Financial Guaranty Insurance Company
125 Park Avenue
New York, New York 10017
(212) 312-3000
(800) 352-0001
Financial Guaranty Insurance Policy
Form 9133
Page 6 of 6
Policy Number:
06030127
Control Number:
0010001
Issuing Entity:
GMACM Home Equity Loan Trust 2006-HE5
Insured Obligations:
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$1,244,459,000 in aggregate principal amount of GMACM Home Equity
Loan-Backed Term Notes, Series 2006-HE5, Class I-A-1, Class II-A-1
and Class II-A-2 Notes (collectively, the "Notes")
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Indenture Trustee:
The Bank of New York Trust Company, N.A.
Financial Guaranty Insurance Company ("Financial Guaranty"), a New
York stock insurance company, in consideration of the right of
Financial Guaranty to receive monthly premiums pursuant to the
Indenture (as defined below) and the Insurance Agreement referred
to
therein, and subject to the terms of this Financial Guaranty
Insurance Policy (this "Policy"), hereby unconditionally and
irrevocably
agrees to pay each Insured Payment (as defined below) to the
Indenture Trustee named above or its successor, as indenture
trustee for
the Holders of the Notes, except as otherwise provided herein with
respect to Preference Amounts.
Capitalized terms used and not
otherwise defined herein shall have the meanings assigned to such
terms in the Annex A attached to the Indenture as in effect and
executed on the date hereof, without giving effect to any
subsequent amendment or modification to the Indenture unless such
amendment
or modification has been approved in writing by Financial Guaranty.
The following terms used herein shall have the meanings assigned to
them below:
The term "Deficiency Amount" means, with respect to any Payment
Date and the Notes, an amount, if any, equal to the sum of:
(1)
the amount by which the aggregate amount of accrued interest on the
Notes (excluding any Relief Act Shortfalls and
any prepayment interest shortfalls for that Payment Date) at the
respective Note Rates on that Payment Date
exceeds the amount on deposit in the Note Payment Account available
for interest distributions on the Notes on
that Payment Date; and
(2)
(i) with respect to any Payment Date that is not the Final Payment
Date and for which the Overcollateralization
Amount on such payment date is zero (after giving effect to any
principal payments on the Notes on such Payment
Date), the principal portion of any Liquidation Loss Amount for
that Payment Date, to the extent not distributed
to the Holders of the Notes on such Payment Date; or
(ii) on the Final Payment Date, the aggregate outstanding Note
Balance of the Notes after giving effect to all
other payments of principal on the Notes on the Final Payment Date
from all sources other than the Policy.
The term "Final Payment Date" for each Class of the Notes means the
Payment Date occurring in February 2037.
The term "Insured Payment" means with respect to (a) any Payment
Date (1) any Deficiency Amount and (2) any Preference Amount and
(b)
any other date, any Preference Amount.
Financial Guaranty will pay a Deficiency Amount with respect to the
Notes by 12:00 noon (New York City time) in immediately available
funds to the Indenture Trustee on the later of (i) the second
Business Day following receipt in New York, New York on a Business
Day
by Financial Guaranty of a Notice from the Indenture Trustee
specifying the Deficiency Amount which is due in respect of the
Notes,
and (ii) the Payment Date on which the related Deficiency Amount is
payable to the Holders of the Notes pursuant to the Indenture,
for disbursement to the Holders of the Notes in the same manner as
other payments with respect to the Notes are required to be made.
Any Notice received by Financial Guaranty after 12:00 noon New York
City time on a given Business Day or on any day that is not a
Business Day shall be deemed to have been received by Financial
Guaranty on the next succeeding Business Day.
If any portion or all of any amount that is insured hereunder that
was previously distributed to a holder of Notes is recoverable and
sought to be recovered from such Holder as a voidable preference by
a trustee in bankruptcy pursuant to the U.S. Bankruptcy Code,
pursuant to a final non-appealable order of a court exercising
proper jurisdiction in an insolvency proceeding (a "Final Order")
(such recovered amount, a "Preference Amount"), Financial Guaranty
will pay on the guarantee described in the first paragraph hereof,
an amount equal to such Preference Amount by 12:00 noon on the
second Business Day following receipt by Financial Guaranty on a
Business Day of (w) a certified copy of the Final Order, (x) an
opinion of counsel satisfactory to Financial Guaranty that such
order
is final and not subject to appeal, (y) an assignment, in form
reasonably satisfactory to Financial Guaranty, irrevocably
assigning
to Financial Guaranty all rights and claims of the Indenture
Trustee and/or such Holder of the Notes relating to or arising
under
such Preference Amount and constituting an appropriate instrument,
in form satisfactory to Financial Guaranty, appointing Financial
Guaranty as the agent of the Indenture Trustee and/or such Holder
in respect of such Preference Amount, including without limitation
in any legal proceeding relating to the Preference Amount, and (z)
a Notice appropriately completed and executed by the Indenture
Trustee or such Holder, as the case may be.
Such payment shall be made to the receiver, conservator,
debtor-in-possession or trustee
in bankruptcy named in the Final Order and not to the Indenture
Trustee or Holder of the Notes directly (unless the Holder has
previously paid such amount to such receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in such Final
Order in
which case payment shall be made to the Indenture Trustee for
distribution to the Holder upon delivery of proof of such payment
reasonably satisfactory to Financial Guaranty).
Notwithstanding the foregoing, in no event shall Financial Guaranty
be (i) required
to make any payment under this Policy in respect of any Preference
Amount to the extent such Preference Amount is comprised of
amounts previously paid by Financial Guaranty hereunder, or (ii)
obligated to make any payment in respect of any Preference Amount,
which payment represents a payment of the principal amount of any
Notes, prior to the time Financial Guaranty otherwise would have
been required to make a payment in respect of such principal, in
which case Financial Guaranty shall pay the balance of the
Preference Amount when such amount otherwise would have been
required.
Any of the documents required under clauses (w) through (z) of the
preceding paragraph that are received by Financial Guaranty after
12:00 noon New York City time on a given Business Day or on any day
that is not a Business Day shall be deemed to have been received
by Financial Guaranty on the next succeeding Business Day.
If any notice received by Financial Guaranty is not in proper form
or is
otherwise insufficient for the purpose of making a claim under this
Policy with respect to a Deficiency Amount or a Preference
Amount, as applicable, it will be deemed not to have been received
by Financial Guaranty, and Financial Guaranty will promptly so
advise the Indenture Trustee, a
