EXHIBIT 10.2
 
The 1115 Agreement.
 
 
 

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Item 1115 Agreement dated as of March 7, 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 Bear Stearns Financial Products Inc., 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 “SIT”).
 
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 of the registrant.
 
GAAP: As defined in Section 3(a)(ii).
 
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.
 
Free Writing Prospectus: The free writing prospectus dated March 7, 2006.
 
Master Agreement: The ISDA Master Agreement assumed to apply to the Derivative
Agreement pursuant to its terms.
 
 
 

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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 Free Writing Prospectus and 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;

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

 
 
(D)
a description of any affiliation or relationship (as set forth in Item 1119)
between the Counterparty and any of the following parties:

 
 
(1)
IndyMac Bank (or any other sponsor identified to the Counterparty by IndyMac
Bank);

 
 
(2)
the related Depositor (as identified to the Counterparty by IndyMac Bank);

 
 
(3)
the SPV;

 
 
(4)
IndyMac Bank (or any other servicer or master servicer identified to the
Counterparty by IndyMac Bank);

 
 
(5)
Deutsche Bank National Trust Company (or any other trustee identified to the
Counterparty by IndyMac Bank);

 
 
 

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(6)
any originator identified to the Counterparty by IndyMac Bank;

 
 
(7)
any enhancement or support provider identified to the Counterparty by IndyMac
Bank; and

 
 
(8)
any other material transaction party identified to the Counterparty by IndyMac
Bank.

 
 
(ii)
if requested by the related Depositor for the purpose of compliance with Item
1115(b) with respect to a Transaction, 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 (or any entity that consolidates the Counterparty) and any
affiliated entities providing derivative instruments to the SPV (the “Company
Financial Information”), in a form appropriate for use in the Free Writing
Prospectus, Prospectus Supplement and in an EDGAR-compatible form and

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

 
 
(b)
Following the Closing Date with respect to a Transaction,

 
 
(i)
no later than the 25th calendar day of each month, the Counterparty shall (1)
notify the related Depositor in writing of any affiliations or relationships
that develop following the Closing Date between the Counterparty and any of the
parties specified in Section 2(a)(i)(D) (and any other parties identified in
writing by the related Depositor) and (2) provide to the related Depositor a
description of such proceedings, affiliations or relationships as described in
Section 2(b)(i)(1);

 
 
(ii)
if the Counterparty provided Company Financial Information to the related
Depositor for the Free Writing Prospectus and/or the Prospectus Supplement,
within 5 Business Days of the release of any updated financial data, the
Counterparty shall (1) provide current Company Financial Information as required
under Item 1115(b) of Regulation AB to the related Depositor in an
EDGAR-compatible form, and (2) if applicable, cause its accountants to issue
their consent to filing or incorporation by reference of such financial
statements in the Exchange Act Reports of the SPV; and

 
 
(iii)
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

 
 
 
 

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Financial Information as required under Item 1115(b) of Regulation AB to the
related Depositor in an EDGAR-compatible form, (2) if applicable, cause its
accountants 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 as required under Item 1115(b) of Regulation AB to
the related Depositor in an EDGAR-compatible form and if applicable, cause its
accountants to issue their consent to filing or incorporation by 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)
The accountants who certify the financial statements and supporting schedules
included in the Company Financial Information (if applicable) are independent
registered public accountants as required by the Securities Act.

 
 
(ii)
If applicable, the financial statements included in the Company Financial
Information present fairly the consolidated financial position of the
Counterparty (or the entity that consolidates the Counterparty) and its
consolidated subsidiaries as of 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. 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.

 
 
(iii)
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 material 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

 
 
 

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

 
Section 4.
Indemnification; Remedies

 
 
(a)
The Counterparty 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
(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)
[reserved]; or

 
 
(iii)
any breach by the Counterparty 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
of a representation or warranty pursuant to Section 3 to the extent made as of a
date subsequent to the Closing Date.

 
 
(b)
(i)
Any failure by the Counterparty 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 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 Free Writing Prospectus and the Prospectus
Supplement, the date of

 
 
 

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printing of the Free Writing Prospectus or Prospectus Supplement, as
applicable), or any breach by the Counterparty of a representation or warranty
pursuant to Section 3 to the extent made as of a date subsequent to such closing
date, 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 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), 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, either (A) 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, or (B) post collateral
satisfactory to Bear Stearns Financial Products Inc. and the Depositor in an
amount sufficient to reduce the aggregate significance percentage to 5% in the
case that financials have been requested for the purpose of compliance with Item
1115(b)(1) and to 15% in the case that financials have been requested for the
purpose of compliance with Item 1115(b)(2), then an Additional Termination Event
(as defined in the Master Agreement) shall have occurred with the Counterparty
as the sole Affected Party. 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).

 
 
 

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(iii)
In the event that the Counterparty or the SPV has found a replacement entity in
accordance with Section 2(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)
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.

 
 
(b)
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.

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

 
 
(d)
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.

 
 
(e)
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.

 
 
(f)
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.

 
 
 

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(g)
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
necessary or expedient to effectuate and carry out this Agreement.

 
 
(h)
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.

 
 
(i)
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/       Name: Andy Sciandra       
Title:   Senior Vice President
Secondary Marketing
         

 
 

  INDYMAC ABS, INC.          
 
By:
/s/       Name: Andy Sciandra       
Title:   Senior Vice President
Secondary Marketing
         

 
 

  INDYMAC BANK, INC.          
 
By:
/s/       Name: Andy Sciandra       
Title:   Senior Vice President
Secondary Marketing
         

 
 

  BEAR STEARNS FINANCIAL PRODUCTS INC.          
 
By:
/s/       Name:      
Title:  
         

 
 

  BEAR STEARNS FINANCIAL PRODUCTS INC.          
 
By:
/s/Annie Manevit       Name: Annie Manevit      
Title:   Authorized Signature
Ref No. FXNSC 7962
         

 
 
 

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