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-HS2
Policy Number:
05030143
Control Number:
0010001
Insured Obligations:
$349,650,000 in aggregate principal amount of Home Equity Loan-Backed Term
Notes, Series 2005-HS2, 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 September 2020, for the Class A-I-3 Notes, the
payment date in July 2024, for the Class
A-I-4 Notes and Class A-I-5 Notes, the
payment date in December 2035.
"Group I Credit Enhancement Draw Amount"
shall mean for the Class I Notes (1) an
amount, if any, equal to on any Payment
Date 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 and (d) the Guaranteed
Payment Amount, if applicable; and (2) 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.
"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 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 (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 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, in form
satisfactory to
Financial Guaranty, 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 principal, in which case
Financial Guaranty shall pay the balance of the Preference Amount when such
amount otherwise would have been
required.
If any notice received by Financial Guaranty is not in proper form or is
oth
