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EXECUTED VERSION
CERTIFICATE GUARANTY INSURANCE POLICY ENDORSEMENT
Attached to and forming Effective Date of Endorsement:
part of Policy No. AB1044BE November 29, 2006
issued to:
Deutsche Bank Trust Company Americas, as Trustee
on behalf of, and for the benefit of the Holders of,
the Residential Accredit Loans, Inc. Class A-3
Mortgage Asset-Backed Pass-Through Certificates,
Series 2006-QH1
For all purposes of this Policy, the following terms shall have
the
following meanings:
"Agreement" shall mean the Series Supplement, dated as of November
1,
2006, among Residential Accredit Loans, Inc., as Depositor,
Residential Funding
Company, LLC, as Master Servicer, and Deutsche Bank Trust Company
Americas, as
Trustee, to the Standard Terms of Pooling and Servicing Agreement,
dated as of
November 1, 2006, as such Agreement may be amended, modified or
supplemented
from time to time as set forth in the Agreement.
"Deficiency Amount" shall, as applied to the Class A-3
Certificates,
mean (A) with respect to each Distribution Date prior to the Final
Scheduled
Distribution Date, an amount equal to the sum of (i) any shortfall
in amounts
available in the Certificate Account to pay one month's interest on
the
Certificate Principal Balance of the Class A-3 Certificates at the
applicable
Pass-Through Rate, net of any Relief Act Shortfalls and Prepayment
Interest
Shortfalls allocated to the Class A-3 Certificates and (ii) the
principal
portion of any Realized Losses allocated to the Class A-3
Certificates for such
Distribution Date; (B) with respect to the Final Scheduled
Distribution Date and
the Class A-3 Certificates, an amount equal to the outstanding
Certificate
Principal Balance of the Class A-3 Certificates due on such Final
Scheduled
Distribution Date to the extent not paid from all sources other
than this Policy
on that Distribution Date; and (C) for any date on which the
acceleration of the
Certificates has been directed or consented to by the
Certificateholders
pursuant to the Agreement, the amount required to pay the
Certificate Principal
Balance of the Class A-3 Certificates in full, together with
accrued and unpaid
interest thereon through the date of payment of the Class A-3
Certificates. Any
Deficiency Amount shall not include any Prepayment Interest
Shortfalls, any
Relief Act Shortfalls or any shortfalls attributable to the Net
Rate Cap or to
Net Deferred Interest. For purposes of the foregoing, amounts in
the Certificate
Account available for interest distributions on any Distribution
Date shall be
deemed to include all amounts in the Certificate Account for such
Distribution
Date available for distribution on such Distribution Date.
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"Distribution Date" shall mean the 25th day of each month (or if
such
25th day is not a Business Day, the first Business Day immediately
following)
beginning with the First Distribution Date.
"Due for Payment" shall mean, with respect to any Insured Amounts,
such
amount that is due and payable under the Agreement on the related
Distribution
Date.
"Final Scheduled Distribution Date" shall mean, with respect to
the
Class A-3 Certificates, the Distribution Date in December 2036.
"First Distribution Date" shall mean December 26, 2006.
"Holder" shall mean any person who is the registered owner or
beneficial
owner of any of the Class A-3 Certificates.
"Insurance Policy" or "Policy" shall mean this Certificate
Guaranty
Insurance Policy together with each and every endorsement
hereto.
"Insured Amounts" (1) shall mean, with respect to any Distribution
Date,
any Deficiency Amount plus any Preference Amount and (2) shall
mean, with
respect to the Final Scheduled Distribution Date, the Deficiency
Amount for the
Final Scheduled Distribution Date.
"Insured Obligations" shall mean the Class A-3 Certificates as
issued
pursuant to the Agreement.
"Insured Payments" shall mean, with respect to any Distribution
Date,
the aggregate amount actually paid by the Insurer to the Trustee in
respect of
Insured Amounts for such Distribution Date.
"Insurer" shall mean Ambac Assurance Corporation, or any
successor
thereto, as issuer of the Insurance Policy.
"Late Payment Rate" shall mean the lesser of (a) the greater of (i)
the
per annum rate of interest publicly announced from time to time by
Citibank,
N.A. as its prime or base lending rate plus one per centum per
annum (any change
in such rate of interest to be effective on the date such change is
announced by
Citibank, N.A.), and (ii) the then applicable rate of interest on
the Class A-3
Certificates and (b) the maximum rate permissible under applicable
usury or
similar laws limiting interest rates. The Late Payment Rate shall
be computed on
the basis of the actual number of days elapsed over a year of 360
days for any
Distribution Date.
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"Letter Agreement" shall mean the letter agreement, dated November
29,
2006, between the Insurer and Residential Funding Company, LLC.
"Nonpayment" shall mean, with respect to any Distribution Date,
an
Insured Amount which is Due for Payment but has not and will not be
paid in
respect of such Distribution Date pursuant to the Agreement.
"Notice" shall mean the telephonic or telegraphic notice,
promptly
confirmed in writing by telecopy substantially in the form of
Exhibit A to the
Policy, the original of which is subsequently delivered by
registered or
certified mail, from the Trustee specifying the Insured Amount
which shall be
due and owing on the applicable Distribution Date.
"Preference Amount" shall mean any amount previously distributed to
a
Class A-3 Certificateholder by or on behalf of the Trust Estate
that is
recoverable and sought to be recovered as a voidable preference by
a trustee in
bankruptcy pursuant to the United States Bankruptcy Code (11
U.S.C.), as amended
from time to time, in accordance with a final nonappealable order
of a court
having competent jurisdiction.
"Premium" shall mean the premium amount payable to the Insurer on
each
Distribution Date as specified in this Policy.
"Premium Percentage" shall have the meaning set forth in the
Letter
Agreement.
"Reimbursement Amount" shall mean, as of any Distribution Date, the
sum
of (x) (i) all Insured Payments paid by the Insurer, but for which
the Insurer
has not been reimbursed prior to such Distribution Date pursuant to
Section 4.02
of the Agreement, plus (ii) interest accrued thereon, calculated at
the Late
Payment Rate from the date the Trustee received the related Insured
Payments,
and (y) (i) any other amounts then due and owing to the Insurer
under this
Policy but for which the Insurer has not been reimbursed prior to
such
Distribution Date pursuant to Section 4.02 of the Agreement plus
(ii) interest
on such amounts at the Late Payment Rate.
"Term of the Policy" shall mean the period from and including the
date
of issuance of the Policy to and including the date on which (i)
the Certificate
Principal Balance of the Class A-3 Certificates is reduced to zero,
(ii) any
period during which any payment of the Class A-3 Certificates could
have been
avoided in whole or in part as a preference payment under
applicable bankruptcy,
insolvency, receivership or si
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