EXHIBIT 10.3
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The Item 1115 Agreement.
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).
XXXXX: 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. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or
by the staff of the Commission, or as may be provided by the Commission or its
staff from time to time.
Securities Act: The Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
Section 2. Information to be Provided by the Counterparty.
(a) Prior to printing the related Prospectus Supplement,
(i) the Counterparty shall provide to the related
Depositor such information regarding the
Counterparty, as a derivative instrument
counterparty, as is reasonably requested by the
related Depositor for the purpose of compliance with
Item 1115(a)(1) of Regulation AB. Such information
shall include, at a minimum:
(A) the Counterparty's legal name (and any
d/b/a);
(B) the organizational form of the Counterparty;
and
(C) a description of the general character of
the business of the Counterparty;
(ii) if requested by the related Depositor for the purpose
of compliance with Item 1115(b) with respect to a
Transaction (prior to the related Depositor taking
the steps necessary to suspend its obligation to file
Exchange Act Reports with respect to the SPV under
Sections 13 and 15(d) of the Exchange Act, in
accordance with the requirements of Regulation AB)
the Counterparty shall:
(A) provide the financial data required by Item
1115(b)(1) or (b)(2) of Regulation AB (as
specified by the related Depositor to the
Counterparty) with respect to the
Counterparty, any affiliated entities
providing derivative instruments to the SPV
and any entities guaranteeing the
obligations of the Counterparty or any
affiliate entity providing derivative
instruments to the SPV (a "Counterparty
Guarantor") (the "Company Financial
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Information"), in a form appropriate for use
in the Prospectus Supplement and in an
XXXXX-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 XXXXX-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 XXXXX-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 XXXXX-compatible form and if
applicable, cause its accountants (and, if
applicable, the accountants of any Counterparty
Guarantor) to issue their consent to filing or
incorporation by
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reference of such financial statements in the
Exchange Act Reports of the SPV or (B) assign the
Derivative Agreement as provided below.
Section 3. Representations and Warranties and Covenants of the
Counterparty.
(a) The Counterparty represents and warrants to the related
Depositor, as of the date on which information is first
provided to the related Depositor under Section 2(a)(ii),
Section 2(b)(ii) or Section 2(b)(iii)(A), that, except as
disclosed in writing the related Depositor prior to such date:
(i) Each of the Counterparty, and, if applicable, any
Company Guarantor is required to file reports with
the Commission pursuant to section 13(a) or 15(d) of
the Exchange Act.
(ii) Each of the Counterparty, and, if applicable, any
Company Guarantor has filed all reports and other
materials required to be filed by such requirements
during the preceding 12 months (or such shorter
period that such party was required to file such
reports and materials).
(iii) Each of the reports filed by the Counterparty and, if
applicable, any Company Guarantor include (or
properly incorporate by reference) the financial
statements of the Counterparty or, if applicable,
such Company Guarantor.
(iv) The accountants who certify the financial statements
and supporting schedules included in the Company
Financial Information (including Company Financial
Information of any Counterparty Guarantor) (if
applicable) are independent registered public
accountants as required by the Securities Act.
(v) If applicable, with respect to the Counterparty and
each Counterparty Guarantor, either (I) the financial
statements included in the Company Financial
Information present fairly the consolidated financial
position of the Counterparty or such Counterparty
Guarantor, as applicable and its consolidated
subsidiaries as at the dates indicated and the
consolidated results of their operations and cash
flows for the periods specified; except as otherwise
stated in the Company Financial Information, said
financial statements have been prepared in conformity
with generally accepted accounting principles
("GAAP") applied on a consistent basis; and the
supporting schedules included in the Company
Financial Information present fairly in accordance
with GAAP the information required to be stated
therein or (II) if the Counterparty or Counterparty
Guarantor has adopted International Financial
Reporting Standards and International Accounting
Standards (collectively "IFRS") for the purpose of
preparing its financial statements, the Company
Financial Information present fairly the consolidated
financial position of the Counterparty or such
Counterparty Guarantor, as applicable and its
consolidated subsidiaries as
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at the dates indicated and the consolidated results
of their operations and cash flows for the periods
specified; except as otherwise stated in the Company
Financial Information, said financial statements have
been prepared in conformity with IFRS applied on a
consistent basis; and the supporting schedules
included in the Company Financial Information present
fairly in accordance with IFRS the information
required to be stated therein and such Company
Financial Information has been reconciled with GAAP.
(vi) The selected financial data and summary financial
information included in the Company Financial
Information present fairly the information shown
therein and have been compiled on a basis consistent
with that of the audited financial statements of the
Counterparty.
(vii) The Company Financial Information and other Company
Information included or incorporated by reference in
the Registration Statement (including through filing
on an Exchange Act Report), at the time they were or
hereafter are filed with the Commission, complied in
all respects with the requirements of Item 1115(b) of
Regulation AB (in the case of the Company Financial
Information) and, did not and will not contain an
untrue statement of a material fact or omit to state
a material fact required to be stated therein or
necessary in order to make the statements therein, in
the light of the circumstances under which they were
made, not misleading.
(b) If the Counterparty or a Counterparty Guarantor has provided
Company Financial Information that is incorporated by
reference into the Registration Statement of the related
Depositor, the Counterparty or such Counterparty Guarantor, so
long as the related Depositor is required to file Exchange Act
Reports with respect to the SPV, will file promptly all
documents required to be filed with the Commission pursuant to
Section 13 or 14 of the Exchange Act. If permitted by the
Exchange Act, the related Depositor will take the steps
necessary to suspend its obligation to file Exchange Act
Reports, with respect to the SPV, under Sections 13 and 15(d)
of the Exchange Act.
(c) If at any time the representations and warranties set forth in
3(a)(i) through (iii) are no longer true and correct, the
Counterparty or the Counterparty Guarantor, as applicable,
shall provide notice to the related Depositor, and if any
Company Financial Information is required to be included in
the Registration Statement, or the Exchange Act Reports of the
SPV, will provide to the related Depositor such Company
Financial Information in XXXXX-compatible format no later than
the 20th calendar day of the month in which any of the
representations or warranties in Section 3(a)(i) through (iii)
ceased to be correct.
(d) The Counterparty agrees that the terms of this Agreement shall
be incorporated by reference into any Derivative Agreement so
that each SPV who is a beneficiary of
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a Derivative Agreement shall be an express third party
beneficiary of this Agreement.
Section 4. Indemnification; Remedies
(a) Each of the Counterparty and any Counterparty Guarantor shall
indemnify IndyMac Bank and the related Depositor, each person
responsible for the preparation, execution or filing of any
report required to be filed with the Commission with respect
to such SPV, or for execution of a certification pursuant to
Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act; each
broker dealer acting as underwriter, each person who controls
any of such parties (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act); and the
respective present and former directors, officers, employees
and agents of each of the foregoing, and shall hold each of
them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs,
judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained
or alleged to be contained in any information,
report, accountants' consent or other material
provided in written or electronic form under Section
2 by or on behalf of the Counterparty or any
Counterparty Guarantor (collectively, the "Company
Information"), or (B) the omission or alleged
omission to state in the Company Information a
material fact required to be stated in the Company
Information or necessary in order to make the
statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) any failure by the Counterparty or any Counterparty
Guarantor to deliver any information, report,
certification, accountants' consent or other material
or to assign the Derivative Agreement when and as
required under Section 2; or
(iii) any breach by the Counterparty or any Counterparty
Guarantor of a representation or warranty set forth
in Section 3(a) and made as of a date prior to the
Closing Date, to the extent that such breach is not
cured by the Closing Date, or any breach by the
Counterparty or any Counterparty Guarantor of a
representation or warranty pursuant to Section 3 to
the extent made as of a date subsequent to the
Closing Date.
In the case of any failure or such Counterparty Guarantor of
performance described in clause (a)(ii) of this Section, the
Counterparty shall promptly reimburse the related Depositor
and each Person responsible for the preparation, execution or
filing of any report required to be filed with the Commission
with respect to such SPV, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the
Exchange Act with respect to the SPV, for all costs reasonably
incurred by each such party in order to obtain the
information, report,
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certification, accountants' consent or other material not
delivered as required by the Counterparty.
(b) (i) Any failure by the Counterparty or any Counterparty
Guarantor to deliver any information, report,
accountants' consent or other material when and in
any case only as required under Section 2 or any
breach by the Counterparty or any Counterparty
Guarantor of a representation or warranty set forth
in Section 3 and made as of a date prior to the
Closing Date, to the extent that such breach is not
cured by the Closing Date (or in the case of
information needed for purposes of printing the
Prospectus Supplement, the date of printing of the
Prospectus Supplement), shall, except as provided in
clause (ii) of this paragraph, immediately and
automatically, without notice or grace period,
constitute an Additional Termination Event (as
defined in the Master Agreement) with the
Counterparty as the sole Affected Party (as defined
in the Master Agreement) under the Derivative
Agreement. Following such termination, a termination
payment (if any) shall be payable by the applicable
party as determined by the application of Section
6(e)(ii) of the Master Agreement, with Market
Quotation and Second Method being the applicable
method for determining the termination payment
(notwithstanding anything in the Derivative Agreement
to the contrary).
(ii) If the Counterparty or any Counterparty Guarantor has
failed to deliver any information, report, or
accountants' consent when and as required under
Section 2, which continues unremedied for the lesser
of ten calendar days after the date on which such
information, report, or accountants' consent was
required to be delivered or such period in which the
applicable Exchange Act Report for which such
information is required can be timely filed (without
taking into account any extensions permitted to be
filed), or if the Counterparty has provided Company
Information any breach by the Counterparty or any
Counterparty Guarantor of a representation or
warranty pursuant to Section 3 to the extent made as
of a date subsequent to such closing date, and the
Counterparty has not, at its own cost, within the
period in which the applicable Exchange Act Report
for which such information is required can be timely
filed caused another entity (which meets any
applicable ratings threshold in the Derivative
Agreement) to replace the Counterparty as party to
the Derivative Agreement that (i) has signed an
agreement with IndyMac Bank and the Depositors
substantially in the form of this Agreement, (ii) has
agreed to deliver any information, report,
certification or accountants' consent when and as
required under Section 2 hereof and (iii) is approved
by the Depositor (which approval shall not be
unreasonably withheld) and any rating agency, if
applicable, on terms substantially similar to the
Derivative Agreement, then an Additional Termination
Event (as defined in the Master Agreement) shall have
occurred with the Counterparty as the sole Affected
Party. In the event that an Early Termination Date is
designated in connection with such Additional
Termination Event, a
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termination payment (if any) shall be payable by the
applicable party as of the Early Termination Date as
determined by the application of Section 6(e)(ii) of
the Master Agreement, with Market Quotation and
Second Method being the applicable method for
determining the termination payment (notwithstanding
anything in the Derivative Agreement to the
contrary).
(iii) In the event that the Counterparty or the SPV has
found a replacement entity in accordance with Section
4(b)(ii), the Counterparty shall promptly reimburse
the SPV for all reasonable incidental expenses
incurred by the SPV, as such are incurred, in
connection with the termination of the Counterparty
as counterparty and the entry into a new Derivative
Agreement. The provisions of this paragraph shall not
limit whatever rights the SPV may have under other
provisions of this Agreement or otherwise, whether in
equity or at law, such as an action for damages,
specific performance or injunctive relief.
Section 5. Miscellaneous.
(a) Company Financial Information. Notwithstanding anything to the
contrary contained herein, if Regulation AB is amended, or the
Commission has issued interpretive guidance uniformly
applicable to registrants of Asset-Backed Securities allowing
the presentation of the financial information required by Item
1115 of Regulation AB with respect to an affiliate of the
Counterparty rather than the Counterparty and any affiliated
entities providing derivatives to the SPV, "Company Financial
Information" shall be deemed to refer to the financial
information of such permitted entity provided the Counterparty
has received written confirmation from IndyMac Bank that no
amendment to this Agreement is necessary. The parties shall
reasonably cooperate with respect to any amendments to this
Agreement to reflect such amendment or interpretation.
(b) Construction. Throughout this Agreement, as the context
requires, (a) the singular tense and number includes the
plural, and the plural tense and number includes the singular;
(b) the past tense includes the present, and the present tense
includes the past; and (c) references to parties, sections,
schedules, and exhibits mean the parties, sections, schedules,
and exhibits of and to this Agreement. The section headings in
this Agreement are inserted only as a matter of convenience,
and in no way define, limit, extend, or interpret the scope of
this Agreement or of any particular section.
(c) Assignment. None of the parties may assign their rights under
this Agreement without the prior written consent of the other
parties. Subject to the foregoing, this Agreement shall be
binding on and inure to the benefit of the parties and their
respective successors and permitted assigns.
(d) No Third-Party Benefits Except as Specified. None of the
provisions of this Agreement are intended to benefit, or to be
enforceable by, any third-party
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beneficiaries except the related SPV and any trustee of an SPV
or any Administrator.
(e) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of
New York without regard to the conflict of laws principles
thereof.
(f) Amendment and Waiver. This Agreement may not be modified or
amended except by an instrument in writing signed by the
parties hereto. No waiver of any provision of this Agreement
or of any rights or obligations of any party under this
Agreement shall be effective unless in writing and signed by
the party or parties waiving compliance, and shall be
effective only in the specific instance and for the specific
purpose stated in that writing.
(g) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
(h) Additional Documents. Each party hereto agrees to execute any
and all further documents and writings and to perform such
other actions which may be or become reasonably necessary or
expedient to effectuate and carry out this Agreement.
(i) Severability. Any provision hereof which is prohibited or
unenforceable shall be ineffective only to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof.
(j) Integration. This Agreement contains the entire understanding
of the parties with respect to the subject matter hereof.
There are no restrictions, agreements, promises,
representations, warranties, covenants or undertakings with
respect to the subject matter hereof other than those
expressly set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings between the
parties with respect to its subject matter.
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IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
INDYMAC MBS, INC.
By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Title: Vice President
INDYMAC ABS, INC.
By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Title: Vice President
INDYMAC BANK, F.S.B.
By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Title: Vice President
DEUTSCHE BANK AG, NEW YORK BRANCH
By: /s/ Xxxxxxxx Xxxx
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Name: Xxxxxxxx Xxxx
Title: Vice President
By: /s/ Xxxxxxx Xxxx
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Name: Xxxxxxx Xxxx
Title: Legal Counsel
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