Exhibit 99.3
-------------
| EXECUTION |
| |
-------------
ITEM 1115 AGREEMENT
Item 1115 Agreement (this "Agreement"), dated as of November 15, 2006, among
IndyMac Bank F.S.B. ("Sponsor"), IndyMac ABS, Inc, (a "Depositor"), IndyMac
MBS, Inc. (a "Depositor") and Bear Xxxxxxx Financial Products Inc. (the
"Derivative Provider").
RECITALS
WHEREAS, the Depositors have each filed a Registration Statement
on Form S-3 (each, a "Registration Statement") with the U.S. 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 "Issuing Entity");
WHEREAS, from time to time, on or prior to the closing date of a
securitization (the "Closing Date") pursuant to which Securities are offered
(each, a "Securitization"), the Derivative Provider may enter into certain
derivative agreements with the Issuing Entity (or a trustee or securities or
swap administrator or other person acting in a similar capacity in connection
with such Securitization (each, an "Administrator")), or the Derivative
Provider may enter into certain derivative agreements with Sponsor or an
affiliate of the Sponsor and such derivative agreements are assigned to the
Issuing Entity or Administrator (each, in either case, a "Derivative
Agreement"), in each case with respect to such Securitization;
WHEREAS, the Derivative Provider agrees and acknowledges that the
Sponsor and Depositors are required under Regulation AB (as defined herein) to
disclose certain financial data and/or financial statements with respect to
the Derivative Provider, depending on the applicable "significance percentage"
for each Derivative Agreement as calculated from time to time in accordance
with Item 1115 of Regulation AB;
WHEREAS, the Sponsor, on behalf of itself and each Issuing Entity
through which it effects Securitizations, the Depositors and the Derivative
Provider, desire to set forth certain rights and obligations with regard to
financial data and/or financial statements which the Sponsor and Depositors
and other information which the Sponsor and Depositors may be required to
disclose in accordance with Regulation AB (as defined herein) and certain
related matters.
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.
Additional Termination Event: With respect to any Derivative
Agreement, as defined in the related Master Agreement.
Affected Party: With respect to any Derivative Agreement, as
defined in the related Master Agreement.
Company Information: As defined in Addendum A.
Company Financial Information: With respect to each
Securitization, the financial data described in Item 1115(b)(1) of Regulation
AB or the financial statements described in Item 1115(b)(2) of
Regulation AB, in either case with respect to the Derivative Provider
providing derivative instruments to the related Issuing Entity and/or
Administrator.
GAAP: As defined in Section 3(a)(ii).
Exchange Act: The Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
Exchange Act Reports: With respect to an Issuing Entity, all
Distribution Reports on Form 10-D, Current Reports on Form 8-K and Annual
Reports on Form 10-K and any amendments thereto, required to be filed by a
Depositor with respect to such Issuing Entity pursuant to the Exchange Act.
Free Writing Prospectus: With respect to each Securitization, the
free writing prospectus or prospectuses prepared in connection with the public
offering and sale of the related Securities and used to price such Securities.
Master Agreement: With respect to any Derivative Agreement, the
ISDA Master Agreement referenced in such Derivative Agreement, together with
any Schedule, Credit Support Annex and Confirmations forming a part thereof or
incorporated therein, or, if no such ISDA Master Agreement exists, the ISDA
Master Agreement deemed to apply to such Derivative Agreement pursuant to its
terms, together with any Schedule, Credit Support Annex and Confirmations
deemed to form a part thereof or to be incorporated therein.
Prospectus Supplement: With respect to each Securitization, 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 Derivative Provider.
(a) Prior to printing the Free Writing Prospectus and/or Prospectus
Supplement relating to each Securitization, the Derivative
Provider, at its own expense, shall:
(i) provide to the Depositor the following information and such
other information as is reasonably requested by the
Depositor for the purpose of compliance with Item 1115(a)(1)
of Regulation AB or the Securities Act in respect of such
Securitization:
(A) the Derivative Provider's legal name (and any d/b/a),
(B) the organizational form of the Derivative Provider,
2
(C) a description of the general character of the business
of the Derivative Provider,
(D) a description of any affiliation or relationship (as
set forth in Item 1119) between the Derivative
Provider and any of the following parties:
(1) any servicer that is not affiliated with the
Sponsor (or other person acting in a similar
capacity) identified as such in the related Free
Writing Prospectus and/or Prospectus Supplement,
(2) the trustee (or other person acting in a similar
capacity) identified as such in the related Free
Writing Prospectus and/or Prospectus Supplement,
(3) any originator identified as such in the related
Free Writing Prospectus and/or Prospectus
Supplement,
(4) any enhancement or support provider identified
to the Derivative Provider by the Sponsor, and
(5) any other material Securitization party
identified to the Derivative Provider by the
Sponsor;
(E) information relating to any material legal or
governmental proceedings that would affect the
Derivative Provider's ability to perform its
obligations under the related Derivative Agreement;
and
(F) any other information that is material or otherwise
required for the purpose of compliance (as determined
in good faith by the Depositor its sole discretion and
acting in a commercially reasonable manner) with the
Securities Act; and
(ii) if reasonably requested by the Depositor for the purpose of
compliance with Item 1115(b) of Regulation AB with respect
to such Securitization, provide to the Depositor the Company
Financial Information described in Item 1115(b)(1) of
Regulation AB or Item 1115(b)(2) of Regulation AB (as
specified by the Depositor).
(b) Following the Closing Date with respect to each Securitization:
(i) for so long as the Depositor is required to file Exchange
Act Reports in respect of the related Issuing Entity (which
the parties hereto may assume shall be for the calendar year
following the closing date of the related Securitization,
unless otherwise notified in writing by the Sponsor), the
Derivative Provider, at its own expense, shall no later than
the 25th calendar day of each month, notify the Depositor in
writing of any known material affiliations or relationships
that develop following the Closing Date between the
Derivative Provider and any of the parties specified in
Section 2(a)(i)(D) (and any other parties identified in
writing by the Depositor), and provide to the Depositor a
description of such affiliations or relationships;
3
(ii) if, on any Business Day for so long as the Depositor is
required to file Exchange Act Reports in respect of the
related Issuing Entity, the Depositor provides written
notice to the Derivative Provider that the "significance
percentage" for any Derivative Agreement relating to such
Securitization (calculated separately or in the aggregate
with other Derivative Agreements for such Securitization,
such aggregation as determined by the Depositor in its sole
discretion), is (x) 10% or more (but less than 20%) or (y)
20% or more, in each case based on a reasonable good-faith
determination by the Depositor of the "significance
percentage" in accordance with Item 1115 of Regulation AB
(the providing of such notice, a "Derivative Disclosure
Event"), the Derivative Provider, at its own expense, shall:
(A) provide to the Depositor the Company Financial
Information described in (x) Item 1115(b)(1) of
Regulation AB or (y) Item 1115(b)(2) of Regulation AB,
respectively,
(B) with respect to each Derivative Agreement entered into
in connection with such Securitization, cause another
entity to replace the Derivative Provider as a party
to such Derivative Agreement or, if such replacement
cannot be effected, to enter into a replacement
derivative agreement on terms substantially identical
to such Derivative Agreement (as determined by the
Depositor in its sole discretion), which entity (1)
meets or exceeds (or a guarantor, as applicable, for
such entity meets or exceeds) any rating agency
criteria set forth in, or otherwise applicable to,
such Derivative Agreement (as determined by the
Depositor in its sole discretion), (2) has entered
into an agreement with Sponsor and Depositor
substantially in the form of this Agreement, (3) has
agreed to comply with the immediately preceding clause
(A) and Section 2(b)(iii), and (4) has been approved
by the Depositor (which approval shall not be
unreasonably withheld),
(C) obtain a guaranty of the Derivative Provider's
obligations under the Derivative Agreement from an
affiliate of the Derivative Provider, which affiliate
(1) meets or exceeds any rating agency criteria set
forth in, or otherwise applicable to, such Derivative
Agreement (as determined by the Depositor in its sole
discretion), (2) has entered into an agreement with
the Sponsor and Depositor substantially in the form of
this Agreement, (3) has agreed to comply with the
immediately preceding clause (A) and Section 2(b)(iii)
such that the information provided in respect of such
affiliate will satisfy any requirements under Item
1115 of Regulation AB that are applicable to the
Derivative Provider (as determined by the Depositor in
its sole discretion), and (4) has been approved by the
Depositor (which approval shall not be unreasonably
withheld), or
(D) post collateral in an amount sufficient to reduce the
"significance percentage" for purposes of Item 1115 of
Regulation AB with respect to any Derivative Agreement
relating to such Securitization, calculated separately
or in the aggregate with other Derivative Agreements
for such Securitization (such aggregation and
calculation of the "significance percentage" as
determined by the Depositor in its sole discretion)
(1) to
4
5% if the Depositor has notified the Derivative
Provider that the "significance percentage" is 10% or
more (but less than 20%) or (2) to 15% if the
Depositor has notified the Derivative Provider that
the "significance percentage" is 20% or more; and
(iii) for so long (A) as the Depositor is required to file
Exchange Act Reports in respect of the related Issuing
Entity (which the parties hereto may assume shall be for the
calendar year following the closing date of the related
Securitization, unless otherwise notified in writing by the
Sponsor) and (B) the "significance percentage" for any
Derivative Agreement relating to such Securitization
(calculated separately or in the aggregate with other
Derivative Agreements for such Securitization) is (x) 10% or
more (but less than 20%) or (y) 20% or more, in each case
based on a reasonable good-faith determination by the
Depositor of the significance percentage in accordance with
Item 1115 of Regulation AB, if the Derivative Provider has
provided Company Financial Information to the Depositor
pursuant to Section 2(a)(ii) or Section 2(b)(ii), the
Derivative Provider, at its own expense, shall within five
(5) days of the release of any updated Company Financial
Information, provide to the Depositor such updated Company
Financial Information.
(iv) In no event shall the Derivative Provider be required to
calculate the "significance percentage" for purposes of this
Agreement.
(c) The Derivative Provider shall provide all Company Financial
Information provided pursuant to this Section 2 in Microsoft
Word(R) format, Microsoft Excel(R) format or another format
suitable for conversion to the format required for filing by the
Depositor with the Commission via the Electronic Data Gathering
and Retrieval System (XXXXX) (for avoidance of doubt, Company
Financial Information shall not be provided in .pdf format);
alternatively, if permitted by Regulation AB (as determined by the
Sponsor in its sole discretion), the Derivative Provider may
provide such Company Financial Information by providing to the
Depositor written consent to incorporate by reference in Exchange
Act Reports of the Depositor such Company Financial Information
from reports filed by the Derivative Provider pursuant to the
Exchange Act. In addition, the Derivative Provider shall also
provide Company Financial Information provided pursuant to Section
2(a)(ii) in a format appropriate for use in the related Free
Writing Prospectus and Prospectus Supplement. If any Company
Financial Information provided pursuant to this Section 2 has been
audited, the Derivative Provider shall cause its outside
accounting firm to provide to the Depositor such accounting firm's
written consent to the filing or incorporation by reference in the
Exchange Act Reports of the Depositor of such accounting firm's
report relating to its audits of such Company Financial
Information.
Section 3. Representations and Warranties of the Derivative Provider.
The Derivative Provider represents and warrants to the Depositor,
as of the date on which the Derivative Provider first provides Company
Financial Information to the Depositor under Section 2(a)(ii), Section
2(b)(ii) or Section 2(b)(iii), that, except as disclosed in writing to the
Depositor prior to such date:
(a) the outside accounting firm that certifies the financial
statements and supporting schedules included in Company Financial
Information, or which provides a procedures
5
letter with respect to such Company Financial Information, (as
applicable) is an independent registered public accounting firm as
required by the Securities Act;
(b) 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
Derivative Provider;
(c) the financial statements included in the Company Financial
Information present fairly the consolidated financial position of
the Derivative Provider and its consolidated subsidiaries as of
the dates indicated and the consolidated results of their
operations and cash flows for the periods specified; except as
otherwise stated in the Company Financial Information, such
financial statements have been prepared in conformity with United
States 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; and
(d) the Company Financial Information and other Company Information
included in any Free Writing Prospectus or Prospectus Supplement
or referenced via a website link or incorporated by reference in
the Registration Statement (including through filing on an
Exchange Act Report), at the time they were or hereafter are filed
with the Commission, complied in all material respects with the
requirements of Item 1115(b) of Regulation AB (in the case of the
Company Financial Information), and did not and will not contain
an untrue statement of a material fact or omit to state a material
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.
Section 4. Third Party Beneficiaries.
The Derivative Provider agrees that the terms of this Agreement
shall be incorporated by reference into any Derivative Agreement so that each
Issuing Entity or Administrator that is a party to a Derivative Agreement
shall be an express third party beneficiary of this Agreement.
Section 5. Indemnification.
The Derivative Provider indemnification set forth in Addendum A
hereto is incorporated by reference herein.
Section 6. Additional Termination Events.
(a) (i) Any breach by the Derivative Provider of a representation or
warranty set forth in Section 3 to the extent made as of a date
prior to a Closing Date, which is not cured by such Closing Date
(or, in the case of information required under Section 2(a), the
date of printing of the Free Writing Prospectus or Prospectus
Supplement, as applicable), or (ii) any breach by the Derivative
Provider of a representation or warranty pursuant to Section 3 to
the extent made as of a date subsequent to such Closing Date, or
(iii) any failure by the Derivative Provider to comply with the
requirements of Section 2(a), Section 2(b)(ii) or so much of
Section 2(b)(iii) as relates to Section 2(a) or 2(b)(ii), shall
immediately and automatically, without notice, constitute an
Additional Termination Event under each Derivative Agreement
entered into in connection with the related Securitization, with
respect to which the Derivative Provider shall be the sole
Affected Party.
6
(b) Any failure of the Derivative Provider to satisfy the requirements
of Section 2(b)(ii) within ten (10) calendar days of any
Derivative Disclosure Event shall constitute an Additional
Termination Event under each Derivative Agreement entered into in
connection with the related Securitization, which respect to which
the Derivative Provider shall be the sole Affected Party.
(c) Following a termination of a Derivative Agreement resulting from
an Additional Termination Event set forth in this Section 6, a
termination payment (if any) shall be payable under such
Derivative Agreement by the applicable party as determined under
Section 6(e)(ii) of the related Master Agreement, with Market
Quotation and Second Method being the applicable method for
determining such termination payment (notwithstanding anything in
such Derivative Agreement to the contrary).
(d) In the event that a replacement entity or replacement derivative
agreement has been secured in accordance with Section 2(b)(ii)(B),
or a guarantor has been secured in accordance with Section
2(b)(ii)(C), the Derivative Provider shall promptly reimburse the
Issuing Entity for all reasonable incidental expenses incurred by
the Issuing Entity in connection with the replacement of the
Derivative Provider or Derivative Agreement or addition of such
guarantor. The provisions of this paragraph shall not limit
whatever rights the Issuing Entity 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 7. Miscellaneous.
(a) Construction. Throughout this Agreement, as the context requires,
(i) the singular tense and number includes the plural, and the
plural tense and number includes the singular, (ii) the past tense
includes the present, and the present tense includes the past, and
(iii) references to parties, sections, schedules, and exhibits
mean the parties, sections, schedules, and exhibits of and to this
Agreement. The section headings in this Agreement are inserted
only as a matter of convenience, and in no way define, limit,
extend, or interpret the scope of this Agreement or of any
particular section.
(b) Assignment. No party to this Agreement may assign its rights under
this Agreement without the prior written consent of the other
parties hereto. Subject to the foregoing, this Agreement shall be
binding on and inure to the benefit of the parties and their
respective successors and permitted assigns.
(c) Notices. All notices and other communications hereunder will be in
writing (including by facsimile) and effective only upon receipt,
and, if sent to the Derivative Provider will be mailed or
delivered to Bear Xxxxxxx Financial Products Inc., 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: DPC Manager, if sent
to the Sponsor will be mailed or delivered to IndyMac Bank,
F.S.B., 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000-0000,
Attention: Capital Markets, and if sent to a Depositor will be
mailed or delivered to IndyMac ABS, Inc. or IndyMac MBS, Inc., as
applicable, 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000,
Attention: Capital Markets.
(d) Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York
without regard to the conflict of laws principles thereof (other
than Sections 5-1401 and 5-1402 of the New York General
Obligations Law).
7
(e) Additional Documents. Each party hereto agrees to execute any and
all further documents and writings and to perform such other
actions which may be or become necessary or expedient to
effectuate and carry out this Agreement.
(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, all of
which together shall constitute one and the same instrument.
(h) Severability. Any provision hereof which is prohibited or
unenforceable shall be ineffective only to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions hereof.
(i) Integration. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof. There are
no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject
matter hereof other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject
matter.
8
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 BANK F.S.B.
By: /s/ Xxxx Xxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
INDYMAC ABS, INC.
By: /s/ Xxxx Xxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
INDYMAC MBS, INC.
By: /s/ Xxxx Xxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
BEAR XXXXXXX FINANCIAL PRODUCTS, INC.
By: /s/ F. Xxxxx Xxxxxx
-------------------------------------
Name: F. Xxxxx Xxxxxx
Title: DPC Manager
9
Addendum A
----------
Indemnification
(a) The Derivative Provider shall indemnify IndyMac Bank FSB ("IndyMac" or the
"Sponsor"), the related Depositor and Issuing Entity, each person responsible
for the preparation, execution or filing of any report required to be filed
with the Commission with respect to such Depositor or Issuing Entity, 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 of that certain Item 1115 Agreement, dated as of
November __, 2006, among IndyMac Bank FSB, the Depositor and the
Derivative Provider (the "Agreement") by or on behalf of the
Derivative Provider or referenced via a website link or
incorporated by reference in the Registration Statement (including
through filing on an Exchange Act Report) (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 Derivative Provider to deliver any information,
report, certification, accountants' letter or other material when
and as required under Section 2 of the Agreement, other than the
information required by Sections 2(a)(ii) and 2(b)(ii) of the
Agreement; or
(iii) any breach by the Derivative Provider of a representation or
warranty set forth in Section 3 of the Agreement 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 Derivative
Provider 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 of performance described in clause 2 of this
addendum, the Derivative Provider shall promptly reimburse the Depositor, the
Sponsor or the Issuing Entity, as applicable, and each Person responsible for
the preparation, execution or filing of any report required to be filed with
the Commission with respect to such Securitization Transaction, or for
execution of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d)
under the Exchange Act with respect to such Securitization Transaction, for
all costs reasonably incurred by each such party in order to obtain the
information, report, certification, accountants' letter or other material not
delivered as required by the Derivative Provider.
(b) IndyMac Bank and the related Depositor shall indemnify the Derivative
Provider, each person who controls the Derivative Provider (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,
10
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 (A) any untrue statement of a material fact
contained or alleged to be contained in the related Free Writing Prospectus or
Prospectus Supplement (other than the Company Information), or (B) the
omission or alleged omission to state in related Free Writing Prospectus or
Prospectus Supplement (other than the Company Information) a material fact
required to be stated in the Free Writing Prospectus or Prospectus Supplement
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Capitalized terms used and not otherwise defined in this addendum shall have
the meanings set forth in the Agreement.
11
