**Exhibit 10.117**

 

EXECUTION COPY

 

 

**MBIA INSURANCE CORPORATION,**

asInsurer

 

**FIRST INVESTORS SERVICING CORPORATION,**

asServicer

 

**FIRST INVESTORS FINANCIAL SERVICES, INC.**

asSeller and as Administrator

 

**FIRST INVESTORS AUTO FUNDING CORPORATION,**

asDepositor

 

**FIRST INVESTORS AUTO OWNER TRUST 2005-A,**

asIssuer

 

**WELLS FARGO DELAWARE TRUST COMPANY,**

asOwner Trustee

 

**WELLS FARGO BANK, NATIONAL ASSOCIATION,**

asBack-up Servicer and Indenture Trustee

 

 

**INSURANCE AGREEMENT**

 

First InvestorsAuto Owner Trust 2005-A$69,000,000 3.57% Class A-l Asset-Backed Notes$106,493,000 4.23% Class A-2 Asset-Backed Notes

 

Dated as of May 5,2005

 

 

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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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**INSURANCEAGREEMENT**

 

This **INSURANCEAGREEMENT**(this “Insurance Agreement”), dated as of May 5, 2005by and among **FIRST INVESTORS FINANCIALSERVICES, INC.**as seller (together with its permitted successors andassigns, the “Seller”) and as Administrator, **FIRSTINVESTORS SERVICING CORPORATION,**as Servicer (together with itspermitted successors and assigns, the “Servicer”), **FIRST INVESTORS AUTO FUNDING CORPORATION,**as Depositor (the “Depositor”),**FIRST INVESTORS AUTO OWNER TRUST 2005-A,**asIssuer (the “Issuer” or the “Trust”), **WELLSFARGO DELAWARE TRUST COMPANY,**as Owner Trustee (the “Owner Trustee”)**MBIA INSURANCE CORPORATION,**asInsurer (the “Insurer”), **WELLS FARGO BANK,NATIONAL ASSOCIATION,**as Back-up Servicer (the “Back-up Servicer”)and as Indenture Trustee (the “Indenture Trustee”).

 

WHEREAS, the Indenture dated as of May 5, 2005 (the “Indenture”)relating to the First Investors Auto Owner Trust 2005-A $69,000,000 3.57% Class A-lAsset-Backed Notes and $106,493,000 4.23% Class A-2 Asset-Backed Notes(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, the Insurer shallbe paid an insurance premium pursuant to the Indenture, and the details of suchpremium are set forth herein; and

 

WHEREAS, the Servicer, theSeller, the Depositor and the Issuer have undertaken certain obligations inconsideration 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 defined in this Article I shall havethe meanings provided herein for all purposes of this Insurance Agreement,unless the context clearly requires otherwise, in both singular and pluralform, as appropriate. Unless the context clearly requires otherwise, allcapitalized terms used herein and not otherwise defined in this Article Ishall have the meanings assigned to them in the Indenture, the Sale andAllocation Agreement, or the Servicing Agreement. All words used herein shallbe construed to be of such gender or number as the circumstances 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 ofsimilar import, refer to this Insurance Agreement as a whole and not to anyparticular paragraph, clause or other subdivision hereof, unless otherwisespecifically noted.

 

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*“AdjustedNet Income”*means,for any period and any Person, such Person’s consolidated net income (or loss)determined in accordance with GAAP, but excluding: (a) the income of anyother Person (other than its Subsidiaries) in which such Person or any of itsSubsidiaries has an ownership interest, unless received by such Person or itsSubsidiary in a cash distribution; (b) any after-tax gains or lossesattributable to an asset disposition other than in the ordinary course ofbusiness; and (c) to the extent not included in clause (a) and clause(b) above, any after-tax extraordinary, non-cash or nonrecurring gains orlosses.

 

*“AdministrationAgreement”*means theAdministration Agreement dated as of May 5, 2005, between theAdministrator, the Issuer and the Indenture Trustee as the same may be amendedor supplemented from time to time in accordance with the terms thereof.

 

*“Administrator”*means First Investors Financial Services, Inc.or any successor Administrator under the Administration Agreement.

 

*“AdverseSelection Procedure”*meansany method of selecting or identifying a Contract eligible to be included inthe Trust Estate, other than in accordance with the Transaction Documents, thatmaterially and adversely affects the representative nature of the sample ofContracts so selected.

 

*“BusinessDay”*means any dayother than (a) a Saturday or a Sunday or (b) a day on which bankinginstitutions or trust companies in New York, New York; Wilmington, Delaware;Houston, Texas; Minneapolis, Minnesota; or Atlanta, Georgia are authorized orobligated by law, executive order or governmental 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,acquire 51% or more of the total outstanding shares of FIFSG; (b) anyPerson shall, at any time following the Closing Date, acquire directly orindirectly 51% or more of the voting control with respect to the total outstandingshares of FIFSG; (c) FIFSG shall cease to own, directly or indirectly, 51%or more of the total outstanding shares of the Seller or the Servicer; or (d) FIFSGshall not have directly or indirectly 51% or more of the voting control withrespect to the total outstanding shares of the Seller or the Servicer.

 

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

 

*“Commission”*means the Securities and Exchange Commission.

 

*“Contribution Agreement”*means the Contribution Agreement dated as of May 5,2005 between the Seller and the Depositor.

 

*“Date of Issuance”*means the date on which the Policy is issuedas specified therein.

 

*“Default”*means any event which results, or which withthe giving of notice or the lapse of time or both would result, in an Event ofDefault.

 

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*“Documents”*shall have the meaning set forth in Section 2.01(j)hereof.

 

*“EBITDA”*means, for any period and any Person, thetotal of the following (calculated without duplication) for such Person on aconsolidated basis for such period: (a) Adjusted Net Income; plus (b) anyprovision for (or less any benefit from) income or franchise taxes deducted indetermining Net Adjusted Income; plus (c) Interest Expense deducted indetermining Adjusted Net Income; plus amortization and depreciation expensededucted in determining Adjusted Net Income, plus (e) other noncashcharges deducted in determining Net Adjusted Income and no already deducted inaccordance with clause (d) above or claus (b) and clause (c) ofthe definition of Adjusted Net Income; minus (f) noncash credits includedin determining consolidated Adjusted Net Income and not already excluded inaccordance with the definitions of Adjusted Net Income.

 

*“EBIDTA Coverage Ratio”*means the ratio of EBITDA to InterestExpense.

 

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

 

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

 

*“Financial Statements”*means, with respect to FIFSG, the balancesheets and the statements of income, retained earnings and cash flows and thenotes thereto which have been provided to the Insurer by FIFSG.

 

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

 

*“GAAP”*means generally accepted accountingprinciples of the United States as in effect from time to time.

 

*“Guaranty”*means the Guaranty entered into as of May 5,2005, by First Investors Financial Services, Inc., as Guarantor, theServicer, the Back-up Servicer and the Indenture Trustee.

 

*“IndemnificationAgreement”*means theIndemnification Agreement dated as of April 27, 2005, among the Insurer,the Seller and the Initial Purchaser.

 

*“Indenture”*means the Indenturedated as of May 5, 2005 between the Issuer and the Indenture Trustee andCustodian as the same may be amended or supplemented from time to time inaccordance with the terms thereof.

 

*“IndentureTrustee”*means WellsFargo Bank, National Association, a national banking association, as IndentureTrustee under the Indenture, and any successor Indenture Trustee under theIndenture.

 

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

 

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

 

*“InsurerDefault”*means theoccurrence and continuance of any failure of the Insurer to make payments underthe Policy in accordance with its terms.

 

*“Insurer Insolvency”*means (i) the entry against the Insurerof a decree or order by a court or agency or supervisory authority havingjurisdiction 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 or similarproceedings, or for the winding up or liquidation of the Insurer’s affairs, andthe continuance of any such decree or order unstayed and in effect or (ii) theconsent by the Insurer to the appointment of a trustee, conservator, receiveror liquidator in any insolvency, conservatorship, receivership, readjustment ofdebt, marshalling of assets and liabilities or similar proceedings of orrelating to such Insurer as of or relating to substantially all of itsproperty, or such Insurer shall admit in writing its liability to pay its debtsgenerally as they become due, file a petition (or have one filed against suchInsurer) to take advantage of any applicable insolvency or reorganizationstatute, make an assignment for the benefit of its creditors, or suspend(voluntarily or involuntarily) payment of its obligations.

 

*“InterestExpense”*means, forany period and any Person, interest expense of such Person calculated withoutduplication on a consolidated basis for such period in accordance with GAAP.

 

*“InvestmentCompany Act”*meansthe Investment Company Act of 1940, including, unless the context otherwiserequires, the rules and regulations thereunder, as amended.

 

*“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 such prime rateof interest to be effective on the date such change is announced by Citibank,N.A.) plus 3%. The Late Payment Rate shall be computed on the basis of a yearof 365 days calculating the actual number of days elapsed. In no event shallthe Late Payment Rate exceed the maximum rate permissible under any applicablelaw limiting interest rates.

 

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

 

*“MaterialAdverse Change”*means,in respect of any Person, a material adverse change in (i) the business,financial condition, results of operations or properties of such Person or (ii) theability of such Person to perform its obligations under any of the TransactionDocuments.

 

*“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 rating agencydesignated by the Insurer.

 

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

 

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

 

*“OfferingDocument”*means theoffering memorandum dated April 27, 2005 in respect of the Obligations(and any amendment or supplement thereto) and any other offering document inrespect of the Obligations prepared by the Servicer, the Seller, Depositor orthe Issuer that makes reference to the Policy.

 

*“OpinionFacts and Assumptions”*meansthe facts and assumptions contained in the insolvency opinions dated May 5,2005 by Dechert LLP under the heading “Facts and Assumptions” insofar as theyrelate to the Seller, the Issuer and the Depositor.

 

*“Owners”*means registered holders of Obligations.

 

*“OwnerTrustee”*means WellsFargo Delaware Trust Company, not in its individual capacity, but solely asOwner Trustee of the Issuer.

 

*“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).

 

*“PremiumPercentage”*shallhave the meaning ascribed to such term in Section 3.02 hereof.

 

*“PremiumSide Letter Agreement”*meansthat certain Premium Letter dated as of May 5, 2005 among the Seller, theIssuer, the Servicer, and the Insurer specifying the up-front Insurance Premiumpayable on the Closing Date and the monthly Insurance Premium payable to theInsurer pursuant to the Indenture.

 

*“PurchaseAgreement”*means thePurchase Agreement between among the Initial Purchaser, the Seller and theIssuer with respect to the offer and sale of the Obligations, as the same maybe amended from time to time.

 

*“Sale andAllocation Agreement”*meansthe Sale and Allocation Agreement dated as of May 5, 2005, among theServicer, the Indenture Trustee, the Depositor, the Securities Intermediary,and the Issuer as the same may be amended or supplemented from time to time inaccordance with the terms thereof.

 

*“SecuritiesAct”*means theSecurities Act of 1933, including, unless the context otherwise requires, the rules andregulations thereunder, as amended from time to time.

 

*“SecuritiesExchange Act”*meansthe Securities Exchange Act of 1934, including, unless the context otherwiserequires, the rules and regulations thereunder, as amended from time totime.

 

*“ServicingAgreement”*means theServicing Agreement dated as of May 5, 2005 among the Servicer, theBack-up Servicer, and the Issuer.

 

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*“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 in Section 4.01hereof.

 

*“Transaction”*means thetransactions contemplated by the Transaction Documents, including thetransactions described in the Offering Document.

 

*“Transaction Documents”*means this Insurance Agreement, the PremiumSide Letter Agreement, the Indenture, the Guaranty, the Trust Agreement, theCertificate of Trust, the Sale and Allocation Agreement, the ContributionAgreement, the Servicing Agreement, the Administration Agreement, the PurchaseAgreement, and the Obligations.

 

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

 

*“TrustAgreement”*means theAmended and Restated Trust Agreement dated as of May 5, 2005 among theDepositor and the Owner Trustee as the same may be amended or supplemented fromtime to time in accordance with the terms thereof.

 

*“TrustIndenture Act”*meansthe Trust Indenture Act of 1939, including, unless the context otherwiserequires, the rules and regulations thereunder, as amended from time totime.

 

**ARTICLE II**

 

**REPRESENTATIONS,WARRANTIES AND COVENANTS**

 

**Section 2.01. Representations and Warranties ofthe Servicer, the Seller and the Depositor.**The Servicer, the Seller and the Depositorrepresent, warrant and covenant as of the Date of Issuance, each as to thosematters relating to itself, as follows:

 

(a)                                 *Due Organization andQualification.*Each of theServicer, the Seller and the Depositor is a corporation, duly organized,validly existing and in good standing under the laws of its respectivejurisdiction of incorporation. Each of the Servicer, the Seller and theDepositor is duly qualified to do business, is in good standing and has obtainedall licenses, permits, charters, registration and approvals (together, “approvals”)necessary for the conduct of its business as currently conducted and as describedin the Offering Document and the performance of its obligations under the TransactionDocuments, in each jurisdiction in which the failure to be so qualified or to obtainsuch approvals would render any Transaction Document unenforceable in any respector would have a material adverse effect upon the Transaction, the Owners or theInsurer.

 

(b)                                *Power and Authority. *Each of the Servicer, the Seller and the Depositor has all necessarycorporate power and authority to conduct its business as currently

 

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conducted and, as described in the Offering Document, to execute,deliver and perform its obligations under the Transaction Documents and toconsummate the Transaction.

 

(c)                                 *Due Authorization.*The execution, delivery and performance ofthe Transaction Documents by the Servicer, the Seller and the Depositor havebeen duly authorized by all necessary corporate action and do not require anyadditional approvals or consents of, or other action by or any notice to orfiling with any Person, including, without limitation,  any governmental entity or the Servicer’s,  the Seller’s or the Depositor’s stockholders,which have not previously been obtained or given by the Servicer, the Seller orthe Depositor.

 

(d)                                *Noncontravention.*None of the execution and delivery of theTransaction Documents by the Servicer, the Seller or the Depositor, theconsummation of the Transaction contemplated thereby or the satisfaction of theterms and conditions of the Transaction Documents:

 

(i)                                    conflicts with or results in any breach orviolation of any provision of the certificate of incorporation or bylaws of theServicer, 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, theSeller 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 havea material adverse effect on the Transaction; or

 

(iii)                              results in or requires the creation of anylien 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 no action, proceeding or investigation by or before any court,governmental or administrative agency or arbitrator against or affecting theServicer, the Seller, the Depositor or any of its or their subsidiaries, or anyproperties or rights of the Servicer, the Seller, the Depositor or any of itsor their subsidiaries, 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 the Depositor.

 

(f)                                   *Valid and Binding Obligations.*The Obligations, when executed,authenticated and issued in accordance with the Indenture, and the Transaction Documents(other than the Obligations), when executed and delivered by the Servicer, theSeller and the Depositor, will constitute the legal, valid and binding obligationsof the

 

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Servicer, the Seller, the Depositor and the Trust, 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 and public policy considerations as to rights ofindemnification for violations of federal 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.*The Financial Statements of FIFSG, copies ofwhich have been furnished to the Insurer, (i) are, as of the dates and forthe periods referred to therein, complete and correct in all material respects,(ii) present fairly the financial condition and results of operations ofthe companies reported therein as of the dates and for the periods indicatedand (iii) have been prepared in accordance with generally acceptedaccounting principles consistently applied, except as noted therein (subject asto interim statements to normal year-end adjustments). Since the date of themost recent Financial Statements, there has been no Material Adverse Change inrespect of the Servicer or the Seller. Except as disclosed in the FinancialStatements, the Servicer and the Seller are not subject to any contingentliabilities or commitments that, individually or in the aggregate, have amaterial possibility of causing a Material Adverse Change in respect of theServicer or the Seller.

 

(h)                                *Compliance With Law, Etc.*No practice, procedure or policy employed, orproposed to be employed, by the Servicer, the Seller or the Depositor in theconduct of its business violates any law, regulation, judgment, agreement,order or decree applicable to any of them that, if enforced, could reasonablybe expected to result in a Material Adverse Change with respect to theServicer, the Seller or the Depositor. None of the Servicer, the Seller and theDepositor is in breach of or in default under any applicable law oradministrative regulation of its respective jurisdiction of incorporation, orany department, division, agency or instrumentality thereof or of the UnitedStates or any applicable judgment or decree or any loan agreement, note,resolution, certificate, agreement or other instrument to which the Servicer,the Seller or the Depositor is a party or is otherwise subject which, ifenforced, would have a material adverse effect on the ability of the Servicer,the Seller or the Depositor, as the case may be, to perform its respectiveobligations under the Transaction Documents.

 

(i)                                    *Taxes.*The Servicer, the Seller and the Depositorand the Servicer’s, the Seller’s and the Depositor’s parent company orcompanies have filed prior to the date hereof all federal and state tax returnsthat are required to be filed and paid all taxes, including any assessmentsreceived by them that are not being contested in good faith, to the extent thatsuch 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 Changewith respect to the Servicer, the Seller or the Depositor.

 

(j)                                    *Accuracy of Information.*Neither the Transaction Documents, nor otherinformation relating to the Contracts, the operations of the Servicer, theSeller or the

 

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Depositor (including servicing or origination ofloans) or the financial condition of the Servicer, the Seller or the Depositor(collectively, the “Documents”), as amended, supplemented or superseded,furnished to the Insurer by the Servicer, the Seller or the Depositor containsany statement of a material fact by the Servicer, the Seller or Depositor whichwas untrue or misleading in any material respect when made. None of theServicer, the Seller or the Depositor has any knowledge of circumstances thatcould reasonably be expected to cause a Material Adverse Change with respect tothe Servicer, the Seller or the Depositor. Since the furnishing of theDocuments, there has been no change or any development or event involving aprospective change known to the Servicer, the Seller or the Depositor thatwould render any of the Documents untrue or misleading in any material respect.

 

(k)                                 *Compliance With SecuritiesLaws.*The offer and sale ofthe Obligations comply in all material respects with all requirements of law,including all registration requirements of applicable 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 thedelivery of the Obligations and the disclosure under the heading “Plan ofDistribution” in the Offering Document. Neither the offer nor the sale of the Obligationshas been or will be in violation of the Securities Act or any other federal orstate securities laws. The Issuer is not required to be registered as an “investmentcompany” under the Investment Company Act.

 

(l)                                    *Transaction Documents.*Each of the representations and warranties ofthe Servicer, the Seller and the Depositor contained in the TransactionDocuments is true and correct in all material respects, and each of theServicer, the Seller and the Depositor hereby make each such representation andwarranty to, and for the benefit of, the Insurer as if the same were set forthin full herein.

 

(m)                              *Solvency, FraudulentConveyance.*The Servicer,the Seller and the Depositor are solvent and will not be rendered insolvent bythe Transaction and, after giving effect to the Transaction, none of theServicer, the Seller or the Depositor will be left with an unreasonably smallamount of capital with which to engage in its business. None of the Servicer,the Seller or the Depositor intend to incur, or believe that it has incurred,debts beyond its ability to pay as they mature. None of the Servicer, theSeller or the Depositor contemplates the commencement of insolvency,bankruptcy, liquidation or consolidation proceedings or the appointment of areceiver, liquidator, conservator, trustee or similar official in respect ofthe Servicer, the Seller or the Depositor or any of their assets. The amount ofconsideration being received by the Issuer upon the sale of the Obligations tothe Initial Purchaser constitutes reasonably equivalent value and fair

 

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consideration for the interest in the Contractsevidenced by the Obligations. The Seller is not transferring the Contracts tothe Issuer and the Issuer is not selling the Obligations to any InitialPurchaser, as provided in the Transaction Documents, with any intent to hinder,delay or defraud any of the Seller’s or the Depositor’s creditors.

 

(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 ServicingCorporation” is the correct legal name of the Servicer indicated on the publicrecords of the Servicer’s jurisdiction of organization which shows the Servicerto be organized.

 

(ii)                                 The principal place of business of the Selleris located in Houston, Texas, and the Seller is a corporation organized underthe laws of the State of Texas. “First Investors Financial Services, Inc.”is the correct legal name of the Seller indicated on the public records of theSeller’s jurisdiction of organization which shows the Seller 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 AutoFunding Corporation” is the correct legal name of the Depositor indicated onthe public records of the Depositor’s jurisdiction of organization which showsthe Depositor to be organized.

 

(o)                                *Opinion Facts andAssumptions.*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.*The Seller and the Depositorrepresent and warrant with respect to each Contract that: (a) the relatedObligor has no right of recission or cancellation, claims or defenses, set-offsor counterclaims of any kind whatsoever as to or against each Contract; (b) theobligation created by the contract evidencing each Contract is a bonafide saleor refinancing in the ordinary course of the Originator’s business; (c) thecontract evidencing such Contract complies with all applicable state andfederal laws and regulations; (d) the contract evidencing each Contract,including, but not limited to, description of the motor vehicle and/or servicescontained therein, is in all respects complete, accurate and represents theentire agreement between the Originator and the Obligor and complies with theFederal Consumer Credit Protection Act and all other applicable state andfederal laws and regulations.

 

**Section 2.02. Affirmative Covenants of theServicer, the Seller and the Depositor.**The Servicer, the Seller and the Depositorhereby agree, each as to itself, that during the Term of the InsuranceAgreement, unless the Insurer shall otherwise expressly consent in writing:

 

(a)                                 *Compliance With Agreementsand Applicable Laws.*TheServicer, the Seller and the Depositor shall not be in default under theTransaction Documents and

 

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shall comply with all material requirements of any law, rule orregulation applicable to it. So long as no Insurer Default or InsurerInsolvency exists, unless the Insurer shall otherwise consent, none of theServicer, 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.*The Servicer, its successors and assigns, theSeller, its successors and assigns, and the Depositor, its successors andassigns, shall maintain their corporate existence and shall at all timescontinue to be duly organized under the laws of their respective jurisdictionsof incorporation and duly qualified and duly authorized (as described insections 2.01 (a), (b) and (c) hereof) and shall conduct its businessin accordance with the terms of its certificate or articles of incorporationand bylaws.   The Seller, the Depositorand the Servicer shall notify the Insurer within sixty (60) days prior to anychange in its legal name as indicated on the public records of the Servicer’s,the Seller’s or the Depositor’s jurisdiction of organization which shows the Servicer,the Seller, or the Depositor to be organized, jurisdiction of organization,identity or corporate structure. The Seller, the Servicer and the Depositorshall notify the Insurer within sixty (60) days prior to any relocation of itsprincipal office.

 

(c)                                 *Financial Statements;Accountants’ Reports; Other Information.*The Servicer, the Seller and the Depositor shall keep or cause to bekept in reasonable detail books and records of account of their assets andbusiness, including, but not limited to, books and records relating to theTransaction. The Servicer and the Seller shall furnish or cause to be furnishedto the Insurer:

 

(i)                                    *Annual FinancialStatements.*As soon asavailable, and in any event within 120 days after the close of each fiscal yearof FIFSG, the audited consolidated balance sheets of FIFSG and its subsidiariesas of the end of such fiscal year and the related audited consolidatedstatements of income, changes in shareholders’ equity and cash flows for suchfiscal year, all in reasonable detail and stating in comparative form therespective figures for the corresponding date and period in the precedingfiscal year, prepared in accordance with generally accepted accountingprinciples, consistently applied, and accompanied by the audit opinion of FIFSG’sindependent accountants (which shall be a nationally recognized independentpublic accounting firm) and by the certificate specified in Section 2.02(e) hereof.

 

(ii)                                 *Quarterly FinancialStatements.*As soon asavailable, and in any event within 90 days after each of the first three fiscalquarters of each fiscal year of FIFSG, the unaudited consolidated balancesheets of FIFSG and its subsidiaries as of the end of such fiscal quarter andthe 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 in accordancewith generally accepted accounting principles,

 

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consistently applied, and accompanied by the certificate specified in Section 2.02(e) hereof.

 

(iii)                              *Initial and ContinuingReports.*On or before theClosing Date, the Servicer will provide the Insurer a copy of the electronicfile to be delivered to the Indenture Trustee on the Closing Date setting forthas to each Contract, the information required under the definition of “ContractSchedule” in Section 1.1 of the Sale and Allocation Agreement. Thereafter,the Servicer shall deliver to the Insurer not later than 12:00 noon, New YorkCity time, on each Determination Date the report required by Section 3.8of the Sale and Allocation Agreement.

 

(iv)                             *Computer Diskette.*Beginning in May 2005, the Servicer willdeliver to the Insurer on a monthly basis, a computer diskette or otherelectronic file in a format acceptable to the Insurer, containing theinformation provided to the Insurer pursuant to clause (iii) of this subsection 2.02(c) andalso containing information similar to the information provided in the ContractSchedule delivered to the Indenture Trustee pursuant to the Sale andAllocation Agreement and described in Schedule 1 of the Sale and AllocationAgreement.

 

(v)                                *Certain Information.*Upon the reasonable request of the Insurer,the Servicer and the Seller shall promptly provide copies of any requestedproxy statements, financial statements, reports and registration statementswhich the Servicer or the Seller files with, or delivers to, the Commission orany national securities exchange.

 

(vi)                             *Other Information.*Promptly upon receipt thereof, copies of allschedules, list of contracts, financial statements or other similar reportsdelivered to or by the Servicer, the Seller or the Depositor pursuant to theterms of the Transaction Documents and, promptly upon request, such other dataas the Insurer may reasonably request. The Seller agrees, in the event of anymerger, consolidation or asset transfer of the Seller as described in Section 4.3of the Sale and Allocation Agreement, to deliver the certificates and opinionsdescribed therein to the Insurer.

 

The Insurer agrees that itand its agents, accountants and attorneys shall keep confidential all financialstatements, reports and other information delivered by the Servicer, the Selleror the Depositor pursuant to this Section 2.02(c) to the extentprovided in Section 2.02(f) hereof.

 

(d)                                *The Depositor ShareholderMeetings.*The Depositorshall have annual shareholder meetings and at least annual board of directormeetings and shall prepare income and franchise tax returns as appropriate. TheDepositor shall deliver to the Insurer copies of the minutes of such meetingsno later than April 30 of each year and such tax returns promptly uponfiling but in no event later than August 31 of each year, beginning in2005.

 

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(e)                                 *Compliance Certificate.*The Servicer and the Seller shall deliver tothe Insurer, concurrently with the delivery of the financial statementsrequired pursuant to Sections 2.02(c)(i) and (ii) hereof, one or morecertificates signed by an officer of the Servicer and an officer of the Sellerauthorized to execute such certificates on behalf of the Servicer and theSeller stating that:

 

(i)                                    a review of the Servicer’s performance underthe Transaction Documents during such period has been made under such officer’ssupervision;

 

(ii)                                 to the best of such individual’s knowledgefollowing reasonable inquiry, no Default or Event of Default has occurred, orif a Default or Event of Default has occurred, specifying the nature thereofand, if the Servicer has a right to cure pursuant to Section 5.1 of theIndenture, stating in reasonable detail (including, if applicable, anysupporting calculations) the steps, if any, being taken by the Servicer to curesuch Default or Event of Default or to otherwise comply with the terms of theagreement to which such Default or Event of Default relates;

 

(iii)                              the attached financial statements submittedin 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 effect anerrors and omissions insurance policy in accordance with the terms andrequirements of Section 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 AdverseChange, the Servicer and the Seller shall, upon the reasonable request of theInsurer, permit the Insurer or its authorized agents (provided that no InsurerDefault shall 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’s consent,as applicable, which consent shall not be unreasonably withheld, to discuss theaffairs, finances and accounts of the Servicer or the Seller with the Servicer’sor the Seller’s

 

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independent accountants, provided that an officer ofthe Servicer or the Seller shall have the right to be present during suchdiscussions.

 

Such inspections anddiscussions shall be conducted during normal business hours and shall notunreasonably disrupt the business of the Servicer or the Seller. The books andrecords of the Servicer shall be maintained at the address of the Servicerdesignated herein for receipt of notices, unless the Servicer shall otherwiseadvise the parties hereto in writing, and the books and records of the Sellershall be maintained at the address of the Seller designated herein for receiptof notices, unless the Seller shall otherwise advise the parties hereto inwriting.

 

The Insurer agrees that itand its shareholders, directors, agents, accountants and attorneys shall keepconfidential any matter of which it becomes aware through such inspections ordiscussions (unless readily available from public sources), except as may beotherwise required by regulation, law or court order or requested byappropriate governmental authorities or as necessary to preserve its rights orsecurity under or to enforce the Transaction Documents, provided that theforegoing shall not limit the right of the Insurer to make such informationavailable to its regulators, securities rating agencies, reinsurers, credit andliquidity providers, counsel and accountants.

 

(g)                                *Notice of Material Events.*The Servicer, the Seller and the Depositorshall be obligated (which obligation shall be satisfied as to each if performedby the Servicer, the Seller or the Depositor) promptly to inform the Insurer inwriting of the occurrence of any of the following to the extent any of thefollowing relate to it:

 

(i)                                    the submission of any claim or the initiationor threat of any legal process, litigation or administrative or judicialinvestigation, or rule making or disciplinary proceeding by or against theServicer, the Seller or the Depositor that (A) could be required to bedisclosed to the Commission or to the Servicer’s, the Seller’s or the Depositor’sshareholders or (B) could result in a Material Adverse Change with respectto the Servicer, the Seller or the Depositor, or the promulgation of anyproceeding or any proposed or final rule which would result in a MaterialAdverse Change with respect to the Servicer, the Seller or the Depositor;

 

(ii)                                 the submission of any claim or the initiationor threat of any legal process, litigation or administrative or judicialinvestigation in any federal, state or local court or before any arbitrationboard, or any such proceeding threatened by any government agency, which, ifadversely determined, would have a material adverse effect on the Issuer, theOwners or the Insurer;

 

(iii)                              any change in the location of the Servicer’s,the Seller’s or the Depositor’s principal office, jurisdiction of organization,legal name as indicated on the public records of the Servicer’s, the Seller’sor the Depositor’s jurisdiction of organization which shows the Servicer, theSeller, or the Depositor to be organized, any change in the location of theServicer’s, the Seller’s or the

 

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Depositor’s books and records, or any change in thelocation of the Corporate Trust Office (as defined in the Sale and AllocationAgreement), or any change in the account number or location of the CollectionAccount, the Note Payment Account, the Certificate Payment Account or theReserve 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

 

(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, consolidationor asset transfer of the Seller as described in Section 4.3 of the Saleand Allocation Agreement.

 

(h)                                *Financing Statements andFurther Assurances.*TheSeller shall cause the Issuer to file all necessary financing statements orother instruments, and any amendments or continuation statements relatingthereto, necessary to be kept and filed in such manner and in such places asmay be required by law to preserve and protect fully the interest of theIndenture Trustee in the Trust. The Servicer, the Seller and the Depositorshall, upon the request of the Insurer, from time to time, execute, acknowledgeand deliver, or cause to be executed, acknowledged and delivered, within tendays of such request, such amendments hereto and such further instruments andtake such further action as may be reasonably necessary to effectuate theintention, performance and provisions of the Transaction Documents. Inaddition, each of the Servicer, the Seller and the Depositor agrees tocooperate with S&P and Moody’s in connection with any review of theTransaction that may be undertaken by S&P and Moody’s after the date hereofand to provide all information reasonably requested by S&P or Moody’s.

 

(i)                                    *Maintenance of Licenses.*The Servicer, the Seller and the Depositor, respectively,or any successors thereof shall maintain or cause to be maintained alllicenses, permits, charters and registrations which are material to the conductof its business.

 

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(j)                                    *Redemption of Obligations.*The Servicer, the Seller and the Depositorshall instruct the Indenture Trustee, upon redemption or payment of all of theObligations pursuant to the Indenture or otherwise, to furnish to the Insurer anotice of such redemption and, upon a redemption or payment of all of theObligations, to surrender the Policy to the Insurer for cancellation.

 

(k)                                 *Disclosure Document.*Each Offering Document delivered with respectto the Obligations shall clearly disclose that the Policy is not covered by theproperty/casualty insurance security fund specified in Article 76 of theNew York Insurance Law.

 

(l)                                    *Servicing of Contracts.*The Servicer shall perform such actions withrespect to the Contracts as are required by or provided for in the ServicingAgreement. The Servicer will provide the Insurer with written notice of anychange or amendment to any Transaction Document as currently in effect.

 

(m)                              *Maintenance of Trust.*On or before each March 31, beginning in2006, so long as any of the Obligations are outstanding, and promptly after theexecution and delivery of each amendment to any financing statement, theServicer shall furnish to the Insurer and the Indenture Trustee an officers’certificate and an opinion of counsel as described in Section 3.6(b) ofthe Indenture, either stating that such action has been taken with respect tothe recording, filing, rerecording and refiling of any financing statements andcontinuation statements as is necessary to maintain the interest of theIndenture Trustee created by the Indenture with respect to the Trust andreciting the details of such action or stating that no such action is necessaryto maintain such interests. Such officers’ certificate shall also describe therecording, filing, rerecording and refiling of any financing statements andcontinuation statements that will be required to maintain the interest of theIndenture Trustee in the Trust until the date such next officers’ certificateis due. The Servicer will use its best efforts to cause any necessaryrecordings or filings to be made with respect to the Trust.

 

(n)                                *Seller’s Indemnity.*Notwithstanding anything in subsection 3.03hereof, the Seller shall pay to the Insurer an amount equal to any amount paidby the Insurer because of the Servicer’s failure to deposit into the CollectionAccount any amount required to be so deposited by it pursuant to the ServicingAgreement or the Sale and Allocation Agreement, together with interest on anyand all amounts remaining unreimbursed (to the extent permitted by law, if inrespect to 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. Notwithstanding anythingherein to the contrary, the Seller shall have no obligation to guaranty anyamounts representing (i) recourse for uncollectible Contracts and (ii) anyprincipal or interest on any Note.

 

(o)                                *Closing Documents.*The Servicer, the Seller and the Depositorshall provide or cause to be provided to the Insurer a bound volume or volumesof the Transaction Documents and an executed original copy of each documentexecuted in

 

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connection with the Transaction within 60 days after the date ofclosing. Upon the reasonable request of the Insurer, the Servicer, the Sellerand the Depositor shall provide or cause to be provided to the Insurer a copyof each of the Transaction Documents on computer diskette, in a formatacceptable to the Insurer; provided, however, that the failure to so delivershall not constitute (i) an Event of Default hereunder or under theIndenture or (ii) an Event of Servicing Termination.

 

(p)                                *Preference Payments.*With respect to any Preference Amount (asdefined in the Policy), the Servicer shall provide to the Insurer upon therequest of the Insurer:

 

(i)                                    a certified copy of the final nonappealableorder of a court having competent jurisdiction ordering the recovery by atrustee in bankruptcy as voidable preference amounts included in previousdistributions under Section 3.3 of the Sale and Allocation Agreement toany Owner pursuant to the United States Bankruptcy Code, 11 U.S.C. §§ 101et seq., as amended (the “Bankruptcy Code”);

 

(ii)                                 an opinion of counsel reasonably satisfactoryto the Insurer, and upon which the Insurer shall be entitled to rely, statingthat 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 preferencepayment or 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 Stockof Depositor.*The Sellershall hold, either directly or indirectly, all of the common stock of theDepositor during the Term of the Insurance Agreement. The Seller shall notsell, pledge or otherwise transfer such stock without the prior written consentof the Insurer.

 

(r)                                   *Purchase Option.*In the event the Depositor exercises itspurchase option pursuant to Section 5.16 of the Sale and AllocationAgreement, the Depositor shall promptly deliver to the Insurer the documentsdescribed in Section 5.16 of the Sale and Allocation Agreement.

 

**Section 2.03. Negative Covenants 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:

 

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(a)                                 *Impairment of Rights.  *None of the Servicer, the Seller or the Depositor shall take anyaction, or fail to take any action, if reasonably requested by the Insurer at atime when no Insurer Default or Insurer Insolvency exists or 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 Servicer, the Seller or the Depositor, or may interfere with theenforcement of any rights of the Insurer under or with respect to theTransaction Documents.   The Servicer,the Seller or the Depositor 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 such actionor failure to act.   The Servicer, theSeller and the Depositor shall furnish to the Insurer all information requestedby it that is reasonably necessary to determine compliance with this Section (a).

 

(b)                                *Adverse SelectionProcedure. *The Servicer, the Seller and the Depositor willnot use any Adverse Selection Procedure in selecting Contracts to betransferred to the Indenture Trustee from the outstanding contracts thatqualify under the Sale and Allocation Agreement for inclusion in the Trust.

 

(c)                                 *Waiver, Amendments,Assignments, Etc.   *Except as may be otherwise expressly setforth in the Transaction Documents, none of the Servicer, the Seller or the Depositorshall waive, modify or amend, or consent to any waiver, modification or amendmentof, any of the terms, provisions or conditions of any of the Transaction Documentswithout the prior written consent of the Insurer; and (if no Insurer Default orInsurer Insolvency exists) none of the Servicer, the Seller or the Depositorshall assign any of the Transaction Documents to which it is a party withoutthe prior written consent of the Insurer.

 

(d)                                *Contracts; Charge-offPolicy. *Except as otherwise permitted in the Sale andAllocation Agreement or the Servicing Agreement, the Servicer and the Sellershall not, and the Depositor shall not cause the Servicer or the Seller to,alter or amend any Contract or, with regard to the Servicer, alter or amend itsCollection Policy or, with regard to the Seller, prior to the day following thePrefunding Account End Date, alter or amend its Credit Policy, in any case in amanner that materially adversely affects the Insurer unless the Insurer shallhave previously given its consent, which consent shall not be withheldunreasonably.

 

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

 

(a)                                 *Due Organization andQualification.*The Issuer isa statutory trust and is duly organized, validly existing and in good standingunder the laws of the State of Delaware. The Issuer is duly qualified to dobusiness, 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

 

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Transaction Documents to which it is a party, ineach jurisdiction in which the failure to be so qualified or to obtain suchapprovals would render any Transaction Document to which it is a partyunenforceable in any respect or would have a material adverse effect upon theTransaction, the Owner or the Insurer.

 

(b)                                *Power and Authority.*The Issuer has all necessary 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 to which it is a party and to consummate theTransaction.

 

(c)                                 *Due Authorization.*The execution, delivery and performance ofthe Transaction Documents by the Issuer have been duly authorized by allnecessary corporate action and do not require any additional approvals orconsents, or other action by or any notice to or filing with any Person,including, without limitation, any governmental entity or the Issuer’s stockholders,which have not previously been obtained or given by the Issuer.

 

(d)                                *Noncontravention. *Neither the execution and delivery of the Transaction Documents by theIssuer, the consummation of the Transaction contemplated thereby nor thesatisfaction of the terms and conditions of the Transaction Documents:

 

(i)                                    conflicts with or results in any breach orviolation of any provision of the Trust Agreement or any law, rule, regulation,order, writ, judgment, injunction, decree, determination or award currently ineffect having applicability to the Issuer or any of its material properties,including regulations issued by an administrative agency or other governmentalauthority having supervisory powers over the Issuer;

 

(ii)                                 constitutes a default by the Issuer under ora breach of any provision of any loan agreement, mortgage, indenture or otheragreement or instrument to which the Issuer is a party or by which any of itsproperties, which are individually or in the aggregate material to the Issuer,is or may be bound or affected; or

 

(iii)                              results in or requires the creation of anylien upon or in respect of any assets of the Issuer except as contemplated bythe Transaction Documents.

 

(e)                                 *Legal Proceedings. *There is no action, proceeding or investigation by or before any court,governmental or administrative agency or arbitrator against or affecting theIssuer or any properties or rights of the Issuer pending or, to the Issuer’sknowledge after reasonable inquiry, threatened, which, in any case, couldreasonably be expected to result in a Material Adverse Change with respect tothe Issuer.

 

(f)                                   *Valid and Binding Obligations.  *The Obligations, when executed, authenticatedand issued in accordance with the Indenture and the Transaction Documents(other than the Obligations),when executed and delivered by the Issuer, will constitute the legal, valid andbinding obligations of the Issuer enforceable in accordance

 

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with their respective terms, except as such enforceability may belimited by bankruptcy, insolvency, reorganization, moratorium or other similarlaws affecting creditors’ rights generally and general equitable principles andpublic policy considerations as to rights of indemnification for violations offederal securities laws. The Issuer will not at any time in the future denythat the Transaction Documents constitute the legal, valid and bindingobligations of the Issuer.

 

(g)                                *Compliance With Law, Etc.*No practice, procedure or policy employed, orproposed to be employed, by the Issuer in the conduct of its business violatesany law, regulation, judgment, agreement, order or decree applicable to itthat, if enforced, could reasonably be expected to result in a Material AdverseChange with respect to the Issuer. The Issuer is not in breach of or defaultunder any applicable law or administrative regulation of its respectivejurisdiction or incorporation, or any department, division, agency or instrumentalitythereof or of the United States or any applicable judgment or decree or anyloan agreement, note, resolution, certificate, agreement or other instrument towhich the Issuer is a party or is otherwise subject which, if enforced, wouldhave a material adverse effect on the ability of the Issuer, to perform itsobligations under the Transaction Documents.

 

(h)                                *Compliance With SecuritiesLaws.*The offer and sale ofthe Obligations comply in all material respects with all requirements of law,including all registration requirements of applicable 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 thedelivery of the Obligations and the disclosure under the heading “Plan ofDistribution” in the Offering Document. Neither the offer nor the sale of theObligations has been or will be in violation of the Securities Act or any otherfederal or state securities laws.

 

(i)                                    *Taxes.*The Issuer has filed prior to the date hereofall federal and state tax returns that are required to be filed and paid alltaxes, including any assessments received by them that are not being contestedin good faith, to the extent that such taxes have become due, except for anyfailures to file or pay that, individually or in the aggregate, would notresult in a Material Adverse Change with respect to the Issuer.

 

(j)                                    *Transaction Documents.*Each of the representations and warranties ofthe Issuer contained in the Transaction Documents is true and correct in allmaterial respects, and the Issuer hereby makes each such representation andwarranty to, and for the benefit of, the Insurer as if the same were set forthin full herein; provided that the remedy for

 

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any breach of this paragraph shall be limited to the remedies specifiedin the related Transaction Document or in this Insurance Agreement.

 

(k)                                 *Solvency.*The Issuer is solvent and will not berendered insolvent by the Transaction and, after giving effect to theTransaction, the Issuer will not be left with an unreasonably small amount ofcapital with which to engage in its respective business, nor does the Issuerintend to incur, or believe that it has incurred, debts beyond its ability topay as they mature. The Issuer does not contemplate the commencement ofinsolvency, bankruptcy, liquidation or consolidation proceedings or the appointmentof a receiver, liquidator, conservator, trustee or similar official in respectof the Issuer or any of its assets.

 

(l)                                    *Principal Place ofBusiness.*The principalplace of business of the Issuer is located in Wilmington, Delaware and theIssuer is a statutory trust organized under the laws of the State of Delaware. “FirstInvestors Auto Owner Trust 2005-A” is the correct legal name of the Issuerindicated on the public records of the Issuer’s jurisdiction of organizationwhich shows the Issuer to be organized.

 

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

 

(n)                                *No Consents.*No authorization or approval or other actionby, and no notice to or filing with, any Person, including, without limitation,any governmental entity or regulatory body, is required for the due execution,delivery and performance by the Issuer of the Transaction Documents or anyother material document or instrument to be delivered thereunder, except (ineach case) such as have been obtained or the failure of which to be obtainedwould not be reasonably likely to have a material adverse effect on theTransaction.

 

(o)                                *No Material Event ofDefault.*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 andAssumptions.*The opinionFacts and Assumptions insofar as they relate to the Issuer are true and correctas of the Date of Issuance.

 

**Section 2.05. Affirmative Covenants of theIssuer.**The Issuerhereby agrees that during the Term of the Insurance Agreement, unless theInsurer shall otherwise expressly consent in writing:

 

(a)                                 *Compliance With Agreementsand Applicable Laws.*TheIssuer shall not be in default under the Transaction Documents and shall complywith all material requirements of any law, rule or regulation applicableto it. Except in accordance with

 

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the terms of the Transaction Documents, the Issuershall not agree to or consent to any waiver of, any material amendment to, orany modification of the terms of any Transaction Documents unless the Insurershall have given its prior written consent; provided, however, that if anInsurer Default has occurred and is continuing, the Issuer need not obtain theconsent of the Insurer for any waiver, amendment, or modification which is notmaterially adverse to the Insurer.

 

(b)                                *Maintain Existence.   *The Issuer and its successors and assigns shall maintain theirexistence and shall at all times continue to be duly organized under the lawsof its respective jurisdiction and duly qualified and duly authorized and shallconduct its business in accordance with the terms of its organizationaldocuments.

 

(c)                                 *Notice of MaterialEvents.  *The Issuer shall be obligated promptly to informthe Insurer in writing of the occurrence of any of the following to the extentany of the following relate to it and to the extent that it receives actualnotice of the occurrence of any of the following events:

 

(i)                                    the submission of any claim or the initiationor threat of any legal process, litigation or administrative or judicialinvestigation, or rule making or disciplinary proceeding by or against theIssuer that (A) could be required to be disclosed to the Commission or tothe Issuer’s owners or (B) could result in a Material Adverse Change withrespect to the Issuer or the promulgation of any proceeding or any proposed orfinal rule which would result in a Material Adverse Change with respect tothe Issuer;

 

(ii)                                 any change in the location of the Issuer’s orthe Owner Trustee’s principal place of business, jurisdiction of organization,legal name as indicated on the public records of the Issuer’s or the OwnerTrustee’s jurisdiction of organization which shows the Issuer’s or the OwnerTrustee’s to be organized or any change in the location of the Issuer’s booksand 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) the Issueris being placed under regulatory supervision, (B) any license, permit,charter, registration or approval necessary for the conduct of the Issuer’sbusiness is to be, or may be suspended or revoked, or (C) the Issuer is tocease and desist any practice, procedure or policy employed by the Issuer inthe conduct of its business, and such cessation may result in a MaterialAdverse Change with respect to the Issuer.

 

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(d)                                *Financing Statements andFurther Assurances.*To theextent provided in the Indenture, the Issuer will cause to be filed allnecessary financing statements or other instruments, and any amendments orcontinuation statements relating thereto, necessary to be kept and filed insuch manner and in such places as may be required by law to preserve andprotect fully the interest of the Indenture Trustee. The Issuer shall, upon therequest of the Insurer, from time to time, execute, acknowledge and deliver, orcause to be executed, acknowledged and delivered, within ten days of suchrequest, such amendments hereto and such further instruments and take suchfurther action as may be reasonably necessary to effectuate the intention,performance and provisions of the Transaction Documents to which it is a party.  In addition, the Issuer 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.

 

(e)                                 *Maintenance ofLicenses.  *The Issuer, or any successors thereof, shall maintainall licenses, permits, charters and registrations which are material to theconduct of its business.

 

(f)                                   *Third-PartyBeneficiary. *The Issuer agrees that the Insurer shall haveall rights of a third-party beneficiary in respect of each Transaction Documentand hereby incorporates and restates its representations, warranties andcovenants as set forth therein for the benefit of the Insurer.

 

(g)                                *Tax Matters. *The Issuer will take all actions necessary to ensure that the Issuer istreated as a trust for federal and state income tax purposes and not as an association(or publicly traded partnership), taxable as a corporation.

 

(h)                                *Financial Statements;Accountants’ Reports; Other Information.*The Issuer shall keep or cause to be kept in reasonable detail booksand records of account of its assets and business, including, but not limitedto, books and records relating to the Transaction. The Issuer shall furnish orcause to be furnished to the Insurer promptly upon receipt thereof, copies ofall schedules, opinions of counsel or accountants, officer’s certificates,financial statements or other similar reports delivered to or by the Issuerpursuant to the terms of the Transaction Documents and, promptly upon request,such other data as the Insurer may reasonably request.

 

(i)                                    *Access to Records;Discussions With Officers and Accountants.*On an annual basis, or upon the occurrence of a Material AdverseChange, the Issuer shall, upon the reasonable request of the Insurer, at itsexpense, 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 and accountsof the Issuer; and

 

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(iii)                              with the Issuer’s consent, as the case maybe, which consent shall not be unreasonably withheld, to discuss the affairs,finances and accounts of the Issuer with the Issuer’s independent accountants,provided that a representative of the Seller or the Issuer shall have the rightto be present during such discussions.

 

Such inspections anddiscussions shall be conducted during normal business hours and shall notunreasonably disrupt the business of the Issuer. The books and records of theIssuer will be maintained at the address of the Issuer designated herein forreceipt of notices, unless the Issuer shall otherwise advise the parties heretoin writing.

 

The Insurer agrees that itand its shareholders, directors, agents, accountants and attorneys shall keepconfidential any matter of which it becomes aware through such inspections ordiscussions (unless readily available from public sources), except as may beotherwise required by regulation, law or court order or requested byappropriate governmental authorities or as necessary to preserve its rights orsecurity under or to enforce the Transaction Documents, provided that theforegoing shall not limit the right of the Insurer to make such informationavailable to its regulators, securities rating agencies, reinsurers, credit andliquidity providers, counsel and accountants.

 

**Section 2.06. Negative Covenants of the Issuer.**The Issuer hereby agrees that during the Termof the Insurance Agreement, unless the Insurer shall otherwise expresslyconsent in writing:

 

(a)                                 *Impairment of Rights.*The Issuer shall not take any action, or failto take any action, if such action or failure to take action may result in amaterial adverse change as described in clause (ii) of the definition ofMaterial Adverse Change with respect to the Issuer, or may interfere with theenforcement of any rights of the Insurer under or with respect to theTransaction Documents. The Issuer shall give the Insurer written notice of anysuch action or failure to act on the earlier of: (i) the date upon whichany publicly 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 Issuer shall furnish to the Insurer allinformation requested by it that is reasonably necessary to determinecompliance with this paragraph.

 

(b)                                *Waiver, Amendments, Etc.*Except upon the prior written consent of the Insurerwhich consent shall not unreasonably be withheld, the Issuer shall not allowthe transfer, modification or amendment, nor consent to any transfer, modificationor amendment of the Certificate of Trust unless such amendment is requiredunder the Delaware Statutory Trust Act.

 

(c)                                 *Restrictions on Liens.*The Issuer shall not, except as contemplatedby the Transaction Documents, (i) create, incur or suffer to exist, oragree to create, incur or suffer to exist, or consent to cause or permit in thefuture (upon the happening of a contingency or otherwise) the creation,incurrence or existence of any lien of the Contracts or (ii) file underthe Uniform Commercial Code of any jurisdiction any financing statement whichnames the Issuer as a debtor, or sign any security agreement

 

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authorizing any secured party thereunder to file such financingstatement, with respect to the Contracts.

 

(d)                                *Successors.*The Issuer shall not remove or replace, orcause to be removed or replaced, the Servicer, the Indenture Trustee or theOwner Trustee without the prior written approval of the Insurer.

 

(e)                                 *Subsidiaries.*The Issuer shall not form, or cause to beformed, any subsidiaries.

 

(f)                                   *No Mergers.*The Issuer shall not consolidate with ormerge into any Person or transfer all or any material amount of its assets toany Person, liquidate or dissolve except as permitted by the Trust Agreementand as contemplated by the Transaction Documents.

 

(g)                                *Other Activities.*The Issuer shall not (i) sell, pledge,transfer, exchange or otherwise dispose of any of its assets except aspermitted under the Transaction Documents; or (ii) engage in any businessor activity except as contemplated by the Transaction Documents and aspermitted by the Trust Agreement.

 

(h)                                *Trust Agreement.*The Issuer shall not amend the TrustAgreement without the prior written consent of the Insurer.

 

**Section 2.07. Representations, Warranties andCovenants of Indenture Trustee and Back-up Servicer.**The Indenture Trustee and the Back-upServicer represents and warrants to, as of the Date of Issuance, and covenantswith the other parties hereto as follows:

 

(a)                                 *Due Organization andQualification.*The IndentureTrustee and the Back-up Servicer are each a national banking association orcorporation, duly organized, validly existing and in good standing under thelaws of its respective jurisdiction of incorporation. 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 the performanceof its obligations under the Transaction Documents, in each jurisdiction in whichthe failure to be so qualified or to obtain such approvals would render any TransactionDocument unenforceable in any respect or would have a material adverse effectupon the Transaction, the Owners or the Insurer.

 

(b)                                *Due Authorization.*The execution, delivery and performance ofthe Transaction Documents by the Indenture Trustee and the Back-up Servicerhave been duly authorized by all necessary corporate action and do not requireany additional approvals or consents of, or other action by or any notice to orfiling with any Person, including, without limitation, any governmental entityor the Indenture Trustee’s or the Back-up Servicer’s stockholders, which havenot previously been obtained or given by the Indenture Trustee or the Back-upServicer, as applicable.

 

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(c)                                 *Noncontravention.*None of the execution and delivery of theTransaction Documents by the Indenture Trustee or the Back-up Servicer, theconsummation of the Transaction contemplated thereby or the satisfaction of theterms and conditions of the Transaction Documents:

 

(i)                                    conflicts with or results in any breach orviolation of any provision of the certificate or articles of incorporation orbylaws 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 are individually or in the aggregate material tothe Indenture Trustee or the Back-up Servicer, is or may be bound or affected;or

 

(iii)                              results in or requires the creation of anylien upon or in respect of any assets of the Indenture Trustee or the Back-upServicer, except as contemplated by the Transaction Documents.

 

(d)                                *Legal Proceedings.*There is no action, proceeding orinvestigation by or before any court, governmental or administrative agency orarbitrator against or affecting the Indenture Trustee, the Back-up Servicer, orany of their subsidiaries, or any properties or rights of the Indenture Trustee,the Back-up Servicer or any of their subsidiaries, pending or, to the IndentureTrustee’s or the Back-up Servicer’s knowledge after reasonable inquiry,threatened, which, in any case, could reasonably be expected to result in aMaterial Adverse Change with respect to the Indenture Trustee or the Back-up Servicer.

 

(e)                                 *Valid and BindingObligations and Agreements.*TheObligations, when executed, authenticated and issued in accordance with theIndenture, and the Transaction Documents (other than the Obligations), to whichthey are parties when executed and delivered by the Indenture Trustee and theBack-up Servicer, will constitute the legal, valid and binding obligations ofthe Indenture Trustee and the Back-up Servicer, 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. Neitherthe Indenture Trustee nor the Back-up Servicer will at any time in the futuredeny that the Transaction Documents constitute the legal, valid and bindingobligations of the Indenture Trustee and the Back-up Servicer, as applicable.

 

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(f)                                   *Compliance With Law, Etc.*No practice, procedure or policy employed, orproposed to be employed, by the Indenture Trustee or the Back-up Servicer inthe conduct of their business violates any law, regulation, judgment,agreement, order or decree applicable to any the Indenture Trustee or theBack-up Servicer that, if enforced, could reasonably be expected to result in aMaterial Adverse Change with respect to the Indenture Trustee or the Back-upServicer. Neither the Indenture Trustee nor the Back-up Servicer is in breachof or 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 or decreeor 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 the representations and warranties ofthe Indenture Trustee and the Back-up Servicer contained in the TransactionDocuments is true and correct in all material respects, and the IndentureTrustee and the Back-up Servicer hereby makes each such representation andwarranty to, and for the benefit of, the Insurer as if the same were set forthin full herein.

 

(h)                                *Compliance and Amendments.*The Indenture Trustee and the Back-upServicer shall comply in all material respects with the terms and conditions ofthe Transaction Documents to which it is a party and the Indenture Trustee andthe Back-up Servicer shall not agree to any amendment to or modification of theterms of any of the Transaction Documents to which it is a party unless theInsurer shall otherwise give its prior written consent.

 

(i)                                    *Notices.*The Indenture Trustee shall promptly notifythe Insurer of any merger, consolidation or asset transfer with respect to itas described in Section 6.9 of the Indenture.

 

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

 

(a)                                 *Representations andWarranties.*As of the Dateof Issuance, each of the representations and warranties of the Owner Trustee setforth in the Transaction Documents is true and correct in all material respectsand the Owner Trustee makes each such representation and warranty to, and forthe benefit of, the Insurer as if the same were set forth in full herein.

 

(b)                                *Compliance and Amendments.*The Owner Trustee shall comply in all materialrespects with the terms and conditions of the Transaction Documents to which itis a party and the Owner Trustee shall not agree to any amendment to ormodification of the terms of any of the Transaction Documents to which it is aparty unless the Insurer shall otherwise give its prior written consent.

 

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**Section 2.09. Negative Covenant of theAdministrator.**TheAdministrator shall not remove the Owner Trustee pursuant to Section 10.2of the Trust Agreement unless it has obtained the prior written consent of theInsurer if no Insurer Default or Insurer Insolvency exists.

 

**ARTICLE III**

 

**THE POLICY;REIMBURSEMENT**

 

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

 

(a)                                 *Payment of InitialInsurance 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 Insurer shall have received a fullyexecuted copy of the Premium Side Letter Agreement and a copy of each of theTransaction Documents, in form and substance satisfactory to the Insurer, dulyauthorized, executed and delivered by each party thereto.

 

(c)                                 *Certified Documents andResolutions.*The Insurershall have received a copy of (i) the certificate or articles ofincorporation and bylaws of the Servicer, the Seller and the Depositor and (ii) theresolutions of the Seller’s Board of Directors authorizing the sale of theContracts and (iii) the execution, delivery and performance by theServicer, the Seller and the Depositor of the Transaction Documents and the Transactioncontemplated thereby, certified by the Secretary or an Assistant Secretary of theServicer, the Seller and the Depositor (which certificate shall state that suchcertificate or articles of incorporation, bylaws and resolutions are in fullforce and effect without modification on the Date of Issuance).

 

(d)                                *Incumbency Certificate.*The Insurer shall have received a certificateof the Secretary or an Assistant Secretary of the Servicer, the Seller and theDepositor certifying the names and signatures of the officers of the Servicer,the Seller and the Depositor authorized to execute and deliver the TransactionDocuments and that shareholder consent to the execution and delivery of suchdocuments is not necessary.

 

(e)                                 *Representations andWarranties; Certificate.*Therepresentations and warranties of the Servicer, the Seller and the Depositorset forth or incorporated by reference in this Insurance Agreement shall betrue and correct in all material respects as of the Date of Issuance as if madeon the Date of Issuance and the Insurer shall have received a certificate ofappropriate officers of the Servicer, the Seller and the Depositor to thateffect.

 

(f)                                   *Opinions of Counsel.*

 

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(i)                                    The law firm of Dechert LLP shall have issuedits favorable opinion, in form and substance reasonably acceptable to theInsurer and its counsel, regarding and the validity and enforceability of theTransaction Documents, other than the Trust Agreement, against the Depositor,the Servicer, the Issuer and the Seller.

 

(ii)                                 The law firm of Dechert LLP shall have issuedits favorable opinions, in form and substance reasonably acceptable to theInsurer and its counsel, regarding the transfer of the Contracts from theSeller to the Depositor and from the Depositor to the Issuer, and consolidationof the Depositor and the Seller and the Seller and the Issuer in the event ofthe Seller’s bankruptcy.

 

(iii)                              The law firm of Richards, Layton &Finger, P.A. shall have issued its favorable opinions, in form and substancereasonably acceptable to the Insurer and its counsel, regarding the perfectionof the Indenture Trustee’s interest in the Trust Estate, including in theReserve 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 otheropinions of counsel, in form and substance acceptable to the Insurer and itscounsel, including tax opinions, addressing such other matters as the Insurermay reasonably request.

 

(g)                                *Approvals, Etc.*The Insurer shall have received true andcorrect copies of all approvals, licenses and consents, if any, including,without limitation, any required approval of the shareholders of the Servicer,the Seller and the Depositor, required in connection with the Transaction.

 

(h)                                *No Litigation, Etc.*No suit, action or other proceeding,investigation or injunction, or final judgment relating thereto, shall bepending or, to the knowledge of the Seller, Servicer, or the Issuer, threatenedbefore any court or governmental agency in which it is sought to restrain orprohibit or to obtain damages or other relief in connection with theTransaction Documents or the consummation of the Transaction.

 

(i)                                    *Legality.*No statute, rule, regulation or order shallhave been enacted, entered or deemed applicable by any government orgovernmental or administrative agency or court that would make the Transactioncontemplated by any of the Transaction Documents illegal or otherwise preventthe consummation thereof.

 

(j)                                    *Issuance of Ratings.*The Insurer shall have received confirmationthat the risk secured by the Policy constitutes at least an investment graderisk by S&P and Moody’s, and that the Obligations, when issued, will berated “AAA” by S&P and “Aaa” by Moody’s.

 

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(k)                                 *No Default.*No Default or Event of Default shall haveoccurred.

 

(l)                                    *Additional Items.*The Insurer shall have received such otherdocuments, instruments, approvals or opinions requested by the Insurer or itscounsel as may be reasonably necessary to effect the Transaction, including,but not limited to, evidence satisfactory to the Insurer and its counsel thatthe conditions precedent, if any, in the Transaction Documents have beensatisfied.

 

(m)                              *Conform to Documents.*The Insurer and its counsel shall havedetermined that all documents, certificates and opinions to be delivered inconnection with the Obligations conform to the terms of the TransactionDocuments.

 

(n)                                *Satisfaction of Conditionsof the Purchase Agreement.*Allconditions in the Purchase Agreement relating to the Initial Purchaser’sobligation to purchase the Obligations shall have been satisfied.

 

(o)                                *Purchase Agreement.*The Insurer shall have received copies ofeach of the documents, and shall be entitled to rely on each of the documents,required to be delivered to the Initial Purchaser pursuant to the PurchaseAgreement.

 

(p)                                *Guaranty.*The Guaranty shall be executed by all partiesthereto and delivered to the Indenture Trustee.

 

**Section 3.02. Payment of Fees and Insurance Premium.**

 

(a)                                 *Legal and Accounting Fees.*The Servicer or Seller shall pay or cause to bepaid, on the Date of Issuance, legal fees and disbursements incurred by theInsurer in connection with the issuance of the Policy and any fees of theInsurer’s auditors. Any fees of the Insurer’s auditors payable in respect ofany amendment or supplement to the Offering Document or any other OfferingDocument incurred after the Date of Issuance shall be paid by the Servicerafter presentation of an invoice therefor.

 

(b)                                *Insurance Premium.*In consideration of the issuance by theInsurer of the Policy, the Insurer shall be entitled to receive the InsurancePremium, so long as no Insurer Default or Insurer Insolvency has occurred, asand when due in accordance with the terms of the Premium Side Letter Agreement (i) inthe case of Insurance Premium due on or before the Date of Issuance, directlyfrom the Servicer or the Seller and (ii) in the case of Insurance Premiumdue after the Date of Issuance, *first*, pursuant to the Sale and AllocationAgreement, and *second*, to the extent the amounts insubclause *first*are notsufficient, 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 InsurancePremium paid hereunder or under the Sale and Allocation Agreement shall benonrefundable without regard to whether the Insurer makes any payment under thePolicy or any other circumstances relating to the Obligations or provisionbeing made for payment of the Obligations prior

 

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to maturity. All payments of Insurance Premium to bemade to the Insurer shall be made by wire transfer to an account designatedfrom time to time by the Insurer by written notice to the Servicer and theIndenture Trustee.

 

**Section 3.03. Reimbursement and AdditionalPayment Obligation.**

 

(a)                                 In accordance with the priorities establishedin Section 3.5 of the Sale and Allocation Agreement, the Insurer shall beentitled to (i) reimbursement for any payment 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 with interestthereon at a rate equal to the Late Payment Rate and (iii) reimbursementfor any payments made by the Insurer with respect to the fees and expenses of asuccessor Servicer or with respect to any transition costs relating to the transferof servicing from the Servicer to such successor Servicer together withinterest thereon at a rate equal to the Late Payment Rate.

 

(b)                                Notwithstanding anything in Section 3.03(a) tothe contrary, the Servicer and the Seller agree to reimburse the Insurer asfollows: (i) from the Seller, for payments made under the Policy arisingas a result of the Seller’s failure to repurchase any Contract required to berepurchased pursuant to Section 2.3 of the Contribution Agreement, togetherwith interest on any and all amounts remaining unreimbursed (to the extent permittedby law, if in respect of any unreimbursed amounts representing interest) from thedate such amounts became due until paid in full (after as well as beforejudgment), at a rate of interest equal to the Late Payment Rate, and (ii) fromthe Servicer, 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 Contractto be repurchased under Section 2.28 of the Servicing Agreement, together withinterest on any and all amounts remaining unreimbursed (to the extent permittedby law, if in respect to any unreimbursed amounts representing interest) fromthe date such amounts became due until paid in full (after as well as before judgment),at a rate of interest equal to the Late Payment Rate.

 

(c)                                 The Servicer and the Seller agree to pay tothe Insurer as follows: any and all charges, fees, costs and expenses that theInsurer may reasonably pay or incur, including, but not limited to, attorneys’ andaccountants’ fees and expenses, in connection with (i) any accountsestablished to facilitate payments under the Policy to the extent the Insurerhas not been immediately reimbursed on the date that any amount is paid by theInsurer under the Policy, (ii) the enforcement, defense or preservation ofany rights in respect of any of the Transaction Documents, including defending,monitoring

 

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or participating in any litigation or proceeding(including any insolvency or bankruptcy proceeding in respect of anyTransaction participant or any affiliate thereof) relating to any of theTransaction Documents, any party to any of the Transaction Documents, in itscapacity as such a party, or the Transaction, (iii) any amendment,consent, waiver or other action with respect to, or related to, any TransactionDocument, whether or not executed or completed, or (iv) any reliening, anyreplacement servicer or any transition costs relating to the transfer ofservicing from the Servicer to a replacement servicer; provided, however, thatthe amounts recovered by the Insurer from the Seller and the Servicer pursuantto this paragraph for the items set forth in (v) above shall be limited to$250,000.00; provided, further, that costs and expenses shall include areasonable allocation of compensation and overhead attributable to the time ofemployees of the Insurer spent in connection with the actions described inclause (ii) above, and the Insurer reserves the right to charge areasonable fee as a condition to executing any waiver or consent proposed inrespect of any of the Transaction Documents. Notwithstanding anything herein tothe contrary, the Seller and the Servicer shall have no obligation to pay anyamounts representing (i) recourse for uncollectible Contracts and (ii) anyprincipal or interest on any Note.

 

(d)                                The Servicer, the Seller and the Depositoragree to pay, severally but not jointly to the Insurer as follows: interest onany and all amounts described in subsections (b), (c), (e) and (f) ofthis Section 3.03 from the date payable or paid by such party until paymentthereof in full, and interest on any and all amounts described in Section 3.02hereof from the date due until payment thereof in full, in each case, payable tothe Insurer at the Late Payment Rate per annum.

 

(e)                                 (i) The Servicer and the Seller agree topay to the Insurer as follows: any payments made by the Insurer on behalf of,or advanced to, the Servicer or the Seller, respectively, including, withoutlimitation, any amounts payable by the Servicer or the Seller pursuant to theTransaction Documents (other than the Obligations).

 

(ii)                                 The Depositor agrees to pay to the Insurer asfollows: any payments made by the Insurer on behalf of, or advanced to, theDepositor, including, without limitation, any amounts payable by the Depositorpursuant 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

 

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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, who controls theInsurer within the meaning of either Section 15 of the Securities Act or Section 20of the Securities Exchange Act from and against any and all claims, losses,liabilities (including penalties), actions, suits, judgments, demands, damages,costs or reasonable expenses (including, without limitation, reasonable feesand expenses of attorneys, consultants and auditors and reasonable costs ofinvestigations) or obligations whatsoever paid by the Insurer (hereincollectively referred to as “Liabilities”) of any nature arising out of orrelating to the Transaction contemplated by the Transaction Documents by reasonof:

 

(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 Documentunder the caption “Description of the Insurer and the Insurance Policy” or inthe financial statements of the Insurer, including any information in anyamendment or supplement to the Offering Document furnished by the Insurer inwriting expressly for use therein that amends or supplements such information(all such information being referred to herein as “Insurer Information”) or (b) inthe last paragraph of the cover page of the Offering Document regardingthe delivery of the Obligations and under the heading “Plan of Distribution” inthe Offering Document;

 

(ii)                                 to the extent not covered by clause (i) above,any act or omission of the Seller, the Depositor, the Servicer, or the allegationthereof, in connection with the offering, issuance, sale or delivery of theObligations other than by reason of false or misleading information provided bythe Insurer in writing for inclusion in the Offering Document as specified inclause (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, the Seller orthe Servicer of any federal or state securities, banking or antitrust laws, rules orregulations in connection with the issuance, offer and sale of the Obligationsor the Transaction contemplated by the Transaction Documents;

 

(v)                                the violation by the Depositor, the Seller orthe Servicer of any federal or state laws, rules or regulations relatingto the Transaction, including without limitation the maximum amount of interestpermitted to be received on account of any loan of money or with respect to theContracts;

 

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(vi)                             the breach by the Seller or the Servicer ofany of its obligations under this Insurance Agreement or any of the otherTransaction Documents; and

 

(vii)                          the breach by the Servicer or the Seller ofany representation or warranty on the part of the Servicer or the Sellercontained in the Transaction Documents or in any certificate or reportfurnished or delivered to the Insurer thereunder.

 

This indemnity provisionshall survive the termination of this Insurance Agreement and shall surviveuntil the statute of limitations has run on any causes of action which arisefrom one of these reasons and until all suits filed as a result thereof havebeen finally concluded. Notwithstanding anything else in this Section 3.04(a),the Seller shall have no obligation for amounts due under this Section 3.04(a) foracts or omissions of or any liabilities attributable to the Depositor or theIssuer.

 

(b)                                [Reserved]

 

(c)                                 Any party which proposes to assert the rightto be indemnified under this Section 3.04 will, promptly after receipt ofnotice of commencement of any action, suit or proceeding against such party inrespect of which a claim is to be made against the Servicer, the Seller or theDepositor under this Section 3.04, notify the Servicer, the Seller or theDepositor of the commencement of such action, suit or proceeding, enclosing acopy of all papers served. In case any action, suit or proceeding shall be broughtagainst any indemnified party and it shall notify the Servicer, the Seller orthe Depositor of the commencement thereof, the Servicer, the Seller or theDepositor shall be entitled to participate in, and, to the extent that it shallwish, to assume the defense thereof, with counsel satisfactory to suchindemnified party, and after notice from the Servicer, the Seller or theDepositor to such indemnified party of its election so to assume the defensethereof, the Servicer, the Seller or the Depositor shall not be liable to such indemnifiedparty for any legal or other expenses other than reasonable costs of investigationsubsequently incurred by such indemnified party in connection with the defensethereof. The indemnified party shall have the right to employ its counsel inany such action the defense of which is assumed by the Servicer, the Seller orthe Depositor in accordance with the terms of this subsection (c), but thefees and expenses of such counsel shall be at the expense of such indemnifiedparty unless the employment of counsel by such indemnified party has beenauthorized by the Servicer, the Seller or the Depositor. The Servicer, theSeller or the Depositor shall not be liable for any settlement of any action orclaim 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 Insurer withinthe meaning of either Section 15 of the Securities Act or Section 20of the Securities Exchange Act from and against any and all claims, losses,liabilities (including penalties), actions, suits, judgments, demands, damages,costs or reasonable expenses

 

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(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 IndentureTrustee of any of its obligations under this Insurance Agreement or theIndenture. 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.

 

(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 or Section 20of the Securities Exchange Act from and against any and all claims, losses,liabilities (including penalties), actions, suits, judgments, demands, damages,costs or reasonable expenses (including, without limitation, reasonable feesand expenses of attorneys, consultants and auditors and reasonable costs ofinvestigations) or obligations whatsoever of any nature arising out of thebreach by the Back-up Servicer of any of its obligations under this InsuranceAgreement or the Servicing Agreement. This indemnity provision shall survivethe termination of this Insurance Agreement and shall survive until the statuteof limitations has run on any causes of action which arise from one of thesereasons and until all suits filed as a result thereof have been finallyconcluded.

 

**Section 3.05. Payment Procedure.**In the event of any payment by the Insurer,the Indenture Trustee, the Servicer, the Back-up Servicer, the Seller and theDepositor agree to accept the voucher or other evidence of payment as primafacie evidence of the propriety thereof and the liability therefor to theInsurer. All payments to be made to the Insurer under this Insurance Agreementshall be made to the Insurer in lawful currency of the United States of Americain immediately available funds at the notice address for the Insurer asspecified in Section 6.02 hereof on the date when due or as the Insurershall otherwise direct by written notice to the other parties hereto. In theevent that the date of any payment to the Insurer or the expiration of any timeperiod hereunder occurs on a day which is not a Business Day, then such paymentor expiration 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 tobe made to the Insurer under this Insurance Agreement shall bear interest atthe Late Payment Rate from the date when due to the date paid.

 

**ARTICLE IV**

 

**FURTHERAGREEMENTS**

 

**Section 4.01. Effective Date; Term of theInsurance 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 longer subjectto a claim under the Policy and the Policy shall have been surrendered to theInsurer for cancellation and (b) all amounts payable to the Insurer

 

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by the Servicer, the Indenture Trustee, the Back-up Servicer, theSeller or the Depositor or from any other source under the TransactionDocuments and all amounts payable under the Obligations have been paid in full;provided, however, that the provisions of Sections 3.02, 3.03, 3.04 and 4.06hereof shall survive any termination of this Insurance Agreement.

 

**Section 4.02. Further Assurances and CorrectiveInstruments.**

 

(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, the Servicer,the Indenture Trustee, the Back-up Servicer, the Seller, the Issuer, the OwnerTrustee and the Depositor agree that they will, from time to time, execute,acknowledge and deliver, or cause to be executed, acknowledged and delivered,such supplements hereto and such further instruments as the Insurer may requestand as may be required in the Insurer’s judgment to effectuate the intention ofor 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 enforceability of, orany amendment or other modifications of, or waiver, with respect to any of theTransaction 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 with thePolicy proving to be forged, fraudulent, invalid or insufficient in any respector any statement therein being untrue or inaccurate in any respect;

 

(v)                                any payment by the Insurer under the Policyagainst presentation of a certificate or other document that does not strictlycomply with terms of the Policy;

 

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(vi)                             any failure of the Servicer, the IndentureTrustee, the Back-up Servicer, the Seller, the Issuer or the Depositor toreceive 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 representation, warranty or covenant contained in any of theTransaction 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 the obligationsof the Servicer, the Indenture Trustee, the Back-up Servicer, the Seller, theIssuer, the Owner Trustee or the Depositor under this Insurance Agreement agreeto be bound by this Insurance Agreement and (i) to the extent permitted bylaw, waive and renounce any and all redemption and exemption rights and thebenefit of all valuation and appraisement privileges against the indebtednessand obligations evidenced by any Transaction Document or by any extension orrenewal thereof; (ii) waive presentment and demand for payment, notices ofnonpayment and of dishonor, protest of dishonor and notice of protest; (iii) waiveall notices in connection with the delivery and acceptance hereof and all othernotices in connection with the performance, default or enforcement of anypayment hereunder, except as required by the Transaction Documents; (iv) waiveall rights of abatement, diminution, postponement or deduction, or any defenseother than payment, or to any right of setoff or recoupment arising out of anybreach under any of the Transaction Documents, by any party thereto or anybeneficiary thereof, or out of any obligation at any time owing to theServicer, the Indenture Trustee, the Back-up Servicer, the Seller, the Issuer,the Owner Trustee or the Depositor; (v) agree that its liabilitieshereunder shall, except as otherwise expressly provided in this Section 4.03,be unconditional and without regard to any setoff, counterclaim or theliability of any other Person for the payment hereof; (vi) agree that anyconsent, waiver or forbearance hereunder with respect to an event shall operateonly for such event and not for any subsequent event; (vii) consent to anyand all extensions of time that may be granted by the Insurer with respect toany payment hereunder or other provisions hereof and to the release of anysecurity at any time given for any payment hereunder, or any part thereof, withor without substitution, and to the release of any Person or entity liable forany such payment; and (viii) consent to the addition of any and all othermakers, endorsers, guarantors and other obligors for any payment hereunder, andto the acceptance of any and all other security for any payment hereunder, andagree that the addition of any such obligors or security shall not affect theliability of the parties hereto for any payment hereunder.

 

(c)                                 Nothing herein shall be construed as prohibitingthe Servicer, the Indenture Trustee, the Back-up Servicer, the Seller, theIssuer, the Owner Trustee or the Depositor from pursuing any rights or remediesit may have against any other Person in a separate legal proceeding.

 

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**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 the Servicer, the Indenture Trustee, the Back-upServicer, the Seller, the Issuer, the Owner Trustee nor the Depositor may assignits rights under this Insurance Agreement, or delegate any of its dutieshereunder, without the prior written consent 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 be entitled toassign or pledge to any bank or other lender providing liquidity or credit withrespect to the Transaction or the obligations of the Insurer in connectiontherewith any rights of the Insurer under the Transaction Documents or withrespect to any real or personal property or other interests pledged to theInsurer, or in which the Insurer has a security interest, in connection with theTransaction.

 

(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, promises andagreements contained herein shall be for the sole and exclusive benefit of theparties hereto and their successors and permitted assigns. Neither theIndenture Trustee nor any Owner shall have any right to payment from any InsurancePremiums paid or payable hereunder or under the Sale and Allocation Agreementor from any other amounts paid by the Servicer, the Indenture Trustee, theBack-up Servicer, the Seller or the Depositor pursuant to Section 3.02,3.03 or 3.04 hereof.

 

(e)                                 The Servicer, the Seller, the Depositor, theBack-up Servicer, the Issuer, the Owner Trustee and the Indenture Trustee agreethat the Insurer shall have all rights of a third-party beneficiary in respectof the Indenture and each other Transaction Document to which it is not asigning party and hereby incorporate and restate their representations, warrantiesand covenants as set forth therein for the benefit of the Insurer.

 

**Section 4.05. Liability of the Insurer.**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

 

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knowledgethereof). In furtherance and not in limitation of the foregoing, the Insurer(or its Fiscal Agent) may accept documents that appear on their face to be inorder, without responsibility for further investigation.

 

**Section 4.06. Parties Will Not InstituteInsolvency 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-upServicer, Seller and Servicer To Join in Enforcement Action.**

 

(a)                                 To the extent necessary to enforce any rightof the Insurer in or remedy of the Insurer under any Contract, the IndentureTrustee, the Depositor, the Back-up Servicer, the Seller, the Issuer, the OwnerTrustee and the Servicer agree to join in any action initiated by the Trust orthe Insurer for the protection of such right or exercise of such remedy.

 

(b)                                In the event of any court proceeding (x) withrespect to which the Servicer, Depositor, the Seller or any affiliate thereof(each a “First Investors Company”) is a party (including, without limitation,an insolvency or bankruptcy proceeding in respect of any First InvestorsCompany) which affects the Trust Estate, the Policy or the obligations of theInsurer under the Transaction Documents, and (y) with respect to which suchFirst Investors Company fails to defend or answer, the Insurer shall have the rightto direct, assume or otherwise participate in the defense thereof (so long asno Insurer Default has occurred and is continuing). 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 inconnection with such action, proceeding or investigation, (including, withoutlimitation, any judgment or settlement entered into or paid by the Insurer),shall be included in the Insurance Payment Amount and shall be payable to theInsurer pursuant to Section 3.5(d)(vi) of the Sale and Allocation Agreement.

 

(c)                                 The Indenture Trustee shall cooperate with,and take such action as directed by, the Insurer (so long as no Insurer Defaulthas occurred and is continuting), including (without limitation) entering intosuch agreements and settlements as the Insurer in its sole discretion shalldirect with respect to such court proceeding. The Indenture Trustee shall notbe liable to the Insurer for any such action that conforms to the direction ofthe Insurer. The Indenture Trustee’s reasonable out-of-pocket costs and expenses(including attorneys’ fees and expenses) with respect to any such action shallbe reimbursed pursuant to the Sale and Allocation Agreement; provided, however,that if such costs and expenses are not so reimbursed on the Payment Dateimmediately following the date incurred, then the Insurer shall reimburse theIndenture Trustee for such costs and expenses within 60 days of suchnonpayment.

 

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

 

(e)                                 Notwithstanding anything contained herein orin 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 iscontinuing), undertake or join any litigation or agree to any settlement of anyaction, proceeding or investigation affecting the Owner Trustee, the Issuer orthe Trust Estate or the rights or obligations of the Insurer hereunder or underthe Policy or the other Transaction Documents.

 

**Section 4.08. Subrogation.**To the extent of any payments under thePolicy, the Insurer shall be fully subrogated to any remedies against the Depositor,the Seller or the Servicer or in respect of the Contracts available to theIndenture Trustee under the Indenture or Sale and Allocation Agreement. TheIndenture Trustee acknowledges such subrogation and, further, agrees to executesuch instruments prepared by the Insurer and to take such reasonable actionsas, 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 eventsshall constitute an Event of Default hereunder:

 

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

 

(b)                                a legislative body has enacted any law thatdeclares 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 “Eventof Servicing Termination” under the Servicing Agreement as defined therein;

 

(d)                                The failure of the Seller, the Issuer or theDepositor to comply with, or maintain the accuracy of, the Opinion Facts andAssumptions, to the extent they are related to a date after the Closing Date;

 

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(e)                                 The occurrence of final rulings against theSeller 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;

 

(f)                                   The departure of both Tommy Moore and BennieDuck from the Seller or its consolidated subsidiaries, if replacement for suchindividuals acceptable to the Insurer is not made within 90 days;

 

(g)                                The Seller fails to maintain a minimum GAAPequity as a percentage of on-balance sheet portfolio of 10%. Equity may include50% of subordinated debt with a maturity equal to or greater than five years,subject to MBIA review of and satisfaction with the subordinated debtagreement;

 

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

 

(i)                                    The Seller fails to maintain a minimum EBITDACoverage of 1.1:1.0. The test shall be measured quarterly (coinciding with FIFSquarterly fiscal reporting) on a rolling six months basis;

 

(j)                                    A Change in Control occurs;

 

(k)                                 A material change occurs in the operations ofthe Servicer which materially adversely affects the ability of the Servicer toservice the Contracts or to perform its obligations under the ServicingAgreement;

 

(l)                                    As of the end of any of its fiscal quarters,FIFSG shareholder’s equity (determined in accordance with GAAP) is less thanthe sum of $24,120,545 and 50% of the aggregate of the net income of FIFSG(determined in accordance with GAAP and without deduction for any net losses)for such fiscal quarter and all prior fiscal quarters ending after January 31,2005; or

 

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

 

**Section 5.02. Remedies; No Remedy Exclusive.**

 

(a)                                 Upon the occurrence of an Event of Default,the Insurer may exercise any one or more of the rights and remedies set forthbelow:

 

(i)                                    exercise any rights and remedies under theTransaction Documents in accordance with the terms of the Transaction Documentsor direct the Indenture Trustee to exercise such remedies in accordance withthe terms of the Transaction Documents; or

 

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(ii)                                 take whatever action at law or in equity asmay appear necessary or desirable in its judgment to collect the amounts thendue under the Transaction Documents or to enforce performance and observance ofany obligation, agreement or covenant of the Servicer, the Indenture Trustee,the Back-up Servicer, the Seller, the Issuer, the Owner Trustee or theDepositor under the Transaction Documents.

 

(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 omission to exercise any right or power accruingunder the Transaction Documents upon the happening of any event set forth in Section 5.01hereof shall impair any such right or power or shall be construed to be awaiver thereof, but any such right and power may be exercised from time to timeand as often as may be deemed expedient. In order to entitle the Insurer toexercise any remedy reserved to the Insurer in this Article, it shall not benecessary to give any notice, other than such notice as may be required in thisArticle V.

 

**Section 5.03. Waivers.**

 

(a)                                 No failure by the Insurer to exercise, and nodelay by the Insurer in exercising, any right hereunder shall operate as awaiver thereof. The exercise by the Insurer of any right hereunder shall notpreclude the exercise of any other right, and the remedies provided herein tothe Insurer are declared in every case to be cumulative and not exclusive ofany remedies provided by law or equity.

 

(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 waiver signedby the Insurer and delivered to the Servicer, the Indenture Trustee, theBack-up Servicer, the Seller, the Issuer and the Depositor. Unless such writingexpressly provides to the contrary, any waiver so granted shall extend only tothe specific event or occurrence which gave rise to the Event of Default sowaived and not to any other similar event or occurrence which occurs subsequentto the date of such waiver.

 

**ARTICLE VI**

 

**MISCELLANEOUS**

 

**Section 6.01. Amendments, Etc.**This Insurance Agreement may be amended,modified or terminated only by written instrument or written instruments signedby the parties hereto. The Servicer agrees to promptly provide a copy of anyamendment to this Insurance Agreement to the Indenture Trustee, S&P andMoody’s. No act or course of dealing shall be deemed to constitute anamendment, modification or termination hereof.

 

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**Section 6.02. Notices.**All demands, notices and other communicationsto be given hereunder shall be in writing (except as otherwise specificallyprovided herein) and shall be mailed by registered mail or personally deliveredor telecopied to the recipient as follows:

 

(a)                                 To the Insurer:

 

MBIA Insurance Corporation

113 King Street

Armonk, NY 10504

Attention:  Insured PortfolioManagement-Structured Finance (IPM-SF)

(First Investors Auto OwnerTrust 2005-A)

Telecopy No.: (914) 765-3810

Confirmation: (914) 273-4545

 

(in each case in which notice or other communication to the Insurerrefers to an Event of Default, a claim on the Policy or with respect to whichfailure on the part of the Insurer to respond shall be deemed to constituteconsent or acceptance, then a copy of such notice or other communication shouldalso be sent to the attention of each of the general counsel and the Insurerand shall be marked to indicate “URGENT MATERIAL ENCLOSED.”)

 

(b)                                To the Seller and Administrator:

 

First Investors Financial Services, Inc.

Suite 710

675 Bering Drive

Houston, TX 77057

Attention: Bennie H. Duck

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: Bennie H. Duck

 

(d)                                To the Indenture Trustee:

 

Wells Fargo Bank, National Association

MAC N9311-161

 

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Sixth and Marquette Streets

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: Bennie H. Duck

Telecopy No.: (713) 977-0657

Confirmation: (713) 977-2600

 

(f)                                   To the Issuer:

 

First Investors Auto Owner Trust 2005-A

c/o Wells Fargo Delaware Trust Company

919 N. Market Street, Suite 700

Wilmington, DE 19801

Attention: Corporate Trust Administration

 

(g)                                To the Owner Trustee:

 

c/o Wells Fargo Delaware Trust Company

919 N. Market Street, Suite 700

Wilmington, DE 19801

Attention: Corporate Trust

 

(h)                                To the Back-up Servicer:

 

Wells Fargo Bank, National Association

Sixth and Marquette Streets

Minneapolis, MN 55479-0070

Attention: Asset-Backed Trust Administration

 

A party may specify anadditional or different address or addresses by writing mailed or delivered tothe other parties as aforesaid. All such notices and other communications shallbe effective upon receipt.

 

**Section 6.03. Severability.**In the event that any provision of thisInsurance Agreement shall be held invalid or unenforceable by any court ofcompetent jurisdiction, the parties hereto agree that such holding shall notinvalidate or render unenforceable any other provision hereof. The partieshereto further agree that the holding by any court of competent jurisdictionthat any remedy pursued by any party hereto is unavailable or unenforceableshall not affect in any way the ability of such party to pursue any otherremedy available to it.

 

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**Section 6.04. Governing Law.**This Insurance Agreement shall be governed byand construed in accordance with the laws of the State of New York withoutgiving effect to the conflict of law provisions thereof.

 

**Section 6.05. Consent to Jurisdiction.**

 

(a)                                 The parties hereto hereby irrevocably submitto the jurisdiction of the United States District Court for the SouthernDistrict of New York and any court in the State of New York located in the Cityand County of New York, and any appellate court from any thereof, in anyaction, suit or proceeding brought against it and to or in connection with anyof the Transaction Documents or the Transaction contemplated thereunder or forrecognition or enforcement of any judgment, and the parties hereto herebyirrevocably and unconditionally agree that all claims in respect of any suchaction or proceeding may be heard or determined in such New York state courtor, to the extent permitted by law, in such federal court. The parties heretoagree that a final judgment in any such action, suit or proceeding shall beconclusive and may be enforced in other jurisdictions by suit on the judgmentor in any other manner provided by law. To the extent permitted by applicablelaw, the parties hereto hereby waive and agree not to assert by way of motion,as a defense or otherwise in any such suit, action or proceeding, any claimthat it is not personally subject to the jurisdiction of such courts, that thesuit, action or proceeding is brought in an inconvenient forum, that the venueof the suit, action or proceeding is improper or that the related documents orthe subject matter thereof may not be litigated in or by such courts.

 

(b)                                To the extent permitted by applicable law,the parties hereto shall not seek and hereby waive the right to any review ofthe judgment of any such court by any court of any other nation or jurisdictionwhich may be called upon to grant an enforcement of such judgment.

 

(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 to startlegal proceedings relating to any of the Transaction Documents any party heretoor its or their property in the courts of any jurisdiction.

 

**Section 6.06. Consent of the Insurer.**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 incounterparts by the parties hereto, and all such counterparts shall constituteone and the same instrument.

 

**Section 6.08. Headings.**The headings of Articles and Sections and theTable of Contents contained in this Insurance Agreement are provided forconvenience only. They form no part of this Insurance Agreement and shall notaffect its construction or interpretation. Unless

 

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otherwise indicated, all references to Articles and Sections in thisInsurance Agreement refer to the corresponding Articles and Sections of thisInsurance Agreement.

 

**Section 6.09. Trial by Jury Waived.**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, agentor attorney of any party hereto has represented, expressly or otherwise, thatit would not, in the event of litigation, seek to enforce the foregoing waiverand (B) acknowledges that it has been induced to enter into theTransaction Documents to which it is a party by, among other things, thiswaiver.

 

**Section 6.10. Limited Liability.**No recourse under any Transaction Documentshall be had against, and no personal liability shall attach to, any officer,employee, director, affiliate or shareholder of any party hereto, as such, bythe enforcement of any assessment or by any legal or equitable proceeding, byvirtue of any statute or otherwise in respect of any of the TransactionDocuments, the Obligations or the Policy, it being expressly agreed andunderstood that each Transaction Document is solely a corporate obligation ofeach party hereto, and that any and all personal liability, either at commonlaw or in equity, or by statute or constitution, of every such officer,employee, director, affiliate or shareholder for breaches by any party heretoof any obligations under any Transaction Document is hereby expressly waived asa condition of and in consideration for the execution and delivery of thisInsurance Agreement.

 

**Section 6.11. Entire Agreement.**The Transaction Documents and the Policy setforth the entire agreement between the parties with respect to the subjectmatter thereof, and this Insurance Agreement supersedes and replaces anyagreement or understanding that may have existed between the parties prior tothe date hereof in respect of such subject matter.

 

**Section 6.12. No Recourse.**It is expressly understood and agreed to bythe parties hereto that (a) this Insurance Agreement is executed anddelivered by Wells Fargo Delaware Trust Company, not individually or personallybut solely as trustee of the Issuer, in the exercise of the powers andauthority conferred and vested in it, (b) each of the representations,undertakings and agreements herein made on the part of the Issuer or the Trustis made and intended not as personal representations, undertakings andagreements by Wells Fargo Delaware Trust Company but is made and intended forthe purpose of binding only the Issuer or the Owner Trustee, as applicable, (c) nothingherein contained shall be construed as creating any liability on the part ofWells Fargo Delaware Trust Company, individually or personally, to perform anycovenant either expressed or implied contained herein, all such liability, ifany, being expressly waived by the parties hereto and by any Person claimingby, through or under the parties hereto and (d) under no circumstancesshould Wells Fargo Delaware Trust Company be personally liable for the breachor failure of any obligation, representation, warranty or covenant made orundertaken by the Issuer or the Trust under this Insurance Agreement or anyother Transaction Documents.

 

**Section 6.13. Limited Recourse.**Notwithstanding any other provision containedherein or in any of the Transaction Documents, the liability of the Issuer tothe Insurer hereunder is

 

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limitedin recourse to the Collateral, when and as applied in accordance with thepriority of payments set forth in Section 3.5 of the Sale and AllocationAgreement, and to the extent such proceeds of the Collateral are insufficientto meet the obligations of the Issuer hereunder in full, the Issuer shall haveno further liability in respect of any such outstanding obligations, it beingagreed between the parties that, upon realization of the Collateral and itsreduction to zero, all claims arising out of or in connection with thisAgreement against the Issuer shall thereupon extinguish and shall notthereafter revive.

 

**Section 6.14. Subordination.**Any obligations of the Depositor under thisAgreement are obligations solely of the Depositor and will not constitute aclaim against the Depositor to the extent that the Depositor does not havefunds sufficient to make payment of such obligations. In furtherance of and notin derogation of the foregoing, the parties hereto (other than the Depositor),by entering into or accepting this Agreement, each acknowledges and agrees thatit has no right, title, or interest in or to the Other Assets of the Depositor.To the extent that, notwithstanding the agreements and provisions contained inthe preceding sentence, any party hereto either (i) asserts an interest orclaim to, or benefit from, Other Assets, or (ii) is deemed to have anysuch interest, claim to, or benefit in or from Other Assets, whether byoperation of law, legal process, pursuant to applicable provisions ofinsolvency laws or otherwise (including by virtue of Section 1111(b) ofthe Bankruptcy Code or any successor provision having similar effect under theBankruptcy Code), then such party further acknowledges and agrees that any suchinterest, claim or benefit in or from Other Assets is and will be expresslysubordinated to the indefeasible payment in full, which, under the terms of therelevant documents relating to the securitization or conveyance of such OtherAssets, are entitled to be paid from, entitled to the benefits of, or otherwisesecured by such Other Assets (whether or not any such entitlement or securityinterest is legally perfected or otherwise entitled to a priority ofdistributions or application under applicable law, including insolvency laws,and whether or not asserted against the Depositor), including the payment ofpost-petition interest on such other obligations and liabilities. Thissubordination provision will be deemed a subordination provision within themeaning of Section 510(a) of the Bankruptcy Code. Each party hereto(other than the Depositor) further acknowledges and agrees that no adequateremedy at law exists for a breach of this Section 6.14 and the terms ofthis Section 6.14 may be enforced by an action for specific performance.The provisions of the Section 6.14 will be for the third party benefit ofthose entitled to rely thereon and will survive the termination of thisAgreement.

 

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IN WITNESS WHEREOF, theparties hereto have executed this Insurance Agreement, all as of the day andyear 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, NATIONAL  ASSOCIATION, as Back-up Servicer and Indenture  Trustee |
|   |                                                                                 |
|   |                                                                                 |
|   | By                                                                                   |   |   |
|   | Title                                                                                |   |   |
|        |                                                                                      |  |  |  |

 

 

 

FirstInvestors Auto Owner Trust 2005-A

InsuranceAgreement

Signature Page

Kutak Rock - FirmLibrary-4830-8254-2336.5

 

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|   |   | FIRST  INVESTORS AUTO OWNER TRUST  2005-A, as Issuer,                                                                                                 |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                  |
|   |   | By:        WELLS  FARGO DELAWARE TRUST  COMPANY, not in its individual capacity, but  solely as Owner Trustee |
|   |   |                                                                                                                                                  |
|   |   |                                                                                                                                                  |
|   | By     |                                                                                                                                                  |   |
|   | Title  |                                                                                                                                                  |   |
|   |   |                                                                                                                                                  |
|   |   |                                                                                                                                                  |
|   |   | WELLS  FARGO DELAWARE TRUST  COMPANY, not in its individual capacity, but  solely as Owner Trustee                                                    |
|   |   |                                                                                                                                                  |
|   | By     |                                                                                                                                                  |   |
|   | Title  |                                                                                                                                                  |   |
|        |        |                                                                                                                                                       |  |  |  |

 

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