efc7-1889_5899864v4ex103.htm


    Exhibit
      10.3

     

        Item
      1115
      Agreement dated as of June 29, 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 Merrill Lynch Capital
      Services, 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
“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 either 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).

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

            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; 

     

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

     

    (D)            
      a description of any affiliation or material ownership
      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);

    
      
        
        

      

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

     

    (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 (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 either
      the Counterparty or any affiliate entity providing derivative instruments to
      the
      SPV (a “Counterparty Guarantor”) (the “Company Financial Information”), in a
      form appropriate for use in the Prospectus Supplement and in an EDGAR-compatible
      form; and 

     

    (B)             
      if applicable, cause its accountants or the accountants of the
      Counterparty Guarantor 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, 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 requested by the related Depositor, then no
      later
      than March 1 of each calendar year, the Counterparty shall (1) notify the
      related Depositor in writing of any affiliations or material
      ownership 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 affiliations or material ownership
      relationships as described in Section 2(b)(i)(1);

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (ii)              
      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 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 (or, if applicable, the accountants
      of any Counterparty Guarantor) to issue their consent to filing 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
      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 (or, 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 as required under Item 1115 (b) of Regulation AB
      to the related Depositor in an EDGAR-compatible form and if applicable, cause
      its accountants (or, 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 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 are
      independent registered public accountants as required by the Securities
      Act.

     

    (ii)               
      If applicable, with respect to the Counterparty
      or
      the Counterparty Guarantor, as applicable, 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 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.

    
      
        
        

      

      
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    (iii)            
      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 or the Counterparty
      Guarantor, as applicable. 

     

    (iv)            
      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)            
      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 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:

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (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; or

     

    (ii)             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 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 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
      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 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).

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (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.

    
      
        
        

      

      
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    (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 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

     

                                                   
      MERRILL LYNCH CAPITAL SERVICES

     

    
By: 
/s/
      Angelina
      Lopes                                              

         Name:  
Angelina Lopes
        
Title:     Authorized Signatory 

     

    ACKNOWLEDGED AND
      AGREED

    (solely with respect to
      Section 4(b)):

    MERRILL LYNCH & CO.,
      INC.

     

     

     

    
By: 
/s/
      Patricia
      Kropiewnicki                                    

         Name:  
Patricia Kropiewnicki
        
Title:     Designated Signatory

     

    10