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Exhibit 10.2
EXECUTION COPY
 
INDEMNIFICATION AGREEMENT
 
among
 
FINANCIAL SECURITY ASSURANCE INC.,
 
AFS FUNDING TRUST
 
and
 
J.P. MORGAN SECURITIES INC.
 
Dated as of September 5, 2002
 
$111,000,000 Class A-1 1.755% Asset Backed Notes
$153,000,000 Class A-2 2.04% Asset Backed Notes
$194,000,000 Class A-3 2.72% Asset Backed Notes
$142,000,000 Class A-4 3.40% Asset Backed Notes

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Page

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Section 1.
  
Definitions
  
1
Section 2.
  
Representations, Warranties and Agreements of Financial Security
  
3
Section 3.
  
Representations, Warranties and Agreements of the Underwriters
  
5
Section 4.
  
Indemnification
  
6
Section 5.
  
Indemnification Procedures
  
6
Section 6.
  
Contribution
  
7
Section 7.
  
Miscellaneous
  
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EXHIBIT A—Opinion of Assistant General Counsel

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INDEMNIFICATION AGREEMENT
 
INDEMNIFICATION AGREEMENT dated as of September 5, 2002, among FINANCIAL
SECURITY ASSURANCE INC. (“Financial Security”), AFS FUNDING TRUST, (the
“Seller”) and J.P. MORGAN SECURITIES INC., as the Representative (as defined
below):
 
Section 1.    Definitions.    For purposes of this Agreement, the following
terms shall have the meanings provided below:
 
“Agreement” means this Indemnification Agreement, as amended from time to time.
 
“Federal Securities Laws” means the Securities Act, the Securities Exchange Act
of 1934, the Trust Indenture Act of 1939, the Investment Company Act of 1940,
the Investment Advisers Act of 1940 and the Public Utility Holding Company Act
of 1935, each as amended from time to time, and the rules and regulations in
effect from time to time under such Acts.
 
“Financial Security Agreements” means this Agreement, the Spread Account
Agreement, the Spread Account Agreement Supplement and the Insurance Agreement.
 
“Financial Security Information” has the meaning provided in Section 2(g)
hereof.
 
“Financial Security Party” means any of Financial Security, its parent,
subsidiaries and affiliates, and any shareholder, director, officer, employee,
agent or “controlling person” (as such term is used in the Securities Act) of
any of the foregoing.
 
“Indemnified Party” means any party entitled to any indemnification pursuant to
Section 4 hereof.
 
“Indemnifying Party” means any party required to provide indemnification
pursuant to Section 4 hereof.
 
“Insurance Agreement” means the Insurance and Indemnity Agreement, dated as of
September 5, 2002 among Financial Security, the Trust, AmeriCredit Financial
Services, Inc., AmeriCredit Corp. and AFS Funding Trust.
 
“Losses” means (a) any actual out-of-pocket damages incurred by the party
entitled to indemnification or contribution hereunder, (b) any actual
out-of-pocket costs or expenses incurred by such party, including reasonable
fees or expenses of its counsel and other expenses incurred in connection with
investigating or defending any claim, action or other proceeding which entitle
such party to be indemnified hereunder (subject to the limitations set forth in
Section 5 hereof), to the extent not paid, satisfied or reimbursed from funds
provided by any other Person other than an affiliate of such party (provided
that the foregoing shall not create or imply any obligation to pursue recourse
against any such other Person), plus (c) interest on the amount paid by the
party entitled to indemnification or contribution from the date of such payment
to the date of payment by the party who is obligated to indemnify or contribute
hereunder at the statutory rate applicable to judgments for breach of contract.

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“Offering Document” means the Prospectus and any other material or documents
delivered by the Underwriters to any Person in connection with the offer or sale
of the Securities.
 
“Person” means any individual, partnership, joint venture, corporation, trust,
unincorporated organization or other organization or entity (whether
governmental or private).
 
“Policy” means the financial guaranty insurance policy delivered by Financial
Security with respect to the Securities.
 
“Prospectus” means, collectively, the Prospectus relating to the Securities
dated January 25, 2002 and the Prospectus Supplement dated September 6, 2002
(the “Prospectus Supplement”) relating to the Securities.
 
“Representative” means J.P. Morgan Securities Inc., as representative of the
Underwriters.
 
“Securities” means the Trust’s $111,000,000 Class A-1 1.755% Asset Backed Notes,
$153,000,000 Class A-2 2.04% Asset Backed Notes, $194,000,000 Class A-3 2.72%
Asset Backed Notes and $142,000,000 Class A-4 3.40% Asset Backed Notes issued
pursuant to the Series 2002-D Indenture.
 
“Securities Act” means the Securities Act of 1933, as amended from time to time.
 
“Seller Party” means any of the Seller, its parent, subsidiaries and affiliates
and any employee, agent or “controlling person” (as such term is used in the
Securities Act) of any of the foregoing.
 
“Spread Account Agreement” means the Spread Account Agreement, as amended and
restated, dated as of May 11, 1998, as amended as of October 25, 1999, as
further amended as of May 22, 2000, as further amended as of November 29, 2000,
among Financial Security, AFS Funding Trust, the collateral agent named therein
and the trustees specified therein, as the same may be amended, supplemented or
otherwise modified in accordance with the terms thereof.
 
“Spread Account Agreement Supplement” means the Series 2002-D Supplement to
Spread Account Agreement, dated as of September 5, 2002, among Financial
Security, AFS Funding Trust, the collateral agent named therein and the trustees
specified therein.
 
“Trust” means AmeriCredit Automobile Receivables Trust 2002-D.
 
“Underwriter Information” has the meaning provided in Section 3(c) hereof.
 
“Underwriter Party” means any of the Underwriters, its respective parent,
subsidiaries and affiliates and any shareholder, director, officer, employee,
agent or “controlling person” (as such item is used in the Securities Act) of
any of the foregoing.
 
“Underwriters” means J.P. Morgan Securities Inc. and Wachovia Securities, Inc.,
as underwriters.

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“Underwriting Agreement” means the Underwriting Agreement, dated as of September
6, 2002 among the Seller, AmeriCredit Financial Services, Inc. and the
Representative.
 
Section
 
2.    Representations, Warranties and Agreements of Financial
Security.    Financial Security represents, warrants and agrees as follows:

 
(a)    Organization, Etc.    Financial Security is a stock insurance company
duly organized, validly existing and authorized to transact financial guaranty
insurance business under the laws of the State of New York.
 
(b)    Authorization, Etc.    The Policy and the Financial Security Agreements
have been duly authorized, executed and delivered by Financial Security.
 
(c)    Validity, Etc.    The Policy and the Financial Security Agreements
constitute valid and binding obligations of Financial Security, enforceable
against Financial Security in accordance with their terms, subject, as to the
enforcement of remedies, to bankruptcy, insolvency, reorganization,
rehabilitation, moratorium and other similar laws affecting the enforceability
of creditors’ rights generally applicable in the event of the bankruptcy or
insolvency of Financial Security and to the application of general principles of
equity and subject, in the case of this Agreement, to principles of public
policy limiting the right to enforce the indemnification provisions contained
herein.
 
(d)    Exemption From Registration.    The Policy is exempt from registration
under the Securities Act.
 
(e)    No Conflicts.    Neither the execution or delivery by Financial Security
of the Policy or the Financial Security Agreements, nor the performance by
Financial Security of its obligations thereunder, will conflict with any
provision of the certificate of incorporation or the bylaws of Financial
Security nor result in a breach of, or constitute a default under, any material
agreement or other instrument to which Financial Security is a party or by which
any of its property is bound nor violate any judgment, order or decree
applicable to Financial Security of any governmental or regulatory body,
administrative agency, court or arbitrator having jurisdiction over Financial
Security (except that, in the published opinion of the Securities and Exchange
Commission, the indemnification provisions of this Agreement, insofar as they
relate to indemnification for liabilities arising under the Securities Act, are
against public policy as expressed in the Securities Act and are therefore
unenforceable).
 
(f)    Financial Information.    The consolidated balance sheets of Financial
Security as of December 31, 2001 and December 31, 2000 and the related
consolidated statements of income, changes in shareholder’s equity and cash
flows for the fiscal years then ended, and the interim consolidated balance
sheet of Financial Security as of June 30, 2002 (unaudited), and the related
statements of income, changes in shareholder equity and cash flows for the
interim period then ended, which are incorporated by reference in the
Prospectus, fairly present in all material respects the financial condition of
Financial Security as of such dates and for such periods in accordance with
generally accepted accounting principles consistently applied (subject as to
interim statements to normal

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year-end adjustments) and since the date of the most current interim
consolidated balance sheet referred to above there has been no change in the
financial condition of Financial Security which would materially and adversely
affect its ability to perform its obligations under the Policy.
 
(g)    Financial Security Information.    The information in the Prospectus
Supplement set forth under the caption “The Insurer” (as revised from time to
time in accordance with the provisions hereof, the “Financial Security
Information”) is limited and does not purport to provide the scope of disclosure
required to be included in a prospectus with respect to a registrant in
connection with the offer and sale of securities of such registrant registered
under the Securities Act. Within such limited scope of disclosure, however, as
of the date of the Prospectus Supplement and as of the date hereof, the
Financial Security Information does not contain any untrue statement of a
material fact, or omit to state a material fact necessary to make the statements
contained therein, in the light of the circumstances under which they were made,
not misleading.
 
(h)    Additional Information.    Financial Security will furnish to the
Underwriters or the Seller, upon request of the Underwriters or the Seller, as
the case may be, copies of Financial Security’s most recent financial statements
(annual or interim, as the case may be) which fairly present in all material
respects the financial condition of Financial Security as of the dates and for
the periods indicated, in accordance with generally accepted accounting
principles consistently applied except as noted therein (subject, as to interim
statements, to normal year-end adjustments). In addition, if the delivery of a
Prospectus relating to the Securities is required at any time prior to the
expiration of nine months after the time of issue of the Prospectus in
connection with the offering or sale of the Securities, the Seller or the
Underwriters will notify Financial Security of such requirement to deliver a
Prospectus and Financial Security will promptly provide the Underwriters and the
Seller with any revisions to the Financial Security Information that are in the
judgment of Financial Security necessary to prepare an amended Prospectus or a
supplement to the Prospectus.
 
(i)    Opinion of Counsel.    Financial Security will furnish to the
Underwriters and the Seller on the closing date for the sale of the Securities
an opinion of its Assistant General Counsel, to the effect set forth in Exhibit
A attached hereto, dated such closing date and addressed to the Seller and the
Underwriters.
 
(j)    Consents and Reports of Independent Accountants.    Financial Security
will furnish to the Underwriters and the Seller, upon request, as comfort from
its independent accountants in respect of its financial condition, (i) at the
expense of the Person specified in the Insurance Agreement, a copy of the
Prospectus, including either a manually signed consent or a manually signed
report of Financial Security’s independent accountants and (ii) the quarterly
review letter by Financial Security’s independent accountants in respect of the
most recent interim financial statements of Financial Security.
 
Nothing in this Agreement shall be construed as a representation or warranty by
Financial Security concerning the rating of its insurance financial strength by
Moody’s Investors Service, its insurer financial strength by Standard & Poor’s
Ratings Services and Standard & Poor’s

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(Australia) Pty. Ltd., its claims-paying ability by Fitch IBCA, Inc. and Japan
Rating and Investment Information, Inc. or any other rating assigned by a rating
agency (collectively, the “Rating Agencies”). The Rating Agencies, in assigning
such ratings, take into account facts and assumptions not described in the
Prospectus and the facts and assumptions which are considered by the Rating
Agencies, and the ratings issued thereby, are subject to change over time.
 
Section 3.    Representations, Warranties and Agreements of the
Underwriters.    Each of the Underwriters represents, warrants and agrees as
follows:
 
(a)    Compliance With Laws.    Such Underwriter will comply in all material
respects with all legal requirements in connection with offers and sales of the
Securities and make such offers and sales in the manner provided in the
Prospectus.
 
(b)    Offering Document.    Such Underwriter will not use, or distribute to
other broker-dealers for use, any Offering Document in connection with the offer
and sale of the Securities unless such Offering Document includes such
information as has been furnished by Financial Security for inclusion therein
and the information therein concerning Financial Security has been approved by
Financial Security in writing. Financial Security hereby consents to the
information in respect of Financial Security included in the Prospectus. Each
Offering Document will include the following statement:
 
“The Policy is not covered by the Property/Casualty Insurance Security Fund
specified in Article 76 of the New York Insurance Law”.
 
Each Offering Document including financial statements with respect to Financial
Security prepared in accordance with generally accepted accounting principles
(but excluding any Offering Document in which such financial statements are
incorporated by reference) will include the following statement immediately
preceding such financial statements:
 
“The New York State Insurance Department recognizes only statutory accounting
practices for determining and reporting the financial condition and results of
operations of an insurance company, for determining its solvency under the New
York Insurance Law, and for determining whether its financial condition warrants
the payment of a dividend to its stockholders. No consideration is given by the
New York State Insurance Department to financial statements prepared in
accordance with generally accepted accounting principles in making such
determinations.”
 
(c)    Underwriter Information. All material provided by the Underwriters for
inclusion in the Prospectus (as revised from time to time, the “Underwriter
Information”), insofar as such information relates to the Underwriters, is true
and correct in all material respects. In respect of the Prospectus Supplement,
the Underwriter Information is limited

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to the information set forth in the body of the Prospectus Supplement and within
the “Underwriting” section, the first, the third and final (i.e. sixth)
paragraphs immediately following the Class A-4 Notes Underwriter commitment
table.
 
Section 4.    Indemnification.
 
(a)    Financial Security agrees, upon the terms and subject to the conditions
provided herein, to indemnify, defend and hold harmless each Seller Party and
each Underwriter Party against (i) any and all Losses incurred by them with
respect to the offer and sale of the Securities and resulting from Financial
Security’s breach of any of its representations, warranties or agreements set
forth in Section 2 hereof and (ii) any and all Losses to which any Seller Party
or Underwriter Party may become subject, under the Securities Act or otherwise,
insofar as such Losses arise out of or result from an untrue statement of a
material fact contained in any Offering Document or the omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or omission was made in the Financial
Security Information included therein in accordance with the provisions hereof.
 
(b)    Each of the Underwriters, agrees, severally but not jointly, upon the
terms and subject to the conditions provided herein, to indemnify, defend and
hold harmless each Financial Security Party and each Seller Party against (i)
any and all Losses incurred by them with respect to the offer and sale of the
Securities and resulting from the Underwriters’ breach of any of its
representations, warranties or agreements set forth in Section 3 hereof and (ii)
any and all Losses to which any Financial Security Party or Seller Party may
become subject, under the Securities Act or otherwise, insofar as such Losses
arise out of or result from an untrue statement of a material fact contained in
any Offering Document or the omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or omission was made in the Underwriter Information included therein.
 
(c)    Upon the incurrence of any Losses for which a party is entitled to
indemnification hereunder, the Indemnifying Party shall reimburse the
Indemnified Party promptly upon establishment by the Indemnified Party to the
Indemnifying Party of the Losses incurred.
 
Section 5.    Indemnification Procedures.    Except as provided below in Section
6 with respect to contribution, the indemnification provided herein by an
Indemnifying Party shall be the exclusive remedy of any and all Indemnified
Parties for the breach of a representation, warranty or agreement hereunder by
an Indemnifying Party; provided, however, that each Indemnified Party shall be
entitled to pursue any other remedy at law or in equity for any such breach so
long as the damages sought to be recovered shall not exceed the Losses incurred
thereby resulting from such breach. In the event that any action or regulatory
proceeding shall be commenced or claim asserted which may entitle an Indemnified
Party to be indemnified under this Agreement, such party shall give the
Indemnifying Party written or telegraphic notice of such action or claim
reasonably promptly after receipt of written notice thereof. The

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Indemnifying Party shall be entitled to participate in and, upon notice to the
Indemnified Party, assume the defense of any such action or claim in reasonable
cooperation with, and with the reasonable cooperation of, the Indemnified Party.
The Indemnified Party will have the right to employ its own counsel in any such
action in addition to the counsel of the Indemnifying Party, but the fees and
expenses of such counsel will be at the expense of such Indemnified Party,
unless (a) the employment of counsel by the Indemnified Party at its expense has
been authorized in writing by the Indemnifying Party, (b) the Indemnifying Party
has not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, or (c)
the named parties to any such action or proceeding (including any impleaded
parties) include both the Indemnifying Party and one or more Indemnified
Parties, and the Indemnified Parties shall have been advised by counsel that (A)
there may be one or more legal defenses available to them which are different
from or additional to those available to the Indemnifying Party and (B) the
representation of the Indemnifying Party and such Indemnified Parties by the
same counsel would be inappropriate or contrary to prudent practice (in which
case, if such Indemnified Parties notify the Indemnifying Party in writing that
they elect to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense of such
action or proceeding on behalf of such Indemnified Parties, it being understood,
however, that the Indemnifying Party shall not, in connection with any one such
action or proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys at any time for all Seller Parties, one such firm
for all Underwriter Parties and one such firm for all Financial Security
Parties, as the case may be, which firm shall be designated in writing by the
Seller in respect of the Seller Parties, by the Underwriters in respect of the
Underwriter Parties and by Financial Security in respect of the Financial
Security Parties), in each of which cases the fees and expenses of counsel will
be at the expense of the Indemnifying Party and all such fees and expenses will
be reimbursed promptly as they are incurred. The Indemnifying Party shall not be
liable for any settlement of any such claim or action unless the Indemnifying
Party shall have consented thereto or be in default in its obligations
hereunder. Any failure by an Indemnified Party to comply with the provisions of
this Section shall relieve the Indemnifying Party of liability only if such
failure is prejudicial to the position of the Indemnifying Party and then only
to the extent of such prejudice.
 
Section 6.    Contribution.
 
(a)    To provide for just and equitable contribution if the indemnification
provided by any Indemnifying Party is determined to be unavailable or
insufficient for any Indemnified Party (other than due to application of this
Section), each Indemnifying Party shall contribute to the Losses arising from
any breach of any of its representations, warranties or agreements contained in
this Agreement on the basis of the relative fault of each of the parties as set
forth in Section 6(b) below; provided, however, that an Indemnifying Party shall
in no event be required to contribute to all Indemnified Parties an aggregate
amount in excess of the Losses incurred by such Indemnified Parties resulting
from the breach of representations, warranties or agreements contained in this
Agreement.

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(b)    The relative fault of each Indemnifying Party, on the one hand, and of
each Indemnified Party, on the other, shall be determined by reference to, among
other things, whether the breach of, or alleged breach of, any representations,
warranties or agreements contained in this Agreement relates to information
supplied by, or action within the control of, the Indemnifying Party or the
Indemnified Party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such breach.
 
(c)    The parties agree that Financial Security shall be solely responsible for
the Financial Security Information and the Underwriters shall be solely
responsible for the Underwriter Information and that the balance of each
Offering Document shall be the responsibility of the Seller.
 
(d)    Notwithstanding anything in this Section 6 to the contrary, the
Underwriters shall not be required to contribute an amount in excess of the
amount by which the total price of the Securities underwritten by the
Underwriters exceeds the amount of any damages that the Underwriters have
otherwise been required to pay in respect of such untrue statement or omission.
 
(e)    No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
 
(f)    Upon the incurrence of any Losses entitled to contribution hereunder, the
contributor shall reimburse the party entitled to contribution promptly upon
establishment by the party entitled to contribution to the contributor of the
Losses incurred.
 
Section 7.    Miscellaneous.
 
(a)    Notices.    All notices and other communications provided for under this
Agreement shall be delivered to the address set forth below or to such other
address as shall be designated by the recipient in a written notice to the other
party or parties hereto.
 
If to Financial Security:
  
Financial Security Assurance Inc.
    
350 Park Avenue
    
New York, NY 10022
    
Attention: Senior Vice President—Transaction Oversight Department (with a copy
to the attention of the General Counsel)
    
Re: AmeriCredit Automobile Receivables Trust 2002-D
    
Confirmation: (212) 826-0100
    
Telecopy Nos.: (212) 339-3518,
                           (212) 339-3529

 

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If to the Seller:
 
AFS Funding Trust
   
c/o Deutsche Bank Trust Company Delaware
   
(f/k/a Bankers Trust (Delaware))
   
E.A. Delle Donne Corporate Center
   
Montgomery Building
   
1011 Centre Road
   
Wilmington, DE 19805-1266
   
Attention: Corporate Trust Administration
   
Confirmation: (302) 636-3305
 
With a copy to:
 
AmeriCredit Financial Services, Inc.
   
Administrator of AFS Funding Trust
   
801 Cherry Street, Suite 3900
   
Fort Worth, TX 76102
   
Attn: Chief Financial Officer
   
Confirmation: (817) 302-7000
   
Telecopy No.: (817) 302-7942
 
If to the Underwriters:
 
J.P. Morgan Securities Inc.
   
270 Park Ave, 7th Floor
   
New York, NY 10017
   
Attention: ITS_Structured Finance, AmeriCredit 2002-D
   
Confirmation: [                ]
   
Telecopy No.: 212-946-8552

 
(b)    Governing Law.    THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH,
AND THIS AGREEMENT AND ALL MATTERS ARISING OUT OF OR RELATING IN ANY WAY TO THIS
AGREEMENT SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK.
 
(c)    Assignments.    This Agreement may not be assigned by any party without
the express written consent of each other party. Any assignment made in
violation of this Agreement shall be null and void.
 
(d)    Amendments.    Amendments of this Agreement shall be in writing signed by
each party hereto.
 
(e)    Survival, Etc.    The indemnity and contribution agreements contained in
this Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of any Indemnifying Party, (ii)
the issuance of the Securities or (iii) any termination of this Agreement or the
Policy. The indemnification provided in this Agreement will be in addition to
any liability which the parties may otherwise have and shall in no way limit any
obligations of the Seller under the Underwriting Agreement or the Insurance
Agreement.

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(f)    Counterparts.    This Agreement may be executed in counterparts by the
parties hereto, and all such counterparts shall constitute one and the same
instrument.
 
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IN WITNESS WHEREOF, the parties hereto have caused this Indemnification
Agreement to be duly executed and delivered as of the date first above written.
 
FINANCIAL SECURITY ASSURANCE INC.
By:
 
/s/    RAYMOND GALKOWSKI

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Name: Raymond Galkowski
Title: Authorized Officer

 
AFS FUNDING TRUST
By:
 
AmeriCredit Financial Services, Inc., as
Administrator
By:
 
/s/    PRESTON A. MILLER

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Name: Preston A. Miller
Title: Executive Vice President and Treasurer

 
J.P. MORGAN SECURITIES INC.
By:
 
/s/    MIKHAIL RADIK

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Name: Mikhail Radik
Title: Vice President

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EXHIBIT A
 
OPINION OF ASSOCIATE GENERAL COUNSEL
 
Based upon the foregoing, I am of the opinion that:
 
1.    Financial Security is a stock insurance company duly organized, validly
existing and authorized to transact financial guaranty insurance business under
the laws of the State of New York.
 
2.    The Policy and the Financial Security Agreements have been duly
authorized, executed and delivered by Financial Security.
 
3.    The Policy and the Financial Security Agreements constitute valid and
binding obligations of Financial Security, enforceable against Financial
Security in accordance with their terms, subject, as to the enforcement of
remedies, to bankruptcy, insolvency, reorganization, rehabilitation, moratorium
and other similar laws affecting the enforceability of creditors’ rights
generally applicable in the event of the bankruptcy or insolvency of Financial
Security and to the application of general principles of equity and subject, in
the case of the Indemnification Agreement, to principles of public policy
limiting the right to enforce the indemnification provisions contained therein
insofar as they relate to indemnification for liabilities arising under
applicable securities laws.
 
4.    The Policy is exempt from registration under the Securities Act of 1933,
as amended (the “Act”).
 
5.    Neither the execution or delivery by Financial Security of the Policy or
the Financial Security Agreements, nor the performance by Financial Security of
its obligations thereunder, will conflict with any provision of the certificate
of incorporation or the bylaws of Financial Security or violate any law or
regulation, which violation would impair the binding effect or enforceability of
the Policy or any of the Agreements or, to the best of my knowledge, result in a
breach of, or constitute a default under, any agreement or other instrument to
which Financial Security is a party or by which it or any of its property is
bound or, to the best of my knowledge, violate any judgment, order or decree
applicable to Financial Security of any governmental or regulatory body,
administrative agency, court or arbitrator having jurisdiction over Financial
Security (except that in the published opinion of the Securities and Exchange
Commission the indemnification provisions of the Indemnification Agreement,
insofar as they relate to indemnification for liabilities arising under the Act,
are against public policy as expressed in the Act and are therefore
unenforceable).
 
In addition, please be advised that I have reviewed the description of Financial
Security under the caption “The Insurer” in the Prospectus (the “Offering
Document”) of the Seller with respect to the Securities. The information
provided in the Offering Document with respect to Financial Security is limited
and does not purport to provide the scope of disclosure required to be included
in a prospectus with respect to a registrant under the Act in connection with
the public offer and sale of securities of such registrant. Within such limited
scope of disclosure,

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however, there has not come to my attention any information which would cause me
to believe that the description of Financial Security referred to above, as of
the date of the Offering Document or as of the date of this opinion, contained
or contains any untrue statement of a material fact or omitted or omits to state
a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except that I express
no opinion with respect to any financial statements or other financial
information contained or referred to therein).

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