INDEMNIFICATION AGREEMENT
XXXXXX XXXXXXX ABS CAPITAL I INC.
CDC MORTGAGE CAPITAL TRUST
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-HE3
WHEREAS, Xxxxxx Xxxxxxx ABS Capital I Inc. (the "Depositor") is acting as
depositor with respect to (i) the Prospectus (the "Base Prospectus"), dated
Xxxxx 00, 0000, (xx) the Prospectus Supplement, dated August 23, 2004 (the
"Prospectus Supplement" and together with the Base Prospectus, the "Prospectus")
and (iii) the Confidential Private Placement Memorandum, dated August 26, 2004
(the "Private Placement Memorandum" and together with the Prospectus, the
"Offering Documents"), relating to CDC Mortgage Capital Trust 2004-HE3, Mortgage
Pass-Through Certificates, Series 2004-HE3, (the "Certificates") to be issued
pursuant to a Pooling and Servicing Agreement, dated as of August 1, 2004 (the
"P&S"), among CDC Mortgage Capital Inc., as Unaffiliated Seller (the
"Unaffiliated Seller"), the Depositor, Countrywide Home Loans Servicing LP, as
Servicer (the "Servicer") Deutsche Bank National Trust Company as custodian (the
"Custodian"), and JPMorgan Chase Bank as Trustee (the "Trustee");
WHEREAS, the Depositor purchased the Mortgage Loans from the Unaffiliated
Seller pursuant to an Unaffiliated Seller's Agreement dated as of August 1, 2004
(the "Unaffiliated Seller's Agreement"), by and between the Depositor and the
Unaffiliated Seller;
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 August 26, 2004 (the "Certificate
Purchase Agreement"), between the Depositor and the Initial Purchaser, to
purchase on the Closing Date described therein the Class B-4 Certificates (the
"Class B-4 Certificates") as described therein; and
WHEREAS, Xxxxxx Xxxxxxx & Co. Incorporated, as representative (the
"Representative"), of itself and the other underwriters named in the
Underwriting Agreement dated August 23, 2004 (the "Underwriting Agreement"),
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.
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:
1. Indemnification and Contribution.
(a) 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 Prospectus Supplement, the Private Placement
Memorandum or in the Comp Materials or any omission or alleged omission to state
in the Prospectus Supplement, the Private Placement Memorandum or in the Comp
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 to the Prospectus
Supplement, the Private Placement Memorandum or to the Comp 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 Initial Purchaser, the
Underwriters, the Depositor or any such director, officer or controlling person
of the Initial Purchaser, the Underwriters or of the Depositor.
(b) 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 Private Placement Memorandum or
any omission or alleged omission to state in the Private Placement Memorandum 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 Private Placement
Memorandum, 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 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.
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(c) 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 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.
As used herein:
"Certificate Insurer Information" means the information concerning the
Certificate Insurer under the caption "The Certificate Insurer" in the
Prospectus Supplement, including information contained therein through
incorporation by reference under the caption "Incorporation of Information By
Reference".
"Depositor Information" means the statements set forth in the Prospectus
Supplement under the caption "Transaction Overview - Parties - The Depositor".
"Initial Purchaser Information" means the statements set forth under the
caption "Method of Placement" in the Private Placement Memorandum.
"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 Comp
Materials, (as defined below) to the extent such Comp Materials were approved by
the Unaffiliated Seller, and (y) the information set forth in the Prospectus
Supplement, other than the Depositor Information, the Certificate Insurer
Information, the Servicer Information, the Initial Purchaser Information and the
Underwriter Information.
"Servicer Information" means the information concerning the Servicer under
the caption "Transaction Overview--The Servicer" and "The Servicer".
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"Underwriter Information" means the statements set forth (i) in the last
paragraph on the cover page of the Prospectus Supplement, (ii) and under the
caption "Plan of Distribution" in the Prospectus Supplement.
The terms "Collateral term sheet" and "Structural term sheet" shall have
the respective meanings assigned to them in the February 13, 1995 letter (the
"PSA Letter") of Cleary, Gottlieb, Xxxxx & Xxxxxxxx on behalf of the Public
Securities Association (which letter, and the SEC staff's response thereto, were
publicly available February 17, 1995). The term "Collateral term sheet" as used
herein includes any subsequent Collateral term sheet that reflects a substantive
change in the information presented. The term "Computational Materials" has the
meaning assigned to it in the May 17, 1994 letter (the "Xxxxxx letter" and
together with the PSA Letter, the "No-Action Letters") of Xxxxx & Xxxx on behalf
of Xxxxxx, Peabody & Co., Inc. (which letter, and the SEC staff's response
thereto, were publicly available May 20, 1994). The term "Comp Materials" as
used herein means collectively Collateral Term Sheets, Structural Term Sheet and
Computational Materials.
(d) 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 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
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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 Initial Purchaser,
the Underwriters 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.
(e) 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-4 Certificates, as applicable, 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 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.
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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, 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-4 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-4 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.
(f) 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 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-4
Certificates, as applicable.
2. Representations and Warranties. The Unaffiliated Seller represents that:
(i) 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 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;
(ii) 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;
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(iii) 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;
(iv) (a) no proceeding of or before any court, tribunal or
governmental body is currently pending or, (b) 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;
(v) 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
(vi) this Agreement has been duly executed and delivered by the
Unaffiliated Seller.
3. 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 Xxxxxxxx Xxxxx
at Xxxxxx Xxxxxxx & Co. Incorporated's legal department at 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000; if sent to the Initial Purchaser or 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 Xxxxxxxx Xxxxx at Xxxxxx Xxxxxxx & Co.
Incorporation's legal department at 0000 Xxxxxx xx xxx Xxxxxxxx, 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.
4. Miscellaneous. This Agreement shall be governed by, and construed in
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
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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 23rd
day of August, 2004.
XXXXXX XXXXXXX ABS CAPITAL I INC.
By /s/ Xxxxxxx Xxx
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Name: Xxxxxxx Xxx
Title: Executive Director
XXXXXX XXXXXXX & CO. INCORPORATED,
as Initial Purchaser and Representative
By /s/ Xxxxx Xxxx
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Name: Xxxxx Xxxx
Title: Head of ABS Banking
CDC MORTGAGE CAPITAL INC.
By /s/ F. Xxxx Xxxxxx
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Name: F. Xxxx Xxxxxx
Title: Managing Director
By Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Director
Signature Page to the Underwriter Indemnification Agreement
