DATE: November 29, 2006
TO: Deutsche Bank Trust Company Americas, not in its
individual capacity but solely as Supplemental
Interest Trust Trustee for the benefit of RALI
Series 2006-QA10 Supplemental Interest Trust, acting
on behalf of the Class A Certificateholders and the
Class M Certificateholders under the Pooling and
Servicing Agreement identified below ("PARTY A")
ATTENTION: RALI Series 2006-QA10
FROM: Deutsche Bank Trust Company Americas, not in its
individual capacity but solely as Supplemental
Interest Trust Trustee for the benefit of RALI
Series 2006-QA10 Supplemental Interest Trust, acting
on behalf of the Class SB Certificateholders under
the Pooling and Servicing Agreement identified below
("PARTY B")
SUBJECT: Payment Swap Confirmation and Agreement
REFERENCE NUMBER
The purpose of this letter agreement (the "Agreement") is to confirm the terms
and conditions of the Transaction entered into on the Trade Date specified below
(the "Transaction") between Party A and Party B. This Agreement, which evidences
a complete and binding agreement between you and us to enter into the
Transaction on the terms set forth below, constitutes a "Confirmation" as
referred to in the ISDA Form Master Agreement (as defined below), as well as a
"Schedule" as referred to in the ISDA Form Master Agreement.
1. This Agreement is subject to and incorporates the 2000 ISDA Definitions
(the "Definitions"), as published by the International Swaps and Derivatives
Association, Inc. ("ISDA"). You and we have agreed to enter into this Agreement
in lieu of negotiating a Schedule to the 1992 ISDA Master Agreement
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(Multicurrency-Cross Border) form (the "ISDA Form Master Agreement") but,
rather, an ISDA Form Master Agreement shall be deemed to have been executed by
you and us on the date we entered into the Transaction. In the event of any
inconsistency between the provisions of this Agreement and the Definitions or
the ISDA Form Master Agreement, this Agreement shall prevail for purposes of the
Transaction. Terms used and not otherwise defined herein, in the ISDA Form
Master Agreement or the Definitions shall have the meanings assigned to them in
the series supplement (the "Series Supplement"), dated as of November 1, 2006,
to the standard terms of pooling and servicing agreement, dated as of November
1, 2006 (the "Standard Terms", and together with the Series Supplement, the
"Pooling and Servicing Agreement"), among Residential Accredit Loans, Inc., as
depositor, Residential Funding Company, LLC, as master servicer, and Deutsche
Bank Trust Company Americas, as trustee. Each reference to a "Section" or to a
"Section" "of this Agreement" will be construed as a reference to a Section of
the 1992 ISDA Form Master Agreement. Each capitalized term used herein that is
not defined herein or in the 1992 ISDA Form Master Agreement shall have the
meaning defined in the Pooling and Servicing Agreement. Notwithstanding anything
herein to the contrary, should any provision of this Agreement conflict with any
provision of the Pooling and Servicing Agreement, the provision of the Pooling
and Servicing Agreement shall apply.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
Trade Date:
Effective Date:
Termination Date: December 25, 2036 subject to
adjustment in accordance with the
Business Day Convention.
Business Days: California, Minnesota, Texas, New
York, Illinois.
Business Day Convention: Following.
PARTY A PAYMENTS:
Party A Payment Dates: Each Distribution Date under the
Pooling and Servicing Agreement.
Party A Payment Amounts: On each Party A Payment Date, the
amount, if any, equal to the
aggregate amount of Net Swap
Payments and Swap Termination
Payments owed to the Swap
Counterparty remaining unpaid after
application of the sum of (A) from
the Adjusted Available Distribution
Amount that would have remained had
the Adjusted Available Distribution
Amount been applied on such
Distribution Date to make the
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distributions for such Distribution
Date under Section 4.02(c) clauses
(i) through (x) of the Pooling and
Servicing Agreement, of (I) Accrued
Certificate Interest on the Class SB
Certificates, (II) the amount of any
Overcollateralization Reduction
Amount and (III) for each
Distribution Date after the
Certificate Principal Balance of
each Class of Class A Certificates
and Class M Certificates has been
reduced to zero, the
Overcollateralization Amount, (B)
from prepayment charges on deposit
in the Certificate Amount, any
prepayment charges received on the
Mortgage Loans during the related
Prepayment Period and (C) from the
amount distributable with respect to
the REMIC III Regular Interest IO.
PARTY B PAYMENTS:
Party B Payment Dates: Each Distribution Date under the
Pooling and Servicing Agreement
Party B Payment Amounts: On each Party B Payment Date, an
amount equal to the lesser of (a)
the Available Distribution Amount
remaining on such Distribution Date
after the distributions on such
Distribution Date under Section
4.02(c) clauses (i) through (vi) of
the Pooling and Servicing Agreement
and (b) the aggregate unpaid Basis
Risk Shortfalls allocated to the
Class A Certificateholders and the
Class M Certificateholders for such
Distribution Date.
3. Additional Provisions: Each party hereto is hereby advised and
acknowledges that the other party has engaged in (or refrained from engaging in)
substantial financial transactions and has taken (or refrained from taking)
other material actions in reliance upon the entry by the parties into the
Transaction being entered into on the terms and conditions set forth herein and
in the ISDA Form Master Agreement relating to such Transaction, as applicable.
4. Provisions Deemed Incorporated in a Schedule to the ISDA Form Master
Agreement:
1) Termination Provisions. For purposes of the ISDA Form Master
Agreement:
(a) "Specified Entity" is not applicable to Party A or Party B
for any purpose.
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(b) "Specified Transaction" is not applicable to Party A or
Party B for any purpose, and, accordingly, Section 5(a)(v) shall not
apply to Party A or Party B.
(c) The "Cross Default" provisions of Section 5(a)(vi) shall not
apply to Party A or Party B.
(d) The "Credit Event Upon Merger" provisions of Section
5(b)(iv) will not apply to Party A or Party B.
(e) With respect to Party A and Party B, the "Bankruptcy"
provision of Section 5(a)(vii)(2) of the ISDA Form Master Agreement will
be deleted in its entirety.
(f) The "Automatic Early Termination" provision of Section 6(a)
will not apply to Party A or to Party B.
(g) Payments on Early Termination. For the purpose of Section
6(e) of the ISDA Form Master Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(h) "Termination Currency" means United States Dollars.
(i) The provisions of Sections 5(a)(ii), 5(a)(iii) and 5(a)(iv)
shall not apply to Party A or Party B.
(j) Tax Event. The provisions of Section 2(d)(i)(4) and 2(d)(ii)
of the ISDA Form Master Agreement shall not apply to Party A and Party A
shall not be required to pay any additional amounts referred to therein.
2) Tax Representations.
(a) Payer Representations. For the purpose of Section 3(e) of
the ISDA Form Master Agreement, each of Party A and Party B will make
the following representations:
It is not required by any applicable law, as modified by
the practice of any relevant governmental revenue
authority, of any Relevant Jurisdiction to make any
deduction or withholding for or on account of any Tax
from any payment (other than interest under Section
2(e), 6(d)(ii) or 6(e) of the ISDA Form Master
Agreement) to be made by it to the other party under
this Agreement. In making this representation, it may
rely on:
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(i) the accuracy of any representations made by the
other party pursuant to Section 3(f) of the ISDA Form Master
Agreement;
(ii) the satisfaction of the agreement contained in
Sections 4(a)(i) or 4(a)(iii) of the ISDA Form Master Agreement
and the accuracy and effectiveness of any document provided by
the other party pursuant to Sections 4(a)(i) or 4(a)(iii) of the
ISDA Form Master Agreement; and
(iii) the satisfaction of the agreement of the other
party contained in Section 4(d) of the ISDA Form Master
Agreement, provided that it shall not be a breach of this
representation where reliance is placed on clause (ii) and the
other party does not deliver a form or document under Section
4(a)(iii) by reason of material prejudice to its legal or
commercial position.
(b) Payee Representations. For the purpose of Section 3(f) of
the ISDA Form Master Agreement, Party A and Party B make the following
representations: None
3) Documents to be Delivered. For the purpose of Section 4(a) (i) and
4(a) (iii):
(1) Tax forms, documents, or certificates to be delivered are:
PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH TO
DELIVER DOCUMENT CERTIFICATE BE DELIVERED
Party A and Party B Any documents required Promptly after the earlier
or reasonably requested of (i) reasonable demand
to allow the other party by either party or (ii)
to make payments under actual knowledge that such
this Agreement without formor document is required
any deduction or
withholding for or on
the account of any Tax
or with such deduction
or withholding at a
reduced rate
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(2) Other documents to be delivered are:
PARTY REQUIRED FORM/DOCUMENT/ DATE BY WHICH TO COVERED BY
TO DELIVER CERTIFICATE BE DELIVERED SECTION 3(D)
DOCUMENT REPRESENTATION
Party A and Party B Any documents required by Upon execution Yes
the receiving party to and delivery of
evidence the authority of this Agreement
the delivering party for it and such
to execute and deliver this Confirmation
Agreement, any Confirmation
to which it is a party, and
to evidence the authority of
the delivering party to
perform its obligations
under this Agreement and
such Confirmation.
Party A and Party B A certificate of an Upon the Yes
authorized officer of the execution and
party, as to the incumbency delivery of this
and authority of the Agreement and
respective officers of the such Confirmation
party signing this Agreement
4) Miscellaneous. Miscellaneous
(a) Address for Notices: For the purposes of Section 12(a) of
this Agreement:
Address for notices or communications to Party A:
Address: RALI Series 2006-QA10 Trust,
acting through Deutsche Bank Trust Company Americas
not in its individual capacity but solely in its
capacity as Supplemental Interest Trust Trustee for
the benefit of the RALI Series 2006-QA10
Supplemental Interest Trust
Attn: RALI Series 2006-QA10 Trust
Fax: 000-000-0000
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with a copy to: Residential Funding Company, LLC
0000 Xxxxxxxxxx Xxxx Xxxx., Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Xxxxxxxxx: 000-000-0000
(For all purposes)
Address for notices or communications to Party B:
Address: RALI Series 2006-QA10 Trust,
acting through Deutsche Bank Trust Company Americas
not in its individual capacity but solely in its
capacity as Supplemental Interest Trust Trustee for
the benefit of the RALI Series 2006-QA10
Supplemental Interest Trust
Attn: RALI Series 2006-QA10 Trust
Fax: 000-000-0000
with a copy to: Residential Funding Company, LLC
0000 Xxxxxxxxxx Xxxx Xxxx., Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Xxxxxxxxx No.: 000-000-0000
(For all purposes)
(b) Process Agent. For the purpose of Section 13(c):
Party A: Not Applicable
Party B: Not Applicable
(c) Offices. The provisions of Section 10(a) will not apply to
this Agreement; neither Party A nor Party B have any Offices other than
as set forth in the Notices Section.
(d) Multibranch Party. For the purpose of Section 10(c) of the
ISDA Form Master Agreement, neither Party A nor Party B is a
Multibranch. Party.
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(e) Calculation Agent. The Calculation Agent is Party B.
(f) Credit Support Document.
Not Applicable
(g) Credit Support Provider.
Not Applicable
(h) Governing Law. The parties to this ISDA Agreement hereby
agree that the law of the State of New York shall govern their rights
and duties in whole, without regard to the conflict of law provision
thereof, other than New York General Obligations Law Sections 5-1401 and
5-1402.
(i) Non-Petition. Party A and Party B each hereby irrevocably
and unconditionally agrees that it will not institute against, or join
any other person in instituting against or cause any other person to
institute against RALI Series 2006-QA10 Trust, Mortgage Asset-Backed
Pass-Through Certificates, Series 2006-QA10, or the other party any
bankruptcy, reorganization, arrangement, insolvency, or similar
proceeding under the laws of the United States, or any other
jurisdiction for the non-payment of any amount due hereunder or any
other reason until the payment in full of the Certificates and the
expiration of a period of one year plus ten days (or, if longer, the
applicable preference period) following such payment.
(j) Severability. If any term, provision, covenant, or condition
of this Agreement, or the application thereof to any party or
circumstance, shall be held to be invalid or unenforceable (in whole or
in part) for any reason, the remaining terms, provisions, covenants, and
conditions hereof shall continue in full force and effect as if this
Agreement had been executed with the invalid or unenforceable portion
eliminated, so long as this Agreement as so modified continues to
express, without material change, the original intentions of the parties
as to the subject matter of this Agreement and the deletion of such
portion of this Agreement will not substantially impair the respective
benefits or expectations of the parties.
The parties shall endeavor to engage in good faith negotiations
to replace any invalid or unenforceable term, provision, covenant or
condition with a valid or enforceable term, provision, covenant or
condition, the economic effect of which comes as close as possible to
that of the invalid or unenforceable term, provision, covenant or
condition.
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(k) Consent to Recording. Each party hereto consents to the
monitoring or recording, at any time and from time to time, by the other
party of any and all communications between officers or employees of the
parties, waives any further notice of such monitoring or recording, and
agrees to notify its officers and employees of such monitoring or
recording.
(l) Waiver of Jury Trial. Each party to this Agreement
respectively waives any right it may have to a trial by jury in respect
of any Proceedings relating to this Agreement or any Credit Support
Document.
(m) Set-Off Notwithstanding any provision of this Agreement or
any other existing or future agreement, each party irrevocably waives
any and all rights it may have to set off, net, recoup or otherwise
withhold or suspend or condition payment or performance of any
obligation between it and the other party hereunder against any
obligation between it and the other party under any other agreements.
The provisions for Set-off set forth in Section 6(e) of the ISDA Form
Master Agreement shall not apply for purposes of this Transaction.
(n) This Agreement may be executed in several counterparts, each
of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
(o) Trustee Liability Limitations. It is expressly understood
and agreed by the parties hereto that (a) this Agreement is executed and
delivered by Deutsche Bank Trust Company Americas, not individually or
personally but solely as Trustee of Party A and Party B, in the exercise
of the powers and authority conferred and vested in it and that Deutsche
Bank Trust Company Americas shall perform its duties and obligations
hereunder in accordance with the standard of care set forth in Article
VIII of the Pooling and Servicing Agreement, (b) each of the
representations, undertakings and agreements herein made on the part of
Party A and Party B is made and intended not as personal
representations, undertakings and agreements by Deutsche Bank Trust
Company Americas but is made and intended for the purpose of binding
only Party A and Party B, (c) nothing herein contained shall be
construed as creating any liability on Deutsche Bank Trust Company
Americas, 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; provided that nothing in this
paragraph shall relieve Deutsche Bank Trust Company Americas from
performing its duties and obligations hereunder and under the Pooling
and Servicing Agreement in accordance with the standard of care set
forth therein, and (d) under no circumstances shall Deutsche Bank Trust
Company Americas be personally liable for the payment of any
indebtedness or expenses of Party A or Party B or be liable for the
breach or failure of any obligation, representation, warranty or
covenant made or undertaken by Party A or Party B under this Agreement
or any other related documents; provided, that nothing in this paragraph
shall relieve Deutsche Bank Trust Company Americas from performing its
duties and obligations hereunder and under the Pooling and Servicing
Agreement in accordance with the standard of care set forth herein and
therein.
9
5) "Affiliate". Party A and Party B shall be deemed to not have any
Affiliates for purposes of this Agreement, including for purposes of Section
6(b)(ii).
6) Section 3 of the ISDA Form Master Agreement is hereby amended by
adding at the end thereof the following subsection (g):
"(g) Relationship Between Parties.
Each party represents to the other party on each date when it enters
into a Transaction that:--
(1) Nonreliance. (i) It is not relying on any statement or
representation of the other party regarding the Transaction (whether
written or oral), other than the representations expressly made in this
Agreement or the Confirmation in respect of that Transaction and (ii) it
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 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 the other party.
(2) Evaluation and Understanding.
(i) It has the capacity to evaluate (internally or
through independent professional advice) the Transaction and has
made its own decision to enter into the Transaction and has been
directed by the Pooling and Servicing Agreement to enter into
this Transaction; and
(ii) It understands the terms, conditions and risks of
the Transaction and is willing and able to accept those terms
and conditions and to assume those risks, financially and
otherwise.
(3) Purpose. It is entering into the Transaction for the
purposes of managing its borrowings or investments, hedging its
underlying assets or liabilities or in connection with a line of
business.
(4) Status of Parties. The other party is not acting as agent,
fiduciary or advisor for it in respect of the Transaction.
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(5) Eligible Contract Participant. It is an "eligible swap
participant" as such term is defined in Section 35.1(b)(2) of the
regulations (17 C.F.R 35) promulgated under, and it constitutes an
"eligible contract participant" as such term is defined in Section
1(a)12 of the Commodity Exchange Act, as amended."
7) Account Details and Settlement Information:
PAYMENTS TO PARTY A:
Deutsche Bank Trust Company Americas
ABA Number: 000-000-000
Account Number: [as provided by Party B in writing to Party A]
Account Name: [as provided by Party B in writing to Party A]
Ref: RALI 2006-QA10 Swap
PAYMENTS TO PARTY B:
Deutsche Bank Trust Company Americas
ABA Number: 000-000-000
Account Number: [as provided by Party B in writing to Party A]
Account Name: [as provided by Party B in writing to Party A]
Ref: RALI 2006-QA10 Swap
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Please sign and return to us a copy of this Agreement.
Very truly yours,
DEUTSCHE BANK TRUST COMPANY AMERICAS,
not in its individual capacity but
solely as Supplemental Interest Trust
Trustee for the benefit of RALI Series
2006-QA10 Supplemental Interest Trust,
acting on behalf of the Class SB
Certificateholders
By: /s/ Xxx Xxxxxxxx
Name: Xxx Xxxxxxxx
Title: Authorized Signer
AGREED AND ACCEPTED AS OF THE TRADE DATE
DEUTSCHE BANK TRUST COMPANY AMERICAS,
not in its individual capacity but
solely as Supplemental Interest Trust
Trustee for the benefit of RALI Series
2006-QA10 Supplemental Interest Trust,
acting on behalf of the Class A
Certificateholders, and the Class M
Certificateholders
By: /s/ Xxx Xxxxxxxx
Name: Xxx Xxxxxxxx
Title: Authorized Signer
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