Document:

Exhibit 4.3

(Multicurrency—Cross Border)

           

ISDAÒ

International Swap Dealers Association, Inc.

MASTER AGREEMENT

dated as of October 12, 2006

	
WACHOVIA BANK, N.A.

 

(“Party A”)

	
and

	
DEUTSCHE BANK NATIONAL TRUST COMPANY, not in its individual capacity but solely as Supplemental Interest Trust Trustee on behalf of Long Beach Mortgage Loan Supplemental Interest Trust
2006‐9

(“Party B”)

 

have entered and/or anticipate entering into one or more transactions (each a “Transaction”) that are or will

be governed by this Master Agreement, which includes the schedule (the “Schedule”), and the documents

and other confirming evidence (each a “Confirmation”) exchanged between the parties confirming those Transactions.

 

Accordingly, the parties agree as follows:—

 

1.                  
 Interpretation

 

(a)                 Definitions. The terms defined in Section 14 and in the Schedule will have the meanings therein specified for the purpose of this
Master Agreement.

 

(b)                 Inconsistency. In the event of any inconsistency between the provisions of the Schedule and the other provisions of this Master
Agreement, the Schedule will prevail.  In the event of any inconsistency between the provisions of any Confirmation and this Master Agreement (including the Schedule), such Confirmation will prevail for the purpose of the relevant Transaction.

 

(c)                 Single Agreement. All Transactions are entered into in reliance on the fact that this Master Agreement and all Confirmations form a
single agreement between the parties (collectively referred to as this “Agreement”), and the parties would not otherwise enter into any Transactions.

 

2.                  
 Obligations

 

(a)                
 General Conditions.

(i)       Each party will make each payment or delivery specified in
each Confirmation to be made by it, subject to the other provisions of this Agreement.

 

(ii)     Payments under this Agreement will be made on the due date
for value on that date in the place

of the account specified in the relevant Confirmation or otherwise pursuant to this Agreement, in freely transferable funds and in the manner customary for payments in the required currency. Where settlement is by delivery (that is, other than by
payment), such delivery will be made for receipt on the due date in the manner customary for the relevant obligation unless otherwise specified in the relevant Confirmation or elsewhere in this Agreement.

 

(iii)    Each obligation of each party under Section 2(a)(i) is subject to (1) the
condition precedent that no Event of Default or Potential Event of Default with respect to the other party has occurred and is continuing, (2) the condition precedent that no Early Termination Date in respect of the relevant Transaction has occurred or been effectively designated and (3) each other applicable condition precedent specified in this Agreement.

value of that which was (or would have been) required to be delivered as of the originally scheduled date

for delivery, in each case together with (to the extent permitted under applicable law) interest, in the currency,

of such amounts, from (and including) the date such amounts or obligations were or would have been required

to have been paid or performed to (but excluding) such Early Termination Date, at the Applicable Rate. Such

amounts of interest will be calculated on the basis of daily compounding and the actual number of days

elapsed. The fair market value of any obligation referred to in clause (b) above shall be reasonably

determined by the party obliged to make the determination under Section 6(e) or, if each party is so obliged,

it shall be the average of the Termination Currency Equivalents of the fair market values reasonably

determined by both parties.

 

IN WITNESS WHEREOF the parties have executed this document on the respective dates specified below

with effect from the date specified on the first page of this document.

 

	
WACHOVIA BANK, N.A.

	
 

	

DEUTSCHE BANK NATIONAL TRUST COMPANY, not in its individual capacity but solely as Supplemental Interest Trust Trustee on behalf of Long Beach
Mortgage Loan Supplemental Interest Trust 2006‐9

	
 

 

 

 

By:                  /s/ Kim V.
Farr                              

 

Name:     Kim V. Farr

 Title:       Director

 Date: 

	
 

	
 

 

 

 

By:                  /s/ Ronaldo
Reyes                       

 

Name:  Ronaldo Reyes

 Title:    Vice President

 Date: 

	
 

	
 

	
 

 

 

By:                  /s/ Melissa
Wilman                     

 

Name:  Melissa Wilman

 Title:    Vice President

 Date: 

 

 

 

                                                                                                                                                         
Rate Swap Schedule

 

 

 

 

 

SCHEDULE

to the

Master Agreement

 

 

dated as of October 12, 2006

 

between

 

 

 

 

	
WACHOVIA BANK, N.A.

	
 

 

and

	

Deutsche Bank National Trust Company, not in its individual capacity but solely as Supplemental Interest Trust Trustee
on behalf of Long Beach Mortgage Loan Supplemental Interest Trust 2006-9 (the “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 not apply to Party A or Party
B.

 

(c)   Certain Events of Default.  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:

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 not apply to Party A or Party
B.

Section 5(a)(iii) (Credit Support Default) will apply to Party A at any time Party
A is posting collateral or is providing a guarantee or other contingent agreement pursuant to Part 5(b) and will not apply to Party B.

Section 5(a)(iv) (Misrepresentation) will not apply to Party A or 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 not apply to Party A or Party B.

Section 5(a)(vii) (Bankruptcy) will apply to Party A and Party B; provided that
clause (2) thereof shall not apply to Party B.

Section 5(a)(viii) (Merger without Assumption) will apply to Party A
and 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.

Section 5(b)(iii) (Tax Event upon Merger) will apply to Party A and will not apply to Party B.

Section 5(b)(iv) (Credit Event upon Merger) will not apply to Party A or to 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)    Market Quotation will apply.

(ii)   The Second Method will apply.

(g)   "Termination Currency" means United States
Dollars.

 

(h)   Gross Up.  The provisions of Section 2(d)(i)(4) of this
Agreement shall not apply to Party B as “X” and the provisions of Section 2(d)(ii) of this Agreement shall not apply to Party B as “Y,” such that Party B shall not be required to pay any additional amounts referred to therein.

 

(i)    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)    Party A fails to comply with the Downgrade Provisions as set forth in Part 5(b).  For all purposes of this Agreement, Party A shall be the sole Affected Party
with respect to the occurrence of a Termination Event described in this Part 1(h)(i).

(ii)   The Pooling and Servicing Agreement dated as of October 1, 2006 among
Long Beach Securities Corp. as Depositor, Washington Mutual Bank as Seller and Servicer and Deutsche Bank National Trust Company as Trustee for the trust and Supplemental Interest Trust Trustee (the “Trustee”) for the Supplemental Interest Trust
(the “Trust”) as amended and supplemented from time to time (the “PSA”) or other transaction document is amended or modified without the prior written consent of Party A, where such consent is required under the terms of the
PSA.

(iii)  The Trust is terminated pursuant to the PSA.

(iv)  The deposit of the Termination Price by the Terminator with the Trust pursuant to
Section 9.01 of the PSA on a date that is no later than the Determination Date in the month immediately preceding the Distribution Date in which the Certificates will be retired; provided that the Early Termination Date may not occur until a date that is no
earlier than the Business Day after the Distribution Date falling in the month immediately preceding the Distribution Date on which the Certificates will be retired pursuant to Section 9.01 of the PSA.

(v)   Party A fails to satisfy its obligations under Section 2 of that certain
Indemnification and Disclosure Agreement dated as of October 12, 2006, between Party A and Washington Mutual Bank.  For all purposes of this Agreement, Party A shall be the sole Affected Party with respect to the occurrence of a Termination Event described in
this Part 1(h)(v).

Part 2

Tax Representations.

 

(a)   Payer Representations. For the purpose of
Section 3(e) of this Agreement, Party A will make the following representation and Party B will make the following representation:

 

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 (i) 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) of this Agreement by reason of material prejudice to its legal or commercial position.

 

(b)   Payee Representations. For the purpose of Section 3(f) of this
Agreement, Party A and Party B make the representations specified below, if any:

 

(i)       Party A makes the following representation to Party
B:

 

(A)    
It is a national banking association organized or formed under the laws of the United States and is a United States resident for United States federal income tax purposes.

 

(ii)     Party B makes the following representations to Party A:

 

(A)     Party B is a
“U.S. Payee” within the meaning of Treasury Regulation Section 1.1441-5(b).

(B)      Party B
is a United States Person within the meaning of Section 7701(a)(30) of the Tax Code.

 

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:—

 

	
Party required to deliver document

	
Form/Document/Certificate

	
Date by which to be delivered

	
Party A and Party B

	
Any form or document reasonably requested by the other party to permit payments without (or with minimal) withholding of Tax as specified in Section 4(a)(iii) of
this Agreement, including a United States Internal Revenue Service Form W-9.

	
(i) On a date which is before the first Scheduled Payment Date under this Agreement, (ii) promptly upon reasonable demand by the other party, and (iii) promptly upon
learning that any such form previously provided has become obsolete, incorrect, or ineffective.

 

(b) Other documents to be delivered are:—

 

	
Party required to deliver document

	
Form/Document/Certificate

	
Date by which to be delivered

	
Covered by Section 
 3(d) Representation

	
Party A

	
Certified copy of the board of directors resolution (or equivalent authorizing documentation) which sets forth the authority of each signatory to this Agreement and
each Credit Support Document (if any) signing on its behalf and the authority of such party to enter into Transactions contemplated and performance of its obligations hereunder.

	
Concurrently with the execution and delivery of this Agreement.

	
Yes

	
Party A and Party B

	
Incumbency certificate (or, if available the current authorized signature book or equivalent authorizing documentation) specifying the names, titles, authority and
specimen signatures of the persons authorized to execute this Agreement which sets forth the specimen signatures of each signatory to this Agreement, each Confirmation and each Credit Support Document (if any) signing on its behalf.

	
Concurrently with the execution and delivery of this Agreement unless previously delivered and still in full force and effect.

	
Yes

	
Party A and B

	
An opinion of counsel to such party relating to the enforceability of this Agreement reasonably satisfactory in form and substance to the other party.

	
Concurrently with the execution and delivery of the Confirmation unless previously delivered and still in full force and effect.

	
No

	
Party B

	
An executed copy of the PSA.

	
Within 30 days after the date of this Agreement.

	
Yes

Part 4.

 

Miscellaneous.

 

(a)   Addresses for Notices. For the purposes of Section 12(a) of this
Agreement:

 

Party A:         Wachovia Bank, N.A.

301 South College, DC-8

Charlotte, NC 28202-0600

Attention:              Bruce M. Young

                                Senior Vice President, Risk Management

Fax: (704) 383-0575

Phone: (704) 383-8778

 

Party B:          Deutsche Bank National Trust Company, not in its individual capacity but solely as
Supplemental Interest Trust Trustee on behalf of Long Beach Mortgage Loan Supplemental Interest Trust 2006-9

1761 East St. Andrew Place,

Santa Ana,

California 92705-4934

Attention:              Long Beach Mortgage Loan Trust 2006-9

 

(b)   Process Agent. For the purposes of Section 13(c) of this
Agreement:

 

Party A appoints as its Process Agent:  Not applicable.

 

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.

 

(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:  Any Credit Support Annex that may be entered into by Party A and Party B in
connection with the occurrence of a Collateralization Event or Rating Event, each as defined under Part 5(b).

 

With respect to Party B:  The PSA.

 

(g)   Credit Support Provider.

 

Credit Support Provider means in relation to Party A:  None or, in that event that Party A provides a guarantee or other contingent agreement pursuant to Part 5(b)
below, such guarantor or other provider of credit support.

 

Credit Support Provider means in relation to Party B:  Not applicable.

 

(h)   Governing Law. 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.

 

(k)   The word “third” shall be replaced by the word “second”
in the third line of Section 5(a)(i) of this Agreement.

 

(l)    For the avoidance of doubt, it is expressly understood and agreed by the
parties hereto that, to the extent that any Event of Default described in Section 5(a) of this Agreement is applicable to the Trust, such Event of Default is applicable only to the Trust and not to the Trustee individually or personally.

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” if (A) (i) the unsecured, unguaranteed and otherwise unsupported long-term senior debt obligations of
Party A are rated below "A1" by Moody's Investors Service, Inc. (“Moody’s”) or are rated "A1" by Moody's and such rating is on watch for possible downgrade (but only for so long as it is on watch for possible downgrade) or (ii) the
unsecured, unguaranteed and otherwise unsupported short-term debt obligations of Party A are rated below "P‐1" by Moody's or are rated "P‐1" by Moody's and such rating is on watch for possible downgrade (but only for so long as it is on watch for
possible downgrade), (B) no short-term rating is available from Moody's and the unsecured, unguaranteed and otherwise unsupported long-term senior debt obligations of Party A are rated below "Aa3" by Moody's or are rated "Aa3" by Moody's and such rating is on
watch for possible downgrade (but only for so long as it is on watch for possible downgrade), or (C)  either (i) the unsecured, unguaranteed and otherwise unsupported short-term debt obligations of Party A are rated below "A‐1" by Standard &
Poor's Rating Services, a division of The McGraw-Hill Companies, Inc. (“S&P”) or (ii) if Party A 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 below "A+" by S&P or (D)  either (i) the unsecured, unguaranteed and otherwise unsupported long-term senior debt obligations of Party A are
rated below “A” by Fitch, Inc. (“Fitch”) or (ii) the unsecured, unguaranteed and otherwise unsupported short-term debt obligations of Party A are rated below “F1” by Fitch.  For the avoidance of
doubt, the parties hereby acknowledge and agree that notwithstanding the occurrence of a Collateralization Event, this Agreement and each Transaction hereunder shall continue to qualify as a Swap Agreement for purposes of the distribution priorities in Article IV of
the PSA.  Within 30 days from the date a Collateralization Event has occurred and so long as such Collateralization Event is continuing, Party A shall, at its own expense, and subject to satisfaction of the Rating Agency Condition either (i) pursuant to the
terms of an ISDA Credit Support Annex, including Paragraph 13, added to this Agreement by an amendment to this Agreement (the “Credit Support Annex”), post collateral to Party B in an amount sufficient to restore to the levels that existed
immediately prior to the Collateralization Event the ratings of any Certificates then rated by the Rating Agencies, (ii) furnish a guarantee of Party A’s obligations under this Agreement from a guarantor which satisfies the Hedge Counterparty Ratings
Requirement (as defined herein), or (iii) obtain a substitute counterparty 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.  To the extent that Party A elects or is required to post collateral pursuant to this Part 5(b)(1), Party A shall request its legal counsel to deliver to each applicable Rating Agency within thirty
(30) calendar days of the occurrence of such Collateralization Event an opinion satisfactory to the Rating Agency as to the enforceability of the Credit Support Annex.

(2)   It shall be a ratings event (a “Ratings Event”) if at any time after the date hereof Party A shall fail to satisfy the Hedge Counterparty
Ratings Threshold.  “Hedge Counterparty Ratings Threshold” shall mean (A) the unsecured, unguaranteed and otherwise unsupported long-term senior debt obligations of Party A are rated at least "BBB-" by S&P, (B) the unsecured,
unguaranteed and otherwise unsupported long-term senior debt obligations of Party A are rated at least "A3" by Moody's (and such rating is not on watch for possible downgrade) and the unsecured, unguaranteed and otherwise unsupported short-term debt obligations
of Party A are rated at least "P‐2" by Moody's (and such rating is not on watch for possible downgrade), and (C) either (i) the unsecured, unguaranteed and otherwise unsupported long-term senior debt
obligations of Party A are rated at least "BBB+" by Fitch or (ii) the unsecured, unguaranteed and otherwise unsupported short-term debt obligations of Party A are rated at least "F2" by Fitch.  For the avoidance of all doubts, the parties hereby
acknowledge and agree that notwithstanding the occurrence of a Ratings Event, this Agreement and each Transaction hereunder shall continue to qualify as a Swap Agreement for purposes of the distribution priorities in Section 4.01 of the PSA.

(3)   Following a Ratings Event, Party A shall take the following actions:

(a)   Within 30 days (or, in the case of a failure to meet the requirements of subparagraph (A) of the definition of “Hedge Counterparty Ratings Threshold”,
within 10 Business Days) of the Ratings Event, Party A, at its sole expense, shall (i) obtain a substitute counterparty that (A) satisfies the Rating Agency Condition, (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 applicable, or (ii) furnish a guarantee of Party A’s obligations under this Agreement from a guarantor
that (A) satisfies the Hedge Counterparty Ratings Requirement and (B) satisfies the Rating Agency Condition, or (iii) take such other action that satisfies the Rating Agency Condition.  Notwithstanding anything contained herein to the contrary, if Party A is
required to transfer its rights and obligations under this Agreement pursuant to this Part 5(b)(3) as a result of a rating issued by S&P, Party A shall, at all times prior to such transfer, be required to post collateral in accordance with (i) the terms of the
Credit Support Annex or (ii) an agreement with Party B providing for the posting of collateral, which agreement shall satisfy the Rating Agency Condition specified in Part 5(n) below and require Party A to post the required collateral.

“Hedge Counterparty Ratings Requirement” shall mean (a) either (i) the unsecured, unguaranteed and otherwise unsupported short-term debt obligations
of the substitute counterparty are rated at least "A‐1" by S&P or (ii) if the substitute counterparty does not have a short-term rating from S&P, the unsecured, unguaranteed and otherwise unsupported long-term senior debt obligations of the substitute
counterparty are rated at least "A+" by S&P, (b) either (i) the unsecured, unguaranteed and otherwise unsupported long-term senior debt obligations of such substitute counterparty are rated at least "A1" by Moody's (and if rated "A1" by Moody's, such rating is
not on watch for possible downgrade) and the unsecured, unguaranteed and otherwise unsupported short-term debt obligations of such substitute counterparty are rated at least "P‐1" by Moody's (and if rated "P-1" by Moody's, such rating is not on watch for
possible downgrade and remaining on watch for possible downgrade), or (ii) if such substitute counterparty does not have a short-term debt rating from Moody's, the unsecured, unguaranteed and otherwise unsupported long-term senior debt obligations of such substitute
counterparty are rated at least "Aa3" by Moody's (and if rated "Aa3" by Moody's, such rating is not on watch for possible downgrade), and (c) either (i) the unsecured, unguaranteed and otherwise unsupported long-term senior debt obligations of such substitute
counterparty are rated at least "A" by Fitch or (ii) the unsecured, unguaranteed and otherwise unsupported short-term debt obligations of such substitute counterparty are rated at least "F1" by Fitch. For the purpose of this definition, no direct or indirect recourse
against one or more shareholders of the substitute counterparty (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
substitute counterparty.

 

(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.
 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.  Party B is acting not in its individual capacity but solely as Trustee on behalf of Long Beach Mortgage Loan Supplemental Interest Trust 2006‐9.

 

(2)           Non-Reliance.
Party A is acting for its own account and it 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.  Party B is acting not in its individual capacity but solely as Trustee on behalf of Long Beach Mortgage Loan Supplemental Interest Trust 2006‐9. 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.

 

(d)   Section
1(c).  For purposes of Section 1(c) of the Agreement, the Transaction with External ID: 1592187 shall be the sole Transaction under the Agreement.

 

(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 such 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, to an Affiliate of Party A that 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; provided that (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, (D) Party A will be responsible for any costs or expenses incurred in connection with such transfer, and (E) 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 the Transferee 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 Transferee 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).

 

(f)    Trustee Capacity.  It is expressly understood and
agreed by the parties hereto that (i) this Agreement is executed and delivered by Deutsche Bank National Trust Company (“Deutsche Bank”) not individually or personally but solely as Supplemental Interest Trust Trustee of 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 Deutsche Bank
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 Deutsche Bank, individually or personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto and (iv) under no circumstances shall Deutsche Bank be personally liable for the payment of any indebtedness or
expenses of the Trust or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the 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 PSA.

 

(g)   Additional Representations.

 

        Party B represents
that:

 

(i)    Status.  The Trustee is trustee of the Trust under the PSA.  It
is a national banking association validly existing under the laws of the United States; and 

 

(ii)   Powers. In its capacity as trustee of the Trust, the Trustee has power under
the PSA to execute this Agreement and any other documentation relating to this Agreement that the Trustee is executing and delivering on behalf of the Trust, to deliver this Agreement and any other documentation relating to this Agreement that it is required to
execute and deliver and to perform the obligations (on behalf of the Trust) under this Agreement and any obligations (on behalf of the Trust) under any Credit Support Document to which the Trustee on behalf of the Trust is party and has taken all necessary action to
authorize such execution, delivery and performance.

 

(h)   Proceedings.  Without impairing any right afforded to it
under the PSA as a third party beneficiary, Party A shall not institute against or cause any other person to institute against, or join any other person in instituting against the Trust or the trust formed pursuant to the PSA, 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.

 

(i)    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"

 

(j)    Pooling and Servicing Agreement.  Party B will provide
at least ten days' prior written notice to Party A of any proposed amendment or modification to the PSA and Party B will obtain the prior written consent of Party A to any such amendment or modification, where such consent is required under the terms of the
PSA.

 

(k)   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; provided that nothing herein shall be construed to waive or otherwise limit the netting provisions contained in Section 2(c)(ii)
or Section 6(e) of this Agreement or any set-off rights contained in the Credit Support Annex.  The provisions for set-off set forth in Section 6(e) of this Agreement shall not apply for purposes of this Transaction.

 

(l)    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(l) shall not constitute an Event of Default
or a Termination Event.

 

(m)  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 Class A Certificates and the Mezzanine
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.

 

(n)   Rating Agency Condition.  Without prejudice to Section 9
of this Agreement, this Agreement will not be amended unless the Rating Agency Condition is satisfied with respect to such amendment.  “Rating Agency Condition” means, with respect to any particular proposed act or omission to act hereunder
that the party acting or failing to act must consult with each of S&P, Fitch and Moody’s then providing a rating of the Class A Certificates and the Mezzanine Certificates and receive a prior written confirmation from each of the Rating Agencies that
S&P, Moody’s or Fitch will not downgrade or withdraw its then-current ratings of any outstanding Class A Certificates and the Mezzanine Certificates.

 

(o)   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.

 

(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 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.

 

(r)    Independent Reliance.  The parties agree to amend Section 3 of this Agreement by the addition of the
following provision at the end thereof and marked as subsection (g).

 

“(g)     Independent Reliance.   Party A is entering into this Agreement and will enter into each
Transaction in reliance upon such tax, accounting, regulatory, legal, and financial advice as it deems necessary and not upon any view expressed by the other party.  Party B is entering into this Agreement and will enter into each Transaction in reliance upon
the direction of the Depositor and not upon any view expressed by the other party.”

 

(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)    Method of Notice.  Section 12(a)(ii) of this Agreement is deleted in its entirety.

 

(u)   USA PATRIOT Act Notice.  Party A hereby notifies Party B that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies Party B, which information includes the name and address of Party B and other information that
will allow Party A to identify Party B in accordance with the Act.

 

(v)   Severability.  If any term, provision, covenant, or condition of this Agreement, or the application thereof to any
party or circumstance, shall be held to be invalid or unenforceable (in whole or in part) for any reason, the remaining terms, provisions, covenants, and conditions hereof shall continue in full force and effect as if this Agreement had been executed with the invalid
or unenforceable portion eliminated, so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter of this Agreement and the deletion of such portion of this Agreement will not
substantially impair the respective benefits or expectations of the parties; provided, however, that this severability provision shall not be applicable if any provision of Section 2, 5, 6, or 13 (or any definition or provision in Section 14 to the extent it relates
to, or is used in or in connection with any such Section) shall be so held to be invalid or unenforceable.

 

        The parties shall endeavor to engage in good faith negotiations to replace any invalid or unenforceable
term, provision, covenant or condition with a valid or enforceable term, provision, covenant or condition, the economic effect of which comes as close as possible to that of the invalid or unenforceable term, provision, covenant or condition.

IN WITNESS WHEREOF, the parties have executed this document by their duly authorized officers with effect from the date specified on the first page
hereof.

 

 

	
WACHOVIA BANK, N.A.

	
Deutsche Bank National Trust Company, not in its individual capacity but solely as Supplemental
Interest Trust Trustee on behalf of Long Beach Mortgage Loan Supplemental Interest Trust 2006-9

	
 

By: /s/ Kim V.
Farr                                                          

Name:     Director

Title:

	
 

By: /s/ Ronaldo
Reyes                                                  

Name:  Ronaldo Reyes

Title:    Vice President

 

	
 

	
 

 

By: /s/ Melissa
Wilman                                                 

Name:  Melissa Wilman

Title:    Vice President

 

 

 

[Signature Page to Schedule for LBMLT 2006-9]

 

 

 

 

Long Beach Mortgage Loan Supplemental Interest Trust 2006-9 (the “Trust”)

 

 

External ID: 1592187

 

 

______________________________________________________________________________

 

Dear Sir/Madam

 

The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and conditions of the Transaction entered into between us on the Trade Date specified below (the “Transaction”).  This Confirmation
constitutes a “Confirmation” as referred to in the Agreement specified below.

 

In this Confirmation “Provider” means Wachovia Bank, N.A. and “Counterparty” means
 Deutsche Bank National Trust Company, not in its individual capacity but solely as Supplemental
Interest Trust Trustee on behalf of the Trust.

 

1.         The definitions and provisions contained in the 2000 ISDA Definitions (as published by the International Swaps
and Derivatives Association, Inc.) are incorporated into this Confirmation.  Any reference to a “Swap Transaction” in the 2000 ISDA Definitions is deemed to be a reference to a “Transaction” for purposes of this Confirmation, and any
reference to a “Transaction” in this Confirmation is deemed to be a reference to a “Swap Transaction” for purposes of the 2000 ISDA Definitions.  In the event of any inconsistency between those definitions and provisions and this
Confirmation, this Confirmation will govern.

 

            This Confirmation supplements, forms part of, and is subject to, the 1992 ISDA Master Agreement dated as of October 12, 2006 as amended
and supplemented from time to time (the “Agreement”), between you and us.  All provisions contained in the Agreement govern this Confirmation except as expressly modified below.

 

Reference is made to that certain Pooling and Servicing Agreement dated as of October 1, 2006, among Long Beach Securities Corp. as Depositor, Washington Mutual Bank as Seller and Servicer, Deutsche Bank Trust Company
Delaware as Delaware Trustee and Counterparty as Supplemental Interest Trust Trustee (in such capacity, the “Trustee”), as amended and supplemented from time to time (the “PSA”).

 

            Provider and Counterparty each represents to the other that it has entered into this Swap Transaction in reliance upon such tax,
accounting, regulatory, legal, and financial advice as it deems necessary and not upon any view expressed by the other.

 

2.         The terms of the particular Transaction to which this Confirmation relates are as follows:

 

	

Notional Amount:

	

USD 1,255,170,197, subject to amortisation as set out in the Additional Terms attached hereto

	

Trade Date:

	

October 2, 2006

	

Effective Date:

	

November 25, 2006

	

Termination Date:

	

October 25, 2011, subject to adjustment in accordance with the following Business Day Convention

	

Fixed Amounts:

	
 

	

Fixed Rate Payer:

	

Counterparty

	

Fixed Rate Payer Payment Dates:

	

The 25th day of each month commencing on 25 December 2006, and ending on the Termination Date,
inclusive, subject to adjustment in accordance with the Following Business Day Convention, using No Adjustment for Period End Dates.

	

Fixed Rate:

	

4.93%

	

Fixed Rate Day Count Fraction:

	

30/360

 

	

Floating Amounts:

	
 

	

Floating Rate Payer:

	

Provider

	

Floating Rate Payer

 Payment Dates:

	

The 25th day of each month commencing on 25 December 2006, and ending on the Termination Date,
inclusive, subject to adjustment in accordance with the Following Business Day Convention, using No Adjustment for Period End Dates.

	

Floating Rate Option:

	

USD-LIBOR-BBA

	

Designated Maturity:

	

1 month

	

Spread:

	

None

	

Floating Rate

 Day Count Fraction:

	

30/360

	

Reset Dates:

	

The first day of each Calculation Period

	

Compounding

	

Inapplicable

 

	

Business Day:

	

The States of California, Delaware, New York and Washington or if the Trustee gives Provider notice of the change
in the principal corporate trust office of the Trustee in accordance with the PSA, the city in which the principal corporate trust office of the Trustee is located.

 

	

Calculation Agent:

	

Provider

	
 

	
 

 

3.          
Account Details:

 

Payments to Provider:                  As advised separately in writing

 

Payments to Counterparty:           As advised separately in writing

 

4.          
Offices:

(a)        The Office of Provider for this Transaction is Charlotte, North Carolina.

 

(b)        The Office of Counterparty for this Transaction is Santa Ana, California.

 

5.          
Relationship between the Parties:

 

Each party will be deemed to represent to the other party on the date on which it enters into this Transaction that (absent a written agreement between the parties that expressly imposes affirmative obligations to the
contrary for this Transaction):

 

(a)        Principal. Provider is acting as principal and not as agent when entering into this Agreement and
each Transaction.  Counterparty is acting not in its individual capacity but solely as Supplemental Interest Trust Trustee on behalf of the Trust.

 

(b)        Non-Reliance. Provider is acting for its own account and it has made its own independent decisions to
enter into this Transaction and as to whether this Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisors as it has deemed necessary.  Counterparty is acting not in its individual capacity but solely as Trustee
on behalf of the Trust.  Neither party is relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into this Transaction; it being understood that information and explanations related to the terms and
conditions of this Transaction shall not be considered investment advice or a recommendation to enter into this Transaction.  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 this Transaction.

 

(c)        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 Transaction.  It is also capable of assuming, and assumes, all financial and other risks of this Transaction.

 

(d)        Status of Parties.  The other party is not acting as a fiduciary or an advisor for
it in respect of this Transaction.            

 

(e)        Awareness.  In so far as Counterparty is not acting as a dealer or a market professional in the
relevant market, this Transaction is entered into in accordance with its authorized policies for purposes of hedging or managing its assets, liabilities and/or investments or in connection with a line of business (and not for speculation).

 

6.          
Trustee Capacity:

 

It is expressly understood and agreed by the parties hereto that (i) this Confirmation is executed and delivered by Deutsche Bank National Trust Company (“Deutsche Bank”) not
individually or personally but solely as Trustee of 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 Deutsche Bank 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 Deutsche Bank,
individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto and (iv) under no
circumstances shall Deutsche Bank be personally liable for the payment of any indebtedness or expenses of the Trust or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Trust under this Confirmation
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 PSA.

 

ADDITIONAL TERMS

 

	

Period up to but excluding the Payment Date scheduled to occur on:

	

Notional Amount (USD):

646:

	
12/25/2006

	
      1,255,170,197

	
1/25/2007

	
      1,244,649,942

	
2/25/2007

	
      1,232,236,154

	
3/25/2007

	
      1,217,938,684

	
4/25/2007

	
      1,201,782,617

	
5/25/2007

	
      1,197,567,410

	
6/25/2007

	
      1,191,103,358

	
7/25/2007

	
      1,181,847,393

	
8/25/2007

	
      1,169,805,759

	
9/25/2007

	
      1,154,568,466

	
10/25/2007

	
      1,135,104,817

	
11/25/2007

	
      1,103,765,994

	
12/25/2007

	
      1,070,464,760

	
1/25/2008

	
      1,036,859,533

	
2/25/2008

	
      1,004,161,940

	
3/25/2008

	
         972,403,848

	
4/25/2008

	
         941,505,766

	
5/25/2008

	
         912,952,337

	
6/25/2008

	
         885,739,661

	
7/25/2008

	
         851,565,336

	
8/25/2008

	
         819,382,754

	
9/25/2008

	
         788,873,532

	
10/25/2008

	
         513,679,117

	
11/25/2008

	
         476,167,667

	
12/25/2008

	
         437,388,361

	
1/25/2009

	
         403,991,234

	
2/25/2009

	
         378,173,022

	
3/25/2009

	
         356,844,632

	
4/25/2009

	
         338,441,739

	
5/25/2009

	
         322,447,320

	
6/25/2009

	
         308,863,680

	
7/25/2009

	
         296,133,480

	
8/25/2009

	
         283,904,074

	
9/25/2009

	
         272,284,124

	
10/25/2009

	
         256,913,559

	
11/25/2009

	
         254,752,735

	
12/25/2009

	
         232,135,443

	
1/25/2010

	
         220,132,028

	
2/25/2010

	
         208,825,848

	
3/25/2010

	
         198,061,761

	
4/25/2010

	
         187,787,292

	
5/25/2010

	
         178,028,108

	
6/25/2010

	
         169,012,469

	
7/25/2010

	
         160,474,558

	
8/25/2010

	
         153,209,126

	
9/25/2010

	
         146,250,350

	
10/25/2010

	
         138,841,184

	
11/25/2010

	
         130,910,272

	
12/25/2010

	
         123,266,910

	
1/25/2011

	
         116,017,868

	
2/25/2011

	
         109,068,874

	
3/25/2011

	
         102,647,079

	
4/25/2011

	
          96,704,698

	
5/25/2011

	
          91,077,854

	
6/25/2011

	
          85,289,904

	
7/25/2011

	
          79,275,870

	
8/25/2011

	
          73,830,659

	
9/25/2011

	
          68,831,195

	
10/25/2011

	
          64,363,090

 

 

 

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing the copy of this Confirmation enclosed for that purpose and returning it to us.

 

Yours faithfully,

 

WACHOVIA BANK, N.A.

           

 

 

 

By:       /s/ Kim V. Farr

            Name: Kim V. Farr

            Title:     Director

 

 

 

Confirmed as of the date first written above:

 

Deutsche Bank National Trust Company, not in its individual capacity but solely as Supplemental Interest Trust Trustee on behalf of Long Beach Mortgage Loan Supplemental Interest Trust 2006-9

 

 

 

By:       /s/ Ronaldo
Reyes                              

Name:  Ronaldo Reyes

Title:    Vice President

 

 

 

By:       /s/ Melissa
Wilman                             

Name:  Melissa Wilman

Title:    Vice President

[Signature Page to Swap Confirmation for LBMLT 2006-9]EX-10.1

SEPARATION AGREEMENT AND GENERAL RELEASE AND WAIVER

This Separation Agreement and General Release and Waiver (this “Agreement”) is made as
of October 26, 2006, between KRATON Polymers LLC (the “Company”), and Raymond Guba (the
“Employee”).

WHEREAS, the Company engaged the Employee to be its Vice President and Chief Financial
Officer;

WHEREAS, the Employee and the Company are parties to an Employment Agreement dated December
15, 2005 (the “Employment Agreement”);

WHEREAS, the parties wish to confirm the resignation of the Employee’s employment with the
Company and set forth their agreement as to the manner in which the Employee’s employment with the
Company will be closed out;

NOW, THEREFORE, in consideration of the mutual covenants set forth herein and for other good
and valuable consideration, receipt of which is hereby acknowledged, the Company and the Employee
agree as follows:

1. Termination of Employment.

(a) The parties agree that the Employee’s employment with the Company shall terminate as of
October 6, 2006 (the “Date of Termination”). The Employee will resign, effective as of the
Date of Termination, all positions, titles, duties, authorities and responsibilities with, arising
out of or relating to his employment with the Company and its affiliates and agrees to execute all
additional documents and take such further steps as may be required to effectuate such resignation.

(b) The parties agree that this Agreement shall serve as and fulfill all the requirements of a
Notice of Termination for purposes of Section 7(e) of the Employment Agreement.

(c) The Employment Agreement is hereby terminated and, except as set forth herein, no benefits
shall be paid thereunder.

2. Accrued Obligations.

(a) No later than October 31, 2006, the Company shall pay the Employee a lump sum payment of
$7,294.91, in satisfaction of all of the accrued but unused vacation time to which the Employee is
entitled pursuant to company policy. The Employee acknowledges that he is not entitled to any
bonus in connection with the 2006 fiscal year.

(b) The Employee has submitted or will submit to the Company any requests for reimbursement
for any unreimbursed business expenses properly incurred by the Employee in accordance with Company
policy within forty-five days of the Date of Termination. The Company will process these
reimbursement requests in a manner consistent with past practices in effect prior to the Date of
Termination.

(c) The Employee shall be entitled to any benefit to which the Employee may be entitled under
any tax qualified pension plan of the Company or its affiliates and any other benefits required to
be provided by law.

(d) These payments and benefits set forth in this Section 2 represent all of the Accrued
Obligations (as that term is defined in the Employment Agreement) owed to the Employee and the
Employee hereby acknowledges that payments of the amounts and provision of the benefits outlined in
this Section 2 satisfy all of the Company’s obligations concerning Accrued Obligations.

3. Payments and Benefits.

(a) In exchange for the Employee’s entering into this Agreement, including the General Release
and Waiver contained herein and subject to Sections 10 and 11 herein, the Company shall make the
following payments to the Employee and provide the Employee with benefits as set forth below (these
payments and benefits collectively the “Termination Payments”):

(i) continuation of Executive’s annual Base Salary of $300,000 for a period of six (6)
months following such termination date, (the “Severance Continuation Period”), provided that
such Severance Continuation Period will be extended for an additional six (6) months
(“Additional Severance Continuation Period”) if Executive has not secured employment within
such initial six (6) month Severance Continuation Period;

(ii) any additional benefits, if any, the Employee may be entitled to under the Pension
Benefit Restoration Plan;

(iii) medical benefits for the Employee and his eligible dependents comparable to those
medical benefits Executive participated in on the Date of Termination during the Severance
Continuation Period, provided in any case such medical benefits shall cease if Executive
becomes entitled to medical benefits from a new employer;

(iv) a one time payment for reasonable attorneys’ fees incurred in negotiating this
Separation Agreement not to exceed $3,000. The Employee will submit to the Company a copy
of the paid invoice from the Employee’s attorney and Company will promptly process such
reimbursement request;

(v) Company releases Employee from repayment of any sum due under the Kraton Relocation
Policy for Employees relocation to Houston; and

(vi) Employee may retain any airline frequent flyer mileage earned during the
Employee’s employment with the Company.

(b) All payments and other benefits provided to the Employee, including without limitation the
Termination Payment and the Accrued Obligations shall be subject to, and reduced by, all applicable
withholding or other taxes. The Termination Payment and Accrued Obligations shall not be taken
into account as compensation and no service credit shall be given after the Date of Termination for
purposes of determining the benefits payable to the Employee or the Employee’s family under any
plan, program, agreement or arrangement of the Company. The Employee acknowledges that, except for
the Termination Payment and the Accrued Obligations, he is not entitled to any other payment from
the Company, including, without limitation, any payment in the nature of severance, termination, or
bonus pay (accrued or otherwise) from the Company.

4. Equity. The Employee hereby acknowledges that he does not own and is not entitled
to any equity interests in Kraton Management LLC, TJ Chemical Holdings LLC or any of their
respective affiliates and all Company Profits Units (as that term is defined in the Kraton
Management LLC Agreement) and all Options (as that term is defined in the TJ Chemical Holdings LLC
2004 Option Plan) shall be forfeited immediately. Additionally, all Notional Units (as defined in
the Employment Agreement) will be forfeited immediately.

5. General Release and Waiver.

(a) The Employee, his heirs, successors, and assigns, hereby knowingly and voluntarily remise,
release and forever discharge the Company, its subsidiaries and affiliates, its and their
respective officers, directors, partners, shareholders, employees, successors and assigns
(collectively, the “Related Persons”), from any and all debts, demands, actions, causes of actions,
accounts, covenants, contracts, agreements, claims, damages, omissions, promises, and any and all
claims and liabilities whatsoever, of every name and nature, known or unknown, suspected or
unsuspected, both in law and equity (“Claims”), which the Employee has ever had, now has, or may
hereafter claim to have against the Company or any Related Persons by reason of any matter, cause
or thing whatsoever arising from the beginning of time to the time the Employee signs this
Agreement. This Release of Claims shall apply to any Claim of any type, including, without
limitation, any and all Claims of any type that the Employee may have arising under the common law,
under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act of 1967 (“ADEA”), the Older Workers Benefit Protection Act, the
Americans With Disabilities Act of 1967, the Family and Medical Leave Act of 1993, the Employee
Retirement Income Security Act of 1974, the Texas Labor Code, including without limitation the
Texas Commission on Human Rights Act (V.T.C.A. Section 21.001, et seq.), each as amended, and any
other Texas law, and any other federal, state or local statutes, regulations, ordinances or common
law, or under any policy, agreement, contract, understanding or promise, written or oral, formal or
informal, between any of the Related Persons and the Employee, and shall further apply, without
limitation, to any and all Claims in connection with, related to or arising out of the Employee’s
relationship, employment, or the termination of the Employee’s employment, with the Company, and
all Claims for alleged tortious, defamatory or fraudulent conduct. The Employee also hereby waives
any Claim for reinstatement, severance pay, attorney’s fees, or costs, except as otherwise
expressly set forth in this Agreement. By signing this Agreement, the Employee agrees and
represents that he will not be entitled to any personal recovery in any action or proceeding that
may be commenced on his behalf arising out of any of the matters that are the subject of the
Release, including but not limited to claims brought by the Equal Employment Opportunity
Commission. This release shall not apply to any obligation of the Company or its affiliates
pursuant to this Agreement or any rights in the nature of indemnification, which the Employee may
have with respect to claims against the Employee relating to or arising out of his employment with
the Company or its affiliates.

(b) The Employee acknowledges the Termination Payments constitute good and valuable
consideration to which he is otherwise not entitled for the release contained in this Section 5.

6. Confidentiality of Agreement. The Employee and the Company shall keep the terms of
this Agreement confidential and shall not directly or indirectly disseminate any information (in
any form) regarding this Agreement to any person or entity except to Employees spouse, legal and
tax advisors or as may be agreed to in writing by the other party. Notwithstanding the foregoing,
either party may disclose the information described herein, to the extent compelled to do so by
lawful service of process, subpoena, court order, or as otherwise compelled to do by law, including
any disclosure requirement of the U.S. securities laws, including full and complete disclosure in
response thereto, in which event such party agrees to provide the other party with a copy of the
document(s) seeking disclosures of such information promptly upon receipt of such document(s) and
prior to disclosure of any such information, so that the other party may, upon notice to the first
party, take such action as it deems to be necessary or appropriate in relation to such subpoena or
request. The obligations under this Section 6 all cease for both parties at such time that this
document (once executed by both parties) is filed publicly with the Securities and Exchange
Commission.

7. Return of Property and Cessation of Services Provided by the Company.

(a) The Employee shall return all property of the Company in his possession within 30 days of
the Date of Termination, including, but not limited to: sporting event or other tickets purchased
by the Company; credit cards; security key cards; telephone cards; car service cards;
identification cards; records and copies of records; correspondence and copies of correspondence;
files, including all computer files; and other books or manuals issued by the Company.

(b) The Employee shall, within 30 days of the Date of Termination, cancel: (i) all club
memberships currently sponsored, paid for or maintained by the Company for the Employee’s benefit;
(ii) all subscriptions currently sponsored, paid for or maintained by the Company for the
Employee’s benefit, including, but not limited to: subscriptions to periodicals; newspapers;
seasonal or other tickets to sporting events or other entertainment; and (iii) any other service
currently sponsored and or maintained by the Company for the Employee’s benefit.

8. Non-Disparagement. The Employee hereby agrees not to make any statement, written
or oral, that materially disparages the business or management of the Company or its affiliates.
The Company hereby agrees that it will use its reasonable efforts to ensure that the members of the
Board of Directors of the Company and its senior executive officers shall not make any statement,
written or oral that materially disparages the Employee’s reputation. The Company is not aware of
any claims or causes of action arising on or prior to the date of this Agreement against the
Employee arising from the employment relationship of the Employee with the Company.

9. Non-Competition.

(a) The Employee acknowledges and recognizes the highly competitive nature of the businesses
of the Company and accordingly agrees as follows:

(i) From the date hereof until the Date of Termination and, for a period of one
year following the Date of Termination (the “Restricted Period”), the Employee will
not, whether on the Employee’s own behalf or on behalf of or in conjunction with any
person, company, business entity or other organization engaged in a Competitive
Business (as defined below), directly or indirectly solicit or assist in soliciting
on behalf of any entity engaged in a Competitive Business, the business of any
client or prospective client:

(A) with whom the Employee had personal contact or dealings on behalf
of the Company during the Employee’s employment with the Company;

(B) with whom other employees reporting to the Employee have had
personal contact or dealings on behalf of the Company during the Employee’s
employment with the Company; or

(C) for whom the Employee had direct or indirect responsibility during
his employment with the Company.

(ii) During the Restricted Period, the Employee will not directly or
indirectly:

(A) engage in a Competitive Business;

(B) enter the employ of, or render any services to, any person or
entity (or any division of any person or entity) who or which engages in a
Competitive Business; provided that the Employee shall not be prohibited
from rendering any services to any company that derives less than 10% of its
revenues from a Competitive Business (a “Permitted Company”), if such
services or employment relate solely to a business of the Company that is
not in competition with a Competitive Business;

(C) acquire a financial interest in, or otherwise become actively
involved with, any Competitive Business, directly or indirectly, as an
individual, partner, shareholder, officer, director, principal, agent,
trustee or consultant; provided, however, a Competitive Business shall not
include a Permitted Company, or

(D) interfere with, or attempt to interfere with, business
relationships (whether formed before, on or after the date of the Employment
Agreement) between the Company and customers, clients, suppliers partners,
members or investors of the Company of which it is reasonable to expect that
the Employee is aware.

(iii) For purposes of this Agreement, “Competitive Business” means the
development, manufacture, license, sale or provision of products or services that
the Company currently, or at any time during the Employment Term, sells,
manufactures, licenses or provides, or has specific plans to do so, including
without limitation styrenic block copolymers made by anionic polymerization.

(iv) Notwithstanding anything to the contrary in this Agreement, the Employee
may, directly or indirectly own, solely as an investment, securities of any person
engaged in a Competitive Business which is publicly traded on a national or regional
stock exchange or on the over-the-counter market if the Employee (i) is not a
controlling person of, or a member of a group which controls, such person and (ii)
does not, directly or indirectly, own 5% or more of any class of securities of such
person.

(v) During the Restricted Period, the Employee will not, whether on the
Employee’s own behalf or on behalf of or in conjunction with any person, company,
business entity or other organization whatsoever, directly or indirectly, solicit or
encourage any employee of the Company to leave the employment of the Company

(vi) For a period of six (6) months from the Date of Termination, the Employee
will not on his own behalf or on behalf of or in conjunction with any person,
company, business organization or other entity, directly or indirectly, hire any
employee who was employed by the Company as of the Date of Termination or who left
the employment of the Company coincident with, or within six months prior to the
Date of Termination. Notwithstanding the foregoing, following a Change in Control,
the Employee will not be restricted from hiring any employee who is terminated
without Cause following such Change in Control.

(vii) During the Restricted Period, the Employee will not, directly or
indirectly, solicit or encourage to cease to work with the Company any individual
consultant then under contract with the Company.

It is expressly understood and agreed that although the Employee and the Company consider the
restrictions contained in this Section 9 to be reasonable, if a final judicial determination is
made by a court of competent jurisdiction that the time or territory or any other restriction
contained in this Agreement is an unenforceable restriction against the Employee, the provisions of
this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum
time and territory and to such maximum extent as such court may judicially determine or indicate to
be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction
contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make
it enforceable, such finding shall not affect the enforceability of any of the other restrictions
contained herein.

10. Confidentiality. From the date hereof until the Date of Termination and
thereafter, the Employee will not disclose or use for the Employee’s own benefit or purposes or the
benefit or purposes of any other person, firm, partnership, joint venture, association, corporation
or other business organization, entity or enterprise other than the Company, any trade secrets, or
other confidential information or data of the Company relating to the Company’s customers,
development programs, costs, marketing, trading, investment, sales activities, promotion, credit
and financial data, manufacturing processes, financing methods, plans, or the business and affairs
of the Company generally; provided that the foregoing shall not apply to information which is not
unique to the Company or which is generally known to the industry or the public. The Employee
agrees that he will return to the Company immediately upon the Date of Termination, all memoranda,
books, papers, plans, information, letters and other data, and all copies thereof or therefrom, in
any way relating to the business of the Company, except that he may retain personal notes,
notebooks and diaries and personally owned books, reference material or information of a similar
nature, that do not contain confidential information of the type described in the preceding
sentence of this section. The Employee further agrees that he will not retain or use for the
Employee’s account at any time any trade names, trademark or other proprietary business designation
used or owned in connection with the business of the Company.

11. Certain Forfeitures in Event of Breach. The Employee acknowledges and agrees
that, notwithstanding any other provision of this Agreement, in the event the Employee materially
breaches any of his obligations under Sections 5, 8 or 9 of this Agreement based upon facts
ascertained from a reasonable investigation by the Company, the Employee agrees that he will
reimburse the Company for the full amount of the Termination Payments.

12. No Admission. This Agreement does not constitute an admission of liability or
wrongdoing of any kind by the Employee or Company or any of its affiliates.

13. Heirs and Assigns. The terms of this Agreement shall be binding on the parties
hereto and their respective successors and assigns.

14. General Provisions.

(a) Integration. This Agreement constitutes the entire understanding of the Company and the
Employee with respect to the subject matter hereof and supersedes all prior understandings, written
or oral, including without limitation the Employment Agreement. The terms of this Agreement may be
changed, modified or discharged only by an instrument in writing signed by the parties hereto. A
failure of the Company or the Employee to insist on strict compliance with any provision of this
Agreement shall not be deemed a waiver of such provision or any other provision hereof. In the
event that any provision of this Agreement is determined to be so broad as to be unenforceable,
such provision shall be interpreted to be only so broad as is enforceable.

(b) Choice of Law. This Agreement shall be construed, enforced and interpreted in
accordance with and governed by the laws of the State of Texas, without regard to its choice of law
provisions.

(c) Construction of Agreement. The parties hereto acknowledge and agree that each party has
reviewed and negotiated the terms and provisions of this Agreement and has had the opportunity to
contribute to its revision. Accordingly, the rule of construction to the effect that ambiguities
are resolved against the drafting party shall not be employed in the interpretation of this
Agreement. Rather, the terms of this Agreement shall be construed fairly as to both parties hereto
and not in favor or against either party.

(d) Counterparts. This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which counterpart, when so executed and
delivered, shall be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.

(e) Notice. Any notice or other communication required or permitted under this Agreement
shall be effective only if it is in writing and shall be deemed to be given when delivered
personally or four days after it is mailed by registered or certified mail, postage prepaid, return
receipt requested or one day after it is sent by a reputable overnight courier service and, in each
case, addressed as follows (or if it is sent through any other method agreed upon by the parties):

If to the Company:

KRATON Polymers LLC

C/o Texas Pacific Group

301 Commerce Street, suite 3300

Fort Worth, TX 76102

Attention: Joseph Waiter, Esq.

With a copy to:

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

Attention: Robert J. Raymond, Esq.

If to the Employee, to the address on record with the Company; or, for either party, to such
other address as any party hereto may designate by notice to the others, and shall be deemed to
have been given upon receipt.

15. Insurance. For a period of six (6) years following the Employee’s Date of
Termination, the Company agrees to purchase and maintain insurance for the Employee’s benefit,
covering director, officer and fiduciary liability on the same basis as active directors, officers
and/or fiduciaries.

16. Cooperation of Employee. Consistent with the obligations set forth in Section
11(j) of the Employment Agreement (which is incorporated by reference in its entirety herein and
which provisions, by its express terms, survives the termination of the Employment Agreement), the
Employee shall, at the Company’s expense, provide his reasonable cooperation in connection with any
action or proceeding (or any appeal therefrom) that relates to events occurring during the
Employee’s employment with the Company. The Company agrees to defend, indemnify and hold Employee
harmless in conjunction with any liability that may arise as a result from such cooperation to the
same extent as the Company does for its employees and officers.

17. Knowing and Voluntary Waiver. The Employee acknowledges that, by the Employee’s
free and voluntary act of signing below, the Employee agrees to all of the terms of this Agreement
and intends to be legally bound thereby.

The Employee understands that he may consider whether to agree to the terms contained herein
for a period of twenty-one days after the date hereof. Accordingly, the Employee may execute this
Agreement by October 26, 2006, to acknowledge his understanding of and agreement with the
foregoing. The Termination Payment provided for herein will not commence until the Effective Date
as that term is defined directly below. The Employee acknowledges that he has consulted with an
attorney prior to executing this Agreement.

This Agreement will become effective, enforceable and irrevocable on the eighth day after the
date on which it is executed by the Employee (the “Effective Date”). During the seven-day
period prior to the Effective Date, the Employee may revoke his agreement to accept the terms
hereof by indicating in writing to the Company, in a manner consistent with the Notice provisions
provided for in Section 14(e) above, his intention to revoke. If the Employee exercises his right
to revoke hereunder, he shall forfeit his right to receive any of the benefits provided for herein,
other than the Accrued Obligations, and to the extent such payments have already been made (other
than the Accrued Obligations), the Employee agrees that he will immediately reimburse the Company
for the amounts of such payments.

The Employee acknowledges that, by his free and voluntary act of signing below, he agrees to
all of the terms of this Agreement, including the General Release and Waiver contained herein and
intends to be legally bound thereby.

1

IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by its duly authorized
representatives and the Employee has signed this Agreement as of the day and year first above
written.

KRATON POLYMERS LLC

/s/ Richard A. Ott

Name: Richard A. Ott

Title: VP HR/Communication

/s/ Raymond Guba

Raymond Guba

2

Acknowledgment

STATE OF  Texas

ss:

COUNTY OF Harris

On the  26  day of  October, 2006, before me personally came
Raymond Guba who, being by me duly sworn, did depose and say that he resides at 22 E.
Ambassador Road; and did acknowledge and represent that he has had an opportunity to consult
with attorneys and other advisers of his choosing regarding the Separation Agreement and General
Release and Waiver set forth therein, that he has reviewed all of the terms of the Separation
Agreement and General Release and Waiver and that he fully understands all of its provisions,
including, without limitation, the general release and waiver set forth therein.

/s/ Toni A. Montegut 

Notary Public

Date: _10-26-2006

3

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