Exhibit 10.3
 
 
 
Item 1115 Agreement dated as of May 30, 2006 (this “Agreement”), between IndyMac
Bank, F.S.B.., a federal savings bank (“IndyMac Bank”), IndyMac MBS, Inc., a
Delaware corporation (“IndyMac MBS”), IndyMac ABS, Inc., a Delaware corporation
(“IndyMac ABS”), and Deutsche Bank AG, New York Branch, as counterparty (the
“Counterparty”).
 
RECITALS
 
WHEREAS, IndyMac MBS and IndyMac ABS each have filed Registration Statements on
Form S-3 (each, a “Registration Statement”) with the Securities and Exchange
Commission (the “Commission”) for purposes of offering mortgage backed or
asset-backed notes and/or certificates (the “Securities”) through special
purpose vehicles (each, an “SPV”).
 
WHEREAS, from time to time, on the closing date (the “Closing Date”) of a
transaction pursuant to which Securities are offered (each, a “Transaction”),
the Counterparty and the SPV or an underwriter or dealer with respect to the
Transaction, enter into certain derivative agreements (each, a “Derivative
Agreement”), including interest rate or currency swaps, for purposes of
providing certain yield enhancements to the SPV or the related trustee on behalf
of the SPV or a swap or corridor contract administrator (each, an
“Administrator”).
 
NOW, THEREFORE, in consideration of the mutual agreements set forth herein and
for other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the parties hereby agree as follows:
 
Section 1.
Definitions

 
Company Information:  As defined in Section 4(a)(i).
 
Company Financial Information:  As defined in Section 2(a)(ii).
 
Depositor:  Means IndyMac MBS and IndyMac ABS with respect to the related
Registration Statement for which the entity is the registrant.
 
GAAP:  As defined in Section 3(a)(v).
 
EDGAR:  The Commission’s Electronic Data Gathering, Analysis and Retrieval
system.
 
Exchange Act:  The Securities Exchange Act of 1934, as amended and the rules and
regulations promulgated thereunder.
 
Exchange Act Reports:  All Distribution Reports on Form 10-D, Current Reports on
Form 8-K and Annual Reports on Form 10-K that are to be filed with respect to
the related SPV pursuant to the Exchange Act.
 
IFRS:  Has the meaning set forth in Section 3(a)(v).
 
 

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Master Agreement:  The ISDA Master Agreement between the Counterparty and SPV,
or if no such Master Agreement exists, the ISDA Master Agreement assumed to
apply to the Derivative Agreement pursuant to its terms.
 
Prospectus Supplement:  The prospectus supplement prepared in connection with
the public offering and sale of the related Securities.
 
Regulation AB:  Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17
C.F.R. §§229.1100-229.1123, as such may be amended from time to time, and
subject to such clarification and interpretation as have been provided by the
Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff
of the Commission, or as may be provided by the Commission or its staff from
time to time.
 
Securities Act:  The Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
 
Section 2.
Information to be Provided by the Counterparty.

 
 
(a)
Prior to printing the related Prospectus Supplement,

 
 
(i)
the Counterparty shall provide to the related Depositor such information
regarding the Counterparty, as a derivative instrument counterparty, as is
reasonably requested by the related Depositor for the purpose of compliance with
Item 1115(a)(1) of Regulation AB. Such information shall include, at a minimum:

 
 
(A)
the Counterparty’s legal name (and any d/b/a);

 
 
(B)
the organizational form of the Counterparty; and

 
 
(C)
a description of the general character of the business of the Counterparty;

 
 
(ii)
if requested by the related Depositor for the purpose of compliance with Item
1115(b) with respect to a Transaction (prior to the related Depositor taking the
steps necessary to suspend its obligation to file Exchange Act Reports with
respect to the SPV under Sections 13 and 15(d) of the Exchange Act, in
accordance with the requirements of Regulation AB) the Counterparty shall:

 
 
(A)
provide the financial data required by Item 1115(b)(1) or (b)(2) of Regulation
AB (as specified by the related Depositor to the Counterparty) with respect to
the Counterparty, any affiliated entities providing derivative instruments to
the SPV and any entities guaranteeing the obligations of the Counterparty or any
affiliate entity providing derivative instruments to the SPV (a “Counterparty
Guarantor”) (the “Company Financial

 
 
 
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Information”), in a form appropriate for use in the Prospectus Supplement and in
an EDGAR-compatible form (if not incorporated by reference) and hereby
authorizes the related Depositor to incorporate by reference the financial data
required by Item 1115(b)(2) of Regulation AB; and

 
 
(B)
if applicable, cause its accountants to issue their consent to the filing or the
incorporation by reference of such financial statements in the Registration
Statement.

 
 
(b)
Following the Closing Date with respect to a Transaction, and until the related
Depositor takes the steps necessary to suspend its obligation to file Exchange
Act Reports with respect to the SPV under Sections 13 and 15(d) of the Exchange
Act,

 
 
(i)
if the Counterparty provided Company Financial Information to the related
Depositor for the Prospectus Supplement, within 5 Business Days of the release
of any updated financial data, the Counterparty shall (1) provide current
Company Financial Information (including Company Financial Information of any
Counterparty Guarantor) as required under Item 1115(b) of Regulation AB to the
related Depositor in an EDGAR-compatible form (if not incorporated by reference)
and hereby authorizes the related Depositor to incorporate by reference the
financial data required by Item 1115(b)(2) of Regulation AB, and (2) if
applicable, cause its accountants (and, if applicable, the accountants of any
Counterparty Guarantor) to issue their consent to filing or incorporation by
reference of such financial statements in the Exchange Act Reports of the SPV;
and

 
 
(ii)
if the related Depositor requests Company Financial Information from the
Counterparty, for the purpose of compliance with Item 1115(b) of Regulation AB
following the Closing Date, the Counterparty shall upon five Business Days
written notice either (A), (1) provide current Company Financial Information
(including Company Financial Information of any Counterparty Guarantor) as
required under Item 1115(b) of Regulation AB to the related Depositor in an
EDGAR-compatible form (if not incorporated by reference) and hereby authorizes
the related Depositor to incorporate by reference the financial data required by
Item 1115(b)(2) of Regulation AB, (2) if applicable, cause its accountants (and,
if applicable, the accountants of any Counterparty Guarantor) to issue their
consent to filing or incorporation by reference of such financial statements in
the Exchange Act Reports of the SPV and (3) within 5 Business Days of the
release of any updated financial data, provide current Company Financial
Information (including Company Financial Information of any Counterparty
Guarantor) as required under Item 1115(b) of Regulation AB to the related
Depositor in an EDGAR-compatible form and if applicable, cause its accountants
(and, if applicable, the accountants of any Counterparty Guarantor) to issue
their consent to filing or incorporation by

 
 
 
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reference of such financial statements in the Exchange Act Reports of the SPV or
(B) assign the Derivative Agreement as provided below.

 
Section 3.
Representations and Warranties and Covenants of the Counterparty.

 
 
(a)
The Counterparty represents and warrants to the related Depositor, as of the
date on which information is first provided to the related Depositor under
Section 2(a)(ii), Section 2(b)(ii) or Section 2(b)(iii)(A), that, except as
disclosed in writing the related Depositor prior to such date:

 
 
(i)
Each of the Counterparty, and, if applicable, any Company Guarantor is required
to file reports with the Commission pursuant to section 13(a) or 15(d) of the
Exchange Act.

 
 
(ii)
Each of the Counterparty, and, if applicable, any Company Guarantor has filed
all reports and other materials required to be filed by such requirements during
the preceding 12 months (or such shorter period that such party was required to
file such reports and materials).

 
 
(iii)
Each of the reports filed by the Counterparty and, if applicable, any Company
Guarantor include (or properly incorporate by reference) the financial
statements of the Counterparty or, if applicable, such Company Guarantor.

 
 
(iv)
The accountants who certify the financial statements and supporting schedules
included in the Company Financial Information (including Company Financial
Information of any Counterparty Guarantor) (if applicable) are independent
registered public accountants as required by the Securities Act.

 
 
(v)
If applicable, with respect to the Counterparty and each Counterparty Guarantor,
either (I) the financial statements included in the Company Financial
Information present fairly the consolidated financial position of the
Counterparty or such Counterparty Guarantor, as applicable and its consolidated
subsidiaries as at the dates indicated and the consolidated results of their
operations and cash flows for the periods specified; except as otherwise stated
in the Company Financial Information, said financial statements have been
prepared in conformity with generally accepted accounting principles (“GAAP”)
applied on a consistent basis; and the supporting schedules included in the
Company Financial Information present fairly in accordance with GAAP the
information required to be stated therein or (II) if the Counterparty or
Counterparty Guarantor has adopted International Financial Reporting Standards
and International Accounting Standards (collectively “IFRS”) for the purpose of
preparing its financial statements, the Company Financial Information present
fairly the consolidated financial position of the Counterparty or such
Counterparty Guarantor, as applicable and its consolidated subsidiaries as

 
 
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at the dates indicated and the consolidated results of their operations and cash
flows for the periods specified; except as otherwise stated in the Company
Financial Information, said financial statements have been prepared in
conformity with IFRS applied on a consistent basis; and the supporting schedules
included in the Company Financial Information present fairly in accordance with
IFRS the information required to be stated therein and such Company Financial
Information has been reconciled with GAAP.

 
 
(vi)
The selected financial data and summary financial information included in the
Company Financial Information present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited financial
statements of the Counterparty.

 
 
(vii)
The Company Financial Information and other Company Information included or
incorporated by reference in the Registration Statement (including through
filing on an Exchange Act Report), at the time they were or hereafter are filed
with the Commission, complied in all respects with the requirements of Item
1115(b) of Regulation AB (in the case of the Company Financial Information) and,
did not and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.

 
 
(b)
If the Counterparty or a Counterparty Guarantor has provided Company Financial
Information that is incorporated by reference into the Registration Statement of
the related Depositor, the Counterparty or such Counterparty Guarantor, so long
as the related Depositor is required to file Exchange Act Reports with respect
to the SPV, will file promptly all documents required to be filed with the
Commission pursuant to Section 13 or 14 of the Exchange Act. If permitted by the
Exchange Act, the related Depositor will take the steps necessary to suspend its
obligation to file Exchange Act Reports, with respect to the SPV, under Sections
13 and 15(d) of the Exchange Act.

 
 
(c)
If at any time the representations and warranties set forth in 3(a)(i) through
(iii) are no longer true and correct, the Counterparty or the Counterparty
Guarantor, as applicable, shall provide notice to the related Depositor, and if
any Company Financial Information is required to be included in the Registration
Statement, or the Exchange Act Reports of the SPV, will provide to the related
Depositor such Company Financial Information in EDGAR-compatible format no later
than the 20th calendar day of the month in which any of the representations or
warranties in Section 3(a)(i) through (iii) ceased to be correct.

 
 
(d)
The Counterparty agrees that the terms of this Agreement shall be incorporated
by reference into any Derivative Agreement so that each SPV who is a beneficiary
of

 
 
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a Derivative Agreement shall be an express third party beneficiary of this
Agreement.

 
Section 4.
Indemnification; Remedies

 
 
(a)
Each of the Counterparty and any Counterparty Guarantor shall indemnify IndyMac
Bank and the related Depositor, each person responsible for the preparation,
execution or filing of any report required to be filed with the Commission with
respect to such SPV, or for execution of a certification pursuant to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act; each broker dealer acting as
underwriter, each person who controls any of such parties (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act); and the
respective present and former directors, officers, employees and agents of each
of the foregoing, and shall hold each of them harmless from and against any
losses, damages, penalties, fines, forfeitures, legal fees and expenses and
related costs, judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon:

 
 
(i)
(A) any untrue statement of a material fact contained or alleged to be contained
in any information, report, accountants’ consent or other material provided in
written or electronic form under Section 2 by or on behalf of the Counterparty
or any Counterparty Guarantor (collectively, the “Company Information”), or
(B) the omission or alleged omission to state in the Company Information a
material fact required to be stated in the Company Information or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading;

 
 
(ii)
any failure by the Counterparty or any Counterparty Guarantor to deliver any
information, report, certification, accountants’ consent or other material or to
assign the Derivative Agreement when and as required under Section 2; or

 
 
(iii)
any breach by the Counterparty or any Counterparty Guarantor of a representation
or warranty set forth in Section 3(a) and made as of a date prior to the Closing
Date, to the extent that such breach is not cured by the Closing Date, or any
breach by the Counterparty or any Counterparty Guarantor of a representation or
warranty pursuant to Section 3 to the extent made as of a date subsequent to the
Closing Date.

 
In the case of any failure or such Counterparty Guarantor of performance
described in clause (a)(ii) of this Section, the Counterparty shall promptly
reimburse the related Depositor and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission with
respect to such SPV, or for execution of a certification pursuant to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to the SPV, for
all costs reasonably incurred by each such party in order to obtain the
information, report,
 
 
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certification, accountants’ consent or other material not delivered as required
by the Counterparty.
 
 
(b)
(i)
Any failure by the Counterparty or any Counterparty Guarantor to deliver any
information, report, accountants’ consent or other material when and in any case
only as required under Section 2 or any breach by the Counterparty or any
Counterparty Guarantor of a representation or warranty set forth in Section 3
and made as of a date prior to the Closing Date, to the extent that such breach
is not cured by the Closing Date (or in the case of information needed for
purposes of printing the Prospectus Supplement, the date of printing of the
Prospectus Supplement), shall, except as provided in clause (ii) of this
paragraph, immediately and automatically, without notice or grace period,
constitute an Additional Termination Event (as defined in the Master Agreement)
with the Counterparty as the sole Affected Party (as defined in the Master
Agreement) under the Derivative Agreement.  Following such termination, a
termination payment (if any) shall be payable by the applicable party as
determined by the application of Section 6(e)(ii) of the Master Agreement, with
Market Quotation and Second Method being the applicable method for determining
the termination payment (notwithstanding anything in the Derivative Agreement to
the contrary).

 
 
(ii)
If the Counterparty or any Counterparty Guarantor has failed to deliver any
information, report, or accountants’ consent when and as required under Section
2, which continues unremedied for the lesser of ten calendar days after the date
on which such information, report, or accountants’ consent was required to be
delivered or such period in which the applicable Exchange Act Report for which
such information is required can be timely filed (without taking into account
any extensions permitted to be filed), or if the Counterparty has provided
Company Information any breach by the Counterparty or any Counterparty Guarantor
of a representation or warranty pursuant to Section 3 to the extent made as of a
date subsequent to such closing date, and the Counterparty has not, at its own
cost, within the period in which the applicable Exchange Act Report for which
such information is required can be timely filed caused another entity (which
meets any applicable ratings threshold in the Derivative Agreement) to replace
the Counterparty as party to the Derivative Agreement that (i) has signed an
agreement with IndyMac Bank and the Depositors substantially in the form of this
Agreement, (ii) has agreed to deliver any information, report, certification or
accountants’ consent when and as required under Section 2 hereof and (iii) is
approved by the Depositor (which approval shall not be unreasonably withheld)
and any rating agency, if applicable, on terms substantially similar to the
Derivative Agreement, then an Additional Termination Event (as defined in the
Master Agreement) shall have occurred with the Counterparty as the sole Affected
Party.  In the event that an Early Termination Date is designated in connection
with such Additional Termination Event, a 

 
 
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termination payment (if any) shall be payable by the applicable party as of the
Early Termination Date as determined by the application of Section 6(e)(ii) of
the Master Agreement, with Market Quotation and Second Method being the
applicable method for determining the termination payment (notwithstanding
anything in the Derivative Agreement to the contrary).

 
 
(iii)
In the event that the Counterparty or the SPV has found a replacement entity in
accordance with Section 4(b)(ii), the Counterparty shall promptly reimburse the
SPV for all reasonable incidental expenses incurred by the SPV, as such are
incurred, in connection with the termination of the Counterparty as counterparty
and the entry into a new Derivative Agreement. The provisions of this paragraph
shall not limit whatever rights the SPV may have under other provisions of this
Agreement or otherwise, whether in equity or at law, such as an action for
damages, specific performance or injunctive relief.

 
Section 5.
Miscellaneous.

 
 
(a)
Company Financial Information. Notwithstanding anything to the contrary
contained herein, if Regulation AB is amended, or the Commission has issued
interpretive guidance uniformly applicable to registrants of Asset-Backed
Securities allowing the presentation of the financial information required by
Item 1115 of Regulation AB with respect to an affiliate of the Counterparty
rather than the Counterparty and any affiliated entities providing derivatives
to the SPV, "Company Financial Information" shall be deemed to refer to the
financial information of such permitted entity provided the Counterparty has
received written confirmation from IndyMac Bank that no amendment to this
Agreement is necessary. The parties shall reasonably cooperate with respect to
any amendments to this Agreement to reflect such amendment or interpretation.

 
 
(b)
Construction. Throughout this Agreement, as the context requires, (a) the
singular tense and number includes the plural, and the plural tense and number
includes the singular; (b) the past tense includes the present, and the present
tense includes the past; and (c) references to parties, sections, schedules, and
exhibits mean the parties, sections, schedules, and exhibits of and to this
Agreement. The section headings in this Agreement are inserted only as a matter
of convenience, and in no way define, limit, extend, or interpret the scope of
this Agreement or of any particular section.

 
 
(c)
Assignment. None of the parties may assign their rights under this Agreement
without the prior written consent of the other parties. Subject to the
foregoing, this Agreement shall be binding on and inure to the benefit of the
parties and their respective successors and permitted assigns.

 
 
(d)
No Third-Party Benefits Except as Specified. None of the provisions of this
Agreement are intended to benefit, or to be enforceable by, any third-party

 
 
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beneficiaries except the related SPV and any trustee of an SPV or any
Administrator.

 
 
(e)
Governing Law. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York without regard to the conflict
of laws principles thereof.

 
 
(f)
Amendment and Waiver. This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto. No waiver of any provision
of this Agreement or of any rights or obligations of any party under this
Agreement shall be effective unless in writing and signed by the party or
parties waiving compliance, and shall be effective only in the specific instance
and for the specific purpose stated in that writing.

 
 
(g)
Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

 
 
(h)
Additional Documents. Each party hereto agrees to execute any and all further
documents and writings and to perform such other actions which may be or become
reasonably necessary or expedient to effectuate and carry out this Agreement.

 
 
(i)
Severability. Any provision hereof which is prohibited or unenforceable shall be
ineffective only to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof.

 
 
(j)
Integration. This Agreement contains the entire understanding of the parties
with respect to the subject matter hereof. There are no restrictions,
agreements, promises, representations, warranties, covenants or undertakings
with respect to the subject matter hereof other than those expressly set forth
or referred to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter.

 
 
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IN WITNESS WHEREOF, the parties hereto have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
 

  INDYMAC MBS, INC.          
 
By:
/s/  Jill Jacobson       Name:  Jill Jacobson        Title:  Vice President     
     

 

  INDYMAC ABS, INC.          
 
By:
/s/  Jill Jacobson       Name:  Jill Jacobson        Title:  Vice President     
     

 

  INDYMAC BANK, F.S.B.          
 
By:
/s/  Jill Jacobson       Name:  Jill Jacobson        Title:  Vice President     
     

 

  DEUTSCHE BANK AG, NEW YORK BRANCH          
 
By:
/s/ Kathleen Yohe       Name:   Kathleen Yohe       Title:     Vice President  
       

 

       
 
By:
/s/ Matthew Riba       Name:   Matthew Riba       Title:     Legal Counsel      
   

 

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