Document:

efc8-0027_ex103.htm

    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).

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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
                

            

    

     

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
       

      
        	
                 

              	
                 

              	
                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
                

            

    

     

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
       

      
        	
                 

              	
                 

              	
                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
                

            

    

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
       

      
        	
                 

              	
                 

              	
                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, 

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    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 

            

    

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
       

      
        	
                 

              	
                 

              	
                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. 

            

    

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

     

    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	 
	 	 	 	 

          

        

      

    

     

    

    
      
        
        

      

      
        10Control No.
 	
                  Number of Rights Issued:

       

      Maximum Eligible Shares:
 
	
                   
 	
       
 

      

      FORM OF

      RIGHTS CERTIFICATE

      PATRICK INDUSTRIES, INC.

      NON-TRANSFERABLE SUBSCRIPTION RIGHTS FOR COMMON STOCK

      THE OFFER EXPIRES AT 5:00 P.M., NEW YORK CITY TIME, ON [           ], 2008 (unless extended)

       

      IN ORDER TO EXERCISE YOUR RIGHTS, YOU MUST COMPLETE THIS CARD AND RETURN IT TO THE SUBSCRIPTION AGENT.

      Dear Shareholder:

      You are entitled to exercise the subscription rights (the “Rights”) issued to you as of [         ], 2008, the record date for the offer, to subscribe for the number of shares of common stock, without par value (the “Common Stock”), of Patrick Industries, Inc. (“Patrick”) shown on this Rights Certificate upon the terms and conditions specified in the Patrick prospectus dated [            ], 2008 (the “Prospectus”). A copy of the Prospectus is included in the materials sent to you with this Rights Certificate. As a shareholder on the record date, you are receiving one Right for each share of Common Stock owned by you as of the close of business on the record date. Each Right allows you to subscribe for 0.222131 of a share of Common Stock at the cash price of $11.25 per whole share (the “Subscription Price”). If the number of Rights
      you receive would otherwise permit you to purchase a fraction of a share, the number of shares you may purchase will be rounded down to the nearest whole share. 

      In order to exercise your Rights or the Rights of the beneficial owners on whose behalf you are acting, you must present to National City Bank, the subscription agent (the “Subscription Agent”), by 5:00 p.m., New York City time, on       [            ], 2008 (unless extended, the “Expiration Date”), either (i) a properly completed and executed Rights Certificate, with any required signature guarantees, and full payment in an amount equal to the number of shares of Common Stock subscribed for multiplied by the Subscription Price of $11.25, or (ii) a Notice of Guaranteed Delivery, guaranteeing delivery by 5:00 p.m. on the third business day after the Expiration Date of (a) a properly completed and executed Rights Certificate, with any required signature guarantees; and (b) full payment in an amount equal to the number of shares of Common Stock subscribed for multiplied by
      the Subscription Price of $11.25. The Notice of Guaranteed Delivery must be received by 5:00 p.m., New York City time, on the Expiration Date. See “The Rights Offering – Method of Subscription – Exercise of Rights” and “The Rights Offering – Guaranteed Delivery Procedures” in the Prospectus for more information.

       

      Your payment must be made in U.S. dollars for the full number of shares of Common Stock subscribed for by (i) uncertified check, bank draft or certified check drawn on personal or business accounts upon a U.S. bank made payable to “National City Bank;” (ii) cashier’s check drawn upon a U.S. bank or express money order made payable to “National City Bank;” or (iii) wire transfer of available funds to the account maintained by the Subscription Agent for the purpose of the offer (see wiring transfer instructions on the following page). Your payment will be considered received by the Subscription Agent only upon (i) clearance of any uncertified check deposited by the Subscription Agent; (ii) receipt by the Subscription Agent of any certified check, cashier’s check or bank draft drawn upon a U.S. bank, any express money order or any wire transfer; or (iii) receipt of
      collected funds in the Subscription Agent’s account.

       

      The Subscription Agent will send you a confirmation (or, if you own your shares through a depository or nominee, to such depository or nominee) showing (i) the number of shares of Common Stock acquired pursuant to the subscription; (ii) the aggregate purchase price for the shares of Common Stock acquired pursuant to the subscription; and (iii) any excess payment to be refunded to you. Any excess payment to be refunded will be mailed as soon as practicable after the Expiration Date.

      Shareholders whose shares are held of record by Cede & Co. or by any other depository or nominee on their behalf or their broker-dealers’ behalf will have any shares acquired during the subscription period credited to the account of Cede & Co. or other depository or nominee. With respect to all other shareholders, stock certificates for all shares of Common Stock acquired will be mailed as soon as practicable after the Expiration Date.

       

      
      

      

      

      To subscribe for your subscription shares, please complete line “A” on the card below.

      

      	
                  SAMPLE CALCULATION:
  
	
                  One Right entitles you to purchase 0.222131 of a share of our Common Stock. You must hold at least 5 Rights to purchase one share of Common Stock. By way of illustration, if you hold 28 Rights, you may purchase 6 whole shares of Common Stock. You multiply 28 Rights times 0.222131 and round down to the nearest whole number. Fractional shares will not be issued. 
 
	
                  28
 	
                  x  0.222131
 	
                  =  6.22 

      (Shares of Common Stock)

       
 	
      6
 	
                  x
 	
                  $11.25
 	
                  =
 	
      $67.25
 
	
                  (No. of Rights)
 	
                   
 	
                  (No. of Shares for Which You May  Subscribe After Rounding Down)
 	
                  (Subscription Price)
 	
                  (Payment to be Remitted)
 
	
                   
 	
                   
 	
       
 	
                   
 	
                   
 	
                   
 	
                   
 	
                   
 

      

      METHOD OF EXERCISE OF RIGHTS:

      Please send this completed and executed Rights Certificate and full payment for the shares of Common Stock subscribed for to:

       

      

      	
                  By First Class Mail Only:
 National City Bank
 c/o The Colbent Corp.
 P.O. Box 859208
 Braintree, MA 02185-9208
 	
                  By Hand, Express Mail, or Overnight Courier:
 National City Bank
 c/o The Colbent Corp.
 161 Bay State Drive
 Braintree, MA 02184
 	
                  You may confirm receipt by calling
 1-800-622-6757 or by sending an email to shareholder.inquiries@nationalcity.com. Delivery to an address other than one of the addresses listed to the left will not constitute valid delivery.
 

      

      PLEASE FILL IN ALL APPLICABLE INFORMATION.

      

      	
                  A.
 	
                  Subscription:
 	
                   
 	
                  x 0.222131  =
 	
                  _________                __________              x
 	
                  $11.25            =
 	
                  $
 	
                   

	
                   
 	
                   
 	
                  (Rights Exercised)
 	
                  (Shares of                  (No. of Whole

      Common                   Shares Rounded

      Stock)                     Down) 
 	
                   
 	
                   
 	
                  (Payment Remitted)
 	
                   

	
                   
 	
                   
 	
                   
 	
                   
 	
                   
 	
                   
 	
                   
 	
                   
 	
                   

	
                   
 	
                  Form of Payment:
 	
                   
 	
                   
 	
                   
 	
                   
 	
                   
 	
                   
 	
                   

	
                  ⁪
 	
                  Uncertified check, bank draft or certified check drawn on personal or business accounts upon a U.S. bank made payable to “National City Bank.”
 	
                   
 	
                   
 	
                   
 	
                   

	
                  ⁪
 	
                  Cashier’s check drawn upon a U.S. bank or express money order made payable to “National City Bank.” 
 	
                   
 	
                   

	
                  ⁪
 	
                  Wire transfer of funds to the account maintained by the Subscription Agent for the rights offering as follows:
 	
                   
 	
                   
 	
                   
 	
                   

	
                   
 	
                  Wire Instructions:

      National City Bank/Cleve

      ABA No. 041000124

      Beneficiary Name: Trust Department

      Beneficiary Account No. 2171150005490

      For further credit to:

      Patrick Industries, Inc.

      Account No. 0180R178007

      DDA No. 534902308 
 	
                   

       
 	
                   
 	
                   
 	
                   

	
                   
 	
                   
 
	
                  SECTION 1. TO SUBSCRIBE:  I acknowledge that I have received the Prospectus for the offer, and I hereby irrevocably subscribe for the number of shares of Common Stock indicated above on the terms and conditions set forth in the Prospectus. I hereby agree that if I fail to pay for the shares of Common Stock for which I have subscribed, Patrick may exercise its legal remedies against me.

       

      __________________________________________________
   Signature(s) of Subscriber(s)

       

      If signature is by trustee(s), executor(s), administrator(s), guardian(s), attorneys(s)-in-fact, agent(s), officer(s) or a corporation or another acting in a fiduciary or representative capacity, please provide the following information:

       

      __________________________________________________
   Name

       

      __________________________________________________
   Capacity (Full Title)

       

      __________________________________________________
   Taxpayer ID # or Social Security #

       
 	
                   

      __________________________________________________

      __________________________________________________
   (Address for delivery of shares if other than shown on front)

      If permanent change of address, check here ⁪

      Please give
      your telephone number:  (     ) ____________________

       

       

      IMPORTANT: YOU MUST HAVE YOUR SIGNATURE GUARANTEED IF YOU WISH TO HAVE YOUR SHARES DELIVERED TO AN ADDRESS OTHER THAN YOUR OWN. 

       

      The signature(s) must correspond in every particular, without alteration, with the name(s) as printed on your Rights Certificate. Your signature must be guaranteed by an Eligible Guarantor
      Institution as that term is defined under Rule 17Ad-15 of the Securities Exchange Act of 1934, which may include:

      a)   a commercial bank or trust company, or
 b)   a member firm of a domestic stock exchange, or
 c)   a savings bank or credit union

       

      Signature Guaranteed_______________________________________________
                                           
             (Name of Bank or Firm)

       

      By__________________________________________________
                            (Signature of Officer and Title)

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