SWAP SCHEDULE
SCHEDULE
TO THE
MASTER AGREEMENT
dated as of October 30, 2006
between
DEUTSCHE BANK TRUST COMPANY AMERICAS,
and not in its individual capacity but solely
CREDIT SUISSE INTERNATIONAL as supplemental interest trust trustee
on behalf of the supplemental interest
trust created under the Pooling and
Servicing Agreement in respect of
RALI 2006-QA9 TRUST
______________________________ ____________________________________
("Party A") ("Party B")
PART 1
TERMINATION PROVISIONS.
(a) "SPECIFIED ENTITY" means in relation to Party A for the purpose of:
Section 5(a)(v), Not Applicable
Section 5(a)(vi), Not Applicable
Section 5(a)(vii), Not Applicable
Section 5(b)(iv), Not Applicable
and in relation to Party B for the purpose of:
Section 5(a)(v), Not Applicable
Section 5(a)(vi), Not Applicable
Section 5(a)(vii), Not Applicable
Section 5(b)(iv), Not Applicable
(b) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14 of
this Agreement.
(c) CERTAIN EVENTS OF DEFAULT. Subject to Part 1(h) below, the following Events
of Default will apply to the parties as specified below, and the definition
of "Event of Default" in Section 14 is deemed to be modified accordingly:
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Section 5(a)(i) (Failure to Pay or Deliver) will apply to Party A and
Party B.
Section 5(a)(ii) (Breach of Agreement) will apply to Party A
and will not apply to Party B.
Section 5(a)(iii) (Credit Support Default) will apply to Party A and
will not apply to Party B, unless Party A has posted collateral under
the Credit Support Annex, in which case Section 5(a)(iii)(1) will apply
to Party B.
Section 5(a)(iv) (Misrepresentation) will apply to Party A
and will not apply to Party B.
Section 5(a)(v) (Default under Specified Transaction) will not apply to
Party A or Party B.
Section 5(a)(vi) (Cross Default) will apply to Party A and will not
apply to Party B. "SPECIFIED INDEBTEDNESS" shall have the meaning
specified in Section 14 of this Agreement and "THRESHOLD AMOUNT" means
3% of shareholder's equity of Party A.
Section 5(a)(vii) (Bankruptcy) will apply to Party A and Party B;
PROVIDED that in respect of Party B, (i) clause (2) thereof shall not
apply, (ii) clause (4) thereof shall not apply to Party B to the extent
that the relevant proceeding is instituted by Party A in breach of Party
A's agreement in Part 5(g) of this Schedule, (iii) the words "seeks or"
shall be deleted from clause (6) thereof and any appointment that is
effected by or pursuant to the transaction documents shall not
constitute an Event of Default under such clause (6), (iv) clause (7)
thereof shall not apply, (v) clause (8) thereof shall apply only to the
extent not inconsistent with clauses (i) to (iv) of this sentence and
(vi) clause (9) thereof shall not apply.
Section 5(a)(viii) (Merger without Assumption) will apply to Party A and
will not apply to Party B.
(d) TERMINATION EVENTS. The following Termination Events will apply to the
parties as specified below:
Section 5(b)(i) (Illegality) will apply to Party A and Party B.
Section 5(b)(ii) (Tax Event) will apply to Party A and Party B; PROVIDED
that 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)" shall be
deleted.
Section 5(b)(iii) (Tax Event upon Merger) will apply to Party A and
Party B; PROVIDED that in the event that Party A is the Affected Party
in respect of an event described in Section 5(b)(iii), Party A shall not
be entitled to designate an Early Termination Date pursuant to such
Section 5(b)(iii). Section 5(b)(iv) (Credit Event upon Merger) will not
apply to Party A or Party B.
(e) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) of this
Agreement will not apply to Party A or Party B.
(f) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of this
Agreement:
(i) Loss will apply; subject to Part 5(y)
(ii) The Second Method will apply.
(g) "TERMINATION CURRENCY" means United States Dollars.
(h) ADDITIONAL TERMINATION EVENTS. The following Additional Termination Events
will apply, in each case with respect to Party B as the sole Affected Party
(unless otherwise provided below):
(i) Each of the following shall constitute an Additional Termination Event
with Party A as sole Affected Party:
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(a) An S&P Collateralization Event has occurred and is
continuing and Party A has failed to comply with or
perform any obligation to be complied with or performed
by Party A in accordance with the "Downgrade Provisions"
as set forth in Part 5(b)(2) and a Ratings Event has
neither occurred nor is continuing. Any event which
constitutes an Additional Termination Event pursuant to
this Section 1(h)(i)(a) shall not constitute an Event of
Default (unless such event constitutes a breach of Part
5(b)(4)).
(b) A Moody's Collateralization Event has occurred and is
continuing, and Party A has failed to comply with or
perform any obligation to deliver collateral under the
Credit Support Annex and no more than 30 Local Business
Days have elapsed since the last time that no Moody's
Ratings Event had occurred and was continuing. Any event
which constitutes an Additional Termination Event
pursuant to this Section 1(h)(i)(b) shall not constitute
an Event of Default (unless such event constitutes
breach of Part 5(b)(4)).
(c) A Ratings Event has occurred and is continuing and Party
A has failed to comply with or perform any obligation to
be complied with or performed by Party A in accordance
with the "Downgrade Provisions" as set forth in Part
5(b)(4) and (i) at least one Eligible Replacement has
made a Live Bid to be the transferee of a transfer to be
made in accordance with the terms hereof and/or (ii) at
least one entity that satisfies the Hedge Counterparty
Ratings Requirements is able to provide an Eligible
Guarantee in respect of all of Party A's present and
future obligations under this Agreement satisfying the
requirements set forth under Part 5(b) hereof. The
failure by Party A to comply with or perform any
obligation (other than the obligation to post collateral
pursuant to the terms of the Credit Support Annex) to be
complied with or performed by Party A in accordance with
the "Downgrade Provisions" as set forth in Part 5(b)(4)
will constitute an Additional Termination Event and not
an Event of Default.
(ii) The Series Supplement dated as of October 30, 2006 to the Standard
Terms of Pooling and Servicing Agreement dated as of March 1, 2006 among
Residential Accredit Loans, Inc. as Depositor, Residential Funding
Company, LLC as Master Servicer, and Deutsche Bank Trustee Company
Americas as Trustee as amended and supplemented from time to time (such
Series Supplement together with such Standard Terms, the PSA or the
POOLING AND SERVICING AGREEMENT) or other transaction document is
amended or modified (other than an amendment or modification solely to
accommodate replacement agents to the transaction, e.g., servicer,
manager) without the prior written consent of Party A, where such
consent is required under the terms of the PSA (such consent not to be
unreasonably withheld). For all purposes hereunder, including in the
Credit Support Annex and each Confirmation, "Trustee" shall mean the
trustee for the Supplemental Interest Trust Trustee under the PSA.
(iii) The termination of the Trust pursuant to Article IX of the PSA,
provided, however, that notwithstanding Section 6(b)(iv) of this
Agreement, either party may designate an Early Termination Date in
respect of this Additional Termination Event.
(iv) Upon the occurrence of a Swap Disclosure Event (as defined in Part 5(u)
below) Party A has not, within 10 days after such Swap Disclosure Event,
complied with any of the provisions set forth in Part 5(u)(iii) below.
For all purposes of this Agreement, Party A shall be the sole Affected
Party with respect to the occurrence of an Additional Termination Event
described in this Part 1(h)(iv).
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PART 2
TAX REPRESENTATIONS.
(a) PAYER REPRESENTATIONS. For the purpose of Section 3(e) of this Agreement,
neither Party A nor Party B will make any representations.
(b) PAYEE REPRESENTATIONS. For the purpose of Section 3(f) of this Agreement,
neither Party A nor Party B will make any representations.
PART 3
AGREEMENT TO DELIVER DOCUMENTS.
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party
agrees to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:-- None
(b) Other documents to be delivered are:--
-------------- -------------------------------------------------- ------------------ ----------------
PARTY FORM/DOCUMENT/CERTIFICATE DATE BY WHICH TO COVERED BY
REQUIRED TO BE DELIVERED SECTION 3(D)
DELIVER REPRESENTATION
DOCUMENT
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-------------- -------------------------------------------------- ------------------ ----------------
Party A and Certified copy of the board of directors Concurrently Yes
Party B resolution (or equivalent authorizing with the
documentation) which sets forth the authority of execution and
each signatory to this Agreement and each Credit delivery of
Support Document (if any) signing on its behalf this Agreement.
and the authority of such party to enter
into Transactions contemplated and performance
of its obligations hereunder.
-------------- -------------------------------------------------- ------------------ ----------------
Party A and Incumbency certificate (or, if available the Concurrently Yes
Party B current authorized signature book or equivalent with the
authorizing documentation) specifying the names, execution and
titles, authority and specimen signatures of the delivery of
persons authorized to execute this Agreement this Agreement
which sets forth the specimen signatures unless previously
of each signatory to this Agreement, delivered and
each Confirmation and each Credit Support still in full
Document (if any) signing on its behalf. orce and effect.
-------------- -------------------------------------------------- ------------------ ----------------
Party A and B An opinion of counsel to such party as to the Concurrently No
enforceability of this Agreement that is with the
reasonably satisfactory in form and substance to execution and
the other party. delivery of the
Confirmation
unless
previously
delivered and
still in full
force and effect.
-------------- -------------------------------------------------- ------------------ ----------------
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PARTY FORM/DOCUMENT/CERTIFICATE DATE BY WHICH TO COVERED BY
REQUIRED TO BE DELIVERED SECTION 3(D)
DELIVER REPRESENTATION
DOCUMENT
-------------- -------------------------------------------------- ------------------ ----------------
Party B All opinions of counsel to Party B delivered as Upon execution of No
of the Closing Date this Agreement
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Party B Such other information in connection with the Upon request No
Certificates or the PSA in the possession of
Party B as Party A may reasonably request.
-------------- -------------------------------------------------- ------------------ ----------------
Party B An executed copy of the PSA . Within 30 days Yes
after the date of
this Agreement.
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PART 4.
MISCELLANEOUS.
(a) ADDRESSES FOR NOTICES. For the purposes of Section 12(a) of this Agreement:
Party A:
(1) Address for notices or communications to Party A (other than by
facsimile):-
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Attention: (1) Head of Credit Risk
London E14 4QJ Management;
England (2) Managing Director -
Operations Department;
(3) Managing Director - Legal
Department
Telex No.:264521 Answerback: CSI G
(For all purposes.)
(2) For the purpose of facsimile notices or communications under this
Agreement (other than a notice or communication under Section 5 or 6):-
Facsimile No.: 44 20 7888 2686
Attention: Managing Director - Legal Department
Telephone number for oral confirmation of receipt of facsimile in
legible form: 44 20 7888 2028
Designated responsible employee for the purposes of Section 12(a)(iii):
Senior Legal Secretary
Party B:
Address for notices or communications to Party B:
Deutsche Bank Trust Company Americas
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: RALI 2006-QA9 Trust
(b) PROCESS AGENT. For the purposes of Section 13(c) of this Agreement:
Party A appoints as its Process Agent:
Credit Suisse Securities (USA) LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Legal and Compliance Department
Party B appoints as its Process Agent: Not applicable.
(c) OFFICES. With respect to Party A, the provisions of Section 10(a) will apply
to this Agreement.
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(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.
(f) CREDIT SUPPORT DOCUMENT. Credit Support Document means:-
With respect to Party A: The Credit Support Annex and any guarantee that is
provided to Party B pursuant to Part 5 (b) below.
With respect to Party B: The Credit Support Annex.
(g) CREDIT SUPPORT PROVIDER.
Credit Support Provider means in relation to Party A: Not applicable or, if
a guarantee is provided to Party B pursuant to Part 5 (b) below, the
guarantor providing such guarantee.
Credit Support Provider means in relation to Party B: Not applicable..
(h) GOVERNING LAW. This Agreement and, to the fullest extent permitted by
applicable law, all matters arising out of or relating in any way to this
Agreement will be governed by and construed in accordance with the laws of
the State of New York (without reference to choice of law doctrine other
than New York General Obligation Law Sections 5-1401 and 5-1402).
(i) NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) of this Agreement
will apply to all Transactions.
(j) "AFFILIATE." Each of Party A and Party B shall be deemed to have no
Affiliates.
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PART 5.
OTHER PROVISIONS.
(a) DEFINITIONS.
Any capitalized terms used but not otherwise defined in this Agreement shall
have the meanings assigned to them (or incorporated by reference) in the
PSA. In the event of any inconsistency between the terms of this Agreement
and the terms of the PSA, this Agreement will govern.
(b) DOWNGRADE PROVISIONS.
(1) It shall be a collateralization event (COLLATERALIZATION EVENT) if:
(A) with respect to each Relevant Entity, either (i) such Relevant
Entity has both a long-term and short-term rating by ▇▇▇▇▇'▇
Investors Service, Inc. (MOODY'S) and (x) the unsecured, unguaranteed
and otherwise unsupported long-term senior debt obligations of such
Relevant Entity are rated "A3" or below by Moody's or (y) the
unsecured, unguaranteed and otherwise unsupported short-term debt
obligations of such Relevant Entity are rated "P-2" or below by
Moody's, or (ii) no short-term rating is available from Moody's and
the unsecured, unguaranteed and otherwise unsupported long-term
senior debt obligations of such Relevant Entity are rated "A2" or
below by Moody's or (iii) such Relevant Entity has no rating by
Moody's of its unsecured, unguaranteed and otherwise unsupported
long-term senior debt obligations (such event, a MOODY'S
COLLATERALIZATION EVENT), or
(B) with respect to each Relevant Entity, either (i) the unsecured,
unguaranteed and otherwise unsupported short-term debt obligations of
such Relevant Entity are rated "A-2" or below by Standard & Poor's
Rating Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. (S&P)
or (ii) if such Relevant Entity does not have a short-term rating
from S&P, the unsecured, unguaranteed and otherwise unsupported
long-term senior debt obligations of Party A are rated "A" or below
by S&P (such event, an S&P COLLATERALIZATION EVENT).
RELEVANT ENTITY means Party A and any guarantor under an Eligible
Guarantee in respect of all of Party A's present and future
obligations under this Agreement.
(2) Without prejudice to Party A's obligations under the Collateral Support
Annex, during any period in which a Collateralization Event is
occurring, Party A shall, at its own expense and within thirty (30)
Business Days of such Collateralization Event (or 30 calendar days, in
the case of an S&P Collateralization Event), either (i) post collateral
according to the terms of the 1994 ISDA Credit Support Annex to this
Schedule, including Paragraph 13 thereof (the CREDIT SUPPORT ANNEX),
(ii) furnish an Eligible Guarantee (as defined below) of Party A's
obligations under this Agreement that is (in the case of an S&P
Collateralization Event) subject to the satisfaction of the S&P Ratings
Condition from a guarantor that satisfies the Hedge Counterparty Ratings
Requirement (as defined herein), or (iii) obtain a substitute
counterparty (and provide prior written notice to each Rating Agency
with respect thereto) that (a) is reasonably acceptable to Party B
(which shall be evidenced by Party B's receipt of Rating Agency
Approval), (b) satisfies the Hedge Counterparty Ratings Requirement and
(c) assumes the obligations of Party A under this Agreement (through an
assignment and assumption agreement in form and substance reasonably
satisfactory to Party B) or replaces the outstanding Transactions
hereunder with transactions on identical terms, except that Party A
shall be replaced as counterparty, PROVIDED that such substitute
counterparty, as of the date of such assumption or replacement, must
not, as a result thereof, be required to withhold or deduct on account
of tax under the Agreement or the new transactions, as applicable, and
such assumption or replacement must not lead to a termination event or
event of default occurring in respect of the new transactions, as
8
applicable, PROVIDED FURTHER, that (in the case of an S&P
Collateralization Event) satisfaction of the S&P Ratings Condition shall
be required for any transfer of any Transactions under this Part
5(b)(2)(iii) unless such transfer is in connection with the assignment
and assumption of this Agreement by such substitute counterparty without
modification of its terms, other than the following terms: party name,
dates relevant to the effective date of such transfer, tax
representations (provided that the representations in Part 2(a) are not
modified) and any other representations regarding the status of the
substitute counterparty of the type included in Section (c) of this Part
5 and notice information (in which case, Party A shall provide written
notice to S&P with respect thereto). To the extent that Party A elects
or is required to post collateral pursuant to this Part 5(b)(1)
following an S&P Collateralization Event, Party A shall deliver to each
Rating Agency (with a copy to the Trustee) within thirty (30) calendar
days of the occurrence of such Collateralization Event an opinion
acceptable to S&P as to the enforceability of the Credit Support Annex
and which confirms that, notwithstanding the commencement of a case
under the Bankruptcy Code with respect to Party A, the collateral will
(a) be available to meet swap obligations notwithstanding the automatic
stay and (b) if delivered pre-bankruptcy, will not be subject to
recovery as preferences or constructive fraudulent conveyances, in each
case subject to standard qualifications and assumptions.
ELIGIBLE GUARANTEE means an unconditional and irrevocable guarantee that
is provided by a guarantor as principal debtor rather than surety and is
directly enforceable by Party B, where either (A) a law firm has given a
legal opinion confirming that none of the guarantor's payments to Party
B under such guarantee will be subject to withholding for Tax or (B)
such guarantee provides that, in the event that any of such guarantor's
payments to Party B are subject to withholding for Tax, such guarantor
is required to pay such additional amount as is necessary to ensure that
the net amount actually received by Party B (free and clear of any
withholding tax) will equal the full amount Party B would have received
had no such withholding been required.
An entity shall satisfy the HEDGE COUNTERPARTY RATINGS REQUIREMENT if
(a) either (i) the unsecured, unguaranteed and otherwise unsupported
short-term debt obligations of the entity are rated at least "A-1" by
S&P or (ii) if the entity does not have a short-term rating from S&P,
the unsecured, unguaranteed and otherwise unsupported long-term senior
debt obligations of the entity are rated at least "A+" by S&P, and (b)
either (i) the unsecured, unguaranteed and otherwise unsupported
long-term senior debt obligations of such entity are rated at least "A3"
by Moody's and the unsecured, unguaranteed and otherwise unsupported
short-term debt obligations of such entity are rated at least "P-2" by
Moody's (if such entity has both a long-term and short-term rating from
Moody's) or (ii) if such entity does not have a short-term debt rating
from Moody's, the unsecured, unguaranteed and otherwise unsupported
long-term senior debt obligations of such entity are rated at least "A3"
by Moody's. For the purpose of this definition, no direct or indirect
recourse against one or more shareholders of the entity (or against any
Person in control of, or controlled by, or under common control with,
any such shareholder) shall be deemed to constitute a guarantee,
security or support of the obligations of the entity.
S&P RATINGS CONDITION shall mean prior written confirmation from S&P
that a proposed action will not cause the downgrade or withdrawal of the
then current ratings of any outstanding Certificates.
RATING AGENCY shall mean each of S&P and Moody's.
9
(3) It shall be a ratings event (RATINGS EVENT) if at any time after the
date hereof (A) the unsecured, unguaranteed and otherwise unsupported
long-term senior debt obligations of each Relevant Entity are rated
"BB+" or below by S&P (such event, an S&P RATINGS EVENT) (B) either (i)
the unsecured, unguaranteed and otherwise unsupported long-term senior
debt obligations of Party A are unrated or rated "Baa1" or below by
Moody's (or such rating is withdrawn) or (ii) the unsecured,
unguaranteed and otherwise unsupported short-term debt obligations of
Party A are unrated or rated "P-3" or below by Moody's (or such rating
is withdrawn) (such event, a MOODY'S RATINGS EVENT).
(4) Following a Ratings Event, Party A shall take the following actions:
(a) in the case of an S&P Ratings Event or if at any time after the
date hereof S&P withdraws all of the Relevant Entity's ratings and no
longer rates the Relevant Entity, Party A, at its sole expense, shall
(i) within 10 Business Days, subject to extension upon S&P Ratings
Condition, of the Ratings Event, obtain a substitute counterparty
(and provide written notice to each Rating Agency with respect
thereto), that (A) satisfies the Hedge Counterparty Ratings
Requirement and (B) assumes the obligations of Party A under this
Agreement (through an assignment and assumption agreement in form and
substance reasonably satisfactory to Party B) or replaces the
outstanding Transactions hereunder with transactions on identical
terms, except that Party A shall be replaced as counterparty,
PROVIDED that such substitute counterparty, as of the date of such
assumption or replacement, must not, as a result thereof, be required
to withhold or deduct on account of tax under the Agreement or the
new transactions, as applicable, and such assumption or replacement
must not lead to a termination event or event of default occurring in
respect of the new transactions, as applicable; PROVIDED FURTHER that
satisfaction of the S&P Ratings Condition shall be required within
such 10 Business Days or longer period, as applicable, for any
transfer of any Transaction under this clause (a)(i) unless such
transfer is in connection with the assignment and assumption of this
Agreement without modification of its terms by such counterparty,
other than the following terms: party name, dates relevant to the
effective date of such transfer, tax representations (provided that
the representations in Part 2(a) are not modified) and any other
representations regarding the status of the substitute counterparty
of the type included in Section (c) of this Part 5 and notice
information (in which case, Party A shall provide prior written
notice to S&P and the Trustee with respect thereto) and (ii) post
collateral according to the terms of the Credit Support Annex; and
(b) in the case of a Moody's Ratings Event, Party A, at its sole
expense, shall (i) use commercially reasonable efforts to, as soon as
reasonably practicable, (A) furnish an Eligible Guarantee of Party
A's obligations under this Agreement from a guarantor that satisfies
paragraph (b) of the definition of Hedge Counterparty Ratings
Requirement or (B) obtain a substitute counterparty (and provide
prior written notice to each Rating Agency with respect thereto) that
(1) is reasonably acceptable to Party B (which shall be evidenced by
Party B's receipt of Rating Agency Approval), (2) satisfies the
paragraph (b) of the definition of Hedge Counterparty Ratings
Requirement and (3) assumes the obligations of Party A under this
Agreement (through an assignment and assumption agreement in form and
substance reasonably satisfactory to Party B) or replaces the
outstanding Transactions hereunder with transactions on substantially
the same terms, including rating triggers, credit support
documentation and other provisions of this Agreement, except that
Party A shall be replaced as counterparty, PROVIDED that such
substitute counterparty, as of the date of such assumption or
replacement, must not, as a result thereof, be required to withhold
or deduct on account of tax under the Agreement or the new
transactions, as applicable, and such assumption or replacement must
not lead to a termination event or event of default occurring in
respect of the new transactions, as applicable and (ii) post
collateral according to the terms of the Credit Support Annex.
10
RATING AGENCY APPROVAL shall mean prior written confirmation from S&P
and Moody's that such action will not cause them to downgrade or
withdraw its then-current ratings of any outstanding Certificates.
(c) Section 3(a) of this Agreement is hereby amended to include the following
additional representations after paragraph 3(a)(v):
(vi) ELIGIBLE CONTRACT PARTICIPANT. It is an "eligible contract participant"
as defined in section 1a(12) of the U.S. Commodity Exchange Act.
(vii) INDIVIDUAL NEGOTIATION. This Agreement and each Transaction hereunder
is subject to individual negotiation by the parties.
(viii) RELATIONSHIP BETWEEN PARTY A AND PARTY B. Subject as provided in Part
5(f), each of Party A and Party B will be deemed to represent to the other
on the date on which it enters into a Transaction or an amendment thereof
that (absent a written agreement between Party A and Party B that expressly
imposes affirmative obligations to the contrary for that Transaction):
(1) PRINCIPAL. Party A is acting as principal and not as agent when
entering into this Agreement and each Transaction.
(2) NON-RELIANCE. Party A is acting for its own account and with respect
to Party B, the Trustee is executing this Agreement as trustee on behalf
of the Trust. Each party has made its own independent decisions to enter
into that Transaction and as to whether that Transaction is appropriate
or proper for it based upon its own judgment and upon advice from such
advisors as it has deemed necessary. It is not relying on any
communication (written or oral) of the other party as investment advice
or as a recommendation to enter into that Transaction; it being
understood that information and explanations related to the terms and
conditions of a Transaction shall not be considered investment advice or
a recommendation to enter into that Transaction. No communication
(written or oral) received from the other party shall be deemed to be an
assurance or guarantee as to the expected results of that Transaction.
(3) EVALUATION AND UNDERSTANDING. It is capable of evaluating and
understanding (on its own behalf or through independent professional
advice), and understands and accepts, the terms, conditions and risks of
this Agreement and each Transaction hereunder. It is also capable of
assuming, and assumes, all financial and other risks of this Agreement
and each Transaction hereunder.
(4) STATUS OF PARTIES. The other party is not acting as a fiduciary or
an advisor for it in respect of that 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.
(d) Section 4 is hereby amended by adding the following new agreement:
(f) ACTIONS AFFECTING REPRESENTATIONS. Party B agrees not to take any
action during the term of this Agreement or any Transaction hereunder
that renders or could render any of the representations and warranties
in this Agreement untrue, incorrect, or incomplete, and, if any event or
condition occurs that renders or could render any such representation
untrue, incorrect, or incomplete, Party B will immediately give written
notice thereof to Party A.
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(e) TRANSFER. Section 7 is hereby amended to read in its entirety as follows:
Except as stated under Section 6(b)(ii), provided that to the extent
Party A makes a transfer pursuant to Section 6(b)(ii) it will provide a
prior written notice to the Rating Agencies of such transfer, 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 this Agreement or any Transaction
without the prior written consent of the other party; PROVIDED, however,
that (i) Party A may make such a transfer of this Agreement pursuant to
a consolidation or amalgamation with, or merger with or into, or
transfer of substantially all of its assets to, another entity, or an
incorporation, reincorporation or reconstitution, and (ii) Party A may
transfer this Agreement to any Person that is an office, branch or
affiliate of Party A (any such Person, office, branch or affiliate, a
TRANSFEREE) on at least five Business Days' prior written notice to
Party B; PROVIDED that, with respect to clause (ii), (A) as of the date
of such transfer the Transferee will not be required to withhold or
deduct on account of a Tax from any payments under this Agreement unless
the Transferee will be required to make payments of additional amounts
pursuant to Section 2(d)(i)(4) of this Agreement in respect of such Tax;
(B) a Termination Event or Event of Default does not occur under this
Agreement as a result of such transfer; (C) such notice is accompanied
by a written instrument pursuant to which the Transferee acquires and
assumes the rights and obligations of Party A so transferred; and (D)
Party A will be responsible for any costs or expenses incurred in
connection with such transfer. Party B will execute such documentation
as is reasonably deemed necessary by Party A for the effectuation of any
such transfer. Notwithstanding the foregoing, no transfer shall be made
unless the transferring party obtains a written acknowledgment from each
of the Rating Agencies that, notwithstanding such transfer, the
then-current ratings of the Certificates will not be reduced or
withdrawn, PROVIDED, HOWEVER, that this provision shall not apply to any
transfer that is made pursuant to the provisions of Part 5(b) of this
Agreement.
Except as specified otherwise in the documentation evidencing a
transfer, a transfer of all the obligations of Party A made in
compliance with this Section 7 will constitute an acceptance and
assumption of such obligations (and any related interests so
transferred) by the Transferee, a novation of the transferee in place of
Party A with respect to such obligations (and any related interests so
transferred), and a release and discharge by Party B of Party A from,
and an agreement by Party B not to make any claim for payment,
liability, or otherwise against Party A with respect to, such
obligations from and after the effective date of the transfer.
In addition, Party A may transfer this Agreement without the prior
written consent of the Trustee on behalf of Party B but with prior
written notice to S&P and the Trustee, to an Affiliate of Party A that
(i) satisfies the Hedge Counterparty Rating Requirements or that has
furnished a guarantee, subject to S&P Ratings Condition, of the
obligations under this Agreement from a guarantor that satisfies the
Hedge Counterparty Rating Requirements and (ii) as of the date of such
transfer such Affiliate will not be required to withhold or deduct on
account of a Tax from any payments under this Agreement unless such
Affiliate will be required to make payments of additional amounts
pursuant to Section 2(d)(i)(4) of this Agreement in respect of such Tax;
provided that satisfaction of the S&P Ratings Condition will be required
unless such transfer is in connection with the assignment and assumption
of this Agreement by such an Affiliate without modification of its
terms, other than the following terms: party name, dates relevant to the
effective date of such transfer, tax representations (provided that the
representations in Part 2(a) are not modified) and any other
representations regarding the status of such an Affiliate the substitute
counterparty of the type included in Section (c) of this Part 5 and
notice information (in which case, Party A shall provide written notice
to S&P with respect thereto).
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(f) TRUSTEE CAPACITY. It is expressly understood and agreed by the parties
hereto that (i) this Agreement is executed and delivered by Trustee (the
TRUSTEE) not individually or personally but solely as trustee of the Trust
created pursuant to the PSA (the TRUST), in the exercise of the powers and
authority conferred and vested in it under the PSA, (ii) each of the
representations, undertakings and agreements herein made on the part of the
Trust is made and intended not as personal representations, undertakings and
agreements by the Trustee but is made and intended for the purpose of
binding only the Trust, (iii) nothing herein contained shall be construed as
creating any liability on the part of the Trustee, individually or
personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties
hereto and by any Person claiming by, through or under the parties hereto
and (iv) under no circumstances shall the Trustee be personally liable for
the payment of any indebtedness or expenses of the Trust or be liable for
the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the Trust under this Agreement or any other
related documents as to all of which recourse shall be had solely to the
assets of the Trust in accordance with the terms of the Pooling and
Servicing Agreement.
(g) PROCEEDINGS. Party A shall not institute against or cause any other person
to institute against, or join any other person in instituting against Party
B or the trust created pursuant to the Pooling and Servicing Agreement, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or state bankruptcy,
dissolution or similar law, for a period of one year and one day, or if
longer the applicable preference period then in effect, following
indefeasible payment in full of the Certificates. Nothing shall preclude, or
be deemed to stop, Party A (i) from taking any action prior to the
expiration of the aforementioned one year and one day period, or if longer
the applicable preference period then in effect, in (A) any case or
proceeding voluntarily filed or commenced by Party B or (B) any involuntary
insolvency proceeding filed or commenced by a Person other than Party A or
(ii) from commencing against Party B or any of the Mortgage Loans any legal
action which is not a bankruptcy, reorganization, arrangement, insolvency,
moratorium, liquidation or similar proceeding. This provision shall survive
termination of this Agreement.
(h) CHANGE OF ACCOUNT. Section 2(b) of this Agreement 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"
(i) SET-OFF. Notwithstanding any provision of this Agreement or any other
existing or future agreements, each of Party A and Party B irrevocably
waives as to itself any and all contractual rights it may have to set off,
net, recoup or otherwise withhold or suspend or condition its payment or
performance of any obligation to the other party under this Agreement
against any obligation of one party hereto to the other party hereto arising
outside of this Agreement. The provisions for set-off set forth in Section
6(e) of this Agreement shall not apply for purposes of this Transaction.
(j) 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 notice of such event or condition
(or, in lieu of giving notice of such event or condition in the case of an
event or condition that with the giving of notice or passage of time or both
would constitute an Event of Default or Termination Event with respect to
the party, to cause such event or condition to cease to exist before
becoming an Event of Default or Termination Event); PROVIDED that failure to
provide notice of such event or condition pursuant to this Part 5(j) shall
not constitute an Event of Default or a Termination Event.
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(k) REGARDING PARTY A. Party B acknowledges and agrees that Party A has had and
will have no involvement in and, accordingly Party A accepts no
responsibility for: (i) the establishment, structure, or choice of assets of
Party B; (ii) the selection of any person performing services for or acting
on behalf of Party B; (iii) the selection of Party A as the Counterparty;
(iv) the terms of the Certificates; (v) the preparation of or passing on the
disclosure and other information contained in any offering circular for the
Certificates, the PSA, or any other agreements or documents used by Party B
or any other party in connection with the marketing and sale of the
Certificates (other than information provided by Party A for purposes of the
disclosure document relating to the Certificates); (vi) the ongoing
operations and administration of Party B, including the furnishing of any
information to Party B which is not specifically required under this
Agreement; or (vii) any other aspect of Party B's existence.
(l) RATING AGENCY APPROVAL ON AMENDMENT. In addition to the requirements of
Section 9, this Agreement will not be amended unless Party B shall have
received Rating Agency Approval.
(m) JURISDICTION. Section 13(b) is hereby amended by: (i) deleting in the second
line of subparagraph (i) thereof the word "non-": and (ii) deleting the
final paragraph thereof.
(n) LIMITED RECOURSE NON-PETITION. The liability of Party B in relation to this
Agreement and any Confirmation hereunder is limited in recourse to assets in
the Trust and payments of interest proceeds and principal proceeds thereon
applied in accordance with the terms of the PSA. Upon application of all of
the assets in the Trust (and proceeds thereon) in accordance with the PSA,
Party A shall not be entitled to take any further steps against Party B to
recover any sums due but still unpaid hereunder or thereunder, all claims in
respect of which shall be extinguished.
(o) PAYMENTS TO PARTY A SUBJECT TO PRIORITY OF PAYMENTS. Party A hereby agrees
that, notwithstanding any provision of this agreement to the contrary, Party
B's obligations to pay any amounts owing under Section 6(e) of this
Agreement where Party A is either the Defaulting Party or the sole Affected
Party (other than pursuant to an Illegality or Tax Event) shall be subject
to the payment priority described at Section 4.02 of the PSA and Party A's
right to receive payment of such amounts shall be subject to the payment
priority described at Section 4.02 of the PSA.
(p) WAIVER OF JURY TRIAL. Each party waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in respect of any
suit, action or proceeding relating to this Agreement or any Credit Support
Document. Each party certifies (i) that no representative, agent or attorney
of the other party or any Credit Support Provider has represented, expressly
or otherwise, that such other party would not, in the event of such a suit,
action or proceeding, seek to enforce the foregoing waiver and (ii)
acknowledges that it and the other party have been induced to enter into
this Agreement and provide for any Credit Support Document, as applicable,
by, among other things, the mutual waivers and certifications in this
Section.
(q) CONSENT TO RECORDING. Each party (i) consents to the recording of the
telephone conversations of trading and marketing personnel of the parties
and their Affiliates in connection with this Agreement or any potential
transaction and (ii) if applicable, agrees to obtain any necessary consent
of, and give notice of such recording to, such personnel of it and its
Affiliates.
(r) 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 illegal, 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 illegal, 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
to this Agreement.
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(s) ESCROW PAYMENTS. If (whether by reason of the time difference between the
cities in which payments are to be made or otherwise) it is not possible for
simultaneous payments to be made on any date on which both parties are
required to make payments hereunder, either party may at its option and in
its sole discretion notify the other party that payments on that date are to
be made in escrow. In this case deposit of the payment due earlier on that
date shall be made by 2:00 pm (local time at the place for the earlier
payment) on that date with an escrow agent selected by the notifying party,
accompanied by irrevocable payment instructions (i) to release the deposited
payment to the intended recipient upon receipt by the escrow agent of the
required deposit of the corresponding payment from the other party on the
same date accompanied by irrevocable payment instructions to the same effect
or (ii) if the required deposit of the corresponding payment is not made on
that same date, to return the payment deposited to the party that paid it
into escrow. The party that elects to have payments made in escrow shall pay
all costs of the escrow arrangements.
(t) COMPLIANCE WITH REGULATION AB.
(i) Party A agrees and acknowledges that Depositor (DEPOSITOR) is required
under Regulation AB under the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended (the EXCHANGE ACT) (REGULATION
AB), to disclose certain financial information regarding Party A or its
group of affiliated entities, if applicable, depending on the aggregate
"significance percentage" of this Agreement and any other derivative
contracts between Party A or its group of affiliated entities, if
applicable, and Party B, as calculated from time to time in accordance with
Item 1115 of Regulation AB.
(ii) It shall be a swap disclosure event (SWAP DISCLOSURE EVENT) if, on any
Business Day during the term of the Transaction, Depositor requests from
Party A the applicable financial information described in Item 1115 of
Regulation AB (such request to be based on a reasonable determination by
Depositor, in good faith, that such information is required under Regulation
AB as a result of the aggregate "significance percentage" exceeding 10%)
(the SWAP FINANCIAL DISCLOSURE).
(iii) Upon the occurrence of a Swap Disclosure Event, Party A, at its own
expense, shall (a) provide to Depositor the Swap Financial Disclosure, (b)
secure 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, PROVIDED, that satisfaction of the S&P Ratings
Condition shall be required for any transfer of any Transactions under this
clause (iii) unless such transfer is in connection with the assignment and
assumption of this Agreement by such substitute counterparty without
modification of its terms, other than the following terms: party name, dates
relevant to the effective date of such transfer, tax representations
(provided that the representations in Part 2(a) are not modified) and any
other representations regarding the status of the substitute counterparty of
the type included in Section (c) of this Part 5 and notice information (in
which case, Party A shall provide written notice to S&P with respect
thereto), which entity (or a guarantor therefor) meets or exceeds the Hedge
Counterparty Ratings Requirement and which entity is able to comply with the
financial information disclosure requirements of Item 1115 of Regulation AB
or (c) obtain a guaranty of the Party A's obligations under this Agreement
from an affiliate of the 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 with respect to the Counterparty, and cause such
affiliate to provide Swap Financial Disclosure. If permitted by Regulation
AB, any required Swap Financial Disclosure may be provided by incorporation
by reference from reports filed pursuant to the Exchange Act.
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(u) THIRD PARTY BENEFICIARY.
Depositor shall be an express third party beneficiary of this Agreement as
if a party hereto to the extent of the Depositor 's rights explicitly
specified herein
(v) CREDIT SUPPORT DEFAULT. Section 5(a)(iii)(1) of this Agreement is hereby
deleted and replaced with the following:
"(1) The occurrence of an Event of Default under any Credit Support Document
if such Event of Default is continuing after any applicable grace period has
elapsed;"
(w) TAX. Notwithstanding the definition of "Indemnifiable Tax" in Section 14 of
this Agreement, in relation to payments by Party A, any Tax shall be an
Indemnifiable Tax and, in relation to payments by Party B, no Tax shall be
an Indemnifiable Tax.
(x) CALCULATIONS. Notwithstanding Section 6 of this Agreement, so long as Party
A is (A) the sole Affected Party (other than pursuant to an Illegality or a
Tax Event) or (B) the Defaulting Party in respect of any Event of Default,
paragraphs (i) to (vii) below shall apply:
(i) Notwithstanding Part 1(f) hereof, "Market Quotation" shall apply,
and the definition of "Market Quotation" shall be deleted in its
entirety and replaced with the following:
""MARKET QUOTATION" means, with respect to one or more Terminated
Transactions, a Live Bid 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 transaction (the
"REPLACEMENT TRANSACTION") that would have the effect of preserving for
such party the economic equivalent of any payment or delivery (whether
the underlying obligation was absolute or contingent and assuming the
satisfaction of each applicable condition precedent) by the parties
under Section 2(a)(i) in respect of such Terminated Transactions or
group of Terminated Transactions that would, but for the occurrence of
the relevant Early Termination Date, have been required after that date,
(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 and (4) made in respect of a Replacement Transaction
with terms substantially the same as those of this Agreement (save for
the exclusion of provisions relating to Transactions that are not
Terminated Transactions)."
(ii) 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 the Termination Currency Equivalent of
the amount (whether positive or negative) of any Market Quotation for
the relevant Terminated Transaction or group of Terminated Transactions
that is accepted by Party B so as to become legally binding, provided
that:
(1) If, on 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
the Early Termination Date) (such day 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 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; and
(2) 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 Quotations have been made and remain
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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.
(iii) For the purpose of clause (4) of the definition of Market
Quotation, Party B shall determine, based on information provided by the
Reference Market-Maker, whether a Live Bid is made in respect of a
Replacement Transaction with commercial terms substantially the same as
those of this Agreement (save for the exclusion of provisions relating
to Transactions that are not Terminated Transactions).
(iv) At any time on or before the Latest Settlement Amount Determination
Day at which two or more Market Quotations remain capable of becoming
legally binding upon acceptance, Party B shall be entitled to accept
only the lowest of such Market Quotations.
(v) 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.
(vi) If the Settlement Amount is a negative number, Section 6(e)(i)(3)
of this Agreement shall be deleted in its entirety and replaced with the
following:
"SECOND METHOD AND MARKET QUOTATION. If Second Method and Market
Quotation apply, (1) Party B shall pay to Party A an amount equal to the
absolute value of the Settlement Amount in respect of the Terminated
Transactions, (2) Party B shall pay to Party A the Termination Currency
Equivalent of the Unpaid Amounts owing to Party A and (3) Party A shall
pay to Party B the Termination Currency Equivalent of the Unpaid Amounts
owing to Party B; provided that, (i) the amounts payable under (2) and
(3) shall be subject to netting in accordance with Section 2(c) of this
Agreement and (ii) notwithstanding any other provision of this
Agreement, any amount payable by Party A under (3) shall not be
netted-off against any amount payable by Party B under (1)."
(vii) For purposes of this Part 5(y),
"ELIGIBLE REPLACEMENT" means an entity (A) satisfying the Hedge
Counterparty Ratings Requirement or (B) whose present and future
obligations owing to Party B are guaranteed pursuant to a guarantee
provided by a guarantor satisfying the Hedge Counterparty Ratings
Requirements.
"LIVE BID" means a firm quotation from a Reference Market-maker that is
an Eligible Replacement which, when made, was capable of becoming
legally binding upon acceptance.
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(y) RATING AGENCY NOTIFICATIONS. Notwithstanding any other provision of this
Agreement, this Agreement shall not be amended, no Early Termination Date
shall be effectively designated by Party B, and no transfer of any rights or
obligations under this Agreement shall be made (other than a transfer of all
of Party A's rights and obligations with respect to this Agreement in
accordance with Part 5(e) above) unless each Rating Agency has been given
prior written notice of such amendment, designation or transfer.
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IN WITNESS WHEREOF, the parties have executed this document by their duly
authorized officers with effect from the date so specified on the first page
hereof.
DEUTSCHE BANK TRUST COMPANY
AMERICAS, not in its individual
capacity but solely as supplemental
interest trust trustee on behalf of
the supplemental interest trust
created under the Pooling and
Servicing Agreement in respect of
CREDIT SUISSE INTERNATIONAL RALI 2006-QA9 TRUST
By:________________________________ By:_________________________________
Name: Name:
Title: Title:
By:________________________________
Name:
Title:
19