 18, 2006 (the "Base Prospectus"), (iii) the Prospectus Supplement, dated
September 26, 2006 (the "Prospectus Supplement" and together with the Base
Prospectus, the "Prospectus") and (iv) the Confidential Private Placement
Memorandum, dated September 29, 2006 (the "Class B-5 PPM" and collectively with
the Free Writing Prospectus and the Prospectus, the "Offering Documents"),
relating to IXIS Real Estate Capital Trust 2006-HE3, Mortgage Pass-Through
Certificates, Series 2006-HE3, (as defined below) to be issued pursuant to a
Pooling and Servicing Agreement, dated as of September 1, 2006 (the "P&S"),
among the Depositor, IXIS Real Estate Capital Inc., as unaffiliated seller (the
"Unaffiliated Seller"), Master Financial, Inc., as a servicer, Saxon Mortgage
Services, as a servicer, Xxxxx Fargo Bank, National Association, as securities
administrator, master servicer and backup servicer, and Deutsche Bank National
Trust Company, as trustee and custodian;
WHEREAS, the Depositor purchased the Mortgage Loans from the
Unaffiliated Seller pursuant to an Unaffiliated Seller's Agreement dated as of
September 1, 2006, by and between the Depositor and the Unaffiliated Seller;
WHEREAS, Xxxxxx Xxxxxxx & Co. Incorporated, as representative (the
"Representative"), of itself and the other underwriters named in the
Underwriting Agreement (collectively, the "Underwriters"), dated September 26,
2006, between the Depositor and the Representative pursuant to which the
Representative on behalf of the Underwriters is agreeing, subject to the terms
and conditions therein, that the Underwriters purchase on the Closing Date
described therein the Offered Certificates (the "Offered Certificates") as
described therein; and
WHEREAS, Xxxxxx Xxxxxxx & Co. Incorporated, as initial purchaser
(the "Initial Purchaser"), is agreeing, subject to the terms and conditions of
the Certificate Purchase Agreement, dated as of September 29, 2006 (the
"Certificate Purchase Agreement"), between the Depositor and the Initial
Purchaser, to purchase on the Closing Date described therein the Class B-5
Certificates (the "Class B-5 Certificates" and together with the Offered
Certificates, the "Certificates") as described therein.
NOW THEREFORE, in consideration of the agreements contained herein,
and other valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the Unaffiliated Seller, the Depositor and the Representative
agree as follows:
ARTICLE I Indemnification and Contribution.
Section 1.01 The Unaffiliated Seller agrees to indemnify and hold
harmless the Depositor, the Initial Purchaser and each Underwriter, their
respective officers and directors and each person, if any, who controls the
Depositor, the Initial Purchaser or any Underwriter within the meaning of either
Section 15 of the Securities Act of 1933, as amended (the "1933 Act") or
Section 20 of the Securities Exchange Act of 1934, as amended (the "1934 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 1933 Act, the 1934 Act or
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 in whole or in part upon any untrue statement
or alleged untrue statement of a material fact contained in the Free Writing
Prospectus, the Prospectus Supplement, the Class B-5 PPM or in the ABS
Informational and Computational Materials or any omission or alleged omission to
state in the Free Writing Prospectus, the Prospectus Supplement, the Class B-5
PPM or in the ABS Informational and Computational Materials a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, or any such
untrue statement or omission or alleged untrue statement or alleged omission
made in any amendment of or supplement the Free Writing Prospectus, the
Prospectus Supplement, the Class B-5 PPM or to the ABS Informational and
Computational Materials, and agrees to reimburse the Depositor, the Initial
Purchaser and each Underwriter and each such officer, director and controlling
person promptly upon demand for any legal or other expenses reasonably incurred
by any of them in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided however, that the Unaffiliated Seller shall be
liable in any such case only to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with the Seller Information. The foregoing indemnity agreement
is in addition to any liability which the Unaffiliated Seller may otherwise have
to the Underwriters, the Initial Purchaser, the Depositor or any such director,
officer or controlling person of the Underwriters, the Initial Purchaser or of
the Depositor.
Section 1.02 Each Underwriter, severally but not jointly, agrees to
indemnify and hold harmless the Unaffiliated Seller, its officers and directors
and each person, if any, who controls the Unaffiliated Seller within the meaning
of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any
and all losses, claims, damages or liabilities, joint or several, to which the
Unaffiliated Seller may become subject under the 1933 Act, the 1934 Act or 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 in whole or in part upon any untrue statement
or alleged untrue statement of a material fact contained in the Prospectus
Supplement or any omission or alleged omission to state in the Prospectus
Supplement a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, or any such untrue statement or omission or alleged untrue
statement or alleged omission made in any amendment of or supplement to the
Prospectus Supplement, and including in each case any information included
therein by its incorporation by reference into the Prospectus and agrees to
reimburse the Unaffiliated Seller, and each such director, officer or
controlling person for any legal or other expenses reasonably incurred by any of
them in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred; provided however, that the Underwriters shall be liable in any such
case only to the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with the Underwriter Information. The foregoing indemnity
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agreement is in addition to any liability which the Underwriter may otherwise
have to the Unaffiliated Seller or any such director, officer or controlling
person of the Unaffiliated Seller.
Section 1.03 The Initial Purchaser agrees to indemnify and hold harmless
the Unaffiliated Seller, its officers and directors and each person, if any, who
controls the Unaffiliated Seller within the meaning of either Section 15 of the
1933 Act or Section 20 of the 1934 Act, against any and all losses, claims,
damages or liabilities, joint or several, to which the Unaffiliated Seller may
become subject under the 1933 Act, the 1934 Act or 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 in whole or in part upon any untrue statement or alleged untrue
statement of a material fact contained in the Class B-5 PPM or any omission or
alleged omission to state in the Class B-5 PPM a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or any such untrue
statement or omission or alleged untrue statement or alleged omission made in
any amendment of or supplement to the Class B-5 PPM, and including in each case
any information included therein by its incorporation by reference into the
Offering Documents and agrees to reimburse the Unaffiliated Seller, and each
such director, officer or controlling person for any legal or other expenses
reasonably incurred by any of them in connection with investigating or defending
or preparing to defend against any such loss, claim, damage, liability or action
as such expenses are incurred; provided however, that the Initial Purchaser
shall be liable in any such case only to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with the Initial Purchaser Information. The
foregoing indemnity agreement is in addition to any liability which the Initial
Purchaser may otherwise have to the Unaffiliated Seller or any such director,
officer or controlling person of the Unaffiliated Seller.
As used herein:
"Depositor Information" means the statements set forth in the Free
Writing Prospectus and the Prospectus Supplement under the caption "The
Depositor".
"Initial Purchaser Information" means the statements set forth under
the caption "Method of Placement" in the Class B-5 PPM and in (x) the first
sentence of the third to last paragraph and (y) the first sentence of the second
to last paragraph on the cover of the Class B-5 PPM.
"Master Servicer and Securities Administrator Information" means the
information in (i) the Free Writing Prospectus contained (x) in the first three
paragraphs under the heading "The Master Servicer" and (y) under the heading
"The Securities Administrator", and (ii) the Prospectus Supplement contained (x)
in the first three paragraphs under the heading "The Master Servicer" and (y)
under the heading "The Securities Administrator".
"Originator Information" means the information in (i) the Free
Writing Prospectus contained under the heading "The Originators--First NLC
Underwriting Guidelines" and (ii) the Prospectus Supplement contained under the
heading "The Originators--First NLC Underwriting Guidelines".
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"Seller Information" means (x) the information and data concerning
the Mortgage Loans set forth on any computer tape (or other electronic or
printed medium) furnished to the Depositor and/or the Unaffiliated Seller, in
the ABS Informational and Computational Materials, (as defined below) to the
extent such ABS Informational and Computational Materials were approved by the
Unaffiliated Seller and (y) the information set forth in the Free Writing
Prospectus and the Prospectus Supplement, other than the Depositor Information,
the Servicer Information, the Master Servicer and Securities Administrator
Information, the Originator Information, the Initial Purchaser Information and
the Underwriter Information (including, without limitation, the Static Pool
Information (as defined below)).
"Servicer Information" means the information concerning the
servicers under the caption "The Servicers" in the Free Writing Prospectus and
the Prospectus Supplement.
"Static Pool Information" means information regarding the
Unaffiliated Seller's residential mortgage loan securitization provided to the
Depositor by the Unaffiliated Seller and made available on the internet at
xxxx://xxx.xxxxxxxxxxxxx.xxx/xxxxxxxxxxxxx/xxx_xxx/XXXX.xxxx.
"Underwriter Information" means the statements set forth (i) in the
third to last paragraph on the cover page of the Prospectus Supplement, (ii) and
under the caption "Plan of Distribution" in the Prospectus Supplement.
The term "ABS Informational and Computational Materials" has the
meaning assigned to it in Item 1101(a) of Regulation AB.
Section 1.04 Promptly after receipt by any indemnified party under this
Section 1 of notice of any claim or the commencement of any action, such
indemnified party shall, 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 claim or the commencement of that action; provided, however, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 1 except to the extent it has
been materially prejudiced by such failure; and provided further, however, that
the failure to notify any indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 1.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, except as provided in
the following paragraph, the indemnifying party shall not be liable to the
indemnified party under this Section 1 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall
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have been advised by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by (x) the Representative, if the
indemnified parties under this Section 1 consist of the Underwriters, the
Initial Purchaser and/or the Depositor or any of their respective directors,
officers or controlling persons, or (y) by the Unaffiliated Seller if the
indemnified parties under this Section 1 consist of the Unaffiliated Seller or
any of its respective directors, officers or controlling persons.
Each indemnified party, as a condition of the indemnity agreements
contained in this Section 1, shall cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be liable for
any settlement of any such action effected without its written consent (which
consent 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 any loss or liability by reason of such settlement or
judgment.
Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for the reasonable fees and expenses of counsel, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement.
Section 1.05 If the indemnification provided for in this Section 1 is
unavailable to an indemnified party under Sections 1(a) or 1(b) hereof or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then (i) the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities, in
such proportion as is appropriate to reflect the relative benefits received by
the indemnifying party and the indemnified party, respectively, from the
issuance of the Offered Certificates or the Class B-5 Certificates or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the indemnifying party and the
indemnified party, respectively, in connection with the statements or omissions
that result in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Unaffiliated Seller on the one hand and the Depositor, the Initial Purchaser and
the
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Underwriters on the other shall be deemed to be in such proportion as the total
net proceeds from the offering received by the Unaffiliated Seller bears to the
total underwriting discounts and commissions. The relative fault of the
indemnified party and indemnifying party 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 such parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission and
any other equitable considerations.
The Depositor, the Initial Purchaser, the Underwriters and the
Unaffiliated Seller agree that it would not be just and equitable if
contribution pursuant to this Section 1(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the considerations referred to in this Section 1(d) above. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in this Section 1(d) shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim, except where the indemnified party is required to bear
such expenses pursuant to this Section 1, which expenses the indemnifying party
shall pay, at the request of the indemnified party, to the extent that the
indemnifying party will be ultimately obligated to pay such expenses. 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 indemnified shall promptly refund the amount so paid to the indemnifying
party. In no case shall the Initial Purchaser or any Underwriter, in each case,
together with the Depositor be responsible for any amount in excess of (x) the
amount received by the Initial Purchaser in connection with its resale of the
Class B-5 Certificates or by such Underwriter in connection with its resale of
the Offered Certificates, over (y) the amount paid to the Depositor by the
Initial Purchaser for the Class B-5 Certificates or by such Underwriter for the
Offered Certificates, as applicable. No person guilty of fraudulent
misrepresentations (within the meaning of Section 11(f) of the 1933 Act), shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
Section 1.06 The indemnity and contribution agreements contained in this
Section 1 and the representations and warranties set forth in Section 2 shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by the Depositor, its directors
or officers or any person controlling the Depositor, by or on behalf of the
Initial Purchaser, its directors or officers or any person controlling the
Initial Purchaser, by or on behalf of the Underwriter, its directors or officers
or any person controlling the Underwriter or by or on behalf of the Unaffiliated
Seller and each of their respective directors, officers or any person
controlling the Sellers, and (iii) acceptance of and payment for any of the
Offered Certificates or the Class B-5 Certificates, as applicable.
ARTICLE II Representations and Warranties. The Unaffiliated Seller
represents that:
(a) the Unaffiliated Seller is validly existing and in good
standing under the laws of its jurisdiction of formation or incorporation, as
applicable, and has full power and authority to own its assets and to transact
the business in which it is currently engaged. The Unaffiliated Seller is duly
qualified to do business and is in good standing in each jurisdiction in
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which the character of the business transacted by it or any properties owned or
leased by it requires such qualification and in which the failure so to qualify
would have a material adverse effect on the business, properties, assets or
condition (financial or otherwise) of the Unaffiliated Seller;
(b) the Unaffiliated Seller is not required to obtain the consent
of any other person or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or agency
in connection with the execution, delivery, performance, validity or
enforceability of this Agreement;
(c) the execution, delivery and performance of this Agreement by
the Unaffiliated Seller will not violate any provision of any existing law or
regulation or any order decree of any court applicable to the Unaffiliated
Seller or any provision of the charter or bylaws of the Unaffiliated Seller, or
constitute a material breach of any mortgage, indenture, contract or other
agreement to which the Unaffiliated Seller is a party or by which it may be
bound;
(d) no proceeding of or before any court, tribunal or governmental
body is currently pending or, to the knowledge of the Unaffiliated Seller,
threatened against the Unaffiliated Seller or any of its properties or with
respect to this Agreement or the Certificates in either case, which would have a
material adverse effect on the business, properties, assets or condition
(financial or otherwise) of the Unaffiliated Seller;
(e) the Unaffiliated Seller has full power and authority to make,
execute, deliver and perform this Agreement and all of the transactions
contemplated hereunder, and has taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement. When
executed and delivered, this Agreement will constitute the legal, valid and
binding obligation of the Unaffiliated Seller enforceable in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally, by the availability of equitable remedies, and by
limitations of public policy under applicable securities law as to rights of
indemnity and contribution thereunder; and
(f) this Agreement has been duly executed and delivered by the
Unaffiliated Seller.
ARTICLE III Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Depositor will be mailed,
delivered or telegraphed and confirmed to Xxxxxx Xxxxxxx ABS Capital I Inc. 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Xxx with a copy to Xxxxx
Xxx at Xxxxxx Xxxxxxx & Co. Incorporated's legal department at 0000 Xxxxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; if sent to the Representative will be
mailed, delivered or telegraphed and confirmed to Xxxxxx Xxxxxxx & Co.
Incorporated, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Xxx
with a copy to Xxxxx Xxx at Xxxxxx Xxxxxxx & Co. Incorporation's legal
department at 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; or, if sent
to the Unaffiliated Seller, will be mailed, delivered or telegraphed and
confirmed to the Unaffiliated Seller, 0 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: General Counsel.
ARTICLE IV Miscellaneous. This Agreement shall be governed by, and
construed in
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accordance with, the laws of the State of New York without giving effect to the
conflict of laws provisions thereof. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their successors and assigns and
the controlling persons referred to herein, and no other person shall have any
right or obligation hereunder. 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. This Agreement may be executed in
counterparts, each of which when so executed and delivered shall be considered
an original, and all such counterparts shall constitute one and the same
instrument. Capitalized terms used but not defined herein shall have the
meanings provided in the P&S.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers hereunto duly authorized, this
29th day of September, 2006.
XXXXXX XXXXXXX ABS CAPITAL I INC.,
as Depositor
By _____________________________________
Name:
Title:
XXXXXX XXXXXXX & CO. INCORPORATED,
as Representative
By _____________________________________
Name:
Title:
XXXXXX XXXXXXX & CO. INCORPORATED,
as Initial Purchaser
By _____________________________________
Name:
Title:
IXIS REAL ESTATE CAPITAL INC.,
as Unaffiliated Seller
By _____________________________________
Name:
Title:
By _____________________________________
Name:
Title:
[Signature Page to the Underwriter Indemnification Agreement]
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