Execution Copy
DATE: September 28, 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-QA8 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-QA8
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-QA8 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
(Multicurrency-Cross Border) form (the "ISDA Form Master Agreement") but,
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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 September 1, 2006,
to the standard terms of pooling and servicing agreement, dated as of March 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 Corporation, 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: September 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
distributions for such Distribution
Date under Section 4.02(c) clauses
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(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 by
to allow the other party either party or (ii) learning
to make payments under that such form or document
this Agreement without 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-QA8 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-QA8 Supplemental
Interest Trust
Attn: RALI Series 2006-QA8 Trust
Fax: 000-000-0000
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with a copy to: Residential Funding Corporation
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-QA8 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-QA8 Supplemental
Interest Trust
Attn: RALI Series 2006-QA8 Trust
Fax: 000-000-0000
with a copy to: Residential Funding Corporation
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-QA8 Trust,
Mortgage Asset-Backed Pass-Through Certificates, Series 2006-QA8, 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
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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.
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-QA8 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-QA8 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-QA8
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-QA8
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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