Financial Guaranty Insurance Company
125 Park Avenue
New York, New York 10017
(212) 312-3000 (800) 352-0001
SURETY BOND
Form 9140
Page 1 of 4
Issuer: Home Equity Loan Trust 2005-HS1
Policy Number:
05030097
Control Number:
0010001
Insured Obligations:
$550,000,000 in aggregate principal amount of Home Equity Loan-Backed Term
Notes, Series 2005-HS1, Class A-I-1, Class A-I-2, Class
A-I-3, Class A-I-4 and
Class A-I-5 (collectively,
the "Class I Notes")
Indenture Trustee: JPMorgan Chase Bank, 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 as provided in the
Insurance Agreement (as defined
below) and subject to the terms of this
Surety Bond, hereby
unconditionally and
irrevocably agrees to pay each Group I Credit Enhancement Draw Amount (as
defined below) to the Indenture Trustee named above or its successor, as
indenture trustee for the Holders of the
Class I Notes, to the extent set forth
in the Indenture (as defined below). Capitalized terms used and not otherwise
defined herein shall have the meanings
assigned to such terms
in Appendix A to
the Indenture as in effect and executed on
the date hereof.
The following terms used herein shall have
the meanings assigned to them below:
"Final Maturity Date" shall mean for the Class
A-I-1 Notes and Class A-I-2
Notes, the payment date in July 2020,
for the Class A-I-3
Notes, the payment
date in February 2021, for the Class A-I-4 Notes and Class A-I-5 Notes, the
payment date in September 2035.
"Group I Credit Enhancement Draw Amount" shall
mean an amount, if any, equal to
on any Payment Date for the Class I Notes,
the sum of (a) the
amount by which
the Interest Distribution Amount for the Class I Notes on
such Payment
Date
exceeds the amount on deposit in the
Payment Account
available for interest
payments on the Class I Notes on such
Payment Date,
(b) any Liquidation Loss
Amount (other than any Excess Loss Amount)
with respect to the Group I Loans for
such Payment Date, to the extent not
distributed as part of the Liquidation Loss
Distribution Amount for the Class I Notes
or covered by a reduction of the Group
I Overcollateralization Amount on such Payment Date, (c)
any Excess Loss Amount
with respect to the Group I Loans on such
Payment Date, (d) the Guaranteed
Payment Amount, if applicable; and (e) any
Preference Amount (as defined in this
Surety Bond).
"Guaranteed Payment Amount" shall mean with respect to each class of Class
I
Notes, the aggregate outstanding Security
Balance of such Class of Class I Notes
on the related Final Maturity Date, after giving effect to all other
distributions of principal on such Class I
Notes on such Payment Date.
<PAGE>
"Deficiency Amount" shall mean for any Payment Date
the sum of the amounts set
forth in clauses (a), (b), (c) and (d) of the definition of "Group I Credit
Enhancement Draw Amount."
Financial Guaranty will pay a Deficiency Amount with respect to the Class I
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 the day
on which Financial Guaranty shall have Received
Notice that a Deficiency Amount
is due in respect of the Class I Notes and
(ii) the Payment
Date on which the
related Deficiency Amount is payable to the Holders of the Class I Notes
pursuant to the Indenture, for disbursement to the Holders of
the Class I Notes
in the same manner as other payments with respect to the Class I Notes are
required to be made.
Upon such payment, Financial Guaranty shall
be fully subrogated to the rights of
the Holders of the Class I Notes to
receive the amount so paid. Financial
Guaranty's obligations with respect to the
Class I Notes hereunder with respect
to each Payment Date shall be discharged
to the extent funds
consisting of the
related Deficiency Amount are received by
the Indenture Trustee on behalf of the
Holders of the Class I Notes for
payment to such
Holders, as provided in the
Indenture and herein, whether or not such funds are
properly applied by the
Indenture Trustee.
If any portion or all of any amount that is insured hereunder that was
previously distributed to a Holder of Class
I Notes is recoverable and 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 (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 each such
Preference Amount
by
12:00 noon on the next Payment Date after the second Business Day following
Receipt by Financial Guaranty 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
Class I Notes relating to
or arising under such Preference Amount and
appointing Financial Guaranty as the
agent of the Indenture Trustee and/or such Holder in
respect of such 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 Class I Notes
directly (unless the Holder has
previously
paid such amount to
such receiver,
conservator, debtor-in-possession or trustee
named in such Final Order in which
case payment shall be made to the Indenture Trustee for distribution to the
Holder upon 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 Surety Bond 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 Class I Notes, prior to the time Financial
Guaranty otherwise would have been required
to make a payment in respect of such
princi
