INDEMNIFICATION AGREEMENT
XXXXXX XXXXXXX ABS CAPITAL I INC.
CDC MORTGAGE CAPITAL TRUST
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-HE1
WHEREAS, Xxxxxx Xxxxxxx ABS Capital I Inc. (the "Depositor") is acting
as depositor with respect to the Prospectus (the "Base Prospectus"), dated
January 23, 2004, and the Prospectus Supplement to the Prospectus, dated
February 20, 2004 (the "Prospectus Supplement", and together with the Base
Prospectus, the "Prospectus"), relating to CDC Mortgage Capital Trust 2004-HE1,
Mortgage Pass-Through Certificates, Series 2004-HE1, (the "Certificates") to be
issued pursuant to a Pooling and Servicing Agreement, dated as of February 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") and Deutsche Bank National Trust Company 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
February 1, 2004 (the "Unaffiliated Seller's Agreement"), by and between the
Depositor and the Unaffiliated Seller; and
WHEREAS, Xxxxxx Xxxxxxx & Co. Incorporated, as representative (the
"Representative"), of itself and the other underwriters named in the
Underwriting Agreement dated February 20, 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 and each Underwriter, their respective officers and directors and each
person, if any, who controls the Depositor 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 or in the Computational Materials or any omission or
alleged omission to state in the Prospectus Supplement or in the 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 to the Prospectus
Supplement or to the Computational Materials, and agrees to
reimburse the Depositor 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 Depositor or any such
director, officer or controlling person of the Underwriters or of the Depositor.
(b) 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".
"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
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and/or the Unaffiliated Seller, in the Computational Materials, (as defined
below) to the extent such Computational 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, and the Underwriter Information.
"Servicer Information" means the information concerning the Servicer
under the caption "Transaction Overview--The Servicer" and "The Servicer".
"Underwriter Information" means the statements set forth (i) in the
last paragraph on the cover page of the Prospectus Supplement, and (ii) 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
Computation Materials.
(c) 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
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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 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.
(d) 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 (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, and the Underwriters on the other shall be deemed to
be in such proportion as the total net proceeds
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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 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 any
Underwriter, together with the Depositor be responsible for any amount in excess
of (x) the amount received by such Underwriter in connection with its resale of
the Offered Certificates over (y) the amount paid by such Underwriter to the
Depositor for the Offered Certificates. 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.
(e) 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
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.
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;
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(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;
(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 Offered 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 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
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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 20th
day of February, 2004.
XXXXXX XXXXXXX ABS CAPITAL I INC.
By
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Name:
Title:
XXXXXX XXXXXXX & CO. INCORPORATED,
as Representative
By
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Name:
Title:
CDC MORTGAGE CAPITAL INC.
By
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Name:
Title:
By
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Name:
Title:
[Signature Page to the Underwriter Indemnification Agreement]
