EXHIBIT 99.7
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The Class 1-A4A Cap Contract
XXXXXX BROTHERS
Transaction
Date: 31 October, 2006
To: IndyMac INDX Grantor Trust 2006-AR14 1-A4A
c/o Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx,
Xxxxx Xxx, Xxxxxxxxxx 00000-0000,
Attention: Trust Administration; IN06AE
Facsimile: (000) 000-0000
From: Xxxxxx Brothers Special Financing Inc.
Xxxxx Xxx - Confirmations Group
Facsimile: (x0) 000-000-0000 (United States of America)
Telephone: 000-000-0000
Ref. Numbers: Effort ID: N1108826 / Global Deal ID: 2724973
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Dear Sir or Madam:
The purpose of this communication is to set forth the terms and conditions of
the interest rate transaction that has been entered into on the Trade Date
referred to below (the "Transaction"), between Xxxxxx Brothers Special
Financing Inc. ("Party A") and Deutsche Bank National Trust Company, solely in
its capacity as grantor trustee (the "Grantor Trustee") of the supplemental
interest trust (the "Supplemental Interest Trust") created under the PSA (as
defined herein) for IndyMac INDX Mortgage Loan Trust 2006-AR14, on behalf of
IndyMac INDX Grantor Trust 2006-AR14 1-A4A, a grantor trust (the "Grantor
Trust" or "Party B"). This communication constitutes a "Confirmation" as
referred to in the ISDA Form specified below.
This Confirmation is subject to and incorporates the terms of the 1992 version
of the preprinted multicurrency cross-border form of Master Agreement (the
"ISDA Form") published by the International Swaps and Derivatives Association,
Inc. ("ISDA"), but without regard to any modifications or elections that the
parties may be entitled to make pursuant to a Schedule except as provided in
the Additional Provisions paragraph herein. All provisions contained in, or
incorporated by reference to, the ISDA Form shall govern this Confirmation
except as expressly modified below. In addition, this Confirmation shall
itself evidence a complete and binding agreement between you and us as to the
terms and conditions of the Transaction to which this Confirmation relates.
Party A and Party B each represents that entering into the Transaction is
authorized and does not violate any laws of its jurisdiction of organization
or residence or the terms of any agreement to which it is a party and that,
upon due execution and delivery of this Confirmation, it will constitute a
legally valid and binding obligation, enforceable against it in accordance
with its terms, subject to applicable principles of bankruptcy and creditors'
rights generally and to equitable principles of general application.
XXXXXX BROTHERS SPECIAL FINANCING INC.
XXXXXX BROTHERS INC.
000 XXXXXXX XXXXXX, XXX XXXX XX 00000
The definitions and provisions contained in the 2000 ISDA Definitions as
published by the International Swaps and Derivatives Association, Inc. (the
"Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and the terms of this Confirmation, this
Confirmation will govern. For the purpose of the Definitions, references
herein to a "Transaction" shall be deemed to be references to a "Swap
Transaction". Capitalized terms used herein not otherwise defined are given
their meaning in the Prospectus Supplement dated as of October 30, 2006 for
the IndyMac INDX Mortgage Loan Trust 2006-AR14 (the "Prospectus Supplement").
The terms of the particular Transaction to which this communication relates
are as follows:
General Terms:
Trade Date: 27 October, 2006
Effective Date: 31 October, 2006
Termination Date: The earlier of (i) the Distribution Date following
the date on which the Class Certificate Balance of
the underlying Class 1-A4AU from the IndyMac INDX
Mortgage Loan Trust 2006-AR14 (the "Underlying
Class 1-A4AU Certificates") is reduced to zero, or
(ii) 25 November, 2046.
Class Certificate Balance: As reported on Bloomberg Financial Services, Inc.
("Bloomberg") for INDX 2006-AR14 for the Underlying
Class 1-A4AU, by entering Cusip 45668G AW 2,
, type "pdi4", . If Bloomberg fails to
publish the Class Certificate Balance of the
Underlying Class 1-A4AU Certificates for any
Calculation Period, the Class Certificate Balance
of the Underlying Class 1-A4AU Certificates shall
be provided by the Grantor Trustee to the
Calculation Agent pursuant to the Pooling and
Servicing Agreement dated as of October 1, 2006
among Deutsche Bank National Trust Company, as
grantor trustee, corridor trustee and supplemental
interest trustee, IndyMac F.S.B., as seller and
servicer, and IndyMac MBS, Inc., as depositor (the
"PSA").
Notional Amount: USD 47,906,000 for the initial Calculation Period,
and for each Calculation Period thereafter, the
Current Class Certificate Balance of the Underlying
Class 1-A4AU Certificates.
Floating Amounts I:
Floating Amount I Payer: Party B
Floating Amount I Payer Payment Dates: The 25th calendar day of each month, from and
including 25 November, 2006 to and including the
Termination Date, subject to adjustment in
accordance with the Modified Following Business Day
Convention.
Effort ID: N1108826 / Global Deal ID: 2724973
Page 2 of 6
Floating Amount I: The sum of (i) from interest payments on the
Underlying Class 1-A4AU Certificates, accrued and
unpaid interest on the related Cap Deferred
Interest Amount and (ii) to the extent of principal
payments on the underlying Class 1-A4AU
Certificates, the related Cap Deferred Interest
Amount.
Floating Rate Day Count Fraction: Actual/360
Reset Dates: The first day of each Calculation Period
Floating Amounts II:
Floating Amount II Payer: Party A
Floating Amount II Payer Period End The 25th calendar day of each month, from and
Dates: including 25 November, 2006 to and including the
Termination Date, subject to adjustment in
accordance with the Modified Following Business Day
Convention.
Early Payment: One (1) Business Day preceding each Floating Rate
Payer Period End Date.
Floating Amount II: The amount, if any, of Net Deferred Interest
allocated to the Underlying Class 1-A4AU
Certificates.
Floating Rate Day Count Fraction: Actual/360
Reset Dates: The first day of each Calculation Period
Business Days: New York
Miscellaneous:
Calculation Agent: Party A
Office: For the purposes of this Transaction, Party A is
not a Multibranch Party, and Party B is not a
Multibranch Party.
Transfer: Notwithstanding Section 7 of the ISDA Form, Party A
may assign its rights and obligations under this
Transaction, in whole and not in part, to any
Affiliate of Holdings effective upon delivery to
Party B of the guarantee by Holdings, in favor of
Party B, of the obligations of such Affiliate.
Governing Law: The laws of the State of New York (without
reference to choice of law doctrine).
Termination Currency: USD
Effort ID: N1108826 / Global Deal ID: 2724973
Page 3 of 6
Additional Provisions:
1. Payments on Early Termination. For the purpose of Section 6(e) of
the ISDA Form, Loss and the Second Method will apply.
2. Representations. Section 3 of the ISDA Form is hereby amended by
adding the following additional subsections:
(a) No Agency. It is entering into this Transaction as principal
(and not as agent or in any other capacity, fiduciary or
otherwise).
(b) Eligible Contract Participant. It is an "eligible contract
participant" as defined in the Commodity Futures
Modernization Act of 2000.
(c) No Reliance. In connection with the negotiation, entering
into and execution of this Transaction, Party B acknowledges
and agrees that: (i) Party A is acting for its own account
and not as a fiduciary for, or financial or investment
advisor to, Party B (or in any similar capacity) regardless
of whether Party A provides Party B with market information
or its views; (ii) Party B is not relying upon any
communications (whether written or oral) from Party A as
investment advice or as a recommendation to enter into this
Transaction (other than the representations expressly set
forth in the ISDA Form), it being understood that
information and explanations related to the terms and
conditions of this Transaction shall not be considered
investment advice or a recommendation to enter into this
Transaction; (iii) Party B has not received from Party A any
assurance or guarantee as to the expected results of this
Transaction and understands the risks of the Transaction;
(iv) Party B has consulted with its own legal, regulatory,
tax, business, investment, financial, and accounting
advisors to the extent it has deemed necessary, and it has
made its own independent investment, hedging, and trading
decisions based upon its own judgment and upon any advice
from such advisors as it has deemed necessary and not upon
any view expressed by Party A; and (v) Party B has
determined based upon its own judgment and upon any advice
received from its own professional advisors as it has deemed
necessary to consult that entering into the Transaction is
appropriate for such party in light of its financial
capabilities and objectives.
(d) Material Amendment. Party B represents that it will not
enter into any amendments or other modification to the
Prospectus Supplement or the PSA that would reasonably be
expected to have an adverse effect on Party A without at
least ten (10) Business Days' prior notice to Party A and
the prior written consent of Party A. If Party B does enter
into any such an amendment or modification without the prior
written consent of Party A, it shall be an Additional
Termination Event with respect to Party B.
3. Netting of Payments. Subparagraph (ii) of Section 2(c) of the
ISDA Form will not apply to any Transaction between the parties
hereto.
Effort ID: N1108826 / Global Deal ID: 2724973
Page 4 of 6
4. Waiver of Trial By Jury. Insofar as is permitted by law, each
party irrevocably waives any and all rights to trial by jury in
any legal proceeding in connection with this Transaction, and
acknowledges that this waiver is a material inducement to the
other party's entering into this Transaction hereunder.
5. Compliance with Regulation AB. Party A and Party B agree that the
terms of the Item 1115 Agreement dated as of October, 2006 (the
"Regulation AB Agreement"), among IndyMac Bank, F.S.B., IndyMac
MBS, Inc., IndyMac ABS and Party A shall be incorporated by
reference into this Confirmation so that Party B shall be an
express third party beneficiary of the Regulation AB Agreement. A
copy of the Regulation AB Agreement is attached hereto as Exhibit
A.
6. Limitation of Liability. It is expressly understood and agreed by
the parties hereto that (a) this Confirmation is executed and
delivered by Deutsche Bank National Trust Company ("Deutsche
Bank"), not individually or personally but solely as the Grantor
Trustee, in the exercise of the powers and authority conferred
and vested in it, (b) the representations, undertakings and
agreements herein made on the part of the Grantor Trust are made
and intended not as personal representations, undertakings and
agreements by Deutsche Bank but are made and intended for the
purpose of binding only the Grantor Trust, (c) nothing herein
contained shall be construed as creating any liability on
Deutsche Bank, individually or personally, to perform any
covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties who are
signatories to this Confirmation and by any person claiming by,
through or under such parties and (d) under no circumstances
shall Deutsche Bank 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 Grantor Trust under this
Confirmation.
7. Section 5(a)(vii)(2) of the ISDA Form will not apply to Party B.
8. Credit Support Document: With respect to Party A, the Guarantee
of Xxxxxx Brothers Holdings Inc.
Credit Support Provider: With respect to Party A, Xxxxxx Brothers
Holdings Inc.
Account for Payment to
Party A in USD: JPMorgan Chase Bank, New York
ABA # 000000000
A/C of Xxxxxx Brothers Special Financing Inc.
A/C # 066-143543
Account for Payment to
Party B in USD: Deutsche Bank Trust Company Americas
ABA# 000000000
Account# 00000000
Account Name: NYLTD Funds Control/Stars West
Ref: IndyMac INDX 2006-AR14 1-A4A Cap
Effort ID: N1108826 / Global Deal ID: 2724973
Page 5 of 6
Please confirm your agreement with the foregoing by executing this
Confirmation and returning such Confirmation, in its entirety, to us at
facsimile number 000-000-0000 (United States of America), Attention:
Documentation.
Yours sincerely, Accepted and agreed to:
Xxxxxx Brothers Special Financing Inc. The Supplemental Interest Trust for
IndyMac INDX Mortgage Loan Trust
2006-AR14 on behalf of IndyMac INDX
Grantor Trust 2006-AR14 1-A4A
By: Deutsche Bank National Trust
Company not in its individual capacity
but solely as Grantor Trustee
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx By: /s/ Xxxxxxxx Xxxxxxxxxxx
------------------------------- ----------------------------------
Title: Authorized Signatory Name: Xxxxxxxx Xxxxxxxxxxx
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Title: Associate
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Effort ID: N1108826 / Global Deal ID: 2724973
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