EXHIBIT 10.59
EXECUTION
COPY
--------------------------------------------------------------------------------
MBIA INSURANCE CORPORATION,
as Surety
FIRST INVESTORS AUTO RECEIVABLES CORPORATION,
as Transferor
FIRST INVESTORS FINANCIAL SERVICES, INC.,
as Seller
AUTO LENDERS ACCEPTANCE CORPORATION,
as Servicer
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Successor Collateral Agent, Back-up Servicer and Custodian
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Initial Collateral Agent
and
NATIONSBANK, N.A.,
as Reserve Account Agent
AMENDMENT NO. 1 TO
INSURANCE AGREEMENT
First Investors Auto Receivables Corporation Revolving
Automobile Receivables Financing Facility
Dated as of March 31, 1999
------------------------------------------------------------------------------
AMENDMENT NO. 1 TO INSURANCE AGREEMENT
THIS AMENDMENT NO. 1 TO INSURANCE AGREEMENT ("Amendment") amends that
Insurance Agreement dated as of October 1, 1996 (the "Insurance Agreement") by
and among MBIA Insurance Corporation, as Surety, First Investors Auto
Receivables Corporation, as Transferor, First Investors Financial Services,
Inc., as Seller, Chase Bank of Texas (formerly known as Texas Commerce Bank,
National Association), as Collateral Agent, and NationsBank, N.A., as Reserve
Account Agent. This Amendment is dated as of March 31, 1999 by and among MBIA
INSURANCE CORPORATION (the "Surety"), FIRST INVESTORS AUTO RECEIVABLES
CORPORATION, in its capacity as transferor (the "Transferor"), FIRST INVESTORS
FINANCIAL SERVICES, INC., in its capacity as seller (the "Seller"), CHASE BANK
OF TEXAS, NATIONAL ASSOCIATION, as initial Collateral Agent (the "Initial
Collateral Agent"), NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, in its
capacity as successor Collateral Agent (the "Successor Collateral Agent"), in
its capacity as back-up servicer (the "Back-up Servicer"), and in its capacity
as Custodian (the "Custodian"), AUTO LENDERS ACCEPTANCE CORPORATION, in its
capacity as successor servicer (the "Servicer") and NATIONSBANK, N.A., in its
capacity as Reserve Account Agent (the "Reserve Account Agent").
RECITALS:
WHEREAS, the Transferor, Enterprise Funding Corporation (the "Company"),
the Reserve Account Agent, the Initial Collateral Agent, the Surety and the
Seller entered into a Security Agreement (as defined herein) dated as of October
22, 1996 (as amended and supplemented from time to time, the "Security
Agreement"), pursuant to which, among other things, the Transferor granted a
security interest in certain collateral as more fully described therein to the
Collateral Agent thereunder for the benefit of the Company and the Surety, to
secure payments under the Note, the Security Agreement, the Note Purchase
Agreement and this Agreement.
WHEREAS, the Surety issued its Surety Bond (as defined below) at the
request of the Transferor and the Seller, which guarantees payment of Insured
Amounts (as defined in the Surety Bond), upon such terms and conditions as were
mutually agreed upon by the parties and subject to the terms and conditions of
the Surety Bond.
WHEREAS, the servicing of the Receivables will be transferred from General
Electric Capital Corporation to the Servicer, pursuant to the Servicing Transfer
(as defined in the Servicing Agreement) and the Servicer will perform its
servicing duties pursuant to a Servicing Agreement dated as of March 31, 1999
among the Successor Collateral Agent, the Back-up Servicer, the Transferor and
the Servicer.
WHEREAS, the parties hereto desire to amend the Insurance Agreement as an
inducement for the Surety to deliver its consent to the Servicing Transfer and
related documents.
1
WHEREAS, the Transferor, the Company, the Reserve Account Agent, the
Initial Collateral Agent, the Successor Collateral Agent, the Surety and the
Seller are entering into an Amendment No. 2 to Security Agreement dated as of
March 31, 1999, pursuant to which the parties thereto are amending certain
provisions to reflect the Servicing Transfer and certain other matters.
WHEREAS, Section 6.01 of the Insurance Agreement provides that the
Insurance Agreement may be amended with the consent of each of the parties
thereto.
NOW, THEREFORE, in consideration of the premises and of the agreements
herein contained, the Servicer, the Back-up Servicer, the Surety, the
Transferor, the Seller, the Initial Collateral Agent, the Successor Collateral
Agent and the Reserve Account Agent agree as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.01. GENERAL DEFINITIONS. Capitalized terms used in this
Agreement but not otherwise defined herein will have the meanings ascribed to
such terms in the Insurance Agreement.
SECTION 1.02. ADDITIONAL DEFINED TERMS. The following terms are hereby
added to Article I of the Insurance Agreement in appropriate alphabetical order:
"Amendments" shall mean this Amendment, Amendment No. 1 to Note Purchase
Agreement, Amendment No. 2 to Security Agreement, the Servicing Agreement,
Amendment No. 2 to Purchase Agreement and the Guaranty.
"Guaranty" means the Guaranty dated as of March 31, 1999 among the Seller,
the Transferor, the Servicer, the Collateral Agent and the Back-up Servicer.
"Required Rating" shall mean, with respect to a Cap Counterparty, the
rating assigned to the long-term debt obligations of such Cap Counterparty by
each of S&P and Moody's as of the date of this Amendment.
SECTION 1.03. AMENDMENT TO DEFINED TERMS. The following definitions in Article I
of the Insurance Agreement are hereby amended to read as follows (solely for
convenience, added language is italicized and deleted language has been stricken
through):
(a) "Agreement" means the Insurance Agreement dated as of October
22, 1996, AS AMENDED AND SUPPLEMENTED, AND including any additional
amendments or any supplements hereto as herein permitted.
(b) "Financial Statements" means the balance sheets and the
statements of income, retained earnings and cash flows and notes thereto
of FIFSG prepared on a consolidated basis and furnished on behalf of the
Seller AND THE SERVICER to the Surety pursuant to Section 2.02(c) AND
2.05(C) hereof.
(c) "Security Agreement" means the Security Agreement dated as of
October 22, 1996, among the Company, the Transferor, the Surety, the
Seller, the Reserve Account Agent and the Collateral Agent, AS AMENDED,
INCLUDING AS AMENDED BY THE AMENDMENT NO. 2 TO SECURITY AGREEMENT DATED AS
OF MARCH 31, 1999 BY AND AMONG THE TRANSFEROR, THE COMPANY, THE RESERVE
ACCOUNT AGENT, THE BACK-UP SERVICER, THE COLLATERAL AGENT, THE SURETY AND
THE SELLER, AND AS THE SAME MAY BE FURTHER AMENDED AND SUPPLEMENTED AS
PROVIDED THEREIN.
(d) "Servicing Agreement" shall MEAN THE SERVICING AGREEMENT DATED
MARCH 31, 1999, AMONG THE SERVICER, THE TRANSFEROR, THE COLLATERAL AGENT
AND THE BACK-UP SERVICER.
(e) "Transaction Documents" means this Agreement, THE GUARANTY, the
Interest Rate Cap, the Note Purchase Agreement, the Servicing Agreement,
the Security Agreement, the Purchase Agreement, any Originator Agreement
and the Note.
ARTICLE II
AMENDMENTS TO OPERATIVE PROVISIONS
SECTION 2.01. COLLATERAL AGENT. All references in the Agreement to the
"Collateral Agent" shall be deemed to refer to (i) prior to the Servicing
Transfer, the Initial Collateral Agent and (ii) on and after the date of the
Servicing Transfer, to the Successor Collateral Agent, in its capacity as
Collateral Agent, Back-up Servicer and Custodian.
SECTION 2.02. AMENDMENTS TO SECTION 2.01. Section 2.01(h) of the Agreement
is hereby amended as follows (solely for convenience, added language is
italicized and deleted language has been stricken through):
"(h) FINANCIAL STATEMENTS. The Financial Statements of FIFSG,
copies of which the Seller has caused to be furnished to the Surety
on behalf of the SELLER AND THE SERVICER, (i) are, as of the dates
and for the periods referred to therein, complete and correct in all
material respects, (ii) present fairly the financial condition and
results of operations of the companies reported therein as of the
dates and for the periods indicated and (iii) have been prepared in
accordance with generally accepted accounting principles
consistently applied, except as noted therein and subject to
year-end adjustments with respect to interim statements. Since the
date of the most recent Financial Statements, there has been no
material adverse change in such condition or operations. Except as
disclosed in the Financial Statements, neither the Seller NOR THE
SERVICER, is not subject to any contingent liabilities or
commitments that, individually or in the aggregate, have a
3
material possibility of causing a material adverse change in
respect of the Seller OR THE SERVICER."
SECTION 2.03. AMENDMENTS TO SECTION 2.02. Section 2.02(o) of the Agreement
is hereby amended as follows (solely for convenience, added language is
italicized and deleted language has been stricken through):
"(o) NOTICES UNDER THE INTEREST RATE CAP AND THE NOTE PURCHASE
AGREEMENT. The Transferor shall promptly forward to the Surety a copy of
each notice or other communication received by the Transferor or sent by
the Transferor with respect to the Interest Rate Cap and the Note Purchase
Agreement. THE TRANSFEROR SHALL PROMPTLY FORWARD TO THE SURETY A COPY OF
EACH EXECUTED INTEREST RATE CAP ENTERED INTO BY THE TRANSFEROR."
SECTION 2.04. AMENDMENTS TO SECTION 2.03. Section 2.03(e) of the Agreement
is hereby amended as follows (solely for convenience, added language is
italicized and deleted language has been stricken through):
"(e) INTEREST RATE CAP. The Transferor will not enter into ANY
Interest Rate Cap until SUCH Interest Rate Cap AND THE CAP COUNTERPARTY
HAVE been approved in form and substance and in writing by the Surety;
provided, however, that MBIA's prior written consent to the Cap
Counterparty shall not be required if (A) the Cap Counterparty is any of
the following: (i) NationsBanc Capital Markets; (ii) Bank of America;
(iii) Xxxxx Fargo Bank; or (iv) First Union Capital Markets, Inc.; and (B)
such Cap Counterparty referenced in (A) has not been downgraded by either
of S&P or Moody's below its Required Rating. The Transferor shall not
agree to any changes to ANY Interest Rate Cap unless the Surety shall have
previously given its consent. The Transferor shall take or refrain from
taking any action, and exercise or refrain from exercising any rights of
the Transferor under ANY Interest Rate Cap, in the manner directed by the
Surety."
SECTION 2.05. ADDITION OF SECTION 2.04. Section 2.04 is hereby added to
the Insurance Agreement in appropriate numerical order as follows:
"SECTION 2.04. REPRESENTATIONS AND WARRANTIES OF THE SERVICER.
As of the date of the Amendment, the Servicer represents, warrants and
covenants as follows:
(a) DUE ORGANIZATION AND QUALIFICATION. The Servicer is a
corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction. The Servicer is duly qualified to do
business, is in good standing and has obtained all necessary licenses,
permits, charters, registrations and approvals (together, "approvals")
necessary for the conduct of its business as currently conducted and the
performance of its obligations under the Transaction Documents, in each
jurisdiction in which the failure to be so qualified or to obtain such
approvals would render any Transaction Document
4
unenforceable in any respect or would have a material adverse effect upon
the Transaction.
(b) POWER AND AUTHORITY. The Servicer has all necessary corporate or
other power and authority to conduct its business as currently conducted
and to execute, deliver and perform its obligations under the Transaction
Documents and to consummate the Transaction.
(c) DUE AUTHORIZATION. The execution, delivery and performance of
the Transaction Documents by the Servicer has been duly authorized by all
necessary corporate action and do not require any additional approvals or
consents, or other action by or any notice to or filing with any Person,
including, without limitation, any governmental entity or any partners or
stockholders, which have not previously been obtained or given by the
Servicer.
(d) NONCONTRAVENTION. Neither the execution and delivery of the
Transaction Documents by the Servicer, the consummation of the
transactions contemplated thereby nor the satisfaction of the terms and
conditions of the Transaction Documents:
(i) conflicts with or results in any breach or violation of
any provision of the certificate of incorporation or bylaws or other
organizational document of the Servicer or any law, rule,
regulation, order, writ, judgment, injunction, decree, determination
or award currently in effect having applicability to the Servicer or
any of its material properties, including regulations issued by an
administrative agency or other governmental authority having
supervisory powers over the Servicer;
(ii) constitutes a default by the Servicer under or a breach
of any provision of any loan agreement, mortgage, indenture or other
agreement or instrument to which the Servicer is a party or by which
any of its properties, which are individually or in the aggregate
material to the Servicer, is or may be bound or affected; or
(iii) results in or requires the creation of any lien upon or
in respect of any assets of the Servicer.
(e) LEGAL PROCEEDINGS. There is no action, proceeding or
investigation by or before any court, governmental or administrative
agency or arbitrator against or affecting the Servicer or any of its
subsidiaries, or any properties or rights of the Servicer or any of its
subsidiaries, pending or, to the Servicer's knowledge after reasonable
inquiry, threatened, which, in any case, could reasonably be expected to
result in a material adverse effect upon the Servicer's ability to perform
its respective obligations under the Transaction Documents or have a
material adverse effect upon the Surety.
5
(f) VALID AND BINDING OBLIGATIONS. The Transaction Documents (other
than the Note), when executed and delivered by the Servicer, will
constitute the legal, valid and binding obligations of the Servicer,
enforceable in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
general equitable principles and public Surety Bond considerations as to
rights of indemnification for violations of federal securities laws.
(g) FINANCIAL STATEMENTS. The Servicer hereby represents and
warrants that: (a) the financial statements of FIFSG, copies of which have
been furnished to the Surety, (i) are, as of the dates and for the periods
referred to therein, complete and correct in all material respects, (ii)
present fairly the financial condition and results of operations of FIFSG
as of the dates and for the periods indicated and (iii) have been prepared
in accordance with generally accepted accounting principles consistently
applied, except as noted therein (subject as to interim statements to
normal year-end adjustments); (b) since the date of the most recent
financial statements, there has been no material adverse change in respect
of such operations or financial condition; and (c) except as disclosed in
the financial statements, the Servicer is not subject to any contingent
liabilities or commitments that, individually or in the aggregate, have a
material possibility of causing a material adverse change in respect of
the Servicer.
(h) COMPLIANCE WITH LAW, ETC. No practice, procedure or policy
employed, or proposed to be employed, by the Servicer in the conduct of
its business violates any law, regulation, judgment, agreement, order or
decree applicable to it that, if enforced, could reasonably be expected to
result in a material adverse effect upon the Servicer's ability to perform
its respective obligations under the Transaction Documents or have a
material adverse effect upon the Surety.
(i) TAXES. The Servicer and the Servicer's parent company or
companies have filed prior to the date hereof all federal and state tax
returns that are required to be filed and paid all taxes, including any
assessments received by them that are not being contested in good faith,
to the extent that such taxes have become due, except for any failures to
file or pay that, individually or in the aggregate, would not result in a
material adverse change with respect to the Servicer.
(j) ACCURACY OF INFORMATION. Neither the Transaction Documents, nor
other information relating to the Receivables or related assets, the
operations of the Servicer (including servicing or origination of loans)
or the financial condition of the Servicer (collectively, the
"Documents"), as amended, supplemented or superseded, furnished to the
Surety by the Servicer contain any statement of a material fact by the
Servicer which was untrue or misleading in any material adverse respect
when made. The Servicer has no knowledge or circumstances that could
reasonably be expected to cause a material adverse change with respect to
the Servicer. Since the furnishing of the Documents, there has been no
change nor any development or event involving a prospective change known
6
to the Servicer that would render any of the Documents untrue or
misleading in a material respect.
(k) TRANSACTION DOCUMENTS. Each of the representations and
warranties of the Servicer contained in the Transaction Documents is true
and correct in all material respects, and the Servicer hereby makes each
such representation and warranty to, and for the benefit of, the Surety as
if the same were set forth in full herein.
(l) SOLVENCY. The Servicer is solvent and will not be rendered
insolvent by the Transaction and, after giving effect to the Transaction,
the Servicer will not be left with an unreasonably small amount of capital
with which to engage in its business, nor does the Servicer intend to
incur, or believe that it has incurred, debts beyond its ability to pay as
they mature. The Servicer does not contemplate the commencement of
insolvency, bankruptcy, liquidation or consolidation proceedings or the
appointment of a receiver, liquidator, conservator, trustee or similar
official in respect of the Servicer or any of its assets.
(m) PRINCIPAL PLACE OF BUSINESS. The principal place of business of
the Servicer is located in Georgia."
SECTION 2.06 ADDITION OF SECTION 2.05. Section 2.05 is hereby added to the
Insurance Agreement in appropriate numerical order as follows:
"SECTION 2.05. AFFIRMATIVE COVENANTS OF THE SERVICER. The Servicer hereby
agrees that during the Term of this Agreement, unless the Surety shall otherwise
expressly consent in writing:
(a) COMPLIANCE WITH AGREEMENTS AND APPLICABLE LAWS. The Servicer
shall not be in default under the Transaction Documents and shall comply
with all material requirements of any law, rule or regulation applicable
to it. The Servicer shall not agree to any amendment to or modification of
the terms of any Transaction Documents or its organizational documents
(including without limitation, its articles of incorporation and bylaws)
unless the Surety shall have otherwise consented.
(b) CORPORATE EXISTENCE. The Servicer its successors and assigns,
shall maintain its corporate or other existence and shall at all times
continue to be duly organized under the laws of its jurisdiction of
incorporation or formation and duly qualified and duly authorized (as
described in subsections 2.04(a), (b) and (c) hereof) and shall conduct
its business in accordance with the terms of its certificate of
incorporation and bylaws or other formation documents.
(c) THE SERVICER TO PROVIDE FINANCIAL STATEMENTS; ACCOUNTANTS'
REPORTS; OTHER INFORMATION. The Servicer shall keep or cause to be kept in
reasonable detail books and records of account of the Servicer's, and its
consolidated subsidiaries', assets and
7
business, including, but not limited to, books and records relating
to the Transaction. The Servicer shall furnish or cause to be furnished to
the Surety:
(i) FINANCIAL STATEMENTS. All reports, Financial Statements,
Officer's Certificates and reviews required to be furnished under
Article II of the Servicing Agreement and Section 2.02(c) of this
Agreement, including, without limitation, annual audited and
quarterly unaudited financial statements of FIFSG and its
consolidated subsidiaries.
(ii) INITIAL AND CONTINUING REPORTS. The Servicer shall
deliver to the Surety the Monthly Servicer Report required by
Section 2.02(c) of the Servicing Agreement. Such Monthly Report
shall include, among other things, the outstanding Notional Amount
of each Interest Rate Cap, and, to the extent that the Floating
Rate, with respect to any Interest Rate Cap exceeds the Cap Rate for
the related Collection Period, the termination value of the related
Interest Rate Cap.
All financial statements specified in clause (i) above shall
be furnished in consolidated form for FIFSG and its subsidiaries.
The Surety agrees that it and its agents, accountants and
attorneys shall keep confidential all financial statements, reports
and other information delivered by the Servicer pursuant to this
subsection 2.05(c) to the extent provided in subsection 2.05(e)
hereof.
(d) ACCESS TO RECORDS; DISCUSSIONS WITH OFFICERS AND ACCOUNTANTS.
The Servicer shall, upon the reasonable request of the Surety, permit the
Surety or its authorized agents:
(i) to inspect its books and records as they may relate to the
Note, the obligations of such party under the Transaction Documents,
and the Transaction;
(ii) to discuss the affairs, finances and accounts of the
Servicer with the chief operating officer and the chief financial
officer of the Servicer, and
(iii) with the Servicer's consent, which consent shall not be
unreasonably withheld, to discuss the affairs, finances and accounts
of the Servicer with such company's independent accountants,
provided that an officer of the company shall have the right to be
present during such discussions.
Such inspections and discussions shall be conducted during
normal business hours and shall not unreasonably disrupt the
business of the Servicer. The books and records of the Servicer will
be maintained at the address of the Servicer designated herein for
receipt of notices, unless the Servicer shall otherwise advise the
parties hereto in writing.
8
(e) CONFIDENTIALITY. The Surety agrees that it and its shareholders,
directors, agents, accountants and attorneys shall keep confidential any
matter of which it becomes aware through such inspections or discussions
(unless readily available from public sources), except as may be otherwise
required by regulation, law or court order or requested by appropriate
governmental authorities or as necessary to preserve its rights or
security under or to enforce the Transaction Documents, provided that the
foregoing shall not limit the right of the Surety to make such information
available to its regulators, securities rating agencies, reinsurers,
credit and liquidity providers, counsel and accountants. If the Surety is
requested or required (by oral questions, interrogatories, requests for
information or documents subpoena, civil investigative demand or similar
process) to disclose any information of which it becomes aware through
such inspections or discussions, the Surety will promptly notify the
Servicer of such request(s) so that the Servicer may seek an appropriate
protective order and/or waive the Surety's compliance with the provisions
of this Agreement. If, in the absence of a protective order or the receipt
of a waiver hereunder, the Surety is, nonetheless, in the opinion of its
counsel, compelled to disclose such information to any tribunal or else
stand liable for contempt or suffer other censure or significant penalty,
the Surety may disclose such information to such tribunal that the Surety
is compelled to disclose, provided that a copy of all information
disclosed is provided to the Servicer, promptly upon such disclosure.
(f) NOTICE OF MATERIAL EVENTS. The Servicer shall be obligated
promptly to inform the Surety in writing of the occurrence of any of the
following to the extent any of the following relate to it:
(i) the submission of any claim or the initiation or threat of
any legal process, litigation or administrative or judicial
investigation, or rule making or disciplinary proceeding by or
against the Servicer that could result in a material adverse effect
upon the Servicer's ability to perform its respective obligations
under the Transaction Documents or have a material adverse effect
upon the Surety, or the promulgation of any proceeding or any
proposed or final rule which would result in a material adverse
effect upon the Servicer's ability to perform its respective
obligations under the Transaction Documents or have a material
adverse effect upon the Surety;
(ii) any change in the location of the Servicer's principal
offices or any change in the location of the Servicer's books and
records;
(iii) the occurrence of any Event of Default, Potential
Termination Event, Termination Event, Potential Amortization Event,
Amortization Event, Potential Wind-Down Event, Wind-Down Event,
Servicer Event of Default or of any event that would result in a
material adverse effect upon the Servicer's ability to perform its
respective obligations under the Transaction Documents or have a
material adverse effect upon the Surety;
9
(iv) the commencement of any proceedings by or against the
Servicer under any applicable bankruptcy, reorganization,
liquidation, rehabilitation, insolvency or other similar law now or
hereafter in effect or of any proceeding in which a receiver,
liquidator, conservator, trustee or similar official shall have
been, or may be, appointed or requested for the Servicer or any of
its assets; or
(v) the receipt of notice that (A) the Servicer is being
placed under regulatory supervision, (B) any license, permit,
charter, registration or approval necessary for the conduct of the
Servicer's business is to be, or may be suspended or revoked, or (C)
the Servicer is to cease and desist any practice, procedure or
Surety Bond employed by the Servicer in the conduct of its business,
and such cessation may result in a material adverse effect upon the
Servicer's ability to perform its respective obligations under the
Transaction Documents or have a material adverse effect upon the
Surety.
(g) FINANCING STATEMENTS AND FURTHER ASSURANCES. The Servicer will
cause to be filed all necessary financing statements or other instruments,
and any amendments or continuation statements relating thereto, necessary
to be kept and filed in such manner and in such places as may be required
by law to preserve and protect fully the interest of the Collateral Agent
(on behalf of the Secured Parties) in the Collateral. The Servicer shall,
upon the request of the Surety, from time to time, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, within
ten days of such request, such amendments hereto and such further
instruments and take such further action as may be reasonably necessary to
effectuate the intention, performance and provisions of the Transaction
Documents. In addition, the Servicer agrees to cooperate with Standard &
Poor's and Moody's in connection with any review of the Transaction that
may be undertaken by Standard & Poor's and Moody's after the date hereof.
(h) MAINTENANCE OF LICENSES. The Servicer or any successors thereof
shall maintain all licenses, permits, charters and registrations which are
material to the conduct of its business.
(i) THIRD-PARTY BENEFICIARY. The Servicer agrees that the Surety
shall have all rights of a third-party beneficiary in respect of each
Transaction Document to which it is a party and hereby incorporates and
restates their representations, warranties and covenants as set forth
therein for the benefit of the Surety.
(j) AMENDMENTS. The Servicer will provide the Surety with written
notice of any change or amendment to any Transaction Document as currently
in effect and the Servicer agrees that it will not make any change or
amendment to any Transaction Document without the prior written consent of
the Surety thereto.
(k) MAINTENANCE OF COLLATERAL. On or before each April 15, beginning
in 2000, so long as the Note is outstanding, the Servicer shall furnish,
or cause to be furnished, to the Surety and the Collateral Agent an
officers' certificate either stating that
10
such action has been taken with respect to the recording, filing,
rerecording and refiling of any financing statements and continuation
statements as is necessary to maintain the interest of the Collateral
Agent created by the Security Agreement with respect to the Collateral and
reciting the details of such action or stating that no such action is
necessary to maintain such interests. Such officers' certificate shall
also describe the recording, filing, rerecording and refiling of any
financing statements and continuation statements that will be required to
maintain the interest of the Collateral Agent (on behalf of the Secured
Parties) in the Collateral until the date such next officers' certificate
is due. The Servicer will use its best efforts to cause any necessary
recordings or filings to be made with respect to the Collateral.
(l) CLOSING DOCUMENTS. The Servicer shall provide or cause to be
provided to the Surety an executed original copy of each document executed
in connection with the Servicing Transfer within 30 days after the date of
such closing.
(m) PREFERENCE AMOUNTS. With respect to any Preference Amount (as
defined In the Surety Bond), the Servicer shall provide to the Surety upon
the request of the Surety:
(i) a certified copy of the final nonappealable order of a
court having competent jurisdiction ordering the recovery by a
trustee in bankruptcy as voidable preference amounts included in
previous payments to any Insured Party pursuant to the United States
Bankruptcy Code;
(ii) an opinion of counsel satisfactory to the Surety, and
upon which the Surety shall be entitled to rely, stating that such
order is final and is not subject to appeal;
(iii) an assignment in such form as reasonably required by the
Surety, irrevocably assigning to the Surety all rights and claims of
the Servicer, the Collateral Agent and any Insured Party relating to
or arising under the Transaction Documents against the debtor which
made such preference payment or otherwise with respect to such
preference amount; and
(iv) appropriate instruments to effect (when executed by the
affected party) the appointment of the Surety as agent for the
Collateral Agent and any Insured Party in any legal proceeding
relating to such preference payment being in a form satisfactory to
the Surety.
(n) YEAR 2000 PROGRAM. The Servicer has taken all steps necessary
and appropriate to prevent any material difficulties in its computer and
information systems arising from or in connection with the information
processing challenges associated with the Year 2000, and will provide to
the Surety such information and reports as the Surety may reasonably
request from time to time with respect to such steps as have or will be
taken with respect thereto."
11
SECTION 2.07. ADDITION OF SECTION 2.06 TO THE INSURANCE AGREEMENT. Section
2.06 is hereby added to the Insurance Agreement in appropriate numerical order
as follows:
"SECTION 2.06. NEGATIVE COVENANTS OF THE SERVICER. The Servicer
hereby agrees that during the Term of this Agreement, unless the Surety
shall otherwise expressly consent in writing:
(a) IMPAIRMENT OF RIGHTS. The Servicer shall not take any action, or
fail to take any action, if reasonably requested by the Surety, if such
action or failure to take action may interfere with the enforcement of any
rights of the Surety under or with respect to the Transaction Documents.
The Servicer shall give the Surety written notice of any such action or
failure to act on the earlier of: (i) the date upon which any publicly
available filing or release is made with respect to such action or failure
to act or (ii) promptly prior to the date of consummation of such action
or failure to act. The Servicer shall furnish to the Surety all
information requested by it that is reasonably necessary to determine
compliance with this paragraph.
(b) WAIVER, AMENDMENTS, ETC. Except in accordance with the
Transaction Documents, the Servicer shall not waive, modify or amend, or
consent to any waiver, modification or amendment of, any of the terms,
provisions or conditions of the Transaction Documents without the consent
of the Surety.
(c) RECEIVABLES; POLICIES. Except as otherwise permitted in the
Security Agreement, the Servicer shall not alter or amend any Receivable,
its credit policies, its collection policies or its charge-off policies in
a manner that materially adversely affects the Surety unless the Surety
shall have previously given its consent, which consent shall not be
unreasonably withheld.
(d) TRANSACTION DOCUMENTS. The Servicer will not at any time in the
future deny that the Transaction Documents constitute the legal, valid and
binding obligations of the Servicer."
SECTION 2.08. ADDITION OF THE SERVICER TO CERTAIN PROVISIONS. The words
"the Servicer" are hereby added following the phrase "the Transferor" in each
place such phrase appears in the following sections of the Insurance Agreement:
Sections 3.04(a), (except 3.04(a)(vi)); 3.04(d), 3.04(f), 3.05, 3.06, 4.01,
4.02, 4.03, 4.04, 5.01(except 5.01(c) and (e)), 5.02(a)(iii), 5.03, 6.05 and
6.06.
SECTION 2.09. ADDITION OF SECTION 3.01A. Section 3.01A is hereby added to
the Insurance Agreement in appropriate numerical order as follows:
"SECTION 3.01A. CONDITIONS PRECEDENT TO SERVICING TRANSFER. The
Surety hereby consents, subject to the conditions set forth herein, to the
Servicing Transfer. The Transferor and the Seller shall have complied with
the terms and satisfied the conditions precedent set forth below:
12
(a) Receipt by the Surety of a fully executed copy of the
Amendments;
(b) Receipt by the Surety of the following opinions of counsel:
(i) The law firm of Xxxx, Xxxxxx & Xxxxx shall have issued its
favorable opinion, in form and substance acceptable to the Surety
and its counsel, regarding and the validity and enforceability of
the Amendments against the Transferor, the Servicer and the Seller,
and in-house counsel to the Collateral Agent shall have issued its
favorable opinion, in form and substance acceptable to the Surety
and its counsel, regarding and the validity and enforceability of
the Amendments against the Collateral Agent;
(ii) The law firm of Xxxx, Xxxxxx & Xxxxx shall have issued
its favorable opinions, in form and substance acceptable to the
Surety and its counsel and substantially similar to such opinion
given on the Closing Date, regarding the perfection of the
Collateral Agent's interest in the Receivables; and
(iii) The Surety shall have received such other opinions of
counsel, in form and substance acceptable to the Surety and its
counsel, addressing such other matters as the Surety may reasonably
request;
(c) Receipt of confirmation from Standard & Poor's and Moody's that
the rating of the Facility following the Servicing Transfer and without
regard to the Surety Bond is at least BBB- and Baa3, respectively;
(d) The representations and warranties of the parties hereto set
forth or incorporated by reference in this Amendment shall be true and
correct as of the date hereof;
(e) The Servicer will cause FIFSG to furnish a certificate to the
Surety to the effect that (i) the Financial Statements which have been
furnished to the Surety are, as of the date thereof, complete and correct
in all material respects; present fairly the financial condition of FIFSG
on a consolidated basis as of the date thereof; and have been prepared in
accordance with generally accepted accounting principles consistently
applied (except as noted therein and subject to year-end adjustments for
interim statements) and (ii) there has been no material adverse change in
such conditions or operations;
(f) Delivery of such other documents, customary closing
certificates, instruments, approvals or opinions and compliance with such
requirements and conditions as are reasonably requested by the Surety;
(g) No suit, action or other proceeding, investigation or
injunction, or final judgment relating thereto, shall be pending or
threatened before any court or governmental agency in which it is sought
to restrain or prohibit or to obtain damages or other relief in connection
with the Amendments or the consummation of the Servicing Transfer;
13
(h) No statute, rule, regulation or order shall have been enacted,
entered or deemed applicable by any government or governmental or
administrative agency or court that would make the transactions
contemplated by any of the Amendments illegal or otherwise prevent the
consummation thereof; and
(i) No fact or event which results, or which with notice or the
passage of time, or both, would result in a Termination Event,
Amortization Event, Wind-Down Event or Event of Default shall have
occurred.
SECTION 2.10. AMENDMENTS TO SECTION 3.07.
(a) Section 3.07(b) of the Agreement is hereby amended as follows
(solely for convenience, added language is italicized and deleted language
has been stricken through):
"(b) ANYTHING in subsection 3.07(a) hereof to the contrary
notwithstanding, the Surety shall be entitled to reimbursement from
(I) the Seller (i) for payments made under the Surety Bond arising
as a result of the Transferor's failure to repurchase any Receivable
required to be repurchased pursuant to Section 3.1 of the Security
Agreement, or Section 3.02 of the Servicing Agreement, or the
Seller's failure to repurchase any Receivable required to be
repurchased pursuant to Section 6.2 of the Purchase Agreement and
(ii) FROM THE SERVICER for payments made under the Surety Bond,
arising as a result of the Servicer's failure to deposit into the
Collection Account any other amount required to be so deposited
pursuant to the Security Agreement, together with interest on any
and all amounts remaining unreimbursed (to the extent permitted by
law, if in respect to any unreimbursed amounts representing
interest) from the 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."
(b) Section 3.07(e) of the Agreement is hereby amended as follows
(solely for convenience, added language is italicized and deleted language
has been stricken through):
"(e) The Seller, THE SERVICER and the Reserve Account Agent,
as the case may be, and in each case as to matters concerning
itself, agree to pay to the Surety as follows: with respect to the
Seller, interest on any and all amounts described in subclauses (b),
(c), (f) and (g) and with respect to the Reserve Account Agent,
interest on any and all amounts described in subclause (d) of this
Section 3.07 from the date payable or paid by such party until
payment thereof in full, payable to the Surety at the Late Payment
Rate per annum."
14
(c) Section 3.07(f) of the Agreement is hereby amended as follows
(solely for convenience, added language is italicized and deleted language
has been stricken through):
"(f) The Collateral Agent, THE SERVICER, the Seller and the
Transferor agree to pay to the Surety as follows: any payments made
by the Surety on behalf of, or advanced to, the Collateral Agent,
THE SERVICER, the Seller or the Transferor, as the case may be,
consisting of any amounts payable by the Collateral Agent, THE
SERVICER, the Seller or the Transferor pursuant to the Transaction
Documents."
ARTICLE III
MISCELLANEOUS
SECTION 3.01. NOTICES. The following modifications are hereby made to
Section 6.01 of the Insurance Agreement as follows:
(a) The notice address for Texas Commerce Bank is hereby deleted.
(b) The following notice addresses are hereby added:
"To the Collateral Agent, Back-up Servicer and Custodian:
Norwest Bank Minnesota, National Association
Corporate Trust Services-Asset-Backed Administration
Xxxxxxx Xxxxxx
Xxxxx & Xxxxxxxxx
Xxxxxxxxxxx, XX 00000-0000
Telecopy No.: (000) 000-0000
Confirmation: (000) 000-0000"
To the Servicer:
Auto Lenders Acceptance Corporation
c/o First Investors Financial Services Group, Inc.
Suite 710
000 Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Xx.
Telecopy No.: 000-000-0000
Confirmation: 713-977-2600
To the Noteholder:
Enterprise Funding Corporation
15
c/o Global Securitization Services, LLC
00 Xxxx 00xx Xx., Xxxxx 000
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx
Telecopy No.: (000) 000-0000
Confirmation: (000)000-0000
SECTION 3.02. COUNTERPARTS. This Amendment may be executed in counterparts
by the parties hereto, and each such counterpart shall be considered an original
and all such counterparts shall constitute one and the same instrument.
SECTION 3.03. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICTS OF LAW PRINCIPLES THEREOF.
SECTION 3.04. LIMITED SCOPE. This Amendment is specific to the
circumstances described above and does not imply any future amendment or waiver
of rights allocated to the Surety under the Insurance Agreement.
SECTION 3.05. RATIFICATION. Except as expressly affected by the provisions
hereof, the Insurance Agreement as amended shall remain in full force and effect
in accordance with its terms and is hereby ratified and confirmed by the parties
hereto. On and after the date hereof, each reference in the Insurance Agreement
to "this Agreement", "hereunder", "herein" or words of like import shall mean
and be a reference to the Insurance Agreement as amended by this Amendment and
any reference to "the parties hereto", "no party hereto" or words of like import
shall be deemed to include all of the parties to this Amendment.
SECTION 3.06. NOTICE TO RATING AGENCIES. Promptly after the execution of
this Amendment, the Seller shall mail an executed copy of this Amendment to the
Rating Agencies. By execution of this Amendment, the parties acknowledge receipt
of notice of this Amendment.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
16.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, all
as of the day and year first above mentioned.
MBIA INSURANCE CORPORATION
By _________________________________________
Title: _____________________________________
FIRST INVESTORS AUTO RECEIVABLES
CORPORATION, as Transferor
By _________________________________________
Title: _____________________________________
FIRST INVESTORS FINANCIAL SERVICES,
INC., as Seller
By _________________________________________
Title: _____________________________________
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Successor Collateral Agent,
Back-up Servicer and Custodian
By _________________________________________
Title: _____________________________________
NATIONSBANK, N.A., as Reserve Account Agent
By _________________________________________
Title: _____________________________________
AUTO LENDERS ACCEPTANCE
CORPORATION, as Servicer
By _________________________________________
Title: _____________________________________
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Initial Collateral Agent
By _________________________________________
Title: _____________________________________
