FINANCIAL GUARANTY INSURANCE COMPANY,
as Insurer,
INDYMAC BANK, F.S.B.
as Seller and Servicer,
INDYMAC ABS, INC.,
as Depositor,
INDYMAC HOME EQUITY MORTGAGE LOAN ASSET-BACKED TRUST, SERIES 2006-H1
as Issuing Entity
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Indenture Trustee
INSURANCE AND INDEMNITY AGREEMENT
INDYMAC HOME EQUITY MORTGAGE LOAN ASSET-BACKED TRUST,
SERIES 2006-H1,
HOME EQUITY MORTGAGE LOAN ASSET-BACKED NOTES, SERIES 2006-H1
Dated as of March 31, 2006
TABLE OF CONTENTS
(This Table of Contents is for convenience of reference only and shall not be
deemed to be part of this Insurance Agreement. All capitalized terms used in
this Insurance Agreement and not otherwise defined shall have meanings set forth
in Article I of this Insurance Agreement.)
Page
ARTICLE I DEFINITIONS .................................................................... 2
Section 1.01. Defined Terms ....................................................... 2
Section 1.02. Other Definitional Provisions ....................................... 4
ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS ..................................... 5
Section 2.01. Representations and Warranties of IndyMac and the Depositor ......... 4
Section 2.02. Affirmative Covenants of IndyMac and the Depositor .................. 13
Section 2.03. Negative Covenants of IndyMac and the Depositor ..................... 18
Section 2.04. Representations, Warranties and Covenants of the Insurer ............ 20
ARTICLE III THE POLICY; REIMBURSEMENT .................................................... 22
Section 3.01. Issuance of the Policy .............................................. 22
Section 3.02. Payment of Fees and Premium ......................................... 24
Section 3.03. Reimbursement Obligation ............................................ 25
Section 3.04. Indemnification ..................................................... 26
Section 3.05. Payment Procedure ................................................... 29
Section 3.06. Liability of IndyMac ................................................ 26
ARTICLE IV FURTHER AGREEMENTS ............................................................ 29
Section 4.01. Effective Date; Term of the Insurance Agreement ..................... 29
Section 4.02. Further Assurances and Corrective Instruments ....................... 29
Section 4.03. Obligations Absolute ................................................ 29
Section 4.04. Assignments; Reinsurance; Third-Party Rights ........................ 31
Section 4.05. Liability of the Insurer ............................................ 31
ARTICLE V DEFAULTS AND REMEDIES .......................................................... 32
Section 5.01. Defaults ............................................................ 32
Section 5.02. Remedies; No Remedy Exclusive ....................................... 33
Section 5.03. Waivers ............................................................. 34
ARTICLE VI MISCELLANEOUS ................................................................. 34
Section 6.01. Amendments, Etc. .................................................... 34
Section 6.02. Notices ............................................................. 35
Section 6.03. Severability ........................................................ 36
Section 6.04. Governing Law ....................................................... 36
Section 6.05. Consent to Jurisdiction ............................................. 36
Section 6.06. Consent of the Insurer .............................................. 37
Section 6.07. Counterparts ........................................................ 37
Section 6.08. Headings ............................................................ 37
Section 6.09. Trial by Jury Waived ................................................ 37
Section 6.10. Limited Liability ................................................... 37
Section 6.11. Entire Agreement .................................................... 38
i
This INSURANCE AND INDEMNITY AGREEMENT (as amended, modified or
supplemented from time to time, this "Insurance Agreement"), dated as of March
31, 2006, is by and among FINANCIAL GUARANTY INSURANCE COMPANY, as Insurer,
INDYMAC BANK, F.S.B. ("IndyMac"), as Seller and Servicer, INDYMAC ABS, INC., as
Depositor, INDYMAC HOME EQUITY MORTGAGE LOAN ASSET-BACKED TRUST, SERIES 2006-H1
(the "Issuing Entity" or the "Trust") and DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Indenture Trustee with respect to the IndyMac Home Equity Mortgage Loan
Asset-Backed Trust, Series 2006-H1, Home Equity Mortgage Loan Asset-Backed
Notes, Series 2006-H1 (the "Notes").
WITNESSETH :
WHEREAS, the Seller has transferred and assigned its entire interest to
the Depositor and the Depositor accepted from the Seller the transfer and
assignment of such interest pursuant to the terms of that certain Mortgage Loan
Purchase Agreement, dated as of March 1, 2006 (the "Mortgage Loan Purchase
Agreement"), by and among the Seller and the Depositor;
WHEREAS, the Depositor has transferred and assigned its entire interest to
the Indenture Trustee pursuant to that certain Sale and Servicing Agreement,
dated as of March 1, 2006 (as may be amended, modified or supplemented from time
to time as set forth therein, the "Sale and Servicing Agreement"), by and among
the Seller and Servicer, the Depositor, the Trust and the Indenture Trustee, for
the benefit of the Class A Noteholders, in certain adjustable rate, first lien
and second lien revolving home equity line of credit loans (the "Mortgage
Loans");
WHEREAS, an Amended and Restated Trust Agreement, dated as of March 31,
2006, by and among the Depositor, the Owner Trustee and the Administrator (as
may be amended, modified or supplemented from time to time as set forth therein,
the "Trust Agreement") provides for, among other things the formation of the
Issuing Entity and the issuance of certain certificates representing undivided
beneficial ownership interests in the Trust;
WHEREAS, an Indenture, dated as of March 1, 2006, by and between the Trust
and the Indenture Trustee (as may be amended, modified or supplemented from time
to time as set forth therein, the "Indenture") provides for, among other things,
the issuance of the Notes, representing indebtedness of the Trust;
WHEREAS, the Notes will be secured by all of the Issuing Entity's right,
title and interest in the Mortgage Loans and certain other accounts and funds;
WHEREAS, the Insurer has agreed to issue the Policy, as provided in
Article III of this Insurance Agreement, pursuant to which it will agree to pay
in favor of the Indenture Trustee for the benefit of the Holders of the Class A
Notes (as defined herein), certain payments in respect of the Class A Notes;
WHEREAS, the Insurer shall be paid a Premium for the Policy as set forth
herein; and
WHEREAS, each of IndyMac and the Depositor has undertaken certain
obligations in consideration for the Insurer's issuance of the Policy;
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NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.
Unless the context clearly requires otherwise, all capitalized terms used
but not defined herein shall have the respective meanings assigned to them in
the applicable Policy or, if not defined therein, in the Sale and Servicing
Agreement or the Indenture. For purposes of this Insurance Agreement, the
following terms shall have the following meanings:
"Class A Notes" means the IndyMac Home Equity Mortgage Loan Asset-Backed
Trust, Series 2006-H1, Home Equity Mortgage Loan Asset-Backed Notes, Series
2006-H1, Class A Notes.
"Closing Date" means March 31, 2006.
"Default" means any Event of Default or any event or circumstance that,
with the giving of notice or the lapse of time or both, would result in an Event
of Default.
"Depositor" means IndyMac ABS, Inc., a Delaware corporation, or any
successor thereto.
"Documents" has the meaning given such term in Section 2.01(xi) herein.
"Event of Default" means any event of default specified in Section 5.01 of
this Insurance Agreement.
"Final Offering Document" means the Prospectus, dated August 22, 2005, as
supplemented by the prospectus supplement, dated March 30, 2006, in respect of
the Class A Notes.
"Financial Statements" means, with respect to IndyMac, the consolidated
statements of financial condition as of December 31, 2004, and December 31,
2005, and the statements of operations, stockholders' equity and cash flows for
each of the years in the three-year period ended December 31, 2005, and the
notes thereto.
"Holder" has the meanings given such term in the Policy.
"Indenture" has the meaning given such term in the recitals.
"Insurance Agreement" has the meaning given such term in the preamble
hereof.
"Insurer" means Financial Guaranty Insurance Company, or any successor
thereto, as issuer of the Policy.
"Insurer Financial Statements" has the meaning given such term in Section
2.04(j) hereof.
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"Insurer Information" means the information in the Preliminary Offering
Document and the Final Offering Document regarding the Insurer and the Policy,
which consists solely of the information set forth under the caption "The
Insurer and The Policy" and the financial statements of the Insurer as of
December 31, 2005 and December 31, 2004 and for each of the years in the
three-year period ended December 31, 2005 as provided to the Depositor for
inclusion in the Offering Documents.
"Investment Company Act" means the Investment Company Act of 1940,
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.
"Late Payment Rate" means the lesser of (a) the greater of (i) the per
annum rate of interest published in the Wall Street Journal from time to time as
the "prime rate" plus 3%, and (ii) the then applicable highest rate of interest
on the Class A Notes and (b) the maximum rate permissible under applicable usury
or similar laws limiting interest rates, as determined by the Insurer. The Late
Payment Rate shall be computed on the basis of the actual number of days elapsed
over a year of 360 days.
"Material Adverse Change" means, in respect of any Person, a material
adverse change in (i) the ability of such Person to perform its obligations
under any of the Operative Documents or (ii) the business, management, financial
condition, results of operations, assets or properties of such Person.
References to a "Material Adverse Change" herein which do not refer to a
particular Person mean a Material Adverse Change with regard to the Seller, the
Servicer, the Depositor or the Issuing Entity.
"Moody's" means Xxxxx'x Investors Service, Inc., and any successor
thereto.
"Mortgage Loan Purchase Agreement" means the Mortgage Loan Purchase
Agreement, dated as of March 1, 2006, between the Seller and the Depositor.
"Mortgage Loans" means the mortgage loans included in the Trust Fund.
"Notes" has the meaning given such term in the recitals.
"Offering Documents" means any of the Preliminary Offering Document, the
Final Offering Document (each as further supplemented by any subsequent
amendment or supplement thereto), and any other offering document in respect of
the Class A Notes.
"Operative Documents" means this Insurance Agreement, the Notes, the
Mortgage Loan Purchase Agreement, the Sale and Servicing Agreement, the Trust
Agreement and the Indenture.
"Person" means an individual, joint stock company, trust, unincorporated
association, joint venture, corporation, business or owner trust, partnership or
other organization or entity (whether governmental or private).
"Policy" means the Financial Guaranty Insurance Policy, No. 06030041
together with all endorsements thereto, issued by the Insurer in favor of the
Indenture Trustee, for the benefit of the Holders of the Class A Notes.
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"Preliminary Offering Document" means the free writing prospectus, dated
March 28, 2006, in respect of the Class A Notes.
"Premium" means the premium payable in accordance with the Policy, which
shall be payable on each Payment Date in arrears in an amount equal to (A) on
the first Payment Date, an amount calculated by multiplying the Premium
Percentage converted to a daily rate by the aggregate initial Note Principal
Balance of the Class A Notes, for the number of days from and including the
Closing Date to but excluding the first Payment Date, and (B) for subsequent
Payment Dates, one twelfth of the product of (i) the Premium Percentage and (ii)
the aggregate Note Principal Balance of the Class A Notes on the previous
Payment Date (after giving effect to any distributions of principal to be made
on such previous Payment Date).
"Premium Percentage" shall mean 0.14% per annum.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., and any successor thereto.
"Sale and "Servicing Agreement" has the meaning given such term in the
recitals.
"Securities Act" means the Securities Act of 1933, including, unless the
context otherwise requires, the rules and regulations thereunder, as amended
from time to time.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.
"Seller" means IndyMac, in its capacity as seller under the Mortgage Loan
Purchase Agreement.
"Transaction" means the transactions contemplated by the Operative
Documents, including the transactions described in the Offering Documents.
"Trust Fund" has the meaning given such term in the Trust Agreement.
"Underwriters" means Xxxxxx Brothers Inc. and Xxxxxxx, Xxxxx & Co.
"Underwriting Agreement" means the Underwriting Agreement, dated March 28,
2006, among the Underwriters, IndyMac and the Depositor with respect to the
Class A Notes, as amended, modified or supplemented from time to time.
Section 1.02. Other Definitional Provisions.
The words "hereof," "herein" and "hereunder" and words of similar import
when used in this Insurance Agreement shall refer to this Insurance Agreement as
a whole and not to any particular provision of this Insurance Agreement.
Section, subsection, Schedule and Exhibit references are to this Insurance
Agreement unless otherwise specified. The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such
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terms. The words "include" and "including" shall be deemed to be followed by the
phrase "without limitation."
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.01. Representations and Warranties.
(a) Representations and Warranties of IndyMac. IndyMac, in its capacity
as the Seller and the Servicer, represents and warrants as of the Closing Date,
and as of the date of the transfer of each of the Mortgage Loans to the
Depositor pursuant to the Mortgage Loan Purchase Agreement, as follows:
(i) Due Organization and Qualification. IndyMac is a federal
savings bank organized under the laws of the United States, and each is
duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or formation. It is, or will become,
duly qualified to do business, is, or will be, in good standing and has
obtained, or will obtain, all necessary consents, licenses, permits,
charters, registrations and approvals (together, "approvals") necessary
for the conduct of its business as currently conducted and as described in
the Offering Documents and the performance of its obligations under the
Operative Documents to which it is a party in each jurisdiction in which
the failure to be so qualified or to obtain such approvals would render
any Operative Document unenforceable in any material respect or would have
a material adverse effect upon the Transaction.
(ii) Power and Authority. It has all necessary corporate or other
power and authority to conduct its business as currently conducted and as
described in the Offering Documents, to execute and deliver, and to
perform its obligations under, the Operative Documents to which it is a
party and to consummate the Transaction.
(iii) Due Authorization. The execution, delivery and performance of
the Operative Documents by it have been duly authorized by all necessary
corporate or other action and does not require any additional approvals or
consents, or other action by or any notice to or filing with any Person,
including any governmental entity or any of its stockholders or other
owners, which have not previously been obtained or given by it.
(iv) [RESERVED]
(v) Noncontravention. The execution and delivery by it of the
Operative Documents to which it is a party, the consummation of the
Transaction and the satisfaction of the terms and conditions of the
Operative Documents do not and will not:
(1) conflict with or result in any breach or violation of
any provision of its organizational documents or any
law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award currently in
effect having applicability to it or any of its material
properties, including regulations issued by any
administrative agency or other governmental authority
having supervisory powers over it, which
- 5 -
conflict, breach or violation reasonably could be
expected to result in a Material Adverse Change;
(2) constitute a default by it under, result in the
acceleration of any obligation under, or breach any
provision of any loan agreement, mortgage, indenture or
other agreement or instrument to which it is a party or
by which any of its properties is or may be bound or
affected, which default, acceleration or breach
reasonably could be expected to result in a Material
Adverse Change; or
(3) result in or require the creation of any lien upon or in
respect of any of its assets, which lien reasonably
could be expected to result in a Material Adverse
Change, other than any lien created by the Operative
Documents.
(vi) Legal Proceedings. There is no action, proceeding or
investigation by or before any court, governmental or administrative
agency or arbitrator against or affecting it or any of its subsidiaries,
any of its properties or rights or any of its subsidiaries or any of the
Mortgage Loans pending or, to its knowledge after reasonable inquiry,
threatened, which, in any case, if decided adversely to it or any of its
subsidiaries could result in a Material Adverse Change with respect to it.
(vii) Valid and Binding Obligations. The Operative Documents (other
than the Class A Notes) to which it is a party, when executed and
delivered by it and the other parties thereto, will constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and general equitable principles and
public policy considerations as to rights of indemnification for
violations of federal securities laws. The Class A Notes, when executed,
authenticated and delivered in accordance with the Indenture, will be
validly issued and outstanding and entitled to the benefits of the
Indenture. So long as no Insurer Default shall have occurred and shall
have continued beyond any period of cure applicable thereto, it will not
at any time in the future deny that the Operative Documents to which it is
a party constitute its legal, valid and binding obligations.
(viii) Financial Statements. The Financial Statements of IndyMac,
copies of which have been furnished to the Insurer, (i) are, as of the
dates and for the periods referred to therein, complete and correct in all
material respects, (ii) present fairly the financial condition and results
of operations of IndyMac as of the dates and for the periods indicated and
(iii) have been prepared in accordance with generally accepted accounting
principles consistently applied, except as noted therein. Since the date
of the most recent Financial Statements, there has been no Material
Adverse Change with respect to it and it is not subject to any contingent
liabilities or commitments that, individually or in the aggregate, have a
material possibility of causing a Material Adverse Change in respect of
it.
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(ix) [RESERVED].
(x) Taxes. It has filed prior to the date hereof all federal and
state tax returns that are required to be filed and has paid all taxes,
including any assessments received by it that are not being contested in
good faith, to the extent that such taxes have become due, except with
respect to any failures to file or pay that, individually or in the
aggregate, would not result in a Material Adverse Change with respect to
it. Any taxes, fees and other governmental charges payable by it in
connection with the transaction, the execution and delivery of the
Operative Documents to which it is a party and the issuance of the Class A
Notes have been paid or shall have been paid at or prior to the Closing
Date if such taxes, fees or other governmental changes were due on or
prior to the Closing Date.
(xi) Accuracy of Information. Neither the Operative Documents, the
Offering Documents nor other material information relating to the Mortgage
Loans or its operations (collectively, the "Documents"), as amended,
supplemented or superseded, furnished to the Insurer in writing or in
electronic form by it in connection with the Transaction, including,
without limitation, the electronic tape containing statistical data with
respect to the Mortgage Loans, contains any statement of a material fact
which was untrue or misleading in any material respect when made. It does
not have any knowledge of any circumstances that could reasonably be
expected to cause the Documents to include a statement of material fact
which is untrue or misleading when made. Since the furnishing of the
Documents, there has been no change nor any development or event involving
a prospective change known to it that would render any of the Documents
untrue or misleading in any material respect.
(xii) Compliance With Securities Laws. The offering and sale of the
Class A Notes complies in all material respects with all requirements of
law, including the registration requirements of applicable securities
laws. Without limiting the foregoing, the Offering Documents do not
contain any untrue statement of a material fact and do not omit to state a
material fact necessary to make the statements made therein, in light of
the circumstances under which they were made, not misleading; provided,
however, that no representation is made with respect to the Insurer
Information. The offering of the Class A Notes has not been and will not
be in violation of the Securities Act or any other federal or state
securities laws. Based upon advice of legal counsel, the Indenture is not
required to be qualified under the Trust Indenture Act and the Depositor
is not required to be registered as an "investment company" under the
Investment Company Act.
(xiii) Operative Documents. Each of its representations and
warranties contained in the applicable Operative Documents is true and
correct in all material respects and it hereby makes each such
representation and warranty to, and for the benefit of, the Insurer as if
the same were set forth in full herein; provided, however, that the remedy
available to the Insurer hereunder for any breach of a representation and
warranty of the Seller in Section 3.02 of the Mortgage Loan Purchase
Agreement, the Seller in Section 2.03 of the Sale and Servicing Agreement,
and the remedy with respect to any defective Mortgage Loan or any Mortgage
Loan as to which there has been a breach of a representation or warranty
under Section 3.01 of the Mortgage Loan Purchase Agreement
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and Section 2.04 of the Sale and Servicing Agreement shall be limited to
the remedies specified in the related Operative Document.
(xiv) Solvency; Fraudulent Conveyance. It is solvent and will not be
rendered insolvent by the Transaction, is adequately capitalized in light
of its anticipated business activities and, after giving effect to the
Transaction, it will not be left with an unreasonably small amount of
capital with which to engage in the ordinary course of its business, and
it does not intend to incur, nor does it believe that it has incurred,
debts beyond its ability to pay as they mature. It does not contemplate
the commencement of insolvency, liquidation or consolidation proceedings
or the appointment of a receiver, liquidator, conservator, trustee or
similar official in respect of it or any of its assets. The amount of
consideration being received by it upon the transfer, sale, pledge or
assignment of the Mortgage Loans or the Class A Notes, as applicable, and
the amount of consideration received by it upon the transfer, sale, pledge
or assignment of the Mortgage Loans, pursuant to the terms and conditions
of the related Operative Documents constitutes reasonably equivalent value
and fair consideration for the Mortgage Loans or the Class A Notes, as
applicable. It is not transferring or pledging the Mortgage Loans or the
Class A Notes, as applicable, as provided in the Operative Documents, with
any intent to hinder, delay or defraud any of its creditors.
(xv) Primary Beneficiary of Trust or Qualifying SPE Status. With
respect to the Trust, IndyMac Bank F.S.B. is either the primary
beneficiary of the Trust (as the term is defined in FASB Interpretation
No. 46 issued by the Financial Accounting Standards Board) or the Trust is
a Qualifying SPE (as such term is defined in Statement of Financial
Accounting Standards No. 140 issued by the Financial Accounting Standards
Board).
(xvi) [RESERVED].
(xvii) Compliance With Anti-Money Laundering Laws. No practice,
procedure or policy employed or proposed to be employed by it in the
conduct of its business violates any anti-money laundering law or
regulation (including without limitation, the USA PATRIOT Act, Public Law
No. 107-56 (2001), and regulations promulgated thereunder) applicable to
it.
(b) Representations and Warranties of the Depositor.
(i) Due Organization and Qualification. The Depositor is a
Delaware corporation, is duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Depositor is, or
will become, duly qualified to do business, is, or will be, in good
standing and has obtained, or will obtain, all necessary consents,
licenses, permits, charters, registrations and approvals (together,
"approvals") necessary for the conduct of its business as currently
conducted and as described in the Offering Documents and the performance
of its obligations under the Operative Documents to which it is a party in
each jurisdiction in which the failure to be so qualified or to obtain
such approvals would render any Operative Document to which it is a party
unenforceable in any material respect or would have a material adverse
effect upon the Transaction.
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(ii) Power and Authority. The Depositor has all necessary corporate
or other power and authority to conduct its business as currently
conducted and as described in the Offering Documents, to execute and
deliver, and to perform its obligations under, the Operative Documents to
which it is a party and to consummate the Transaction.
(iii) Due Authorization. The execution, delivery and performance of
the Operative Documents by the Depositor have been duly authorized by all
necessary corporate or other action and does not require any additional
approvals or consents, or other action by or any notice to or filing with
any Person, including any governmental entity or any of the stockholders
or other owners of the Depositor, which have not previously been obtained
or given by the Depositor.
(iv) Noncontravention. The execution and delivery by the Depositor
of the Operative Documents to which it is a party, the consummation of the
Transaction and the satisfaction of the terms and conditions of the
Operative Documents do not and will not:
(1) conflict with or result in any breach or violation of
any provision of the applicable organizational documents
of the Depositor or any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or
award currently in effect having applicability to the
Depositor or any of its material properties, including
regulations issued by any administrative agency or other
governmental authority having supervisory powers over
the Depositor;
(2) constitute a default by the Depositor under, result in
the acceleration of any obligation under, or breach any
provision of any loan agreement, mortgage, indenture or
other agreement or instrument to which the Depositor is
a party or by which any of its properties is or may be
bound or affected, which default, acceleration or breach
reasonably could be expected to result in a Material
Adverse Change; or
(3) result in or require the creation of any lien upon or in
respect of any assets of the Depositor, which lien
reasonably could be expected to result in a Material
Adverse Change, except as otherwise contemplated by the
Operative Documents.
(v) Legal Proceedings. There is no action, proceeding or
investigation by or before any court, governmental or administrative
agency or arbitrator against or affecting the Depositor or any of its
subsidiaries, any properties or rights of the Depositor or any of its
subsidiaries or any of the Class A Notes pending or, to the Depositor's
knowledge, threatened, which, in any case, if decided adversely to the
Depositor or any such subsidiary could result in a Material Adverse Change
with respect to the Depositor.
(vi) Valid and Binding Obligations. The Operative Documents to
which it is a party, when executed and delivered by the Depositor and the
other parties thereto, will constitute the legal, valid and binding
obligations of the Depositor, enforceable in
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accordance with their respective terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and general equitable
principles and public policy considerations as to rights of
indemnification for violations of federal securities laws. The Class A
Notes, when executed, authenticated and delivered in accordance with the
Indenture, will be validly issued and outstanding and entitled to the
benefits of the Indenture. So long as no Insurer Default shall have
occurred and shall have continued beyond any period of cure applicable
thereto, the Depositor will not at any time in the future deny that the
Operative Documents to which it is a party constitute the legal, valid and
binding obligations of the Depositor.
(vii) Accuracy of Information. None of the Operative Documents
contains any statement of a material fact with respect to the Depositor
which was untrue or misleading in any material respect when made. With
respect to information relating to the Depositor contained in the
Operative Documents, there has been no change nor any development or event
involving a prospective change known to the Depositor that would render
any such information with respect to the Depositor untrue or misleading in
any material respect. There is no fact known to the Depositor which has a
material possibility of causing a Material Adverse Change with respect to
the Depositor or the Class A Notes.
(viii) Compliance With Securities Laws. The offering of the Class A
Notes complies in all material respects with all requirements of law,
including the registration requirements of applicable securities laws.
(ix) Operative Documents. Each of the representations and
warranties of the Depositor contained in the applicable Operative
Documents is true and correct in all material respects and the Depositor
hereby makes each such representation and warranty to, and for the benefit
of, the Insurer as if the same were set forth in full herein;
(x) Solvency; Fraudulent Conveyance. The Depositor is solvent and
will not be rendered insolvent by the Transaction and, after giving effect
to the Transaction, the Depositor will not be left with an unreasonably
small amount of capital with which to engage in the ordinary course of its
business, and the Depositor does not intend to incur, nor does the
Depositor believe that it has incurred, debts beyond its ability to pay as
they mature. The Depositor does not contemplate the commencement of
insolvency, liquidation or consolidation proceedings or the appointment of
a receiver, liquidator, conservator, trustee or similar official in
respect of itself or any of its assets. The amount of consideration being
received by the Depositor upon the sale of the Class A Notes constitutes
reasonably equivalent value and fair consideration for the Class A Notes.
The Depositor is not selling the Class A Notes, as provided in the
Underwriting Agreement, with any intent to hinder, delay or defraud any of
its creditors.
(xi) Taxes. The Depositor is not delinquent in the filing of any
federal and state tax returns that are required to be filed and is not
delinquent in the payment of any taxes, including any assessments received
by it that are not being contested in good faith, to the extent that such
taxes have become due, except with respect to any failures to file or pay
that, individually or in the aggregate, would not result in a Material
Adverse
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Change with respect to the Depositor. Any taxes, fees and other
governmental charges payable by the Depositor in connection with the
transaction, the execution and delivery of the Operative Documents to
which it is a party and the issuance of the Class A Notes have been paid
or shall have been paid at or prior to the Closing Date if such taxes,
fees or other governmental changes were due on or prior to the Closing
Date.
(xii) Compliance With Anti-Money Laundering Laws. No practice,
procedure or policy employed or proposed to be employed by the Depositor
in the conduct of its business violates any anti-money laundering law or
regulation (including without limitation, the USA PATRIOT Act, Public Law
No. 107-56 (2001), and regulations promulgated thereunder) applicable to
it.
(c) Representations, Warranties and Covenants of Indenture Trustee. The
Indenture Trustee represents and warrants to, as of the Closing Date, and
covenants with the other parties hereto as follows:
(i) Due Organization and Qualification. The Indenture Trustee is
duly organized, existing and authorized to engage in the business of
banking as a national bank.
(ii) Due Authorization. The Indenture Trustee has full power,
authority and right to execute, deliver and perform the Operative
Documents to which it is a party, and has taken all necessary steps to
authorize the execution, delivery and performance by it of the Operative
Documents to which it is a party.
(iii) Due Execution. The Operative Documents to which the Indenture
Trustee is a party have been duly executed and delivered by the Indenture
Trustee.
(d) Representations and Warranties of the Issuing Entity. Each of
IndyMac, the Depositor and the Issuing Entity represents and warrants with
respect to the Issuing Entity, as of the Closing Date, and covenants with the
other parties hereto, as follows:
(i) Due Organization and Qualification. The Issuing Entity is a
statutory trust duly organized, validly existing and in good standing
under the laws of Delaware. The Issuing Entity is, or will become, duly
qualified to do business, is, or will be, in good standing and has
obtained, or will obtain, all necessary consents, licenses, permits,
charters, registrations and approvals (together, "approvals") necessary
for the conduct of its business as currently conducted and as described in
the Offering Documents and the performance of its obligations under the
Operative Documents to which it is a party in each jurisdiction in which
the failure to be so qualified or to obtain such approvals would render
any Operative Document to which it is a party unenforceable in any
material respect or would have a material adverse effect upon the
Transaction.
(ii) Power and Authority. The Issuing Entity has all necessary
power and authority to conduct its business as currently conducted and as
described in the Offering Documents, to execute and deliver, and to
perform its obligations under, the Operative Documents to which it is a
party and to consummate the Transaction.
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(iii) Due Authorization. The execution, delivery and performance of
the Operative Documents by the Issuing Entity have been duly authorized by
all necessary action and does not require any additional approvals or
consents, or other action by or any notice to or filing with any Person,
including any governmental entity or any of the beneficial owners of the
Issuing Entity, which have not previously been obtained by the Issuing
Entity.
(iv) Noncontravention. The execution and delivery by the Issuing
Entity of the Operative Documents to which it is a party, the consummation
of the Transaction and the satisfaction of the terms and conditions of the
Operative Documents do not and will not:
(1) conflict with or result in any breach or violation of
any provision of the applicable organizational documents
of the Issuing Entity or any law, rule, regulation,
order, writ, judgment, injunction, decree, determination
or award currently in effect having applicability to the
Issuing Entity or any of its material properties,
including regulations issued by any administrative
agency or other governmental authority having
supervisory powers over the Issuing Entity;
(2) constitute a default by the Issuing Entity under, result
in the acceleration of any obligation under, or breach
any provision of any loan agreement, mortgage, indenture
or other agreement or instrument to which the Issuing
Entity is a party or by which any of its properties is
or may be bound or affected, which default, acceleration
or breach reasonably could be expected to result in a
Material Adverse Change; or
(3) result in or require the creation of any lien upon or in
respect of any assets of the Issuing Entity, which lien
reasonably could be expected to result in a Material
Adverse Change, except as otherwise contemplated by the
Operative Documents.
(v) Legal Proceedings. There is no action, proceeding or
investigation by or before any court, governmental or administrative
agency or arbitrator against or affecting the Issuing Entity, any
properties or rights of the Issuing Entity or any of the Class A Notes
pending or, to the knowledge of IndyMac, the Depositor or the Issuing
Entity, threatened, which, in any case, if decided adversely to the
Issuing Entity or any such subsidiary could result in a Material Adverse
Change with respect to the Issuing Entity.
(vi) Valid and Binding Obligations. The Operative Documents to
which it is a party, when executed and delivered by the Issuing Entity and
the other parties thereto, will constitute the legal, valid and binding
obligations of the Issuing Entity, enforceable in accordance with their
respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and general equitable principles and
public policy considerations as to rights of indemnification for
violations of federal securities laws. and
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(vii) Operative Documents. Each of the representations and
warranties of the Issuing Entity contained in the applicable Operative
Documents is true and correct in all material respects and each of
IndyMac, the Depositor and the Issuing Entity hereby makes each such
representation and warranty to, and for the benefit of, the Insurer as if
the same were set forth in full herein.
Section 2.02. Affirmative Covenants.
(a) Affirmative Covenants of IndyMac. IndyMac, in its capacity as the
Seller and the Servicer, hereby agrees that during the term of this Insurance
Agreement, unless the Insurer shall otherwise expressly consent in writing:
(i) Compliance With Agreements and Applicable Laws. It shall
comply within the grace periods provided therein in all material respects
with the terms and conditions of and perform its obligations under the
Operative Documents to which it is a party and shall comply with all
requirements of any law, rule or regulation applicable to it in all
circumstances where non-compliance reasonably could be expected to result
in a Material Adverse Change.
(ii) Existence. It and its successors and assigns shall maintain
its existence as a federal savings bank and shall at all times continue to
be duly organized under the laws of its jurisdiction of incorporation or
organization and duly qualified and duly authorized (as described in
subsections 2.01(a), (b) and (c) hereof) and shall conduct its business in
accordance with the terms of its applicable organizational documents;
provided, however, that nothing contained herein shall prohibit the
amendment of such documents or the sale, merger or consolidation of the
Servicer in accordance with the requirements of the Operative Documents;
provided, further, that a change its form of organization or any sale,
merger or consolidation of the Seller shall not be considered a breach of
this clause (b), so long as such change, sale, merger or consolidation
could not reasonably be expected to result in a Material Adverse Change
with respect to IndyMac.
(iii) Financial Statements; Accountants' Reports; Other Information.
It shall keep or cause to be kept in reasonable detail books and records
of account of its assets and business relating to the Transaction. It
shall furnish or cause to be furnished to the Insurer:
(1) Annual Financial Statements. As soon as available, and
in any event within 90 days after the close of each
fiscal year, its unaudited statement of operations,
equity and cash flows for such fiscal year, all in
reasonable detail and stating in comparative form the
respective figures for the corresponding date and period
in the preceding fiscal year, prepared in accordance
with generally accepted accounting principles,
consistently applied, and, accompanied by the audit
opinion of IndyMac's independent accountants (which
shall be a nationally recognized independent public
accounting firm or otherwise acceptable to the Insurer)
and by a certificate relating to
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such statements equivalent to the certificate required
by Section 2.02(a)(ii).
(2) Quarterly Financial Statements. Upon the reasonable
request of the Insurer, and as soon as reasonably
practicable, the unaudited consolidated statements of
operation, equity and cash flows for the portion of the
fiscal year then ended, all in reasonable detail and
stating in comparative form the respective figures for
the corresponding date and period in the preceding
fiscal year, prepared in accordance with generally
accepted accounting principles consistently applied
(subject to normal year-end adjustments); each delivery
of quarterly financial statements shall be accompanied
by a certificate of one (or more) corporate officers
stating that the quarterly financial statements are
correct in all material respects and present fairly the
financial condition and results of operation of itself
and its subsidiaries as of the dates and for the periods
indicated, in accordance with generally accepted
accounting principles consistently applied (subject to
normal year-end adjustments).
(3) Initial Report. On or before the Closing Date, a copy of
the magnetic tape or Mortgage Loan Schedule in the form
of an electronic database or spreadsheet file, using
database or spreadsheet software that is readily
available to the Insurer, to be delivered to the
Indenture Trustee on the Closing Date setting forth, as
to each Mortgage Loan, the information required under
the definition of "Mortgage Loan Schedule" in the Sale
and Servicing Agreement.
(iv) Other Information. (A) Promptly upon receipt thereof, copies
of all schedules, financial statements or other similar reports (including
but not limited to any officer's certificates, legal opinions or comfort
letters) delivered to it from any of the Seller, the Servicer or the
Indenture Trustee, as applicable, pursuant to the terms of any of the
Operative Documents, including all reports provided to either the
Indenture Trustee or any Class A Noteholders, pursuant to the Indenture,
(B) promptly upon request, such other data as the Insurer may reasonably
request relating to the Mortgage Loans, the Class A Notes, the Transaction
or its ability to perform its obligations under the Operative Documents
and (C) all information required to be furnished to the Indenture Trustee
or the Class A Noteholders, as the case may be.
All financial statements specified in clauses (i) and (ii) of this
subsection (c) will be furnished in consolidated form for IndyMac and all its
respective subsidiaries in the event that IndyMac consolidates its financial
statements with its respective subsidiaries. All information supplied pursuant
to clause (iii) will be in the form of an electronic database or spreadsheet
file, using database or spreadsheet software that is readily available to the
Insurer, and formatted in a manner that is reasonably acceptable to the Insurer.
(v) Access to Records; Discussions with Officers and Accountants.
It shall, upon the reasonable request of the Insurer, permit the Insurer
or its authorized agents:
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(1) to inspect its books and records and the books and
records of it as they may relate to the Class A Notes,
its respective obligations under the Operative Documents
to which it is a party and the Transaction (including,
without limitation, access to information reasonably
required for purposes of complying with FASB Financial
Interpretation No. 46 and SFAS 140; provided that the
Insurer will maintain confidentiality with respect to
such information in accordance with its internal
policies);
(2) to discuss its affairs, finances and accounts as they
relate to the Mortgage Loans, the Class A Notes, the
Transaction or, with respect to the Servicer, its
ability to perform its obligations under the Operative
Documents; and
(3) if the Insurer reasonably believes that a Material
Adverse Change may have occurred and with its consent,
which consent shall not be unreasonably withheld or
delayed, to discuss its affairs, finances and accounts
with its independent accountants; provided, however,
that its officers shall have the right to be present
during such discussions and that any associated fee
charged by such independent accountants shall be paid by
the Insurer.
Such inspections and discussions shall be conducted during normal business
hours and shall not unreasonably disrupt the business of the Seller or the
Servicer, as applicable, and shall be at the cost of the Seller or the Servicer,
if a Material Adverse Change shall have occurred, and shall otherwise be at the
cost of the Insurer. The books and records of the Seller and the Servicer shall
be maintained at the address designated herein for receipt of notices, unless
the Seller or the Servicer shall otherwise advise the parties hereto in writing.
(vi) Notice of Material Events. It shall be obligated promptly to
inform the Insurer in writing of the occurrence of any of the following
(of which it obtains actual knowledge):
(1) the submission of any claim or the initiation or
threat of any legal process, litigation or
administrative or judicial investigation, or rule making
or disciplinary proceeding by or against it that (A)
relates to the Mortgage Loans, the Class A Notes, the
Transaction or its ability to perform its obligations
under any Operative Documents and would be required to
be disclosed to potential purchasers of the Class A
Notes if the Class A Notes were at the time being
publicly offered or to the IndyMac's shareholders or (B)
could result in a Material Adverse Change, or the
initiation of any proceeding or the promulgation of any
proposed or final rule (but only to the extent it has
actual knowledge thereof) which would likely result in a
Material Adverse Change;
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(2) any change in its jurisdiction of organization;
(3) the occurrence of any Default or Event of Default or
any Material Adverse Change;
(4) the commencement of any proceedings by or against it
under any applicable bankruptcy, reorganization,
liquidation, rehabilitation, insolvency or other similar
law now or hereafter in effect or of any proceeding in
which a receiver, liquidator, conservator, trustee or
similar official shall have been, or may be, appointed
or requested for it or any of its assets;
(5) the receipt of notice that (A) it is being placed
under regulatory supervision, (B) any license, permit,
charter, registration or approval materially necessary
for the conduct of its business (including its mortgage
business) is to be, or may be, suspended or revoked or
(C) it is to cease and desist any practice, procedure or
policy employed by it in the conduct of its business
(including its mortgage business), and such suspension,
revocation or cessation may reasonably be expected to
result in a Material Adverse Change; or
(6) the receipt of an order from a bank regulator
requiring it (a) to reorganize or recapitalize itself or
to acquire or be acquired by any other bank or (b) to
restate its financial statements.
(vii) Further Assurances. IndyMac shall, upon the reasonable request
of the Insurer, from time to time, execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, within ten days of such
request, such amendments hereto and such further instruments and take such
further action as may be reasonably necessary to effectuate the intention,
performance and provisions of the Operative Documents.
(viii) Maintenance of Licenses. It and any of its successors, has
and shall maintain all licenses, permits, charters and registrations the
loss or suspension of which, or the failure to hold which, could
reasonably be expected to result in a Material Adverse Change.
(ix) Retirement of Class A Notes. The Seller shall instruct the
Indenture Trustee upon a retirement or other payment of all of the Class A
Notes, to surrender the Policy to the Insurer for cancellation.
(x) Rating Agencies. It and any of its successors, will cooperate
with S&P and Xxxxx'x in connection with any review of the Transaction that
may be undertaken by S&P and Xxxxx'x after the date hereof.
(xi) Servicing of Mortgage Loans. All Mortgage Loans will be
serviced in all material respects in compliance with the Sale and
Servicing Agreement.
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(xii) Due Diligence. If in the Insurer's reasonable judgment,
circumstances so warrant, based on the performance of the Transaction (and
the Insurer notifies the Servicer of such circumstances), the Insurer
shall have the right, so long as the Class A Notes remain outstanding, to
conduct reviews of the Servicer's practices as Servicer through reviews of
the Mortgage Loans, reappraisals of Mortgaged Properties and reviews of
servicing practices. Such due diligence shall be conducted at the expense
of the Insurer and in a reasonable manner convenient to both the Servicer
and the Insurer. This due diligence right is in addition to the access
provided pursuant to Section 3.12 of the Sale and Servicing Agreement.
(b) Affirmative Covenants of the Depositor. The Depositor hereby agrees
that during the term of this Insurance Agreement, unless the Insurer shall
otherwise expressly consent in writing:
(i) Compliance With Agreements and Applicable Laws. The Depositor
shall comply within the grace periods provided therein in all material
respects with the terms and conditions of and perform its obligations
under the Operative Documents to which it is a party and shall comply with
all requirements of any law, rule or regulation applicable to it in all
circumstances where non-compliance reasonably could be expected to result
in a Material Adverse Change. The Depositor will not at any time in the
future deny that the Operative Documents to which it is a party
constitutes its legal, valid and binding obligations.
(ii) Existence. The Depositor and its successors and assigns shall
maintain its corporate existence, and shall at all times continue to be
duly organized under the laws of the State of Delaware and duly qualified
and duly authorized (as described in subsections 2.01(B)(a), (b) and (c)
hereof) and shall conduct its business in accordance with the terms of its
applicable organizational documents; provided, however, that nothing
contained herein shall prohibit the amendment of such documents or the
sale, merger or consolidation of the Depositor in accordance with the
requirements of the Operative Documents.
(iii) Further Assurances. The Depositor shall, upon the reasonable
request of the Insurer, from time to time, execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, within
thirty (30) days of such request, such amendments hereto and such further
instruments and take such further action as may be reasonably necessary to
effectuate the intention, performance and provisions of the Operative
Documents. In addition, the Depositor agrees to cooperate with S&P and
Xxxxx'x in connection with any review of the Transaction which may be
undertaken by S&P and Xxxxx'x after the date hereof.
(iv) Closing Documents; Post Closing Matters. The Depositor shall
cause to be delivered within 60 days of the Closing Date two closing sets
to the Insurer and one closing set to its counsel, which closing sets
shall include execution copies of each of the Operative Documents other
than the Class A Notes.
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(v) Disclosure Document. Upon the written direction of the Insurer
prior to the delivery of such Offering Document, each Offering Document
delivered with respect to the Class A Notes shall clearly disclose that
the Policy is not covered by the property/casualty insurance security fund
specified in Article 76 of the New York Insurance Law.
(vi) Compliance With Anti-Money Laundering Laws. The Depositor
shall not employ any practice, procedure or policy in the conduct of its
business that would violate any anti-money laundering law or regulation
(including without limitation, the USA PATRIOT Act, Public Law No. 107-56
(2001), and regulations promulgated thereunder) applicable to it.
(vii) Notice to Insurer. If the Depositor does not receive any
Insurer Financial Statements pursuant to Section 2.04(j) herein at least
five days prior to the date that such Insurer Financial Statements are to
be filed with the Commission, the Depositor shall provide or shall cause
the party responsible for filing the Depositor's Form 10-Ds and 10-Ks to
provide written notice to the Insurer via electronic mail at
XxxXX@xxxx.xxx, stating that it has not received the Insurer Financial
Statements and requesting that such Insurer Financial Statements be
emailed in accordance with Section 2.04(j) herein. Additionally, in the
event that any Insurer Financial Information is to be included in a Form
10-D or Form 10-K filing of the Issuing Entity which occurs prior to the
termination of the offering of the Notes, the Depositor shall provide
written notice to the Insurer via electronic mail at least ten (10) days
prior to such filing, stating that an accountant's consent will be
required for such filing. In such event the Depositor shall be responsible
for paying the Insurer's costs for obtaining such consent. All such emails
shall identify the deal name and the policy number and shall be sent to
XxxXX@xxxx.xxx.
IndyMac shall use its best efforts to cause the Depositor to observe the
provisions of this Section 2.02.
Section 2.03. Negative Covenants.
(a) Negative Covenants of IndyMac. IndyMac, in its capacity as Seller
and the Servicer, hereby agrees that during the term of this Insurance
Agreement, unless the Insurer shall otherwise expressly consent in writing:
(i) Impairment of Rights. It shall not take any action, or fail to
take any action, if such action or failure to take action may result in a
material adverse change as described in clause (i) of the definition of
Material Adverse Change, nor interfere in any material respect with the
enforcement of any rights of the Insurer under or with respect to any of
the Operative Documents. It shall give the Insurer written notice when any
event, action or, to its knowledge, omission to act, may result in a
material adverse change as described in clause (i) of the definition of
Material Adverse Change, on the earlier of: (i) the date upon which any
publicly available filing or release is made with respect to such event,
action or omission to act and (ii) promptly prior to the date of
occurrence of such
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event, action or failure to act. It shall furnish to the Insurer all
information reasonably requested by it that is necessary to determine
compliance with this paragraph.
(ii) Waiver, Amendments, Etc. Except as provided in and in
accordance with the Operative Documents, it shall not modify, waive or
amend, or consent to any modification, waiver or amendment of, any of the
terms, provisions or conditions of the Operative Documents to which it is
a party (other than any amendment to the Offering Documents required by
law) without the prior written consent of the Insurer thereto, which
consent shall not be unreasonably withheld, conditioned or delayed.
(iii) Limitation on Mergers, Etc. It shall not consolidate with or
merge with or into any Person or transfer all or substantially all of its
assets to any Person or liquidate or dissolve except as provided in the
Operative Documents or as permitted hereby. It shall furnish to the
Insurer all information requested by the Insurer that is reasonably
necessary to determine compliance with this paragraph.
(iv) Successors. It shall not terminate or designate, or consent to
the termination or designation of, any successor Servicer or Indenture
Trustee without the prior written approval of the Insurer.
(b) Negative Covenants of the Depositor. The Depositor hereby agrees
that during the term of this Insurance Agreement, unless the Insurer shall
otherwise expressly consent in writing:
(i) Impairment of Rights. The Depositor shall not take any action,
or fail to take any action, if such action or failure to take action may
result in a material adverse change as described in clause (i) of the
definition of Material Adverse Change, nor interfere in any material
respect with the enforcement of any rights of the Insurer under or with
respect to any of the Operative Documents. The Depositor shall give the
Insurer written notice when any event, action or, to the knowledge of the
Depositor, omission to act, in each case, of the Depositor, may result in
a material adverse change as described in clause (i) of the definition of
Material Adverse Change, on the earlier of: (i) the date upon which any
publicly available filing or release is made with respect to such event,
action or omission to act and (ii) promptly prior to the date of
occurrence of such event, action or failure to act. The Depositor shall
furnish to the Insurer all information reasonably requested by it that is
necessary to determine compliance with this paragraph.
(ii) Waiver, Amendments, Etc. Except as provided in and in
accordance with the Operative Documents, the Depositor shall not modify,
waive or amend, or consent to any modification, waiver or amendment of,
any of the terms, provisions or conditions of the Operative Documents to
which it is a party (other than any amendment to the Offering Documents
required by law) without the prior written consent of the Insurer thereto,
which consent shall not be unreasonably withheld, conditioned or delayed.
(iii) Limitation on Mergers, Etc. The Depositor shall not
consolidate with or merge with or into any Person or transfer all or
substantially all of its assets to any Person or liquidate or dissolve
except as provided in the Operative Documents. The Depositor
- 19 -
shall furnish to the Insurer all information requested by the Insurer that
is reasonably necessary to determine compliance with this paragraph.
(iv) Successors. The Depositor shall not terminate or designate, or
consent to the termination or designation of, any successor Indenture
Trustee without the prior written approval of the Insurer.
Section 2.04. Representations, Warranties and Covenants of the Insurer.
The Insurer represents, warrants and covenants to each of IndyMac and the
Depositor as follows:
(a) Organization and Licensing. The Insurer is a duly organized, validly
existing and in good standing New York stock insurance company duly qualified to
conduct an insurance business in any jurisdiction where qualification may be
necessary to accomplish the Transaction.
(b) Corporate Power. The Insurer has the corporate power and authority
to issue the Policy and execute and deliver this Insurance Agreement and to
perform all of its obligations hereunder and thereunder.
(c) Authorization; Approvals. Proceedings legally required for the
issuance and execution of the Policy and the execution, delivery and performance
of this Insurance Agreement have been taken and licenses, orders, consents or
other authorizations or approvals of any governmental boards or bodies legally
required for the enforceability of the Policy and the conduct by the Insurer of
the business and activities contemplated by the Transaction have been obtained;
any proceedings not taken and any licenses, authorizations or approvals not
obtained are not material to the enforceability of the Policy.
(d) Enforceability. The Policy, when issued, and this Insurance
Agreement, will each constitute a legal, valid and binding obligation of the
Insurer, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium, receivership and other similar laws
affecting creditors' rights generally and to general principles of equity and
subject to principles of public policy limiting the right to enforce the
indemnification provisions contained therein and herein, insofar as such
provisions relate to indemnification for liabilities arising under federal
securities laws.
(e) Financial Information. The consolidated balance sheets of the
Insurer and its subsidiaries as of December 31, 2005 and December 31, 2004, the
related consolidated statements of income, stockholder's equity and cashflows
for the years ended December 31, 2005 and 2004 and for the periods from December
18, 2003 through December 31, 2003, and from January 1, 2003 through December
17, 2003, and the accompanying footnotes, together with an opinion thereon of
Ernst & Young LLP, independent registered public accounting firm, a copy of
which has been delivered to the Depositor to be incorporated by reference into
the registration statement relating to the Offering Document, present fairly in
all material respects the financial condition of the Insurer as of such dates
and for the periods covered by such statements in accordance with generally
accepted accounting principles consistently applied. Since December 31, 2005,
there has been no material change in such financial condition of the
- 20 -
Insurer that would materially and adversely affect its ability to perform its
obligations under the Policy.
(f) Insurer Information. The Insurer Information in the Preliminary
Offering Document as of the date of the Preliminary Offering Document, the
Insurer Information in the Final Offering Document as of the date of the Final
Offering Document and as of the date hereof, is true and correct in all material
respects and does not contain any untrue statement of a material fact.
(g) No Litigation. There are no actions, suits, proceedings or
investigations pending or, to the best of the Insurer's knowledge, threatened
against it at law or in equity or before or by any court, governmental agency,
board or commission or any arbitrator which, if decided adversely, would
materially and adversely affect its ability to perform its obligations under the
Policy or this Insurance Agreement.
(h) Confidential Information. The Insurer agrees that it and its
shareholders, directors, agents, accountants and attorneys shall keep
confidential any information or matter of which it becomes aware (i) as a result
of financial statements, reports or other information furnished pursuant to
Section 2.02(c), (ii) during the inspections conducted or discussions had
pursuant to Section 2.02(e) or (iii) as a result of information provided by
IndyMac or any of its affiliates to the Insurer that constitutes "customer
information" within the meaning of 12 C.F.R. Part 30.1 (the "Regulation"),
consisting of data, information, and records pertaining to individual customers
of IndyMac or any of its affiliates, including but not limited to names,
addresses (other than names and addresses as they appear in the public recording
offices), telephone numbers, account numbers, customer lists and demographic,
financial or transaction information that pertains to an individual customer
("Customer Information"); and with respect to the Customer Information, the
Insurer agrees that all Customer Information will be held and treated by the
Insurer in the manner required by the Regulation, and will not, except as
hereinafter provided, without the prior written consent of IndyMac, be disclosed
by the Insurer in any manner whatsoever, in whole or in part unless such
information is readily available from public sources or is disclosed to the
Insurer on a non-confidential basis from any Person or source other than the
Seller, the Servicer or the Depositor, which Person or source is not actually
known to the Insurer to be subject to a confidentiality obligation to the
Seller, the Servicer or the Depositor, or except as may be otherwise required by
regulation, law or court order or requested by appropriate governmental
authorities or as necessary or expedient to preserve its rights or security
under or to enforce any of the Operative Documents or any other agreement
executed in connection with the transactions related to the Operative Documents
to which the Insurer is a party or of which the Insurer is a third party
beneficiary, or in connection with any legal proceeding in which the Insurer is
a party; provided, however, that the foregoing shall not limit the right of the
Insurer to make such information available to its regulators, securities rating
agencies, reinsurers, credit and liquidity providers, counsel and accountants.
If the Insurer is requested or required (by oral questions, interrogatories,
requests for information or documents, subpoena, civil investigative demand or
similar process) to disclose any information of which it becomes aware through
such inspections or discussions, the Insurer will, as promptly as practicable,
notify IndyMac of such request(s) so that IndyMac may seek an appropriate
protective order and/or waive the Insurer's compliance with the provisions of
this Insurance Agreement, unless the Insurer, in the opinion of its counsel, is
prohibited from providing such
- 21 -
notice by any tribunal, court or governmental agency or other governmental or
quasi-governmental authority. If, in the absence of a protective order or the
receipt of a waiver hereunder, the Insurer is, nonetheless, in the opinion of
its counsel, compelled to disclose such information to any tribunal or else
suffer a penalty or liability, the Insurer may disclose such information to such
tribunal that the Insurer is compelled to disclose; provided, however, that a
copy of all information disclosed is provided to IndyMac promptly upon such
disclosure; provided, further, however, that no such copy must be delivered or
supplied if the Insurer, in the opinion of its counsel, is prohibited from
providing such a copy by any tribunal, court or governmental agency or other
governmental or quasi-governmental authority.
(i) Compliance with Law, Etc. No practice, procedure or policy employed,
or proposed to be employed, by the Insurer in the conduct of its business
violates any law, regulation, judgment, agreement, order or decree applicable to
the Insurer that, if enforced, could result in a Material Adverse Change with
respect to the Insurer.
(j) Delivery of Financial Statements of Insurer. As soon as reasonably
practicable after the release of its unaudited financial statements for each of
the March, June and September 2006 fiscal quarters and the release of its
audited financial statements for the 2006 fiscal year, the Insurer shall furnish
to the Depositor such unaudited or audited financial statements, as appropriate
(the "Insurer Financial Statements") for the related period meeting the
requirements of Regulation S-X of the Securities Act. The Insurer Financial
Statements shall be delivered in electronic form via electronic mail to
xxxxx.xxxxx@xxxxxxxxxxx.xxx, or such other address that has been designated by
the Depositor and provided in writing to the Insurer. To the extent that the
Insurer shall have been notified in writing on or before March 31, 2007 that the
Depositor's reporting obligations under the Securities Exchange Act have not
been suspended in accordance with the Securities Exchange Act and the related
rules and regulations thereto, the Insurer shall continue to furnish such
quarterly and annual financial statements as set forth above for so long as such
financial statements may be required for the Depositor to comply with its
reporting requirements under the Securities Exchange Act. All written notices
under this section shall be sent to the Insurer via electronic mail at
XxxXX@xxxx.xxx. The requirement for the delivery of any Insurer Financial
Statements pursuant to this Section 2.04(j) shall be satisfied to the extent
that the Insurer has delivered the required Insurer Financial Statements
pursuant to any other transaction in which IndyMac is acting as "Seller." The
Insurer shall use commercially reasonable efforts to identify each transaction
to which the delivery relates, provided that the failure to denote such
transactions shall not be deemed a failure to deliver such Insurer Financial
Statements pursuant to this Section 2.04(j).
ARTICLE III
THE POLICY; REIMBURSEMENT
Section 3.01. Issuance of the Policy.
The Insurer agrees to issue the Policy on the Closing Date subject to
satisfaction of the conditions precedent set forth below on or prior to the
Closing Date:
(a) [RESERVED];
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(b) Operative Documents. The Insurer shall have received a copy of each
of the Operative Documents, in form and substance reasonably satisfactory to the
Insurer, duly authorized, executed and delivered by each party thereto;
(c) Governmental Approvals. The Insurer shall have received a copy of
any governmental approval necessary for the Transaction;
(d) [RESERVED];
(e) Representations and Warranties. The representations and warranties
(other than with respect to the Mortgage Loans) of each of the Seller, the
Servicer and the Depositor that are made on and as of the Closing Date or
Cut-off Date, as applicable, set forth or incorporated by reference in this
Insurance Agreement shall be true and correct on and as of such Closing Date or
Cut-off Date, as applicable;
(f) Opinions of Counsel. The Insurer shall have received all opinions of
counsel addressed to any of Moody's and S&P, the Indenture Trustee, the Owner
Trustee, IndyMac, the Depositor and the Underwriter, or any other parties to the
Operative Documents and the Transaction dated the Closing Date in form and
substance reasonably satisfactory to the Insurer, addressed to the Insurer and
addressing such matters as the Insurer may reasonably request, and the counsel
providing each such opinion shall have been instructed by its client to deliver
such opinion to the addressees thereof;
(g) Approvals, Etc. The Insurer shall have received true and correct
copies of all approvals, licenses and consents, if any, including any required
approval of the shareholders or beneficial owners, as applicable, of IndyMac and
the Depositor, required in connection with the Transaction;
(h) No Litigation, Etc. No suit, action or other proceeding,
investigation or injunction, or final judgment relating thereto, shall be
pending or threatened before any court, governmental or administrative agency or
arbitrator in which it is sought to restrain or prohibit or to obtain damages or
other relief in connection with any of the Operative Documents or the
consummation of the Transaction;
(i) Legality. No statute, rule, regulation or order shall have been
enacted, entered or deemed applicable by any government or governmental or
administrative agency or court that would make the Transaction illegal or
otherwise prevent the consummation thereof;
(j) Satisfaction of Conditions of the Underwriting Agreement. All
conditions in the Underwriting Agreement relating to the Underwriters'
obligation to purchase the Class A Notes shall have been satisfied, without
taking into account any waiver by the Underwriter of any condition unless such
waiver has been approved by the Insurer;
(k) Issuance of Ratings. The Insurer shall have received confirmation
that the Class A Notes are rated at least "BBB-" by S&P and at least "Baa2" by
Moody's, without regard to the Policy, and that the Class A Notes, when issued,
will be rated "AAA" by S&P and "Aaa" by Moody's;
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(l) No Default. No Default or Event of Default shall have occurred;
(m) The Insurer shall have received executed copies of certificates of
the secretaries of each of the Seller, the Servicer and the Depositor, and such
other officers of each of them as the Insurer shall have reasonably requested,
each of which shall be substantially in the form approved by the Insurer;
(n) Satisfactory Documentation. The Insurer and its counsel shall have
reasonably determined that all documents, certificates and opinions to be
delivered in connection with the Class A Notes conform to the terms of the Sale
and Servicing Agreement, the Indenture and this Insurance Agreement.
Section 3.02. Payment of Fees and Premium.
(a) Legal, Accounting and Due Diligence Fees. IndyMac shall pay or cause
to be paid to the Insurer, at the Closing Date, legal fees, due diligence
expenses and accounting fees incurred by the Insurer in connection with the
issuance of the Policy in an amount equal to $31,000.
(b) Premium.
(i) In consideration of the issuance by the Insurer of the Policy,
the Insurer shall be entitled to receive the Premium with respect to the
Policy, in the amount set forth herein, as and when due and from the
Available Funds as specified in Section 5.01 of the Sale and Servicing
Agreement. The Premium due on each Payment Date in respect of the Policy
shall be an amount equal to 1/12th of the product of (i) the Premium
Percentage and (ii) the aggregate Note Balance of the Notes on the prior
Payment Date (after giving effect to any distributions to be made on such
Payment Date); provided that on the First Payment Date, the Premium will
be equal to the product of the (i) Premium Percentage converted to a daily
rate and (ii) the aggregate Note Balance of the Notes as of the Closing
Date and (iii) the number of days from and including the Closing Date to
and including the first Payment Date.
(ii) The Premium paid under the Indenture shall be nonrefundable
without regard to whether the Insurer makes any payment under the Policy
or any other circumstances relating to the Class A Notes or provision
being made for payment of the Class A Notes prior to maturity.
(c) Rating Agency Fees. IndyMac shall promptly pay the initial fees of
S&P and Moody's with respect to the Class A Notes and the transaction following
receipt of a statement with respect thereto. All periodic and subsequent fees of
S&P or Moody's with respect to, and directly allocable to, the Class A Notes
shall be for the account of, and shall be billed to, IndyMac. The fees for any
other rating agency shall be paid by the party requesting such other agency's
rating unless such other agency is a substitute for S&P or Moody's in the event
that S&P or Xxxxx'x is no longer rating the Class A Notes, in which case the
fees for such agency shall be paid by IndyMac.
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Section 3.03. Reimbursement Obligation.
(a) As and when due in accordance with and from the Available Funds as
specified in Section 8.02 of the Indenture, the Insurer shall be entitled to
reimbursement for any payment made by the Insurer under the Policy, which
reimbursement shall be due and payable on the date that any amount is paid under
the Policy, in an amount equal to the amount to be so paid and all amounts
previously paid that remain unreimbursed, together with interest on any and all
such amounts remaining unreimbursed (to the extent permitted by law, if in
respect of any unreimbursed amounts representing interest) from the date such
amounts became due until paid in full (after as well as before judgment), at a
rate of interest equal to the Late Payment Rate.
(b) Anything herein or in any Operative Document to the contrary
notwithstanding, the Insurer shall be entitled to full reimbursement (i) from
IndyMac for any payment made under the Policy arising as a result of IndyMac's
failure to substitute for or deposit an amount in respect of any defective
Mortgage Loan as required pursuant to Section 3.01 of the Mortgage Loan Purchase
Agreement or Section 2.03 and Section 2.04 of the Sale and Servicing Agreement,
together with interest on any and all such amounts remaining unreimbursed (to
the extent permitted by law, if in respect of any such unreimbursed amounts
representing interest) from the date such amounts became due until paid in full
(after as well as before judgment), at a rate of interest equal to the Late
Payment Rate, and (ii) from each of the Seller or the Servicer for any payment
made under the Policy arising as a result of IndyMac's failure to pay or deposit
any amount required to be paid or deposited pursuant to the Operative Documents,
together with interest on any and all such amounts remaining unreimbursed (to
the extent permitted by law, if in respect of any such unreimbursed amounts
representing interest) from the date such amounts became due until paid in full
(after as well as before judgment), at a rate of interest equal to the Late
Payment Rate.
(c) IndyMac agrees to pay to the Insurer any and all reasonable charges,
fees, costs and expenses that the Insurer may reasonably pay or incur, including
reasonable attorneys' and accountants' fees and expenses, in connection with (i)
the enforcement, defense or preservation of any rights in respect of any of the
Operative Documents, including defending, monitoring or participating in any
litigation or proceeding (including any insolvency proceeding in respect of any
Transaction participant or any affiliate thereof) relating to any of the
Operative Documents, any party to any of the Operative Documents (in its
capacity as such a party) or the Transaction or (ii) any amendment, waiver or
other action with respect to, or related to, any Operative Document, whether or
not executed or completed. Provided that three Business Days written notice of
the intended payment or incurrence shall have been given to IndyMac by the
Insurer, such reimbursement shall be due on the dates on which such charges,
fees, costs or expenses are paid or incurred by the Insurer. Notwithstanding the
foregoing, in no event shall the Insurer have any recourse under this subsection
against the Seller or the Servicer with respect to any payments the Insurer has
made in respect of principal or interest distributions on the Class A Notes
(except pursuant to Section 3.03(b) above). In addition, IndyMac shall be
responsible for payment of all costs and expenses that the Insurer shall incur
relating to any insolvency, bankruptcy or liquidation of IndyMac.
(d) IndyMac agrees to pay to the Insurer interest (without duplication)
on any and all amounts described in subsections 3.03(b), 3.03(c) and 3.03(e) and
Sections 3.02 and 3.04 from
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the date such amounts become due or, in the case of subsection 3.03(c) or
Section 3.04, are incurred or paid by the Insurer until payment thereof in full
(after as well as before judgment), at the Late Payment Rate.
(e) IndyMac agrees to pay to the Insurer as follows: any payments made
by the Insurer on behalf of, or advanced to, IndyMac or the Depositor including
any amounts payable by IndyMac or the Depositor pursuant to any of the Operative
Documents on the date any such payment is made or advanced by the Insurer.
Notwithstanding the foregoing, in no event shall the Insurer have any recourse
under this subsection against IndyMac or the Depositor with respect to any
payments the Insurer has made in respect of principal or interest distributions
on the Class A Notes (except pursuant to Section 3.03(b) above).
(f) The Insurer shall have no right to set-off payments to be made under
the Policy against payments to be made to the Insurer by IndyMac or the
Depositor (or any person or organization acting on their behalf), the Indenture
Trustee, any Seller or any Holder or any affiliate, officer or director of any
of them.
Section 3.04. Indemnification.
(a) In addition to any and all of the Insurer's rights of reimbursement,
indemnification and subrogation and to any other rights of the Insurer pursuant
hereto or under law or in equity, IndyMac, as Seller and as Servicer, agrees to
pay, and to protect, indemnify and save harmless, the Insurer and its officers,
directors, shareholders, employees, agents and each Person, if any, who controls
the Insurer within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act from and against, any and all claims,
losses, liabilities (including penalties), actions, suits, judgments, demands,
damages, costs or expenses (including reasonable fees and expenses of attorneys,
consultants and auditors and reasonable costs of investigations) incurred by the
Insurer, its officers, directors, shareholders, employees, agents and each
Person, if any, who controls the Insurer within the meaning of either Section 15
of the Securities Act or Section 20 of the Securities Exchange Act, arising out
of or relating to the transactions contemplated by the Operative Documents by
reason of:
(i) any omission or action (other than any resulting from an
omission or action by the Insurer, the Depositor or the Underwriters) in
connection with the offering or delivery of the Class A Notes other than
those covered by subparagraph (v) below;
(ii) the misfeasance or malfeasance of, or gross negligence or
theft committed by, any director, officer, employee or agent of IndyMac in
connection with any Transaction arising from or relating to the Operative
Documents;
(iii) the violation by IndyMac of any federal or state law, rule or
regulation, or any judgment, order or decree applicable to it;
(iv) the breach by IndyMac, the Depositor or the Issuing Entity of
any representation, warranty, or covenant under any of the Operative
Documents or the occurrence, in respect of IndyMac, in its capacity as
Servicer, of any Event of Servicing Termination under the Sale and
Servicing Agreement, or in respect of IndyMac, under any of the Operative
Documents of any "event of default"; or
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(v) any untrue statement or alleged untrue statement of a material
fact contained in any Offering Document or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, other than with respect to the
Insurer Information or the Underwriter.
(b) In addition to any and all of the Insurer's rights of reimbursement,
indemnification and subrogation and to any other rights of the Insurer pursuant
hereto or under law or in equity, the Depositor agrees to pay, and to protect,
indemnify and save harmless, the Insurer and its officers, directors,
shareholders, employees, agents and each Person, if any, who controls the
Insurer within the meaning of either Section 15 of the Securities Act or Section
20 of the Securities Exchange Act from and against, any and all claims, losses,
liabilities (including penalties), actions, suits, judgments, demands, damages,
costs or expenses (including reasonable fees and expenses of attorneys,
consultants and auditors and reasonable costs of investigations) incurred by the
Insurer, its officers, directors, shareholders, employees, agents and each
Person, if any, who controls the Insurer within the meaning of either Section 15
of the Securities Act or Section 20 of the Securities Exchange Act, arising out
of or relating to the transactions contemplated by the Operative Documents to
which it or any Affiliate is a party by reason of:
(i) any omission or action (other than any resulting from an
omission or action by any Person other than the Depositor) in connection
with the offering, issuance or delivery of the Class A Notes by the
Depositor;
(ii) the misfeasance or malfeasance of, or gross negligence or
theft committed by, any director, officer, employee or agent of the
Depositor in connection with any Transaction arising from or relating to
the Operative Documents to which it is a party;
(iii) the violation by the Depositor of any federal or state law,
rule or regulation, or any judgment, order or decree applicable to it; or
(iv) the breach by the Depositor of any representation, warranty or
covenant under any of the Operative Documents to which it is a party or
the occurrence in respect of the Depositor under any of the Operative
Documents to which it is a party of any "event of default".
(c) The Insurer agrees to pay, and to protect, indemnify and save
harmless, each of IndyMac and the Depositor and their respective officers,
directors, shareholders, employees, agents and each Person, if any, who controls
IndyMac and the Depositor within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act from and against,
any and all claims, losses, liabilities (including penalties), actions, suits,
judgments, demands, damages, costs or expenses (including reasonable fees and
expenses of attorneys, consultants and auditors and reasonable costs of
investigations) of any nature incurred by IndyMac, the Depositor or their
respective officers, directors, shareholders, employees, agents and each Person,
if any, who controls the Insurer within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act, arising out of or
by reason of (i) any untrue statement or alleged untrue statement of a material
fact contained in the Insurer Information or any omission or alleged omission to
state in the Insurer Information a material
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fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, (ii)
any failure of the Insurer to make a payment required to be made under the
Policy or (iii) a breach of any of the representations and warranties of the
Insurer contained in Section 2.04.
(d) If any action or proceeding (including any governmental
investigation) shall be brought or asserted against any Person (individually, an
"Indemnified Party" and, collectively, the "Indemnified Parties") in respect of
which the indemnity provided in Section 3.04(a), (b) or (c) may be sought from
IndyMac or the Depositor, on the one hand, or the Insurer, on the other (each,
an "Indemnifying Party") hereunder, each such Indemnified Party shall promptly
notify the Indemnifying Party in writing, and the Indemnifying Party shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all expenses. The
omission so to notify the Indemnifying Party will not relieve it from any
liability which it may have to any Indemnified Party except to the extent the
Indemnifying Party is prejudiced thereby. The Indemnified Party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof at the expense of the Indemnified Party; provided, however, that
the fees and expenses of such separate counsel shall be at the expense of the
Indemnifying Party if (i) the Indemnifying Party has agreed in writing to pay
such fees and expenses, (ii) the Indemnifying Party shall have failed within a
reasonable period of time to assume the defense of such action or proceeding and
employ counsel reasonably satisfactory to the Indemnified Party in any such
action or proceeding or (iii) the named parties to any such action or proceeding
(including any impleaded parties) include both the Indemnified Party and the
Indemnifying Party, and the Indemnified Party shall have been advised by counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to the Indemnifying Party (in which case,
if the Indemnified Party notifies the Indemnifying Party in writing that it
elects to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense of such action
or proceeding on behalf of such Indemnified Party, it being understood, however,
that the Indemnifying Party shall not, in connection with any one such action or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys at any time for the Indemnified Parties, which
firm shall be designated in writing by the Indemnified Party and shall be
reasonably satisfactory to the Indemnifying Party). The Indemnifying Party shall
not be liable for any settlement of any such action or proceeding effected
without its written consent, which consent shall not be unreasonably withheld,
conditioned or delayed, but, if settled with its written consent, or if there is
a final judgment for the plaintiff in any such action or proceeding with respect
to which the Indemnifying Party shall have received notice in accordance with
this subsection (c), the Indemnifying Party agrees to indemnify and hold the
Indemnified Parties harmless from and against any loss or liability by reason of
such settlement or judgment. Notwithstanding anything in this paragraph to the
contrary, the consent of such Indemnified Party shall not be required if such
settlement fully discharges, with prejudice against the plaintiff, the claim or
action against such Indemnified Party.
(e) To provide for just and equitable contribution if the
indemnification provided by the Indemnifying Party is determined to be
unavailable or insufficient to hold harmless any Indemnified Party (other than
due to application of this Section), each Indemnifying Party shall
- 28 -
contribute to the losses incurred by the Indemnified Party on the basis of the
relative fault of the Indemnifying Party, on the one hand, and the Indemnified
Party, on the other hand.
No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.
Section 3.05. Payment Procedure.
In the event of any payment by the Insurer, IndyMac and the Depositor
agree to accept the voucher or other evidence of payment as prima facie evidence
of the propriety thereof and the liability, if any, described in Section 3.03
therefor to the Insurer. All payments to be made to the Insurer under this
Insurance Agreement shall be made to the Insurer in lawful currency of the
United States of America in immediately available funds at the notice address or
wire transfer in accordance with the wire transfer instructions for the Insurer
as specified in the Indenture on the date when due or as the Insurer shall
otherwise direct by written notice to the other parties hereto. In the event
that the date of any payment to the Insurer or the expiration of any time period
hereunder occurs on a day that is not a Business Day, then such payment or
expiration of time period shall be made or occur on the next succeeding Business
Day with the same force and effect as if such payment was made or time period
expired on the scheduled date of payment or expiration date.
ARTICLE IV
FURTHER AGREEMENTS
Section 4.01. Effective Date; Term of the Insurance Agreement.
This Insurance Agreement shall take effect on the Closing Date and shall
remain in effect until the later of (a) such time as the Insurer is no longer
subject to a claim under the Policy and the Policy shall have been surrendered
to the Insurer for cancellation and (b) all amounts payable to the Insurer by
IndyMac or the Depositor hereunder or from any other source hereunder or under
the Operative Documents and all amounts payable under the Class A Notes have
been paid in full; provided, however, that the provisions of Sections 3.02, 3.03
and 3.04 hereof shall survive any termination of this Insurance Agreement.
Section 4.02. Waiver of Rights. Except at such times as a default in
payment under the Policy shall exist or shall have occurred, none of IndyMac,
the Depositor or the Indenture Trustee shall grant any waiver of rights under
any of the Operative Documents to which any of them is a party without the prior
written consent of the Insurer, which shall not be unreasonably withheld,
conditioned or delayed and any such waiver without prior written consent of the
Insurer shall be null and void and of no force or effect.
Section 4.03. Obligations Absolute.
(a) So long as no Credit Enhancer Default shall have occurred and shall
have continued beyond any period of cure applicable thereto, the obligations of
IndyMac and the Depositor hereunder shall be absolute and unconditional and
shall be paid or performed strictly in accordance with this Insurance Agreement
under all circumstances irrespective of:
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(i) any lack of validity or enforceability of any of the Operative
Documents or the Class A Notes, or any amendment or other modifications
of, or waiver, with respect to any of the Operative Documents or the Class
A Notes, that have not been approved by the Insurer;
(ii) any exchange or release of any other obligations hereunder;
(iii) the existence of any claim, setoff, defense, reduction,
abatement or other right that IndyMac or the Depositor may have at any
time against the Insurer or any other Person;
(iv) any document presented in connection with the Policy proving
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(v) any payment by the Insurer under the Policy against
presentation of a certificate or other document that does not strictly
comply with terms of that Policy;
(vi) any failure of IndyMac or the Depositor to receive the
proceeds from the sale of the Class A Notes; and
(vii) any other circumstances, other than payment in full, that
might otherwise constitute a defense available to, or discharge of,
IndyMac or the Depositor in respect of any Operative Document.
(b) So long as no Credit Enhancer Default shall have occurred and shall
have continued beyond any period of cure applicable thereto, IndyMac and the
Depositor and any and all others who are now or may become liable for all or
part of the obligations of IndyMac or the Depositor under this Insurance
Agreement, to the extent permitted by law, irrevocably renounce the right to
assert as a defense to the performance of their respective obligations each of
the following: (i) any and all redemption and exemption rights and the benefit
of all valuation and appraisement privileges against the indebtedness and
obligations evidenced by any Operative Document or by any extension or renewal
thereof; (ii) presentment and demand for payment, notices of nonpayment and of
dishonor, protest of dishonor and notice of protest; (iii) all notices in
connection with the delivery and acceptance hereof and all other notices in
connection with the performance, default or enforcement of any payment
hereunder, except as required by the Operative Documents; and (iv) all rights of
abatement, diminution, postponement or deduction, or to any defense other than
payment, or to any right of setoff or recoupment arising out of any breach under
any of the Operative Documents, by any party thereto or any beneficiary thereof,
or out of any obligation at any time owing to IndyMac or the Depositor.
(c) IndyMac and the Depositor and any and all others who are now or may
become liable for all or part of the obligations of IndyMac or the Depositor
under this Insurance Agreement, to the extent permitted by law, agree to be
bound by this Insurance Agreement and (i) agree that any consent, waiver or
forbearance hereunder with respect to an event shall operate only for such event
and not for any subsequent event; (ii) consent to any and all extensions of time
that may be granted by the Insurer with respect to any payment hereunder or
other provisions hereof and to the release of any security at any time given for
any payment hereunder,
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or any part thereof, with or without substitution, and to the release of any
Person or entity liable for any such payment; and (iii) consent to the addition
of any and all other makers, endorsers, guarantors and other obligors for any
payment hereunder, and to the acceptance of any and all other security for any
payment hereunder, and agree that the addition of any such obligors or security
shall not affect the liability of the parties hereto for any payment hereunder.
(d) Nothing herein shall be construed as prohibiting IndyMac or the
Depositor from pursuing any rights or remedies it may have against any Person in
a separate legal proceeding.
Section 4.04. Assignments; Reinsurance; Third-Party Rights.
(a) This Insurance Agreement shall be a continuing obligation of the
parties hereto and shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Neither IndyMac
nor the Depositor may assign any of their respective rights under this Insurance
Agreement or the Policy, or delegate any of their respective duties hereunder or
thereunder, without the prior written consent of the Insurer (except to the
extent otherwise provided under Section 2.03(A)(c) and (B)(c)), which consent
shall not be unreasonably withheld delayed or conditioned. Any assignments made
in violation of this Insurance Agreement shall be null and void.
(b) The Insurer shall have the right to give participations in its
rights under this Insurance Agreement and to enter into contracts of reinsurance
with respect to the Policy upon such terms and conditions as the Insurer may in
its discretion determine; provided, however, that no such participation or
reinsurance agreement or arrangement shall relieve the Insurer of any of its
obligations hereunder or under the Policy, nor shall IndyMac or the Depositor be
required to deal directly with any such parties.
(c) Except as provided herein with respect to participants and
reinsurers, nothing in this Insurance Agreement shall confer any right, remedy
or claim, express or implied, upon any Person, including, particularly, any
Holder, other than the Insurer against IndyMac or the Depositor, or IndyMac or
the Depositor against the Insurer, and all the terms, covenants, conditions,
promises and agreements contained herein shall be for the sole and exclusive
benefit of the parties hereto and their successors and permitted assigns.
Neither the Indenture Trustee nor any Holder shall have any right to payment
from any Premiums paid or payable hereunder or under the Sale and Servicing
Agreement or from any amounts paid by IndyMac pursuant to Sections 3.02 or 3.03.
Section 4.05. Liability of the Insurer.
Neither the Insurer nor any of its officers, directors or employees shall
be liable or responsible for: (a) the use that may be made of the Policy by the
Indenture Trustee or for any acts or omissions of the Indenture Trustee in
connection therewith; or (b) the validity, sufficiency, accuracy or genuineness
of documents delivered to the Insurer in connection with any claim under the
Policy, or of any signatures thereon, even if such documents or signatures
should in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged (unless the Insurer shall have actual knowledge thereof).
In furtherance and not in limitation of the
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foregoing, the Insurer may accept documents that appear on their face to be in
order, without responsibility for further investigation.
Section 4.06. Annual Servicing Audit and Certification.
The annual servicing audit required pursuant to Section 3.11 of the Sale
and Servicing Agreement shall be performed by an independent third party
reasonably acceptable to the Insurer. Any one of the four major nationally
recognized firms of independent public accountants is deemed to be acceptable.
ARTICLE V
DEFAULTS AND REMEDIES
Section 5.01. Defaults.
The occurrence of any of the following shall constitute an Event of
Default hereunder:
(a) Any representation or warranty (other than a representation or
warranty in respect of the Mortgage Loans contained in Section 3.01 of the
Mortgage Loan Purchase Agreement or Section 2.04 of the Sale and Servicing
Agreement) made by IndyMac or the Depositor hereunder or under the Operative
Documents, or in any certificate furnished hereunder or under the Operative
Documents, shall prove to be untrue or incorrect in any material respect
(including, without limitation, any representation or warranty made by the
Seller, the Servicer or the Depositor as to the Trust Fund;
(b) (i) IndyMac or the Depositor shall fail to pay when due any amount
payable by it hereunder or (ii) a legislative body has enacted any law that
declares or a court of competent jurisdiction shall find or rule that this
Insurance Agreement or any other Operative Document is not valid and binding on
IndyMac or the Depositor; provided that, with respect to any law or judicial
action within the scope of this clause (ii), IndyMac and the Depositor shall
have 30 days to reinstate the binding effect of this Insurance Agreement or any
other Operative Document, and the Insurer agrees to take such actions as may be
reasonably requested of it to facilitate the reinstatement of such binding
effect;
(c) The occurrence and continuance of an "event of default" or "Servicer
Events of Termination" or "Event of Default," under any Operative Document;
(d) Any failure on the part of IndyMac or the Depositor duly to observe
or perform in any material respect any other of the covenants or agreements on
the part of IndyMac or the Depositor contained in this Insurance Agreement
(other than the covenants or agreements contained in Section 2.02(a)(i), a
breach of any of which shall constitute an immediate Event of Default) which
continues unremedied for a period of 30 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to IndyMac by the Insurer (with a copy to the Indenture Trustee) or by the
Indenture Trustee (with a copy to the Insurer, including, without limitation,
any covenants of the Servicer or the Depositor made as to the Trust Fund);
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(e) A decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under any present or
future federal or state bankruptcy, insolvency or similar law or the appointment
of a conservator or receiver or liquidator or other similar official in any
bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against IndyMac or the Depositor and such
decree or order shall have remained in force undischarged or unstayed for a
period of 90 consecutive days;
(f) IndyMac or the Depositor shall consent to the appointment of a
conservator or receiver or liquidator or other similar official in any
bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to IndyMac or the Depositor or
of or relating to all or substantially all of their respective property;
(g) IndyMac or the Depositor shall become insolvent or admit in writing
its inability to pay its debts generally as they become due, file a petition to
take advantage of or otherwise voluntarily commence a case or proceeding under
any applicable bankruptcy, insolvency, reorganization or other similar statute,
make an assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations; or
(h) the Trust Fund shall become subject to an entity level tax or to
registration as an investment company under the Investment Company Act.
Section 5.02. Remedies; No Remedy Exclusive.
(a) Upon the occurrence of an Event of Default, the Insurer may exercise
any one or more of the rights and remedies set forth below:
(i) declare all indebtedness under any of the Operative Documents
or arising out of the Transaction of every type or description then owed
by the Seller, the Servicer or the Depositor to the Insurer to be
immediately due and payable, and the same shall thereupon be immediately
due and payable;
(ii) exercise any rights and remedies under the Trust Agreement in
accordance with the terms thereof or direct the Owner Trustee to exercise
such rights and remedies in accordance with the terms of the Trust
Agreement;
(iii) exercise any rights and remedies under the Indenture in
accordance with the terms thereof or direct the Indenture Trustee to
exercise such rights and remedies in accordance with the terms of the
Indenture;
(iv) exercise any rights and remedies under the Mortgage Loan
Purchase Agreement in accordance with the terms thereof or direct the
appropriate party to exercise such rights and remedies in accordance with
the terms of the Mortgage Loan Purchase Agreement; or
(v) take whatever action at law or in equity as may appear
necessary or desirable in its judgment to collect the amounts, if any,
then due under this Insurance Agreement or any other Operative Document or
to enforce performance and observance
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of any obligation, agreement or covenant of IndyMac or the Depositor under
this Insurance Agreement or any other Operative Documents.
(b) Unless otherwise expressly provided, no remedy herein conferred or
reserved is intended to be exclusive of any other available remedy, but each
remedy shall be cumulative and shall be in addition to other remedies given
under this Insurance Agreement, the Indenture, or existing at law or in equity.
No delay or omission to exercise any right or power accruing under this
Insurance Agreement or the Indenture upon the happening of any event set forth
in Section 5.01 shall impair any such right or power or shall be construed to be
a waiver thereof, but any such right and power may be exercised from time to
time and as often as may be deemed expedient. In order to entitle the Insurer to
exercise any remedy reserved to the Insurer in this Article, it shall not be
necessary to give any notice, other than such notice as may be required by this
Article.
Section 5.03. Waivers.
(a) No failure by the Insurer to exercise, and no delay by the Insurer
in exercising, any right hereunder shall operate as a waiver thereof. The
exercise by the Insurer of any right hereunder shall not preclude the exercise
of any other right, and the remedies provided herein to the Insurer are declared
in every case to be cumulative and not exclusive of any remedies provided by law
or equity.
(b) The Insurer shall have the right, to be exercised in its complete
discretion, to waive any Event of Default hereunder, by a writing setting forth
the terms, conditions and extent of such waiver signed by the Insurer and
delivered to IndyMac. Unless such writing expressly provides to the contrary,
any waiver so granted shall extend only to the specific event or occurrence
which gave rise to the Event of Default so waived and not to any other similar
event or occurrence which occurs subsequent to the date of such waiver.
ARTICLE VI
MISCELLANEOUS
Section 6.01. Third-Party Beneficiary. IndyMac, in its capacity as the
Seller and the Servicer, and the Depositor hereby agree that the Insurer shall
have all rights provided to the Insurer in the Operative Documents and that the
Insurer shall constitute a third-party beneficiary with respect to such rights
in respect of the Operative Documents and hereby incorporates and restates its
representations, warranties and covenants as set forth therein for the benefit
of the Insurer. The Insurer agrees that the rights it shall have as a
third-party beneficiary under the Indenture shall be limited to the rights
granted to it and the Class A Noteholders in the Indenture.
Section 6.02. Amendments, Etc.
This Insurance Agreement may be amended, modified, supplemented or
terminated only by written instrument or written instruments signed by the
parties hereto. IndyMac agrees to provide a copy of any amendment to this
Insurance Agreement promptly to the Indenture Trustee and the rating agencies
maintaining a rating on the Class A Notes. No act or course of dealing shall be
deemed to constitute an amendment, modification, supplement or termination
hereof.
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Section 6.03. Notices.
All demands, notices and other communications to be given hereunder shall
be in writing (except as otherwise specifically provided herein) and shall be
mailed by registered mail or personally delivered and telecopied or emailed to
the recipient as follows:
(a) To the Insurer:
Financial Guaranty Insurance Company
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Surveillance - IndyMac 2006-H1
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
E-mail: XXXxxxxxxxxxxx@xxxx.xxx
(in each case in which notice or other communication to the
Insurer refers to an Event of Default, a claim on the Policy
or with respect to which failure on the part of the Insurer to
respond shall be deemed to constitute consent or acceptance,
then a copy of such notice or other communication should also
be sent to the attention of the general counsel of each of
IndyMac, the Insurer and the Indenture Trustee and, in all
cases, both any original and all copies shall be marked to
indicate "URGENT MATERIAL ENCLOSED.") Any notice regarding
delivery or non-delivery of the Insurer Financial Information
shall be sent via electronic mail to the Insurer at
XxxXX@xxxx.xxx and shall reference the deal name and policy
number.
(b) To IndyMac:
IndyMac Bank, F.S.B.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Treasurer
Notice to IndyMac shall also constitute notice to the Depositor to
the extent the party providing such notice is required to provide
notice to both parties (in each case in which notice or other
communication to IndyMac refers to an Event of Default, a claim
against IndyMac or the Depositor or with respect to which failure on
the part of IndyMac or the Depositor to respond shall be deemed to
constitute consent or acceptance, then a copy of such notice or
other communication should also be sent to the attention of the
general counsel of each of IndyMac, the Insurer and the Indenture
Trustee and, in all cases, both any original and all copies shall be
marked to indicate "URGENT MATERIAL ENCLOSED.").
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(c) To the Depositor:
IndyMac ABS, Inc.
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
(d) To the Indenture Trustee:
Deutsche Bank National Trust Company
0000 Xxxx Xxxxx Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Attention: Trust Administration--IN06H1
Facsimile: 000-000-0000
Confirmation: 714-247-6000
A party may specify an additional or different address or addresses by
writing mailed or delivered to the other parties as aforesaid. All such notices
and other communications shall be effective upon receipt.
Section 6.04. Severability.
In the event that any provision of this Insurance Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, the parties
hereto agree that such holding shall not invalidate or render unenforceable any
other provision hereof. The parties hereto further agree that the holding by any
court of competent jurisdiction that any remedy pursued by any party hereto is
unavailable or unenforceable shall not affect in any way the ability of such
party to pursue any other remedy available to it.
Section 6.05. Governing Law.
This Insurance Agreement shall be governed by and construed in accordance
with the laws of the State of New York (without giving effect to the conflict of
laws provisions thereof other than Sections 5-1401 and 5-1402 of the General
Obligations Law) which the Parties expressly rely upon as the governing law
hereunder.
Section 6.06. Consent to Jurisdiction.
(a) The parties hereto hereby irrevocably submit to the non-exclusive
jurisdiction of the United States District Court for the Southern District of
New York and any court in the State of New York located in the City and County
of New York, and any appellate court from any thereof, in any action, suit or
proceeding brought against it and to or in connection with any of the Operative
Documents or the Transaction or for recognition or enforcement of any judgment,
and the parties hereto hereby irrevocably and unconditionally agree that all
claims in respect of any such action or proceeding may be heard or determined in
such New York state court or, to the extent permitted by law, in such federal
court. The parties hereto agree that a final unappealable judgment in any such
action, suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. To
the extent permitted by applicable law, the parties hereto hereby waive and
agree not to assert
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by way of motion, as a defense or otherwise in any such suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
such courts, that the suit, action or proceeding is brought in an inconvenient
forum, that the venue of the suit, action or proceeding is improper or that the
related documents or the subject matter thereof may not be litigated in or by
such courts.
(b) To the extent permitted by applicable law, the parties hereto shall
not seek and hereby waive the right to any review of the judgment of any such
court by any court of any other nation or jurisdiction which may be called upon
to grant an enforcement of such judgment.
(c) Nothing contained in this Insurance Agreement shall limit or affect
any party's right to serve process in any other manner permitted by law or to
start legal proceedings relating to any of the Operative Documents against any
other party or its properties in the courts of any jurisdiction.
Section 6.07. Consent of the Insurer.
In the event that the consent of the Insurer is required under any of the
Operative Documents, the determination whether to grant or withhold such consent
shall be made by the Insurer in its sole discretion without any implied duty
towards any other Person, except as otherwise expressly provided therein, and
such consent is only effective when and if given by the Insurer in writing.
Section 6.08. Counterparts.
This Insurance Agreement may be executed in counterparts by the parties
hereto, and all such counterparts shall constitute one and the same instrument.
Section 6.09. Headings.
The headings of Articles and Sections and the Table of Contents contained
in this Insurance Agreement are provided for convenience only. They form no part
of this Insurance Agreement and shall not affect its construction or
interpretation.
Section 6.10. Trial by Jury Waived.
Each party hereby waives, to the fullest extent permitted by law, any
right to a trial by jury in respect of any litigation arising directly or
indirectly out of, under or in connection with any of the Operative Documents or
any of the Transactions contemplated thereunder. Each party hereto (A) certifies
that no representative, agent or attorney of any party hereto has represented,
expressly or otherwise, that it would not, in the event of litigation, seek to
enforce the foregoing waiver and (B) acknowledges that it has been induced to
enter into the Operative Documents to which it is a party by, among other
things, this waiver.
Section 6.11. Limited Liability.
No recourse under any Operative Document shall be had against, and no
personal liability shall attach to, any officer, employee, director, affiliate
or shareholder of any party hereto, as
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such, by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise in respect of any of the
Operative Documents or the Policy, it being expressly agreed and understood that
each Operative Document is solely a corporate obligation of each party thereto,
and that any and all personal liability, either at common law or in equity, or
by statute or constitution, of every such officer, employee, director, affiliate
or shareholder for breaches of any party thereto of any obligations under any
Operative Document is hereby expressly waived as a condition of and in
consideration for the execution and delivery of this Insurance Agreement.
Section 6.12. Limitation of Owner Trustee Liability.
It is expressly understood and agreed by the parties hereto that (a) this
Insurance Agreement is executed and delivered by Wilmington Trust Company, not
individually or personally, but solely as Owner Trustee, in the exercise of the
powers and authority conferred and vested in it, pursuant to the Trust
Agreement, (b) each of the representations, undertakings and agreements herein
made on the part of the Trust is made and intended not as personal
representations, undertakings and agreements by Wilmington Trust Company but is
made and intended for the purpose for binding only the Trust, (c) nothing herein
contained shall be construed as creating any liability on Wilmington Trust
Company, individually or personally, to perform any covenant either expressed or
implied contained herein, all such liability, if any, being expressly waived by
the parties hereto and by any person claiming by, through or under the parties
hereto, and (d) under no circumstances shall Wilmington Trust Company be
personally liable for the payment of any indebtedness or expenses of the Trust
or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Trust under this Insurance
Agreement or any Operative Document.
Section 6.13. Entire Agreement.
This Insurance Agreement and the Policy set forth the entire agreement
between the parties with respect to the subject matter hereof and thereof, and
this Insurance Agreement supersedes and replaces any agreement or understanding
that may have existed between the parties prior to the date hereof in respect of
such subject matter.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, all
as of the day and year first above mentioned.
FINANCIAL GUARANTY INSURANCE COMPANY,
as Insurer
By: /s/ Xxxx Xxxxxxx
____________________________________
Name: Xxxx Xxxxxxx
Title: Director
INDYMAC BANK, F.S.B.,
as Seller and Servicer
By: /s/ Xxxx Xxxxxxxx
____________________________________
Name: Xxxx Xxxxxxxx
Title: Senior Vice President,
Secondary Marketing
INDYMAC ABS, INC.,
as Depositor
By: /s/ Xxxx Xxxxxxxx
____________________________________
Name: Xxxx Xxxxxxxx
Title: Senior Vice President,
Secondary Marketing
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
By: /s/ Xxx Xxxxxxxx
____________________________________
Name: Xxx Xxxxxxxx
Title: Authorized Signer
INDYMAC HOME EQUITY MORTGAGE LOAN
ASSET-BACKED TRUST, SERIES 2006-H1,
as Issuing Entity
By: Wilmington Trust Company, not in
its individual capacity but solely
as Owner Trustee
By: /s/ Xxxxxxxx X. Xxxxx
____________________________________
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
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