HSBC [GRAPHIC OMITTED]
HSBC Bank USA, National Association
452 Fifth Avenue
New York, NY 10018
Fax: (212) 525-5517
DATE:
NOVEMBER 29, 2006
TO:
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
ATTENTION: RALI SERIES
2006-QA10 SUPPLEMENTAL INTEREST TRUST
FACSIMILE: 714-247-6285
TO:
RESIDENTIAL FUNDING SECURITIES, LLC
ADDRESS : 7501
WISCONSIN AVE, SUITE 900
BETHESDA, MD 20814
ATTENTION: STEVE
MILSTEIN
FACSIMILE: 301-664-6901
FROM :
HSBC BANK USA, NATIONAL ASSOCIATION
FACSIMILE : 212-525-5517
SUBJECT:
FIXED INCOME DERIVATIVES CONFIRMATION
REFERENCE:
411454HN/DRAFT
--------------------------------------------------------------------------------
The purpose of this long-form confirmation ("CONFIRMATION") is to confirm the
terms and conditions of the current Transaction entered into on the Trade Date
specified below (the "TRANSACTION") between HSBC Bank USA, National
Association
("PARTY A") and Deutsche Bank Trust Company Americas, not individually, but
solely as supplemental interest trust trustee (the "Supplemental
Interest Trust
Trustee") on behalf of the supplemental interest trust with respect to the
RALI
Series 2006-QA10 Supplemental Interest Trust (the "Supplemental
Interest Trust")
("PARTY B") created under the Series Supplement, dated as of
November 1, 2006 to
the standard terms to the Pooling and Servicing Agreement,
dated as of
November
1, 2006 (together 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 and supplemental
interest trust
trustee. This Confirmation evidences a complete and binding
agreement between
you and us to enter
into the Transaction on the terms set
forth below and replaces any previous agreement between us with respect to the
subject matter hereof.
This Confirmation
constitutes a "CONFIRMATION" and also
constitutes a
"SCHEDULE"
as referred to in the ISDA
Master Agreement, and
Paragraph 13 of a Credit Support Annex to the Schedule.
1. This
Confirmation shall supplement, form a part of, and be subject to
an
agreement in the form
of the ISDA Master
Agreement (Multicurrency -
Cross Border) as published and copyrighted in 1992 by the
International
Swaps and Derivatives
Association, Inc. (the
"ISDA MASTER AGREEMENT"),
as if Party A and Party B had executed an agreement in such form
on the
date hereof,
with
a Schedule as set forth in Item 3 of this
Confirmation, and an
ISDA Credit Support Annex (Bilateral Form - ISDA
1
<PAGE>
Agreements Subject
to New York
Law Only version) as published and
copyrighted in
1994 by the International Swaps and Derivatives
Association, Inc.,
with Paragraph 13 thereof as set forth in Annex
A
hereto (the "CREDIT
SUPPORT ANNEX").
For the avoidance of
doubt, the
Transaction described
herein shall be the sole Transaction governed by
such ISDA Master Agreement. In the event of any inconsistency
among any
of the following
documents, the
relevant document
first listed shall
govern: (i) this Confirmation, exclusive of the provisions set
forth in
Item 3 hereof and Annex A hereto; (ii) the provisions set forth in
Item
3 hereof, which are
incorporated by reference into the Schedule; (iii)
the Credit Support Annex; (iv) the Definitions; and (v) the ISDA Master
Agreement.
Each reference herein to a "Section" (unless specifically referencing
the Pooling
and Servicing Agreement) or to a "Section" "of this
Agreement" will be
construed as a reference to a Section of the ISDA
Master Agreement; each herein reference to a "Part" will be
construed as
a reference to the provisions herein deemed incorporated in a Schedule
to the ISDA Master
Agreement; each
reference herein to a "Paragraph"
will be construed as a
reference to a
Paragraph of the Credit Support
Annex.
2. The
terms of the
particular
Transaction
to which this Confirmation
relates are as follows:
Type of Transaction:
Interest Rate Swap
Notional Amount:
With respect
to any Calculation
Period, the
amount set forth for
such period on
Schedule I
attached
hereto.
Trade Date:
November 1, 2006
Effective Date:
November 29, 2006
Termination Date:
November 25,
2011,
subject
to
adjustment in
accordance
with the
Business Day Convention
Fixed Amounts:
Fixed Rate Payer:
Party B
Fixed Rate Payer
Period End Dates:
The 25th calendar day
of each month
during the Term of this Transaction,
commencing December
25, 2006, and
ending on the Termination Date, with
No Adjustment.
Fixed Rate Payer
Payment Dates:
Early Payment - Two
Business Days
preceding the 25th
calendar day of
each month
during the Term of
this
Transaction, commencing December 25,
2006, and ending on the Termination
Date, subject
to adjustment in
accordance with
the Business Day
Convention.
Fixed Rate:
5.32%
Fixed Amount:
To be determined in accordance with
the following formula:
Fixed
Rate*Notional
Amount*Fixed
Rate Day Count Fraction
2
<PAGE>
Fixed Rate Day
Count Fraction:
30/360
Floating Amounts:
Floating Rate Payer:
Party A
Floating Rate Payer
Period
End Dates: The 25th
calendar day of
each month
during the Term of
this
Transaction, commencing December 25,
2006, and ending on the Termination
Date, subject
to adjustment in
accordance with
the Business Day
Convention.
Floating Rate Payer
Payment Dates:
Early Payment - Two
Business Days
preceding the 25th
calendar day of
each month
during the Term of
this
Transaction, commencing December 25,
2006, and ending on the Termination
Date, subject
to adjustment in
accordance with
the Business Day
Convention.
Floating Rate Option:
USD-LIBOR-BBA
Floating Amount:
To be determined in accordance with
the following formula:
Floating
Rate
Option*Notional
Amount*Floating
Rate Day Count
Fraction
Designated Maturity:
One month
Floating Rate Day
Count Fraction:
Actual/360
Reset Dates:
The
first day of each Calculation
Period.
Compounding:
Inapplicable
Business Days:
New York
Business Day Convention: Following
Calculation Agent:
Party A
Additional Payments:
Party A
agrees
to
pay USD
2,855,000.00 to Party B in
accordance
with the
payment
instructions set forth
in Section 4
for value November 3, 2006, subject
to adjustment in accordance with the
Following Business Day Convention
3
<PAGE>
3. Provisions
Deemed Incorporated in a Schedule to the ISDA Master
Agreement:
PART 1. TERMINATION PROVISIONS.
For the purposes of this Agreement:-
(a)
"SPECIFIED ENTITY" will not apply to Party A or Party B for any
purpose.
(b)
"SPECIFIED
TRANSACTION" will
not apply to Party A or Party B for
any
purpose.
(c)
EVENTS OF DEFAULT.
The statement
below that an Event of
Default will apply to
a specific
party means that upon the occurrence of such an Event of Default
with
respect to such
party, the other party shall have the rights of a
Non-defaulting Party under Section 6 of this Agreement;
conversely, the
statement below that such event will not apply to a specific party
means
that the other party shall not have such rights.
(i)
The "FAILURE TO PAY OR DELIVER" provisions of Section 5(a)(i)
will apply
to Party A and
will apply to Party B; provided,
however, that Section 5(a)(i) is hereby amended by replacing
the
word "third" with the
word "first";
provided, further, that
notwithstanding anything to the contrary in Section 5(a)(i),
any
failure by Party A to comply with or perform any obligation to
be complied
with or performed by Party A under the Credit
Support Annex shall
not constitute
an Event of Default
under
Section 5(a)(i) unless
(A) a Required Ratings
Downgrade Event
has occurred and been
continuing for 30 or
more Local Business
Days and (B) such failure is not remedied on or before the
third
Local Business
Day after notice of such failure is given to
Party A.
(ii) The
"BREACH OF AGREEMENT"
provisions of Section
5(a)(ii) will
apply to Party A and will not apply to Party B.
(iii) The
"CREDIT SUPPORT
DEFAULT" provisions of Section 5(a)(iii)
will apply to Party A and will not apply to Party B except
that
Section 5(a)(iii)(1)
will apply to Party B solely in respect of
Party B's obligations under Paragraph 3(b) of the Credit
Support
Annex; provided,
however, that notwithstanding anything to the
contrary in
Section 5(a)(iii)(1), any failure by Party A to
comply with or perform
any obligation
to be complied
with or
performed by Party A
under the Credit
Support Annex shall
not
constitute an Event of Default under Section 5(a)(iii) unless
(A) a Required Ratings
Downgrade Event has occurred and been
continuing for 30 or
more Local
Business Days and (B) such
failure is not
remedied on or before the third Local Business
Day after notice of such failure is given to Party A.
(iv) The
"MISREPRESENTATION"
provisions
of Section
5(a)(iv) will
apply to Party A and will not apply to Party B.
(v)
The "DEFAULT UNDER SPECIFIED TRANSACTION" provisions of Section
5(a)(v) will apply to Party A and will not apply to Party B.
(vi) The
"CROSS DEFAULT" provisions of Section 5(a)(vi) will apply to
Party A and will not apply to Party B. For purposes of Section
5(a)(vi), solely with respect to Party A:
"Specified
Indebtedness" will
have the meaning
specified in
Section 14 , except that such term shall not include
obligations
in respect of deposits
received in the ordinary course of Party
A's banking business.
4
<PAGE>
"Threshold Amount" means with respect to Party A an amount
equal
to three percent (3%) of the Shareholders' Equity of Party A
(as
set forth in Party A's
Call Report)
or, if applicable, the
Eligible Guarantor.
"Shareholders' Equity"
means with respect to an entity, at any
time, the sum (as
shown in the most recent annual audited
financial statements
of such entity) of (i)
its capital stock
(including preferred
stock) outstanding, taken at par value,
(ii) its capital surplus and (iii) its retained earnings,
minus
(iv) treasury stock,
each to be determined
in accordance with
generally accepted accounting principles.
(vii) The
"BANKRUPTCY"
provisions of Section
5(a)(vii) will apply to
Party A and will apply to Party B except that the provisions of
Section 5(a)(vii)(2),
(6) (to the extent
that such
provisions
refer to any appointment contemplated or effected by the
Pooling
and Servicing
Agreement or any appointment to which Party B has
not become
subject), (7) and (9) will not apply to Party B;
provided
that,
with
respect
to Party B only, Section
5(a)(vii)(4) is
hereby amended by adding after the words
"against it" the words
"(excluding any
proceeding or
petition
instituted or
presented by Party A or its Affiliates)", and
Section 5(a)(vii)(8) is hereby amended by deleting the words
"to
(7) inclusive"
and inserting lieu thereof ", (3), (4) as
amended, (5), (6) as amended, or (7)".
(viii) The "MERGER
WITHOUT ASSUMPTION" provisions of Section 5(a)(viii)
will apply to Party A and will apply to Party B.
(d)
TERMINATION EVENTS.
The statement below
that a Termination
Event will apply to a
specific
party means that upon the occurrence of such a Termination Event, if
such specific party is
the Affected Party
with respect to a Tax Event,
the Burdened Party
with respect to a Tax
Event Upon Merger
(except as
noted below) or the
non-Affected
Party with respect to
a Credit Event
Upon Merger,
as the case may be,
such specific party shall have the
right to designate an Early Termination Date in accordance
with Section
6 of this
Agreement; conversely,
the statement below that such an event
will not apply to a specific party means that such party shall
not have
such right;
provided, however, with respect to "Illegality" the
statement that such event will apply to a specific party means that
upon
the occurrence of such
a Termination Event
with respect to such party,
either party shall have the right to designate an Early Termination
Date
in accordance with Section 6 of this Agreement.
(i) The
"ILLEGALITY"
provisions
of Section
5(b)(i) will apply to
Party A and will apply to Party B.
(ii) The "TAX
EVENT" provisions of Section 5(b)(ii) will apply to
Party A except that,
for purposes of the
application of Section
5(b)(ii) to Party A,
Section 5(b)(ii) is hereby amended by
deleting the words "(x) any action taken by a taxing authority,
or brought in a court of competent jurisdiction, on or after the
date on which a
Transaction
is entered into (regardless of
whether such action is
taken or brought with
respect to a party
to this Agreement)
or (y)", and the "TAX EVENT" provisions of
Section 5(b)(ii) will apply to Party B.
(iii) The "TAX EVENT
UPON MERGER"
provisions of Section 5(b)(iii) will
apply to Party A and will apply to Party B, provided that Party
A
shall not be entitled to designate an Early Termination Date by
reason of a Tax Event
upon Merger in respect
of which it is the
Affected Party.
(iv) The "CREDIT
EVENT UPON MERGER"
provisions
of Section
5(b)(iv)
will not apply to Party A and will not apply to Party B.
5
<PAGE>
(e)
The "AUTOMATIC
EARLY TERMINATION" provision of Section 6(a) will
not
apply to Party A and will not apply to Party B.
(f)
PAYMENTS ON EARLY
TERMINATION. For the
purpose of Section 6(e) of this
Agreement:
(i)
Market Quotation will
apply, provided,
however, that, in the
event of a Derivative
Provider Trigger
Event, the following
provisions will apply:
(A) The
definition of Market
Quotation in Section 14 shall be
deleted in its entirety and replaced with the following:
"MARKET QUOTATION"
means, with respect to one or more
Terminated Transactions, a Firm Offer which is (1) made by
a Reference
Market-maker that is an Eligible Replacement,
(2) for an amount that would be paid to Party B (expressed
as a negative
number) or by Party B (expressed as a
positive number) in consideration of an agreement between
Party B and such
Reference Market-maker
to enter into a
Replacement
Transaction, and (3)
made on the basis
that
Unpaid Amounts in respect of the Terminated Transaction or
group of Transactions
are to be excluded but, without
limitation, any
payment or delivery
that would, but
for
the relevant Early
Termination Date,
have been required
(assuming
satisfaction of
each applicable condition
precedent) after
that Early Termination Date is to be
included. The
party making the determination (or its
agent) will request each Reference Market-maker to provide
its quotation to the extent reasonably practicable as of
the same day and time
(without regard to
different time
zones) on or as soon as reasonably practicable after the
relevant Early Termination Date. The day and time as of
which those quotations are to be obtained will be selected
in good faith by the party obliged to make a determination
under Section
6(e), and, if each party is so obliged,
after consultation with the other.
(B) The
definition of
Settlement
Amount shall be
deleted in
its entirety and replaced with the following:
"SETTLEMENT AMOUNT"
means, with respect to any Early
Termination Date,
an amount (as determined by Party B
based on
information
provided
by the Reference
Market-Maker) equal to:
(a) If
a Market Quotation for the relevant
Terminated Transaction
or group of
Terminated
Transactions is
accepted by Party B so as to
become legally
binding on or before the day
falling ten Local Business Days after the day on
which the Early
Termination Date is designated,
or such later
day as Party B may specify in
writing to Party A, but in either case no later
than one Local
Business Day prior to
the Early
Termination Date
(such
day, the "Latest
Settlement Amount
Determination
Day"),
the
Termination Currency
Equivalent
of the amount
(whether positive or
negative) of such Market
Quotation;
(b) If,
on the Latest Settlement
Amount
Determination Day, no
Market Quotation for
the
relevant Terminated
Transaction
or group of
Terminated
Transactions has been
accepted by
Party B so as to become legally binding and one
or more Market Quotations from Approved
Replacements have been
made and remain
capable
of becoming legally binding upon acceptance, the
Settlement Amount
shall equal the
Termination
Currency
Equivalent of
the amount (whether
positive or
negative) of the lowest of such
Market
Quotations
(for the avoidance of
doubt,
the lowest of such
Market Quotations
shall be
the lowest
Market Quotation of such Market
Quotations expressed as a positive number or, if
any of such Market
Quotations is expressed as a
negative number, the Market Quotation expressed
as a negative number
with the largest
absolute
value); or
6
<PAGE>
(c) If,
on the Latest Settlement
Amount
Determination Day, no
Market Quotation for
the
relevant Terminated
Transaction
or group of
Terminated
Transactions is
accepted by Party B
so as to become
legally binding
and no Market
Quotation from an Approved Replacement remains
capable of
becoming legally binding upon
acceptance, the
Settlement
Amount shall equal
Party B's Loss (whether positive or negative and
without reference to any Unpaid Amounts) for the
relevant Terminated
Transaction
or group of
Terminated Transactions.
(C) If
Party B requests Party
A in writing to obtain
Market
Quotations, Party A shall use its reasonable efforts to do
so before the Latest Settlement Amount Determination Day.
(D) If the
Settlement
Amount is a negative
number, Section
6(e)(i)(3) shall be
deleted in its
entirety and replaced
with the following:
"(3)
Second Method and Market Quotation. If the Second
Method and Market
Quotation apply, (I)
Party B shall pay
to Party A an amount
equal to the absolute
value of the
Settlement
Amount in
respect
of the Terminated
Transactions, (II)
Party B shall pay to Party A the
Termination Currency
Equivalent
of the Unpaid Amounts
owing to Party A and
(III) Party A shall
pay to Party B
the Termination
Currency Equivalent of the Unpaid Amounts
owing to Party B; provided, however, that (x) the amounts
payable under the immediately preceding clauses (II) and
(III) shall be
subject to
netting in accordance with
Section 2(c) of this Agreement and (y) notwithstanding any
other provision of this Agreement, any amount payable by
Party A under the immediately preceding clause (III) shall
not be netted-off
against any amount
payable by Party B
under the immediately preceding clause (I)."
(E) At any time on or before the Latest Settlement Amount
Determination Day at
which two or more
Market Quotations
from Approved
Replacements
remain capable of becoming
legally binding upon acceptance, Party B shall be entitled
to accept only the
lowest of such Market
Quotations (for
the avoidance
of doubt, the lowest of such Market
Quotations shall be
the lowest Market
Quotation of such
Market Quotations expressed as a positive number or, if any
of such Market Quotations is expressed as a negative
number, the Market Quotation expressed as a negative number
with the largest absolute value).
(ii) The
Second Method will apply.
(g)
"TERMINATION CURRENCY" means USD.
(h)
ADDITIONAL TERMINATION EVENTS. Additional Termination Events will
apply
as provided in Part 5(c).
7
<PAGE>
PART 2. TAX MATTERS.
(a)
TAX REPRESENTATIONS.
(i) PAYER
REPRESENTATIONS.
For the purpose of
Section 3(e) of
this
Agreement: (A) Party A makes the following representation(s):
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
this Agreement)
to be made by it
to
the other party
under this Agreement. In making this
representation, it
may rely on: the accuracy of any
representations made
by the other party pursuant to
Section 3(f) of this Agreement; (ii) the satisfaction of
the agreement contained in Section 4(a)(i) or 4(a)(iii) of
this Agreement and the accuracy and effectiveness of any
document provided by
the other party
pursuant to Section
4(a)(i) or
4(a)(iii) of this Agreement; and (iii) the
satisfaction of the agreement of the other party contained
in Section 4(d) of this 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) Party B
makes the following representation(s):
None.
(ii) PAYEE
REPRESENTATIONS.
For the purpose of Section 3(f) of this
Agreement:
(A) Party A
makes the following representation(s):
Party A is a
national banking association organized
under the federal laws of the United States and its U.S.
taxpayer identification number is 20-1177241.
(B) Party B
makes the following representation(s):
None.
(b)
TAX PROVISIONS.
(i) GROSS
UP. Section 2(d)(i)(4) shall not apply to Party B as X, and
Section 2(d)(ii)
shall not apply to Party B as Y, in each
case
such that Party B
shall not be required
to pay any
additional
amounts referred to therein.
(ii)
INDEMNIFIABLE TAX.
The definition of "Indemnifiable Tax" in
Section 14 is deleted
in its entirety and replaced with the
following:
"INDEMNIFIABLE TAX"
means, in relation to payments by Party
A,
any Tax and, in relation to payments by Party B, no Tax.
8
<PAGE>
PART 3. AGREEMENT TO DELIVER DOCUMENTS.
(a)
For the purpose of Section 4(a)(i), tax forms, documents, or
certificates to be delivered are:
PARTY
REQUIRED
TO DELIVER
FORM/DOCUMENT/
DATE BY WHICH TO
DOCUMENT
CERTIFICATE
BE DELIVERED
Party A
A correct, complete
and duly executed to
be provided upon
U.S. Internal Revenue
Service Form
request
(or successor
thereto), together with
appropriate attachments, that eliminates
U.S.
federal withholding
and backup
withholding Tax on payments to Party
A under this Agreement.
Party B
Tax forms relating to
the beneficial
to
be provided upon
owner of payments to Party B under
request
this Agreement from time to time
9
<PAGE>
<TABLE>
<CAPTION>
(b) For the purpose of Section 4(a)(ii), other documents to be
delivered are:
PARTY REQUIRED TO FORM/DOCUMENT/
DATE BY WHICH TO
COVERED BY
DELIVER DOCUMENT CERTIFICATE
BE DELIVERED
SECTION 3(D)
REPRESENTATION
<S>
<C>
<C>
<C>
Party A and
Any documents
required
by Upon the
execution and
Yes
Party B
the receiving
party
to
delivery of this Agreement
evidence the authority of the
delivering party or its Credit
Support Provider, if
any, for
it to execute and deliver the
Agreement,
this Confirmation,
and any Credit Support Documents
to which it is a
party, and to
evidence the authority
of the
delivering party or
its Credit
Support
Provider to perform its
obligations under the Agreement,
this Confirmation and any Credit
Support Document, as the case may
be
Party A and
A certificate of an
authorized
Upon the execution and
Yes
Party B
officer of
the party, as to delivery of this
Agreement
the incumbency
and authority
of the respective
officers of
the party
signing
the
Agreement, this
Confirmation,
and any
relevant
Credit
Support Document,
as the case
may be
Party A
Annual Financial
Statements of Promptly upon request
made by Yes
Party A as set forth
in Party Party B
A's Call Report
Party A
Quarterly Financial
Statements
Promptly upon request made by Yes
of Party A as set forth in Party B
Party A's Call Report
Party A
An opinion of counsel
to Party
Upon the execution and
No
A
delivery of this Agreement
</TABLE>
PART 4. MISCELLANEOUS.
(a)
ADDRESS FOR
NOTICES: For the purposes of Section 12(a) of this
Agreement:
Address for notices or communications to Party A:
Address:
452 Fifth Avenue, New York, NY 10018
Attention:
Christian McGreevy
Facsimile:
212-525-8710
Telephone:
212-525-5517
10
<PAGE>
Please direct all settlement inquiries to:
HSBC Bank USA, National Association
Derivative Settlements
Attention:
Jeffrey Lombino
Telephone:
(212) 525-5393
Fax:
(212) 525-6903
(For all purposes)
Address for notices or communications to Party B:
Address: RALI
Series 2006-QA10 Supplemental Interest Trust,
c/o Deutsche Bank Trust Company Americas
1761 East St. Andrew Place
Santa Ana, California 92705
Attn:
RALI Series 2006-QA10 Supplemental Interest Trust
Fax:
714-247-6285
with a copy to:
Address:
Residential Funding Corporation
2255 North Ontario, Suite 400
Burbank, CA
Attention:
Bond Administration
Facsimile No.:(818) 260-1815
Telephone No:
(For
all purposes)
(b)
PROCESS AGENT. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not applicable.
Party B appoints as its Process Agent: Not applicable.
(c)
OFFICES. The provisions of Section 10(a) will apply to this
Agreement
(d)
MULTIBRANCH PARTY. For the purpose of Section 10(c) of this
Agreement:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e)
CALCULATION AGENT. The Calculation Agent is Party A; provided,
however,
that if an Event of Default shall have occurred with respect to
Party A,
Party B shall have the
right to appoint as
Calculation
Agent a third
party, reasonably
acceptable
to Party A, the cost
for which shall be
borne by Party A.
11
<PAGE>
(f)
CREDIT SUPPORT DOCUMENT.
Party
A: The Credit Support Annex, and any guarantee in support
of Party A's obligations under this Agreement.
Party B: None
(g)
CREDIT SUPPORT PROVIDER.
Party
A: The guarantor
under any guarantee in
support of Party
A's obligations under this Agreement.
Party B: None.
(h)
GOVERNING LAW. The parties to this 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 provisions thereof other than New
York General Obligations Law Sections 5-1401 and 5-1402.
(i)
NETTING OF PAYMENTS. The parties agree that subparagraph (ii) of
Section
2(c) will apply to each Transaction hereunder.
(j)
AFFILIATE. "Affiliate"
shall have the meaning assigned thereto in
Section 14; provided,
however, that Party A and Party B shall be deemed
to have no Affiliates
for purposes of this
Agreement,
including for
purposes of Section 6(b)(ii).
12
<PAGE>
PART 5. OTHERS PROVISIONS.
(a)
DEFINITIONS.
Unless otherwise
specified in a Confirmation, this
Agreement and each
Transaction under this
Agreement are subject to the
2000 ISDA Definitions as published and copyrighted in 2000 by the
International
Swaps and
Derivatives
Association, Inc. (the
"DEFINITIONS"), and
will be governed in
all relevant
respects by the
provisions set forth in the Definitions, without regard to any
amendment
to the Definitions
subsequent to the date hereof. The provisions of the
Definitions are hereby
incorporated by reference in and shall be deemed
a part of this Agreement, except that (i) references in the
Definitions
to a "Swap
Transaction" shall be
deemed references to a
"Transaction"
for purposes of this
Agreement, and (ii)
references to a "Transaction"
in this Agreement shall be deemed references to a "Swap
Transaction" for
purposes of the
Definitions. Each term
capitalized but not
defined in
this Agreement shall
have the meaning
assigned thereto in
the Pooling
and Servicing Agreement.
(b)
AMENDMENTS TO ISDA MASTER AGREEMENT.
(i) SINGLE
AGREEMENT.
Section 1(c) is hereby
amended by the
adding
the words "including,
for the avoidance of doubt, the Credit
Support Annex" after the words "Master Agreement".
(ii) CONDITIONS
PRECEDENT.Section
2(a)(iii) is hereby amended by
adding the following at the end thereof:
Notwithstanding anything to the contrary in Section
2(a)(iii)(1),
if an Event of Default with respect to Party B or Potential
Event
of Default
with respect to Party B has occurred and been
continuing for
more than 30 Local Business Days and no Early
Termination Date in
respect of the
Affected Transactions has
occurred or
been effectively designated by Party A, the
obligations of Party A
under Section
2(a)(i) shall cease to
be
subject to
the condition precedent set forth in Section
2(a)(iii)(1) with
respect to such
specific occurrence
of such
Event of Default or such Potential Event of Default (the
"SPECIFIC EVENT"); provided, however, for the avoidance of
doubt,
the obligations of Party A under Section 2(a)(i) shall be
subject
to the condition
precedent set forth in Section 2(a)(iii)(1)
(subject to
the foregoing) with respect to any subsequent
occurrence of the same
Event of Default with
respect to Party B
or Potential
Event of Default with
respect to Party B after the
Specific Event has
ceased to be
continuing and with
respect to
any occurrence
of any other
Event of Default
with respect to
Party B or Potential
Event of Default
with respect to Party B
that occurs subsequent to the Specific Event.
(iii) CHANGE OF
ACCOUNT. Section 2(b) is hereby amended by the addition
of the following
after the word
"delivery"
in the first
line
thereof:
"to another account in the same legal and tax jurisdiction as
the
original account".
(iv)
REPRESENTATIONS. Section 3 is hereby amended by adding at the
end
thereof the following subsection (g):
"(g) Relationship Between Parties.
(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.
13
<PAGE>
(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 subject
to Section
6(n) of this Agreement to enter into the
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
an agent, fiduciary or advisor for it in respect of
the Transaction.
(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 an "eligible
contract
participant" as defined in Section 1(a)(12) of the
Commodity Exchange Act, as amended."
(v)
TRANSFER TO AVOID TERMINATION EVENT. Section 6(b)(ii) is hereby
amended by (i)
deleting the words "or if a Tax Event Upon Merger
occurs and the Burdened Party is the Affected Party," and (ii)
by
deleting the words "to
transfer" and inserting the words "to
effect a Permitted Transfer" in lieu thereof.
(vi)
JURISDICTION. Section 13(b) is hereby amended by: (i) deleting
in
the second line of subparagraph (i) thereof the word "non-",
(ii)
deleting "; and" from the end of subparagraph 1 and inserting
"."
in lieu thereof, and (iii) deleting the final paragraph
thereof.
(vii) LOCAL
BUSINESS DAY. The definition of Local Business Day in
Section 14 is hereby amended by the addition of the words "or
any
Credit Support Document" after "Section 2(a)(i)" and the
addition
of the words "or Credit Support Document" after "Confirmation".
(c)
ADDITIONAL TERMINATION
EVENTS. The following Additional Termination
Events will apply:
(i) FIRST
RATING TRIGGER COLLATERAL. If (A) it is not the case that a
Moody's Second
Trigger Ratings Event has occurred and been
continuing for 30 or more Local Business Days and (B) Party A
has
failed to comply with
or perform any
obligation to be
complied
with or performed
by Party A in accordance with the Credit
Support Annex, then an
Additional Termination
Event shall have
occurred with
respect to Party A and Party A shall be
the sole
Affected Party with respect to such Additional Termination
Event.
(ii) SECOND
RATING TRIGGER
REPLACEMENT.
If (A) a Required Ratings
Downgrade Event has
occurred and been continuing for 30 or more
Local Business
Days
and (B) (i) at least one Eligible
Replacement has made a Firm Offer to be the transferee of all of
Party A's rights and obligations under this Agreement (and such
Firm Offer remains an
offer that will become
legally binding
upon such Eligible
Replacement upon
acceptance by the
offeree)
and/or (ii) an
Eligible Guarantor has made a Firm Offer to
provide an Eligible
Guarantee (and such
Firm Offer
remains an
offer that will
become legally binding upon such Eligible
Guarantor immediately
upon acceptance by the offeree), then an
Additional Termination Event shall have occurred with respect
to
Party A and Party A
shall be the sole Affected Party with
respect to such Additional Termination Event.
14
<PAGE>
(iii) REGULATION
AB: "If, upon the
occurrence of a
disclosure event
pursuant to Section 2 of the Indemnification Agreement, dated
November 22, 2006,
(the "Indemnification Agreement") by and
among Party A, Residential Accredit Loans, Inc. and
Residential
Funding Company, LLC, Party A has not, within 10 days after
such
disclosure event
(a) provided the information required by
Section 2 of the Indemnification Agreement, (b) secured another
entity to replace Party A as party to this Agreement, on terms
substantially similar
to this Agreement
and subject to prior
notification to
the Rating Agencies, which entity (and a
guarantor therefore)
meets or exceeds the Approved Ratings
Threshold (and which satisfies the Rating Agency Condition) and
which entity is able
to comply with the
requirements
of Item
1115 of Regulation
AB and (c) obtain a
guaranty of Party A's
obligations under this
Agreement from an affiliate of Party A
that is able to comply with the financial information
disclosure
requirements of Item 1115 of Regulation AB, such that
disclosure
provided in respect of the affiliate will satisfy any
disclosure
requirements
applicable to
Party A, then an Additional
Termination Event
shall have occurred
with respect to Party
A
and Party A shall be the sole affected party with respect to
such Additional Termination Event
(iv)
OPTIONAL
TERMINATION OF
SECURITIZATION.
An
Additional
Termination Event
shall occur upon the notice to
Certificate
holders of an Optional
Termination becoming
unrescindable
in
accordance with
Article ix of the Pooling and Servicing
Agreement (such notice, the "OPTIONAL TERMINATION NOTICE").
With
respect to such Additional Termination Event: (A) Party B
shall
be the sole Affected Party; (B) notwithstanding anything to the
contrary in
Section 6(b)(iv) or Section 6(c)(i), the final
Distribution Date specified in the Optional Termination Notice
is hereby designated as the Early Termination Date for this
Additional
Termination
Event in respect of all Affected
Transactions; (C)
Section 2(a)(iii)(2)
shall not be applicable
to any Affected Transaction in connection with the Early
Termination Date
resulting from this Additional Termination
Event; notwithstanding
anything to the contrary in Section
6(c)(ii), payments
and deliveries under Section 2(a)(i) or
Section 2(e) in respect of the Terminated Transactions
resulting
from this Additional
Termination
Event will be required
to be
made through and including the Early Termination Date
designated
as a result of this Additional Termination Event; provided,
for
the avoidance of
doubt, that any such
payments or
deliveries
that are made on or prior to such Early Termination Date will
not be treated
as Unpaid Amounts in determining the amount
payable in
respect of such Early Termination Date; (D)
notwithstanding anything to the contrary in Section 6(d)(i),
(I)
if, no later than 4:00
pm New York City time on the day that is
four Business
Days prior to the final Distribution Date
specified in the Optional Termination Notice, the Supplemental
Interest Trust Trustee requests the amount of the Estimated
Swap
Termination Payment,
Party A shall provide
to the Supplemental
Interest Trust
Trustee in writing (which may be done in
electronic format) the
amount of the Estimated Swap Termination
Payment no
later than 2:00 pm New York City time on the
following Business
Day and (II) if the
Supplemental
Interest
Trust Trustee
provides written notice (which may be done in
electronic format) to
Party A no later than two Business Days
prior to the final
Distribution Date
specified in the Optional
Termination
Notice that
all requirements of the Optional
Termination have been met, then Party A shall, no later than
one
Business Day prior to the final Distribution Date specified in
the Optional
Termination
Notice,
make
the calculations
contemplated by
Section 6(e) of the ISDA Master Agreement (as
amended herein) and provide to the Supplemental Interest Trust
Trustee in writing (which may be done in electronic format) the
amount payable
by either Party B or Party A in respect of
the
related Early
Termination
Date
in connection with this
Additional Termination Event; provided, however, that the
amount
payable by Party B, if
any, in respect
of the related Early
Termination Date
shall be the lesser of (x) the amount
calculated to be due by Party B pursuant to Section 6(e) and
(y)
the Estimated Swap Termination Payment; and (E)
notwithstanding
anything to the contrary in this Agreement, any amount due from
Party B to Party A in
respect of this
Additional
Termination
Event will be payable on the final Distribution Date specified
in the Optional Termination Notice and any amount due from
Party
A to Party B in respect of this Additional Termination Event
will be payable one Business Day prior to the final
Distribution
Date specified in the Optional Termination Notice.
15
<PAGE>
(d)
REQUIRED RATINGS
DOWNGRADE EVENT. In
the event that no Relevant Entity
has credit ratings at
least equal to the
Required Ratings Threshold
(such event, a "REQUIRED RATINGS DOWNGRADE EVENT"), then Party A shall,
as soon as reasonably
practicable
and so long as a
Required Ratings
Downgrade Event is in
effect, at its own
expense, using
commercially
reasonable efforts,
procure either (A) a
Permitted Transfer or
(B) an
Eligible Guarantee from an Eligible Guarantor.
(e)
TRANSFERS.
(i)
Section 7
is hereby amended to read in its entirety as follows:
"Subject to Section
6(b)(ii), Part 5(d), neither Party A nor
Party B is permitted
to assign, novate or
transfer (whether
by
way of security or
otherwise)
as a whole or in part
any of its
rights, obligations
or interests under the Agreement or any
Transaction without
(a) the prior written
consent of the
other
party or (b)
satisfaction of the
Rating Agency
Condition with
respect to S&P and Moody's."
(ii) If an
Eligible Replacement
has made a Firm Offer
(which remains
an offer that will become legally binding upon acceptance by
Party B) to be the transferee pursuant to a Permitted
Transfer,
Party B shall, at
Party A's written request and at Party A's
expense execute
such documentation as is reasonably deemed
necessary
by Party A to effect such transfer.
(f)
NON-RECOURSE. Party A
acknowledges and agree that, notwithstanding any
provision in this Agreement to the contrary, the obligations of Party B
hereunder are limited
recourse obligations
of Party B, payable
solely
from the Supplemental
Interest Trust and the proceeds thereof, in
accordance with the
priority of payments and other terms of the Pooling
and Servicing
Agreement and that
Party A will not have any recourse to
any of the directors, officers, employees, shareholders or
affiliates of
the Party B with respect to any claims, losses, damages, liabilities,
indemnities or other
obligations in
connection with any
transactions
contemplated hereby.
In the event that the Supplemental Interest Trust
and the proceeds
thereof, should be
insufficient to satisfy all claims
outstanding and
following the
realization
of the account held by
the
Supplemental Interest Trust and the proceeds thereof, any claims
against
or obligations of
Party B under the ISDA Master Agreement or any other
confirmation
thereunder still
outstanding
shall be extinguished
and
thereafter not revive. The Supplemental Interest Trust Trustee
shall not
have liability for any failure or delay in making a payment
hereunder to
Party A due to any failure or delay in receiving amounts in the account
held by the Supplemental Interest Trust from the Trust
created pursuant
to the Pooling and Servicing Agreement. This provision will survive
the
termination of this Agreement.
(g)
TIMING OF PAYMENTS BY
PARTY B UPON EARLY
TERMINATION.
Notwithstanding
anything to the contrary in Section 6(d)(ii), to the extent that all or
a portion (in either case, the "Unfunded Amount") of any amount that is
calculated as being due in respect of any Early Termination Date under
Section 6(e)
from Party B to Party A will be paid by Party B from
amounts other than any
upfront payment
paid to Party B by an
Eligible
Replacement that has
entered a Replacement
Transaction
with Party B,
then such Unfunded Amount shall be due on the next subsequent
Distribution Date
following the date on which the payment
would have
been payable as determined in accordance with Section 6(d)(ii), and on
any subsequent
Distribution Dates
until paid in full (or if such Early
Termination Date
is the final Distribution Date, on such final
Distribution Date);
provided, however, that if the date on which the
payment would have been payable as determined in accordance with
Section
6(d)(ii) is a
Distribution Date,
such payment will be
payable on such
Distribution Date.
16
<PAGE>
(h)
RATING AGENCY
NOTIFICATIONS. Except
as otherwise provided
herein, no
Early Termination
Date shall be
effectively
designated
hereunder by
Party B and no
transfer of any rights or obligations under this
Agreement shall be
made by either party unless each Swap Rating Agency
has been given prior written notice of such designation or
transfer.
(i)
NO SET-OFF. Except as
expressly provided for in Section 2(c), Section 6
or Part 1(f)(i)(D)
hereof, and
notwithstanding any
other 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. Section
6(e) shall be amended
by deleting
the following
sentence: "The
amount, if any, payable in respect of an Early
Termination Date and determined pursuant to this Section will be
subject
to any Set-off."
(j)
AMENDMENT.
Notwithstanding any
provision to the contrary in this
Agreement, no
amendment of either
this Agreement
or any Transaction
under this Agreement
shall be permitted by
either party unless each of
the Swap Agencies has been provided prior written notice of the
same and
S&P and
Moody's confirms in writing (including by facsimile
transmission) that it
will not downgrade,
withdraw or otherwise modify
its then-current ratings of the Certificates or the Notes.
(k)
NOTICE OF CERTAIN
EVENTS OR CIRCUMSTANCES. Each Party agrees, upon
learning of the
occurrence or existence of any event or condition that
constitutes (or that
with the giving of
notice or passage
of time or
both would constitute)
an Event of Default or
Termination
Event with
respect to such party, promptly to give the other Party and to each
Swap
Rating Agency notice
of such event or condition; provided that failure
to provide notice of such event or condition pursuant to this Part 5
