Document:

EXHIBIT 10.2

                                 PREMIUM LETTER

                                                     October 13, 2006

XL Asset Funding Company I LLC
20 N. Martingale Road, Suite 200
Schaumburg, IL 60173

                  Re:   INSURANCE  AND  INDEMNITY   AGREEMENT  (the   "Insurance
Agreement"),  dated as of October 13, 2006,  among XL CAPITAL  ASSURANCE INC., a
New York stock  insurance  company  (together  with its  successors and assigns,
"XLCA"),  XL ASSET FUNDING COMPANY I LLC, a Delaware limited  liability  company
(the "Investment Agreement Provider") and XL LIFE AND ANNUITY HOLDING COMPANY, a
Delaware  corporation  (together  with  its  successors  and  assigns,  "Holding
Company"  and,  together  with  Investment  Agreement  Provider,  the  "Provider
Entities").

Ladies and Gentlemen:

This  letter  will  confirm  the  agreement  of XL Asset  Funding  Company I LLC
("XLAF") and XL Capital Assurance Inc. ("XLCA") that XLAF will make the payments
set forth below in connection with and in  consideration of the issue by XLCA of
Financial   Guaranty   Insurance   Policies   (collectively,   the  "Policies").
Capitalized  terms used herein but not defined  herein  shall have the  meanings
given those terms in the Insurance Agreement.

The payments  payable below shall  constitute  the "Premium"  referred to in the
Insurance  Agreement.  This letter is the  "Premium  Letter"  referred to in the
Insurance Agreement. The obligations of XLAF hereunder constitute obligations of
XLAF under the Insurance  Agreement and this letter shall be deemed to be a part
of the Insurance Agreement as if fully set forth therein.

The Premium (the  "Premium")  shall be paid on the tenth (10th)  Business Day of
each month  (or,  if such day is not a Business  Day,  then the next  succeeding
Business Day) in arrears,  based on the actual number of days in the immediately
preceding  calendar  month and a year of 365/366 days, in an amount equal to ten
(10) basis points per annum  multiplied  by sum of the  weighted  average of the
outstanding  principal balance of each Qualified  Investment Contract during the
immediately  preceding  calendar month. The Premium shall be summarized as shown
in the attached  Monthly  Premium Report  attached hereto as Exhibit A and which
shall be delivered to XLCA each month when the Premium is paid. Any changes must
be agreed to by both parties.

<PAGE>

Any payments of Premium payable  hereunder,  once paid,  shall not be refundable
for any  reason  whatsoever,  including,  without  limitation,  the  lack of any
payment under the Insurance Policies.

No recourse  under this letter shall be had against,  and no personal  liability
shall attach to, any officer,  employee,  director,  affiliate or shareholder of
any party hereto,  as such, by the enforcement of any assessment or by any legal
or equitable proceeding,  or by virtue of any statute or otherwise in respect of
this letter, it being expressly agreed and understood that this letter is solely
a  corporate  obligation  of each party  hereto,  and that any and all  personal
liability, either at common law or in equity, or by statute or constitution,  of
every such officer, employee, director, affiliate or shareholder for breaches by
any party hereto of any obligations under this letter is hereby expressly waived
as a condition of and in  consideration  for the  execution and delivery of this
letter.

Payment  to XLCA shall be made by Federal  funds wire  transfers  to XLCA to the
account set forth below,  unless another account is designated to you in writing
by a Managing Director of XLCA, with the following details  specifically  stated
on the wire instructions:

Receiving Bank:   Bank of America
                  777 Main Street
                  Hartford, CT  06115-2001
                  ABA - 026009593

Beneficiary:      XL Capital Assurance Inc.
                  1221 Avenue of the Americas
                  New York, NY  10020-1001
                  Account Number 942-783-5841

Reference:        XLAF GIC Program

The  Investment  Agreement  Provider  agrees that this  letter and the  contents
thereof  are for its  confidential  use only and will  not,  without  the  prior
written  consent of XLCA (except as otherwise  required by law),  disclose  this
letter  and  the  contents  thereof  to any  Person  other  than  its  officers,
directors, accountants, attorneys and other advisors.

This agreement  shall be governed by the laws of the State of New York,  without
regard to its conflicts of law principles.

<PAGE>

                                           Sincerely,

                                           XL CAPITAL ASSURANCE INC.

                                           By: /s/ Thomas Randazzo
                                               ---------------------------------
                                               Name:  Thomas Randazzo
                                               Title:   Senior Managing Director
Acknowledged and Agreed to by
XL ASSET FUNDING COMPANY I LLC

By:  /s/ Frank Beardsley
     --------------------------
     Name:  Frank Beardsley
     Title: PresidentEXHIBIT 10.3

                      SECURITIES ACCOUNT CONTROL AGREEMENT

     This Securities Account Control Agreement, dated as of July 20, 2006, among
XL ASSET  FUNDING  COMPANY I LLC,  a Delaware  limited  liability  company  (the
"Debtor"),  XL CAPITAL ASSURANCE INC., a New York stock insurance company,  (the
"Secured  Party") and MELLON  BANK,  N.A.  (the  "Securities  Intermediary")  is
entered into pursuant to the provisions of that certain  Insurance and Indemnity
Agreement  among the Debtor,  XL Life and Annuity  Holding  Company,  a Delaware
Corporation and the Secured Party (the "Insurance Agreement") that may hereafter
be entered into by the Debtor and Secured Party.  Capitalized terms used but not
defined  herein  shall  have  the  meaning  assigned  to them  in the  Insurance
Agreement.  All references herein to the "UCC" shall mean the Uniform Commercial
Code as in effect in the State of New York.

     SECTION  1.   ESTABLISHMENT   OF  SECURITIES   ACCOUNTS.   The   Securities
Intermediary hereby confirms and agrees that:

     (a) Pursuant to a Custody  Agreement  between the Debtor and the Securities
Intermediary,  dated August 8, 2002, (the "Custody  Agreement"),  the Securities
Intermediary has established the accounts set forth on Schedule I,  collectively
know as the "Collateral Account" in the name of the Debtor and maintained in the
State of Pennsylvania  (such Collateral  Account and any additional or successor
account, the "Securities Account"). The Securities Intermediary shall not change
the name or account number of the Securities  Account  without the prior written
consent of the Secured Party;

     (b) All  securities  or other  property  underlying  any  financial  assets
credited  to the  Securities  Account  shall  be  registered  in the name of the
Securities Intermediary,  indorsed to the Securities Intermediary or in blank or
credited to another  securities account maintained in the name of the Securities
Intermediary  and in no case will any financial asset credited to the Securities
Account be  registered  in the name of the  Debtor,  payable to the order of the
Debtor or specially  indorsed to the Debtor  except to the extent the  foregoing
have been specially indorsed to the Securities Intermediary or in blank;

     (c) All property delivered to the Securities  Intermediary pursuant to this
Agreement,  the Insurance Agreement or the Collateral Management Agreement shall
be promptly credited to the Securities Account; and

     (d) The Securities  Account is an account to which financial  assets are or
may be credited, and the Securities  Intermediary shall, subject to the terms of
this  Agreement,  treat the Debtor as  entitled  to  exercise  the  rights  that
comprise any financial asset credited to the account.

     SECTION 2. "FINANCIAL ASSETS" ELECTION. The Securities  Intermediary hereby
agrees that each item of property (whether investment property, financial asset,
security,  instrument  or cash)  credited  to the  Securities  Account  shall be
treated as a "financial asset" within the meaning of Section 8-102 (a)(9) of the
UCC.

<PAGE>

SECTION  3.  ENTITLEMENT  ORDERS  AND  SOLE  CONTROL.  (a)  If at any  time  the
Securities Intermediary shall receive an "entitlement order" (within the meaning
of Section 8-102 (a)(8) of the UCC) from the Secured Party directing transfer or
redemption of any financial asset relating to Securities Account, the Securities
Intermediary shall comply with such entitlement order without further consent by
the Debtor or any other person. The Securities  Intermediary shall settle trades
of  financial  assets held in the  Securities  Account at the  direction  of the
Debtor and shall comply with entitlement  orders from the Debtor relating to the
Securities  Account.  The Secured Party  acknowledges that the Debtor intends to
actively trade the Securities  Account may authorize free  deliveries and engage
in futures,  options,  swaps, forward contracts,  foreign exchange contracts and
other  derivative  investments,  and the  Secured  Party  expressly  agrees that
Securities  Intermediary may send out assets or pledge collateral as directed to
settle such transactions.

(b) If at any time the Secured Party delivers to the  Securities  Intermediary a
Notice of Sole Control in substantially  the form set forth in EXHIBIT A hereto,
the Securities  Intermediary  agrees that after receipt of such notice,  it will
take all  instruction  with respect to the  Securities  Account  solely from the
Secured Party. The Securities  Intermediary  shall have no responsibility to the
parties to monitor the value of the Account,  or to monitor that the investments
authorized are in accord with any investment policy or make any determination as
to whether the Secured Party has the right to Sole Control.

(c)  Secured  Party  hereby  agrees  that it will not  deliver  a Notice of Sole
Control or  "entitlement  order" until an "Event of Default" has  occurred.  The
term "Event of Default"  shall mean (i) prior to the date on which the Insurance
Agreement has been executed and delivered, XLCA shall make any payment under any
policy  and (ii) at all  times on and after  such  date,  as such term  shall be
defined in the Insurance Agreement.

     SECTION 4. SUBORDINATION OF LIEN, WAIVER OF SET-OFF.  In the event that the
Securities  Intermediary has or subsequently obtains by agreement,  by operation
of law or  otherwise  a  security  interest  in the  Securities  Account  or any
security entitlement credited thereto, the Securities Intermediary hereby agrees
that such  security  interest  shall be  subordinate  to the  security  interest
created  hereby,  by the Insurance  Agreement or by the Custody  Agreement.  The
financial assets and other items deposited to the Securities Account will not be
subject to deduction, set-off, banker's lien, or any other right in favor of any
person  other than as created  hereby or  pursuant  to the  Insurance  Agreement
except that pursuant to the Custody  Agreement the Securities  Intermediary  may
set off all  amounts due for  customary  fees and  charges  with  respect to the
Securities  Account  including  reimbursement  for  amounts  advanced  to settle
authorized transactions.

     SECTION 5. CHOICE OF LAW.  This  Agreement and the  Securities  Account (as
well as the securities  entitlements  related  thereto) shall be governed by the
laws  of the  State  of New  York.  Regardless  of any  provision  in any  other
agreement,  for purposes of the UCC, the State of New York shall be deemed to be
the Securities Intermediary's jurisdiction.

<PAGE>

     SECTION 6. CONFLICT WITH OTHER AGREEMENTS.

In the event of any conflict between this Agreement (or any portion thereof) and
any other  agreement now existing or hereafter  entered into,  the terms of this
Agreement shall prevail.

No amendment or  modification of this Agreement or waiver of any right hereunder
shall be binding on any party hereto  unless it is in writing,  signed by all of
the parties hereto.

     SECTION 7.  ADVERSE  CLAIMS.  Except for the  claims  and  interest  of the
Secured  Party  and of the  Debtor in the  Securities  Account,  the  Securities
Intermediary  does not know of any claim  to, or  interest  in,  the  Securities
Account or in any  financial  asset  credited  thereto,  except to the extent of
assets  pledged in  connection  with  futures  transactions.  The Secured  Party
acknowledges that certain securities in the Securities Account have been pledged
as collateral for futures  contracts.  These securities are custodied  elsewhere
but are  reflected  in the  Securities  Account for  recordkeeping  purposes and
identified on the  Securities  Intermediary's  on-line  system with the notation
"ANH" in the reg/loc code.  Any security with such notation shall not be treated
as  Collateral.  If any person  asserts any lien,  encumbrance  or adverse claim
(including any writ, garnishment,  judgment, warrant of attachment, execution or
similar  process)  against  the  Securities  Account or in any  financial  asset
carried therein, the Securities Intermediary will promptly notify the Debtor and
the Secured Party thereof.

     SECTION 8. INDEMNIFICATION OF SECURITIES INTERMEDIARY. Debtor hereby agrees
to  indemnify,  defend  and  hold  harmless  the  Securities  Intermediary,  its
directors,  officers, agents and employees against any and all claims, causes of
action,   liabilities,   lawsuits,   demands  and  damages,   including  without
limitation,  any and all court costs and reasonable  attorney's fees, in any way
related to or arising out of or in connection  with this Agreement or any action
taken or not  taken  pursuant  hereto,  except  to the  extent  as a  result  of
Securities Intermediary's gross negligence or willful misconduct.

     SECTION 9.  REPRESENTATIONS,  WARRANTIES  AND  COVENANTS OF THE  SECURITIES
INTERMEDIARY.   The   Securities   Intermediary   hereby  makes  the   following
representations, warranties and covenants:

     (a) The Securities  Account has been  established as set forth in Section 1
above and the  Securities  Account  will be  maintained  in the manner set forth
herein until termination of this Agreement;

     (b) The Securities  Account  constitutes a "securities  account" within the
meaning of Section 8-501(a) of the UCC;

     (c) This  Agreement  is the valid and  legally  binding  obligation  of the
Securities Intermediary;

<PAGE>

     (d) The  Securities  Intermediary  has not  entered  into,  and  until  the
termination  of this Agreement will not enter into, any agreement with any other
person  relating to the Securities  Account and/or any financial  asset credited
thereto pursuant to which the Securities  Intermediary has agreed to comply with
entitlement orders of such person.  The Securities  Intermediary has not entered
into any other  agreement  with the Debtor or the Secured  Party  purporting  to
limit or condition the obligation of the Securities  Intermediary to comply with
entitlement orders as set forth in Section 3 hereof; and

     (e) The Securities  Intermediary will provide monthly statements concerning
the Securities Account to the Debtor and the Secured Party.

     SECTION 10.  GRANTING  CLAUSE.  As security  for all amounts owed under the
Insurance Agreement, this Agreement, the Collateral Management Agreement and any
other  agreement  between Debtor and Secured Party,  the Debtor hereby  pledges,
assigns and conveys to the Secured Party , all of its right,  title and interest
in and to the Securities Account and all securities,  cash, investments or other
financial assets now or hereafter credited thereto.

     SECTION 11.  SUCCESSORS;  ASSIGNMENT.  The terms of this Agreement shall be
binding  upon,  and shall inure to the benefit of, the parties  hereto and their
respective corporate successors or heirs and personal representatives who obtain
such rights  solely by operation of law. The Secured Party may assign its rights
hereunder only with the express written  consent of the Securities  Intermediary
and by sending written notice of such assignment to the Debtor.

     SECTION 12.  NOTICES.  All notices,  demands and  communications  hereunder
shall be in writing  and shall be deemed to be duly given if sent by  registered
or certified mail, return receipt requested,  reputable  overnight mail service,
by  receipted  hand  delivery or by  facsimile  provided  that  confirmation  of
effective transmission is received and provided further that a hard copy is sent
the same day by either  United  States  First  Class Mail,  reputable  overnight
delivery service or hand delivery, as follows:

SECURED PARTY:

XL Capital Assurance Inc.
1221 Avenue of the Americas
New York. NY 10020-1001
Attention: General Counsel and Surveillance
Phone: 212-478-3400
Fax: 212-478-3587

DEBTOR:

XL Asset Funding Company I LLC
20 N. Martingale Road, Suite 200
Shaumburg, IL 60173
Attention: XL Asset Funding I, Financial Administration Department
Phone: 1-800-394-2990
Fax: 847-517-2399

<PAGE>

SECURITIES INTERMEDIARY:

Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Attention: Mary Lyn Saly
Phone: 412-236-7654
Fax: 412-234-8725

or at such  other  address as any of the above may have  furnished  to the other
parties in writing in a manner  specified in this Section and any such notice or
communications  shall be deemed to have been given as of the third  business day
after the date so mailed or on the date hand delivered or delivered by overnight
mail  service,  as the case may be,  except with respect to the XLCA as to which
date shall be deemed to have been given on the date received by the XLCA.

     SECTION  13.  TERMINATION.  The  rights and  powers  granted  herein to the
Secured  Party,  granted  in order  to  perfect  its  security  interest  in the
Securities  Account,  are  powers  coupled  with  interest  and will  neither be
affected  by  the  bankruptcy  of the  Debtor  nor by the  lapse  of  time.  The
obligations of the Securities  Intermediary  hereunder  shall continue in effect
until the security interests of the Secured Party in the Securities Account have
been  terminated  pursuant to the terms of this  Agreement and the Secured Party
has notified the Securities  Intermediary  of such  termination in writing.  The
Secured Party agrees to provide Notice of Termination in substantially  the form
of  EXHIBIT B hereto to the  Securities  Intermediary  upon the  request  of the
Debtor on or after the termination of the Secured Party's  security  interest in
the Securities Account pursuant to the terms of this Agreement.

     SECTION 14.  COUNTERPARTS.  This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this  Agreement by signing and  delivering  one or more
counterparts.

<PAGE>

     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the day and year first above written.

                                              Debtor:
                                              XL ASSET FUNDING COMPANY  I LLC

                                              By: /s/ Karen McIntyre
                                                 -------------------------------
                                              Name:  Karen McIntyre
                                              Title: Vice President

                                              Secured Party:
                                              XL CAPITAL ASSURANCE INC.

                                              By: /s/ Thomas Randazzo
                                                 -------------------------------
                                              Name:  Thomas Randazzo
                                              Title: Senior Managing Director

                                              Securities Intermediary:
                                              MELLON BANK, N.A.

                                              By: /s/ Donna F. Moses
                                                 -------------------------------
                                              Name:  Donna F. Moses
                                              Title: First Vice President

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