**Exhibit 10.113**

 

EXECUTION COPY

 

 

**MBIAINSURANCE CORPORATION,**

as Insurer

 

**FIRSTINVESTORS SERVICING CORPORATION,**

as Servicer

 

**FIRSTINVESTORS FINANCIAL SERVICES, INC.**

as Seller and as Administrator

 

**FIRSTINVESTORS AUTO FUNDING CORPORATION,**

as Depositor

 

**FIRSTINVESTORS AUTO OWNER TRUST 2003-A,**

as Issuer

 

**DEUTSCHEBANK TRUST COMPANY DELAWARE,**

as Owner Trustee

 

**WELLSFARGO BANK MINNESOTA, NATIONAL ASSOCIATION,**

as Back-up Servicer and Indenture Trustee

 

 

**INSURANCEAGREEMENT**

 

First Investors Auto Owner Trust 2003-A

$139,661,000 2.58% Asset-Backed Class A Notes

 

Dated as of November 20, 2003

 

 

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TABLE OF CONTENTS

 
| ARTICLE I                             |
|--------------------------------------------|
|                                       |   |
| DEFINITIONS                                |   |
| ARTICLE II                            |
| REPRESENTATIONS,  WARRANTIES AND COVENANTS |
|                                       |   |
| Section 2.01.                         | Representations  and Warranties of the Servicer, the Seller and the Depositor |   |
| Section 2.02.                         | Affirmative  Covenants of the Servicer, the Seller and the Depositor |   |
| Section 2.03.                         | Negative  Covenants of the Servicer, the Seller and the Depositor |   |
| Section 2.04.                         | Representations  and Warranties of the Issuer |   |
| Section 2.05.                         | Affirmative  Covenants of the Issuer |   |
| Section 2.06.                         | Negative Covenants of  the Issuer |   |
| Section 2.07.                         | Representations,  Warranties and Covenants of Indenture Trustee and Back-up Servicer |   |
| Section 2.08.                         | Representations,  Warranties and Covenants of Owner Trustee |   |
| Section 2.09.                         | Negative  Covenant of the Administrator |   |
|                                       |   |   |
| ARTICLE III                           |
| THE POLICY; REIMBURSEMENT                  |
|                                       |   |
| Section 3.01.                         | Issuance  of the Policy |   |
| Section 3.02.                         | Payment of Fees  and Insurance Premium |   |
| Section 3.03.                         | Reimbursement  and Additional Payment Obligation. |   |
| Section 3.04.                         | Indemnification;  Limitation of Liability |   |
| Section 3.05.                         | Payment  Procedure |   |
|                                       |   |   |
| ARTICLE IV                            |
| FURTHER  AGREEMENTS                        |
|                                       |   |
| Section 4.01.                         | Effective  Date; Term of the Insurance Agreement |   |
| Section 4.02.                         | Further  Assurances and Corrective Instruments |   |
| Section 4.03.                         | Obligations  Absolute |   |
| Section 4.04.                         | Assignments;  Reinsurance; Third-Party Rights |   |
| Section 4.05.                         | Liability of the Insurer |   |
| Section 4.06.                         | Parties  Will Not Institute Insolvency Proceedings |   |
| Section 4.07.                         | Indenture  Trustee, Depositor, Back-up Servicer, Seller and Servicer To Join in  Enforcement Action |   |

 

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| Section 4.08.  | Subrogation                    |   |
|---------------------|--------------------------------|--------|
|                |                           |   |
| ARTICLE V      |
| DEFAULTS;  REMEDIES |
|                |                           |
| Section 5.01.  | Defaults                       |   |
| Section 5.02.  | Remedies; No Remedy  Exclusive |   |
| Section 5.03.  | Waivers                        |   |
|                |                           |   |
| ARTICLE VI     |
| MISCELLANEOUS       |
|                |                           |
| Section 6.01.  | Amendments,  Etc               |   |
| Section 6.02.  | Notices                        |   |
| Section 6.03.  | Severability                   |   |
| Section 6.04.  | Governing  Law                 |   |
| Section 6.05.  | Consent  to Jurisdiction       |   |
| Section 6.06.  | Consent  of the Insurer        |   |
| Section 6.07.  | Counterparts                   |   |
| Section 6.08.  | Headings                       |   |
| Section 6.09.  | Trial  by Jury Waived          |   |
| Section 6.10.  | Limited  Liability             |   |
| Section 6.11.  | Entire  Agreement              |   |
| Section 6.12.  | Limitation  of Liability       |   |
| Section 6.13.  | Limited  Recourse              |   |
| Section 6.14.  | Subordination                  |   |

 

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**INSURANCE AGREEMENT**

 

This **INSURANCEAGREEMENT** (this “Insurance Agreement”), dated as ofNovember 20, 2003 by and among **FIRST INVESTORS FINANCIAL SERVICES**, **INC.**as seller (together with its permitted successors and assigns, the “Seller”)and as Administrator,**FIRST INVESTORS SERVICING CORPORATION,**asServicer (together with its permitted successors and assigns, the “Servicer”), **FIRSTINVESTORS AUTO FUNDING CORPORATION**, as Depositor (the “Depositor”), **FIRSTINVESTORS AUTO OWNER TRUST 2003-A**, as Issuer (the “Issuer” or the“Trust”), **DEUTSCHEBANK TRUST COMPANY DELAWARE,**as Owner Trustee (the “Owner Trustee”) **MBIAINSURANCE CORPORATION,**as Insurer (the “Insurer”), **WELLS FARGOBANK MINNESOTA, NATIONAL ASSOCIATION**, as Back-up Servicer (the“Back-up Servicer”) and as Indenture Trustee (the “Indenture Trustee”).

 

WHEREAS, theIndenture dated as of November 20, 2003 (the “Indenture”) relating to theFirst Investors Auto Owner Trust 2003-A $139,661,000 2.58% Asset-Backed Class ANotes (the “Obligations”), between the Issuer and the Indenture Trustee, in itscapacity as Indenture Trustee and Custodian, provides for, among other things,the issuance of asset backed notes and the Insurer has issued its note guarantyinsurance policy (the “Policy”) that guarantees certain payments on theObligations;

 

WHEREAS, theInsurer shall be paid an insurance premium pursuant to the Indenture, and thedetails of such premium are set forth herein; and

 

WHEREAS, theServicer, the Seller, the Depositor and the Issuer have undertaken certainobligations in consideration for the Insurer’s issuance of the Policy;

 

NOW, THEREFORE, inconsideration of the premises and the mutual agreements herein contained, theparties hereto agree as follows:

 

**ARTICLE I******

**DEFINITIONS**

** **

The terms definedin this Article I shall have the meanings provided herein for all purposesof this Insurance Agreement, unless the context clearly requires otherwise, inboth singular and plural form, as appropriate. Unless the context clearly requires otherwise, all capitalized termsused herein and not otherwise defined in this Article I shall have themeanings assigned to them in the Indenture, the Sale and Allocation Agreement,or the Servicing Agreement.  All wordsused herein shall be construed to be of such gender or number as thecircumstances require.  This “InsuranceAgreement” shall mean this Insurance Agreement as a whole and as the same may,from time to time hereafter, be amended, supplemented or modified.  The words “herein,” “hereby,” “hereof,”“hereto,” “hereinabove” and “hereinbelow,” and words of similar import, referto this Insurance Agreement as a whole and not to any particular paragraph,clause or other subdivision hereof, unless otherwise specifically noted.

 

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*“Administration Agreement”* means the Administration Agreement datedas of November 20, 2003, between the Administrator, the Issuer and theIndenture Trustee as the same may be amended or supplemented from time to timein accordance with the terms thereof.

 

*“Administrator”* means First Investors FinancialServices, Inc. or any successor Administrator under the AdministrationAgreement.

 

“*AdverseSelection Procedure*” means any method of selecting or identifying aContract eligible to be included in the Trust Estate, other than in accordancewith the Transaction Documents, that materially and adversely affects therepresentative nature of the sample of Contracts so selected.

 

*“Business Day”*means any day other than (a) a Saturdayor a Sunday (b) a day on which banking institutions or trust companies in NewYork, New York; Wilmington, Delaware; Houston, Texas; Minneapolis, Minnesota;or Atlanta, Georgia are authorized or obligated by law, executive order orgovernmental decree to remain closed.

 

*“Change in Control”* shall mean the occurrence of any of thefollowing (a) any Person shall, at any time following the Closing Date, acquire51% or more of the total outstanding shares of FIFSG; (b) any Person shall, atany time following the Closing Date, acquire directly or indirectly 51% or moreof the voting control with respect to the total outstanding shares of FIFSG;(c) FIFSG shall cease to own, directly or indirectly, 51% or more of the totaloutstanding shares of the Seller or the Servicer; or (d) FIFSG shall not havedirectly or indirectly 51% or more of the voting control with respect to thetotal outstanding shares of the Seller or the Servicer.

 

*“Code”* means the Internal Revenue Code of 1986,including, unless the context otherwise requires, the rules and regulationsthereunder, as amended from time to time.

 

*“Commission”* means the Securities and ExchangeCommission.

 

*“Contribution Agreement”* means the Contribution Agreement datedas of November 20, 2003 between the Seller and the Depositor.

 

*“Date of Issuance”*means the date on which the Policy isissued as specified therein.

 

*“Default”*means any event which results, or whichwith the giving of notice or the lapse of time or both would result, in anEvent of Default.

 

*“Documents”* shall have the meaning set forth insection 2.01(k) hereof.

 

*“Event of Default”*means any event of default specified inSection 5.01 hereof.

 

*“FIFSG”* means First Investors Financial ServicesGroup, Inc.

 

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 “*Financial Statements*”**means, with respect toFIFSG, the balance sheets and the statements of income, retained earnings andcash flows and the notes thereto which have been provided to the Insurer.

 

*“Fiscal Agent”*means the Fiscal Agent, if any,designated pursuant to the terms of the Policy.

 

*“Guaranty”* means the Guaranty entered into as ofNovember 20, 2003, by First Investors Financial Services, Inc., asGuarantor, the Servicer, the Back-up Servicer and  the Indenture Trustee.

 

*“Indemnification Agreement”* means the Indemnification Agreementdated as of November 13, 2003, among the Insurer, the Seller and theInitial Purchaser.

 

* “Indenture”*means the Indenture dated as of November 20, 2003 between theIssuer and the Indenture Trustee and Custodian as the same may be amended orsupplemented from time to time in accordance with the terms thereof.

 

*“Indenture Trustee”*means Wells Fargo Bank Minnesota,National Association, a national banking association, as Indenture Trusteeunder the Indenture, and any successor Indenture Trustee under the Indenture.

 

*“Initial Purchaser”* means Wachovia Capital Markets, LLC.

 

*“Insurance Premium”*means the premium payable in accordancewith Section 3.02 hereof.

 

“*InsurerDefault*” means the occurrence and continuance of any failure of theInsurer to make payments under the Policy in accordance with its terms.

 

 “*Insurer Insolvency*” means (i) the entryagainst the Insurer of a decree or order by a court or agency or supervisoryauthority having jurisdiction in the premises for the appointment of a trustee,conservator, receiver or liquidator in any insolvency, conservatorship,receivership, readjustment of debt, marshalling of assets and liabilities orsimilar proceedings, or for the winding up or liquidation of the Insurer’saffairs, and the continuance of any such decree or order unstayed and in effector (ii) the consent by the Insurer to the appointment of a trustee,conservator, receiver or liquidator in any insolvency, conservatorship,receivership, readjustment of debt, marshalling of assets and liabilities orsimilar proceedings of or relating to such Insurer as of or relating tosubstantially all of its property, or such Insurer shall admit in writing itsliability to pay its debts generally as they become due, file a petition (orhave one filed against such Insurer) to take advantage of any applicableinsolvency or reorganization statute, make an assignment for the benefit of itscreditors, or suspend (voluntarily or involuntarily) payment of itsobligations.

 

*“Investment Company Act”*means the Investment Company Act of 1940,including, unless the context otherwise requires, the rules and regulationsthereunder, as amended.

 

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*“Late Payment Rate”*means, for any date of determination, therate of interest as it is publicly announced by Citibank, N.A. at its principaloffice in New York, New York as its prime rate (any change in suchprime rate of interest to be effective on the date such change is announced byCitibank, N.A.) plus 3%.  The Late PaymentRate shall be computed on the basis of a year of 365 days calculating theactual number of days elapsed.  In noevent shall the Late Payment Rate exceed the maximum rate permissible under anyapplicable law limiting interest rates.

 

*“Liabilities”* shall have the meaning ascribed to suchterm in Section 3.04(a) hereof.

 

*“Losses”* means (i) any actual out-of-pocketloss paid by the Insurer or its respective parents, subsidiaries and affiliatesor any shareholder, director, officer, employee, agent or any “controllingperson” (as such term is used in the Securities Act) of any of the foregoing,and (ii) any actual out-of-pocket costs and expenses paid by such party,including reasonable fees and expenses of its counsel, to the extent not paid,satisfied or reimbursed from funds provided by any other Person (provided thatthe foregoing shall not create or imply any obligation to pursue recourseagainst any such other Person).

 

*“Material Adverse Change”*means, in respect of any Person, amaterial adverse change in (i) the business, financial condition, resultsof operations or properties of such Person or (ii) the ability of suchPerson to perform its obligations under any of the Transaction Documents.

 

*“Moody’s”*means Moody’s Investors Service, Inc., aDelaware corporation, and any successor thereto, and, if such corporation shallfor any reason no longer perform the functions of a securities rating agency,“Moody’s” shall be deemed to refer to any other nationally recognized ratingagency designated by the Insurer.

 

*“Obligations”* shall have the meaning as defined in thePolicy.

 

*“Obligor”*means the original obligor under eachContract, including any guarantor of such obligor and their respectivesuccessors.

 

*“Offering Document”*means the offering memorandum datedNovember 13, 2003 of the Issuer in respect of the Obligations (and anyamendment or supplement thereto) and any other offering document in respect ofthe Obligations prepared by the Servicer, the Seller, Depositor or the Issuerthat makes reference to the Policy.

 

*“Opinion Facts and Assumptions”* means the facts and assumptionscontained in the insolvency opinions dated November 20, 2003 by DechertLLP under the heading “Facts and Assumptions” insofar as they relate to theSeller, the Issuer and the Depositor.

 

*“Owners”*means registered holders of Obligations.

 

*“Owner Trustee”*means Deutsche Bank Trust CompanyDelaware, not in its individual capacity, but solely as Owner Trustee of theIssuer.

 

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*“Person”*means an individual, joint stock company,trust, unincorporated association, joint venture, corporation, business orowner trust, limited liability company, partnership or other organization orentity (whether governmental or private).

 

*“Premium Percentage”*shall have the meaning ascribed to suchterm in Section 3.02 hereof.

 

*“Premium Side Letter Agreement”* means that certain Premium Letter datedas of November 20, 2003 among the Seller, the Issuer, the Servicer, andthe Insurer specifying the up-front Insurance Premium payable on the ClosingDate and the monthly Insurance Premium payable to the Insurer pursuant to theIndenture.

 

*“Purchase Agreement”* means the Purchase Agreement between theInitial Purchaser and the Depositor with respect to the offer and sale of theObligations, as the same may be amended from time to time.

 

*“Sale**and Allocation Agreement”* means the Saleand Allocation Agreement dated as of November 20, 2003, among theServicer, the Indenture Trustee, the Securities Intermediary, and the Issuer asthe same may be amended or supplemented from time to time in accordance withthe terms thereof.

 

*“Securities Act”*means the Securities Act of 1933,including, unless the context otherwise requires, the rules and regulationsthereunder, as amended from time to time.

 

*“Securities Exchange Act”*means the Securities Exchange Act of1934, including, unless the context otherwise requires, the rules andregulations thereunder, as amended from time to time.

 

“*ServicingAgreement*” means the Servicing Agreement dated as ofNovember 20, 2003 among the Servicer, the Back-up Servicer, and theIssuer.

 

*“S&P”*means Standard & Poor’s RatingsServices, a division of The McGraw-Hill Companies, Inc., and any successorthereto, and, if such corporation shall for any reason no longer perform thefunctions of a securities rating agency, “S&P” shall be deemed to refer toany other nationally recognized rating agency designated by the Insurer.

 

*“Term of the Insurance Agreement”*shall be determined as provided inSection 4.01 hereof.

 

*“Transaction”*means the transactions contemplated bythe Transaction Documents, including the transactions described in the OfferingDocument.

 

*“Transaction Documents”*means this Insurance Agreement, thePremium Side Letter Agreement, the Indenture, the Offering Document, theGuaranty, the Trust Agreement, the Certificate of Trust, the Sale andAllocation Agreement, the Contribution Agreement, the Servicing Agreement, theAdministration Agreement, the Purchase Agreement, and the Obligations.

 

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*“Trust”*means the trust created pursuant to theIndenture.

 

*“Trust Agreement”*means the Amended and Restated TrustAgreement dated as of November 20, 2003 among the Depositor and the OwnerTrustee as the same may be amended or supplemented from time to time in accordancewith the terms thereof.

 

*“Trust Indenture Act”*means the Trust Indenture Act of 1939,including, unless the context otherwise requires, the rules and regulationsthereunder, as amended from time to time.

 

**ARTICLE II**REPRESENTATIONS, WARRANTIES ANDCOVENANTS

** **

**Section 2.01.****  Representations andWarranties of the Servicer, the Seller and the Depositor.** The Servicer, the Seller and the Depositor represent, warrant andcovenant as of the Date of Issuance, each as to those matters relating toitself, as follows:

 

(a)                                  *Due Organization and Qualification*. The Servicer, the Seller and the Depositor are each a corporation, dulyorganized, validly existing and in good standing under the laws of itsrespective jurisdiction of incorporation. Each of the Servicer, the Seller and the Depositor is duly qualified todo business, is in good standing and has obtained all licenses, permits,charters, registrations and approvals (together, “approvals”) necessary for theconduct of its business as currently conducted and as described in the OfferingDocument and the performance of its obligations under the TransactionDocuments, in each jurisdiction in which the failure to be so qualified or toobtain such approvals would render any Transaction Document unenforceable inany respect or would have a material adverse effect upon the Transaction, theOwners or the Insurer.

 

(b)                                 *Power and Authority*.  Each of theServicer, the Seller and the Depositor has all necessary corporate power andauthority to conduct its business as currently conducted and, as described inthe Offering Document, to execute, deliver and perform its obligations underthe Transaction Documents and to consummate the Transaction.

 

(c)                                  *Due Authorization*.  Theexecution, delivery and performance of the Transaction Documents by theServicer, the Seller and the Depositor have been duly authorized by allnecessary corporate action and do not require any additional approvals orconsents of, or other action by or any notice to or filing with any Person,including, without limitation, any governmental entity or the Servicer’s, theSeller’s or the Depositor’s stockholders, which have not previously beenobtained or given by the Servicer, the Seller or the Depositor.

 

(d)                                 *Noncontravention*.  None of theexecution and delivery of the Transaction Documents by the Servicer, the Selleror the Depositor, the consummation of the Transaction contemplated thereby orthe satisfaction of the terms and conditions of the Transaction Documents:

 

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(i)                                     conflicts with or results in any breachor violation of any provision of the certificate of incorporation or bylaws ofthe Servicer, the Seller or the Depositor or any law, rule, regulation, order,writ, judgment, injunction, decree, determination or award currently in effecthaving applicability to the Servicer, the Seller or the Depositor or any oftheir material properties, including regulations issued by an administrativeagency or other governmental authority having supervisory powers over theServicer, the Seller or the Depositor;

 

(ii)                                  constitutes a default by the Servicer,the Seller or the Depositor under or a breach of any provision of any loanagreement, mortgage, indenture or other agreement or instrument to which theServicer, the Seller or the Depositor is a party or by which any of its ortheir respective properties, which individually or in the aggregate could have a material adverse effect onthe Transaction; or

 

(iii)                               results in or requires the creation ofany lien upon or in respect of any assets of the Servicer, the Seller or theDepositor, except as contemplated by the Transaction Documents.

 

(e)                                  *Legal Proceedings*.  There is noaction, proceeding or investigation by or before any court, governmental oradministrative agency or arbitrator against or affecting the Servicer, theSeller, the Depositor or any of its or their subsidiaries, or any properties orrights of the Servicer, the Seller, the Depositor or any of its or theirsubsidiaries, pending or, to the Servicer’s, the Seller’s or the Depositor’sknowledge after reasonable inquiry, threatened, which, in any case, couldreasonably be expected to result in a Material Adverse Change with respect tothe Servicer, the Seller or Depositor.

 

(f)                                    *Valid and Binding Obligations*.  TheObligations, when executed, authenticated and issued in accordance with theIndenture, and the Transaction Documents (other than the Obligations), whenexecuted and delivered by the Servicer, the Seller and the Depositor, willconstitute the legal, valid and binding obligations of the Servicer, theSeller, the Depositor and the Trust, as applicable, enforceable in accordancewith their respective terms, except as such enforceability may be limited bybankruptcy, insolvency, reorganization, moratorium or other similar lawsaffecting creditors’ rights generally and general equitable principles andpublic policy considerations as to rights of indemnification for violations offederal securities laws.  None of theServicer, the Seller or the Depositor will at any time in the future deny thatthe Transaction Documents constitute the legal, valid and binding obligationsof the Servicer, the Seller, the Depositor or the Trust, as applicable.

 

(g)                                 *Financial Statements*.  TheFinancial Statements of FIFSG, copies of which have been furnished to theInsurer, (i) are, as of the dates and for the periods referred to therein,complete and correct in all material respects, (ii) present fairly thefinancial condition and results of operations of the companies reported thereinas of the dates and for the periods indicated and (iii) have been preparedin accordance with generally accepted accounting principles consistentlyapplied, except as noted therein (subject as to interim statements to normalyear-end adjustments).  Since the dateof the

 

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most recent FinancialStatements, there has been no Material Adverse Change in respect of theServicer or the Seller.  Except asdisclosed in the Financial Statements, the Servicer and the Seller are notsubject to any contingent liabilities or commitments that, individually or inthe aggregate, have a material possibility of causing a Material Adverse Changein respect of the Servicer or the Seller.

 

(h)                                 *Compliance With Law, Etc*.  No practice,procedure or policy employed, or proposed to be employed, by the Servicer, theSeller or the Depositor in the conduct of its business violates any law,regulation, judgment, agreement, order or decree applicable to any of themthat, if enforced, could reasonably be expected to result in a Material AdverseChange with respect to the Servicer, the Seller or the Depositor.  The Servicer, the Seller and the Depositorare not in breach of or in default under any applicable law or administrativeregulation of its respective jurisdiction of incorporation, or any department,division, agency or instrumentality thereof or of the United States or anyapplicable judgment or decree or any loan agreement, note, resolution,certificate, agreement or other instrument to which the Servicer, the Seller orthe Depositor is a party or is otherwise subject which, if enforced, would havea material adverse effect on the ability of the Servicer, the Seller or theDepositor, as the case may be, to perform its respective obligations under theTransaction Documents.

 

(i)                                     *Taxes*.  The Servicer, the Seller andthe Depositor and the Servicer’s, the Seller’s and the Depositor’s parentcompany or companies have filed prior to the date hereof all federal and statetax returns that are required to be filed and paid all taxes, including anyassessments received by them that are not being contested in good faith, to theextent that such taxes have become due, except for any failures to file or paythat, individually or in the aggregate, would not result in a Material AdverseChange with respect to the Servicer, the Seller or the Depositor.

 

(j)                                     *Accuracy of Information*.  Neither theTransaction Documents, nor other information relating to the Contracts, theoperations of the Servicer, the Seller or the Depositor (including servicing ororigination of loans) or the financial condition of the Servicer, the Seller orthe Depositor (collectively, the “Documents”), as amended, supplemented orsuperseded, furnished to the Insurer by the Servicer, the Seller or theDepositor contains any statement of a material fact by the Servicer, the Selleror Depositor which was untrue or misleading in any material adverse respectwhen made.  None of the Servicer, theSeller or the Depositor has any knowledge of circumstances that couldreasonably be expected to cause a Material Adverse Change with respect to theServicer, the Seller or the Depositor. Since the furnishing of the Documents, there has been no change or anydevelopment or event involving a prospective change known to the Servicer, theSeller or the Depositor that would render any of the Documents untrue ormisleading in any material respect.

 

(k)                                  *Compliance With Securities Laws*. The offer and sale of the Obligations comply in all material respectswith all requirements of law, including all registration requirements ofapplicable securities laws.  Withoutlimitation of the foregoing, the Offering Document does not contain any untruestatement of a material fact and does not

 

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omit to state a materialfact necessary to make the statements made therein, in light of thecircumstances under which they were made, not misleading; provided, however,that no representation is made with respect to the information in the OfferingDocument set forth under the heading “Description of the Insurer and theInsurance Policy” or the consolidated financial statements of the Insurerincorporated by reference in the Offering Document; and provided, further, thatno representation is made with respect to the statements set forth in the lastparagraph of the cover page of the Offering Document regarding the delivery ofthe Obligations and the disclosure under the heading “Plan of Distribution” inthe Offering Document.  Neither theoffer nor the sale of the Obligations has been or will be in violation of theSecurities Act or any other federal or state securities laws.  The Issuer is not required to be registeredas an “investment company” under the Investment Company Act.

 

(l)                                     *Transaction Documents*.  Each of therepresentations and warranties of the Servicer, the Seller and the Depositorcontained in the Transaction Documents is true and correct in all materialrespects, and the Servicer, the Seller and the Depositor hereby make each suchrepresentation and warranty to, and for the benefit of, the Insurer as if thesame were set forth in full herein.

 

(m)                               *Solvency, Fraudulent Conveyance*. The Servicer, the Seller and the Depositor are solvent and will not berendered insolvent by the Transaction and, after giving effect to theTransaction, none of the Servicer, the Seller or the Depositor will be leftwith an unreasonably small amount of capital with which to engage in itsbusiness, nor does the Servicer, the Seller or the Depositor intend to incur,or believe that it has incurred, debts beyond its ability to pay as theymature.  None of the Servicer, theSeller or the Depositor contemplates the commencement of insolvency, bankruptcy,liquidation or consolidation proceedings or the appointment of a receiver,liquidator, conservator, trustee or similar official in respect of theServicer, the Seller or the Depositor or any of their assets.  The amount of consideration being receivedby the Issuer upon the sale of the Obligations to the Initial Purchaserconstitutes reasonably equivalent value and fair consideration for the interestin the Contracts evidenced by the Obligations. The Seller  is not transferringthe Contracts to the Issuer and the Issuer is not selling the Obligations toany Initial Purchaser, as provided in the Transaction Documents, with anyintent to hinder, delay or defraud any of the Seller’s or the Depositor’screditors.

 

(n)                                 Principal Place of Business.

 

(i)                                     The principal place of business of theServicer is located in Atlanta, Georgia, and the Servicer is a corporationorganized under the laws of the State of Delaware.  “First Investors Servicing Corporation” is the correct legal nameof the Servicer indicated on the public records of the Servicer’s jurisdictionof organization which shows the Servicer to be organized.

 

(ii)                                  The principal place of business of theSeller is located in Houston, Texas, and the Seller is a corporation organizedunder the laws of the State of Texas. “First Investors Financial Services, Inc.”****is the correct legal name ofthe

 

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Seller indicated on thepublic records of the Seller’s jurisdiction of organization which shows theSeller to be organized.

 

(iii)                               The principal place of business of theDepositor is located in Houston, Texas and the Depositor is a corporationorganized under the laws of the State of Delaware.  “First Investors Auto Funding Corporation” is the correct legalname of the Depositor indicated on the public records of the Depositor’sjurisdiction of organization which shows the Depositor to be organized.

 

(o)                                 *Opinion Facts and Assumptions*.  The OpinionFacts and Assumptions insofar as they relate to the Seller and the Depositorare true and correct as of the Date of Issuance.

 

(p)                                 *Requirements for Receivables. *TheSeller and the Depositor represent and warrant with respect to each Contractthat: (a) the related Obligor has no right of recission or cancellation,claims or defenses, set-offs or counterclaims of any kind whatsoever as to oragainst each Contract; (b) the obligation created by the contractevidencing each Contract is a bonafide sale in the ordinary course of theOriginator’s business; (c) the contract evidencing such Contract complieswith all state and federal laws and regulations; (d) the contractevidencing each Contract, including, but not limited to, description of themotor vehicle and/or services contained therein, is in all respects complete,accurate and represents the entire agreement between the Originator and theObligor and complies with Federal Consumer Credit Protection Act and all otherapplicable state and federal laws and regulations.

 

**Section 2.02.****  AffirmativeCovenants of the Servicer, the Seller and the Depositor.** The Servicer, the Seller and the Depositor hereby agree that during theTerm of the Insurance Agreement, unless the Insurer shall otherwise expresslyconsent in writing:

 

(a)                                  *Compliance With Agreements and Applicable Laws*. The Servicer, the Seller and the Depositor shall not be in default underthe Transaction Documents and shall comply with all material requirements ofany law, rule or regulation applicable to it. So long as no Insurer Default orInsurer Insolvency exists, unless the Insurer shall otherwise consent, none ofthe Servicer, the Seller or the Depositor shall agree to any amendment to ormodification of the terms of any Transaction Documents unless the Insurer shallhave given its prior written consent.

 

(b)                                 *Corporate Existence*.  TheServicer, its successors and assigns, the Seller, its successors and assigns,and the Depositor, its successors and assigns, shall maintain their corporateexistence and shall at all times continue to be duly organized under the lawsof their respective jurisdictions of incorporation and duly qualified and dulyauthorized (as described in sections 2.01(a), (b) and (c) hereof) and shallconduct its business in accordance with the terms of its certificate orarticles of incorporation and bylaws. The Seller, the Depositor and the Servicer shall notify the Insurerwithin sixty (60) days prior to any change in its legal name as indicated onthe public records of the Servicer’s, the Seller’s or the Depositor’sjurisdiction of organization which shows the

 

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Servicer, the Seller, orthe Depositor to be organized, jurisdiction of organization, identity orcorporate structure.  The Seller, theServicer and the Depositor shall notify the Insurer within sixty (60) days priorto any relocation of its principal office.

 

(c)                                  *Financial Statements; Accountants’ Reports; OtherInformation*.  The Servicer, the Seller and the Depositorshall keep or cause to be kept in reasonable detail books and records ofaccount of their assets and business, including, but not limited to, books andrecords relating to the Transaction. The Servicer and the Seller shall furnish or cause to be furnished tothe Insurer:

 

(i)                                     *Annual Financial Statements*.  As soon asavailable, and in any event within 120 days after the close of each fiscalyear of FIFSG, the audited consolidated balance sheets of FIFSG and itssubsidiaries as of the end of such fiscal year and the related auditedconsolidated statements of income, changes in shareholders’ equity and cashflows for such fiscal year, all in reasonable detail and stating in comparativeform the respective figures for the corresponding date and period in thepreceding fiscal year, prepared in accordance with generally acceptedaccounting principles, consistently applied, and accompanied by the auditopinion of FIFSG’s independent accountants (which shall be a nationallyrecognized independent public accounting firm) and by the certificate specifiedin Section 2.02(e) hereof.

 

(ii)                                  *Quarterly Financial Statements. *Assoon as available, and in any event within 90 days after each of the firstthree fiscal quarters of each fiscal year of FIFSG, the unaudited consolidatedbalance sheets of FIFSG and its subsidiaries as of the end of such fiscalquarter and the related unaudited consolidated statements of income, changes inshareholders’ equity and cash flows for such fiscal quarter, all in reasonabledetail and stating in comparative form the respective figures for thecorresponding date and period in the preceding fiscal year, prepared inaccordance with generally accepted accounting principles, consistently applied,and accompanied by the certificate specified in Section 2.02(e) hereof.

 

(iii)                               *Initial and Continuing Reports*. On or before the Closing Date, the Servicer will provide the Insurer acopy of the magnetic tape to be delivered to the Indenture Trustee on theClosing Date setting forth as to each Contract, the information required underthe definition of “Contract Schedule” in Section 1.1 of the Sale andAllocation Agreement.  Thereafter, theServicer shall deliver to the Insurer not later than 12:00 noon,New York City time, on each Determination Date the report required bySection 3.8 of the Sale and Allocation Agreement.

 

(iv)                              *Computer Diskette. *Beginning in December 2003, theServicer will deliver to the Insurer on a monthly basis, a computer diskette orother electronic file in a format acceptable to the Insurer, containing theinformation provided to the Insurer pursuant to clause (iii) of thissubsection 2.02(c) and also containing information similar to theinformation provided in the Contract

 

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Schedule deliveredto the Indenture Trustee pursuant to the Sale and Allocation Agreement anddescribed in Schedule 1 of the Sale and Allocation Agreement.

 

(v)                                 *Certain Information*.  Upon thereasonable request of the Insurer, the Servicer and the Seller shall promptlyprovide copies of any requested proxy statements, financial statements, reportsand registration statements which the Servicer or the Seller files with, ordelivers to, the Commission or any national securities exchange.

 

(vi)                              *Other Information*.  Promptlyupon receipt thereof, copies of all schedules, list of contracts, financialstatements or other similar reports delivered to or by the Servicer, the Selleror the Depositor pursuant to the terms of the Transaction Documents and,promptly upon request, such other data as the Insurer may reasonablyrequest.  The Seller agrees, in theevent of any merger, consolidation or asset transfer of the Seller as describedin Section 4.3 of the Sale and Allocation Agreement, to deliver thecertificates and opinions described therein to the Insurer.

 

The Insurer agrees that it and its agents, accountants and attorneysshall keep confidential all financial statements, reports and other informationdelivered by the Servicer, the Seller or the Depositor pursuant to thisSection 2.02(c) to the extent provided in Section 2.02(f) hereof.

 

(d)                                 *The Depositor Shareholder Meetings. *The Depositor shall have annual shareholder meetingsand at least annual board of director meetings and shall prepare income andfranchise tax returns as appropriate. The Depositor shall deliver to the Insurer copies of the minutes of suchmeetings no later than April 30 of each year and such tax returns promptlyupon filing but in no event later than August 31 of each year, beginningin 2004.

 

(e)                                  *Compliance Certificate*.  The Servicerand the Seller shall deliver to the Insurer, concurrently with the delivery ofthe financial statements required pursuant to Sections 2.02(c)(i) and (ii)hereof, one or more certificates signed by an officer of the Servicer and anofficer of the Seller authorized to execute such certificates on behalf of theServicer and the Seller stating that:

 

(i)                                     a review of the Servicer’s performanceunder the Transaction Documents during such period has been made under suchofficer’s supervision;

 

(ii)                                  to the best of such individual’sknowledge following reasonable inquiry, no Default or Event of Default hasoccurred, or if a Default or Event of Default has occurred, specifying thenature thereof and, if the Servicer has a right to cure pursuant toSection 5.1 of the Indenture, stating in reasonable detail (including, ifapplicable, any supporting calculations) the steps, if any, being taken by theServicer to cure such Default or Event of Default or to otherwise

 

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comply with the terms ofthe agreement to which such Default or Event of Default relates;

 

(iii)                               the attached financial statementssubmitted in accordance with Sections 2.02(c)(i) or (ii) hereof, as the casemay be, are complete and correct in all material respects and present fairlythe financial condition and results of operations of FIFSG as of the dates andfor the periods indicated, in accordance with generally accepted accountingprinciples consistently applied; and

 

(iv)                              the Servicer has in full force and effecta blanket fidelity bond (or direct insurer bond) and an errors and omissionsinsurance policy in accordance with the terms and requirements ofSection 2.25 of the Servicing Agreement.

 

(f)                                    *Access to Records; Discussions With Officers and Accountants*. On an annual basis, or upon the occurrence of a Material Adverse Change,the Servicer and the Seller shall, upon the reasonable request of the Insurer,permit the Insurer or its authorized agents (provided that no Insurer Defaultshall have occurred and is continuing):

 

(i)                                     to inspect, audit and make copies ofabstracts from, the books and records of the Servicer and of the Seller as theymay relate to the Obligations, the Contracts, the obligations of the Serviceror of the Seller under the Transaction Documents, and the Transaction;

 

(ii)                                  to discuss the affairs, finances and accountsof the Servicer or of the Seller with the chief operating officer and the chieffinancial officer of the Servicer or of the Seller, as the case may be; and

 

(iii)                               with the Servicer’s or the Seller’sconsent, as applicable, which consent shall not be unreasonably withheld, todiscuss the affairs, finances and accounts of the Servicer or the Seller withthe Servicer’s or the Seller’s independent accountants, provided that anofficer of the Servicer or the Seller shall have the right to be present duringsuch discussions.

 

Such inspectionsand discussions shall be conducted during normal business hours and shall notunreasonably disrupt the business of the Servicer or the Seller.  The books and records of the Servicer shallbe maintained at the address of the Servicer designated herein for receipt ofnotices, unless the Servicer shall otherwise advise the parties hereto inwriting, and the books and records of the Seller shall be maintained at theaddress of the Seller designated herein for receipt of notices, unless theSeller shall otherwise advise the parties hereto in writing.

 

The Insurer agreesthat it and its shareholders, directors, agents, accountants and attorneysshall keep confidential any matter of which it becomes aware through suchinspections or discussions (unless readily available from public sources),except as may be otherwise required by regulation, law or court order orrequested by appropriate governmental authorities or as necessary to preserveits rights or security under or to

 

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enforce the Transaction Documents, provided that the foregoing shallnot limit the right of the Insurer to make such information available to itsregulators, securities rating agencies, reinsurers, credit and liquidityproviders, counsel and accountants.

 

(g)                                 *Notice of Material Events*.  TheServicer, the Seller and the Depositor shall be obligated (which obligationshall be satisfied as to each if performed by the Servicer, the Seller or theDepositor) promptly to inform the Insurer in writing of the occurrence of anyof the following to the extent any of the following relate to it:

 

(i)                                     the submission of any claim or theinitiation or threat of any legal process, litigation or administrative orjudicial investigation, or rule making or disciplinary proceeding by or againstthe Servicer, the Seller or the Depositor that (A) could be required to bedisclosed to the Commission or to the Servicer’s, the Seller’s or theDepositor’s shareholders or (B) could result in a Material Adverse Changewith respect to the Servicer, the Seller or the Depositor, or the promulgationof any proceeding or any proposed or final rule which would result in aMaterial Adverse Change with respect to the Servicer, the Seller or the Depositor;

 

(ii)                                  the submission of any claim or theinitiation or threat of any legal process, litigation or administrative orjudicial investigation in any federal, state or local court or before anyarbitration board, or any such proceeding threatened by any government agency,which, if adversely determined, would have a material adverse effect on theIssuer, the Owners or the Insurer;

 

(iii)                               any change in the location of theServicer’s, the Seller’s or the Depositor’s principal office, jurisdiction oforganization, legal name as indicated on the public records of the Servicer’s,the Seller’s or the Depositor’s jurisdiction of organization which shows theServicer, the Seller, or the Depositor to be organized, any change in thelocation of the Servicer’s, the Seller’s or the Depositor’s books and records,or any change in the location of the Corporate Trust Office (as defined in theSale and Allocation Agreement), or any change in the account number or locationof the Collection Account, the Note Payment Account, the Certificate PaymentAccount or the Reserve Account;

 

(iv)                              the occurrence of any Event of ServicingTermination, Default or Event of Default or of any Material Adverse Change;

 

(v)                                 the commencement of any proceedings by oragainst the Servicer, the Seller or the Depositor under any applicablebankruptcy, reorganization, liquidation, rehabilitation, insolvency or othersimilar law now or hereafter in effect or of any proceeding in which areceiver, liquidator, conservator, trustee or similar official shall have been,or may be, appointed or requested for the Servicer, the Seller or the Depositoror any of its or their assets; or

 

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(vi)                              the receipt of notice that (A) theServicer, the Seller or the Depositor is being placed under regulatorysupervision, (B) any license, permit, charter, registration or approvalnecessary for the conduct of the Servicer’s, the Seller’s or the Depositor’sbusiness is to be, or may be suspended or revoked, or (C) the Servicer,the Seller or the Depositor is to cease and desist any practice, procedure orpolicy employed by the Servicer, the Seller or the Depositor in the conduct ofits business, and such cessation may result in a Material Adverse Change withrespect to the Servicer, the Seller or the Depositor.

 

(vii)                           The occurrence of any merger,consolidation or asset transfer of the Seller as described in Section 4.3of the Sale and Allocation Agreement.

 

(h)                                 *Financing Statements and Further Assurances*. The Seller shall cause the Issuer to file all necessary financingstatements or other instruments, and any amendments or continuation statementsrelating thereto, necessary to be kept and filed in such manner and in suchplaces as may be required by law to preserve and protect fully the interest ofthe Indenture Trustee in the Trust.  TheServicer, the Seller and the Depositor shall, upon the request of the Insurer,from time to time, execute, acknowledge and deliver, or cause to be executed,acknowledged and delivered, within ten days of such request, such amendmentshereto and such further instruments and take such further action as may bereasonably necessary to effectuate the intention, performance and provisions ofthe Transaction Documents.  In addition,each of the Servicer, the Seller and the Depositor agrees to cooperate withS&P and Moody’s in connection with any review of the Transaction that maybe undertaken by S&P and Moody’s after the date hereof and to provide allinformation reasonably requested by S&P or Moody’s.

 

(i)                                     *Maintenance of Licenses*.  TheServicer, the Seller and the Depositor, respectively, or any successors thereofshall maintain or cause to be maintained all licenses, permits, charters andregistrations which are material to the conduct of its business.

 

(j)                                     *Redemption of Obligations*.  TheServicer, the Seller and the Depositor shall instruct the Indenture Trustee,upon redemption or payment of all of the Obligations pursuant to the Indentureor otherwise, to furnish to the Insurer a notice of such redemption and, upon aredemption or payment of all of the Obligations, to surrender the Policy to theInsurer for cancellation.

 

(k)                                  *Disclosure Document*.  EachOffering Document delivered with respect to the Obligations shall clearlydisclose that the Policy is not covered by the property/casualty insurancesecurity fund specified in Article 76 of the New York Insurance Law.

 

(l)                                     *Servicing of Contracts*.  The Servicershall perform such actions with respect to the Contracts as are required by orprovided for in the Servicing Agreement. The Servicer will provide the Insurer with written notice of any changeor amendment to any Transaction Document as currently in effect.

 

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(m)                               *Maintenance of Trust*.  On or beforeeach March 31, beginning in 2005, so long as any of the Obligations areoutstanding, and promptly after the execution and delivery of each amendment toany financing statement, the Servicer shall furnish to the Insurer and theIndenture Trustee an officers’ certificate and an opinion of counsel asdescribed in Section 3.6(b) of the Indenture, either stating that suchaction has been taken with respect to the recording, filing, rerecording andrefiling of any financing statements and continuation statements as isnecessary to maintain the interest of the Indenture Trustee created by theIndenture with respect to the Trust and reciting the details of such action orstating that no such action is necessary to maintain such interests.  Such officers’ certificate shall alsodescribe the recording, filing, rerecording and refiling of any financingstatements and continuation statements that will be required to maintain theinterest of the Indenture Trustee in the Trust until the date such nextofficers’ certificate is due.  TheServicer will use its best efforts to cause any necessary recordings or filingsto be made with respect to the Trust.

 

(n)                                 *Seller’s Indemnity*. Notwithstanding anything in subsection 3.03 hereof, the Sellershall pay to the Insurer an amount equal to any amount paid by the Insurerbecause of the Servicer’s failure to deposit into the Collection Account anyamount required to be so deposited by it pursuant to the Servicing Agreement orthe Sale and Allocation Agreement, together with interest on any and allamounts remaining unreimbursed (to the extent permitted by law, if in respectto any unreimbursed amounts representing interest) from the date such amountsbecame due until paid in full (after as well as before judgment) at a rate of interestequal to the Late Payment Rate Notwithstanding anything herein to the contrary,the Seller shall have no obligation to guaranty any amounts representing (i)recourse for uncollectible Contracts and (ii) any principal or interest on anyNote.

 

(o)                                 *Closing Documents*.  TheServicer, the Seller and the Depositor shall provide or cause to be provided tothe Insurer a bound volume or volumes of the Transaction Documents and anexecuted original copy of each document executed in connection with the Transactionwithin 60 days after the date of closing. Upon the reasonable request of the Insurer, the Servicer, the Seller andthe Depositor shall provide or cause to be provided to the Insurer a copy ofeach of the Transaction Documents on computer diskette, in a format acceptableto the Insurer;  provided, however, thatthe failure to so deliver shall not constitute (i) an Event of Defaulthereunder or under the Indenture or (ii) an Event of Servicing Termination.

 

(p)                                 *Preference Payments*.  With respectto any Preference Amount (as defined in the Policy), the Servicer shall provideto the Insurer upon the request of the Insurer:

 

(i)                                     a certified copy of the finalnonappealable order of a court having competent jurisdiction ordering therecovery by a trustee in bankruptcy as voidable preference amounts included inprevious distributions under Section 3.3 of the Sale and AllocationAgreement to any Owner pursuant to the United States Bankruptcy Code,11 U.S.C. §§ 101 et seq., as amended (the “Bankruptcy Code”);

 

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(ii)                                  an opinion of counsel reasonablysatisfactory to the Insurer, and upon which the Insurer shall be entitled torely, stating that such order is final and is not subject to appeal;

 

(iii)                               an assignment in such form as reasonablyrequired by the Insurer, irrevocably assigning to the Insurer all rights andclaims of the Servicer, the Indenture Trustee and any Owner relating to orarising under the Contracts against the debtor which made such preference paymentor otherwise with respect to such preference amount; and

 

(iv)                              appropriate instruments to effect (whenexecuted by the affected party) the appointment of the Insurer as agent for theIndenture Trustee and any Owner in any legal proceeding relating to suchpreference payment being in a form satisfactory to the Insurer.

 

(q)                                 *Seller To Hold Common Stock of Depositor. *The Seller shall hold, either directly or indirectly,all of the common stock of the Depositor during the Term of the InsuranceAgreement.  The Seller shall not sell,pledge or otherwise transfer such stock without the prior written consent ofthe Insurer.

 

(r)                                    Reserved.

 

(s)                                  *Purchase Option.*  In the eventthe Depositor exercises its purchase option pursuant to Section 5.16 ofthe Sale and Allocation Agreement, the Depositor shall promptly deliver to theInsurer the documents described in Section 5.16 of the Sale and AllocationAgreement.

 

**Section 2.03.****  Negative Covenantsof the Servicer, the Seller and the Depositor**.  TheServicer, the Seller and the Depositor hereby agree that during the Term of theInsurance Agreement, unless the Insurer shall otherwise expressly consent inwriting:

 

(a)                                  *Impairment of Rights*.  None of theServicer, the Seller or the Depositor shall take any action, or fail to takeany action, if reasonably requested by the Insurer at a time when no InsurerDefault or Insurer Insolvency exists or if such action or failure to takeaction may result in a material adverse change as described in clause (ii)of the definition of Material Adverse Change with respect to the Servicer, theSeller or the Depositor, or may interfere with the enforcement of any rights ofthe Insurer under or with respect to the Transaction Documents.  The Servicer, the Seller or the Depositorshall give the Insurer written notice of any such action or failure to act onthe earlier of: (i) the date upon which any publicly available filing orrelease is made with respect to such action or failure to act or(ii) promptly prior to the date of consummation of such action or failureto act.  The Servicer, the Seller andthe Depositor shall furnish to the Insurer all information requested by it thatis reasonably necessary to determine compliance with this Section (a).

 

(b)                                 *Adverse Selection Procedure*.  The Servicer,the Seller and the Depositor will not use any Adverse Selection Procedure inselecting Contracts to be transferred to

 

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the Indenture Trusteefrom the outstanding contracts that qualify under the Sale and AllocationAgreement for inclusion in the Trust.

 

(c)                                  *Waiver, Amendments, Assignments, Etc*. Except as may be otherwise expressly set forth in the TransactionDocuments, none of the Servicer, the Seller or the Depositor shall waive,modify or amend, or consent to any waiver, modification or amendment of, any ofthe terms, provisions or conditions of any of the Transaction Documents withoutthe prior written consent of the Insurer; and (if no Insurer Default or InsurerInsolvency exists) none of the Servicer, the Seller or the Depositor shallassign any of the Transaction Documents to which it is a party without theprior written consent of the Insurer.

 

(d)                                 *Contracts; Charge-off Policy*.  Except asotherwise permitted in the Sale and Allocation Agreement or the ServicingAgreement, the Servicer, the Seller and the Depositor shall not alter or amendany Contract, their respective collection policies or their respectivecharge-off policies in a manner that materially adversely affects the Insurerunless the Insurer shall have previously given its consent, which consent shallnot be withheld unreasonably.

 

**Section 2.04.****  Representations andWarranties of the Issuer. **As of the Date of Issuance, the Issuerrepresents, warrants and covenants as follows:

 

(a)                                  *Due Organization and Qualification*. The Issuer is a statutory trust and is duly organized, validly existingand in good standing under the laws of the State of Delaware.  The Issuer is duly qualified to do business,is in good standing and has obtained all licenses, permits, charters,registrations and approvals (together, “approvals”) necessary for the conductof its business as currently conducted and as described in the OfferingDocument and the performance of its obligations under the Transaction Documentsto which it is a party, in each jurisdiction in which the failure to be soqualified or to obtain such approvals would render any Transaction Document towhich it is a party unenforceable in any respect or would have a materialadverse effect upon the Transaction, the Owner or the Insurer.

 

(b)                                 *Power and Authority*.  The Issuerhas all necessary power and authority to conduct its business as currentlyconducted and, as described in the Offering Document, to execute, deliver andperform its obligations under the Transaction Documents to which it is a partyand to consummate the Transaction.

 

(c)                                  *Due Authorization*.  Theexecution, delivery and performance of the Transaction Documents by the Issuerhave been duly authorized by all necessary corporate action and do not requireany additional approvals or consents, or other action by or any notice to orfiling with any Person, including, without limitation, any governmental entityor the Issuer’s stockholders, which have not previously been obtained or given bythe Issuer.

 

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(d)                                 *Noncontravention*.  Neither theexecution and delivery of the Transaction Documents by the Issuer, theconsummation of the Transaction contemplated thereby nor the satisfaction ofthe terms and conditions of the Transaction Documents:

 

(i)                                     conflicts with or results in any breachor violation of any provision of the Trust Agreement or any law, rule,regulation, order, writ, judgment, injunction, decree, determination or awardcurrently in effect having applicability to the Issuer or any of its materialproperties, including regulations issued by an administrative agency or othergovernmental authority having supervisory powers over the Issuer;

 

(ii)                                  constitutes a default by the Issuer underor a breach of any provision of any loan agreement, mortgage, indenture orother agreement or instrument to which the Issuer is a party or by which any ofits properties, which are individually or in the aggregate material to theIssuer, is or may be bound or affected; or

 

(iii)                               results in or requires the creation ofany lien upon or in respect of any assets of the Issuer except as contemplatedby the Transaction Documents.

 

(e)                                  *Legal Proceedings*.  There is noaction, proceeding or investigation by or before any court, governmental oradministrative agency or arbitrator against or affecting the Issuer or anyproperties or rights of the Issuer pending or, to the Issuer’s knowledge afterreasonable inquiry, threatened, which, in any case, could reasonably be expectedto result in a Material Adverse Change with respect to the Issuer.

 

(f)                                    *Valid and Binding Obligations*.  TheObligations, when executed, authenticated and issued in accordance with theIndenture and the Transaction Documents (other than the Obligations), whenexecuted and delivered by the Issuer, will constitute the legal, valid andbinding obligations of the Issuer enforceable in accordance with theirrespective terms, except as such enforceability may be limited by bankruptcy,insolvency, reorganization, moratorium or other similar laws affectingcreditors’ rights generally and general equitable principles and public policyconsiderations as to rights of indemnification for violations of federalsecurities laws.  The Issuer will not atany time in the future deny that the Transaction Documents constitute thelegal, valid and binding obligations of the Issuer.

 

(g)                                 *Compliance With Law, Etc*.  No practice,procedure or policy employed, or proposed to be employed, by the Issuer in theconduct of its business violates any law, regulation, judgment, agreement,order or decree applicable to it that, if enforced, could reasonably beexpected to result in a Material Adverse Change with respect to theIssuer.  The Issuer is not in breach ofor default under any applicable law or administrative regulation of itsrespective jurisdiction or incorporation, or any department, division, agencyor instrumentality thereof or of the United States or any applicablejudgment or decree or any loan agreement, note, resolution, certificate,agreement or other instrument to which the Issuer is a party or is otherwisesubject which, if enforced, would have a

 

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material adverse effecton the ability of the Issuer, to perform its obligations under the TransactionDocuments.

 

(h)                                 *Compliance With Securities Laws*. The offer and sale of the Obligations comply in all material respectswith all requirements of law, including all registration requirements ofapplicable securities laws.  Withoutlimitation of the foregoing, the Offering Document does not contain any untruestatement of a material fact and does not omit to state a material factnecessary to make the statements made therein, in light of the circumstancesunder which they were made, not misleading; provided, however, that norepresentation is made with respect to the information in the Offering Documentset forth under the heading “Description of the Insurer and the InsurancePolicy” or the consolidated financial statements of the Insurer incorporated byreference in the Offering Document; and provided, further, that norepresentation is made with respect to the statements set forth in the lastparagraph of the cover page of the Offering Document regarding the delivery ofthe Obligations and the disclosure under the heading “Plan of Distribution” inthe Offering Document.   Neither theoffer nor the sale of the Obligations has been or will be in violation of theSecurities Act or any other federal or state securities laws.

 

(i)                                     *Taxes*.  The Issuer has filed prior tothe date hereof all federal and state tax returns that are required to be filedand paid all taxes, including any assessments received by them that are notbeing contested in good faith, to the extent that such taxes have become due,except for any failures to file or pay that, individually or in the aggregate,would not result in a Material Adverse Change with respect to the Issuer.

 

(j)                                     *Transaction Documents*.  Each of therepresentations and warranties of the Issuer contained in the TransactionDocuments is true and correct in all material respects, and the Issuer herebymakes each such representation and warranty to, and for the benefit of, theInsurer as if the same were set forth in full herein; provided that the remedyfor any breach of this paragraph shall be limited to the remedies specified inthe related Transaction Document or in this Insurance Agreement.

 

(k)                                  *Solvency*.  The Issueris solvent and will not be rendered insolvent by the Transaction and, after givingeffect to the Transaction, the Issuer will not be left with an unreasonablysmall amount of capital with which to engage in its respective business, nordoes the Issuer intend to incur, or believe that it has incurred, debts beyondits ability to pay as they mature.  TheIssuer does not contemplate the commencement of insolvency, bankruptcy,liquidation or consolidation proceedings or the appointment of a receiver,liquidator, conservator, trustee or similar official in respect of the Issueror any of its assets.

 

(l)                                     *Principal Place of Business*.  Theprincipal place of business of the Issuer is located in Wilmington, Delawareand the Issuer is a statutory trust organized under the laws of the State ofDelaware.  “First Investors Auto OwnerTrust 2003-A” is the correct legal name of the Issuer indicated on the publicrecords of the Issuer’s jurisdiction of organization which shows the Issuer tobe organized.

 

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(m)                               *Investment Company Act*.  The Issueris not an “investment company,” or an “affiliated person” of, or “promoter” or“principal underwriter” for, an “investment company,” as such terms are definedin the Investment Company Act. The Issuer is not required to be registered asan “investment company” under the Investment Company Act.

 

(n)                                 *No Consents*.  Noauthorization or approval or other action by, and no notice to or filing with,any Person, including, without limitation, any governmental entity orregulatory body, is required for the due execution, delivery and performance bythe Issuer of the Transaction Documents or any other material document orinstrument to be delivered thereunder, except (in each case) such as have beenobtained or the failure of which to be obtained would not be reasonably likelyto have a material adverse effect on the Transaction.

 

(o)                                 *No Material Event of Default*.  There is nomaterial event of default on the part of the Issuer under any agreementinvolving financial obligations which would materially adversely impact thefinancial conditions or operations of the Trust or its obligations under anydocument associated with this Transaction.

 

(p)                                 *Opinion Facts and Assumptions*. The opinion Facts and Assumptions insofar as theyrelate to the Issuer are true and correct as of the Date of Issuance.

 

**Section 2.05.****  AffirmativeCovenants of the Issuer**.  The Issuer hereby agrees thatduring the Term of the Insurance Agreement, unless the Insurer shall otherwiseexpressly consent in writing:

 

(a)                                  *Compliance With Agreements and Applicable Laws*. The Issuer shall not be in default under the Transaction Documents andshall comply with all material requirements of any law, rule or regulationapplicable to it.  Except in accordancewith the terms of the Transaction Documents, the Issuer shall not agree to orconsent to any waiver of, any material amendment to, or any modification of theterms of any Transaction Documents unless the Insurer shall have given itsprior written consent; provided, however, that if an Insurer Default has occurredand is continuing, the Issuer need not obtain the consent of the Insurer forany waiver, amendment, or modification which is not materially adverse to theInsurer.

 

(b)                                 *Maintain Existence*.  The Issuerand its successors and assigns shall maintain their existence and shall at alltimes continue to be duly organized under the laws of its respectivejurisdiction and duly qualified and duly authorized and shall conduct itsbusiness in accordance with the terms of its organizational documents.

 

(c)                                  *Notice of Material Events*.  The Issuershall be obligated promptly to inform the Insurer in writing of the occurrenceof any of the following to the extent any of the following relate to it and tothe extent that it receives actual notice of the occurrence of any of thefollowing events:

 

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(i)                                     the submission of any claim or theinitiation or threat of any legal process, litigation or administrative orjudicial investigation, or rule making or disciplinary proceeding by or againstthe Issuer that (A) could be required to be disclosed to the Commission orto the Issuer’s owners or (B) could result in a Material Adverse Change with respect to theIssuer or  the promulgation of anyproceeding or any proposed or final rule which would result in a MaterialAdverse Change with respect to the Issuer;

 

(ii)                                  any change in the location of theIssuer’s or the Owner Trustee’s principal place of business, jurisdiction oforganization, legal name as indicated on the public records of the Issuer’s orthe Owner Trustee’s jurisdiction of organization which shows the Issuer’s orthe Owner Trustee’s to be organized or any change in the location of theIssuer’s books and records;

 

(iii)                               the occurrence of any Default or Event ofDefault or of any Material Adverse Change;

 

(iv)                              the commencement of any proceedings by oragainst the Issuer under any applicable bankruptcy, reorganization,liquidation, rehabilitation, insolvency or other similar law now or hereafterin effect or of any proceeding in which a receiver, liquidator, conservator,trustee or similar official shall have been, or may be, appointed or requestedfor the Issuer or any of its assets; or

 

(v)                                 the receipt of notice that (A) theIssuer is being placed under regulatory supervision, (B) any license,permit, charter, registration or approval necessary for the conduct of theIssuer’s business is to be, or may be suspended or revoked, or (C) theIssuer is to cease and desist any practice, procedure or policy employed by theIssuer in the conduct of its business, and such cessation may result in aMaterial Adverse Change with respect to the Issuer.

 

(d)                                 *Financing Statements and Further Assurances*. To the extent provided in the Indenture, the Issuer will cause to befiled all necessary financing statements or other instruments, and anyamendments or continuation statements relating thereto, necessary to be keptand filed in such manner and in such places as may be required by law topreserve and protect fully the interest of the Indenture Trustee.  The Issuer shall, upon the request of theInsurer, from time to time, execute, acknowledge and deliver, or cause to beexecuted, acknowledged and delivered, within ten days of such request,such amendments hereto and such further instruments and take such furtheraction as may be reasonably necessary to effectuate the intention, performanceand provisions of the Transaction Documents to which it is a party.  In addition, the Issuer agrees to cooperatewith S&P and Moody’s in connection with any review of the Transaction thatmay be undertaken by S&P and Moody’s after the date hereof.

 

(e)                                  *Maintenance of Licenses*.  The Issuer,or any successors thereof, shall maintain all licenses, permits, charters andregistrations which are material to the conduct of its business.

 

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(f)                                    *Third-Party Beneficiary*.  The Issueragrees that the Insurer shall have all rights of a third-party beneficiary inrespect of each Transaction Document and hereby incorporates and restates itsrepresentations, warranties and covenants as set forth therein for the benefitof the Insurer.

 

(g)                                 *Tax Matters. *The Issuer will take all actionsnecessary to ensure that the Issuer is treated as a trust for federal and stateincome tax purposes and not as an association (or publicly traded partnership),taxable as a corporation.

 

(h)                                 *Financial Statements; Accountants’ Reports; OtherInformation*.  The Issuer shall keep or cause to be kept in reasonable detail books and records ofaccount of its assets and business, including, but not limited to, books andrecords relating to the Transaction. The Issuer shall furnish or cause to be furnished to the Insurerpromptly upon receipt thereof, copies of all schedules, opinions of counsel oraccountants, officer’s certificates, financial statements or other similarreports delivered to or by the Issuer pursuant to the terms of the TransactionDocuments and, promptly upon request, such other data as the Insurer mayreasonably request.

 

(i)                                     *Access to Records; Discussions With Officers and Accountants*. On an annual basis, or upon the occurrence of a Material Adverse Change,the Issuer shall, upon the reasonable request of the Insurer, at its expense,permit the Insurer or its authorized agents:

 

(i)                                     to inspect the books and records of theIssuer as they may relate to the Obligations, the obligations of the Issuerunder the Transaction Documents, and the Transaction;

 

(ii)                                  to discuss the affairs, finances andaccounts of the Issuer; and

 

(iii)                               with the Issuer’s consent, as the casemay be, which consent shall not be unreasonably withheld, to discuss theaffairs, finances and accounts of the Issuer with the Issuer’s independentaccountants, provided that a representative of the Seller or the Issuer  shall have the right to be present duringsuch discussions.

 

Such inspections and discussions shall beconducted during normal business hours and shall not unreasonably disrupt thebusiness of the Issuer.  The books and records of the Issuer will bemaintained at the address of the Issuer designated herein for receipt ofnotices, unless the Issuer shall otherwise advise the parties hereto inwriting.

 

The Insurer agrees that it and itsshareholders, directors, agents, accountants and attorneys shall keep confidentialany matter of which it becomes aware through such inspections or discussions(unless readily available from public sources), except as may be otherwiserequired by regulation, law or court order or requested by appropriategovernmental authorities or as necessary to preserve its rights or securityunder or to enforce the Transaction Documents, provided that the foregoingshall not limit the right of the Insurer to make such information available toits regulators, securities rating agencies, reinsurers, credit and liquidityproviders, counsel and accountants.

 

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**Section 2.06.****  Negative Covenantsof the Issuer.*** *The Issuer hereby agrees that during the Term of theInsurance Agreement, unless the Insurer shall otherwise expressly consent inwriting:

 

(a)                                  *Impairment of Rights*.  The Issuershall not take any action, or fail to take any action, if such action orfailure to take action may result in a material adverse change as described inclause (ii) of the definition of Material Adverse Change with respect tothe Issuer, or may interfere with the enforcement of any rights of the Insurerunder or with respect to the Transaction Documents.  The Issuer shall give the Insurer written notice of any suchaction or failure to act on the earlier of: (i) the date upon which anypublicly available filing or release is made with respect to such action orfailure to act or (ii) promptly prior to the date of consummation of suchaction or failure to act.  The Issuershall furnish to the Insurer all information requested by it that is reasonablynecessary to determine compliance with this paragraph.

 

(b)                                 *Waiver, Amendments, Etc*.  Except uponthe prior written consent of the Insurer which consent shall not unreasonablybe withheld, the Issuer shall not allow the transfer, modification oramendment, nor consent to any transfer, modification or amendment of theCertificate of Trust unless such amendment is required under the DelawareBusiness Trust Act.

 

(c)                                  *Restrictions on Liens. *The Issuershall not, except as contemplated by the Transaction Documents, (i) create,incur or suffer to exist, or agree to create, incur or suffer to exist, orconsent to cause or permit in the future (upon the happening of a contingencyor otherwise) the creation, incurrence or existence of any lien of theContracts or (ii) sign or file under the Uniform Commercial Code of anyjurisdiction any financing statement which names the Issuer as a debtor, orsign any security agreement authorizing any secured party thereunder to filesuch financing statement, with respect to the Contracts.

 

(d)                                 *Successors.*  The Issuershall not remove or replace, or cause to be removed or replaced, the Servicer,the Indenture Trustee or the Owner Trustee without the prior written approvalof the Insurer.

 

(e)                                  *Subsidiaries.*  The Issuershall not form, or cause to be formed, any subsidiaries.

 

(f)                                    *No Mergers*.  The Issuershall not consolidate with or merge into any Person or transfer all or anymaterial amount of its assets to any Person, liquidate or dissolve except aspermitted by the Trust Agreement and as contemplated by the TransactionDocuments.

 

(g)                                 *Other Activities*.  The Issuershall not (i) sell, pledge, transfer exchange or otherwise dispose of any ofits assets except as permitted under the Transaction Documents; or (ii) engagein any business or activity except as contemplated by the Transaction Documentsand as permitted by the Trust Agreement.

 

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(h)                                 *Trust Agreement*.  The Issuershall not amend the Trust Agreement without the prior written consent of theInsurer.

 

**Section 2.07.****  Representations,Warranties and Covenants of Indenture Trustee and Back-up Servicer.** The Indenture Trustee and the Back-up Servicer represents and warrantsto, as of the Date of Issuance, and covenants with the other parties hereto asfollows:

 

(a)                                  *Due Organization and Qualification*. The Indenture Trustee and the Back-up Servicer are each a nationalbanking association or corporation, duly organized, validly existing and ingood standing under the laws of its respective jurisdiction ofincorporation.  Each of the IndentureTrustee and the Back-up Servicer is duly qualified to do business, is in goodstanding and has obtained all licenses, permits, charters, registrations andapprovals (together, “approvals”) necessary for the conduct of its business ascurrently conducted and as described in the Offering Document and theperformance of its obligations under the Transaction Documents, in each jurisdictionin which the failure to be so qualified or to obtain such approvals wouldrender any Transaction Document unenforceable in any respect or would have amaterial adverse effect upon the Transaction, the Owners or the Insurer.

 

(b)                                 *Due Authorization*.  Theexecution, delivery and performance of the Transaction Documents by theIndenture Trustee and the Back-up Servicer have been duly authorized by allnecessary corporate action and do not require any additional approvals orconsents of, or other action by or any notice to or filing with any Person,including, without limitation, any governmental entity or the IndentureTrustee’s or the Back-up Servicer’s stockholders, which have not previouslybeen obtained or given by the Indenture Trustee or the Back-up Servicer, asapplicable.

 

(c)                                  *Noncontravention*.  None of theexecution and delivery of the Transaction Documents by the Indenture Trustee orthe Back-up Servicer, the consummation of the Transaction contemplated therebyor the satisfaction of the terms and conditions of the Transaction Documents:

 

(i)                                     conflicts with or results in any breachor violation of any provision of the certificate or articles of incorporationor bylaws of the Indenture Trustee or the Back-up Servicer or any law, rule,regulation, order, writ, judgment, injunction, decree, determination or awardcurrently in effect having applicability to the Indenture Trustee or theBack-up Servicer or any of their material properties, including regulationsissued by an administrative agency or other governmental authority havingsupervisory powers over the Indenture Trustee or the Back-up Servicer;

 

(ii)                                  constitutes a default by the IndentureTrustee or the Back-up Servicer under or a breach of any provision of any loanagreement, mortgage, indenture or other agreement or instrument to which theIndenture Trustee or the Back-up Servicer is a party or by which any of theirrespective properties, which

 

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are individually or inthe aggregate material to the Indenture Trustee or the Back-up Servicer, is ormay be bound or affected; or

 

(iii)                               results in or requires the creation ofany lien upon or in respect of any assets of the Indenture Trustee or theBack-up Servicer, except as contemplated by the Transaction Documents.

 

(d)                                 *Legal Proceedings*.  There is noaction, proceeding or investigation by or before any court, governmental oradministrative agency or arbitrator against or affecting the Indenture Trustee,the Back-up Servicer, or any of their subsidiaries, or any properties or rightsof the Indenture Trustee, the Back-up Servicer or any of their subsidiaries,pending or, to the Indenture Trustee’s or the Back-up Servicer’s knowledgeafter reasonable inquiry, threatened, which, in any case, could reasonably beexpected to result in a Material Adverse Change with respect to the IndentureTrustee or the Back-up Servicer.

 

(e)                                  *Valid and Binding Obligations and Agreements*. The Obligations, when executed, authenticated and issued in accordancewith the Indenture, and the Transaction Documents (other than the Obligations),to which they are parties when executed and delivered by the Indenture Trusteeand the Back-up Servicer, will constitute the legal, valid and bindingobligations of the Indenture Trustee and the Back-up Servicer, as applicable,enforceable in accordance with their respective terms, except as suchenforceability may be limited by bankruptcy, insolvency, reorganization,moratorium or other similar laws affecting creditors’ rights generally andgeneral equitable principles. Neither the Indenture Trustee nor the Back-upServicer will at any time in the future deny that the Transaction Documentsconstitute the legal, valid and binding obligations of the Indenture Trusteeand the Back-up Servicer, as applicable.

 

(f)                                    *Compliance With Law, Etc*.  No practice,procedure or policy employed, or proposed to be employed, by the IndentureTrustee or the Back-up Servicer in the conduct of their business violates anylaw, regulation, judgment, agreement, order or decree applicable to any theIndenture Trustee or the Back-up Servicer that, if enforced, could reasonablybe expected to result in a Material Adverse Change with respect to theIndenture Trustee or the Back-up Servicer. Neither the Indenture Trustee nor the Back-up Servicer is in breach ofor in default under any applicable law or administrative regulation of itsrespective jurisdiction of organization, or any department, division, agency orinstrumentality thereof or of the United States or any applicable judgment ordecree or any loan agreement, note, resolution, certificate, agreement or otherinstrument to which the Indenture Trustee or the Back-up Servicer is a party oris otherwise subject which, if enforced, would have a material adverse effecton the ability of the Indenture Trustee or the Back-up Servicer, as the casemay be, to perform their respective obligations under the TransactionDocuments.

 

(g)                                 *Transaction Documents*.  Each of therepresentations and warranties of the Indenture Trustee and the Back-upServicer contained in the Transaction Documents is true and correct in allmaterial respects, and the Indenture Trustee and the Back-up 

 

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Servicer hereby makeseach such representation and warranty to, and for the benefit of, the Insureras if the same were set forth in full herein.

 

(h)                                 *Compliance and Amendments. *TheIndenture Trustee and the Back-up Servicer shall comply in all materialrespects with the terms and conditions of the Transaction Documents to which itis a party and the Indenture Trustee and the Back-up Servicer shall not agreeto any amendment to or modification of the terms of any of the TransactionDocuments to which it is a party unless the Insurer shall otherwise give itsprior written consent.

 

(i)                                     *Notices*.  TheIndenture Trustee shall promptly notify the Insurer of any merger,consolidation or asset transfer with respect to it as described inSection 6.9 of the Indenture.

 

**Section 2.08.****  Representations,Warranties and Covenants of Owner Trustee.**  The OwnerTrustee hereby represents and warrants as follows:

 

(a)                                  *Representations and Warranties. *Asof the Date of Issuance, each of the representations and warranties of theOwner Trustee set forth in the Transaction Documents is true and correct in allmaterial respects and the Owner Trustee makes each such representation andwarranty to, and for the benefit of, the Insurer as if the same were set forthin full herein.

 

(b)                                 *Compliance and Amendments.*  The OwnerTrustee shall comply in all material respects with the terms and conditions ofthe Transaction Documents to which it is a party and the Owner Trustee shallnot agree to any amendment to or modification of the terms of any of theTransaction Documents to which it is a party unless the Insurer shall otherwisegive its prior written consent.

 

(c)                                  *Furnishing of Documents; Notices*. The Owner Trustee hereby agrees to furnish to the Insurer the documentsdescribed in Section 7.2 of the Trust Agreement to the same extent asrequired with respect to the Depositor. The Owner Trustee shall provide the Insurer with prior written notice ofany merger, consolidation or asset transfer with respect to it as described inSection 10.4 of the Trust Agreement.

 

**Section 2.09.****  Negative Covenant ofthe Administrator**.  The Administrator shall not remove the OwnerTrustee pursuant to Section 10.2 of the Trust Agreement unless it hasobtained the prior written consent of the Insurer if no Insurer Default orInsurer Insolvency exists.

 

**ARTICLE III**THE POLICY; REIMBURSEMENT

** **

**Section 3.01.****  Issuance of thePolicy**.  The Insurer agrees to issue the Policy onthe Closing Date subject to satisfaction of the conditions precedent set forthbelow:

 

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(a)                                  *Payment of Initial Insurance Premium and Expenses*. The Insurer shall have been paid by the Servicer or the Seller, inaccordance with the terms of the Premium Side Letter Agreement, that portion ofa nonrefundable Insurance Premium payable on the Date of Issuance and theServicer shall agree to reimburse or pay directly other fees and expensesidentified in Section 3.02 hereof as payable.

 

(b)                                 *Transaction Documents*.  The Insurershall have received a fully executed copy of the Premium Side Letter Agreementand a copy of each of the Transaction Documents, in form and substancesatisfactory to the Insurer, duly authorized, executed and delivered by eachparty thereto.

 

(c)                                  *Certified Documents and Resolutions*. The Insurer shall have received a copy of (i) the certificate orarticles of incorporation and bylaws of the Servicer, the Seller and theDepositor and (ii) the resolutions of the Seller’s Board of Directorsauthorizing the sale of the Contracts and (iii) the execution, delivery andperformance by the Servicer, the Seller and the Depositor of the TransactionDocuments and the Transaction contemplated thereby, certified by the Secretaryor an Assistant Secretary of the Servicer, the Seller and the Depositor (whichcertificate shall state that such certificate or articles of incorporation,bylaws and resolutions are in full force and effect without modification on theDate of Issuance).

 

(d)                                 *Incumbency Certificate*.  The Insurershall have received a certificate of the Secretary or an Assistant Secretary ofthe Servicer, the Seller and the Depositor certifying the names and signaturesof the officers of the Servicer, the Seller and the Depositor authorized toexecute and deliver the Transaction Documents and that shareholder consent tothe execution and delivery of such documents is not necessary.

 

(e)                                  *Representations and Warranties; Certificate*. The representations and warranties of the Servicer, the Seller and theDepositor set forth or incorporated by reference in this Insurance Agreementshall be true and correct in all material respects as of the Date of Issuanceas if made on the Date of Issuance and the Insurer shall have received acertificate of appropriate officers of the Servicer, the Seller and theDepositor to that effect.

 

(f)                                    *Opinions of Counsel*.

 

(i)                                     The law firm of Dechert LLP shall haveissued its favorable opinion, in form and substance reasonably acceptable tothe Insurer and its counsel, regarding and the validity and enforceability ofthe Transaction Documents, other than the Trust Agreement, against theDepositor, the Servicer, the Issuer and the Seller.

 

(ii)                                  The law firm of Dechert LLP shall haveissued its favorable opinions, in form and substance reasonably acceptable tothe Insurer  and its counsel, regardingthe transfer of the Contracts from the Seller to the Depositor

 

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and from the Depositor tothe Issuer, and consolidation of the Depositor and the Seller and the Sellerand the Issuer in the event of the Seller’s bankruptcy.

 

(iii)                               The law firm of Richards, Layton &Finger, P.A.  shall have issued itsfavorable opinions, in form and substance reasonably acceptable to the Insurerand its counsel, regarding the perfection of the Indenture Trustee’s interestin the Trust Estate, including in the Reserve Account Property.

 

(iv)                              The law firm of Richards, Layton &Finger, P.A. shall have issued its favorable opinion, in form and substancereasonably acceptable to the Insurer and its counsel, regarding and thevalidity and enforceability of the Trust Agreement.

 

(v)                                 The Insurer  shall have received such other opinions of counsel, in form andsubstance acceptable to the Insurer and its counsel, including tax opinions,addressing such other matters as the Insurer may reasonably request.

 

(g)                                 *Approvals, Etc*.  The Insurershall have received true and correct copies of all approvals, licenses andconsents, if any, including, without limitation, any required approval of theshareholders of the Servicer, the Seller and the Depositor, required inconnection with the Transaction.

 

(h)                                 *No Litigation, Etc*.  No suit,action or other proceeding, investigation or injunction, or final judgmentrelating thereto, shall be pending or, to the knowledge of the Seller,Servicer, or the Issuer, threatened before any court or governmental agency inwhich it is sought to restrain or prohibit or to obtain damages or other reliefin connection with the Transaction Documents or the consummation of theTransaction.

 

(i)                                     *Legality*.  No statute,rule, regulation or order shall have been enacted, entered or deemed applicableby any government or governmental or administrative agency or court that wouldmake the Transaction contemplated by any of the Transaction Documents illegalor otherwise prevent the consummation thereof.

 

(j)                                     *Issuance of Ratings*.  The Insurershall have received confirmation that the risk secured by the Policyconstitutes at least an investment grade risk by S&P and Moody’s, and thatthe Obligations, when issued, will be rated “AAA” by S&P and “Aaa” byMoody’s.

 

(k)                                  *No Default*.  No Defaultor Event of Default shall have occurred.

 

(l)                                     *Additional Items*.  The Insurershall have received such other documents, instruments, approvals or opinionsrequested by the Insurer or its counsel as may be reasonably necessary toeffect the Transaction, including, but not limited to, evidence satisfactory tothe Insurer and its counsel that the conditions precedent, if any, in theTransaction Documents have been satisfied.

 

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(m)                               *Conform to Documents*.  The Insurerand its counsel shall have determined that all documents, certificates andopinions to be delivered in connection with the Obligations conform to theterms of the Transaction Documents.

 

(n)                                 *Satisfaction of Conditions of the Purchase Agreement*. All conditions in the Purchase Agreement relating to the InitialPurchaser’s obligation to purchase the Obligations shall have been satisfied.

 

(o)                                 *Purchase Agreement*.  The Insurershall have received copies of each of the documents, and shall be entitled torely on each of the documents, required to be delivered to the InitialPurchaser pursuant to the Purchase Agreement.

 

(p)                                 *Guaranty*.  The Guarantyshall be executed by all parties thereto and delivered to the IndentureTrustee.

 

**Section 3.02.****  Payment of Fees andInsurance Premium**.

 

(a)                                  *Legal and Accounting Fees*.  The Serviceror Seller shall pay or cause to be paid, on the Date of Issuance, legal feesand disbursements incurred by the Insurer in connection with the issuance ofthe Policy and any fees of the Insurer’s auditors.  Any fees of the Insurer’s auditors payable in respect of anyamendment or supplement to the Offering Document or any other Offering Documentincurred after the Date of Issuance shall be paid by the Servicer afterpresentation of an invoice therefor.

 

(b)                                 *Insurance Premium*.  Inconsideration of the issuance by the Insurer of the Policy, the Insurer shallbe entitled to receive the Insurance Premium, so long as no Insurer Default orInsurer Insolvency has occurred,  as andwhen due in accordance with the terms of the Premium Side Letter Agreement(i) in the case of Insurance Premium due on or before the Date ofIssuance, directly from the Servicer or the Seller and (ii) in the case ofInsurance Premium due after the Date of Issuance, *first*, pursuant to the Saleand Allocation Agreement, and *second*, to the extent the amounts insubclause *first*are not sufficient, directly from the Servicer.  For purposes of the Sale and AllocationAgreement, the term “Premium Percentage” shall have the meaning set forth inthe Premium Side Letter Agreement. The Insurance Premium shall be calculatedaccording to the Premium Side Letter Agreement for the amount due on or beforethe Date of Issuance and for the amount due on each Payment Date.  The Insurance Premium paid hereunder orunder the Sale and Allocation Agreement shall be nonrefundable without regardto whether the Insurer makes any payment under the Policy or any other circumstancesrelating to the Obligations or provision being made for payment of theObligations prior to maturity.  Allpayments of Insurance Premium to be made to the Insurer shall be made by wiretransfer to an account designated from time to time by the Insurer by writtennotice to the Servicer and the Indenture Trustee.

 

**Section 3.03.****  Reimbursement andAdditional Payment Obligation**.

 

(a)                                  In accordance with the prioritiesestablished in Section  3.5 of the Sale and Allocation Agreement, theInsurer shall be entitled to (i) reimbursement for any payment

 

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made by the Insurer underthe Policy, which reimbursement by the Issuer shall be due and payable on thedate that any amount is to be paid pursuant to a Notice (as defined in thePolicy), in an amount equal to the amount to be so paid and all amountspreviously paid that remain unreimbursed, together with interest on any and allamounts remaining unreimbursed (to the extent permitted by law, if in respectof any unreimbursed amounts representing interest) from the date such amountsbecame due until paid in full (after as well as before judgment), at a rate ofinterest equal to the Late Payment Rate, (ii) payment or reimbursement ofany other amounts owed to the Insurer under this Agreement together withinterest thereon at a rate equal to the Late Payment Rate and(iii) reimbursement for any payments made by the Insurer with respect tothe fees and expenses of a successor Servicer or with respect to any transitioncosts relating to the transfer of servicing from the Servicer to such successorServicer together with interest thereon at a rate equal to the Late PaymentRate.

 

(b)                                 Notwithstanding anything inSection 3.03(a) to the contrary, the Servicer and the Seller agree toreimburse the Insurer as follows: (i) from the Seller, for payments made under the Policy arising asa result of the Seller’s failure to repurchase any Contract  required to be repurchased pursuant toSection 2.3 of the Contribution Agreement, together with interest on anyand all amounts remaining unreimbursed (to the extent permitted by law, if inrespect of any unreimbursed amounts representing interest) from the date suchamounts became due until paid in full (after as well as before judgment), at arate of interest equal to the Late Payment Rate, and (ii) from theServicer, for payments made under the Policy, arising as a result of (A) theServicer’s failure to deposit into the Collection Account any amount requiredto be so deposited pursuant to the Sale and Allocation Agreement or theServicing Agreement or (B) the Servicer’s failure to repurchase any contract tobe repurchased under Section 2.28 of the Servicing Agreement, togetherwith interest on any and all amounts remaining unreimbursed (to the extentpermitted by law, if in respect to any unreimbursed amounts representinginterest) from the date such amounts became due until paid in full (after aswell as before judgment), at a rate of interest equal to the Late Payment Rate.

 

(c)                                  The Servicer and the Seller agree to payto the Insurer as follows: any and all charges, fees, costs and expenses thatthe Insurer may reasonably pay or incur, including, but not limited to,attorneys’ and accountants’ fees and expenses, in connection with (i) anyaccounts established to facilitate payments under the Policy to the extent theInsurer has not been immediately reimbursed on the date that any amount is paidby the Insurer under the Policy, (ii) the enforcement, defense orpreservation of any rights in respect of any of the Transaction Documents,including defending, monitoring or participating in any litigation orproceeding (including any insolvency or bankruptcy proceeding  in respect of any Transaction participant orany affiliate thereof) relating to any of the Transaction Documents, any partyto any of the Transaction Documents, in its capacity as such a party, or theTransaction, (iii) any amendment, consent, waiver or other action withrespect to, or related to, any Transaction Document, whether or not executed orcompleted, (iv) preparation of bound volumes of the Transaction Documents,or (v) any reliening, any replacement servicer or any transition costs relatingto the transfer of servicing from the Servicer to a replacement servicer;provided, however, that

 

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the amounts recovered bythe Insurer from the Seller and the Servicer pursuant to this paragraph for theitems set forth in (v) above shall be limited to $250,000.00; provided,further, that costs and expenses shall include a reasonable allocation ofcompensation and overhead attributable to the time of employees of the Insurerspent in connection with the actions described in clause (ii) above, andthe Insurer reserves the right to charge a reasonable fee as a condition toexecuting any waiver or consent proposed in respect of any of the TransactionDocuments.  Notwithstanding anythingherein to the contrary, the Seller and the Servicer shall have no obligation topay any amounts representing (i) recourse for uncollectible Contracts and (ii)any principal or interest on any Note.

 

(d)                                 The Servicer, the Seller and theDepositor agree to pay to the Insurer as follows: interest on any and allamounts described in subsections (b), (c), (e) and (f) of thisSection 3.03 from the date payable or paid by such party until paymentthereof in full, and interest on any and all amounts described inSection 3.02 hereof from the date due until payment thereof in full, ineach case, payable to the Insurer at the Late Payment Rate per annum.

 

(e)                                  The Servicer, the Seller and theDepositor agree to pay to the Insurer as follows: any payments made by theInsurer on behalf of, or advanced to, the Servicer, the Seller or theDepositor, respectively, including, without limitation, any amounts payable bythe Servicer, the Seller or the Depositor pursuant to the Transaction Documents(other than the Obligations).

 

(f)                                    Following termination of the Indenturepursuant to Section 10.1 thereof, the Servicer agrees to reimburse theInsurer for any Insured Payments (including, without limitation, any InsuredPayments relating to Preference Amounts as defined in the Policy) required tobe made pursuant to the Policy subsequent to the date of such termination.

 

All such amounts are to be immediately due and payable without demand.

 

**Section 3.04.****  Indemnification;Limitation of Liability**.

 

(a)                                  In addition to any and all rights ofindemnification or any other rights of the Insurer pursuant hereto or under lawor equity, the Seller, the Servicer and any successors thereto agree to pay,and to protect, indemnify and save harmless, the Insurer and its officers,directors, shareholders, employees, agents, and each person, if any, whocontrols the Insurer within the meaning of either Section 15 of the SecuritiesAct or Section 20 of the Securities Exchange Act from and against any andall claims, Losses, liabilities (including penalties), actions, suits,judgments, demands, damages, costs or reasonable expenses (including, withoutlimitation, reasonable fees and expenses of attorneys, consultants and auditorsand reasonable costs of investigations) or obligations whatsoever paid by theInsurer (herein collectively referred to as “Liabilities”) of any naturearising out of or relating to the Transaction contemplated by the TransactionDocuments by reason of:

 

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(i)                                     any untrue statement or alleged untruestatement of a material fact contained in the Offering Document or in anyamendment or supplement thereto or in any preliminary offering document, orarising out of or based upon any omission or alleged omission to state thereina material fact required to be stated therein or necessary to make thestatements therein not misleading, except insofar as such Liabilities arise outof or are based upon any such untrue statement or omission or allegationthereof based upon information set forth (a) in the Offering Document under thecaption “Description of the Insurer and the Insurance Policy” or in thefinancial statements of the Insurer, including any information in any amendmentor supplement to the Offering Document furnished by the Insurer in writingexpressly for use therein that amends or supplements such information (all suchinformation being referred to herein as “Insurer Information”) or (b) in thelast paragraph of the cover page of the Offering Document regarding thedelivery of the Obligations and under the heading “Plan of Distribution” in theOffering Document;

 

(ii)                                  to the extent not covered byclause (i) above, any act or omission of the Seller, the Depositor, theServicer, or the allegation thereof, in connection with the offering, issuance,sale or delivery of the Obligations other than by reason of false or misleadinginformation provided by the Insurer in writing for inclusion in the OfferingDocument as specified in clause (i) above;

 

(iii)                               the misfeasance or malfeasance of, ornegligence or theft committed by, any director, officer, employee or agent ofthe Servicer, the Seller or the Depositor;

 

(iv)                              the violation by the Depositor, theSeller or the Servicer of any federal or state securities, banking or antitrustlaws, rules or regulations in connection with the issuance, offer and sale ofthe Obligations or the Transaction contemplated by the Transaction Documents;

 

(v)                                 the violation by the Depositor, theSeller or the Servicer of any federal or state laws, rules or regulationsrelating to the Transaction, including without limitation the maximum amount ofinterest permitted to be received on account of any loan of money or withrespect to the Contracts;

 

(vi)                              the breach by the Depositor, the Selleror the Servicer of any of its obligations under this Insurance Agreement or anyof the other Transaction Documents; and

 

(vii)                           the breach by the Servicer, the Seller orthe Depositor of any representation or warranty on the part of the Servicer,the Seller or the Depositor contained in the Transaction Documents or in anycertificate or report furnished or delivered to the Insurer thereunder.

 

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This indemnity provision shall survive the termination of thisInsurance Agreement and shall survive until the statute of limitations has runon any causes of action which arise from one of these reasons and until allsuits filed as a result thereof have been finally concluded.  Notwithstanding anything else in thisSection 3.04(a),  the Seller shallhave no obligation for amounts due under this Section 3.04(a) for acts oromissions of or any liabilities attributable to the Depositor or the Issuer.

 

(b)                                 [Reserved]

 

(c)                                  Any party which proposes to assert theright to be indemnified under this Section 3.04 will, promptly afterreceipt of notice of commencement of any action, suit or proceeding againstsuch party in respect of which a claim is to be made against the Servicer, theSeller or the Depositor under this Section 3.04, notify the Servicer, theSeller or the Depositor of the commencement of such action, suit or proceeding,enclosing a copy of all papers served. In case any action, suit or proceeding shall be brought against anyindemnified party and it shall notify the Servicer, the Seller or the Depositorof the commencement thereof, the Servicer, the Seller or the Depositor shall beentitled to participate in, and, to the extent that it shall wish, to assumethe defense thereof, with counsel satisfactory to such indemnified party, andafter notice from the Servicer, the Seller or the Depositor to such indemnifiedparty of its election so to assume the defense thereof, the Servicer, theSeller or the Depositor shall not be liable to such indemnified party for anylegal or other expenses other than reasonable costs of investigationsubsequently incurred by such indemnified party in connection with the defensethereof.  The indemnified party shallhave the right to employ its counsel in any such action the defense of which isassumed by the Servicer, the Seller or the Depositor in accordance with theterms of this subsection (c), but the fees and expenses of such counselshall be at the expense of such indemnified party unless the employment ofcounsel by such indemnified party has been authorized by the Servicer, theSeller or the Depositor.  The Servicer,the Seller or the Depositor shall not be liable for any settlement of anyaction or claim effected without its consent.

 

(d)                                 In addition to any and all rights ofindemnification or any other rights of the Insurer pursuant hereto or under lawor equity, the Indenture Trustee agrees to pay, and to protect, indemnify andsave harmless, the Insurer and its officers, directors, shareholders,employees, agents, including each person, if any, who controls the Insurerwithin the meaning of either Section 15 of the Securities Act of 1933, asamended, or Section 20 of the Securities and Exchange Act of 1934, asamended, from and against any and all claims, losses, liabilities (includingpenalties), actions, suits, judgments, demands, damages, costs or reasonableexpenses (including, without limitation, reasonable fees and expenses of attorneys,consultants and auditors and reasonable costs of investigations) or obligationswhatsoever of any nature arising out of the breach by the Indenture Trustee ofany of its obligations under this Insurance Agreement or the Indenture.  This indemnity provision shall survive thetermination of this Insurance Agreement and shall survive until the statute oflimitations has run on any causes of action which arise from one of thesereasons and until all suits filed as a result thereof have been finally concluded.

 

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(e)                                  In addition to any and all rights ofindemnification or any other rights of the Insurer pursuant hereto or under lawor equity, the Back-up Servicer agrees to pay, and to protect, indemnify andsave harmless, the Insurer and its officers, directors, shareholders,employees, agents, including each person, if any, who controls the Insurerwithin the meaning of either Section 15 of the Securities Act of 1933, asamended, or Section 20 of the Securities and Exchange Act of 1934, asamended, from and against any and all claims, losses, liabilities (includingpenalties), actions, suits, judgments, demands, damages, costs or reasonableexpenses (including, without limitation, reasonable fees and expenses ofattorneys, consultants and auditors and reasonable costs of investigations) orobligations whatsoever of any nature arising out of the breach by the Back-upServicer of any of its obligations under this Insurance Agreement or theServicing Agreement.  This indemnityprovision shall survive the termination of this Insurance Agreement and shallsurvive until the statute of limitations has run on any causes of action whicharise from one of these reasons and until all suits filed as a result thereofhave been finally concluded.

 

**Section 3.05.****  Payment Procedure**. In the event of any payment by the Insurer, the Indenture Trustee, theServicer, the Back-up Servicer, the Seller and the Depositor agree to acceptthe voucher or other evidence of payment as prima facie evidence of thepropriety thereof and the liability therefor to the Insurer.  All payments to be made to the Insurer underthis Insurance Agreement shall be made to the Insurer in lawful currency of theUnited States of America in immediately available funds at the noticeaddress for the Insurer as specified in Section 6.02 hereof on the datewhen due or as the Insurer shall otherwise direct by written notice to theother parties hereto.  In the event thatthe date of any payment to the Insurer or the expiration of any time periodhereunder occurs on a day which is not a Business Day, then such payment orexpiration of time period shall be made or occur on the next succeedingBusiness Day with the same force and effect as if such payment was made or timeperiod expired on the scheduled date of payment or expiration date.  Payments to be made to the Insurer underthis Insurance Agreement shall bear interest at the Late Payment Rate from thedate when due to the date paid.

 

**ARTICLE IV**FURTHER AGREEMENTS

** **

**Section 4.01.****  Effective Date; Termof the Insurance Agreement.**  ThisInsurance Agreement shall take effect on the Date of Issuance and shall remainin effect until the later of (a) such time as the Insurer is no longersubject to a claim under the Policy and the Policy shall have been surrenderedto the Insurer for cancellation and (b) all amounts payable to the Insurerby the Servicer, the Indenture Trustee, the Back-up Servicer, the Seller or theDepositor or from any other source under the Transaction Documents and allamounts payable under the Obligations have been paid in full; provided,however, that the provisions of Sections 3.02, 3.03, 3.04 and 4.06 hereofshall survive any termination of this Insurance Agreement.

 

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**Section 4.02.****  Further Assurancesand Corrective Instruments**.

 

(a)                                  Excepting at such times as an InsurerInsolvency or an Insurer Default shall exist or shall have occurred and becontinuing, none of the Servicer, the Indenture Trustee, the Back-up Servicer,the Seller, the Depositor, the Issuer, the Owner Trustee or the IndentureTrustee shall grant any waiver of rights under any of the Transaction Documentsto which any of them is a party without the prior written consent of the Insurer,and any such waiver without the prior written consent of the Insurer shall benull and void and of no force or effect.

 

(b)                                 To the extent permitted by law, theServicer, the Indenture Trustee, the Back-up Servicer, the Seller, the Issuer,the Owner Trustee and the Depositor agree that they will, from time to time,execute, acknowledge and deliver, or cause to be executed, acknowledged anddelivered, such supplements hereto and such further instruments as the Insurermay request and as may be required in the Insurer’s judgment to effectuate theintention of or facilitate the performance of this Insurance Agreement.

 

**Section 4.03.****  Obligations Absolute**.

 

(a)                                  The obligations of the Servicer, theIndenture Trustee, the Back-up Servicer, the Seller, the Issuer, the OwnerTrustee and the Depositor hereunder shall be absolute and unconditional andshall be paid or performed strictly in accordance with this Insurance Agreementunder all circumstances irrespective of:

 

(i)                                     any lack of validity or enforceabilityof, or any amendment or other modifications of, or waiver, with respect to anyof the Transaction Documents, the Obligations or the Policy;

 

(ii)                                  any exchange or release of any otherobligations hereunder;

 

(iii)                               the existence of any claim, setoff, defense,reduction, abatement or other right that the Servicer, the Indenture Trustee,the Back-up Servicer, the Seller, the Issuer, the Owner Trustee or theDepositor may have at any time against the Insurer or any other Person;

 

(iv)                              any document presented in connection withthe Policy proving to be forged, fraudulent, invalid or insufficient in anyrespect or any statement therein being untrue or inaccurate in any respect;

 

(v)                                 any payment by the Insurer under thePolicy against presentation of a certificate or other document that does notstrictly comply with terms of the Policy;

 

(vi)                              any failure of the Servicer, theIndenture Trustee, the Back-up Servicer, the Seller, the Issuer or theDepositor to receive the proceeds from the sale of the Obligations; or

 

(vii)                           any breach by the Servicer, the IndentureTrustee, the Back-up Servicer, the Seller, the Issuer, the Owner Trustee or theDepositor of any

 

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representation, warrantyor covenant contained in any of the Transaction Documents.

 

(b)                                 The Servicer, the Indenture Trustee, theBack-up Servicer, the Seller, the Depositor, the Issuer, the Owner Trustee andany and all others who are now or may become liable for all or part of theobligations of the Servicer, the Indenture Trustee, the Back-up Servicer, theSeller, the Issuer, the Owner Trustee or the Depositor under this InsuranceAgreement agree to be bound by this Insurance Agreement and (i) to theextent permitted by law, waive and renounce any and all redemption andexemption rights and the benefit of all valuation and appraisement privilegesagainst the indebtedness and obligations evidenced by any Transaction Documentor by any extension or renewal thereof; (ii) waive presentment and demandfor payment, notices of nonpayment and of dishonor, protest of dishonor andnotice of protest; (iii) waive all notices in connection with the deliveryand acceptance hereof and all other notices in connection with the performance,default or enforcement of any payment hereunder, except as required by theTransaction Documents; (iv) waive all rights of abatement, diminution,postponement or deduction, or any defense other than payment, or to any rightof setoff or recoupment arising out of any breach under any of the TransactionDocuments, by any party thereto or any beneficiary thereof, or out of anyobligation at any time owing to the Servicer, the Indenture Trustee, theBack-up Servicer, the Seller, the Issuer, the Owner Trustee or the Depositor;(v) agree that its liabilities hereunder shall, except as otherwiseexpressly provided in this Section 4.03, be unconditional and withoutregard to any setoff, counterclaim or the liability of any other Person for thepayment hereof; (vi) agree that any consent, waiver or forbearancehereunder with respect to an event shall operate only for such event and notfor any subsequent event; (vii) consent to any and all extensions of timethat may be granted by the Insurer with respect to any payment hereunder orother provisions hereof and to the release of any security at any time givenfor any payment hereunder, or any part thereof, with or without substitution,and to the release of any Person or entity liable for any such payment; and(viii) consent to the addition of any and all other makers, endorsers,guarantors and other obligors for any payment hereunder, and to the acceptanceof any and all other security for any payment hereunder, and agree that theaddition of any such obligors or security shall not affect the liability of theparties hereto for any payment hereunder.

 

(c)                                  Nothing herein shall be construed asprohibiting the Servicer, the Indenture Trustee, the Back-up Servicer, theSeller, the Issuer, the Owner Trustee or the Depositor from pursuing any rightsor remedies it may have against any other Person in a separate legalproceeding.

 

**Section 4.04.****  Assignments;Reinsurance; Third-Party Rights**.

 

(a)                                  This Insurance Agreement shall be acontinuing obligation of the parties hereto and shall be binding upon and inureto the benefit of the parties hereto and their respective successors andpermitted assigns.  None of theServicer, the Indenture Trustee, the Back-up Servicer, the Seller, the Issuer,the Owner Trustee nor the Depositor may assign its rights under this InsuranceAgreement, or delegate any of its duties hereunder,

 

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without the prior writtenconsent of the Insurer.  Any assignmentmade in violation of this Insurance Agreement shall be null and void.

 

(b)                                 The Insurer shall have the right to giveparticipations in its rights under this Insurance Agreement and to enter intocontracts of reinsurance with respect to the Policy upon such terms andconditions as the Insurer may in its discretion determine; provided, however,that no such participation or reinsurance agreement or arrangement shallrelieve the Insurer of any of its obligations hereunder or under the Policy.

 

(c)                                  In addition, the Insurer shall beentitled to assign or pledge to any bank or other lender providing liquidity orcredit with respect to the Transaction or the obligations of the Insurer inconnection therewith any rights of the Insurer under the Transaction Documentsor with respect to any real or personal property or other interests pledged tothe Insurer, or in which the Insurer has a security interest, in connectionwith the Transaction.

 

(d)                                 Except as provided herein with respect toparticipants and reinsurers, nothing in this Insurance Agreement shall conferany right, remedy or claim, express or implied, upon any Person, including,particularly, any Owner, other than the Insurer against the Servicer, theIndenture Trustee, the Back-up Servicer, the Seller, the Issuer, the OwnerTrustee or the Depositor, and all the terms, covenants, conditions, promisesand agreements contained herein shall be for the sole and exclusive benefit ofthe parties hereto and their successors and permitted assigns.  Neither the Indenture Trustee nor any Ownershall have any right to payment from any Insurance Premiums paid or payablehereunder or under the Sale and Allocation Agreement or from any other amountspaid by the Servicer, the Indenture Trustee, the Back-up Servicer, the Selleror the Depositor pursuant to Section 3.02, 3.03 or 3.04 hereof.

 

(e)                                  The Servicer, the Seller, the Depositor ,the Back-up Servicer, the Issuer, the Owner Trustee and the Indenture Trusteeagree that the Insurer shall have all rights of a third-party beneficiary inrespect of the Indenture and each other Transaction Document to which it is nota signing party and hereby incorporate and restate their representations,warranties and covenants as set forth therein for the benefit of the Insurer.

 

**Section 4.05.****  Liability of theInsurer.**  Neither the Insurer nor any of its officers,directors or employees shall be liable or responsible for: (a) the usethat may be made of the Policy by the Indenture Trustee or for any acts oromissions of the Indenture Trustee in connection therewith; or (b) thevalidity, sufficiency, accuracy or genuineness of documents delivered to theInsurer (or its Fiscal Agent) in connection with any claim under the Policy, orof any signatures thereon, even if such documents or signatures should in factprove to be in any or all respects invalid, insufficient, fraudulent or forged(unless the Insurer shall have actual knowledge thereof).  In furtherance and not in limitation of theforegoing, the Insurer (or its Fiscal Agent) may accept documents that appearon their face to be in order, without responsibility for further investigation.

 

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**Section 4.06.****  Parties Will NotInstitute Insolvency Proceedings**.* *Solong as this Agreement is in effect, and for one year following itstermination, none of the parties hereto will file any involuntary petition orotherwise institute any bankruptcy, reorganization, arrangement, insolvency orliquidation proceeding or other proceedings under any federal or statebankruptcy or similar law against the Depositor or the Issuer.

 

**Section 4.07.****  Indenture Trustee,Depositor, Back-up Servicer, Seller and Servicer To Join in Enforcement Action.**

 

(a)                                  To the extent necessary to enforce anyright of the Insurer in or remedy of the Insurer under any Contract, theIndenture Trustee, the Depositor, the Back-up Servicer, the Seller, the Issuer,the Owner Trustee and the Servicer agree to join in any action initiated by theTrust or the Insurer for the protection of such right or exercise of suchremedy.

 

(b)                                 In the event of any court proceeding(x) with respect to which the Servicer, Depositor, the Seller or anyaffiliate thereof (each a “First Investors Company”) is a party (including,without limitation, an insolvency or bankruptcy proceeding in respect of anyFirst Investors Company) which affects the Trust Estate, the Policy or theobligations of the Insurer under the Transaction Documents, and (y) withrespect to which such First Investors Company fails to defend or answer, theInsurer shall have the right to direct, assume or otherwise participate in thedefense thereof (so long as no Insurer Default has occurred and iscontinuing).  In such event, the Insurershall, following written notice to the Indenture Trustee, have theexclusive-right to determine, in its sole discretion, the actions necessary topreserve and protect the Trust Estate. All costs and expenses of the Insurer in connection with such action,proceeding or investigation, (including, without limitation, any judgment orsettlement entered into or paid by the Insurer), shall be included in theInsurance Payment Amount and shall be payable to the Insurer pursuant toSection 3.5(d)(vi) of the Sale and Allocation Agreement.

 

(c)                                  The Indenture Trustee shall cooperatewith, and take such action as directed by, the Insurer (so long as no InsurerDefault has occurred and is continuting), including (without limitation)entering into such agreements and settlements as the Insurer in its solediscretion shall direct with respect to such court proceeding.  The Indenture Trustee shall not be liable tothe Insurer for any such action that conforms to the direction of theInsurer.  The Indenture Trustee’sreasonable out-of-pocket costs and expenses (including attorneys’ fees andexpenses) with respect to any such action shall be reimbursed pursuant to theSale and Allocation Agreement; provided, however, that if such costs andexpenses are not so reimbursed on the Payment Date immediately following thedate incurred, then the Insurer shall reimburse the Indenture Trustee for suchcosts and expenses within 60 days of such nonpayment.

 

(d)                                 The Indenture Trustee hereby agrees toprovide to the Insurer prompt written notice of any action, proceeding orinvestigation that names the Owner Trustee or the Issuer as a party or thatcould adversely affect the Trust Estate or the rights or

 

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obligations of theInsurer hereunder or under the Policy or the other Transaction Documents,including (without limitation) any insolvency or bankruptcy proceeding inrespect of the Servicer, Depositor, the Seller or any affiliate thereof.

 

(e)                                  Notwithstanding anything contained hereinor in any of the other Transaction Documents to the contrary, the IndentureTrustee shall not, without the Insurer’s prior written consent or unlessdirected by the Insurer (so long as no Insurer Default has occurred and iscontinuting), undertake or join any litigation or agree to any settlement ofany action, proceeding or investigation affecting the Owner Trustee, the Issueror the Trust Estate or the rights or obligations of the Insurer hereunder orunder the Policy or the other Transaction Documents.

 

**Section 4.08.****  Subrogation.*** *Tothe extent of any payments under the Policy, the Insurer shall be fullysubrogated to any remedies against the Depositor, the Seller or the Servicer orin respect of the Contracts available to the Indenture Trustee under theIndenture or Sale and Allocation Agreement. The Indenture Trustee acknowledges such subrogation and, further, agreesto execute such instruments prepared by the Insurer and to take such reasonableactions as, in the sole judgment of the Insurer, are necessary to evidence suchsubrogation and to perfect the rights of the Insurer to receive any moneys paidor payable under the Indenture or Sale and Allocation Agreement.

 

**ARTICLE V**DEFAULTS; REMEDIES

** **

**Section 5.01.****  Defaults.** The occurrence of any of the following events shall constitute an Eventof Default hereunder:

 

(a)                                  the occurrence and continuance of an“Event of Default” under the Indenture (as defined therein);

 

(b)                                 a legislative body has enacted any lawthat declares or a court of competent jurisdiction shall find or rule that thisInsurance Agreement or any of the Transaction Documents are not valid andbinding on the Servicer, the Indenture Trustee, the Back-up Servicer, theSeller, the Issuer, the Owner Trustee or the Depositor

 

(c)                                  The occurrence and continuance of an“Event of Servicing Termination” under the Servicing Agreement as definedtherein;

 

(d)                                 The failure of the Seller, the Issuer orthe Depositor to comply with, or maintain the accuracy of, the Opinion Factsand Assumptions, to the extent they are related to a date after the ClosingDate;

 

(e)                                  The occurrence of final rulings againstthe Seller or its affiliates by a court of competent jurisdiction assessingmonetary damages in excess of $1,000,000 or settlements resulting in thepayment by the Seller or its affiliates of amounts in excess of $1,000,000;

 

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(f)                                    The departure of either of the followingexecutives from the Seller or its consolidated subsidiaries:  Tommy Moore or Bennie Duck, if a replacementfor such individuals(s) acceptable to the Insurer is not made within 90 days;

 

(g)                                 The Seller fails to maintain a minimumGAAP Equity as a percentage of on-balance sheet portfolio of 10%.  Equity may include 50% of subordinated debtwith a maturity equal to or greater than five years, subject to MBIA review ofand satisfaction with the subordinated debt agreement;

 

(h)                                 The Seller fails to maintain a $9 millionnon-MBIA insured, non-asset backed financing facility;

 

(i)                                     The Seller fails to maintain a minimumEBITDA Coverage of 1.1:1.0.  The testshall be measured quarterly (coinciding with FIFS quarterly fiscal reporting)on a rolling six months basis;

 

(j)                                     A Change in Control occurs;

 

(k)                                  A material change occurs in theoperations of the Servicer which materially adversely affects the ability ofthe Servicer to service the Contracts or to perform its obligations under theServicing Agreement;

 

(l)                                     As of the end of any of its fiscalquarters, FIFSG shareholder’s equity (determined in accordance with GAAP) isless than the sum of $25,250,000 and 50% of the aggregate of the net income ofFIFSG (determined in accordance with GAAP and without deduction for any netlosses) for such fiscal quarter and all prior fiscal quarters ending afterOctober 31, 2002; or

 

(m)                               The Servicer or a wholly owned subsidiaryof the Seller fails to maintain a warehouse facility of at least $150,000,000.

 

**Section 5.02.****  Remedies; No RemedyExclusive**.

 

(a)                                  Upon the occurrence of an Event ofDefault, the Insurer may exercise any one or more of the rights and remediesset forth below:

 

(i)                                     exercise any rights and remedies underthe Transaction Documents in accordance with the terms of the TransactionDocuments or direct the Indenture Trustee to exercise such remedies inaccordance with the terms of the Transaction Documents; or

 

(ii)                                  take whatever action at law or in equityas may appear necessary or desirable in its judgment to collect the amountsthen due under the Transaction Documents or to enforce performance andobservance of any obligation, agreement or covenant of the Servicer, theIndenture Trustee, the Back-up Servicer, the Seller, the Issuer, the Owner Trusteeor the Depositor under the Transaction Documents.

 

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(b)                                 Unless otherwise expressly provided, noremedy herein conferred upon or reserved is intended to be exclusive of anyother available remedy, but each remedy shall be cumulative and shall be inaddition to other remedies given under the Transaction Documents or existing atlaw or in equity.  No delay or omissionto exercise any right or power accruing under the Transaction Documents uponthe happening of any event set forth in Section 5.01 hereof shall impairany such right or power or shall be construed to be a waiver thereof, but anysuch right and power may be exercised from time to time and as often as may bedeemed expedient.  In order to entitlethe Insurer to exercise any remedy reserved to the Insurer in this Article, itshall not be necessary to give any notice, other than such notice as may berequired in this Article V.

 

**Section 5.03.****  Waivers**.

 

(a)                                  No failure by the Insurer to exercise, andno delay by the Insurer in exercising, any right hereunder shall operate as awaiver thereof.  The exercise by theInsurer of any right hereunder shall not preclude the exercise of any otherright, and the remedies provided herein to the Insurer are declared in everycase to be cumulative and not exclusive of any remedies provided by law orequity.

 

(b)                                 The Insurer shall have the right, to beexercised in its complete discretion, to waive any Event of Default hereunder,by a writing setting forth the terms, conditions and extent of such waiversigned by the Insurer and delivered to the Servicer, the Indenture Trustee, theBack-up Servicer, the Seller, the Issuer and the Depositor.  Unless such writing expressly provides tothe contrary, any waiver so granted shall extend only to the specific event oroccurrence which gave rise to the Event of Default so waived and not to anyother similar event or occurrence which occurs subsequent to the date of suchwaiver.

 

**ARTICLE VI**

** **

**MISCELLANEOUS**

** **

**Section 6.01.****  Amendments, Etc.** This Insurance Agreement may be amended, modified or terminated only bywritten instrument or written instruments signed by the parties hereto.  The Servicer agrees to promptly provide acopy of any amendment to this Insurance Agreement to the Indenture Trustee,S&P and Moody’s.  No act or courseof dealing shall be deemed to constitute an amendment, modification ortermination hereof.

 

**Section 6.02.****  Notices.** All demands, notices and other communications to be given hereundershall be in writing (except as otherwise specifically provided herein) andshall be mailed by registered mail or personally delivered or telecopied to therecipient as follows:

 

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(a)                                  To the Insurer:

 

MBIA Insurance Corporation

113 King Street

Armonk, NY  10504

Attention:    InsuredPortfolio Management-Structured Finance (IPM-SF)(First Investors Auto Owner Trust 2003-A)

Telecopy No.:  (914) 765-3810

Confirmation:  (914) 273-4545

 

(in each case in which notice or other communicationto the Insurer refers to an Event of Default, a claim on the Policy or withrespect to which failure on the part of the Insurer to respond shall be deemedto constitute consent or acceptance, then a copy of such notice or othercommunication should also be sent to the attention of each of the generalcounsel and the Insurer and shall be marked to indicate “URGENT MATERIALENCLOSED.”)

 

(b)                                 To the Seller and Administrator:

 

First Investors Financial Services, Inc.

Suite 710

675 Bering Drive

Houston, TX  77057

Attention:  Tommy A. Moore, Jr.

Telecopy No.:  (713) 977-0657

Confirmation:  (713) 977-2600

 

(c)                                  To the Servicer:

 

First Investors Servicing Corporation

380 Interstate North Parkway

Sixth Floor

Atlanta, GA 30339

Attention:  Tommy A. Moore, Jr.

 

(d)                                 To the Indenture Trustee:

 

Wells Fargo Bank Minnesota, NationalAssociation

MAC N9311-161

Sixth and Marquette Streets

 

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Minneapolis, MN 55479

Attention: Corporate Trust Services — Asset-Backed Administration

 

(e)                                  To the Depositor:

 

First Investors Auto Funding Corporation

675 Bering Drive

Houston, TX  77057

Attention: Tommy A. Moore, Jr.

Telecopy No.:  (713) 977-0657

Confirmation:  (713) 977-2600

 

(f)                                    To the Issuer:

 

First Investors Auto Owner Trust 2003-A

c/o Deutsche Bank Trust Company Delaware

1011 Centre Road

Suite 200

Wilmington, DE 19805-1266

Attention: Corporate Trust

 

(g)                                 To the Owner Trustee:

 

Deutsche Bank Trust Company Delaware

1011 Centre Road

Suite 200

Wilmington, DE 19805-1266

Attention: Corporate Trust

 

With a copy to:

 

Deutsche Bank Trust Company Americas

Structured Finance Services

60 Wall Street, 26th floor

New York NY 10005

Attention:                      

Telecopy: (212) 797-8606

Confirmation: (212) 250-8522

 

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(h)                                 To the Back-up Servicer:

 

Wells Fargo Bank Minnesota, National Association

Sixth and Marquette Streets

Minneapolis, MN 55479-0070

Attention: Asset-Backed Trust Administration

 

A party mayspecify an additional or different address or addresses by writing mailed ordelivered to the other parties as aforesaid. All such notices and other communications shall be effective uponreceipt.

 

**Section 6.03.****  Severability.** In the event that any provision of this Insurance Agreement shall beheld invalid or unenforceable by any court of competent jurisdiction, theparties hereto agree that such holding shall not invalidate or renderunenforceable any other provision hereof. The parties hereto further agree that the holding by any court ofcompetent jurisdiction that any remedy pursued by any party hereto isunavailable or unenforceable shall not affect in any way the ability of suchparty to pursue any other remedy available to it.

 

**Section 6.04.****  Governing Law.** This Insurance Agreement shall be governed by and construed inaccordance with the laws of the State of New York without giving effect tothe conflict of law provisions thereof.

 

**Section 6.05.****  Consent toJurisdiction.**

 

(a)                                  The parties hereto hereby irrevocablysubmit to the jurisdiction of the United States District Court for the SouthernDistrict of New York and any court in the State of New York locatedin the City and County of New York, and any appellate court from anythereof, in any action, suit or proceeding brought against it and to or inconnection with any of the Transaction Documents or the Transactioncontemplated thereunder or for recognition or enforcement of any judgment, andthe parties hereto hereby irrevocably and unconditionally agree that all claimsin respect of any such action or proceeding may be heard or determined in suchNew York state court or, to the extent permitted by law, in such federalcourt.  The parties hereto agree that afinal judgment in any such action, suit or proceeding shall be conclusive andmay be enforced in other jurisdictions by suit on the judgment or in any othermanner provided by law.  To the extentpermitted by applicable law, the parties hereto hereby waive and agree not toassert by way of motion, as a defense or otherwise in any such suit, action orproceeding, any claim that it is not personally subject to the jurisdiction ofsuch courts, that the suit, action or proceeding is brought in an inconvenientforum, that the venue of the suit, action or proceeding is improper or that therelated documents or the subject matter thereof may not be litigated in or bysuch courts.

 

(b)                                 To the extent permitted by applicablelaw, the parties hereto shall not seek and hereby waive the right to any reviewof the judgment of any such court by any court of any other nation orjurisdiction which may be called upon to grant an enforcement of such judgment.

 

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(c)                                  Except as provided in Section 4.06herein, nothing contained in this Insurance Agreement shall limit or affect theInsurer’s right to serve process in any other manner permitted by law or tostart legal proceedings relating to any of the Transaction Documents any partyhereto or its or their property in the courts of any jurisdiction.

 

**Section 6.06.****  Consent of theInsurer.**  In the event that the consent of the Insureris required under any of the Transaction Documents, the determination whetherto grant or withhold such consent shall be made by the Insurer in its solediscretion without any implied duty towards any other Person.

 

**Section 6.07.****  Counterparts.** This Insurance Agreement may be executed in counterparts by the partieshereto, and all such counterparts shall constitute one and the same instrument.

 

**Section 6.08.****  Headings.** The headings of Articles and Sections and the Table of Contentscontained in this Insurance Agreement are provided for convenience only.  They form no part of this InsuranceAgreement and shall not affect its construction or interpretation.  Unless otherwise indicated, all referencesto Articles and Sections in this Insurance Agreement refer to the correspondingArticles and Sections of this Insurance Agreement.

 

**Section 6.09.****  Trial by JuryWaived.** Each party hereto hereby waives, to thefullest extent permitted by law, any right to a trial by jury in respect of anylitigation arising directly or indirectly out of, under or in connection withany of the Transaction Documents or any of the Transaction contemplatedthereunder.  Each party hereto(A) certifies that no representative, agent or attorney of any partyhereto has represented, expressly or otherwise, that it would not, in the eventof litigation, seek to enforce the foregoing waiver and (B) acknowledgesthat it has been induced to enter into the Transaction Documents to which it isa party by, among other things, this waiver.

 

**Section 6.10.****  Limited Liability.** No recourse under any Transaction Document shall be had against, and nopersonal liability shall attach to, any officer, employee, director, affiliateor shareholder of any party hereto, as such, by the enforcement of anyassessment or by any legal or equitable proceeding, by virtue of any statute orotherwise in respect of any of the Transaction Documents, the Obligations orthe Policy, it being expressly agreed and understood that each TransactionDocument is solely a corporate obligation of each party hereto, and that anyand all personal liability, either at common law or in equity, or by statute orconstitution, of every such officer, employee, director, affiliate orshareholder for breaches by any party hereto of any obligations under anyTransaction Document is hereby expressly waived as a condition of and inconsideration for the execution and delivery of this Insurance Agreement.

 

**Section 6.11.****  Entire Agreement.** The Transaction Documents and the Policy set forth the entire agreementbetween the parties with respect to the subject matter thereof, and thisInsurance Agreement supersedes and replaces any agreement or understanding thatmay have existed between the parties prior to the date hereof in respect ofsuch subject matter.

 

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**Section 6.12.****  Limitation ofLiability**.  Notwithstanding any other provision hereinor elsewhere, this Insurance Agreement has been executed and delivered byDeutsche Bank Trust Company Delaware, not in its individual capacity, butsolely in its capacity as Owner Trustee of the Issuer, in no event shallDeutsche Bank Trust Company Delaware or the Owner Trustee have any liability inrespect of the representation, warranties or obligations of the Issuerhereunder or under any other  documents,as to all of which recourse shall be solely to the assets of the Issuer, andfor all purposes of this Insurance Agreement and each other document, the OwnerTrustee and Deutsche Bank Trust Company Delaware shall be entitled to thebenefits of the Trust Agreement.

 

**Section 6.13.****  Limited Recourse**. Notwithstanding any other provision contained herein or in any of theTransaction Documents, the liability of the Issuer to the Insurer hereunder islimited in recourse to the Collateral, when and as applied in accordance withthe priority of payments set forth in Section 3.5 of the Sale andAllocation Agreement, and to the extent such proceeds of the Collateral areinsufficient to meet the obligations of the Issuer hereunder in full, theIssuer shall have no further liability in respect of any such outstandingobligations, it being agreed between the parties that, upon realization of theCollateral and its reduction to zero, all claims arising out of or inconnection with this Agreement against the Issuer shall thereupon extinguishand shall not thereafter revive.

 

**Section 6.14.****  Subordination**. Any obligations of the Depositor under this Agreement are obligationssolely of the Depositor and will not constitute a claim against the Depositorto the extent that the Depositor does not have funds sufficient to make paymentof such obligations.  In furtherance ofand not in derogation of the foregoing, the parties hereto (other that theDepositor), by entering into or accepting this Agreement, each acknowledges andagrees that it has no right, title, or interest in or to the Other Assets ofthe Depositor.  To the extent that,notwithstanding the agreements and provisions contained in the precedingsentence, any party hereto either (i) asserts an interest or claim to, orbenefit from, Other Assets, or (ii) is deemed to have any such interest, claimto, or benefit in or from Other Assets, whether by operation of law, legalprocess, pursuant ot applicable provisions of insolvency laws or otherwise(including by virtue of Section 1111(b) of the Bankruptcy Code or anysuccessor provision having similar effect under the Bankruptcy Code), then suchparty further acknowledges and agrees that any such interest, claim or benefitin or from Other Assets is and will be expressly subordinated to theindefeasible payment in full, which, under the terms of the relevant documentsrelating to the securitization or conveyance of such Other Assets, are entitledto be paid from, entitled to the benefits of, or otherwise secured by suchOther Assets (whether or not any such entitlement or security interest islegally perfected or otherwise entitled to a priority of distributions orapplication under applicable law, including insolvency laws, and whether or notasserted against the Depositor), including the payment of post-petitioninterest on such other obligations and liabilities.  This subordination provision will be deemed a subordinationprovision within the meaning of Section 510(a) of the BankruptcyCode.  Each party hereto (other than theDepositor) further acknowledges and agrees that no adequate remedy at lawexists for a breach of this Section 6.14 and the terms of thisSection 6.14 may be enforced by an action for specific performance.  The provisions of the Section 6.14 willbe for the third party benefit of those entitled to rely thereon and willsurvive the termination of this Agreement.

 

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IN WITNESS WHEREOF, the parties hereto have executed this InsuranceAgreement, all as of the day and year first above mentioned.

 
|   | MBIA INSURANCE CORPORATION                                                                    |
|--------|-----------------------------------------------------------------------------------------------|
|   |                                                                                          |
|   |                                                                                          |
|   | By                                                                                            |   |
|   | Assistant Secretary                                                                           |
|   |                                                                                          |
|   |                                                                                          |
|   | FIRST INVESTORS SERVICING                                                                     |
|   | CORPORATION,  as Servicer                                                                |
|   |                                                                                          |
|   |                                                                                          |
|   | By                                                                                            |   |
|   | Title                                                                                         |   |
|   |                                                                                          |
|   |                                                                                          |
|   | FIRST INVESTORS FINANCIAL SERVICES,  INC.,  as Seller and as Administrator               |
|   |                                                                                          |
|   |                                                                                          |
|   | By                                                                                            |   |
|   | Title                                                                                         |   |
|   |                                                                                          |
|   |                                                                                          |
|   | FIRST INVESTORS AUTO FUNDING  CORPORATION,****as Depositor                                    |
|   |                                                                                          |
|   |                                                                                          |
|   | By                                                                                            |   |
|   | Title                                                                                         |   |
|   |                                                                                          |
|   |                                                                                          |
|   | WELLS FARGO BANK MINNESOTA,  NATIONAL ASSOCIATION, as Back-up Servicer  and Indenture Trustee |
|   |                                                                                          |
|   |                                                                                          |
|   | By                                                                                            |   |
|   | Title                                                                                         |   |
|        |                                                                                               |  |  |

 

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|   | FIRST INVESTORS AUTO OWNER TRUST  2003-A, as Issuer,                                                                                                                                 |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                 |
|   | By:   DEUTSCHE BANK TRUST COMPANY  DELAWARE, not in its individual capacity,  but solely as Owner Trustee                                                             |
|   |                                                                                                                                                                                 |
|   |                                                                                                                                                                                 |
|   | By                                                                                                                                                                                   |   |
|   | Title                                                                                                                                                                                |   |
|   |                                                                                                                                                                                 |
|   |                                                                                                                                                                                 |
|   | DEUTSCHE BANK TRUST COMPANY  DELAWARE, not in its individual capacity, but  solely as Owner Trustee and in its individual  capacity solely for the purposes of Section 2.08 (c) |
|   |                                                                                                                                                                                 |
|   | By                                                                                                                                                                                   |   |
|   | Title                                                                                                                                                                                |   |
|        |                                                                                                                                                                                      |  |  |

 

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