**Exhibit 10.125(u)**

 

EXECUTION COPY

 

 

 

FIRST INVESTORS AUTO OWNER TRUST 2006-AAs Issuer,

 

WELLS FARGO BANK, NATIONAL ASSOCIATIONAs Indenture Trustee and Custodian

 

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INDENTURE

Dated as of January 26, 2006

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$32,000,000 4.5685% Class A-1 Asset-Backed Notes

$47,000,000 4.87% Class A-2 Asset-Backed Notes

$74,000,000 4.93% Class A-3 Asset-Backed Notes

$36,060,000 5.00% Class A-4 Asset-Backed Notes

$2,879,112.45 Class B Asset-Backed Notes

 

 

 

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INDENTURE, dated as of January 26, 2006 (as amended,supplemented or otherwise modified and in effect from time to time, this “*Indenture*”), between FIRST INVESTORSAUTO OWNER TRUST 2006-A, a Delaware statutory trust (the “*Issuer*”), and WELLS FARGO BANK,NATIONAL ASSOCIATION, a national banking association, not in its individualcapacity but solely as indenture trustee and as custodian (in such capacities,the “*Indenture Trustee*”and the “*Custodian*”).

 

Each party agrees as follows for the benefit of theother party and for the benefit of the Noteholders:

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**GRANTINGCLAUSE**

 

The Issuer hereby Grants to the Indenture Trustee onthe Closing Date, for the benefit of the Noteholders and the Insurer, all ofthe Issuer’s right, title and interest in, to and under, whether now owned orexisting or hereafter acquired or arising: (i) the Contracts listed in the Contract Schedule as of the Closing Date(the “Initial Contracts”) and the Additional Contracts; (ii) all amountsreceived on or in respect of the Contracts after the applicable Cutoff Dates(except interest received which accrued before such Cutoff Dates); (iii) thesecurity interests in the Financed Vehicles granted by the Obligors pursuant tothe Contracts; (iv) all proceeds from claims on or refunds of premiums withrespect to any physical damage, credit life or credit disability insurancepolicies covering the Financed Vehicles or the Obligors; (v) any LiquidationProceeds; (vi) all of the Issuer’s rights to the Contract Files; (vii) theCollection Account, the Reserve Account, the Prefunding Account, the Class ANote Payment Account and the Class B Note Payment Account and all amounts,securities, financial assets, investments and other property deposited in orcredited to any of the foregoing and all proceeds thereof; (viii) all of theIssuer’s rights under the Sale and Allocation Agreement, the ContributionAgreement and the Servicing Agreement, including the right of the Issuer tocause the Depositor, Seller or the Servicer, as applicable, to repurchaseContracts from the Issuer; and (ix) all present and future claims, demands,causes of action and choses in action in respect of any or all of the foregoingand all payments on or under and all proceeds of every kind and naturewhatsoever in respect of any or all of the foregoing, including all proceeds ofthe conversion thereof, voluntary or involuntary, into cash or other liquidproperty, all cash proceeds, accounts, accounts receivable, notes, drafts,acceptances, chattel paper, checks, deposit accounts, insurance proceeds,condemnation awards, rights to payment of any and every kind and other forms ofobligations and receivables, instruments and other property which at any timeconstitute all or part of or are included in the proceeds of any of theforegoing (collectively, the “*Collateral*”).

 

The foregoing Grant is made in trust to secure thepayment of principal of and interest on, and any other amounts owing in respectof, the Notes, equally and ratably without prejudice, priority or distinction,and to secure compliance with the provisions of this Indenture, all as providedin this Indenture.

 

The Indenture Trustee, as Indenture Trustee on behalfof the Noteholders, acknowledges such Grant, accepts the trusts under thisIndenture in accordance with the provisions of this Indenture and agrees toperform its duties required in this Indenture to the best of its ability to theend that the interests of the Noteholders and the Insurer may be adequately andeffectively protected.

 

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**ArticleI**

 

**Definitions**

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**Section 1.1.           Definitions.**

 

(a)           Exceptas otherwise specified herein or as the context may otherwise require, thefollowing terms shall have the respective meanings set forth below for allpurposes of this Indenture.

 

Act: As defined in Section 11.3(a).

 

AdministrationAgreement:  The Administration Agreement, dated as of thedate hereof, by and among the Administrator, the Issuer and the IndentureTrustee, as the same may from time to time be amended, supplemented orotherwise modified and in effect.

 

Administrator: First Investors or any successor Administrator under the AdministrationAgreement.

 

AuthenticatingAgent:  As defined in Section 2.14.

 

Authorized Officer: With respect to (i) the Issuer, any officer of the Owner Trustee who isauthorized to act for or on behalf of the Owner Trustee in matters relating tothe Issuer and who is identified on the list of Authorized Officers deliveredby the Owner Trustee to the Indenture Trustee on the Closing Date (as such listmay be modified or supplemented from time to time thereafter) and, for so longas the Administration Agreement is in full force and effect, any officer of theAdministrator who is authorized to act for the Administrator in mattersrelating to the Issuer and to be acted upon by the Administrator pursuant tothe Administration Agreement; and (ii) the Seller or the Servicer, an officerof the Seller or the Servicer, as applicable, authorized to act under theTransaction Documents.

 

AuthorizedRepresentative:  As defined in Section6A.2.

 

Book-Entry Notes: A beneficial interest in the Class A Notes, ownership and transfers ofwhich shall be made through book entries by a Clearing Agency as described inSection 2.11.

 

Certificate ofTrust:  As defined in the Trust Agreement.

 

CertificateRegistrar:  As defined in the Trust Agreement.

 

Class: Any class of Notes of the Issuer.

 

Class A Holder or Class A Noteholder:  The Person in whose name a Class A Note isregistered in the Note Register.

 

Class A Notes: Collectively, the Class A-1 Notes, the Class A-2 Notes, the Class A-3Notes and the Class A-4 Notes.

 

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Class A-1 Notes: The Class A-1 Asset-Backed Notes issuedby the Issuer pursuant to this Indenture in the initial aggregate principalamount of $32,000,000.

 

Class A-2 Notes: The Class A-2 Asset-Backed Notes issuedby the Issuer pursuant to this Indenture in the initial aggregate principalamount of $47,000,000.

 

Class A-3 Notes: The Class A-3 Asset-Backed Notes issuedby the Issuer pursuant to this Indenture in the initial aggregate principalamount of $74,000,000.

 

Class A-4 Notes: The Class A-4 Asset-Backed Notes issuedby the Issuer pursuant to this Indenture in the initial aggregate principalamount of $36,060,000.

 

Class A NotePayment Account:  As defined in the Sale and AllocationAgreement.

 

Class B Holder or ClassB Noteholder:  The Person in whose name a Class B Note isregistered in the Note Register.

 

Class B Notes: The Class B Asset-Backed Notes issued by the Issuer pursuant to thisIndenture in the initial aggregate principal amount of $2,879,112.45.

 

Clearing Agency: An organization registered as a “clearing agency” pursuant to Section17A of the Exchange Act.

 

Clearing AgencyParticipant:  A broker, dealer, bank, other financialinstitution or other Person for whom from time to time a Clearing Agency effectsbook-entry transfers and pledges of securities deposited with the ClearingAgency.

 

Closing Date: January 26, 2006.

 

Code: The Internal Revenue Code of 1986, as amended from time to time, and theTreasury Regulations promulgated thereunder.

 

Collateral: As defined in the Granting Clause of this Indenture.

 

Commission: The Securities and Exchange Commission.

 

Custodian: Wells Fargo Bank, National Association, not in its individual capacitybut solely as custodian, as specified herein.

 

Default:  Anyevent that, with notice or the lapse of time or both, would become an Event ofDefault.

 

Definitive Notes: As defined in Section 2.11.

 

Depositor: As defined in the Trust Agreement.

 

Depositor Account: As defined in the Trust Agreement.

 

Event of Default: As defined in Section 5.1.

 

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Excess PrefundingAmount:  The funds, if any, remaining in thePrefunding Account on the Prefunding Account Ending Date.

 

Exchange Act: The Securities Exchange Act of 1934, as amended.

 

Executive Officer: With respect to any corporation, the Chief Executive Officer, the ChiefOperating Officer, the Chief Financial Officer, the President, any ExecutiveVice President, any Senior Vice President, any Vice President, the Secretary orthe Treasurer of such corporation and with respect to any partnership, anygeneral partner of such partnership.

 

File Numbers: As defined Section 6A.1(f).

 

File Number List: As defined in Section 6A.1(f).

 

Final Note PaymentDate:  With respect to the Class A-1 Notes, January16, 2007, with respect to the to the Class A-2 Notes, March 16, 2009, withrespect to the to the Class A-3 Notes, February 15, 2011, with respect to theto the Class A-4 Notes, April 15, 2013 and with respect to the Class B Notes,April 15, 2013.

 

First Investors: First Investors Financial Services, Inc.

 

FISC: First Investors Servicing Corporation, together with its successors andassigns.

 

Fiscal Year: The period commencing on May 1 of each calendar year and ending on April30 of the following year.

 

Grant: To mortgage, pledge, bargain, sell, warrant, alienate, remise, release,convey, assign, transfer, create, and to grant a lien upon and a securityinterest in and right of set-off against, and to deposit, set over and confirmpursuant to this Indenture.  A Grant ofthe Collateral or of any other agreement or instrument shall include allrights, powers and options (but none of the obligations) of the granting partythereunder, including the immediate and continuing right to claim for, collect,receive and give receipt for principal and interest payments in respect of theCollateral and all other monies payable thereunder, to give and receive noticesand other communications, to make waivers or other agreements, to exercise allrights and options, to bring Proceedings in the name of the granting party orotherwise, and generally to do and receive anything that the granting party isor may be entitled to do or receive thereunder or with respect thereto.

 

Guaranty: The guaranty entered into as of the date hereof by the Seller, FISC, theBack-up Servicer and the Indenture Trustee.

 

Holder or Noteholder:  A Class A Holder or Class B Holder or a ClassA Noteholder or Class B Noteholder, respectively.

 

IndemnificationAgreement:  The Indemnification Agreement dated as ofJanuary 10, 2006 among the Insurer, the Seller and Wachovia Capital Markets.

 

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Indenture Trustee: Wells Fargo Bank, National Association, a national banking association,not in its individual capacity but solely as Indenture Trustee under thisIndenture, and any successor indenture trustee under this Indenture.

 

Independent: When used with respect to any specified Person, that such Person (i) isin fact independent of the Trust, any other obligor on the Notes, the Seller,the Servicer and any Affiliate of any of the foregoing Persons, (ii) does nothave any direct financial interest or any material indirect financial interestin the Trust, any such other obligor, the Seller, the Servicer or any Affiliate(other than a special purpose securitization vehicle whose rating is based inpart on its being bankruptcy-remote) of any of the foregoing Persons and (iii)is not connected with the Trust, any such other obligor, the Seller, theServicer or any Affiliate of any of the foregoing Persons as an officer,employee, promoter, underwriter, trustee, partner, director or personperforming similar functions.

 

Indemnitees: As defined in Section 6A.3(d).

 

IndependentCertificate:  A certificate or opinion to be delivered tothe Indenture Trustee under the circumstances described in, and otherwisecomplying with, the applicable requirements of Section 11.1, made by anIndependent appraiser or other expert appointed by an Issuer Order and approvedby the Indenture Trustee in the exercise of reasonable care, and such opinionor certificate shall state that the signer has read the definition of“Independent” in this Indenture and that the signer is Independent within themeaning thereof.

 

Initial Contracts: As defined in the Granting Clause.

 

Initial CutoffDate:  December 31, 2005.

 

Issuer: First Investors Auto Owner Trust 2006-A or any successor to FirstInvestors Auto Owner Trust 2006-A.

 

Issuer Order: A written order signed in the name of the Issuer by an AuthorizedOfficer of the Issuer and delivered to the Indenture Trustee.

 

Issuer Request: A written request signed in the name of the Issuer by an AuthorizedOfficer of the Issuer and delivered to the Indenture Trustee.

 

Issuer’sCertificate:  A certificate signed by an Authorized Officerof the Issuer and delivered to the Indenture Trustee, which certificate shallcomply with the applicable requirements of Section 11.1.

 

Losses: As defined in Sections 6.7(a) and 6A.3(d).

 

Monthly NotePrincipal:  The Class A Monthly Note Principal and/or theClass B Monthly Note Principal, as the context may require.

 

Note Balance: At any time, the sum of the Class A Note Balance and the Class B NoteBalance.

 

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Note DepositoryAgreement:  The agreement dated January 25, 2006, betweenthe Issuer and The Depository Trust Company, as the initial Clearing Agency,relating to the Class A Notes.

 

Note PaymentAccount:  The Class A Note Payment Account or the ClassB Note Payment Account, as the case may be.

 

Note Owner: With respect to any Class A Noteholder of a Book-Entry Note, the Personwho is the beneficial owner of such Book-Entry Note as reflected on the booksof the Clearing Agency or on the books of a Person maintaining an account withsuch Clearing Agency (directly as a Clearing Agency Participant or as anindirect participant, in each case in accordance with the rules of suchClearing Agency).

 

Note Rate: With respect to the Class A-1 Notes, 4.5685% per annum, with respect tothe Class A-2 Notes, 4.87% per annum, with respect to the Class A-3 Notes,4.93% per annum and with respect to the Class A-4 Notes, 5.00% per annum.

 

Note Register: As defined in Section 2.5.

 

Note Registrar: As defined in Section 2.5.

 

Noteholders: Collectively, the Class A Noteholders and the Class B Noteholders, itbeing understood that with regards to voting prior to the payment in full ofthe Class A Notes and the payment in full of all amounts owed to the Insurer, amajority of Class A Noteholders will not include Class B Noteholders.

 

Notes: Collectively, the Class A Notes and the Class B Notes, it beingunderstood that with regards to voting prior to the payment in full of theClass A Notes and the payment in full of all amounts owed to the Insurer, amajority of Class A Notes will not include Class B Notes.

 

Opinion of Counsel: One or more written opinions of counsel who may, except as otherwiseexpressly provided in this Indenture, be outside counsel to the Issuer, theSeller or the Servicer and who shall be acceptable to the Indenture Trustee andthe Insurer (provided that no Insurer Default shall have occurred and iscontinuing), which opinion or opinions shall be addressed to and delivered tothe Indenture Trustee as Indenture Trustee and the Insurer (provided that noInsurer Default shall have occurred and is continuing), shall comply with anyapplicable requirements of Section 11.1 and shall be in form andsubstance satisfactory to the Indenture Trustee.

 

Outstanding: As of the date of determination, all Notes theretofore authenticated anddelivered under this Indenture except:

 

(i)                 Notes theretofore canceled bythe Note Registrar or delivered to the Note Registrar for cancellation;

 

(ii)                Notes or portions thereof thepayment for which money in the necessary amount has been theretofore depositedwith the Indenture Trustee or any Paying Agent in trust for the Holders of suchNotes; provided, however, that if such Notes are to be redeemed, notice of suchredemption must have been duly given pursuant to this

 

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Indenture or provision for such notice must have beenmade in a manner satisfactory to the Indenture Trustee; and

 

(iii)               Notes in exchange for or in lieuof which other Notes have been authenticated and delivered pursuant to thisIndenture unless proof satisfactory to the Indenture Trustee is presented thatany such Notes are held by a protected purchaser;

 

provided, however, that in determiningwhether the Holders of the requisite Note Balance have given any request,demand, authorization, direction, notice, consent or waiver hereunder or underany Transaction Document, Notes owned by the Issuer, the Seller, the Serviceror any Affiliate of any of the foregoing Persons shall be disregarded anddeemed not to be Outstanding, except that, in determining whether the IndentureTrustee shall be protected in relying on any such request, demand,authorization, direction, notice, consent or waiver, only Notes that aResponsible Officer knows to be so owned shall be so disregarded.  Notes so owned that have been pledged in goodfaith may be regarded as Outstanding if the pledgee establishes to thesatisfaction of the Indenture Trustee the pledgee’s right so to act withrespect to such Notes and that the pledgee is not the Issuer, any other obligorupon the Notes, the Seller, the Servicer or any Affiliate of any of theforegoing Persons.

 

Owner Trustee: Wells Fargo Bank Delaware Trust Company, a Delaware limited purposetrust company, not in its individual capacity but solely as Owner Trustee underthe Trust Agreement, and any successor owner trustee under the Trust Agreement.

 

Pass-ThroughEntity:  As defined in Section 2.16.

 

Paying Agent: The Indenture Trustee or any other Person that meets the eligibilitystandards for the Indenture Trustee specified in Section 6.10 and isauthorized by the Issuer to make payments to and distributions from theCollection Account, the Prefunding Account, the Reserve Account and each NotePayment Account, including payment of principal of or interest on the Notes, onbehalf of the Issuer.

 

Predecessor Note: With respect to any particular Note, every previous Note evidencing allor a portion of the same debt as that evidenced by such particular Note.  Any Note authenticated and delivered under Section2.6 in lieu of a mutilated, lost, destroyed or stolen Note shall be deemed,for purposes of this definition, to evidence the same debt as the mutilated,lost, destroyed or stolen Note.

 

Prefunding AccountEnding Date:  April 4, 2006.

 

Premium SideLetter Agreement:  As defined in the Insurance Agreement.

 

Proceeding: Any suit in equity, action at law or other judicial or administrativeproceeding.

 

Purchase Agreement: That Purchase Agreement, dated January 10, 2006, among the Issuer, theSeller and Wachovia Capital Markets.

 

Record Date: With respect to any Payment Date or Redemption Date, the close ofbusiness on the Business Day preceding such Payment Date or Redemption Date;provided, however, that if

 

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Definitive Noteshave been issued pursuant to Section 2.13, Record Date shall mean, withrespect to any Payment Date or Redemption Date, the last day of the precedingCollection Period.

 

Redemption Date: The Payment Date specified by the Servicer pursuant to Section 10.1on which date the Indenture Trustee shall withdraw any amount remaining in theReserve Account and deposit the portion of such amount payable to theNoteholders in the Note Payment Account.

 

Redemption Price: As defined in Section 5.16 of the Sale and Allocation Agreement.

 

Rule 144A: Rule 144A under the Securities Act.

 

Rule 144AInformation:  Such information as is specified pursuant toRule 144A(d)(4) under the Securities Act (or any successor provision thereto).

 

Sale andAllocation Agreement:  The Sale and Allocation Agreement, dated asof the date hereof, by and among the Issuer, the Servicer, the IndentureTrustee, the Securities Intermediary and the Depositor as the same may beamended, supplemented or otherwise modified and in effect from time to time.

 

Securities Act: Securities Act of 1933, as amended.

 

Seller: First Investors Financial Services, Inc. a Texas corporation, in itscapacity as seller under the Contribution Agreement, and its successors in suchcapacity.

 

Servicer: FISC, in its capacity as servicer under the Servicing Agreement, and anySuccessor Servicer.

 

State: Any of the fifty states of the United States of America or the Districtof Columbia.

 

Successor Servicer: As defined in the Servicing Agreement.

 

TransactionDocuments:  The Servicing Agreement, the Sale andAllocation Agreement, the Contribution Agreement, the Premium Side LetterAgreement, the Trust Agreement, the Indemnification Agreement, the Certificateof Trust, this Indenture, the Administration Agreement, the Purchase Agreement,the Note Depository Agreement, the Insurance Agreement, the Policy, theGuaranty and the other documents and certificates delivered in connection therewith,in each case as the same may from time to time be amended, supplemented orotherwise modified and in effect.

 

Trust Accounts: The Collection Account, the Class A Note Payment Account, the Class BNote Payment Account, the Prefunding Account, the Depositor Account and theReserve Account.

 

Trust Estate: All money, instruments, rights and other property that are subject orintended to be subject to the lien and security interest of this Indenture forthe benefit of the Noteholders and the Insurer (including, but not limited to,all property and interests Granted to the Indenture Trustee), including allproceeds thereof.

 

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Wachovia CapitalMarkets:  Wachovia Capital Markets, LLC.

 

(b)           Exceptas otherwise specified herein or as the context may otherwise require,capitalized terms used but not otherwise defined herein have the respectivemeanings set forth in, or incorporated by reference into, the Sale andAllocation Agreement for all purposes of this Indenture.

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**Section 1.2.           Rules of Construction.**

 

Unless the context otherwise requires:

 

(a)           aterm has the meaning assigned to it;

 

(b)           anaccounting term not otherwise defined has the meaning assigned to it inaccordance with generally accepted accounting principles as in effect from timeto time;

 

(c)           “or”is not exclusive;

 

(d)          “including” means including without limitation;

 

(e)           wordsin the singular include the plural and words in the plural include the singularand the masculine as well as the feminine and neuter genders of such terms;

 

(f)            anyagreement, instrument or statute defined or referred to herein or in anyinstrument or certificate delivered in connection herewith means suchagreement, instrument or statute as from time to time amended, modified orsupplemented and includes (in the case of agreements or instruments) referencesto all attachments thereto and instruments incorporated therein; and

 

(g)           referencesto a Person are also to its permitted successors and assigns.

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**ArticleII**

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**TheNotes**

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**Section 2.1.           Form.**

 

(a)           TheClass A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notesand the Class B Notes, together with the Indenture Trustee’s certificates ofauthentication, shall be substantially in the form set forth in Exhibits A-1,A-2, A-3, A-4 and B, respectively, with suchappropriate insertions, omissions, substitutions and other variations as arerequired or permitted by this Indenture, and may have such letters, numbers orother marks of identification and such legends or endorsements placed thereonas may, consistently herewith, be determined by the officers executing suchNotes, as evidenced by their execution thereof. Any portion of the text of any Note may be set forth on the reversethereof, with an appropriate reference thereto on the face of the Note.

 

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(b)           TheDefinitive Notes shall be typewritten, printed, lithographed or engraved, orproduced by any combination of these methods (with or without steel engraved borders),all as determined by the officers executing such Notes, as evidenced by theirexecution of such Notes.

 

(c)           EachNote shall be dated the date of its authentication.  The terms of the Class A-1 Notes, Class A-2Notes, Class A-3 Notes, Class A-4 Notes and Class B Notes set forth in ExhibitsA-1, A-2, A-3, A-4 and B, respectively, heretoare part of the terms of this Indenture and are incorporated herein byreference.

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**Section 2.2.           Execution, Authentication and Delivery.**

 

(a)           TheNotes shall be executed on behalf of the Issuer by any of its AuthorizedOfficers.  The signatures of any suchAuthorized Officer on the Notes may be manual or facsimile.

 

(b)           Notesbearing the manual or facsimile signature of individuals who were at any timeAuthorized Officers of the Issuer shall bind the Issuer, notwithstanding thatsuch individuals or any of them have ceased to hold such offices prior to theauthentication and delivery of such Notes or did not hold such offices on thedate of such Notes.

 

(c)           TheIndenture Trustee shall, upon Issuer Order, authenticate and deliver the ClassA-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class B Notesfor original issue in an aggregate principal amount of $32,000,000,$47,000,000, $74,000,000, $36,060,000  and$2,879,112.45, respectively.  The Class ANote Balance and the Class B Note Balance at any time may not exceed suchrespective amounts.

 

(d)           EachNote shall be dated the date of its authentication.  The Class A Notes shall be issuable asregistered Notes in minimum denominations of $250,000 and integral multiples of$1,000 in excess thereof.  The Class BNotes shall be issued in definitive form only.

 

(e)           NoNote shall be entitled to any benefit under this Indenture or be valid orobligatory for any purpose unless there appears on such Note a certificate ofauthentication substantially in the form provided for herein executed by theIndenture Trustee by the manual signature of one of its authorized signatories,and such certificate upon any Note shall be conclusive evidence, and the onlyevidence, that such Note has been duly authenticated and delivered hereunder.

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**Section 2.3.           Temporary Class A Notes.**

 

(a)           Pendingthe preparation of Definitive Notes, if Definitive Notes are to be prepared inaccordance with Section 2.13, the Issuer may execute, and upon receiptof an Issuer Order the Indenture Trustee shall authenticate and deliver,temporary Class A Notes that are printed, lithographed, typewritten,mimeographed or otherwise produced of the tenor of the Definitive Notes in lieuof which they are issued and with such variations not inconsistent with theterms of this Indenture as the officers executing such Class A Notes maydetermine, as evidenced by their execution of such Notes.

 

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(b)           Iftemporary Class A Notes are issued, the Issuer shall cause Definitive Notes tobe prepared without unreasonable delay. After the preparation of Definitive Notes in accordance with Section2.13, the temporary Class A Notes shall be exchangeable for DefinitiveNotes upon surrender of the temporary Class A Notes at the office or agency ofthe Issuer to be maintained as provided in Section 3.2, without chargeto the Class A Holder.  Upon surrenderfor cancellation of any one or more temporary Class A Notes, the Issuer shallexecute, and the Indenture Trustee shall authenticate and deliver in exchangetherefor, a like principal amount of Definitive Notes of authorizeddenominations.  Until so exchanged, thetemporary Class A Notes shall in all respects be entitled to the same benefitsunder this Indenture as Definitive Notes.

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**Section 2.4.           Tax Treatment.**

 

The Issuer has entered into this Indenture, and theNotes shall be issued, with the intention that, for federal, state and localincome and franchise tax purposes, the Notes shall qualify as indebtedness ofthe Issuer secured by the Trust Estate. The Issuer, by entering into this Indenture, and each Noteholder, by itsacceptance of a Note (and each Note Owner by its acceptance of an interest inthe applicable Book-Entry Note), agree to treat the Notes as indebtedness ofthe Issuer for federal, state and local income and franchise tax purposes.

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**Section 2.5.           Registration; Registration of Transfer and Exchange.**

 

(a)           TheIssuer shall cause to be kept a register (the “Note Register”) in which,subject to such reasonable regulations as it may prescribe, the Issuer shallprovide for the registration of Notes and the registration of transfers ofNotes.  The Indenture Trustee initiallyshall be the registrar (the “*NoteRegistrar*”) for the purpose of registering Notes and transfersof Notes as herein provided.  Upon anyresignation of any Note Registrar, the Issuer shall promptly appoint asuccessor or, if it elects not to make such an appointment, assume the dutiesof Note Registrar.  In addition, theIndenture Trustee hereby accepts its appointment as Certificate Registrar, asdefined in and pursuant to Section 3.4 of the Trust Agreement.

 

(b)           Ifa Person other than the Indenture Trustee is appointed by the Issuer as NoteRegistrar, (i) the Issuer shall give the Indenture Trustee prompt writtennotice of the appointment of such Note Registrar and of the location, or anychange in the location, of the Note Register, (ii) the Indenture Trustee shallhave the right to inspect the Note Register at all reasonable times and toobtain copies thereof and (iii) the Indenture Trustee shall have the right torely upon a certificate executed on behalf of the Note Registrar by anExecutive Officer thereof as to the names and addresses of the Noteholders andthe principal amounts and number of such Notes.

 

(c)           Uponsurrender for registration of transfer of any Note at the office or agency ofthe Issuer to be maintained as provided in Section 3.2, if the requirementsof Section 8-401 of the Relevant UCC are met, the Issuer shall execute, and theIndenture Trustee shall authenticate and deliver to the Noteholder making suchsurrender, in the name of the designated transferee or transferees, one or morenew Notes in any authorized denomination, of a like aggregate principalamount.  The Indenture Trustee may relyupon the Administrator with respect to the determination of whether therequirements of Section 8-401 of the Relevant UCC are met.

 

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(d)           Atthe option of the Noteholder, Notes may be exchanged for other Notes of thesame class in any authorized denominations, of a like aggregate principalamount, upon surrender of the Notes to be exchanged at such office oragency.  Whenever any Notes are sosurrendered for exchange, if the requirements of Section 8-401 the Relevant UCCare met, the Issuer shall execute, and the Indenture Trustee shall authenticateand deliver to the Noteholder making such exchange, the Notes which suchNoteholder is entitled to receive.  TheIndenture Trustee may rely upon the Administrator with respect to thedetermination of whether the requirements of Section 8-401 of the Relevant UCCare met.

 

(e)           AllNotes issued upon any registration of transfer or exchange of Notes shall bethe valid obligations of the Issuer, evidencing the same debt, and entitled tothe same benefits under this Indenture, as the Notes surrendered upon suchregistration of transfer or exchange.

 

(f)            AllNotes presented or surrendered for registration of transfer or exchange shallbe duly endorsed by, or be accompanied by a written instrument of transfer inthe form of the Assignment attached to Exhibits A-1, A-2, A-3,A-4 or B, as the case may be, satisfactory to the IndentureTrustee duly executed by, the Holder thereof or such Holder’s attorney dulyauthorized in writing, with such signature guaranteed by an “eligible guarantorinstitution” meeting the requirements of the Note Registrar.

 

(g)           Noservice charge shall be made to a Holder for any registration of transfer orexchange of Notes, but the Issuer may require payment by such Holder of a sumsufficient to cover any tax or other governmental charge that may be imposed inconnection with any registration of transfer or exchange of Notes, other thanexchanges pursuant to Section 2.3 or 9.5 not involving anytransfer.

 

(h)           TheIssuer shall not be required to make, and the Note Registrar need not register,transfers or exchanges of Notes selected for redemption or Notes with respectto which the due date for any payment will occur within 15 days.

** **

**Section 2.6.           Mutilated, Destroyed, Lost or Stolen Notes.**

 

(a)           If(i) any mutilated Note is surrendered to the Indenture Trustee, or theIndenture Trustee receives evidence to its satisfaction of the destruction,loss or theft of any Note, and (ii) there is delivered to the Indenture Trusteesuch security or indemnity as may be required by it to hold the Issuer and theIndenture Trustee harmless, then, in the absence of notice to the Issuer, theNote Registrar or the Indenture Trustee that such Note has been acquired by aprotected purchaser, and provided that the requirements of Section 8-405 of theRelevant UCC are met, the Issuer shall execute and the Indenture Trustee shallauthenticate and deliver, in exchange for or in lieu of any such mutilated,destroyed, lost or stolen Note, a replacement Note; provided, however, that ifany such destroyed, lost or stolen Note, but not a mutilated Note, shall havebecome or within seven (7) days of the Indenture Trustee’s receipt of evidenceto its satisfaction of such destruction, loss or theft shall be due andpayable, or shall have been called for redemption in whole pursuant to Section10.1, instead of issuing a replacement Note, the Issuer may pay suchdestroyed, lost or stolen Note when so due or payable or upon the RedemptionDate without surrender thereof.  TheIndenture Trustee may rely upon the Administrator with respect to the determinationof whether the requirements of Section 8-405 of the Relevant UCC

 

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are met.  If,after the delivery of such replacement Note or payment of a destroyed, lost orstolen Note pursuant to the proviso to the preceding sentence, a protectedpurchaser of the original Note in lieu of which such replacement Note wasissued presents for payment such original Note, the Issuer and the IndentureTrustee shall be entitled to recover such replacement Note (or such payment)from the Person to whom such replacement Note was delivered or any Persontaking such replacement Note from such Person to whom such replacement Note wasdelivered or any assignee of such Person, except a protected purchaser, andshall be entitled to recover upon the security or indemnity provided thereforto the extent of any loss, damage, cost or expense incurred by the Issuer orthe Indenture Trustee in connection therewith.

 

(b)           Uponthe issuance of any replacement Note under this Section 2.6, the Issuermay require the payment by the Holder of such Note of a sum sufficient to coverany tax or other governmental charge that may be imposed in connection withsuch issuance and any other reasonable expenses (including the fees andexpenses of the Indenture Trustee) related thereto.

 

(c)           Everyreplacement Note issued pursuant to this Section 2.6 in replacement ofany mutilated, destroyed, lost or stolen Note shall constitute an originaladditional contractual obligation of the Issuer, whether or not the mutilated,destroyed, lost or stolen Note shall be at any time enforceable by anyone, andshall be entitled to all the benefits of this Indenture equally andproportionately with any and all other Notes duly issued hereunder.

 

(d)           Theprovisions of this Section 2.6 are exclusive and shall preclude (to theextent lawful) all other rights and remedies with respect to the replacement orpayment of mutilated, destroyed, lost or stolen Notes.

** **

**Section 2.7.           Persons Deemed Owners.**

 

Prior to due presentation of a Note for registrationof transfer, the Issuer, the Indenture Trustee and any agent of the Issuer orthe Indenture Trustee may treat the Person in whose name such Note isregistered in the Note Register (as of the day of determination) as the ownerof such Note for the purpose of receiving payments of principal of and intereston such Note and for all other purposes whatsoever, whether or not such Noteshall be overdue, and none of the Issuer, the Indenture Trustee or any agent ofthe Issuer or the Indenture Trustee shall be affected by any notice to thecontrary.

** **

**Section 2.8.           Payments of Interest and Principal.**

 

(a)           [Reserved.]

 

(b)           Theprincipal of each Class of Notes shall be payable in installments on eachPayment Date (unless the Notes have been declared immediately due and payablein accordance with Section 5.2 following the occurrence of an Event ofDefault) in an aggregate amount equal to the applicable Monthly Note Principalfor such Payment Date in accordance with Section 3.5 of the Sale and AllocationAgreement.  The outstanding principalbalance of any Class of Notes shall be due and payable on the Final NotePayment Date relating to such Class of Notes. On each Payment Date (unless the Notes have been declared immediatelydue and payable in accordance with Section 5.2 following the occurrenceof an Event of Default), upon receipt of

 

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instructions from the Servicer pursuant to Section3.5(d) and (e) of the Sale and Allocation Agreement, the Indenture Trusteeshall:

 

(i)            apply or cause to be applied theamount on deposit in the Class A Note Payment Account on such Payment Date tomake the following payments in the following order of priority:

 

(A)          to each Class of Class A Notes, prorata, based on the respective amounts then due to each Class of Class ANotes in respect of interest, the Total Note Interest payable for such PaymentDate;

 

(B)           to the Class A-1 Noteholders (i) theClass A Monthly Note Principal for that Payment Date until the principal amountof the Class A-1 Notes has been paid in full and (ii) any Excess PrefundingAmount payable to the Class A-1 Noteholders in accordance with Section 3.7(d)of the Sale and Allocation Agreement;

 

(C)           to the Class A-2 Noteholders (i)after the Class A-1 Noteholders have been paid in full, the remaining Class AMonthly Note Principal for that Payment Date, until the principal amount of theClass A-2 Notes has been paid in full and (ii) any Excess Prefunding Amountpayable to the Class A-2 Noteholders in accordance with Section 3.7(d) of the Saleand Allocation Agreement;

 

(D)          to the Class A-3 Noteholders (i) afterthe Class A-2 Noteholders have been paid in full, the remaining Class A MonthlyNote Principal for that Payment Date, until the principal amount of the ClassA-3 Notes has been paid in full and (ii) any Excess Prefunding Amount payableto the Class A-3 Noteholders in accordance with Section 3.7(d) of the Sale andAllocation Agreement; and

 

(E)           to the Class A-4 Noteholders (i)after the Class A-3 Noteholders have been paid in full, the remaining Class AMonthly Note Principal for that Payment Date, until the principal amount of theClass A-4 Notes has been paid in full and (ii) any Excess Prefunding Amountpayable to the Class A-4 Noteholders in accordance with Section 3.7(d) of theSale and Allocation Agreement;

 

(ii)           apply or cause to be applied theamount on deposit in the Class B Note Payment Account on such Payment Date tothe Class B Noteholders, for the payment of any Excess Prefunding Amountpayable to the Class B Noteholders in accordance with Section 3.7(d) of theSale and Allocation Agreement and the Class B Monthly Note Principal for thatPayment Date until the principal amount of the Class B Notes has been paid infull.

 

(c)           Theoutstanding principal balance of each Class of Class A Notes, to the extent notpreviously paid, shall be due and payable on the Final Note Payment Date forsuch Class of Class A Notes.

 

(d)           TheClass A-1 Notes shall accrue interest at 4.5685% per annum, the Class A-2 Notesshall accrue interest at 4.87% per annum, the Class A-3 Notes shall accrueinterest at

 

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4.93% per annum and the Class A-4 Notes shall accrueinterest at 5.00% per annum and such interest shall be due and payable on eachPayment Date.  The Class B Notes shallnot accrue interest.  Interest on theClass A-1 Notes shall be calculated on the basis of the actual number of daysthat have elapsed from and including the prior Payment Date to but excludingthe current Payment Date and a 360-day year. Interest on the Class A-2 Notes, Class A-3 Notes and Class A-4 Notesshall be calculated on the basis a 360-day year consisting of twelve 30-daymonths.  Subject to Section 3.1,any installment of interest or principal, if any, payable on any Class A Notethat is punctually paid or duly provided for by the Issuer on the applicablePayment Date shall be paid to the Person in whose name such Note (or one ormore Predecessor Notes) is registered on the related Record Date by checkmailed first-class postage prepaid to such Person’s address as it appears onthe Note Register on such Record Date; provided, however, that,unless Definitive Notes have been issued pursuant to Section 2.13, withrespect to Class A Notes registered on the Record Date in the name of thenominee of the Clearing Agency (initially, such nominee to be Cede & Co.),payment shall be made by wire transfer in immediately available funds to theaccount designated by such nominee, and except for the final installment ofprincipal payable with respect to such Class A Note on a Payment Date or on therelated Final Note Payment Date (and except for the Redemption Price for anyNote called for redemption in whole pursuant to Section 10.1), whichshall be payable as provided below.  Thefunds represented by any such checks returned undelivered shall be held inaccordance with Section 3.3.  TheIndenture Trustee shall pay all Total Note Interest for any Payment Date to theNoteholders as of the related Record Date even if a portion of such Total NoteInterest relates to an earlier Payment Date.

 

(e)           Allpayments of principal on each Class of Notes and, with respect to each Class ofClass A Notes, interest payments, shall be made prorata to theNoteholders of each Class of Notes.  TheIndenture Trustee shall, before the Payment Date on which the Issuer expects topay the final installment of principal of each Class of Notes and, with respectto each Class of Class A Notes, interest on any Note, notify the Holder of suchNote as of the related Record Date of such final installment.  Such notice shall be mailed or transmitted byfacsimile and shall specify that such final installment shall be payable onlyupon presentation and surrender of such Note and shall specify the place wheresuch Note may be presented and surrendered for payment of suchinstallment.  Notices in connection withredemption of Notes shall be mailed to Noteholders as provided in Section10.2.

 

(f)            Notwithstandingthe foregoing, the entire unpaid principal amount of the Notes shall be due andpayable, if not previously paid, on the date on which the Notes have beendeclared or have automatically become immediately due and payable in accordancewith Section 5.2 following the occurrence of an Event of Default.  On each Payment Date following accelerationof the Notes and with respect to amounts withdrawn from the Reserve Accountpursuant to Section 3.5(f) and Section 3.5(g) of the Sale and AllocationAgreement upon receipt of instructions from the Servicer, the Indenture Trusteeshall:

 

(i)            Apply or cause to be applied theamount on deposit in the Class A Note Payment Account (including amountsdeposited therein from the Reserve Account in accordance with Section 3.5(f) ofthe Sale and Allocation Agreement) on such Payment Date to make the followingpayments in the following order of priority:

 

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(A)          to each Class of Class A Notes, prorata, without priority or preference of any kind, according to theamounts due and payable on the Class A Notes in respect of interest, the TotalNote Interest payable for such Payment Date; and

 

(B)           to the Class A Noteholders, first tothe holders of the Class A-1 Notes any amounts due and unpaid for the paymentof principal thereon until the Class A-1 Notes have been paid in full, and thento the holders of the Class A-2 Notes, the Class A-3 Notes and the Class A-4Notes, any amounts due and unpaid for the payment of principal on such Classesof Class A Notes, pro rata, based on the respective current outstandingprincipal balance of each such Class of Class A Notes.

 

(ii)           Following the payment in full of theentire Class A Note Balance, the Total Note Interest and all amounts due to theInsurer, to pay or cause to be paid the amount on deposit in the Class B NotePayment Account (including amounts deposited therein from the Reserve Accountin accordance with Section 3.5(g) of the Sale and Allocation Agreement) on suchPayment Date to the Class B Noteholders, up to the Class B Note Balance.

** **

**Section 2.9.           Cancellation.**

 

All Notes surrendered for payment, registration oftransfer, exchange or redemption in whole pursuant to Section 10.1shall, if surrendered to any Person other than the Indenture Trustee, bedelivered to the Indenture Trustee and shall be promptly canceled by theIndenture Trustee.  The Issuer may at anytime deliver to the Indenture Trustee for cancellation any Notes previouslyauthenticated and delivered hereunder which the Issuer may have acquired in anymanner whatsoever, and all Notes so delivered shall be promptly canceled by theIndenture Trustee.  No Notes shall beauthenticated in lieu of or in exchange for any Notes canceled as provided inthis Section 2.9, except as expressly permitted by this Indenture.  All canceled Notes may be held or disposed ofby the Indenture Trustee in accordance with its standard retention or disposalpolicy as in effect at the time unless the Issuer shall direct by an IssuerOrder that they be destroyed or returned to it, provided that such Issuer Orderis timely and the Notes have not been previously disposed of by the IndentureTrustee.

** **

**Section 2.10.        Release of Collateral.**

 

Subject to Section 11.1 and the terms of theTransaction Documents, the Indenture Trustee shall release property from thelien of this Indenture at any time before the Notes have been paid in full onlyupon receipt of an Issuer Request accompanied by an Issuer’s Certificate and anOpinion of Counsel.

** **

**Section 2.11.        Book-Entry.**

 

The Class A Notes, upon original issuance, shall beissued in the form of typewritten Notes representing the Book-Entry Notes, tobe delivered to The Depository Trust Company, the initial Clearing Agency, by,or on behalf of, the Issuer.  The Class ANotes representing the Book-Entry Notes shall be registered initially on theNote Register in the name of Cede & Co.,

 

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the nominee of theinitial Clearing Agency, and no Note Owner thereof shall receive a DefinitiveNote representing such Note Owner’s interest in such Note, except as providedin Section 2.13. Unless and until definitive, fully registered Class ANotes (the “*Definitive Notes*”)have been issued to such Note Owners pursuant to Section 2.13:

 

(a)           theprovisions of this Section 2.11 shall be in full force and effect;

 

(b)           theNote Registrar and the Indenture Trustee shall be entitled to deal with theClearing Agency for all purposes of this Indenture (including the payment ofprincipal of and interest on the Class A Notes and the giving of instructionsor directions hereunder) as the sole Holder of the Class A Notes, and shallhave no obligation to the Note Owners;

 

(c)           tothe extent that the provisions of this Section 2.11 conflict with anyother provisions of this Indenture, the provisions of this Section shallcontrol;

 

(d)           therights of Note Owners shall be exercised only through the Clearing Agency andshall be limited to those established by law and agreements between such NoteOwners and the Clearing Agency and/or the Clearing Agency Participants pursuantto the Note Depository Agreement; unless and until Definitive Notes are issuedpursuant to Section 2.13, the initial Clearing Agency shall makebook-entry transfers among the Clearing Agency Participants and receive andtransmit payments of principal of and interest on the Notes to such ClearingAgency Participants; and

 

(e)           wheneverthis Indenture requires or permits actions to be taken based upon instructionsor directions of Noteholders evidencing a specified percentage of the Class ANote Balance, the Clearing Agency shall be deemed to represent such percentageonly to the extent that it has received instructions to such effect from NoteOwners and/or Clearing Agency Participants owning or representing,respectively, such required percentage of the beneficial interest in the ClassA Notes and has delivered such instructions to the Indenture Trustee.

** **

**Section 2.12.        Notices to Clearing Agency.**

 

Whenever a notice or other communication to the ClassA Noteholders is required under this Indenture, unless and until DefinitiveNotes shall have been issued to such Note Owners pursuant to Section 2.13,the Indenture Trustee shall give all such notices and communications specifiedherein to be given to Class A Noteholders to the Clearing Agency, and shallhave no obligation to such Note Owners.

** **

**Section 2.13.        Definitive Notes.**

 

If (a) the Issuer, the Administrator or the Serviceradvises the Indenture Trustee in writing that the Clearing Agency is no longerwilling or able to properly discharge its responsibilities with respect to theBook-Entry Notes and the Indenture Trustee or the Administrator is unable tolocate a qualified successor, (b) the Administrator, at its option, advises theIndenture Trustee in writing that it elects to terminate the book-entry systemthrough the Clearing Agency, (c) at any time the Clearing Agency shall nolonger be registered under the Exchange Act, or other applicable statute orregulation and, in either case, the Administrator or the Indenture Trustee, asapplicable, is unable to appoint a qualified successor or (d) after the

 

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occurrence of anEvent of Default or an Event of Servicing Termination, Note Owners of theBook-Entry Notes representing beneficial interests aggregating not less than51% of the principal amount of such Notes advise the Indenture Trustee and theClearing Agency in writing that the continuation of a book-entry system throughthe Clearing Agency is no longer in the best interests of such Note Owners,then the Clearing Agency shall notify all Note Owners and the Indenture Trusteeof the occurrence of such event and of the availability of Definitive Notes toNote Owners requesting the same.  Uponsurrender to the Indenture Trustee of the typewritten Note representing theBook-Entry Notes by the Clearing Agency, accompanied by registrationinstructions, the Issuer shall execute and the Indenture Trustee shallauthenticate the Definitive Notes in accordance with the instructions of theClearing Agency.  None of the Issuer, theNote Registrar or the Indenture Trustee shall be liable for any delay indelivery of such instructions and may conclusively rely on, and shall beprotected in relying on, such instructions. Upon the issuance of Definitive Notes, the Indenture Trustee shallrecognize the Holders of the Definitive Notes as Noteholders.

** **

**Section 2.14.        Authenticating Agents.**

 

The Indenture Trustee may appoint one or more Persons(each, an “*Authenticating Agent*”)with power to act on its behalf and subject to its direction in theauthentication of Notes in connection with issuance, transfers and exchangesunder Sections2.2, 2.3, 2.5, 2.6 and 2.13,as fully to all intents and purposes as though each such Authenticating Agenthad been expressly authorized by those Sections to authenticate suchNotes.  For all purposes of thisIndenture, the authentication of Notes by an Authenticating Agent pursuant tothis Section 2.14 shall be deemed to be the authentication of Notes “bythe Indenture Trustee.”

 

Any corporation into which any Authenticating Agentmay be merged or converted or with which it may be consolidated, or anycorporation resulting from any merger, consolidation or conversion to which anyAuthenticating Agent shall be a party, or any corporation succeeding to all orsubstantially all of the corporate trust business of any Authenticating Agent,shall be the successor of such Authenticating Agent hereunder, without theexecution or filing of any further act on the part of the parties hereto orsuch Authenticating Agent or such successor corporation.

 

Any Authenticating Agent may at any time resign bygiving written notice of resignation to the Indenture Trustee and the OwnerTrustee.  The Indenture Trustee may atany time terminate the agency of any Authenticating Agent by giving writtennotice of termination to such Authenticating Agent and the Owner Trustee.  Upon receiving such notice of resignation orupon such a termination, the Indenture Trustee shall appoint a successor AuthenticatingAgent and shall give written notice of any such appointment to the OwnerTrustee.

 

The Administrator agrees to pay to each AuthenticatingAgent from time to time reasonable compensation for its services.  The provisions of Sections 2.9 and 6.4shall be applicable to any Authenticating Agent.

** **

**Section 2.15.        Restrictions on Transfers of Class A Notes.**

 

(a)           TheClass A Notes have not been and will not be registered under the Securities Actand no Class A Note or any interest therein may be reoffered, resold, pledgedor otherwise

 

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transferred except as contemplated by the legend setforth in paragraph (d) below.  Anyresale or other transfer, or attempted resale or other transfer which is notmade in compliance with the restrictions set forth in such legend shall not berecognized by the Issuer.  Authorizationof the Issuer of a purchase, resale or transfer of a Class A Note will begranted only if made to a qualified institutional buyer and, in each case, inaccordance with the other requirements applicable to a sale of Class ANotes.  Each purchaser acknowledges andis deemed to acknowledge that no representation is made by the Issuer as to theavailability of any exemption under the Securities Act or any state securitieslaws for resale of the Class A Notes and that such purchaser may be required tobear the financial risks of this investment for an indefinite period of time.

 

(b)           Eachpurchaser and any account for which such purchaser is acquiring the Class ANotes are “Qualified Institutional Buyers” (as defined in Rule 144A under theSecurities Act).  Each purchaser has suchknowledge and experience in financial and business matters as to be capable ofevaluating the merits and risks of its investment in the Class A Notes, andeach purchaser and any account for which such purchaser is acting are each ableto bear the economic risk of such investment.

 

(c)           Eachpurchaser, by its acceptance of its Class A Note, acknowledges that the Class ANotes are being sold to it pursuant to an exemption from the registrationrequirements of the Securities Act.  Nopurchaser is purchasing its Class A Notes with a view to resale, distribute ordispose of in any other manner thereof in violation of the Securities Act.  Each purchaser has had access to suchfinancial and other information concerning the Issuer and the Class A Notes asit deemed necessary or appropriate in order to make an informed investmentdecision with respect to such purchase of the Class A Notes, including anopportunity to ask questions of and request information from the Issuer.

 

(d)           EachClass A Note evidencing Book-Entry Notes and Definitive Notes (and all Class ANotes issued in exchange therefor or substitution thereof) shall bear a legendin substantially the following form:

 

THIS CLASS A NOTE HAS NOT BEEN AND WILL NOT BEREGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),OR THE APPLICABLE SECURITIES LAWS OF ANY STATE. ACCORDINGLY, TRANSFER OF THIS CLASS A NOTE IS SUBJECT TO CERTAINRESTRICTIONS SET FORTH IN SECTION 2.15 OF THE INDENTURE.  BY ITS ACCEPTANCE OF THIS CLASS A NOTE, THEHOLDER OF THIS CLASS A NOTE IS DEEMED TO REPRESENT TO THE TRUST AND THEINDENTURE TRUSTEE THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED INRULE 144A UNDER THE SECURITIES ACT AND IS ACQUIRING THIS CLASS A NOTE FOR ITSOWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOROTHERS (WHICH OTHERS ALSO ARE QUALIFIED INSTITUTIONAL BUYERS).

 

NO SALE, PLEDGE OR OTHER TRANSFER OF THIS CLASS A NOTESHALL BE MADE UNLESS SUCH SALE, PLEDGE OR OTHER TRANSFER IS (A) PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (B) FOR SO LONG ASTHE CLASS A NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO

 

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RULE 144A UNDERTHE SECURITIES ACT TO A PERSON THE TRANSFEROR REASONABLY BELIEVES AFTER DUEINQUIRY IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THATPURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONALBUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ONRULE 144A, OR (C) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATIONREQUIREMENTS OF THE SECURITIES ACT, THE INVESTMENT COMPANY ACT OF 1940, ASAMENDED AND ANY APPLICABLE STATE SECURITIES AND BLUE SKY LAWS OR IS MADE INACCORDANCE WITH EACH SUCH ACT AND STATE LAWS. THE INDENTURE TRUSTEE MAY REQUIREAN OPINION OF COUNSEL TO BE DELIVERED TO IT IN CONNECTION WITH ANY SALE, PLEDGEOR OTHER TRANSFER OF THIS CLASS A NOTE PURSUANT TO CLAUSES (A) OR (C)ABOVE.  ALL OPINIONS OF COUNSEL REQUIREDIN CONNECTION WITH ANY TRANSFER SHALL BE BY COUNSEL REASONABLY ACCEPTABLE TOTHE INDENTURE TRUSTEE.

 

EACH INVESTOR IN THIS CLASS A NOTE OR ANY INTERESTHEREIN WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (I) IT ISNOT, AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS CLASS A NOTE FOR, ONBEHALF OF OR WITH ANY ASSETS OF, AN EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENTSUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, ASAMENDED (“ERISA”), A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODEOF 1986, AS AMENDED (THE “CODE”), OR A PLAN OR OTHER ARRANGEMENT SUBJECT TO ANYPROVISIONS UNDER ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS ORREGULATIONS THAT ARE SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISAOR THE CODE (“SIMILAR LAW”) OR (II) ITS ACQUISITION AND HOLDING OF SUCH CLASS ANOTE OR ANY INTEREST THEREIN WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPTPROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE, OR A VIOLATIONOF SIMILAR LAW.

 

(e)           Thepurchaser of a Class A Note or any interest therein understands and agrees andis deemed to understand and agree by its acceptance of its Class A Note thatthe Class A Notes and related documentation may be amended or supplemented fromtime to time to modify the restrictions on and procedures for resales and othertransfers of the Class A Notes to reflect any change in applicable law orregulation (or interpretation thereof) or in practice relating to the resale ortransfer of restricted securities generally.

 

(f)            TheHolders of the Class A Notes and all Note Owners of Class A Notes are bound by,and are deemed to have notice of, all provisions contained in the Indenture.

 

(g)           Thepurchaser of a Class A Note or any interest therein acknowledges and is deemedto acknowledge by its acceptance of such purchase that the Issuer and otherswill rely upon the truth and accuracy of the foregoing acknowledgments,representations and agreements.  If thepurchaser is acquiring any Class A Notes as a fiduciary or agent for one ormore investor accounts, it represents that it has sole investment discretionwith respect to each such account

 

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and that it has full power to make the foregoingacknowledgments, representations and agreements on behalf of each such account.

** **

**Section 2.16.        Restrictions on Transfers of Class B Notes.**

 

(a)           TheClass B Notes have not been and will not be registered under the Securities Actand no Class B Note or any interest therein may be reoffered, resold, pledgedor otherwise transferred except as contemplated by the legend set forth in paragraph(b) below.  Every Class B Notepresented or surrendered for registration of transfer or exchange shall be dulyendorsed, or be accompanied by a written instrument of transfer in formsatisfactory to the Indenture Trustee, duly executed by such Class B Noteholderor its attorney duly authorized in writing.

 

(b)           EachClass B Note shall bear a legend substantially to the following effect:

 

THIS CLASS B NOTE HAS NOT BEEN REGISTERED UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY STATESECURITIES OR “BLUE SKY” LAWS.  THEHOLDER HEREOF, BY PURCHASING THIS CLASS B NOTE, AGREES THAT THIS NOTE MAY BERESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO AN AFFILIATE OF THEISSUER, (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THESECURITIES ACT OR (3) IN RELIANCE ON AN EXEMPTION FROM THE REGISTRATIONREQUIREMENTS OF THE SECURITIES ACT AND SUBJECT TO THE ISSUER’S AND THEINDENTURE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRETHE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATIONSATISFACTORY TO EACH OF THEM.  ANYNOTEHOLDER WILL, AND EACH SUBSEQUENT NOTEHOLDER IS REQUIRED TO, NOTIFY ANYPURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TOABOVE.  THE ISSUER IS NOT OBLIGATED TOREGISTER THIS CLASS B NOTE UNDER THE SECURITIES ACT OR ANY STATE SECURITIES OR BLUESKY LAWS.  NO TRANSFER OF THIS CLASS BNOTE SHALL BE PERMITTED TO THE EXTENT THAT SUCH TRANSFER WOULD RESULT IN MORETHAN 80 HOLDERS (WITHIN THE MEANING OF TREASURY REGULATION SECTION 1.7704-1(H))OF CLASS B NOTES AND BENEFICIAL INTERESTS IN THE ISSUER IN THE AGGREGATE.  NO TRANSFER OF THIS CLASS B NOTE MAY BE MADETO ANY PERSON (A “PASS-THROUGH ENTITY”) THAT IS A PARTNERSHIP (INCLUDING ANYOTHER ENTITY TREATED AS A PARTNERSHIP FOR INCOME TAX PURPOSES), S CORPORATIONOR GRANTOR TRUST UNLESS SUCH PASS-THROUGH ENTITY IS ABLE TO REPRESENT THAT THISCLASS B NOTE REPRESENTS LESS THAN 50% OF THE FAIR MARKET VALUE OF ALL ASSETS OFSUCH ENTITY.  NOTWITHSTANDING THEFOREGOING, NO TRANSFER OF THIS CLASS B NOTE SHALL BE MADE EXCEPT IN ACCORDANCEWITH THE RESTRICTIONS SET FORTH IN THE INDENTURE AND IN THIS CLASS B NOTE.  TRANSFER OF THIS CLASS B NOTE IS SUBJECT TOADDITIONAL TRANSFER RESTRICTIONS CONTAINED IN SECTION 2.16 OF THEINDENTURE.  EACH HOLDER OF THIS CLASS BNOTE AGREES THAT THIS CLASS B NOTE IS SUBJECT TO THE

 

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PROVISIONS OF ARTICLE 8 OF THE UNIFORM COMMERCIAL CODEAS IN EFFECT IN ALL APPLICABLE JURISDICTIONS.

 

(c)           NoClass B Note (or any interest therein) may be transferred (including, withoutlimitation, by pledge or hypothecation) unless such transferee executes anddelivers to the Issuer, the Insurer and the Indenture Trustee a transfercertificate certifying as to the items set forth in this Section 2.16; provided,however, that no such transferee may be, or may be directly orindirectly acquiring the Class B Notes for, on behalf of or with any assets of,an employee benefit plan or other arrangement subject to Title I of ERISA, aplan subject to Section 4975 of the Code, or a plan or other arrangement subjectto any provisions under any federal, state, local, non-U.S. or other laws orregulations that are substantively similar to the foregoing provisions of ERISAor the Code.

 

Upon the transfer of any such Class B Note, the Issuershall issue and the Indenture Trustee shall authenticate in the name of thetransferee a new Class B Note of the same aggregate principal amount as thesurrendered Class B Note.

 

(d)           Notransfer of a Class B Note shall be permitted to the extent that such transferwould result in more than 80 Holders (within the meaning of Treasury RegulationSection 1.7704-1(h)) of Class B Notes and beneficial interests in the Issuer inthe aggregate.  No transfer of a Class BNote may be made to any Person (a “*Pass-ThroughEntity*”) that is a partnership (including any other entitytreated as a partnership for income tax purposes), S corporation or grantortrust unless such Pass-Through Entity is able to represent that the Class BNote represents less than 50% of the fair market value of all assets of suchentity.  Notwithstanding the foregoing,no transfer of a Class B Note shall be made except in accordance with therestrictions set forth in the Indenture and in the form of Class B Note.

** **

**Section 2.17.        Regarding Owner Trustee.**

 

The parties to this Indenture and each holder of aNote by its acceptance thereof expressly acknowledge and consent to Wells FargoDelaware Trust Company, an affiliate of the Indenture Trustee, acting as OwnerTrustee pursuant to the Trust Agreement. The Indenture Trustee may discharge its functions hereunder and underthe other Transaction Documents fully, without hindrance or regard to conflictof interest principles, duty of loyalty principles or other breach of fiduciaryduties to the extent that any such conflict or breach arises from theperformance by it of its express duties set forth in this Indenture, all ofwhich defenses, claims or assertions are hereby expressly waived by the otherparties hereto and each holder of a Note.

** **

**Article III********Covenants**

** **

**Section 3.1.           Payment Covenant.**

 

The Issuer shall duly and punctually pay the principalof and interest, if any, on the Notes in accordance with the terms of the Notesand this Indenture, which shall be paid pursuant to Section 3.5 of the Sale andAllocation Agreement.  Amounts properlywithheld under the Code by any Person from a payment to any Noteholder ofinterest (with respect to the Class A Notes)

 

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and/or principalshall be considered as having been paid by the Issuer to such Noteholder forall purposes of this Indenture.

** **

**Section 3.2.           Maintenance of Office or Agency.**

 

The Issuer shall maintain in Minneapolis, Minnesota,an office or agency or appoint an agent located in Minneapolis, Minnesota whereNotes may be surrendered for registration of transfer or exchange, and wherenotices and demands to or upon the Issuer in respect of the Notes and thisIndenture may be served.  The Issuerhereby initially appoints the Indenture Trustee to serve as its agent for theforegoing purposes and the Indenture Trustee hereby accepts suchappointment.  The Issuer shall giveprompt written notice to the Indenture Trustee of the location, and of anychange in the location, of any such office or agency.  If, at any time, the Issuer shall fail tomaintain any such office or agency or shall fail to furnish the IndentureTrustee with the address thereof, such surrenders, notices and demands may bemade or served at the Corporate Trust Office, and the Issuer hereby appointsthe Indenture Trustee as its agent to receive all such surrenders, notices anddemands.

** **

**Section 3.3.           Money for Payments to be Held in Trust.**

 

(a)           Asprovided in Section 8.2, all payments of amounts due and payable withrespect to the Notes that are to be made from amounts withdrawn from the TrustAccounts shall be made on behalf of the Issuer by the Indenture Trustee or byanother Paying Agent, and no amounts so withdrawn from the Trust Accounts shallbe paid over to the Issuer, except as provided in this Section 3.3.

 

(b)           Onor before each Payment Date and Redemption Date, the Issuer shall deposit orcause to be deposited in the applicable Note Payment Account an aggregate sumsufficient to pay the amounts then becoming due under the Notes, such sum to beheld in trust for the benefit of the Persons entitled thereto, and (unless thePaying Agent is the Indenture Trustee) shall promptly notify the IndentureTrustee of its action or failure to so act.

 

(c)           TheIssuer shall cause each Paying Agent other than the Indenture Trustee toexecute and deliver to the Indenture Trustee an instrument in which such PayingAgent shall agree with the Indenture Trustee (and if the Indenture Trustee actsas Paying Agent, it hereby so agrees), subject to the provisions of this Section3.3, that such Paying Agent shall:

 

(i)            hold all sums held by it for thepayment of amounts due with respect to the Notes in trust for the benefit ofthe Persons entitled thereto until such sums shall be paid to such Persons orotherwise disposed of as herein provided and pay such sums to such Persons asherein provided;

 

(ii)           give the Indenture Trustee notice ofany default by the Issuer (or any other obligor upon the Notes) of which it hasactual knowledge in the making of any payment required to be made with respectto the Notes;

 

(iii)          at any time during the continuance ofany such default, upon the written request of the Indenture Trustee, forthwithpay to the Indenture Trustee all sums so held in trust by such Paying Agent;

 

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(iv)          immediately resign as a Paying Agentand forthwith pay to the Indenture Trustee all sums held by it in trust forpayment of the Notes if at any time it ceases to meet the standards required tobe met by a Paying Agent at the time of its appointment; and

 

(v)           comply with all requirements of theCode and any state or local tax law with respect to the withholding from anypayments made by it on the Notes of any applicable withholding taxes imposedthereon and with respect to any applicable reporting requirements in connectiontherewith.

 

(d)           TheIssuer may at any time, for the purpose of obtaining the satisfaction anddischarge of this Indenture or for any other purpose, by Issuer Order directany Paying Agent to pay to the Indenture Trustee all sums held in trust by suchPaying Agent, such sums to be held by the Indenture Trustee upon the sametrusts as those upon which such sums were held by such Paying Agent, and uponsuch payment by any Paying Agent to the Indenture Trustee, such Paying Agentshall be released from all further liability with respect to such sums.

 

(e)           Subjectto applicable laws with respect to escheat of funds, any money held by theIndenture Trustee or any Paying Agent in trust for the payment of any amountdue with respect to any Note and remaining unclaimed for two (2) years aftersuch amount has become due and payable shall be discharged from such trust andbe paid to the Issuer on Issuer Request, and the Holder of such Note shallthereafter, as an unsecured general creditor, look only to the Issuer forpayment thereof (but only to the extent of the amounts so paid to the Issuer),and all liability of the Indenture Trustee or such Paying Agent with respect tosuch trust money shall thereupon cease; provided, however, thatthe Indenture Trustee or such Paying Agent, before being required to make anysuch repayment, shall at the expense and direction of the Issuer cause to bepublished once, in a newspaper published in the English language, customarilypublished on each Business Day and of general circulation in The City of NewYork, notice that such money remains unclaimed and that, after a date specifiedtherein, which shall not be less than thirty (30) days from the date of suchpublication, any unclaimed balance of such money then remaining shall be repaidto the Issuer.  The Indenture Trusteeshall also adopt and employ, at the expense and direction of the Issuer, anyother reasonable means of notification of such repayment (including, but notlimited to, mailing notice of such repayment to Holders whose Notes have beencalled but have not been surrendered for redemption in whole pursuant to Section10.1 or whose right to or interest in monies due and payable but notclaimed is determinable from the records of the Indenture Trustee or of anyPaying Agent at the last address of record for each such Holder).

** **

**Section 3.4.           Existence.**

 

The Issuer shall keep in full effect its existence,rights and franchises as a statutory trust under the laws of the State ofDelaware (unless it becomes, or any successor Issuer hereunder is or becomes,organized under the laws of any other State or of the United States of America,in which case the Issuer shall keep in full effect its existence, rights andfranchises under the laws of such other jurisdiction) and shall obtain andpreserve its qualification to do business in each jurisdiction in which suchqualification is or shall be necessary to protect the validity and

 

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enforceability ofthis Indenture, the Notes, the Collateral and each other instrument oragreement included in the Trust Estate.

** **

**Section 3.5.           Protection of Trust Estate.**

 

The Issuer shall from time to time execute, ifapplicable, and deliver all such supplements and amendments hereto and all suchfinancing statements, continuation statements, instruments of further assuranceand other instruments, and shall take such other action necessary or advisableto:

 

(a)           maintainor preserve the lien and security interest (and the priority thereof) of thisIndenture or carry out more effectively the purposes hereof including, withoutlimitation, the filing of any financing statement or any amendment to anyexisting financing statement necessitated by Section 3.8(d)(iv);

 

(b)           perfect,publish notice of or protect the validity of any Grant made or to be made bythis Indenture;

 

(c)           enforceany of the Collateral; or

 

(d)           preserveand defend title to the Trust Estate and the rights of the Indenture Trustee,the Insurer and the Noteholders in the Trust Estate against the claims of allPersons.

 

The Issuer hereby designates the Indenture Trustee itsagent and attorney-in-fact to execute upon a written instruction from theIssuer, the Insurer or Servicer any financing statement, continuation statementor other instrument required to be executed pursuant to this Section 3.5.

** **

**Section 3.6.           Opinions as to Trust Estate.**

 

(a)           Onthe Closing Date, the Issuer shall deliver to the Indenture Trustee and theInsurer an Opinion of Counsel reasonably acceptable to such parties eitherstating that, in the opinion of such counsel, such action has been taken withrespect to this Indenture and other requisite documents and with respect to theexecution and filing of any financing statements and continuation statements,as are necessary to perfect and make effective the first priority lien andsecurity interest in favor of the Indenture Trustee, created by this Indentureand reciting the details of such action, or stating that, in the opinion ofsuch counsel, no such action is necessary to make such lien and securityinterest effective.

 

(b)           Onor before March 31 of each year (commencing with the year 2006), the Issuershall deliver to the Indenture Trustee and the Insurer an Opinion of Counsel acceptableto such parties either stating that, in the opinion of such counsel, suchaction has been taken with respect to the recording, filing, re-recording andrefiling of this Indenture, any indentures supplemental hereto and any otherrequisite documents and with respect to the execution and filing of anyfinancing statements and continuation statements as is necessary to maintainthe lien and security interest created by this Indenture and reciting thedetails of such action or stating that, in the opinion of such counsel, no suchaction is necessary to maintain such lien and security interest.  Such Opinion of Counsel shall also describethe recording, filing, re-recording and refiling of

 

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this Indenture, any indentures supplemental hereto andany other requisite documents and the execution and filing of any financingstatements and continuation statements that shall, in the opinion of suchcounsel, be required to maintain the lien and security interest of thisIndenture until March 31 in the following year.

** **

**Section 3.7.           Performance of Obligations.**

 

(a)           TheIssuer shall not take any action and shall use its best efforts not to permitany action to be taken by others that would release any Person from any of suchPerson’s material covenants or obligations under any instrument or agreementincluded in the Trust Estate or that would result in the amendment,hypothecation, subordination, termination or discharge of, or impair thevalidity or effectiveness of, any such instrument or agreement, except asexpressly provided in this Indenture and the other Transaction Documents.

 

(b)           TheIssuer may contract with other Persons to assist it in performing its dutiesunder this Indenture, and any performance of such duties by a Person identifiedto the Indenture Trustee in an Issuer’s Certificate shall be deemed to beaction taken by the Issuer.  Initially,the Issuer has contracted with the Servicer and the Administrator to assist theIssuer in performing its duties under this Indenture as set forth in theServicing Agreement and the Administration Agreement.

 

(c)           TheIssuer shall punctually perform and observe all of its obligations andagreements contained in this Indenture, the other Transaction Documents to whichit is a party and the instruments and agreements included in the Trust Estate,including, but not limited to, filing or causing to be filed all financingstatements and continuation statements required to be filed under the RelevantUCC by the terms of this Indenture and the Servicing Agreement in accordancewith and within the time periods provided for herein and therein.  Except as otherwise expressly providedtherein, the Issuer shall not waive, amend, modify, supplement or terminate anyTransaction Document or any provision thereof without the consent of theIndenture Trustee, the Insurer or the Noteholders evidencing not less than 51%of the Note Balance.

 

(d)           Ifthe Issuer shall have knowledge of the occurrence of an Event of ServicingTermination under the Servicing Agreement, the Issuer shall promptly notify theIndenture Trustee, the Insurer and the Rating Agencies thereof and shallspecify in such notice the action, if any, the Issuer is taking in respect ofsuch default.  If an Event of ServicingTermination shall arise from the failure of the Servicer to perform any of itsduties or obligations under the Servicing Agreement with respect to theContracts, the Issuer shall take all reasonable steps available to it to remedysuch failure.

 

(e)           [Reserved.]

 

(f)            Uponany termination of the Servicer’s rights and powers pursuant to Section 5.02 ofthe Servicing Agreement, the Issuer shall promptly notify the Indenture Trusteeand the Insurer of such termination. Upon any appointment of a Successor Servicer by the Issuer, the Issuershall promptly notify the Indenture Trustee and the Insurer of suchappointment, specifying in such notice the name and address of such SuccessorServicer.

 

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(g)           Withoutderogating from the absolute nature of the assignment granted to the IndentureTrustee under this Indenture or the rights of the Indenture Trustee hereunder,the Issuer shall not, without the prior written consent of the Insurer (if noInsurer Default shall have occurred and be continuing), the Indenture Trusteeand the Holders of not less than 51% of the Class A Note Balance, amend,modify, waive, supplement, terminate or surrender, or agree to any amendment,modification, waiver, supplement, termination or surrender of, the terms of anyCollateral (except to the extent otherwise permitted in the Servicing Agreementor the other Transaction Documents).

** **

**Section 3.8.           Negative Covenants.**

 

If any Notes are Outstanding or the Insurer has notbeen paid all amounts owed to it, the Issuer shall not:

 

(a)           exceptas expressly permitted by this Indenture, the Trust Agreement, the ServicingAgreement, the Contribution Agreement or the Sale and Allocation Agreement,sell, transfer, exchange or otherwise dispose of any of the properties orassets of the Issuer, including those included in the Trust Estate, unlessdirected to do so by the Indenture Trustee with the prior written consent ofthe Insurer;

 

(b)           claimany credit on, or make any deduction from the principal or interest payable inrespect of, the Notes (other than amounts properly withheld from such paymentsunder the Code or applicable state law) or assert any claim against any presentor former Noteholder by reason of the payment of taxes levied or assessed upon theIssuer;

 

(c)           dissolveor liquidate in whole or in part;

 

(d)          (i) permit the validity or effectiveness of this Indenture to be impaired, orpermit the lien of this Indenture to be amended, hypothecated, subordinated,terminated or discharged, or permit any Person to be released from anycovenants or obligations with respect to the Notes under this Indenture exceptas may be expressly permitted hereby, (ii) permit any lien, charge, excise,claim, security interest, mortgage or other encumbrance (other than the lien ofthis Indenture) to be created on or extend to or otherwise arise upon orencumber the Trust Estate or any part thereof or any interest therein or theproceeds thereof (other than tax liens, mechanics’ liens and other liens thatarise by operation of law, in each case on any of the Financed Vehicles andarising solely as a result of an action or omission of the related Obligor),(iii) permit the lien of this Indenture not to constitute a valid firstpriority (other than as set forth in clause (ii)) security interest inthe Trust Estate, or (iv) change its name, identity or state of organization inany manner that would make any financing statement or continuation statementfiled with respect to it seriously misleading within the meaning of Section9-507 of the Relevant UCC, or cause any financing statement or continuationstatement filed with respect to it to be amended, without prior written noticeto the Insurer and the Indenture Trustee;

 

(e)           engagein any activities other than issuing the Notes, financing, acquiring, owning,pledging and managing the Contracts as contemplated by the Servicing Agreement,the Trust Agreement, the Sale and Allocation Agreement, the ContributionAgreement and this Indenture and activities incidental to such activities; or

 

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(f)            incur,assume or guarantee any indebtedness other than the indebtedness evidenced bythe Notes or indebtedness otherwise permitted by the Servicing Agreement, theTrust Agreement, the Sale and Allocation Agreement, the Contribution Agreementand this Indenture.

** **

**Section 3.9.           Annual Statement as to Compliance.**

 

On or before July 31 of each year (commencing with theyear 2007), the Issuer shall deliver to the Indenture Trustee and the Insurer anIssuer’s Certificate stating, as to the Authorized Officer signing suchIssuer’s Certificate, that:

 

(a)           areview of the activities of the Issuer during the preceding Fiscal Year (or, inthe case of the Issuer’s Certificate to be delivered in the year 2007, duringthe period beginning on the Closing Date and ending on April 30, 2007) and ofits performance under this Indenture has been made under such AuthorizedOfficer’s supervision; and

 

(b)           tothe best of such Authorized Officer’s knowledge, based on such review, theIssuer has complied with all conditions and covenants under this Indenturethroughout such preceding Fiscal Year (or, in the case of the Issuer’sCertificate to be delivered in the year 2007, during the period beginning onthe Closing Date and ending on April 30, 2007) or, if there has been a defaultin its compliance with any such condition or covenant, specifying each suchdefault known to such Authorized Officer and the nature and status thereof.

** **

**Section 3.10.        Issuer May Not Merge.**

 

(a)           TheIssuer shall not consolidate or merge with or into any other Person unless:

 

(i)            the Person (if other than theIssuer) formed by or surviving such consolidation or merger shall be a Personorganized and existing under the laws of the United States of America or anystate thereof and shall expressly assume, by an indenture supplemental hereto,executed and delivered to the Indenture Trustee, in form satisfactory to theIndenture Trustee, and prior to the later of (A) the Final Note Payment Date ofthe Class A-4 Notes, and (B) the date on which all amounts due to the Insurerunder all of the Transaction Documents have been paid in full and the due andpunctual payment of the principal of and interest on all Class A Notes havebeen paid in full, in form satisfactory to the Insurer;

 

(ii)           immediately after giving effect tosuch transaction, no Default or Event of Default shall have occurred and becontinuing;

 

(iii)          the Rating Agency Condition shall havebeen satisfied with respect to such transaction;

 

(iv)          the Issuer shall have received anOpinion of Counsel (and shall have delivered copies thereof to the IndentureTrustee and the Insurer) to the effect that such transaction will not have anymaterial adverse tax consequence to the Trust, any Noteholder or anyCertificateholder;

 

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(v)           any action as is necessary tomaintain the lien and security interest created by this Indenture, and thepriority thereof, shall have been taken;

 

(vi)          if, prior to the later of (A) theFinal Note Payment Date of the Class A-4 Notes and (B) the date on which allamounts due to the Insurer under all of the Transaction Document have been paidin full, the Insurer has given its prior written consent; and

 

(vii)         the Issuer shall have delivered to theIndenture Trustee and the Insurer an Issuer’s Certificate and an Opinion ofCounsel each stating that such consolidation or merger and such supplementalindenture comply with this Section 3.10(a) and that all conditions precedentherein provided for relating to such transaction have been complied with.

 

(b)           Priorto the Final Note Payment Date of the Class A-4 Notes, the Issuer shall notconvey or transfer all or substantially all of its properties or assets.

** **

**Section 3.11.        [Reserved].**

** **

**Section 3.12.        Successor.**

 

Upon any consolidation or merger of the Issuer inaccordance with Section 3.10(a), the Person formed by or surviving suchconsolidation or merger (if other than the Issuer) shall succeed to, and besubstituted for, and may exercise every right and power of, the Issuer underthis Indenture and the other Transaction Documents with the same effect as ifsuch Person had been named as the Issuer herein.

** **

**Section 3.13.        Servicer’s Obligation.**

 

The Issuer shall cause the Servicer to comply with itsobligations under the Sale and Allocation Agreement and the ServicingAgreement.

** **

**Section 3.14.        Guarantees, Loans, Advances and Other Liabilities.**

 

Except as contemplated by the Notes, this Indentureand the other Transaction Documents, the Issuer shall not make any loan oradvance or credit to, or guarantee (directly or indirectly or by an instrumenthaving the effect of assuring another’s payment or performance on anyobligation or capability of so doing or otherwise), endorse or otherwise becomecontingently liable, directly or indirectly, in connection with theobligations, stocks or dividends of, or own, purchase, repurchase or acquire(or agree contingently to do so) any stock, obligations, assets or securitiesof, or any other interest in, or make any capital contribution to, any otherPerson.

** **

**Section 3.15.        Capital Expenditures.**

 

The Issuer shall not make any expenditure (bylong-term or operating lease or otherwise) for capital assets (either realty orpersonalty) except as may be expressly permitted by the Transaction Documents.

 

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**Section 3.16.        Restricted Payments.**

 

The Issuer shall not, directly or indirectly, (a) makeany distribution (by reduction of capital or otherwise), whether in cash,property, securities or a combination thereof, to the Owner Trustee or anyowner of a beneficial interest in the Issuer or otherwise with respect to anyownership or equity interest or security in or of the Issuer or to theServicer, (b) redeem, purchase, retire or otherwise acquire for value any suchownership or equity interest or security or (c) set aside or otherwisesegregate any amounts for any such purpose; provided, however,that the Issuer may make, or cause to be made, (i) payments to the Servicer,the Indenture Trustee and the Owner Trustee as contemplated by, and to theextent funds are available for such purpose under, the Sale and AllocationAgreement, and (ii) payments to the Depositor Account with respect to theCertificate issued in accordance with the terms of the Trust Agreement, to theextent funds are available for such purpose pursuant to Section 3.5(d)(xi) ofthe Sale and Allocation Agreement.  TheIssuer shall not, directly or indirectly, make payments to or distributionsfrom the Collection Account except in accordance with the Sale and AllocationAgreement and the other Transaction Documents.

** **

**Section 3.17.        Notice of Events of Default.**

 

The Issuer shall give the Indenture Trustee, theInsurer and the Rating Agencies prompt written notice of each Event of Defaulthereunder and each default on the part of the Seller or the Servicer of itsobligations under the Sale and Allocation Agreement.

** **

**Section 3.18.        Removal of Administrator.**

 

For so long as any Notes are Outstanding, the Issuer shallnot remove the Administrator without cause unless the Rating Agency Conditionshall have been satisfied in connection therewith and the Insurer haspreviously consented in writing.

** **

**Section 3.19.        Further Instruments and Acts.**

 

Upon request of the Indenture Trustee or the Insurer,the Issuer shall execute and deliver such further instruments and do suchfurther acts as may be reasonably necessary or proper to carry out moreeffectively the purpose of this Indenture.

** **

**Section 3.20.        Rule 144A Information.**

 

At any time when the Issuer is not subject to Section13 or 15(d) of the Exchange Act and is not exempt from reporting pursuant toRule 12g3-2(b) under the Exchange Act, upon the request of any Class ANoteholder or Note Owner of a Class A Note, the Issuer shall promptly furnishor cause to be furnished Rule 144A Information to such Noteholder or Note Owneror to a prospective purchaser of a Class A Note designated by such Class ANoteholder or Note Owner, in order to permit compliance by such Noteholder orNote Owner with Rule 144A in connection with the resale of such Class A Note.

 

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**Section 3.21.        Perfection Representations, Warranties and Covenants.**

 

The perfection representation, warranties and covenantsmade by the Issuer and set forth on Schedule A hereto shall be part of thisIndenture for all purposes.

** **

**ArticleIVSatisfaction and Discharge**

** **

**Section 4.1.           Satisfaction and Discharge of Indenture.**

 

This Indenture shall cease to be of further effect withrespect to the Notes except as to (a) rights of registration of transfer andexchange, (b) substitution of mutilated, destroyed, lost or stolen Notes, (c)rights of Noteholders to receive payments of principal thereof and interestthereon, (d) Sections 3.3, 3.4, 3.5, 3.8, 3.10,3.12, 3.13, 3.15 and 3.16 and, (e) the rights,obligations and immunities of the Indenture Trustee hereunder (including therights of the Indenture Trustee under Section 6.7 and the obligations ofthe Indenture Trustee under Section 4.3), and (f) the rights ofNoteholders as beneficiaries hereof with respect to the property so depositedwith the Indenture Trustee payable to all or any of them, and the IndentureTrustee, on demand of and at the expense of the Issuer, shall execute properinstruments acknowledging satisfaction and discharge of this Indenture withrespect to the Collateral securing the Notes and the Notes, when:

 

(i)            either

 

(A)          all Notes theretofore authenticatedand delivered (other than (1) Notes that have been destroyed, lost or stolenand that have been replaced or paid as provided in Section 2.6 and (2)Notes for whose payment money has theretofore been irrevocably deposited intrust or segregated and held in trust by the Issuer and thereafter repaid tothe Issuer or discharged from such trust, as provided in Section 3.3)have been delivered to the Indenture Trustee for cancellation and the Policyhas expired and has been returned to the Insurer for cancellation; or

 

(B)           all Notes not theretofore deliveredto the Indenture Trustee for cancellation have become due and payable and theIssuer has irrevocably deposited or caused to be irrevocably deposited with theIndenture Trustee, in trust, cash or direct obligations of or obligationsguaranteed by the United States of America (which will mature prior to the dateneeded), in an amount sufficient to pay and discharge the entire indebtednesson each Class of Class A Notes when due its respective Final Note Payment Dateor Redemption Date (if the Notes shall have been called for redemption pursuantto Section 10.1), as the case may be;

 

(ii)           the Issuer has paid or caused to bepaid all other sums payable by the Issuer hereunder and under the TrustAgreement, the Servicing Agreement and the Sale and Allocation Agreement;

 

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(iii)          the Issuer has delivered to theIndenture Trustee and the Insurer an Issuer’s Certificate, an Opinion ofCounsel and (if required by the Indenture Trustee) an Independent Certificatefrom a firm of certified public accountants, each meeting the applicablerequirements of Section 11.1(a) and, subject to Section 11.2,each stating that all conditions precedent provided for in this Indenturerelating to the satisfaction and discharge of this Indenture have been compliedwith; and

 

(iv)          the Issuer or the Servicer hasdelivered to the Indenture Trustee an Opinion of Counsel to the effect that thesatisfaction and discharge of this Indenture pursuant to this Section 4.1will not cause any Noteholder to be treated as having sold or exchanged any ofits Notes for purposes of Section 1001 of the Code.

** **

**Section 4.2.           Satisfaction, Discharge and Defeasance of the Notes.**

 

(a)           Uponsatisfaction of the conditions set forth in subsection (b) below, theIssuer shall be deemed to have paid and discharged the entire indebtedness onall the Notes Outstanding, and the provisions of this Indenture, as it relatesto such Notes, shall no longer be in effect (and the Indenture Trustee, at theexpense of the Issuer, shall execute proper instruments acknowledging thesame), except as to:

 

(i)            the rights of the Noteholders toreceive, from the trust funds described in subsection (b)(i) hereof,payment of the principal of and interest on the Notes Outstanding at maturityof such principal or interest;

 

(ii)           the obligations of the Issuer withrespect to the Notes under Sections 2.5, 2.6, 3.2 and 3.3;

 

(iii)          the obligations of the Issuer to theIndenture Trustee under Section 6.7; and

 

(iv)          the rights, powers, trusts andimmunities of the Indenture Trustee hereunder and the duties of the IndentureTrustee hereunder.

 

(b)           Thesatisfaction, discharge and defeasance of the Notes pursuant to subsection(a) of this Section 4.2 is subject to the satisfaction of all of thefollowing conditions:

 

(i)            the Issuer has deposited or causedto be deposited irrevocably (except as provided in Section 4.4) with theIndenture Trustee as trust funds in trust, specifically pledged as securityfor, and dedicated solely to, the benefit of the Noteholders, which, throughthe payment of interest and principal in respect thereof in accordance withtheir terms will provide, not later than one day prior to the due date of anypayment referred to below, money in an amount sufficient, in the opinion of anationally recognized firm of independent certified public accountantsexpressed in a written certification thereof delivered to the IndentureTrustee, to pay and discharge the entire indebtedness on the Notes Outstanding,for principal thereof and interest thereon to the date of such deposit (in thecase of Notes that have become due and payable) or to the maturity of suchprincipal and interest, as the case may be;

 

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(ii)           such deposit will not result in abreach or violation of, or constitute an event of default under, anyTransaction Document or other agreement or instrument to which the Issuer isbound;

 

(iii)          no Event of Default has occurred andis continuing on the date of such deposit or on the ninety-first (91st) dayafter such date;

 

(iv)          the Issuer has delivered to theIndenture Trustee and the Insurer an Opinion of Counsel to the effect that thesatisfaction, discharge and defeasance of the Notes pursuant to this Section4.2 will not cause any Noteholder to be treated as having sold or exchangedany of its Notes for purposes of Section 1001 of the Code;

 

(v)           the Issuer has delivered to theIndenture Trustee an Issuer’s Certificate and an Opinion of Counsel, eachstating that all conditions precedent provided for in this Indenture relatingto the defeasance contemplated by this Section 4.2 have been complied with; and

 

(vi)          all amounts then owing to the Insurerhave been paid.

** **

**Section 4.3.           Application of Trust Money.**

 

All monies deposited with the Indenture Trusteepursuant to Section 4.1 shall be held in trust and applied by theIndenture Trustee, in accordance with the provisions of the Notes and thisIndenture, to the payment, either directly or through any Paying Agent, as theIndenture Trustee may determine, to the Noteholders for the payment orredemption of which such monies have been deposited with the Indenture Trustee,of all sums due and to become due thereon for principal and interest, but suchmonies need not be segregated from other funds except to the extent requiredherein or in the Sale and Allocation Agreement or required by law.

** **

**Section 4.4.           Repayment of Monies Held by Paying Agent.**

 

In connection with the satisfaction and discharge ofthis Indenture with respect to the Notes, all monies then held by any PayingAgent other than the Indenture Trustee under the provisions of this Indenturewith respect to such Notes shall, upon demand of the Issuer, be paid to theIndenture Trustee to be held and applied according to Section 3.3, andthereupon such Paying Agent shall be released from all further liability withrespect to such monies.

** **

**Section 4.5.           Continuing Obligations of Indenture Trustee.**

 

It is understood that the Indenture Trustee shallremain obligated to perform its duties to make payments pursuant to Section3.5(d) and Section 3.5(e) of the Sale and Allocation Agreement and Section2.8 and Section 5.4(b) of this Indenture, notwithstanding anythingto the contrary in this Article IV or elsewhere in this Indenture, until suchtime as all outstanding amounts have been paid pursuant to such sections.

 

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**ArticleVRemedies**

** **

**Section 5.1.           Events of Default.**

 

“*Event ofDefault*” means the occurrence of any one of the following events(whatever the reason for such event and whether such event shall be voluntaryor involuntary or be effected by operation of law or pursuant to any judgment,decree or order of any court or any order, rule or regulation of anyadministrative or governmental body):

 

(a)           defaultin the payment of any interest on any Class A Note when the same becomes dueand payable;

 

(b)           defaultin the payment of any principal due and payable on any Class of the Class ANotes when the same becomes due and payable on the Final Note Payment Date forsuch Class;

 

(c)           defaultin the observance or performance of any material covenant or agreement of theIssuer, the Depositor or the Seller made in the Transaction Documents (otherthan a covenant or agreement a default in the observance or performance ofwhich is specifically dealt with elsewhere in this Section 5.1), andsuch default shall continue or not be cured for a period of thirty (30) daysafter there shall have been given, by registered or certified mail, to theIssuer by the Indenture Trustee or to the Issuer and the Indenture Trustee bythe Noteholders evidencing not less than 25% of the Class A Note Balance or theInsurer (provided that no Insurer Default shall have occurred and becontinuing), a written notice specifying such default and requiring it to beremedied and stating that such notice is a notice of Default hereunder;

 

(d)           anyrepresentation or warranty of the Issuer, the Depositor or the Seller made inthe Transaction Documents or in any certificate delivered pursuant hereto or inconnection herewith proving to have been incorrect in any material respect asof the time when the same shall have been made, and the circumstance orcondition in respect of which such representation or warranty was incorrectshall not have been eliminated or otherwise cured for a period of thirty (30)days after there shall have been given, by registered or certified mail, to theIssuer by the Indenture Trustee or to the Issuer and the Indenture Trustee bythe Noteholders evidencing not less than 25% of the Class A Note Balance or theInsurer (provided that no Insurer Default shall have occurred and becontinuing), a written notice specifying such incorrect representation orwarranty and requiring it to be remedied and stating that such notice is anotice of Default hereunder;

 

(e)           thefiling of a decree or order for relief by a court having jurisdiction in thepremises in respect of the Seller, the Issuer, the Depositor or any substantialpart of the Trust Estate in an involuntary case under any applicable federal orstate bankruptcy, insolvency or other similar law now or hereafter in effect,or appointing a receiver, liquidator, assignee, custodian, trustee,sequestrator or similar official of the Issuer or for any substantial part ofthe Trust Estate, or ordering the winding-up or liquidation of the Issuer’saffairs, and such decree or order shall remain unstayed and in effect for aperiod of sixty (60) consecutive days;

 

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(f)            thecessation of a valid perfected first priority security interest in theContracts in favor of the Indenture Trustee which is not cured within theapplicable cure period;

 

(g)           themerger or consolidation (including any conveyance transaction) of the Issuerwith or into any Person regardless of the surviving entity, except as expresslypermitted hereunder;

 

(h)           [Reserved];

 

(i)            thecommencement by the Seller, the Depositor or the Issuer of a voluntary caseunder any applicable federal or state bankruptcy, insolvency or other similar lawnow or hereafter in effect, or the consent by the Seller, the Depositor or theIssuer to the entry of an order for relief in an involuntary case under anysuch law, or the consent by the Seller, the Depositor or the Issuer to theappointment or taking possession by a receiver, liquidator, assignee,custodian, trustee, sequestrator or similar official of the Seller, theDepositor or the Issuer or for any substantial part of the Trust Estate, or themaking by the Seller, the Depositor or the Issuer of any general assignment forthe benefit of creditors, or the failure by the Seller, the Depositor or theIssuer generally to pay its debts as such debts become due, or the taking ofany action by the Seller, the Depositor or the Issuer in furtherance of any of theforegoing;

 

(j)            anEvent of Servicing Termination shall have occurred under the ServicingAgreement;

 

(k)           theSeller shall have defaulted on any payment required to be made by it under anymaterial credit agreement or other loan agreement pursuant to which it hasborrowed money;

 

(l)            adraw shall be made under the Policy;

 

(m)          theInsurer shall have given notice that an Event of Default (as defined in theInsurance Agreement) has occurred and is continuing under the InsuranceAgreement;

 

(n)           theaverage Delinquency Ratio for any three Collection Periods: (i) exceeds 5.20%during the period from January 2006 through August 2006; (ii) exceeds 6.25%during the period from September 2006 through January 2008; and (iii) exceeds7.25% thereafter; and

 

(o)           theCumulative Net Loss Rate for any Collection Period indicated in the followingtable shall exceed the percentage corresponding thereto:

 
| **Collection Period** | ** ** | **Cumulative Net Loss  Rate** | ** ** |
|-----------------------|------------|-------------------------------|------------|
| January 2006          |       | 0.275                         | %          |
| February 2006         |       | 0.45                          | %          |
| March 2006            |       | 0.65                          | %          |
| April 2006            |       | 0.85                          | %          |
| May 2006              |       | 1.00                          | %          |
| June 2006             |       | 1.15                          | %          |
| July 2006             |       | 1.50                          | %          |

 

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| **Collection Period**         | ** ** | **Cumulative Net Loss  Rate** | ** ** |
|-------------------------------|------------|-------------------------------|------------|
| August 2006                   |       | 1.65                          | %          |
| September 2006                |       | 1.90                          | %          |
| October 2006                  |       | 2.00                          | %          |
| November 2006                 |       | 2.25                          | %          |
| December 2006                 |       | 2.40                          | %          |
| January 2007                  |       | 2.50                          | %          |
| February 2007                 |       | 2.85                          | %          |
| March 2007                    |       | 3.10                          | %          |
| April 2007                    |       | 3.25                          | %          |
| May 2007                      |       | 3.70                          | %          |
| June 2007                     |       | 3.90                          | %          |
| July 2007                     |       | 4.05                          | %          |
| August 2007                   |       | 4.38                          | %          |
| September 2007                |       | 4.70                          | %          |
| October 2007                  |       | 4.95                          | %          |
| November 2007                 |       | 5.30                          | %          |
| December 2007                 |       | 5.65                          | %          |
| January 2008                  |       | 5.75                          | %          |
| February 2008                 |       | 6.10                          | %          |
| March 2008                    |       | 6.35                          | %          |
| April 2008                    |       | 6.50                          | %          |
| May 2008                      |       | 6.75                          | %          |
| June 2008                     |       | 6.90                          | %          |
| July 2008                     |       | 7.10                          | %          |
| August 2008                   |       | 7.25                          | %          |
| September 2008                |       | 7.35                          | %          |
| October 2008                  |       | 7.40                          | %          |
| November 2008                 |       | 7.50                          | %          |
| December 2008                 |       | 7.65                          | %          |
| January 2009                  |       | 7.75                          | %          |
| February 2009                 |       | 7.90                          | %          |
| March 2009                    |       | 8.00                          | %          |
| April 2009                    |       | 8.10                          | %          |
| May 2009                      |       | 8.20                          | %          |
| June 2009                     |       | 8.30                          | %          |
| July 2009                     |       | 8.40                          | %          |
| August 2009                   |       | 8.50                          | %          |
| September 2009                |       | 8.50                          | %          |
| October 2009                  |       | 8.50                          | %          |
| November 2009                 |       | 8.50                          | %          |
| December 2009 and  thereafter |       | 8.50                          | %          |

 

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*provided,however*, that,unless an Insurer Default shall have occurred and be continuing, neither theIndenture Trustee nor the Noteholders may declare an Event of Default underthis Indenture.

 

The Issuer shall deliver to the Indenture Trustee,within five (5) days after the occurrence of any event that, with notice or thelapse of time or both, would become an Event of Default under clause (c)or (d), written notice of such Default in the form of an Issuer’sCertificate, the status of such Default and what action the Issuer is taking orproposes to take with respect to such Default.

** **

**Section 5.2.           Acceleration of Maturity; Rescission and Annulment.**

 

(a)           Ifno Insurer Default shall have occurred and be continuing and if an Event ofDefault shall have occurred and be continuing, then the Insurer shall have theright, but not the obligation, upon prior written notice to each Rating Agency,to declare the Notes to be immediately due and payable by written notice to theIssuer, the Servicer and the Indenture Trustee, and upon any such declarationthe unpaid principal amount of the Notes, together with accrued and unpaidinterest on each Class of Class A Notes through the date of acceleration, shallbecome immediately due and payable and may direct the Indenture Trustee toexercise remedies provided under Section 5.4(a)(iv).  The Indenture Trustee shall have nodiscretion with respect to the acceleration of the Notes under the foregoingcircumstances.  In the event of any suchacceleration of the Notes, the Indenture Trustee shall continue to make claimsunder the Policy with respect to the Class A Notes in accordance with the termsthereof.

 

(b)           Ifan Insurer Default has occurred and is continuing and an Event of Default hasoccurred and is continuing, then and in every such case the Indenture Trusteeor the Noteholders evidencing not less than 66 2/3% of the Class A Note Balancemay, upon prior written notice to each Rating Agency, declare the Notes to beimmediately due and payable by written notice to the Issuer (and to theIndenture Trustee if given by Class A Noteholders), and upon any suchdeclaration the unpaid principal amount of the Notes, together with accrued andunpaid interest on each Class of Class A Notes through the date ofacceleration, shall become immediately due and payable.

 

Notwithstanding the foregoing, upon the occurrence ofan Event of Default specified in Section 5.1(i) with respect to theIssuer, the Notes shall become immediately due and payable, withoutdeclaration, notice or demand by or to any Person.

 

(c)           Atany time after a declaration of acceleration of maturity has been made butbefore a judgment or decree for payment of the amount due has been obtained bythe Indenture Trustee as hereinafter provided in this Article V, either(i) if the Class A Noteholders accelerated, the Class A Noteholders evidencingnot less than 66 2/3% of the Class A Note Balance (with the prior writtenconsent of the Insurer if the Insurer Default referred to in clause (b) abovehas been cured) or (ii) if the Insurer accelerated, the Insurer, by writtennotice to the Issuer and the Indenture Trustee, may rescind and annul suchdeclaration and its consequences if:

 

(A)          the Issuer has deposited with theIndenture Trustee a sum sufficient to pay all principal of and interest on theNotes and all other amounts that would

 

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be due hereunder as if the Event of Default givingrise to the declaration of the acceleration had not occurred; and

 

(B)           all Events of Default, other than thenonpayment of the principal of the Class A Notes that has become due solely bysuch acceleration, have been cured or waived as provided in Section 5.12.

 

No such rescissionshall affect any subsequent default or impair any right consequent thereto.

 

(d)           Ifan Event of Default has occurred and is continuing, the Insurer may (i) if theNotes have been accelerated in accordance with Section 5.2(a) or 5.2(b)and not rescinded pursuant to Section 5.2(c), elect to prepay all or anyportion of the Class A Note Balance, plus accrued but unpaid interest thereonto the date of payment and (ii) terminate FISC as the servicer under theServicing Agreement; provided, however, that the Insurer shallfulfill its obligations under the Policy.

** **

**Section 5.3.           Collection of Indebtedness and Suits for Enforcement byIndenture Trustee.**

 

(a)           If(i) default is made in the payment of any interest on any Class of Class ANotes when the same becomes due and payable, and such default continues for aperiod of five (5) Business Days, or (ii) default is made in the payment of theprincipal of any Class of Class A Notes when the same becomes due and payable,the Issuer shall pay to the Indenture Trustee, for the benefit of theapplicable Noteholders, the amount then due and payable on such Class of ClassA Notes for principal and, if applicable, interest, with interest upon theoverdue principal at the applicable Note Rate and, to the extent payment atsuch rate of interest shall be legally enforceable, upon overdue installmentsof interest at the applicable Note Rate and in addition thereto such furtheramount as shall be sufficient to cover the costs and expenses of collection,including the reasonable compensation, expenses, disbursements and advances ofthe Indenture Trustee and its agents and counsel and other amounts due andowing to the Indenture Trustee pursuant to Section 6.7.

 

(b)           Ifthe Issuer shall fail forthwith to pay such amounts upon such demand, theIndenture Trustee, in its own name and as trustee of an express trust, may withthe written consent of the Insurer (provided that no Insurer Default shall haveoccurred and be continuing), and shall, at the direction of the Insurer (providedthat no Insurer Default shall have occurred and be continuing), institute aProceeding for the collection of the sums so due and unpaid, and may prosecutesuch Proceeding to judgment or final decree, and may enforce the same againstthe Issuer or any other obligor upon the Notes and collect in the mannerprovided by law out of the property of the Issuer or such other obligor,wherever situated, the monies adjudged or decreed to be payable.

 

(c)           Ifan Event of Default occurs and is continuing, the Indenture Trustee may, asmore particularly provided in Section 5.4, in its discretion, proceed toprotect and enforce its rights and the rights of the Noteholders and theInsurer by such appropriate Proceedings as the Indenture Trustee shall deemmost effective to protect and enforce such rights, whether for the specificenforcement of any covenant or agreement in this Indenture or in aid of theexercise of

 

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any power granted herein or to enforce any other properremedy or legal or equitable right vested in the Indenture Trustee by thisIndenture or by law.

 

(d)           Ifthere shall be pending, relative to the Issuer or any other obligor upon theNotes or any Person having or claiming an ownership interest in the TrustEstate, Proceedings under Title 11 of the United States Code or any otherapplicable federal or state bankruptcy, insolvency or other similar law, or ifa receiver, assignee or trustee in bankruptcy or reorganization, liquidator,sequestrator or similar official shall have been appointed for or takenpossession of the Issuer or its property or such other obligor or Person, or ifthere shall be pending any other comparable judicial Proceedings relative tothe Issuer or any other obligor upon the Notes, or to the creditors or propertyof the Issuer or such other obligor, the Indenture Trustee, irrespective ofwhether the principal of any Notes shall then be due and payable as thereinexpressed or by declaration or otherwise and irrespective of whether theIndenture Trustee shall have made any demand pursuant to the provisions of thisSection 5.3, shall be entitled and empowered, by intervention in suchProceedings or otherwise:

 

(i)            to file and prove a claim or claimsfor the whole amount of principal and interest, if any, owing and unpaid inrespect of the Notes and to file such other papers or documents as may benecessary or advisable in order to have the claims of the Indenture Trustee(including any claim for reasonable compensation to the Indenture Trustee andeach predecessor Indenture Trustee, and their respective agents, attorneys andcounsel, and all other amounts due and owing to the Indenture Trustee pursuantto Section 6.7) and of the Noteholders allowed in such Proceedings;

 

(ii)           unless prohibited by applicable lawand regulations, to vote on behalf of the Noteholders in any election of atrustee, a standby trustee or Person performing similar functions in any suchProceedings;

 

(iii)          to collect and receive any monies orother property payable or deliverable on any such claims and to pay all amountsreceived with respect to the claims of the Noteholders and of the IndentureTrustee on their behalf; and

 

(iv)          to file such proofs of claim and otherpapers or documents as may be necessary or advisable in order to have theclaims of the Indenture Trustee or the Noteholders allowed in any judicialproceedings relative to the Issuer, its creditors and its property;

 

and any trustee,receiver, liquidator, custodian or other similar official in any such Proceedingis hereby authorized by each of the Noteholders to make payments to theIndenture Trustee and, in the event that the Indenture Trustee shall consent tothe making of payments directly to the Noteholders, to pay to the IndentureTrustee such amounts as shall be sufficient to cover reasonable compensation tothe Indenture Trustee and each predecessor Indenture Trustee, and theirrespective agents, attorneys and counsel, and all other amounts due and owingto the Indenture Trustee pursuant to Section 6.7.

 

(e)           Nothingherein contained shall be deemed to authorize the Indenture Trustee toauthorize or consent to or vote for or accept or adopt on behalf of anyNoteholder any plan of

 

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reorganization, arrangement, adjustment or compositionaffecting the Notes or the rights of any Holder thereof or to authorize theIndenture Trustee to vote in respect of the claim of any Noteholder in any suchproceeding except, as aforesaid, to vote for the election of a trustee inbankruptcy or similar Person.

 

(f)            Allrights of action and of asserting claims under this Indenture, or under any ofthe Notes, may be enforced by the Indenture Trustee without the possession ofany of the Notes or the production thereof in any trial or other Proceedingsrelative thereto, and any such action or Proceedings instituted by theIndenture Trustee shall be brought in its own name as trustee of an expresstrust, and any recovery of judgment, subject to the payment of the expenses, disbursementsand compensation of the Indenture Trustee, each predecessor Indenture Trusteeand their respective agents and attorneys, shall be for the ratable benefit ofthe Noteholders.

 

(g)           Inany Proceedings brought by the Indenture Trustee (and also any Proceedingsinvolving the interpretation of any provision of this Indenture to which theIndenture Trustee shall be a party), the Indenture Trustee shall be held torepresent all the Noteholders, and it shall not be necessary to make anyNoteholder a party to any such Proceedings.

** **

**Section 5.4.           Remedies.**

 

(a)           Ifan Event of Default has occurred and is continuing, the Indenture Trusteeshall, at the direction of the Insurer (if no Insurer Default has occurred andis continuing), or at the direction of the Class A Noteholders evidencing notless than 66 2/3% of the Class A Note Balance (if an Insurer Default hasoccurred and is continuing), take one or more of the following actions as sodirected (subject to Section 5.5):

 

(i)            institute Proceedings in its own nameand as trustee of an express trust for the collection of all amounts thenpayable on the Class A Notes or under this Indenture with respect thereto,whether by declaration or otherwise, enforce any judgment obtained, and collectfrom the Issuer and any other obligor upon the Notes monies adjudged due;

 

(ii)           institute Proceedings from time totime for the complete or partial foreclosure of this Indenture with respect tothe Trust Estate;

 

(iii)          exercise any remedies of a securedparty under the Relevant UCC and take any other appropriate action underapplicable law to protect and enforce the rights and remedies of the IndentureTrustee and the Class A Noteholders; or

 

(iv)          sell the Trust Estate or any portionthereof or rights or interest therein at one or more public or private salescalled and conducted in any manner permitted by law;

 

provided, however, that the IndentureTrustee may not sell or otherwise liquidate the Trust Estate following an Eventof Default unless: (A) if no Insurer Default has occurred and is continuing,the Insurer so directs or consents thereto; or if an Insurer Default hasoccurred, 100% of the Holders of the Class A Notes (excluding Class A Notesheld by the Depositor, the Seller, the Servicer or any of their respectiveAffiliates) consent thereto; (B) the proceeds of such sale or liquidation aresufficient to pay in full the Class A Note Balance and all accrued but unpaidinterest on the outstanding Class A Notes and all amounts due to the Insurerunder the Insurance

 

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Agreement and thePolicy; (C) if an Insurer Default has occurred and is continuing, the IndentureTrustee determines that the Trust Estate will not continue to providesufficient funds for the payment of principal of and interest on each Class ofClass A Notes as they would have become due if the Class A Notes had not beendeclared due and payable, and the Indenture Trustee obtains the consent of theClass A Noteholders evidencing not less than 66 2/3% of the Class A NoteBalance (excluding Class A Notes held by the Depositor, the Seller, theServicer or any of their respective Affiliates), or (D) if no Insurer Defaulthas occurred or is continuing, the Insurer makes the determination specified inclause (C) and consents.  In determiningsuch sufficiency or insufficiency with respect to clauses (B) and (C)above, the Indenture Trustee may, but need not, obtain and rely upon an opinionof an Independent investment banking or accounting firm of national reputationas to the feasibility of such proposed action and as to the sufficiency of theTrust Estate for such purpose.

 

(b)           (X)If the Indenture Trustee collects any money or property pursuant to this Section5.4 or (Y) if the Notes have been accelerated in accordance with Section5.2, the Indenture Trustee shall, in the case of clause (X) fromsuch money or property, or in the case of clause (Y) from all funds availableto it, pay such amounts in the following order of priority:

 

(i)            to the Back-up Servicer, the IndentureTrustee, the Custodian and the Owner Trustee, in its individual capacity,respectively, any unpaid or unreimbursed fees and any out-of-pocket expenses(including, but not limited to, attorneys’ fees and transition expenses); providedthat such expenses shall not exceed $50,000 in the aggregate per year and$100,000 in the total aggregate;

 

(ii)           to the Servicer, all amounts due tothe Servicer as compensation pursuant to Sections 2.08 and 2.11 of theServicing Agreement;

 

(iii)          to the Class A Note Payment Account,all accrued but unpaid interest on each Class of Class A Notes, to be paid inaccordance with Section 2.8(f)(i);

 

(iv)          to the Insurer, any insurance premiumsdue and payable to the Insurer;

 

(v)           to the Class A Note Payment Account,the aggregate outstanding principal balance of the Class A Notes, to be paid inaccordance with Section 2.8(f)(i);

 

(vi)          to the Insurer, any unreimbursedpayments under the Policy plus accrued interest on any such payments at therate set forth in the Insurance Agreement and any other amounts due the Insurerunder the Insurance Agreement and the Policy;

 

(vii)         to the Servicer (so long as FirstInvestors Servicing Corporation is not the Servicer), any and all unpaidexpenses incurred in connection with the re-titling of the Financed Vehicles;

 

(viii)        to the Class B Note Payment Account, theoutstanding principal balance of the Class B Notes, to be paid in accordancewith Section 2.8(f)(ii);

 

(ix)           to the Back-up Servicer, theServicer, the Insurer, the Indenture Trustee, the Custodian and the OwnerTrustee, in its individual capacity, respectively, any other

 

41

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amounts due and unpaid to such party under thisIndenture and the other Transaction Documents; and

 

(x)            to the Depositor Account anyremaining amounts for distribution in accordance with Section 5.2 of the TrustAgreement.

 

The IndentureTrustee may fix a record date and payment date for any payment to Noteholderspursuant to this Section 5.4.  Atleast fifteen (15) days before such record date, the Issuer shall mail to eachNoteholder and the Indenture Trustee a notice that states the record date, thepayment date and the amount to be paid.

 

(c)           Whenthe Class A Notes have been paid in full, including all accrued and unpaidinterest owing thereon, all amounts owing the Insurer have been paid in fulland the Policy has been returned for cancellation, the rights of the Class ANoteholders under this Indenture and any other Transaction Document, including,without limitation, with rights with respect to the Trust Estate, shallautomatically vest in the Class B Noteholders.

** **

**Section 5.5.           Optional Preservation of the Contracts.**

 

If the Notes have been declared to be due and payableunder Section 5.2 following an Event of Default, and such declarationand its consequences have not been rescinded and annulled, the IndentureTrustee shall, at the direction of the Insurer (if no Insurer Default hasoccurred and is continuing), or at the direction of the Class A Noteholdersevidencing not less than 66 2/3% of the Class A Note Balance (if an InsurerDefault has occurred and is continuing), maintain possession of the TrustEstate and apply proceeds as if there had been no declaration of acceleration;provided, however, that the Total Available Funds shall be applied inaccordance with such declaration of acceleration in the manner specified inSections 3.5(d), (e), (f) and (g) of the Sale and Allocation Agreement.  It is the desire of the parties hereto andthe Noteholders that there be at all times sufficient funds for the payment ofprincipal of and, if applicable, interest on the Notes, and the IndentureTrustee shall take such desire into account when determining whether or not tomaintain possession of the Trust Estate. In determining whether to maintain possession of the Trust Estate, theIndenture Trustee may, but need not, obtain and rely upon an opinion of anIndependent investment banking or accounting firm of national reputation as tothe feasibility of such proposed action and as to the sufficiency of the TrustEstate for such purpose.

** **

**Section 5.6.           Limitation of Suits.**

 

No Holder of any Note shall have any right toinstitute any Proceeding with respect to this Indenture or for the appointmentof a receiver or trustee, or for any other remedy hereunder, unless:

 

(a)           suchHolder has previously given written notice to the Indenture Trustee of acontinuing Event of Default;

 

(b)           theNoteholders evidencing not less than 25% of the Class A Note Balance have madewritten request to the Indenture Trustee to institute such Proceeding inrespect of such Event of Default in its own name as Indenture Trusteehereunder;

 

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(c)           suchHolder or Holders have offered to the Indenture Trustee reasonable indemnityagainst the costs, expenses and liabilities to be incurred in complying withsuch request;

 

(d)           theIndenture Trustee for sixty (60) days after its receipt of such notice, requestand offer of indemnity has failed to institute such Proceedings;

 

(e)           nodirection inconsistent with such written request has been given to theIndenture Trustee during such 60-day period by the Noteholders evidencing notless than 51% of the Class A Note Balance; and

 

(f)            anInsurer Default has occurred and is continuing.

 

It is understood and intended that no one or moreNoteholders shall have any right in any manner whatever by virtue of, or byavailing of, any provision of this Indenture to affect, disturb or prejudicethe rights of any other Noteholders or to obtain or to seek to obtain priorityor preference over any other Noteholders or to enforce any right under thisIndenture, except in the manner herein provided.

 

In the event the Indenture Trustee shall receiveconflicting or inconsistent requests and indemnity from two or more groups ofNoteholders, each evidencing less than 51% of the Class A Note Balance, theIndenture Trustee in its sole discretion may determine what action, if any,shall be taken, notwithstanding any other provisions of this Indenture.

** **

**Section 5.7.           Unconditional Rights of Noteholders to ReceivePrincipal and Interest.**

 

Notwithstanding any other provisions in thisIndenture, the Holder of any Note shall have the right, which is absolute andunconditional, to receive payment of the principal of and, with respect to theClass A Notes, interest, if any, on such Note on or after the respective duedates thereof expressed in such Note or in this Indenture (or, in the case ofredemption, on or after the Redemption Date) and to institute suit for theenforcement of any such payment, and such right shall not be impaired withoutthe consent of such Holder.

** **

**Section 5.8.           Restoration of Rights and Remedies.**

 

If the Indenture Trustee, the Insurer or anyNoteholder has instituted any Proceeding to enforce any right or remedy underthis Indenture and such Proceeding has been discontinued or abandoned for anyreason or has been determined adversely to the Indenture Trustee, the Insureror such Noteholder, then and in every such case the Issuer, the IndentureTrustee, the Insurer and the Noteholders shall, subject to any determination insuch Proceeding, be restored severally and respectively to their formerpositions hereunder, and thereafter all rights and remedies of the IndentureTrustee and the Noteholders shall continue as though no such Proceeding hadbeen instituted.

 

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**Section 5.9.           Rights and Remedies Cumulative Rights.**

 

No right or remedy herein conferred upon or reservedto the Indenture Trustee, the Insurer or the Noteholders is intended to beexclusive of any other right or remedy, and every right and remedy shall, tothe extent permitted by law, be cumulative and in addition to every other rightand remedy given hereunder or now or hereafter existing at law or in equity orotherwise.  The assertion or employmentof any right or remedy hereunder, or otherwise, shall not prevent theconcurrent assertion or employment of any other appropriate right or remedy.

** **

**Section 5.10.        Delay or Omission Not a Waiver.**

 

No delay or omission of the Indenture Trustee, theInsurer or any Holder of any Note to exercise any right or remedy accruing uponany Default or Event of Default shall impair any such right or remedy orconstitute a waiver of any such Default or Event of Default or any acquiescencetherein.  Every right and remedy given bythis Article V or by law to the Indenture Trustee, the Insurer or theNoteholders may be exercised from time to time, and as often as may be deemedexpedient, by the Indenture Trustee, the Insurer or the Noteholders, as thecase may be.

** **

**Section 5.11.        Control by Noteholders.**

 

The Class A Noteholders evidencing not less than 51%of the Class A Note Balance shall have the right to direct the time, method andplace of conducting any Proceeding for any remedy available to the IndentureTrustee with respect to the Notes or exercising any trust or power conferred onthe Indenture Trustee; provided, however, that:

 

(a)           suchdirection shall not be in conflict with any rule of law or with this Indenture;

 

(b)           subjectto the express terms of Section 5.4, any direction to the IndentureTrustee to sell or liquidate the Trust Estate shall be by the Class ANoteholders evidencing not less than 100% of the Class A Note Balance;

 

(c)           ifthe conditions set forth in Section 5.5 have been satisfied and theIndenture Trustee elects to retain the Trust Estate pursuant to such section,then any direction to the Indenture Trustee by the Noteholders evidencing lessthan 100% of the Class A Note Balance to sell or liquidate the Trust Estateshall be of no force and effect;

 

(d)           theIndenture Trustee may take any other action deemed proper by the IndentureTrustee that is not inconsistent with such direction; and

 

(e)           anInsurer Default shall have occurred and is continuing.

 

Notwithstanding the rights of Noteholders set forth inthis Section 5.11, subject to Section 6.1, the Indenture Trusteeneed not take any action that it reasonably believes might involve it in costs,expenses and liabilities for which it will not be adequately indemnified ormight materially and adversely affect the rights of any Class A Noteholders notconsenting to such action.

 

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**Section 5.12.        Waiver of Past Defaults.**

 

Prior to the declaration of the acceleration of thematurity of the Class A Notes as provided in Section 5.2, the Insurer(if no Insurer Default shall have occurred and be continuing) or theNoteholders evidencing not less than 51% of the Class A Note Balance, with theconsent of the Insurer (if no Insurer Default shall have occurred and becontinuing), may waive any past Default or Event of Default and itsconsequences except a Default or Event of Default (a) in the payment ofprincipal of or interest on any Class of Class A Notes or (b) in respect of acovenant or provision hereof that cannot be amended, supplemented or modifiedwithout the consent of all the Holders. Upon any such waiver, the Issuer, the Indenture Trustee, the Insurer andthe Holders shall be restored to their former positions and rights hereunder,respectively, but no such waiver shall extend to any subsequent or otherDefault or Event of Default or impair any right consequent thereto.  Upon any such waiver, such Default or Eventof Default shall cease to exist and be deemed to have been cured and not tohave occurred, and any Event of Default arising therefrom shall be deemed tohave been cured and not to have occurred, for every purpose of this Indenture,but no such waiver shall extend to any subsequent or other Default or Event ofDefault or impair any right consequent thereto.

** **

**Section 5.13.        Undertaking for Costs.**

 

All parties to this Indenture agree, and each Holderof any Note by such Holder’s acceptance thereof shall be deemed to have agreed,that any court may in its discretion require, in any suit for the enforcementof any right or remedy under this Indenture, or in any suit against theIndenture Trustee for any action taken, suffered or omitted by it as IndentureTrustee, the filing by any party litigant in such suit of an undertaking to paythe costs of such suit, and that such court may in its discretion assessreasonable costs, including reasonable attorneys’ fees, against any partylitigant in such suit, having due regard to the merits and good faith of theclaims or defenses made by such party litigant; provided, however,that the provisions of this Section 5.13 shall not apply to (a) any suitinstituted by the Indenture Trustee, (b) any suit instituted by any Noteholderor group of Noteholders, in each case holding Notes evidencing in the aggregatemore than 10% of the Class A Note Balance or (c) any suit instituted by anyNoteholder for the enforcement of the payment of principal of or, with respectto the Class A Notes, interest on any Note on or after the respective due datesexpressed in such Note and in this Indenture (or, in the case of redemption, onor after the Redemption Date).

** **

**Section 5.14.        Waiver of Stay or Extension Laws.**

 

The Issuer covenants (to the extent that it maylawfully do so) that it shall not at any time insist upon, or plead or in anymanner whatsoever, claim or take the benefit or advantage of, any stay orextension law wherever enacted, now or at any time hereafter in force, that mayaffect the covenants or the performance of this Indenture, and the Issuer (tothe extent that it may lawfully do so) hereby expressly waives all benefit oradvantage of any such law, and covenants that it shall not hinder, delay orimpede the execution of any power herein granted to the Indenture Trustee, butwill suffer and permit the execution of every such power as though no such lawhad been enacted.

 

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**Section 5.15.        Action on Notes.**

 

The Indenture Trustee’s right to seek and recover judgmenton the Notes or under this Indenture shall not be affected by the seeking,obtaining or application of any other relief under or with respect to thisIndenture.  Neither the lien of thisIndenture nor any rights or remedies of the Indenture Trustee or theNoteholders shall be impaired by the recovery of any judgment by the IndentureTrustee against the Issuer or by the levy of any execution under such judgmentupon any portion of the Trust Estate or upon any of the assets of the Issuer.  Any money or property collected by theIndenture Trustee shall be applied in accordance with Section 5.4(b).

** **

**Section 5.16.        Performance and Enforcement of Certain Obligations.**

 

(a)           Promptlyfollowing a request from the Indenture Trustee to do so, and at the Administrator’sexpense, the Issuer shall take all such lawful action as the Indenture Trusteemay request to compel or secure the performance and observance by the Servicerof its obligations to the Issuer under or in connection with the Sale andAllocation Agreement or by the Seller and the Issuer of each of its obligationsunder or in connection with the Servicing Agreement, and to exercise any andall rights, remedies, powers and privileges lawfully available to the Issuerunder or in connection with the Sale and Allocation Agreement to the extent andin the manner directed by the Indenture Trustee, including the transmission ofnotices of default on the part of the Seller or the Servicer thereunder and theinstitution of legal or administrative actions or proceedings to compel orsecure performance by the Seller or the Servicer of each of their obligationsunder the Sale and Allocation Agreement.

 

(b)           Ifan Event of Default has occurred and is continuing, the Indenture Trustee maywith prior written consent of the Insurer (provided that no Insurer Default hasoccurred and is continuing), and at the direction (which direction shall be inwriting or by telephone (confirmed in writing promptly thereafter)) of theClass A Noteholders evidencing not less than 66 2/3% of the Class A NoteBalance (with the prior written consent of the Insurer, or, at the direction ofthe Insurer, in each case provided that no Insurer Default has occurred and iscontinuing) shall, exercise all rights, remedies, powers, privileges and claimsof the Issuer against the Servicer under or in connection with the Sale andAllocation Agreement or against the Servicer under or in connection with theServicing Agreement, including the right or power to take any action to compelor secure performance or observance by the Seller or the Servicer, as the casemay be, of each of their obligations to the Issuer thereunder and to give anyconsent, request, notice, direction, approval, extension or waiver under theSale and Allocation Agreement or the Servicing Agreement, as the case may be,and any right of the Issuer to take such action shall be suspended.

** **

**ArticleVIThe Indenture Trustee**

** **

**Section 6.1.           Duties of Indenture Trustee.**

 

(a)           Ifan Event of Default has occurred and is continuing, the Indenture Trustee shallexercise the rights and powers vested in it by this Indenture and use the samedegree of care and

 

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skill in its exercise of those rights and powers as aprudent person would exercise or use under the circumstances in the conduct ofsuch Person’s own affairs.

 

(b)           Exceptupon the occurrence and during the continuation of an Event of Default:

 

(i)            the Indenture Trustee undertakes toperform such duties and only such duties as are specifically set forth in thisIndenture and no implied covenants or obligations shall be read into thisIndenture against the Indenture Trustee; and

 

(ii)           in the absence of bad faith on itspart, the Indenture Trustee may conclusively rely, as to the truth of thestatements and the correctness of the opinions expressed therein, uponcertificates or opinions furnished to the Indenture Trustee and, if required bythe terms of this Indenture, conforming to the requirements of this Indenture; provided,however, that the Indenture Trustee shall examine the certificates andopinions to determine whether or not they conform to the requirements of thisIndenture.

 

(c)           TheIndenture Trustee may not be relieved from liability for its own negligentaction, its own gross negligent failure to act or its own willful misconduct,except that:

 

(i)            this paragraph does not limit theeffect of paragraph (b) of this Section 6.1;

 

(ii)           the Indenture Trustee shall not beliable for any error of judgment made in good faith by a Responsible Officerunless it is proved that the Indenture Trustee was negligent in ascertainingthe pertinent facts; and

 

(iii)          the Indenture Trustee shall not beliable with respect to any action it takes or omits to take in good faith inaccordance with a direction received by it pursuant to Section 5.11.

 

(d)           Everyprovision of this Indenture that in any way relates to the Indenture Trustee issubject to paragraphs (a), (b), (c) and (g) of thisSection 6.1.

 

(e)           TheIndenture Trustee shall not be liable for interest on any money received by itexcept as the Indenture Trustee may agree in writing with the Issuer.

 

(f)            Moneyheld in trust by the Indenture Trustee need not be segregated from other fundsexcept to the extent required by law or the terms of this Indenture or the Saleand Allocation Agreement.

 

(g)           Noprovision of this Indenture shall require the Indenture Trustee to expend orrisk its own funds or otherwise incur financial liability in the performance ofany of its duties hereunder or in the exercise of any of its rights or powershereunder if the Indenture Trustee shall have reasonable grounds to believethat repayment of such funds or adequate indemnity against such risk orliability is not reasonably assured or provided to it.

 

(h)           Everyprovision of this Indenture relating to the conduct or affecting the liabilityof or affording protection to the Indenture Trustee shall be subject to theprovisions of this Section 6.1.

 

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(i)            TheIndenture Trustee shall not be charged with knowledge of any Event of Defaultunless either (i) a Responsible Officer shall have actual knowledge of suchEvent of Default or (ii) written notice of such Event of Default shall havebeen given to the Indenture Trustee in accordance with the provisions of thisIndenture.

** **

**Section 6.2.           Rights of Indenture Trustee.**

 

(a)           TheIndenture Trustee may rely on any document believed by it to be genuine and tohave been signed or presented by the proper Person.

 

(b)           Beforethe Indenture Trustee acts or refrains from acting, it may require an Issuer’sCertificate or an Opinion of Counsel. The Indenture Trustee shall not be liable for any action it takes oromits to take in good faith in reliance on an Issuer’s Certificate or Opinionof Counsel unless it is proved that the Indenture Trustee was negligent in suchreliance.

 

(c)           TheIndenture Trustee may execute any of the trusts or powers hereunder or performany duties hereunder either directly or by or through agents or attorneys or acustodian or nominee, and the Indenture Trustee shall not be responsible forany misconduct or negligence on the part of, or for the supervision of, anysuch agent, attorney, custodian or nominee appointed with due care by ithereunder.

 

(d)           TheIndenture Trustee shall not be liable for any action it takes or omits to takein good faith which it believes to be authorized or within its rights orpowers; provided, however, that such action or omission by the IndentureTrustee does not constitute willful misconduct, negligence or bad faith.

 

(e)           TheIndenture Trustee may consult with counsel, and the advice or opinion ofcounsel with respect to legal matters relating to this Indenture and the Notesshall be full and complete authorization and protection from liability inrespect to any action taken, omitted or suffered by it hereunder in good faithand in accordance with the advice or opinion of such counsel.

 

(f)            TheIndenture Trustee shall be under no obligation to exercise any of the rights orpowers vested in it by this Indenture at the request or direction of any of theNoteholders pursuant to this Indenture, unless such Noteholders shall haveoffered to the Indenture Trustee reasonable security or indemnity against thecosts, expenses and liabilities which might be incurred by it in compliancewith such request or direction.

 

(g)           TheIndenture Trustee shall not be bound to make any investigation into the factsor matters stated in any resolution, certificate, statement, instrument,opinion, report, notice, request, direction, consent, order, bond, debenture orother paper or document, but the Indenture Trustee, in its discretion, may makesuch further inquiry or investigation into such facts or matters as it may seefit, and, if the Indenture Trustee shall determine to make such further inquiryor investigation, it shall be entitled to examine the books, records andpremises of the Issuer, personally or by agent or attorney.

 

(h)           Exceptwhere the Transaction Documents specifically state otherwise, the IndentureTrustee, provided it has sent out notices in accordance with the applicableTransaction

 

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Document and is otherwise acting in accordance withthe Transaction Documents, may act as directed by the majority of the outstandingNoteholders responding in writing to such request for amendment or writtendirection; provided, however, that the Noteholders representingat least 51% of the Class A Note Balance as of the time such voting response isdue back to the Indenture Trustee must have responded in writing to theIndenture Trustee’s notice to amend or for written direction.  In addition, the Indenture Trustee shall nothave any liability to any Noteholder or Note Owner with respect to any actiontaken pursuant to such notice if the Noteholder or Note Owner does not respondto such notice within the time period set forth in such notice.  By acceptance of a Note, each Noteholder andNote Owner is deemed to agree to the foregoing provisions.

** **

**Section 6.3.           Individual Rights of Indenture Trustee.**

 

The Indenture Trustee, in its individual or any othercapacity, may become the owner or pledgee of Notes and may otherwise deal withthe Issuer or its Affiliates with the same rights it would have if it were notIndenture Trustee.  Any Paying Agent,Note Registrar, co-registrar or co-paying agent hereunder may do the same withlike rights.

** **

**Section 6.4.           Indenture Trustee’s Disclaimer.**

 

The Indenture Trustee (a) shall not be responsiblefor, and makes no representation as to, the validity or adequacy of thisIndenture or the Notes and (b) shall not be accountable for the Issuer’s use ofthe proceeds from the Notes or responsible for any statement of the Issuer inthis Indenture or in any document issued in connection with the sale of theNotes or in the Notes other than the Indenture Trustee’s certificate ofauthentication.

** **

**Section 6.5.           Notice of Default.**

 

If a Default occurs and is continuing and if it isknown to a Responsible Officer of the Indenture Trustee, the Indenture Trusteeshall mail to each Noteholder notice of such Default within ninety (90) daysafter it occurs.  Except in the case of aDefault in payment of principal of or interest, as applicable, on any Note(including payments pursuant to the mandatory redemption provisions of suchNote), the Indenture Trustee may withhold the notice if and so long as acommittee of its Responsible Officers in good faith determines that withholdingthe notice is in the interests of Noteholders.

** **

**Section 6.6.           Reports by Indenture Trustee to Holders.**

 

(a)           TheIndenture Trustee shall deliver, within a reasonable period of time after theend of each calendar year, to each Person who at any time during such calendaryear was a Noteholder, such information as may be required to enable suchPerson to prepare its federal and state income tax returns.

 

(b)           TheIndenture Trustee shall deliver, within a reasonable period of time after theend of each calendar year, to all Noteholders and the Insurer a brief reportrelating to (i) its eligibility and qualification to continue as IndentureTrustee pursuant to the terms of this Indenture, (ii) any amounts advanced byit under this Indenture, (iii) the amount, interest rate and maturity date ofany material indebtedness owing by the Issuer to the Indenture Trustee in its

 

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individual capacity, (iv) the property and fundsphysically held by the Indenture Trustee and (v) any action taken by theIndenture Trustee that materially affects the Notes which has not beenpreviously reported.

** **

**Section 6.7.           Compensation and Indemnity.**

 

(a)           TheIssuer shall pay to the Indenture Trustee from time to time reasonablecompensation for its services in accordance with Section 3.5(d) of the Sale andAllocation Agreement and the Indenture Trustee Fee Letter and, to the extentsuch amounts are not promptly paid by the Issuer, the Issuer shall cause theAdministrator to pay such amounts in accordance with the AdministrationAgreement.  The Indenture Trustee’scompensation shall not be limited by any law on compensation of a trustee of anexpress trust.  The Issuer shall, orshall cause the Administrator to, reimburse the Indenture Trustee for allexpenses reasonably incurred or made by it, including costs of collection, inaddition to the compensation for its services; provided, however,that neither the Issuer nor the Administrator need reimburse the IndentureTrustee for any expense incurred through the Indenture Trustee’s willfulmisconduct, negligence, or bad faith. Such expenses shall include the reasonable compensation and expenses,disbursements and advances of the Indenture Trustee’s agents, counsel,accountants and experts.  The Issuershall, or shall cause the Administrator to, indemnify the Indenture Trustee andthe Custodian against any and all loss, liability or expense (including attorneys’fees) (collectively, together with the amounts specified as “Losses” in Section6A.3(d), the “*Losses*”)incurred by it in connection with the administration of this trust and theperformance of its duties hereunder; provided, however, thatneither the Issuer nor the Administrator need indemnify the Indenture Trusteeor the Custodian for any such loss, liability or expense incurred through theIndenture Trustee’s or Custodian’s willful misconduct, negligence, or badfaith, as applicable.  The Indenture Trusteeor Custodian shall notify the Issuer and the Administrator promptly of anyclaim for which it may seek indemnity. Any failure by the Indenture Trustee or the Custodian to so notify theIssuer and the Administrator shall not, however, relieve the Issuer or theAdministrator of its obligations hereunder. The Issuer shall, or shall cause the Servicer to, defend any such claim,and the Indenture Trustee or the Custodian, as applicable, may have separatecounsel and the Issuer shall, or shall cause the Servicer to, pay the fees andexpenses of such counsel. Notwithstanding the foregoing, Losses shall be paid pursuant to this Section6.7 by the Issuer solely from amounts in excess of funds necessary to payall outstanding interest and principal due to the Noteholders and all otheramounts payable in accordance with the priorities set forth in Section 3.5(d)of the Sale and Allocation Agreement and shall in any case be nonrecourse as tothe Issuer and, to the extent funds are not so available to pay any Losses whendue and owing, the claims relating thereto shall not constitute a claim (asdefined in Section 101 of Title 11 of the United States Bankruptcy Code)against the Issuer but shall continue to accrue.  Each party hereto agrees that the payment ofany claim of any such party in respect of Losses payable by the Issuer shall besubordinated to the payment in full of all outstanding interest and principaldue to each Class of Class A Noteholders.

 

(b)           Notwithstandingthe foregoing, the Indenture Trustee and the Custodian will not be liable:

 

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(i)            for any error of judgment made by itin good faith unless it is proved that the Indenture Trustee or the Custodian,as applicable, was negligent in ascertaining the pertinent facts;

 

(ii)           for any action it takes or omits totake in good faith in accordance with directions received by it from therequisite percentage of Noteholders in accordance with the terms herein or inthe other applicable Transaction Documents; or

 

(iii)          for interest on any money received bythe Indenture Trustee except as the Indenture Trustee and the Issuer may agreein writing.

 

(c)           TheIssuer’s payment obligations to the Indenture Trustee pursuant to this Section6.7 shall survive the resignation or removal of the Indenture Trustee andthe discharge of this Indenture.  Whenthe Indenture Trustee incurs expenses after the occurrence of a Defaultspecified in Section 5.1(e) or (i) with respect to the Issuer,the expenses are intended to constitute expenses of administration under Title11 of the United States Code or any other applicable federal or statebankruptcy, insolvency or similar law.

** **

**Section 6.8.           Replacement of Indenture Trustee.**

 

(a)           Noresignation or removal of the Indenture Trustee, and no appointment of asuccessor Indenture Trustee, shall become effective until either (i) theacceptance of appointment by the successor Indenture Trustee acceptable to theInsurer and payment of fees and expenses owed to the outgoing Indenture Trusteepursuant to this Section 6.8 and Section 6.7 or (ii) the Noteshave been paid and discharged in full in accordance with Section 4.2 ofthis Indenture and all amounts received, if any, in connection with the paymentand discharge of the Notes have been distributed to the Noteholders.  The Indenture Trustee may resign at any timeby so notifying the Issuer and the Insurer. The Insurer, provided an Insurer Default shall not have occurred and becontinuing, or the Noteholders evidencing not less than 51% of the Class A NoteBalance (with the prior written consent of the Insurer (provided that noInsurer Default has occurred and is continuing)) may remove the IndentureTrustee without cause by so notifying the Indenture Trustee and the Issuer andshall appoint a successor Indenture Trustee. The Issuer shall remove the Indenture Trustee if:

 

(A)          the Indenture Trustee fails to complywith Section 6.10;

 

(B)           an Insolvency Event occurs withrespect to the Indenture Trustee;

 

(C)           a receiver or other public officertakes charge of the Indenture Trustee or its property; or

 

(D)          the Indenture Trustee otherwisebecomes incapable of acting.

 

If (a) the Indenture Trustee resigns or is removed,(b) the Class A Noteholders fail to appoint a successor Indenture Trustee acceptableto the Insurer (provided that no Insurer Default has occurred and iscontinuing) following the removal of the Indenture Trustee without cause or (c)if a vacancy exists in the office of Indenture Trustee for any reason (theIndenture Trustee in such event being referred to herein as the retiringIndenture Trustee), the Issuer shall promptly

 

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appoint asuccessor Indenture Trustee acceptable to the Insurer (provided that no InsurerDefault has occurred and is continuing).

 

(b)           Anysuccessor Indenture Trustee shall deliver a written acceptance of itsappointment to the retiring Indenture Trustee, the Insurer and the Issuer.  Upon delivery of such written acceptance, theresignation or removal of the retiring Indenture Trustee shall become effectiveand the successor Indenture Trustee shall have all the rights, powers andduties of the Indenture Trustee under this Indenture.  The successor Indenture Trustee shall mail anotice of its succession to the Noteholders. The retiring Indenture Trustee shall promptly transfer all property heldby it as Indenture Trustee to the successor Indenture Trustee.

 

(c)           Ifa successor Indenture Trustee does not take office within sixty (60) days afterthe retiring Indenture Trustee resigns or is removed, the retiring IndentureTrustee, the Issuer or the Noteholders evidencing not less than 51% of theClass A Note Balance may petition any court of competent jurisdiction for theappointment of a successor Indenture Trustee. If the Indenture Trustee fails to comply with Section 6.10, anyNoteholder may petition any court of competent jurisdiction for the removal ofthe Indenture Trustee and the appointment of a successor Indenture Trustee.

 

(d)           Notwithstandingthe replacement of the Indenture Trustee pursuant to this Section 6.8, theIssuer’s and the Administrator’s obligations under Section 6.7 shallcontinue for the benefit of the retiring Indenture Trustee.

** **

**Section 6.9.           Successor Indenture Trustee.**

 

(a)           Ifthe Indenture Trustee consolidates with, merges or converts into, or transfersall or substantially all its corporate trust business or assets to, anothercorporation or banking association, the resulting, surviving or transfereecorporation or banking association without any further act shall be thesuccessor Indenture Trustee; provided, however, that suchcorporation or banking association must be otherwise qualified and eligibleunder Section 6.10.  The IndentureTrustee shall provide the Rating Agencies and the Insurer with prior writtennotice of any such transaction.

 

(b)           Ifat the time such successor or successors by consolidation, merger or conversionto the Indenture Trustee shall succeed to the trusts created by this Indenture,any of the Notes shall have been authenticated but not delivered, any suchsuccessor to the Indenture Trustee may adopt the certificate of authenticationof any predecessor trustee and deliver such Notes so authenticated, and in caseat that time any of the Notes shall not have been authenticated, any suchsuccessor to the Indenture Trustee may authenticate such Notes either in thename of any predecessor trustee or in the name of the successor to theIndenture Trustee.  In all such casessuch certificates shall have the full force which the Notes or this Indentureprovide that the certificate of the Indenture Trustee shall have.

** **

**Section 6.10.        Eligibility; Disqualification.**

 

(a)           Notwithstandingany other provisions of this Indenture, at any time, for the purpose of meetingany legal requirement of any jurisdiction in which any part of the Trust Estatemay at the time be located, the Indenture Trustee shall have the power and mayexecute

 

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and deliver an instrument to appoint one or more Personsto act as a co-trustee or co-trustees, jointly with the Indenture Trustee, orseparate trustee or separate trustees, of all or any part of the Trust Estate,and to vest in such Person or Persons, in such capacity and for the benefit ofthe Noteholders, such title to the Trust Estate, or any part hereof, and,subject to the other provisions of this Section 6.10, such powers,duties, obligations, rights and trusts as the Indenture Trustee may considernecessary or desirable.  No co-trustee orseparate trustee under this Indenture shall be required to meet the terms ofeligibility as a successor trustee under this Section 6.10 and no noticeof the appointment of any co-trustee or separate trustee shall be requiredunder Section 6.8.

 

(b)           Eachseparate trustee and co-trustee shall, to the extent permitted by law, beappointed and act subject to the following provisions and conditions:

 

(i)            all rights, powers, duties andobligations conferred or imposed upon the Indenture Trustee shall be conferredor imposed upon and exercised or performed by the Indenture Trustee and suchseparate trustee or co-trustee jointly (it being understood that such separatetrustee or co-trustee shall not be authorized to act separately without theIndenture Trustee joining in such act), except to the extent that under any lawof any jurisdiction in which any particular act or acts are to be performed theIndenture Trustee shall be incompetent or unqualified to perform such act oracts, in which event such rights, powers, duties and obligations (including theholding of title to the Trust Estate or any portion thereof in any suchjurisdiction) shall be exercised and performed singly by such separate trusteeor co-trustee, but solely at the direction of the Indenture Trustee;

 

(ii)           no trustee under this Indenture shallbe personally liable by reason of any act or omission of any other trusteeunder this Indenture; and

 

(iii)          the Indenture Trustee may at any timeaccept the resignation of or remove any separate trustee or co-trustee.

 

(c)           Anynotice, request or other writing given to the Indenture Trustee shall be deemedto have been given to each of the then separate trustees and co-trustees aseffectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shallrefer to this Indenture and the conditions of this Article VI.  Each separate trustee and co-trustee, uponits acceptance of the trusts conferred, shall be vested with the estates orproperty specified in its instrument of appointment, either jointly with theIndenture Trustee or separately, as may be provided therein, subject to all theprovisions of this Indenture, specifically including every provision of thisIndenture relating to the conduct of, affecting the liability of, or affordingprotection to, the Indenture Trustee. Each such instrument shall be filed with the Indenture Trustee.

 

(d)           Anyseparate trustee or co-trustee may at any time constitute the Indenture Trusteeits agent or attorney-in-fact with full power and authority, to the extentpermitted by law, to do any lawful act under or in respect of this Indenture onits behalf and in its name.  If anyseparate trustee or co-trustee shall die, become incapable of acting, resign orbe removed, all of its estates, properties, rights, remedies and trusts shallvest in and be exercised by the Indenture Trustee, to the extent permitted bylaw, without the appointment of a new or successor trustee.

 

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(e)           TheIndenture Trustee or its parent shall have a combined capital, surplus andundivided profits of at least $50,000,000 as set forth in its most recentpublished annual report of condition and shall have a long-term debt rating ofinvestment grade by each of the Rating Agencies or shall otherwise beacceptable to each of the Rating Agencies and the Insurer (provided that noInsurer Default has occurred and is continuing).

** **

**Article VI-A**

** **

**Section 6A.1         Possession of Contract Files by the Custodian.**

 

(a)           TheIssuer hereby covenants and agrees with the Indenture Trustee to deliver orcause to be delivered to the Custodian all Contract Files (i) related toContracts sold to the Issuer on the Closing Date no later than the Closing Dateand (ii) related to Contracts sold to the Issuer on an Additional ContractPurchase Date, no later than such Additional Contract Purchase Date.  The Custodian shall continuously hold theContract Files (i) in trust for, and as bailee of, the Indenture Trustee and asbailee for the Issuer for purposes of establishing the Issuer’s ownershipthereof, (ii) for purposes of perfecting the Indenture Trustee’s securityinterest therein, to the extent available under applicable law, for the benefitof the Noteholders and the Insurer, and establishing the Issuer’s ownership thereofsubject to such security interest, (iii) to restrict the possession thereof byany other person except as permitted in accordance with the terms of this ArticleVI-A, and (iv) subject to and in accordance with the terms and provisionsof this Article VI-A.

 

(b)           Subjectto the terms and conditions hereof, the Indenture Trustee and the Issuer herebyappoint Wells Fargo Bank, National Association, as Custodian, and Wells FargoBank, National Association hereby accepts such appointment, to act as custodianand bailee of the Issuer and the Indenture Trustee, for the benefit of theNoteholders and the Insurer, for purposes of Article 9 of the Relevant UCC, tomaintain custody of the Contract Files until the Servicer shall have delivereda release with respect to any such Contract Files in accordance with the termsof the Servicing Agreement.

 

(c)           TheCustodian will promptly report to the Indenture Trustee and the Insurer anyfailure on its part to hold the Contract Files as herein provided and promptlytake appropriate action to remedy any such failure.

 

(d)           TheCustodian shall (i) maintain in effect a fidelity bond and errors and omissionsinsurance, affording coverage to such employees, directors, officers and otherPersons acting on the Custodian’s behalf and in an amount customary forcustodians of automobile loans similar to the Contracts or (ii) self-insure atlevels and in a manner acceptable to the Insurer.

 

(e)           AllContract Files held by the Custodian under this Indenture shall be placed bythe Issuer in a separate file for each Contract File, properly fastened orsecured.

 

(f)            Atthe time of delivery by or on behalf of the Issuer to the Custodian of anyContract File or other documents related to a Contract, the Issuer shall alsodeliver a list in an electronic format acceptable to the Custodian (the “*File Number List*”) of Contract Filenumbers (the “*File Numbers*”).  The Custodian shall check the File Numbers ofthe Contract Files delivered pursuant to this Indenture and certify to theSeller, the Insurer, the Issuer and the

 

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Indenture Trusteein writing within 48 hours after delivery of the File Number List, that it hasreceived all the Contract Files corresponding to the File Number List.  If upon examination of the Contract Files,the Custodian determines that it does not have all the Contract Files on theFile Number List, the Custodian shall promptly give written notice of the sameto the Indenture Trustee, the Insurer, the Issuer and the Seller.

 

(g)           Withoutany limitation of Section 6A.1(a) or (b) hereof, following theCustodian’s receipt of each Contract File, the Custodian shall retainpossession and custody thereof, subject to the terms of this Indenture, for theexclusive benefit of, in trust for, and as bailee of, the Indenture Trustee andfor purposes (i) of perfecting the Indenture Trustee’s security interesttherein, to the extent available under applicable law, for the benefit of theNoteholders and the Insurer and as bailee of the Issuer for purposes ofestablishing the Issuer’s ownership thereof and (ii) of restricting thepossession thereof by any person except as permitted in accordance with theterms of this Article, until and unless such security interest in any ContractFile is released pursuant to the terms of Section 6A.2 hereof.  Upon such receipt the Custodian shall alsomake appropriate notations in the Custodian’s books and records reflecting thatthe Contract File has been pledged to the Indenture Trustee for the benefit ofthe Noteholders and the Insurer and that the Indenture Trustee has acquired andholds a security interest therein. Notwithstanding any other provisions of this Indenture, the Custodianshall not at any time exercise or seek to enforce any claim, right or remedy,including any statutory or common law rights of set-off, that it mightotherwise have against all or any of the Contract Files or related documents orthe proceeds thereof.

** **

**Section 6A.2         Release of Contract Files by the Custodian.**

 

(a)           TheCustodian shall promptly release any Contract File then held by it to theServicer upon receipt of (i) a written request for release of such ContractFile signed by an Authorized Representative of the Servicer in the formattached hereto as Exhibit D or (ii) an email request by an AuthorizedRepresentative of the Servicer containing the information described in ExhibitD, followed by a signed copy of such Exhibit D; provided, however,that the Custodian shall be deemed to have received proper instructions withrespect to the Contract Files upon its receipt of such a written or emailedrequest from an Authorized Representative of the Servicer.  “Authorized Representative of the Servicer”shall mean an individual certified by the Secretary of the Servicer as anindividual who is authorized to give instructions to the Custodian as set forthon a certificate delivered to the Custodian, the Issuer, the Insurer and theIndenture Trustee on the Closing Date or on any such subsequent certificatedelivered to the Custodian, the Issuer, the Insurer and the Indenture Trustee.

 

(b)           TheCustodian shall promptly deliver to the Indenture Trustee or its designee anyor all Contract Files in the Custodian’s custody upon the written request of anAuthorized Officer of the Indenture Trustee. The Indenture Trustee shall provide the Issuer, the Insurer and theServicer with a copy of any such request delivered to the Custodian.  Written instructions as to the method ofshipment and shipper(s) the Custodian is directed to utilize in connection withthe delivery of Contract Files in the performance of the Custodian’s dutieshereunder shall be delivered by the Indenture Trustee to the Custodian prior toany shipment of Contract Files pursuant to the request of Indenture Trusteehereunder.  The Indenture Trustee willarrange for the provision of such services at the cost and expense of theIssuer (or, at the Custodian’s option

 

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the Custodianshall be reimbursed by the Issuer for all costs and expenses incurred by theCustodian consistent with such instructions (it being understood that any suchreimbursement shall be paid in accordance with the priorities set forth inSection 3.5(d) of the Sale and Allocation Agreement)) and will maintain such insuranceagainst loss or damage to the Contract Files as the Indenture Trustee and theServicer reasonably deem appropriate. “Authorized Officer of the Indenture Trustee” shall mean an officercertified by the Secretary of the Indenture Trustee as an officer who isauthorized to give instructions to the Custodian as set forth on a certificatedelivered to the Custodian, the Issuer and the Insurer on the Closing Date oron any such subsequent certificate delivered to the Custodian, the Issuer andthe Insurer.

** **

**Section 6A.3         Regarding the Custodian.**

 

(a)           TheCustodian undertakes to perform only such duties as are expressly set forthherein.

 

(b)           TheCustodian may rely and shall be protected in acting or refraining from actingupon any written notice, instruction or request furnished to it hereunder andbelieved by it to be genuine and to have been signed or presented by the properparty or parties.  The Custodian shall beunder no duty to inquire into or investigate the validity, accuracy or contentof any such document.  The Custodianshall have no duty to verify the authenticity, genuineness or conformity to therequirements of this Indenture of any Contract Files or related documentsdelivered to it hereunder, or to determine whether the materials included in anyContract File conform to the requirements hereof.

 

(c)           TheCustodian shall not be liable for any action taken or omitted by it in goodfaith unless a court of competent jurisdiction determines that the Custodian’swillful misconduct, gross negligence or bad faith was the primary cause of anyloss to the Issuer, the Insurer or the Indenture Trustee.  In the administration of the custodialaccount hereunder, the Custodian may execute any of its powers and perform itsduties hereunder directly or through agents or attorneys and may consult withcounsel, accountants and other skilled persons to be selected and retained byit.  The Custodian shall not be liablefor anything done, suffered or omitted in good faith by it in accordance withthe advice of counsel.

 

(d)           TheIssuer agrees to indemnify and hold the Custodian and its directors, officers,agents and employees (collectively the “*Indemnitees*”)harmless from and against any and all claims, liabilities, losses, damages,fines, penalties, and expenses, including out-of-pocket and incidental expensesand legal fees and expenses (collectively, together with the amounts specifiedas “Losses” pursuant to Section 6.7(a), the “*Losses*”) that may be imposed on,incurred by, or asserted against, the Indemnitees or any of them for followingany instructions or other directions upon which the Custodian is authorized torely pursuant to the terms of this Indenture (it being understood that suchLosses shall be paid pursuant to Section 3.5(d) of the Sale and Allocation Agreement).

 

(e)           Inaddition to and not in limitation of paragraph (d) immediately above,the Issuer also agrees to indemnify and hold the Indemnitees and each of themharmless from and against any and all Losses that may be imposed on, incurredby, or asserted against, the Indemnitees or any of them in connection with orarising out of the Custodian’s performance under this

 

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Indenture,provided the Indemnitees have not acted with gross negligence or bad faith orengaged in willful misconduct or breach of contract (it being understood thatsuch Losses shall be paid pursuant to Section 3.5(d) of the Sale and AllocationAgreement).

 

(f)            Theduties and responsibilities of the Custodian hereunder shall be determinedsolely by the express provisions of this Indenture, and no other or furtherduties or responsibilities shall be implied. The Custodian shall not have any liability under, nor duty to inquireinto the terms and provisions of, any agreement or instructions, other than asspecifically required by this Indenture.

 

(g)           TheCustodian shall not incur any liability for following the instructions hereincontained or expressly provided for, or written instructions given by theparties hereto in accordance with the express provisions hereof.

 

(h)           Inthe event that the Custodian shall be uncertain as to its duties or rightshereunder or shall receive instructions, claims or demands from any partyhereto which, in its opinion, conflict with any of the provisions of thisIndenture, it shall be entitled to refrain from taking any action and its soleobligation shall be to request definitive instructions from the other partieshereto and to keep safely all property held in custody until it shall bedirected otherwise in writing by all of the other parties hereto or by a finalorder or judgment of a court of competent jurisdiction.

 

(i)            Anycorporation or association into which the Custodian in its individual capacitymay be merged or converted or with which it may be consolidated, or anycorporation or association resulting from any merger, conversion orconsolidation to which the Custodian in its individual capacity shall be aparty, or any corporation or association to which all or substantially all ofthe corporate trust business of the Custodian in its individual capacity may besold or otherwise transferred, shall be the Custodian under this Indenturewithout further act.

 

(j)            Anythingin this Indenture to the contrary notwithstanding, in no event shall theCustodian be liable for special, indirect or consequential loss or damage ofany kind whatsoever (including but not limited to lost profits), even if theCustodian has been advised of the likelihood of such loss or damage andregardless of the form of action.

 

(k)           TheCustodian agrees to maintain the Contract Files which are delivered to it atthe offices of the Custodian located at: ABS Custody Vault, 751 Kasota Avenue,MAC N9328-011, Minneapolis, Minnesota 55414, Attn: Corporate Trust Services — Asset Backed Securities Vault,and the Custodian shall notify the Indenture Trustee, the Issuer and theInsurer by written notice of any change in the location of the ContractFiles.  Subject to the foregoing, theCustodian may temporarily move individual Contract Files or any portion thereofwithout notice as necessary to allow the Servicer to conduct collection andother servicing activities in accordance with its customary practices andprocedures.

 

(l)            TheCustodian shall hold the Contract Files in its fire-resistant storage vaultunder its exclusive custody and control in accordance with customary standardsfor such custody and shall maintain a fidelity bond plus document hazardinsurance in such amounts and against such risks as customarily are maintainedby custodians acting in a similar capacity to the Custodian

 

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hereunder withrespect to receivables similar to the Contracts.  If the Indenture Trustee or the Issuersuffers losses or damages as a result of the destruction or loss of any of theContract Files or any item therein, the Custodian shall:  (i) at the request of the Indenture Trusteeor the Issuer, make any appropriate claim under such bond or insurance; and(ii) to the extent of the Indenture Trustee’s or the Issuer’s losses ordamages, pay the proceeds thereof to the Indenture Trustee, or if all of theIssuer’s obligations under this Indenture and the Notes and the InsuranceAgreement have been paid in full, to the Issuer, unless the Custodian hasreplaced the lost or destroyed items or has otherwise reimbursed the IndentureTrustee or the Issuer, as applicable, for such losses or damages.  The Custodian shall maintain the ContractFiles segregated from and not commingled with any other files of the Custodian.

 

(m)          TheCustodian shall not deliver physical possession of, or otherwise transfer,assign, pledge, mortgage, convey or dispose of any Contract Files in itspossession to any Person except (i) as provided in this Article VI-A andthe Servicing Agreement, and (ii) upon termination of this Indenture.

 

(n)           TheCustodian hereby waives any and all rights of offset with respect to any andall Contract Files in the Custodian’s possession, whether such right of offsetarises by contract, operation of law or otherwise.

 

(o)           TheCustodian specifically acknowledges and agrees that so long as Wells FargoBank, National Association, is acting as Custodian under this Indenture in theevent that Wells Fargo Bank, National Association shall either be terminated orresign as Indenture Trustee pursuant to this Indenture, then the Custodianshall similarly either be terminated or resign and the Custodian shall deliverthe Contract Files to the successor Indenture Trustee, acting as successorCustodian, appointed pursuant to the terms of this Indenture at such place asthe successor Custodian may reasonably designate.  Any entity acting as Custodian hereunder maynot resign as such unless such entity also resigns its capacity as Indenture Trustee.

 

(p)           Exceptfor actions expressly authorized by this Article, the Custodian shall take noaction which would or would be likely to impair the security interests createdor existing under any Contract or Financed Vehicle or to impair the value ofany Contract or Financed Vehicle.

 

(q)           TheCustodian hereby agrees not to assert (in its individual capacity or otherwise)any liens of any kind with respect to the Contract Files (except in its role asIndenture Trustee and secured party with respect to the liens created pursuantto this Indenture and secured party assignee with respect to the liens createdpursuant to the Contribution Agreement and the Sale and Allocation Agreement)held by it or the related Contracts and hereby releases and waives any suchliens.

 

(r)            TheCustodian shall permit inspection at all reasonable times upon at least two (2)Business Days prior notice during regular business hours by the Issuer, theIndenture Trustee or the Insurer (or by its auditors when requested by theIssuer, the Insurer or the Indenture Trustee, as applicable) of the ContractFiles and the records of the Custodian relating to this Article (or itsauditors when requested by the Issuer, the Insurer or the Indenture Trustee, asapplicable) to make copies of the Contract Files and the records of the Custodianrelating to this Indenture.

 

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**ArticleVIINoteholders’ Lists and Reports**

** **

**Section 7.1.           Issuer to Furnish Indenture Trustee Names and Addressesof Noteholders.**

 

The Issuer shall furnish or cause to be furnished tothe Indenture Trustee (i) within five (5) days after each Record Date, a list,in such form as the Indenture Trustee may reasonably require, of the names andaddresses of the Class A Noteholders as of such Record Date and (ii) at such othertimes as the Indenture Trustee may request in writing, within thirty (30) daysafter receipt by the Issuer of any such request, a list of similar form andcontent as of a date not more than ten (10) days prior to the time such list isfurnished; provided, however, that so long as the Indenture Trustee is the NoteRegistrar or the Class A Notes are issued as Book-Entry Notes, no such listshall be required to be furnished.

** **

**Section 7.2.           Preservation of Information; Communications toNoteholders.**

 

The Indenture Trustee shall preserve, in as current aform as is reasonably practicable, the names and addresses of the Noteholderscontained in the most recent list furnished to the Indenture Trustee asprovided in Section 7.1 and the names and addresses of the Noteholdersreceived by the Indenture Trustee in its capacity as Note Registrar.  The Indenture Trustee may destroy any listfurnished to it as provided in Section 7.1 upon receipt of a new list sofurnished.

** **

**Section 7.3.           Fiscal Year.**

 

Unless the Issuer otherwise determines, the FiscalYear of the Issuer shall end on April 30 of each year.

** **

**ArticleVIIIAccounts, Disbursements and Releases**

** **

**Section 8.1.           Collection of Money Collection.**

 

Except as otherwise expressly provided herein, theIndenture Trustee may demand payment or delivery of, and shall receive andcollect, directly and without intervention or assistance of any fiscal agent orother intermediary, all money and other property payable to or receivable bythe Indenture Trustee pursuant to this Indenture and the Sale and AllocationAgreement.  The Indenture Trustee shallapply all such money received by it as provided in this Indenture and the Saleand Allocation Agreement.  Except asotherwise expressly provided in this Indenture, if any default occurs in themaking of any payment or performance under any agreement or instrument that ispart of the Trust Estate, the Indenture Trustee may take such action as may beappropriate to enforce such payment or performance, including the institutionand prosecution of appropriate Proceedings. Any such action shall be without prejudice to any right to claim aDefault or Event of Default under this Indenture and any right to proceedthereafter as provided in Article V.

 

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**Section 8.2.           Trust Accounts.**

 

(a)           Onor before the Closing Date, the Issuer shall cause the Servicer to establishand maintain, in the name of the Indenture Trustee, for the benefit of theInsurer and the Noteholders, the Collection Account as provided in Section 3.1of the Sale and Allocation Agreement.

 

(b)           Onor before the Closing Date, the Issuer shall cause the Servicer to establishand maintain, in the name of the Indenture Trustee, for the benefit of theClass A Noteholders and the Insurer, the Reserve Account as provided in Section3.6(a) of the Sale and Allocation Agreement.

 

(c)           Oneach Payment Date, the Indenture Trustee shall apply or cause to be applied theamount on deposit in the Collection Account on such Payment Date in accordancewith Section 3.5(d) of the Sale and Allocation Agreement or Section 5.4(b),as applicable.

 

(d)           Onor before the Closing Date, the Issuer shall cause the Servicer to establishand maintain, in the name of the Indenture Trustee, for the exclusive benefitof the Class A Noteholders, the Class A Note Payment Account as provided inSection 3.1(b) of the Sale and Allocation Agreement and, for the exclusivebenefit of the Class B Noteholders, the Class B Note Payment Account.  On each Payment Date, the Indenture Trusteeshall apply or cause to be applied the amount on deposit in the Class A NotePayment Account and the Class B Note Payment Account on such Payment Date inaccordance with Section 2.8(b) or (f), as applicable.

 

(e)           Onor before the Closing Date, the Issuer shall cause the Servicer to establishand maintain, in the name of the Indenture Trustee, for the exclusive benefitof the Class A Noteholders, the Class B Noteholders and the Insurer, thePrefunding Account as provided in Section 3.7(a) of the Sale and AllocationAgreement.

** **

**Section 8.3.           General Provisions Regarding Accounts.**

 

(a)           Solong as no Default or Event of Default shall have occurred and be continuing,all or a portion of the funds in the Trust Accounts shall be invested by theIndenture Trustee at the direction of the Servicer in Eligible Investments asprovided in Sections 3.1 and 3.6(b) of the Sale and Allocation Agreement.  All income or other gain (net of losses andinvestment expenses) from investments of monies deposited in the Trust Accountsshall be withdrawn by the Indenture Trustee from such accounts and deposited tothe Collection Account and shall constitute Available Funds.  The Servicer shall not direct the IndentureTrustee to make any investment of any funds or to sell any investment held inany of the Trust Accounts unless the security interest Granted and perfected insuch account will continue to be perfected in such investment or the proceedsof such sale, in either case without any further action by any Person, and, inconnection with any direction to the Indenture Trustee to make any suchinvestment or sale, if requested by the Indenture Trustee, the Issuer shalldeliver to the Indenture Trustee an Opinion of Counsel, acceptable to theIndenture Trustee, to such effect.

 

(b)           Subjectto Section 6.1(c), the Indenture Trustee shall not in any way be heldliable by reason of any insufficiency in any of the Trust Accounts resultingfrom any loss on any Permitted Investment included therein, except for lossesattributable to the Indenture Trustee’s

 

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failure to make payments on such Eligible Investmentsissued by the Indenture Trustee, in its commercial capacity as principalobligor and not as trustee, in accordance with their terms.

 

(c)           If(i) the Servicer shall have failed to give investment directions for any fundson deposit in the Trust Accounts to the Indenture Trustee by 11:00 A.M. (NewYork City time) (or such other time as may be agreed upon by the Issuer andIndenture Trustee), on the Business Day preceding each Payment Date, (ii) aDefault or Event of Default shall have occurred and be continuing with respectto the Notes but the Notes shall not have been declared due and payablepursuant to Section 5.2 or (iii) if the Notes shall have been declareddue and payable following an Event of Default, amounts collected or receivablefrom the Trust Estate are being applied in accordance with Section 5.4as if there had not been such a declaration, then the Indenture Trustee shall,to the fullest extent practicable, invest and reinvest funds in the TrustAccounts in Eligible Investments described in clause (vii) of the definitionthereof.

** **

**Section 8.4.           Release of Trust Estate.**

 

(a)           Subjectto the payment of its fees and expenses pursuant to Section 6.7, the IndentureTrustee may, and when required by the provisions of this Indenture shall,execute instruments to release property from the lien of this Indenture, orconvey the Indenture Trustee’s interest in the same, in a manner and undercircumstances that are not inconsistent with the provisions of thisIndenture.  No party relying upon aninstrument executed by the Indenture Trustee as provided in this ArticleVIII shall be bound to ascertain the Indenture Trustee’s authority, inquireinto the satisfaction of any conditions precedent or see to the application ofany monies.

 

(b)           TheIndenture Trustee shall, at such time as there are no Notes Outstanding, thePolicy has been terminated in accordance with its terms and has been returnedto the Insurer for cancellation and all sums due the Indenture Trustee and theInsurer pursuant to Section 6.7 have been paid in full, release anyremaining portion of the Trust Estate that secured the Notes from the lien ofthis Indenture and release to the Issuer or any other Person entitled theretoany funds then on deposit in the Trust Accounts.  The Indenture Trustee shall release propertyfrom the lien of this Indenture pursuant to this Section 8.4(b) onlyupon receipt of an Issuer Request accompanied by an Issuer’s Certificate and anOpinion of Counsel.

** **

**Section 8.5.           Opinion of Counsel**

 

The Indenture Trustee shall receive at least seven (7)days notice when requested by the Issuer to take any action pursuant to Section8.4(a), accompanied by copies of any instruments involved, and theIndenture Trustee shall also require, except in connection with any actioncontemplated by Section 8.4(b), as a condition to such action, anOpinion of Counsel, in form and substance satisfactory to the Indenture Trustee,stating the legal effect of any such action, outlining the steps required tocomplete such action, and concluding that all conditions precedent to thetaking of such action have been complied with and such action will notmaterially and adversely impair the security for the Notes or the rights of theNoteholders or the Insurer in contravention of the provisions of thisIndenture; provided, however, that such Opinion of Counsel shallnot be required to express an opinion as to the fair value of the TrustEstate.  Counsel rendering any suchopinion may rely, without independent investigation, on the

 

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accuracy andvalidity of any certificate or other instrument delivered to the IndentureTrustee in connection with any such action.

** **

**Article IX********Supplemental Indentures**

** **

**Section 9.1.           Supplemental Indentures Without Consent of Noteholders.**

 

The Issuer and the Indenture Trustee, when authorizedby an Issuer Order, may, without the consent of the Holders of any Notes butwith prior notice to the Rating Agencies and the Insurer and with the consentof the Insurer (if no Insurer Default shall have occurred and be continuing),at any time and from time to time, enter into one or more indenturessupplemental hereto, in form satisfactory to the Indenture Trustee, for any ofthe following purposes:

 

(a)           tocorrect or amplify the description of any property at any time subject to thelien of this Indenture, or better to assure, convey and confirm unto theIndenture Trustee any property subject or required to be subjected to the lienof this Indenture, or to subject to the lien of this Indenture additionalproperty;

 

(b)           toevidence the succession, in compliance with the applicable provisions hereof,of another Person to the Issuer, and the assumption by any such successor ofthe covenants of the Issuer herein and in the Notes contained;

 

(c)           toadd to the covenants of the Issuer, for the benefit of the Noteholders and theInsurer, or to surrender any right or power herein conferred upon the Issuer;

 

(d)           toconvey, transfer, assign, mortgage or pledge any property to or with theIndenture Trustee;

 

(e)           tocure any ambiguity, to correct or supplement any provision herein or in anysupplemental indenture that may be inconsistent with any other provision hereinor in any supplemental indenture or to make any other provisions with respectto matters or questions arising under this Indenture which will not beinconsistent with other provisions of this Indenture;

 

(f)            toevidence and provide for the acceptance of the appointment hereunder by asuccessor trustee with respect to the Notes and to add to or change any of theprovisions of this Indenture as shall be necessary to facilitate theadministration of the trusts hereunder by more than one trustee, pursuant tothe requirements of Article VI; or

 

(g)           tomodify, eliminate or add to the provisions of this Indenture to such extent asshall be necessary to effect the qualification of this Indenture under anyfederal statute hereafter enacted.

 

provided, however, that (i) such action shallnot, as evidenced by an Opinion of Counsel which may be based on an officer’scertificate of the Issuer, adversely affect in any material respect theinterests of any Noteholder or the Insurer, (ii) the Rating Agency Conditionshall have been

 

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satisfied withrespect to such action and (iii) such action shall not, as evidenced by anOpinion of Counsel, cause the Issuer to be characterized for federal income taxpurposes as an association or publicly traded partnership taxable as acorporation or otherwise have any material adverse impact on the federal incometaxation of any Notes Outstanding or any Noteholder.  The Indenture Trustee is hereby authorized tojoin in the execution of any such supplemental indenture and to make anyfurther appropriate agreements and stipulations that may be therein contained.

** **

**Section 9.2.           Supplemental Indentures with Consent of Noteholders.**

 

The Issuer and the Indenture Trustee, when authorizedby an Issuer Order, may, with the consent of the Insurer (if no Insurer Defaultshall have occurred and be continuing) and the Noteholders evidencing not lessthan 51% of the Class A Note Balance and with prior notice to the Rating Agenciesand the Insurer, by Act of such Holders delivered to the Issuer and theIndenture Trustee, at any time and from time to time, enter into one or moreindentures supplemental hereto for the purpose of adding any provisions to, orchanging in any manner or eliminating any of the provisions of, this Indentureor modifying in any manner the rights of the Noteholders under this Indenture; provided,however, that (a) such action shall not, as evidenced by an Opinion ofCounsel, which may be based on a certificate of the Issuer, adversely affect inany material respect the interests of any Noteholder or the Insurer, (b) theRating Agency Condition shall have been satisfied with respect to such actionand (c) such action shall not, as evidenced by an Opinion of Counsel, cause theIssuer to be characterized for federal income tax purposes as an association orpublicly traded partnership taxable as a corporation or otherwise have anymaterial adverse impact on the federal income taxation of any Notes Outstandingor any Noteholder; and, provided further, that no such supplemental indentureshall, without the consent of the Insurer and the Holder of each OutstandingNote affected thereby:

 

(i)            change the Final Note Payment Datefor any Class of Notes or the date of payment of any installment of principalof or interest, if applicable, on any Class of Notes, or reduce the principalamount thereof, the interest rate thereon or the Redemption Price with respectthereto, change the provisions of this Indenture relating to the application ofcollections on, or the proceeds of the sale of, the Trust Estate to payment ofprincipal of or interest, if applicable on any Class of Notes, or change anyplace of payment where, or the coin or currency in which, any Note or the interestthereon is payable;

 

(ii)           impair the right to institute suitfor the enforcement of the provisions of this Indenture requiring theapplication of available funds, as provided in Article V, to the paymentof any amount due on any Class of Notes on or after the respective due datesthereof (or, in the case of redemption, on or after the Redemption Date);

 

(iii)          reduce the percentage of the Notes theconsent of the Holders of which is required for any such supplemental indentureor for any waiver of compliance with certain provisions of this Indenture or ofcertain defaults hereunder and their consequences as provided in thisIndenture;

 

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(iv)          modify or alter the provisions of theproviso to the definition of the term “Outstanding”;

 

(v)           reduce the percentage of theprincipal balance of the Notes the consent of the Holders of which is requiredto direct the Indenture Trustee to sell or liquidate the Trust Estate pursuantto Section 5.4 if the proceeds of such sale would be insufficient to payin full the principal amount of and accrued but unpaid interest, if applicable,on any Class of Notes;

 

(vi)          modify any provision of this Indenturespecifying a percentage of the principal amount of the Notes necessary to amendthis Indenture or the other Transaction Documents except to increase anypercentage specified herein or to provide that certain additional provisions ofthis Indenture or the other Transaction Documents cannot be modified or waivedwithout the consent of the Holders of each Outstanding Note affected thereby;

 

(vii)         modify any of the provisions of thisIndenture in such a manner as to affect the calculation of the amount of anypayment of interest, if applicable, or principal due on any Class of Notes onany Payment Date (including the calculation of any of the individual componentsof such calculation) or to affect the rights of the Noteholders to the benefitof any provisions for the mandatory redemption of the Notes contained herein;or

 

(viii)        permit the creation of any lien rankingprior to or on a parity with the lien of this Indenture with respect to anypart of the Trust Estate or, except as otherwise permitted or contemplatedherein, terminate the lien of this Indenture on any such collateral at any timesubject hereto or deprive the Holder of any Note of the security provided bythe lien of this Indenture.

 

The Indenture Trustee may in its discretion determinewhether or not any Notes would be affected by any supplemental indenture andany such determination shall be conclusive upon the Holders of all Notes,whether theretofore or thereafter authenticated and delivered hereunder.  The Indenture Trustee shall not be liable forany such determination made in good faith.

 

It shall not be necessary for any Act of Noteholdersunder this Section 9.2 to approve the particular form of any proposedsupplemental indenture, but it shall be sufficient if such Act shall approvethe substance thereof.  Promptly afterthe execution by the Issuer and the Indenture Trustee of any supplementalindenture pursuant to this Section 9.2, the Indenture Trustee shall mailto the Noteholders to which such amendment or supplemental indenture relates anotice setting forth in general terms the substance of such supplementalindenture.  Any failure of the IndentureTrustee to mail such notice, or any defect therein, shall not, however, in anyway impair or affect the validity of any such supplemental indenture.

** **

**Section 9.3.           Execution of Supplemental Indentures.**

 

In executing, or permitting the additional trustscreated by, any supplemental indenture permitted by this Article IX orthe modification thereby of the trusts created by this Indenture, the IndentureTrustee shall be entitled to receive and, subject to Sections 6.1 and 6.2,shall be

 

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fully protected inrelying upon an Opinion of Counsel stating that the execution of suchsupplemental indenture is authorized or permitted by this Indenture and thatall conditions precedent in this Indenture to the execution and delivery ofsuch supplemental indenture have been satisfied.  The Indenture Trustee may, but shall not beobligated to, enter into any such supplemental indenture that affects theIndenture Trustee’s own rights, duties, liabilities or immunities under thisIndenture or otherwise.

** **

**Section 9.4.           Effect of Supplemental Indenture.**

 

Upon the execution of any supplemental indenturepursuant to the provisions hereof, this Indenture shall be and shall be deemedto be modified and amended in accordance therewith with respect to the Notesaffected thereby, and the respective rights, limitations of rights,obligations, duties, liabilities and immunities under this Indenture of theIndenture Trustee, the Issuer and the Noteholders shall thereafter bedetermined, exercised and enforced hereunder subject in all respects to suchmodifications and amendments, and all the terms and conditions of any suchsupplemental indenture shall be and be deemed to be part of the terms and conditionsof this Indenture for any and all purposes.

** **

**Section 9.5.           Reference in Notes to Supplemental Indentures.**

 

Any Notes authenticated and delivered after theexecution of any supplemental indenture pursuant to this Article IX may,and if required by the Indenture Trustee shall, bear a notation in formapproved by the Indenture Trustee as to any matter provided for in suchsupplemental indenture.  If the Issuer orthe Indenture Trustee shall so determine, new Notes so modified as to conform,in the opinion of the Indenture Trustee and the Issuer, to any suchsupplemental indenture may be prepared and executed by the Issuer andauthenticated and delivered by the Indenture Trustee in exchange forOutstanding Notes.

** **

**ArticleXRedemption of Notes**

** **

**Section 10.1.        Redemption.**

 

The Notes are subject to redemption in whole, but notin part, at the direction of the Issuer on any Payment Date on which theDepositor exercises its option to purchase the assets of the Issuer pursuant toSection 5.16 of the Sale and Allocation Agreement.  The amount paid by the Depositor pursuant tosuch Section 5.16 shall be treated as collections in respect of the Contracts,constitute Available Funds and be applied to pay the unpaid principal amount ofthe Outstanding Notes and accrued and unpaid interest thereon plus all amountsowed to the Insurer, the Owner Trustee, the Indenture Trustee, the Servicer andthe Back-up Servicer under the Transaction Documents.  The Issuer shall furnish or shall cause theDepositor to furnish notice of such redemption to the Insurer, the Seller, theIndenture Trustee, the Rating Agencies and the Noteholders.  The Issuer shall cause the Depositor todeposit the Redemption Price in the Collection Account by 10:00 A.M. (New YorkCity time) on the Business Day prior to the Redemption Date, whereupon allNotes shall be due and payable on the Redemption Date.

 

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**Section 10.2.        Form of Redemption Notice.**

 

Notice of redemption of the Notes under Section10.1 shall be given by the Indenture Trustee by first-class mail, postageprepaid, or by facsimile mailed or transmitted promptly following receipt ofnotice from the Issuer or the Servicer pursuant to Section 10.1, but notlater than ten (10) days prior to the applicable Redemption Date, to eachHolder of the Notes as of the close of business on the Record Date precedingthe applicable Redemption Date, at such Holder’s address or facsimile numberappearing in the Note Register.

 

All notices of redemption shall state:

 

(a)           theRedemption Date;

 

(b)           theRedemption Price; and

 

(c)           theplace where the Notes are to be surrendered for payment of the applicableRedemption Price (which shall be the office or agency of the Issuer to bemaintained as provided in Section 3.2).

 

Notice of redemption of the Notes shall be given bythe Indenture Trustee in the name and at the expense of the Issuer.  Any failure to give notice of redemption, orany defect therein, to any Holder of any Note shall not, however, impair oraffect the validity of the redemption of any other Note.

** **

**Section 10.3.        Notes Payable on Redemption Date.**

 

The Notes to be redeemed shall, following notice ofredemption as required by Section 10.2 (in the case of redemptionpursuant to Section 10.1), become due and payable on the Redemption Dateat the Redemption Price and (unless the Issuer shall default in the payment ofthe Redemption Price) no interest shall accrue on the Redemption Price for anyperiod after the date to which accrued interest is calculated for purposes ofcalculating the Redemption Price.

** **

**ArticleXIMiscellaneous**

** **

**Section 11.1.        Compliance Certificates and Opinions, etc.**

 

(a)           Uponany application or request by the Issuer to the Indenture Trustee to take anyaction under any provision of this Indenture, the Issuer shall furnish to theIndenture Trustee (i) an Issuer’s Certificate stating that all conditionsprecedent, if any, provided for in this Indenture relating to the proposedaction have been complied with, (ii) an Opinion of Counsel stating that, in theopinion of such counsel, all such conditions precedent, if any, have beencomplied with.

 

Every certificate or opinion with respect tocompliance with a condition or covenant provided for in this Indenture shallinclude:

 

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(A)          a statement that each signatory ofsuch certificate or opinion has read or has caused to be read such covenant orcondition and the definitions herein relating thereto;

 

(B)           a brief statement as to the natureand scope of the examination or investigation upon which the statements oropinions contained in such certificate or opinion are based;

 

(C)           a statement that, in the opinion ofeach such signatory, such signatory has made such examination or investigationas is necessary to enable such signatory to express an informed opinion as towhether or not such covenant or condition has been complied with; and

 

(D)          a statement as to whether, in theopinion of each such signatory, such condition or covenant has been compliedwith.

 

(b)           Priorto the deposit of any Collateral or other property or securities with theIndenture Trustee that is to be made the basis for the release of any propertyor securities subject to the lien of this Indenture, the Issuer shall, inaddition to any obligation imposed in Section 11.1(a) or elsewhere inthis Indenture, deliver to the Indenture Trustee an Issuer’s Certificatecertifying or stating the opinion of each person signing such certificate as tothe fair value (within ninety (90) days of such deposit) to the Issuer of theCollateral or other property or securities to be so deposited.

 

(c)           Wheneverthe Issuer is required to furnish to the Indenture Trustee an Issuer’sCertificate certifying or stating the opinion of any signer thereof as to thematters described in Section 11.1(b), the Issuer shall also furnish tothe Indenture Trustee an Independent Certificate as to the same matters if thefair value to the Issuer of the property or securities to be so deposited andof all other such property or securities made the basis of any such withdrawalor release since the commencement of the then-current Fiscal Year of theIssuer, as set forth in the certificates furnished pursuant to Section11.1(b) and this Section 11.1(c), is ten percent (10%) or more ofthe Class A Note Balance, but such a certificate need not be furnished withrespect to any property or securities so deposited if the fair value thereof tothe Issuer as set forth in the related Issuer’s Certificate is less than$25,000 or less than one percent (1%) of the Class A Note Balance.

 

(d)           Wheneverany property or securities are to be released from the lien of this Indenture,the Issuer shall also furnish to the Indenture Trustee an Issuer’s Certificatecertifying or stating the opinion of each person signing such certificate as tothe fair value (within ninety (90) days of such release) of the property orsecurities proposed to be released and stating that in the opinion of suchperson the proposed release will not impair the security under this Indenturein contravention of the provisions hereof.

 

(e)           Wheneverthe Issuer is required to furnish to the Indenture Trustee an Issuer’sCertificate certifying or stating the opinion of any signer thereof as to thematters described in Section 11.1(d), the Issuer shall also furnish tothe Indenture Trustee an Independent Certificate as to the same matters if thefair value of the property or securities and of all other property,

 

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other than property as contemplated by Section11.1(f) or securities released from the lien of this Indenture since thecommencement of the then-current calendar year, as set forth in thecertificates required by Section 11.1(d) and this Section 11.1(e), isten percent (10%) or more of the Class A Note Balance, but such a certificateneed not be furnished in the case of any release of property or securities ifthe fair value thereof as set forth in the related Issuer’s Certificate is lessthan $25,000 or less than one percent (1%) of the Class A Note Balance.

 

(f)            NotwithstandingSection 2.10 or any other provisions of this Section 11.1, theIssuer may, without compliance with the requirements of the other provisions ofthis Section 11.1, (i) collect, liquidate, sell or otherwise dispose ofContracts and Financed Vehicles as and to the extent permitted or required bythe Transaction Documents and (ii) make cash payments out of the Trust Accountsas and to the extent permitted or required by the Transaction Documents.

** **

**Section 11.2.        Form of Documents Delivered to Indenture Trustee.**

 

(a)           Inany case where several matters are required to be certified by, or covered byan opinion of, any specified Person, it is not necessary that all such mattersbe certified by, or covered by the opinion of, only one such Person, or thatthey be so certified or covered by only one document, but one such Person maycertify or give an opinion with respect to some matters and one or more othersuch Persons as to other matters, and any such Person may certify or give anopinion as to such matters in one or several documents.

 

(b)           Anycertificate or opinion of an Authorized Officer of the Issuer may be based,insofar as it relates to legal matters, upon a certificate or opinion of, orrepresentations by, counsel, unless such officer knows, or in the exercise ofreasonable care should know, that the certificate or opinion or representationswith respect to the matters upon which such Issuer’s Certificate or opinion isbased are erroneous.  Any suchcertificate of an Authorized Officer or Opinion of Counsel may be based,insofar as it relates to factual matters, upon a certificate or opinion of, orrepresentations by, one or more officers of the Servicer, the Seller, theAdministrator or the Issuer, stating that the information with respect to suchfactual matters is in the possession of the Servicer, the Seller, theAdministrator or the Issuer, unless such Authorized Officer or counsel knows,or in the exercise of reasonable care should know, that the certificate oropinion or representations with respect to such matters are erroneous.

 

(c)           Whereany Person is required to make, give or execute two or more applications,requests, consents, certificates, statements, opinions or other instrumentsunder this Indenture, they may, but need not, be consolidated and form oneinstrument.

 

(d)           Wheneverin this Indenture, in connection with any application or certificate or reportto the Indenture Trustee, it is provided that the Issuer shall deliver anydocument as a condition of the granting of such application, or as evidence ofthe Issuer’s compliance with any term hereof, it is intended that the truth andaccuracy, at the time of the granting of such application or at the effectivedate of such certificate or report (as the case may be), of the facts andopinions stated in such document shall in such case be conditions precedent tothe right of the Issuer to have such application granted or to the sufficiencyof such certificate or report.  Theforegoing shall not, however, be construed to affect the Indenture Trustee’sright to rely upon the

 

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truth and accuracy of any statement or opinioncontained in any such document as provided in Article VI.

** **

**Section 11.3.        Acts of Noteholders.**

 

(a)           Anyrequest, demand, authorization, direction, notice, consent, waiver or otheraction provided by this Indenture to be given or taken by the Noteholders maybe embodied in and evidenced by one or more instruments of substantiallysimilar tenor signed by the Noteholders in person or by agents duly appointedin writing, and except as herein otherwise expressly provided such action shallbecome effective when such instrument or instruments are delivered to theIndenture Trustee and, where it is hereby expressly required, to theIssuer.  Such instrument or instruments(and the action embodied therein and evidenced thereby) are herein sometimesreferred to as the “Act” of the Noteholders signing such instrument orinstruments.  Proof of execution of anysuch instrument or of a writing appointing any such agent shall be sufficientfor any purpose of this Indenture and (subject to Section 6.1)conclusive in favor of the Indenture Trustee and the Issuer, if made in themanner provided in this Section 11.3.

 

(b)           Thefact and date of the execution by any Person of any such instrument or writingmay be proved in any manner that the Indenture Trustee deems sufficient.

 

(c)           Theownership of Notes shall be proved by the Note Register.

 

(d)           Anyrequest, demand, authorization, direction, notice, consent, waiver or otheraction by the Holder of any Notes shall bind the Holder of every Note issuedupon the registration thereof or in exchange therefor or in lieu thereof, inrespect of anything done, omitted or suffered to be done by the IndentureTrustee or the Issuer in reliance thereon, whether or not notation of suchaction is made upon such Note.

** **

**Section 11.4.        Notices, etc. to Indenture Trustee.**

 

Any request, demand, authorization, direction, notice,consent, waiver or Act of Noteholders or other documents provided or permittedby this Indenture shall be in writing and if such request, demand,authorization, direction, notice, consent, waiver, Act of Noteholders is to bemade upon, given or furnished to or filed with:

 

(a)           theIndenture Trustee by any Noteholder or by the Issuer, shall be sufficient forevery purpose hereunder if made, given, furnished or filed in writing to orwith the Indenture Trustee at its Corporate Trust Office;

 

(b)           theIssuer by the Indenture Trustee or by any Noteholder, shall be sufficient forevery purpose hereunder if in writing and mailed first-class, postage prepaidto the Issuer addressed to: First Investors Auto Owner Trust 2006-A, c/o WellsFargo Delaware Trust Company, 919 North Market Street, Suite 700, Wilmington,DE 19801, Attention: Corporate Trust Administration, or at any other addresspreviously furnished in writing to the Indenture Trustee by the Issuer or theAdministrator.  The Issuer shall promptlytransmit any notice received by it from the Noteholders to the IndentureTrustee; or

 

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(c)           theInsurer by the Indenture Trustee, the Servicer or any Noteholder, shall besufficient for every purpose hereunder if in writing and mailed first-class,postage prepaid to the Insurer addressed to MBIA Insurance Corporation, 113King Street, Armonk, New York 10504, Attention: Insured Portfolio Management,Structured Finance.

 

Notices required to be given to the Rating Agencies bythe Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,personally delivered, telecopied or mailed by certified mail, return receiptrequested, to (i) in the case of Moody’s, at the following address: Moody’sInvestors Service, Inc., 99 Church Street, 4th Floor, New York, New York 10007,ServicerReports@moodys.com, Attn: Yan Yan, with an additional copy to Moody’sInvestors Service, Inc., 99 Church Street, 4th Floor, New York, New York 10007,Attn: ABS Monitoring Department, and (ii) in case of S&P, if availableelectronically, at Servicer_reports@sandp.com, and if not availableelectronically, at the following address: Standard & Poor’s RatingsServices, a division of The McGraw-Hill Companies, Inc., 55 Water Street, 43rdFloor, New York, New York 10041, Attention: ABS Surveillance Group.

** **

**Section 11.5.        Notices to Noteholders; Waiver Notices to Noteholders.**

 

(a)           Wherethis Indenture provides for notice to Noteholders of any event, such noticeshall be sufficiently given (unless otherwise herein expressly provided) if inwriting and mailed, first-class, postage prepaid to each Noteholder affected bysuch event, at its address as it appears on the Note Register, not later thanthe latest date, and not earlier than the earliest date, prescribed for thegiving of such notice.  In any case wherenotice to Noteholders is given by mail, neither the failure to mail such noticenor any defect in any notice so mailed to any particular Noteholder shallaffect the sufficiency of such notice with respect to other Noteholders, andany notice that is mailed in the manner herein provided shall conclusively bepresumed to have been duly given.

 

(b)           Wherethis Indenture provides for notice in any manner, such notice may be waived inwriting by any Person entitled to receive such notice, either before or afterthe event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Noteholders shall befiled with the Indenture Trustee, but such filing shall not be a conditionprecedent to the validity of any action taken in reliance upon such a waiver.

 

(c)           If,by reason of the suspension of regular mail service as a result of a strike,work stoppage or similar activity, it shall be impractical to mail notice ofany event to Noteholders when such notice is required to be given pursuant toany provision of this Indenture, then any manner of giving such notice as shallbe satisfactory to the Indenture Trustee shall be deemed to be a sufficientgiving of such notice.

 

(d)           Wherethis Indenture provides for notice to the Rating Agencies, failure to give suchnotice shall not affect any other rights or obligations created hereunder, andshall not under any circumstance constitute a Default or Event of Default.

** **

**Section 11.6.        Alternate Payment and Notice Provisions.**

 

Notwithstanding any provision of this Indenture or anyof the Notes to the contrary, the Issuer may enter into any agreement with anyHolder of a Note providing for a method of

 

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payment, or noticeby the Indenture Trustee or any Paying Agent to such Holder, that is differentfrom the methods provided for in this Indenture for such payments ornotices.  The Issuer shall furnish to theIndenture Trustee a copy of each such agreement and the Indenture Trustee shallcause payments to be made and notices to be given in accordance with suchagreements.

** **

**Section 11.7.        Effect of Headings and Table of Contents.**

 

The Article and Section headings herein and the Tableof Contents are for convenience of reference only and shall not define or limitany of the terms or provisions hereof.

** **

**Section 11.8.        Successors and Assigns.**

 

All covenants and agreements in this Indenture and theNotes by the Issuer shall bind its successors and assigns, whether so expressedor not.  All agreements of the IndentureTrustee in this Indenture shall bind its successors, co-trustees and agents.

** **

**Section 11.9.        Severability.**

 

If any provision of this Indenture or the Notes shallbe invalid, illegal or unenforceable, the validity, legality, andenforceability of the remaining provisions of this Indenture and the Notesshall not in any way be affected or impaired thereby.

** **

**Section 11.10.      Benefits of Indenture.**

 

Nothing in this Indenture or in the Notes, express orimplied, shall give to any Person, other than the parties hereto and theirsuccessors hereunder, the Insurer, the Noteholders, any other party securedhereunder, and any other Person with an ownership interest in any part of theTrust Estate, any benefit or any legal or equitable right, remedy or claimunder this Indenture.

** **

**Section 11.11.      Legal Holiday.**

 

If the date on which any payment is due shall not be aBusiness Day, then (notwithstanding any other provision of the Notes or thisIndenture) payment need not be made on such date but may be made on the nextsucceeding Business Day with the same force and effect as if made on the dateon which nominally due, and no interest shall accrue for the period from andafter any such nominal date.

** **

**Section 11.12.      Governing Law.**

 

This Indenture shall be construed in accordance withthe laws of the State of New York without reference to its conflict of lawprovisions and the obligations, rights and remedies of the parties under thisIndenture shall be determined in accordance with such laws.

** **

**Section 11.13.      Counterparts.**

 

This Indenture may be executed in any number ofcounterparts, each of which counterparts when so executed shall be deemed to bean original, and all of which counterparts shall together constitute but oneand the same instrument.

 

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**Section 11.14.      Recording of Indenture.**

 

If this Indenture is subject to recording in anyappropriate public recording office, such recording shall be effected by theIssuer at its expense and shall be accompanied by an Opinion of Counsel (whichmay be counsel to the Indenture Trustee or any other counsel reasonablyacceptable to the Indenture Trustee) to the effect that such recording isnecessary either for the protection of the Noteholders or any other Personsecured hereunder or for the enforcement of any right or remedy granted to theIndenture Trustee under this Indenture.

** **

**Section 11.15.      Trust Obligation.**

 

No recourse may be taken, directly or indirectly, withrespect to the obligations of the Issuer, the Owner Trustee or the IndentureTrustee on the Notes or under this Indenture or any certificate or otherwriting delivered in connection herewith or therewith against (a) the IndentureTrustee or the Owner Trustee in its individual capacity, (b) any holder of abeneficial interest in the Issuer or (c) any partner, owner, beneficiary,agent, officer, director, employee or agent of the Indenture Trustee or theOwner Trustee in its individual capacity, of any holder of a beneficialinterest in the Issuer, the Owner Trustee or the Indenture Trustee or of anysuccessor or assign of the Indenture Trustee or the Owner Trustee in itsindividual capacity, except as any such Person may have expressly agreed (itbeing understood that the Indenture Trustee and the Owner Trustee have no suchobligations in their individual capacities), and except that any such partner,owner or beneficiary shall be fully liable, to the extent provided byapplicable law, for any unpaid consideration for stock, unpaid capital contributionor failure to pay any installment or call owing to such entity.  For all purposes of this Indenture the OwnerTrustee (as such and in its individual capacity) shall be subject to, andentitled to the benefits of, the terms and provisions of the Trust Agreement.

** **

**Section 11.16.      No Petition.**

 

The Indenture Trustee, by entering into thisIndenture, and each Noteholder or Note Owner, by accepting a Note or beneficialinterest in a Note, as the case may be, hereby covenant and agree that theywill not at any time institute against, join in any institution against, orknowingly or intentionally cooperate or encourage any other Person ininstituting against, the Depositor or the Issuer, any bankruptcy,reorganization, arrangement, insolvency or liquidation proceedings or otherproceedings under any United States federal or state bankruptcy or similar lawin connection with any obligations relating to the Notes, this Indenture or anyof the other Transaction Documents.

** **

**Section 11.17.      Inspection.**

 

The Issuer shall, with reasonable prior notice, permitany representative of the Indenture Trustee or the Insurer, during the Issuer’snormal business hours, to examine the books of account, records, reports andother papers of the Issuer, to make copies and extracts therefrom, to causesuch books to be audited by Independent certified public accountants, and todiscuss the Issuer’s affairs, finances and accounts with the Issuer’s officers,employees, and Independent certified public accountants, all at such reasonabletimes and as often as may be reasonably requested.  The Indenture Trustee shall and shall causeits representatives to hold in confidence

 

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all suchinformation except to the extent disclosure may be required by law (and allreasonable applications for confidential treatment are unavailing) and exceptto the extent that the Indenture Trustee may reasonably determine that suchdisclosure is consistent with its obligations hereunder.

** **

**Section 11.18.      Certain Matters Regarding the Insurer.**

 

If no Insurer Default shall have occurred and becontinuing, the Insurer shall have the right to exercise all rights, includingvoting rights, which the Class A Noteholders are entitled to exercise pursuantto this Indenture, without any consent of such Class A Noteholders except foramendments which require the consent of both Class A Noteholders and theInsurer, in accordance with Section 9.2; provided, however,that, without the consent of each Class A Noteholder affected thereby, theInsurer shall not exercise such rights to amend this Indenture in any mannerthat would (a) reduce the amount of, or delay the timing of, collections ofpayments on the Contracts or distributions which are required to be made on anyClass of Class A Notes, (b) adversely affect in any material respect theinterests of the Holders of any Class of Class A Notes or (c) alter the rightsof any Class A Holder to consent to such amendment.

 

Notwithstanding any provision of this Indenture to thecontrary, if an Insurer Default has occurred and is continuing, the Insurershall not have the right to take any action under this Indenture or to controlor direct the actions of the Issuer, the Indenture Trustee or the Owner Trusteepursuant to the terms of this Indenture, nor shall the consent of the Insurerbe required with respect to any action (or waiver of a right to take action) tobe taken by the Issuer, the Indenture Trustee, the Owner Trustee, or the ClassA Noteholders; provided, however, that (i) the consent of theInsurer shall be required at all times with respect to any amendment of thisIndenture and (ii) the Insurer shall be entitled to receive notices hereunderat all times whether or not an Insurer Default has occurred.

 

**Section 11.19.      Acknowledgment of Multiple Roles.**

 

The parties expressly acknowledge and consent to WellsFargo Bank, National Association (“*WellsFargo*”) acting in the possible dual capacity of Back-up Serviceror successor Servicer and in the capacity as Indenture Trustee and Custodian.  Wells Fargo may, in such dual capacity,discharge its separate functions fully, without hindrance or regard to conflictof interest principles, duty of loyalty principles or other breach of fiduciaryduties to the extent that any such conflict or breach arises from theperformance by Wells Fargo of express duties set forth in this Indenture in anyof such capacities, all of which defenses, claims or assertions are herebyexpressly waived by the other parties hereto except in the case of negligence(other than errors in judgment) and willful misconduct by Wells Fargo.

 

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IN WITNESS WHEREOF, the parties hereto have causedthis Indenture to be duly executed by their respective officers, thereunto dulyauthorized and duly attested, all as of the day and year first above written.

 
|   | FIRST INVESTORS  AUTO OWNER TRUST 2006-A                                                                         |
|--------|------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                             |
|   | By:                                                                                                              | WELLS FARGO  DELAWARE TRUST  COMPANY, not in its individual capacity but  solely as Owner Trustee |
|   |                                                                                                             |   |
|   |                                                                                                             |   |
|   | By:                                                                                                              |   |   |   |
|   | Name:                                                                                                            |   |   |
|   | Title:                                                                                                           |   |   |   |
|   |                                                                                                             |
|   | WELLS FARGO  BANK, NATIONAL ASSOCIATION,  not in its individual capacity but as Indenture Trustee and  Custodian |
|   |                                                                                                             |
|   |                                                                                                             |   |
|   | By:                                                                                                              |   |   |   |
|   | Name:                                                                                                            |   |   |
|   | Title:                                                                                                           |   |   |   |
|        |                                                                                                                  |  |  |  |  |

 

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SCHEDULE A

to Indenture

** **

**Perfection Representations,Warranties And Covenants**

 

In addition to the representations, warranties andcovenants contained in the Indenture, the Issuer hereby represents, warrants,and covenants to the Indenture Trustee as follows on the Closing Date, and oneach Additional Contract Purchase Date, in each case only with respect to theCollateral pledged to the Indenture Trustee on the Closing Date, or therelevant Additional Contract Purchase Date, as applicable:

** **

**General**

 

1.             The Indenture creates a valid andcontinuing security interest (as defined in the Relevant UCC Section 9-102) inthe Collateral in favor of the Indenture Trustee, which security interest isprior to all other Liens, except as set forth below, and is enforceable as suchas against creditors of and purchasers from and assignees of the Issuer.

 

2.             Each Contract constitutes “tangiblechattel paper” and not “electronic chattel paper”, within the meaning of theRelevant UCC Section 9-102.

 

3.             The Issuer has taken or will takeall steps necessary actions with respect to the Contracts to perfect thesecurity interest of the Indenture Trustee in the Contracts.

** **

**Creation**

 

1.             The Issuer owns and has good andmarketable title to the Collateral, free and clear of any Lien, claim orencumbrance of any Person, excepting only tax liens, mechanics’ liens and otherliens that arise by the operation of law, in each case on any of the FinancedVehicles and arising solely as a result of an action or omission of the relatedObligor.

** **

**Perfection**

 

1.             The Issuer has caused the filing ofall appropriate financing statements in the proper filing office in theappropriate jurisdictions under applicable law in order to perfect the securityinterest in the Collateral granted to the Indenture Trustee under theIndenture.

 

2.             With respect to Collateral thatconstitutes tangible chattel paper, such tangible chattel paper is in thepossession of the Custodian, and the Issuer has received a writtenacknowledgment from the Custodian that it is holding such tangible chattelpaper for the benefit of the Indenture Trustee and the Issuer.  All financing statements filed or to be filedagainst the Issuer in favor of the Indenture Trustee in connection with thisIndenture describing the Collateral contain a statement to the followingeffect: “A purchase of or security interest in any collateral described in thisfinancing statement will violate the rights of the Secured Party.”

 

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**Priority**

 

1.             Other than the security interestgranted to the Indenture Trustee pursuant to this Indenture, the Issuer has notpledged, assigned, sold, granted a security interest in, or otherwise conveyedany of the Collateral.  The Issuer hasnot authorized the filing of, or is aware of any financing statements againsteither the Seller, the Depositor or the Issuer that includes a description ofthe Collateral and proceeds related thereto other than any financingstatement:  (i) relating to the sale ofthe Contributed Property by the Seller to the Depositor under the Contribution Agreement;(ii) relating to the sale of the Trust Property by the Depositor to the Issuerunder the Sale and Allocation Agreement; (iii) relating to the securityinterest granted to the Indenture Trustee by the Issuer under the Indenture; or(iv) that has been terminated or amended to reflect a release of theCollateral.

 

2.             The Issuer is not aware of anyjudgment, ERISA or tax lien filings against either the Seller, the Depositor orthe Issuer.

 

3.             None of the tangible chattel paperthat constitutes or evidences the Contracts has any marks or notationsindicating that it has been pledged, assigned or otherwise conveyed to anyPerson other than the Seller, the Depositor, the Issuer or the IndentureTrustee.

** **

**Survival of PerfectionRepresentations**

 

1.             Notwithstanding any other provisionof this Indenture, the Contribution Agreement, the Sale and AllocationAgreement or any other Transaction Document, the Perfection Representations,Warranties and Covenants contained in this Schedule shall be continuing, and remainin full force and effect until such time as all obligations under the Sale andAllocation Agreement, Contribution Agreement and the Indenture have beenfinally and fully paid and performed.

** **

**No Waiver**

 

1.             The parties hereto: (i) shall not,without obtaining a confirmation of the then-current rating of the Class ANotes (without giving effect to the Policy), waive any of the PerfectionRepresentations, Warranties or Covenants; (ii) shall provide the RatingAgencies with prompt written notice of any breach of the PerfectionRepresentations, Warranties or Covenants, and shall not, without obtaining aconfirmation of the then-current rating of the Class A Notes (without givingeffect to the Policy) as determined after any adjustment or withdrawal of the ratingsfollowing notice of such breach) waive a breach of any of the PerfectionRepresentations, Warranties or Covenants.

 

A-2

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Exhibit A-1

$32,000,000

 

UNLESS THIS CLASS A-1 NOTE IS PRESENTED BY AN AUTHORIZEDREPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCHOTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANYPAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY ANAUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FORVALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTEREDOWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

THIS CLASS A-1 NOTE HAS NOT BEEN AND WILL NOT BEREGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),OR THE APPLICABLE SECURITIES LAWS OF ANY STATE. ACCORDINGLY, TRANSFER OF THIS CLASS A-1 NOTE IS SUBJECT TO CERTAINRESTRICTIONS SET FORTH IN SECTION 2.15 OF THE INDENTURE.  BY ITS ACCEPTANCE OF THIS CLASS A-1 NOTE, THEHOLDER OF THIS CLASS A-1 NOTE IS DEEMED TO REPRESENT TO THE TRUST AND THEINDENTURE TRUSTEE THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED INRULE 144A UNDER THE SECURITIES ACT AND IS ACQUIRING THIS NOTE FOR ITS OWNACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOROTHERS (WHICH OTHERS ALSO ARE QUALIFIED INSTITUTIONAL BUYERS).

 

NO SALE, PLEDGE OR OTHER TRANSFER OF THIS CLASS A-1NOTE SHALL BE MADE UNLESS SUCH SALE, PLEDGE OR OTHER TRANSFER IS (A) PURSUANTTO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (B) FOR SOLONG AS THE CLASS A-1 NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDERTHE SECURITIES ACT TO A PERSON THE TRANSFEROR REASONABLY BELIEVES AFTER DUEINQUIRY IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THATPURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONALBUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ONRULE 144A, OR (C) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATIONREQUIREMENTS OF THE SECURITIES ACT, THE INVESTMENT COMPANY ACT OF 1940, ASAMENDED AND ANY APPLICABLE STATE SECURITIES AND BLUE SKY LAWS OR IS MADE INACCORDANCE WITH EACH SUCH ACT AND STATE LAWS. THE INDENTURE TRUSTEE MAY REQUIREAN OPINION OF COUNSEL TO BE DELIVERED TO IT IN CONNECTION WITH ANY SALE, PLEDGEOR OTHER TRANSFER OF THIS CLASS A-1 NOTE PURSUANT TO CLAUSES (A) OR (C)ABOVE.  ALL OPINIONS OF COUNSEL REQUIREDIN CONNECTION WITH ANY TRANSFER SHALL BE BY COUNSEL REASONABLY ACCEPTABLE TOTHE INDENTURE TRUSTEE.

 

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EACH INVESTOR IN THIS CLASS A-1 NOTE OR ANY INTERESTHEREIN WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (I) IT ISNOT, AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS CLASS A-1 NOTE FOR, ONBEHALF OF OR WITH ANY ASSETS OF, AN EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENTSUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, ASAMENDED (“ERISA”), A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODEOF 1986, AS AMENDED (THE “CODE”), OR A PLAN OR OTHER ARRANGEMENT SUBJECT TO ANYPROVISIONS UNDER ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS ORREGULATIONS THAT ARE SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISAOR THE CODE (“SIMILAR LAW”) OR (II) ITS ACQUISITION AND HOLDING OF SUCH CLASSA-1 NOTE OR ANY INTEREST THEREIN WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPTPROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE, OR A VIOLATIONOF SIMILAR LAW.

 

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| REGISTERED |   |                |
|------------|--------|---------------------|
| No. A-1    |   | CUSIP NO. 32057TAG6 |

 

FIRST INVESTORS AUTO OWNER TRUST 2006-A

 

FORM OF 4.5685% CLASS A-1 ASSET-BACKED NOTES

 

First Investors Auto Owner Trust 2006-A, a statutorytrust organized and existing under the laws of the State of Delaware (hereinreferred to as the “*Issuer*”),for value received, hereby promises to pay to Cede & Co., or its registeredassigns, the principal sum of $32,000,000 (THIRTY TWO MILLION DOLLARS) payableon each Payment Date in the aggregate amount, if any, payable from the Class ANote Payment Account in respect of principal on the Class A Notes pursuant to andin accordance with Section 2.8 of the Indenture, dated as of January 26, 2006(as amended, supplemented or otherwise modified and in effect from time totime, the “*Indenture*”),between the Issuer and Wells Fargo Bank, National Association, a national bankingassociation, as Indenture Trustee and Custodian (in such capacities the“Indenture Trustee” and the “*Custodian*”)and Section 3.5 of the Sale and Allocation Agreement; provided, however, thatif not paid prior to such date, the entire unpaid principal amount of this Noteshall be due and payable on the earlier of January 16, 2007 (the “*Final Note Payment Date*”) and theRedemption Date, if any, pursuant to Section 10.1 of the Indenture.  Capitalized terms used but not defined hereinare defined in Article I of the Indenture, which also contains rules as toconstruction that shall be applicable herein.

 

The Issuer shall pay interest on this Class A-1 Noteat the rate per annum shown above on each Payment Date until the principal ofthis Class A-1 Note is paid or made available for payment, on the principalamount of this Class A-1 Note outstanding on the preceding Payment Date (aftergiving effect to all payments of principal made on the preceding Payment Date),subject to certain limitations contained in Section 3.1 of the Indenture.  Interest on this Class A-1 Note will accruefor each Payment Date from and including the previous Payment Date (or, in thecase of the initial Payment Date or if no interest has been paid, from theClosing Date) to but excluding such Payment Date.  Interest will be computed on the basis of theactual number of days that have elapsed from and including the prior PaymentDate to but excluding the current Payment Date and a 360-day year.  Such principal of and interest on this ClassA-1 Note shall be paid in the manner specified on the reverse hereof.

 

The principal of and interest on this Class A-1 Noteare payable in such coin or currency of the United States of America as at thetime of payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respectto this Class A-1 Note shall be applied first to interest due and payable onthis Class A-1 Note as provided above and then to the unpaid principal of thisClass A-1 Note.

 

Reference is made to the further provisions of thisClass A-1 Note set forth on the reverse hereof, which shall have the sameeffect as though fully set forth on the face of this Class A-1 Note.

 

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Unless the certificate of authentication hereon hasbeen executed by the Indenture Trustee whose name appears below by manualsignature, this Class A-1 Note shall not be entitled to any benefit under theIndenture referred to on the reverse hereof, or be valid or obligatory for anypurpose.

 

This Class A-1 Note is one of a duly authorized issueof Class A-1 Notes of the Issuer, designated as its Class A-1 Asset-BackedNotes, are issued under the Indenture, to which Indenture and all indenturessupplemental thereto reference is hereby made for a statement of the respectiverights and obligations thereunder of the Issuer, the Indenture Trustee and theHolders of the Class A-1 Notes.  TheClass A-1 Notes are subject to all terms of the Indenture.

 

This Class A-1 Note is and will be secured by theCollateral pledged as security therefor as provided in the Indenture.

 

Principal of this Class A-1 Note is payable on eachPayment Date as described on the face hereof. “*Payment Date*”means the fifteenth day of each month or, if any such day is not a BusinessDay, the next succeeding Business Day, commencing February 15, 2006.

 

The entire unpaid principal amount of this Class A-1Note shall be due and payable on the earlier of the Final Note Payment Date andthe Redemption Date, if any, pursuant to Section 10.1 of the Indenture.  Notwithstanding the foregoing, the entireunpaid principal amount of this Note shall be due and payable on the date onwhich an Event of Default shall have occurred and the Notes have to beimmediately due and payable in the manner provided in Section 5.2 of theIndenture.  Notwithstanding the foregoingsentence, this Class A-1 Note shall become immediately due and payable withoutdeclaration, notice or demand by or to any Person upon the occurrence of anEvent of Default specified in Section 5.1(i) of the Indenture with respect tothe Issuer.  All principal payments onthe Class A-1 Notes shall be made pro rata to the Class A-1 Holders entitledthereto.

 

Payments of interest on this Class A-1 Note due andpayable on each Payment Date, together with the installment of principal, ifany, to the extent not in full payment of this Note, shall be made by checkmailed to the Person in whose name this Class A-1 Note is registered appears asthe Registered Holder of this Class A-1 Note (or one or more Predecessor Notes)on the related Record Date by check mailed first-class postage prepaid to suchPerson’s address as it appears on the Note Register on such Record Date;provided, however, that, unless Definitive Notes have been issued pursuant toSection 2.13 of the Indenture, if this Class A-1 Note is registered in the nameof the nominee of the Clearing Agency (initially, such nominee to be Cede &Co.), payments will be made by wire transfer in immediately available funds to theaccount designated by such nominee.  Anyreduction in the principal amount of this Class A-1 Note effected by anypayments made on any Payment Date shall be binding upon all future Holders ofthis Class A-1 Note and of any Class A-1 Note issued upon the registration oftransfer hereof or in exchange hereof or in lieu hereof, whether or not notedhereon.  If funds are expected to beavailable, as provided in the Indenture, for payment in full of the thenremaining unpaid principal amount of this Class A-1 Note on a Payment Date,then the Indenture Trustee, in the name of and on behalf of the Issuer, willnotify the Person who was the registered Holder hereof as of the Record Datepreceding such Payment Date by notice mailed or transmitted by facsimile priorto such Payment Date, and the amount then due and payable shall be payable onlyupon

 

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presentation andsurrender of this Class A-1 Note at the Indenture Trustee’s Corporate TrustOffice or at the office of the Indenture Trustee’s agent appointed for suchpurposes located at Sixth Street and Marquette Avenue MAC N9311-161,Minneapolis, Minnesota  55479,Attention:  Corporate Trust ServicesAsset-Backed Administration or such other address as the Indenture Trustee maydesignate from time to time as its Corporate Trust Offices in accordance withthe Indenture.

 

The Issuer shall pay interest on overdue installmentsof interest at the Note Rate applicable to the Class A-1 Notes to the extentpermitted by law.

 

The Class A-1 Notes are entitled to the benefits ofthe Policy issued by the Insurer.  TheInsurer is obligated to pay, in accordance with the terms of the Policy asdescribed in the “Statement of Insurance” attached hereto.

 

As provided in the Indenture, the Notes may beredeemed in the manner and to the extent described in Section 10.1 of theIndenture.

 

As provided in the Indenture, and subject to certainlimitations set forth therein, the transfer of this Class A-1 Note may beregistered on the Note Register upon surrender of this Class A-1 Note forregistration of transfer at the office or agency designated by the Issuerpursuant to the Indenture, duly endorsed by, or accompanied by a writteninstrument of transfer in form satisfactory to the Indenture Trustee dulyexecuted by, the Holder hereof or such Holder’s attorney duly authorized inwriting, and thereupon one or more new Class A-1 Notes of authorizeddenominations and in the same aggregate principal amount will be issued to thedesignated transferee or transferees.  Noservice charge will be charged for any registration of transfer or exchange ofthis Class A-1 Note, but the transferor may be required to pay a sum sufficientto cover any tax or other governmental charge that may be imposed in connectionwith any such registration of transfer or exchange.

 

Each Noteholder or Note Owner, by its acceptance ofthis Class A-1 Note or, in the case of a Note Owner, a beneficial interest inthis Class A-1 Note, covenants and agrees that no recourse may be taken,directly or indirectly, with respect to the obligations of the Issuer, theOwner Trustee or the Indenture Trustee on this Class A-1 Note or under theIndenture or any certificate or other writing delivered in connectiontherewith, against (i) the Indenture Trustee or the Owner Trustee, each in itsindividual capacity, (ii) any owner of a beneficial interest in the Issuer or(iii) any partner, owner, beneficiary, agent, officer, director or employee ofthe Indenture Trustee or the Owner Trustee, each in its individual capacity,any holder of a beneficial interest in the Issuer, the Owner Trustee or theIndenture Trustee or of any successor or assign of the Indenture Trustee or theOwner Trustee, each in its individual capacity, except as any such Person mayhave expressly agreed (it being understood that the Indenture Trustee and theOwner Trustee have no such obligations in their individual capacities) andexcept that any such partner, owner or beneficiary shall be fully liable, tothe extent provided by applicable law, for any unpaid consideration for stock,unpaid capital contribution for stock, unpaid capital contribution or failureto pay any installment or call owing to such entity.

 

Each Noteholder or Note Owner, by accepting this ClassA-1 Note or a beneficial interest in this Class A-1 Note, as the case may be,hereby covenants and agrees that it will not at any

 

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time instituteagainst, join in any institution against, or knowingly or intentionallycooperate or encourage any other Person in instituting against, the Depositoror the Issuer, any bankruptcy, reorganization, arrangement, insolvency orliquidation proceedings or other proceedings under any United States federal orstate bankruptcy or similar law in connection with any obligations relating tothe Notes, the Indenture or any of the other Transaction Documents.

 

The Issuer has entered into the Indenture and thisClass A-1 Note is issued with the intention that, for federal, state and localincome, and franchise tax purposes, the Class A-1 Notes will qualify asindebtedness of the Issuer secured by the Trust Estate.  The Issuer, by entering into the Indentureand this Class A-1 Note, and each Noteholder, by its acceptance of this ClassA-1 Note (and each Note Owner by its acceptance of a beneficial interest inthis Class A-1 Note), agree to treat this Class A-1 Note as indebtedness of theIssuer for federal, state and local income and franchise tax purposes.

 

Prior to the due presentment for registration oftransfer of this Class A-1 Note, the Issuer, the Indenture Trustee and anyagent of the Issuer or the Indenture Trustee may treat the Person in whose namethis Class A-1 Note (as of the day of determination or as of such other date asmay be specified in the Indenture) is registered as the owner hereof for allpurposes, whether or not this Class A-1 Note be overdue, and none of theIssuer, the Indenture Trustee or any such agent shall be affected by notice tothe contrary.

 

The Indenture allows, with certain exceptions astherein provided, the Issuer and the Indenture Trustee to enter into one ormore indentures that are supplemental to the Indenture and which effect amodification of the rights and obligations of the Issuer and the rights of theHolders of the Class A Notes under the Indenture at any time by the Issuer withthe consent of the Noteholders evidencing not less than 51% of the Class A NoteBalance (subject to the right of the Insurer to exercise such consent providedthat no Insurer Default shall have occurred and be continuing).  The Indenture also permits the IndentureTrustee and the Issuer to enter into supplemental indentures with respect tocertain terms and conditions set forth in the Indenture without the consent ofHolders of the Class A Notes issued thereunder.

 

The term “Issuer,” as used in this Class A-1 Note,includes any successor to the Issuer under the Indenture.

 

The Class A-1 Notes are issuable only in registeredform in denominations as provided in the Indenture, subject to certainlimitations therein set forth.

 

This Class A-1 Note and the Indenture shall begoverned by, and construed in accordance with the laws of the State of NewYork, without reference to its conflict of law provisions, and the obligations,rights and remedies of the parties hereunder and thereunder shall be determinedin accordance with such laws.

 

No reference herein to the Indenture, and no provisionof this Class A-1 Note or of the Indenture, shall alter or impair theobligation of the Issuer, which is absolute and unconditional, to pay theprincipal of and interest on this Class A-1 Note at the times, place and rate,and in the coin or currency herein prescribed.

 

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Anything herein to the contrary notwithstanding,except as expressly provided in the Transaction Documents, none of Wells FargoBank, National Association, in its individual capacity, Wells Fargo DelawareTrust Company, in its individual capacity, any owner of a beneficial interestin the Issuer, or any of their respective partners, beneficiaries, agents,officers, directors, employees or successors or assigns shall be personallyliable for, nor shall recourse be had to any of them for, the payment ofprincipal or of interest on this Class A-1 Note or performance of, or omissionto perform, any of the covenants, obligations or indemnifications contained inthe Indenture.  The Holder of this ClassA-1 Note, by its acceptance hereof (and each Note Owner, by its acceptance of abeneficial interest herein), agrees that, except as expressly provided in theTransaction Documents, in the case of an Event of Default under the Indenture,the Holder shall have no claim against any of the foregoing for any deficiency,loss or claim therefrom; provided, however, that nothingcontained herein shall be taken to prevent recourse to, and enforcementagainst, the assets of the Issuer for any and all liabilities, obligations andundertakings contained in the Indenture or in this Class A-1 Note.

 

A-1-7

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IN WITNESS WHEREOF, the Issuer has caused thisinstrument to be signed as of the date set forth below.

 
| Date: January  26, 2006 |                                     |                                                                                                                        |
|-------------------------|------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------|
|                    |                                     |                                                                                                                        |
|                    | FIRST INVESTORS  AUTO OWNER TRUST 2006-A |
|                    |                                     |
|                    | By:                                      | WELLS FARGO DELAWARE  TRUST  COMPANY, not in its individual capacity but  solely as Owner Trustee under the Trust Agreement |
|                    |                                     |                                                                                                                        |
|                    | By:                                      |                                                                                                                        |   |
|                    |                                     | Authorized Signatory                                                                                                        |   |
|                         |                                          |                                                                                                                             |  |  |

 

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INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of theClass A-1 Notes designated above and referred to in the within-mentionedIndenture.

 
|   | WELLS FARGO  BANK, NATIONAL ASSOCIATION,  not in its individual capacity but solely as Indenture Trustee |
|--------|----------------------------------------------------------------------------------------------------------|
|   |                                                                                                     |
|   | By:                                                                                                      |   |   |
|   |                                                                                                     | Authorized Signatory |   |

 

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ASSIGNMENT

 

Social Security ortaxpayer I.D. or other identifying number of assignee:

 

 

 

 

FOR VALUE RECEIVED, the undersigned hereby sells,assigns and transfers unto:

 

 

(name and address of assignee)

 

the within Noteand all rights thereunder, and hereby irrevocably constitutes and appoints                                      ,attorney, to transfer said Note on the books kept for registration thereof,with full power of substitution in the premises.

 

Dated:                                   

 
|   |                  | */     |
|--------|-----------------------|--------|
|   | Signature of Assignor |   |
|   |                  |   |
|   |                  |   |
|   | Signature Guaranteed  | */     |

 

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*/                                     NOTICE: The signature to this assignment must correspond with the name of theregistered owner as it appears on the face of the within Class A-1 Note inevery particular, without alteration, enlargement or any change whatever.  Such signature must be guaranteed by an“eligible guarantor institution” meeting the requirements of the NoteRegistrar.

 

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STATEMENT OF INSURANCE

 

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Exhibit A-2

$47,000,000

 

UNLESS THIS CLASS A-2 NOTE IS PRESENTED BY ANAUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORKCORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE& CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVEOF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS ISREQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OROTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFULINASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTERESTHEREIN.

 

THIS CLASS A-2 NOTE HAS NOT BEEN AND WILL NOT BEREGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),OR THE APPLICABLE SECURITIES LAWS OF ANY STATE. ACCORDINGLY, TRANSFER OF THIS CLASS A-2 NOTE IS SUBJECT TO CERTAINRESTRICTIONS SET FORTH IN SECTION 2.15 OF THE INDENTURE.  BY ITS ACCEPTANCE OF THIS CLASS A-2 NOTE, THEHOLDER OF THIS CLASS A-2 NOTE IS DEEMED TO REPRESENT TO THE TRUST AND THEINDENTURE TRUSTEE THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED INRULE 144A UNDER THE SECURITIES ACT AND IS ACQUIRING THIS NOTE FOR ITS OWNACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOROTHERS (WHICH OTHERS ALSO ARE QUALIFIED INSTITUTIONAL BUYERS).

 

NO SALE, PLEDGE OR OTHER TRANSFER OF THIS CLASS A-2NOTE SHALL BE MADE UNLESS SUCH SALE, PLEDGE OR OTHER TRANSFER IS (A) PURSUANTTO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (B) FOR SOLONG AS THE CLASS A-2 NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDERTHE SECURITIES ACT TO A PERSON THE TRANSFEROR REASONABLY BELIEVES AFTER DUEINQUIRY IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THATPURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONALBUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ONRULE 144A, OR (C) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATIONREQUIREMENTS OF THE SECURITIES ACT, THE INVESTMENT COMPANY ACT OF 1940, ASAMENDED AND ANY APPLICABLE STATE SECURITIES AND BLUE SKY LAWS OR IS MADE INACCORDANCE WITH EACH SUCH ACT AND STATE LAWS. THE INDENTURE TRUSTEE MAY REQUIREAN OPINION OF COUNSEL TO BE DELIVERED TO IT IN CONNECTION WITH ANY SALE, PLEDGEOR OTHER TRANSFER OF THIS CLASS A-2 NOTE PURSUANT TO CLAUSES (A) OR (C)ABOVE.  ALL OPINIONS OF COUNSEL REQUIREDIN CONNECTION WITH ANY TRANSFER SHALL BE BY COUNSEL REASONABLY ACCEPTABLE TOTHE INDENTURE TRUSTEE.

 

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EACH INVESTOR IN THIS CLASS A-2 NOTE OR ANY INTERESTHEREIN WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (I) IT ISNOT, AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS CLASS A-2 NOTE FOR, ONBEHALF OF OR WITH ANY ASSETS OF, AN EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENTSUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, ASAMENDED (“ERISA”), A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODEOF 1986, AS AMENDED (THE “CODE”), OR A PLAN OR OTHER ARRANGEMENT SUBJECT TO ANYPROVISIONS UNDER ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS ORREGULATIONS THAT ARE SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISAOR THE CODE (“SIMILAR LAW”) OR (II) ITS ACQUISITION AND HOLDING OF SUCH CLASSA-2 NOTE OR ANY INTEREST THEREIN WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPTPROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 THE CODE, OR A VIOLATION OFSIMILAR LAW.

 

A-2-2

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| REGISTERED |   |                |
|------------|--------|---------------------|
| No. A-2    |   | CUSIP NO. 32057TAH4 |

 

FIRST INVESTORS AUTO OWNER TRUST 2006-AFORM OF 4.87% CLASS A-2 ASSET-BACKED NOTES

 

First Investors Auto Owner Trust 2006-A, a statutorytrust organized and existing under the laws of the State of Delaware (hereinreferred to as the “*Issuer*”),for value received, hereby promises to pay to Cede & Co., or its registeredassigns, the principal sum of $47,000,000 (FORTY SEVEN MILLION DOLLARS) payableon each Payment Date in the aggregate amount, if any, payable from the Class ANote Payment Account in respect of principal on the Class A Notes pursuant toand in accordance with Section 2.8 of the Indenture, dated as of January 26,2006 (as amended, supplemented or otherwise modified and in effect from time totime, the “*Indenture*”),between the Issuer and Wells Fargo Bank, National Association, a nationalbanking association, as Indenture Trustee and Custodian (in such capacities the“*Indenture Trustee*” and the“*Custodian*”) and Section3.5 of the Sale and Allocation Agreement; provided, however, thatif not paid prior to such date, the entire unpaid principal amount of this Noteshall be due and payable on the earlier of March 16, 2009 (the “*Final Note Payment Date*”) and theRedemption Date, if any, pursuant to Section 10.1 of the Indenture.  Capitalized terms used but not defined hereinare defined in Article I of the Indenture, which also contains rules as toconstruction that shall be applicable herein.

 

The Issuer shall pay interest on this Class A-2 Noteat the rate per annum shown above on each Payment Date until the principal ofthis Class A-2 Note is paid or made available for payment, on the principalamount of this Class A-2 Note outstanding on the preceding Payment Date (aftergiving effect to all payments of principal made on the preceding Payment Date),subject to certain limitations contained in Section 3.1 of the Indenture.Interest on this Class A-2 Note will accrue for each Payment Date from and includingthe previous Payment Date (or, in the case of the initial Payment Date or if nointerest has been paid, from the Closing Date) to but excluding such PaymentDate.  Interest will be computed on thebasis of a 360-day year of twelve 30 day months.  Such principal of and interest on this ClassA-2 Note shall be paid in the manner specified on the reverse hereof.

 

The principal of and interest on this Class A-2 Noteare payable in such coin or currency of the United States of America as at thetime of payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respectto this Class A-2 Note shall be applied first to interest due and payable onthis Class A-2 Note as provided above and then to the unpaid principal of thisClass A-2 Note.

 

Reference is made to the further provisions of thisClass A-2 Note set forth on the reverse hereof, which shall have the sameeffect as though fully set forth on the face of this Class A-2 Note.

 

Unless the certificate of authentication hereon hasbeen executed by the Indenture Trustee whose name appears below by manualsignature, this Class A-2 Note shall not be entitled to any

 

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benefit under theIndenture referred to on the reverse hereof, or be valid or obligatory for anypurpose.

 

This Class A-2 Note is one of a duly authorized issueof Class A-2 Notes of the Issuer, designated as its Class A-2 Asset-BackedNotes, are issued under the Indenture, to which Indenture and all indenturessupplemental thereto reference is hereby made for a statement of the respectiverights and obligations thereunder of the Issuer, the Indenture Trustee and theHolders of the Class A-2 Notes.  TheClass A-2 Notes are subject to all terms of the Indenture.

 

This Class A-2 Note is and will be secured by theCollateral pledged as security therefor as provided in the Indenture.

 

Principal of this Class A-2 Note is payable on eachPayment Date as described on the face hereof. “*Payment Date*”means the fifteenth day of each month or, if any such day is not a BusinessDay, the next succeeding Business Day, commencing February 15, 2006.

 

The entire unpaid principal amount of this Class A-2Note shall be due and payable on the earlier of the Final Note Payment Date andthe Redemption Date, if any, pursuant to Section 10.1 of the Indenture.  Notwithstanding the foregoing, the entireunpaid principal amount of this Note shall be due and payable on the date onwhich an Event of Default shall have occurred and the Notes have to beimmediately due and payable in the manner provided in Section 5.2 of theIndenture.  Notwithstanding the foregoingsentence, this Class A-2 Note shall become immediately due and payable withoutdeclaration, notice or demand by or to any Person upon the occurrence of anEvent of Default specified in Section 5.1(i) of the Indenture with respect tothe Issuer.  All principal payments onthe Class A-2 Notes shall be made pro rata to the Class A-2 Holders entitledthereto.

 

Payments of interest on this Class A-2 Note due andpayable on each Payment Date, together with the installment of principal, ifany, to the extent not in full payment of this Note, shall be made by checkmailed to the Person in whose name this Class A-2 Note is registered appears asthe Registered Holder of this Class A-2 Note (or one or more Predecessor Notes)on the related Record Date by check mailed first-class postage prepaid to suchPerson’s address as it appears on the Note Register on such Record Date;provided, however, that, unless Definitive Notes have been issued pursuant toSection 2.13 of the Indenture, if this Class A-2 Note is registered in the nameof the nominee of the Clearing Agency (initially, such nominee to be Cede &Co.), payments will be made by wire transfer in immediately available funds tothe account designated by such nominee. Any reduction in the principal amount of this Class A-2 Note effected byany payments made on any Payment Date shall be binding upon all future Holdersof this Class A-2 Note and of any Class A-2 Note issued upon the registrationof transfer hereof or in exchange hereof or in lieu hereof, whether or notnoted hereon.  If funds are expected tobe available, as provided in the Indenture, for payment in full of the thenremaining unpaid principal amount of this Class A-2 Note on a Payment Date,then the Indenture Trustee, in the name of and on behalf of the Issuer, willnotify the Person who was the registered Holder hereof as of the Record Datepreceding such Payment Date by notice mailed or transmitted by facsimile priorto such Payment Date, and the amount then due and payable shall be payable onlyupon presentation and surrender of this Class A-2 Note at the IndentureTrustee’s Corporate Trust Office or at the office of the Indenture Trustee’sagent appointed for such purposes located at

 

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Sixth Street andMarquette Avenue MAC N9311-161, Minneapolis, Minnesota  55479, Attention:  Corporate Trust Services Asset-Backed Administrationor such other address as the Indenture Trustee may designate from time to timeas its Corporate Trust Offices in accordance with the Indenture.

 

The Issuer shall pay interest on overdue installmentsof interest at the Note Rate applicable to the Class A-2 Notes to the extentpermitted by law.

 

The Class A-2 Notes are entitled to the benefits ofthe Policy issued by the Insurer.  TheInsurer is obligated to pay, in accordance with the terms of the Policy asdescribed in the “Statement of Insurance” attached hereto.

 

As provided in the Indenture, the Notes may beredeemed in the manner and to the extent described in Section 10.1 of theIndenture.

 

As provided in the Indenture, and subject to certainlimitations set forth therein, the transfer of this Class A-2 Note may beregistered on the Note Register upon surrender of this Class A-2 Note forregistration of transfer at the office or agency designated by the Issuerpursuant to the Indenture, duly endorsed by, or accompanied by a writteninstrument of transfer in form satisfactory to the Indenture Trustee dulyexecuted by, the Holder hereof or such Holder’s attorney duly authorized inwriting, and thereupon one or more new Class A-2 Notes of authorizeddenominations and in the same aggregate principal amount will be issued to thedesignated transferee or transferees.  Noservice charge will be charged for any registration of transfer or exchange ofthis Class A-2 Note, but the transferor may be required to pay a sum sufficientto cover any tax or other governmental charge that may be imposed in connectionwith any such registration of transfer or exchange.

 

Each Noteholder or Note Owner, by its acceptance ofthis Class A-2 Note or, in the case of a Note Owner, a beneficial interest inthis Class A-2 Note, covenants and agrees that no recourse may be taken,directly or indirectly, with respect to the obligations of the Issuer, theOwner Trustee or the Indenture Trustee on this Class A-2 Note or under theIndenture or any certificate or other writing delivered in connectiontherewith, against (i) the Indenture Trustee or the Owner Trustee, each in itsindividual capacity, (ii) any owner of a beneficial interest in the Issuer or(iii) any partner, owner, beneficiary, agent, officer, director or employee of theIndenture Trustee or the Owner Trustee, each in its individual capacity, anyholder of a beneficial interest in the Issuer, the Owner Trustee or theIndenture Trustee or of any successor or assign of the Indenture Trustee or theOwner Trustee, each in its individual capacity, except as any such Person mayhave expressly agreed (it being understood that the Indenture Trustee and theOwner Trustee have no such obligations in their individual capacities) andexcept that any such partner, owner or beneficiary shall be fully liable, tothe extent provided by applicable law, for any unpaid consideration for stock,unpaid capital contribution for stock, unpaid capital contribution or failureto pay any installment or call owing to such entity.

 

Each Noteholder or Note Owner, by accepting this ClassA-2 Note or a beneficial interest in this Class A-2 Note, as the case may be,hereby covenants and agrees that it will not at any time institute against,join in any institution against, or knowingly or intentionally cooperate orencourage any other Person in instituting against, the Depositor or the Issuer,any bankruptcy,

 

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reorganization,arrangement, insolvency or liquidation proceedings or other proceedings underany United States federal or state bankruptcy or similar law in connection withany obligations relating to the Notes, the Indenture or any of the otherTransaction Documents.

 

The Issuer has entered into the Indenture and thisClass A-2 Note is issued with the intention that, for federal, state and localincome, and franchise tax purposes, the Class A-2 Notes will qualify asindebtedness of the Issuer secured by the Trust Estate.  The Issuer, by entering into the Indentureand this Class A-2 Note, and each Noteholder, by its acceptance of this ClassA-2 Note (and each Note Owner by its acceptance of a beneficial interest inthis Class A-2 Note), agree to treat this Class A-2 Note as indebtedness of theIssuer for federal, state and local income and franchise tax purposes.

 

Prior to the due presentment for registration oftransfer of this Class A-2 Note, the Issuer, the Indenture Trustee and anyagent of the Issuer or the Indenture Trustee may treat the Person in whose namethis Class A-2 Note (as of the day of determination or as of such other date asmay be specified in the Indenture) is registered as the owner hereof for allpurposes, whether or not this Class A-2 Note be overdue, and none of theIssuer, the Indenture Trustee or any such agent shall be affected by notice tothe contrary.

 

The Indenture allows, with certain exceptions astherein provided, the Issuer and the Indenture Trustee to enter into one ormore indentures that are supplemental to the Indenture and which effect amodification of the rights and obligations of the Issuer and the rights of theHolders of the Class A Notes under the Indenture at any time by the Issuer withthe consent of the Noteholders evidencing not less than 51% of the Class A NoteBalance (subject to the right of the Insurer to exercise such consent providedthat no Insurer Default shall have occurred and be continuing).  The Indenture also permits the IndentureTrustee and the Issuer to enter into supplemental indentures with respect tocertain terms and conditions set forth in the Indenture without the consent ofHolders of the Class A Notes issued thereunder.

 

The term “Issuer,” as used in this Class A-2 Note,includes any successor to the Issuer under the Indenture.

 

The Class A-2 Notes are issuable only in registeredform in denominations as provided in the Indenture, subject to certainlimitations therein set forth.

 

This Class A-2 Note and the Indenture shall begoverned by, and construed in accordance with the laws of the State of NewYork, without reference to its conflict of law provisions, and the obligations,rights and remedies of the parties hereunder and thereunder shall be determinedin accordance with such laws.

 

No reference herein to the Indenture, and no provisionof this Class A-2 Note or of the Indenture, shall alter or impair theobligation of the Issuer, which is absolute and unconditional, to pay theprincipal of and interest on this Class A-2 Note at the times, place and rate,and in the coin or currency herein prescribed.

 

Anything herein to the contrary notwithstanding,except as expressly provided in the Transaction Documents, none of Wells FargoBank, National Association, in its individual capacity, Wells Fargo DelawareTrust Company, in its individual capacity, any owner of a

 

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beneficialinterest in the Issuer, or any of their respective partners, beneficiaries,agents, officers, directors, employees or successors or assigns shall bepersonally liable for, nor shall recourse be had to any of them for, thepayment of principal or of interest on this Class A-2 Note or performance of,or omission to perform, any of the covenants, obligations or indemnificationscontained in the Indenture.  The Holderof this Class A-2 Note, by its acceptance hereof (and each Note Owner, by itsacceptance of a beneficial interest herein), agrees that, except as expresslyprovided in the Transaction Documents, in the case of an Event of Default underthe Indenture, the Holder shall have no claim against any of the foregoing forany deficiency, loss or claim therefrom; provided, however, thatnothing contained herein shall be taken to prevent recourse to, and enforcementagainst, the assets of the Issuer for any and all liabilities, obligations andundertakings contained in the Indenture or in this Class A-2 Note.

 

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IN WITNESS WHEREOF, the Issuer has caused thisinstrument to be signed as of the date set forth below.

 
| Date: January  26, 2006 |                                     |                                                                                                                        |
|-------------------------|------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------|
|                    |                                     |                                                                                                                        |
|                    | FIRST INVESTORS  AUTO OWNER TRUST 2006-A |
|                    |                                     |
|                    | By:                                      | WELLS FARGO  DELAWARE TRUST  COMPANY, not in its individual capacity but  solely as Owner Trustee under the Trust Agreement |
|                    |                                     |                                                                                                                        |
|                    | By:                                      |                                                                                                                        |   |
|                    |                                     | Authorized Signatory                                                                                                        |
|                         |                                          |                                                                                                                             |  |  |

 

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INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of theClass A-2 Notes designated above and referred to in the within-mentionedIndenture.

 
|   | WELLS FARGO  BANK, NATIONAL ASSOCIATION,  not in its individual capacity but solely as Indenture Trustee |
|--------|----------------------------------------------------------------------------------------------------------|
|   |                                                                                                     |
|   | By:                                                                                                      |   |   |
|   |                                                                                                     | Authorized Signatory |

 

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ASSIGNMENT

 

Social Security ortaxpayer I.D. or other identifying number of assignee:

 

 

 

 

FOR VALUE RECEIVED, the undersigned hereby sells,assigns and transfers unto:

 

 

(name and address of assignee)

 

the within Noteand all rights thereunder, and hereby irrevocably constitutes and appoints                                 ,attorney, to transfer said Note on the books kept for registration thereof,with full power of substitution in the premises.

 

Dated:                                 

 
|   |                  | */     |
|--------|-----------------------|--------|
|   | Signature of Assignor |   |
|   |                  |   |
|   |                  | */     |
|   | Signature Guaranteed  |   |

 

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*/                                     NOTICE: The signature to this assignment must correspond with the name of theregistered owner as it appears on the face of the within Class A-2 Note inevery particular, without alteration, enlargement or any change whatever.  Such signature must be guaranteed by an“eligible guarantor institution” meeting the requirements of the NoteRegistrar.

 

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STATEMENT OF INSURANCE

 

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Exhibit A-3

$74,000,000

 

UNLESS THIS CLASS A-3 NOTE IS PRESENTED BY ANAUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORKCORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE& CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVEOF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS ISREQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OROTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFULINASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTERESTHEREIN.

 

THIS CLASS A-3 NOTE HAS NOT BEEN AND WILL NOT BEREGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),OR THE APPLICABLE SECURITIES LAWS OF ANY STATE. ACCORDINGLY, TRANSFER OF THIS CLASS A-3 NOTE IS SUBJECT TO CERTAINRESTRICTIONS SET FORTH IN SECTION 2.15 OF THE INDENTURE.  BY ITS ACCEPTANCE OF THIS CLASS A-3 NOTE, THEHOLDER OF THIS CLASS A-3 NOTE IS DEEMED TO REPRESENT TO THE TRUST AND THEINDENTURE TRUSTEE THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED INRULE 144A UNDER THE SECURITIES ACT AND IS ACQUIRING THIS NOTE FOR ITS OWNACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOROTHERS (WHICH OTHERS ALSO ARE QUALIFIED INSTITUTIONAL BUYERS).

 

NO SALE, PLEDGE OR OTHER TRANSFER OF THIS CLASS A-3NOTE SHALL BE MADE UNLESS SUCH SALE, PLEDGE OR OTHER TRANSFER IS (A) PURSUANTTO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (B) FOR SOLONG AS THE CLASS A-3 NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDERTHE SECURITIES ACT TO A PERSON THE TRANSFEROR REASONABLY BELIEVES AFTER DUEINQUIRY IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THATPURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONALBUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ONRULE 144A, OR (C) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATIONREQUIREMENTS OF THE SECURITIES ACT, THE INVESTMENT COMPANY ACT OF 1940, ASAMENDED AND ANY APPLICABLE STATE SECURITIES AND BLUE SKY LAWS OR IS MADE INACCORDANCE WITH EACH SUCH ACT AND STATE LAWS. THE INDENTURE TRUSTEE MAY REQUIREAN OPINION OF COUNSEL TO BE DELIVERED TO IT IN CONNECTION WITH ANY SALE, PLEDGEOR OTHER TRANSFER OF THIS CLASS A-3 NOTE PURSUANT TO CLAUSES (A) OR (C) ABOVE.  ALL OPINIONS OF COUNSEL REQUIRED INCONNECTION WITH ANY TRANSFER SHALL BE BY COUNSEL REASONABLY ACCEPTABLE TO THEINDENTURE TRUSTEE.

 

----

 

EACH INVESTOR IN THIS CLASSA-3 NOTE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED ANDWARRANTED THAT EITHER (I) IT IS NOT, AND IS NOT DIRECTLY OR INDIRECTLYACQUIRING THIS CLASS A-3 NOTE FOR, ON BEHALF OF OR WITH ANY ASSETS OF, ANEMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEERETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), A PLAN SUBJECT TOSECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), ORA PLAN OR OTHER ARRANGEMENT SUBJECT TO ANY PROVISIONS UNDER ANY FEDERAL, STATE,LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIVELY SIMILAR TOTHE FOREGOING PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAW”) OR (II) ITSACQUISITION AND HOLDING OF SUCH CLASS A-3 NOTE OR ANY INTEREST THEREIN WILL NOTCONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA ORSECTION 4975 OF THE CODE, OR A VIOLATION OF SIMILAR LAW.

 

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| REGISTERED |   |                |
|------------|--------|---------------------|
| No. A-3    |   | CUSIP NO. 32057TAJ0 |

 

FIRST INVESTORS AUTO OWNERTRUST 2006-AFORM OF 4.93% CLASS A-3 ASSET-BACKED NOTES

 

First Investors Auto OwnerTrust 2006-A, a statutory trust organized and existing under the laws of theState of Delaware (herein referred to as the “*Issuer*”), for value received, hereby promises to pay toCede & Co., or its registered assigns, the principal sum of $74,000,000(SEVENTY FOUR MILLION DOLLARS) payable on each Payment Date in the aggregateamount, if any, payable from the Class A Note Payment Account in respect ofprincipal on the Class A Notes pursuant to and in accordance with Section 2.8of the Indenture, dated as of January 26, 2006 (as amended, supplemented orotherwise modified and in effect from time to time, the “*Indenture*”), between the Issuer andWells Fargo Bank, National Association, a national banking association, asIndenture Trustee and Custodian (in such capacities the “*Indenture Trustee*” and the “*Custodian*”) and Section 3.5 of theSale and Allocation Agreement; provided, however, that if notpaid prior to such date, the entire unpaid principal amount of this Note shallbe due and payable on the earlier of February 15, 2011 (the “*Final Note Payment Date*”) and theRedemption Date, if any, pursuant to Section 10.1 of the Indenture.  Capitalized terms used but not defined hereinare defined in Article I of the Indenture, which also contains rules as toconstruction that shall be applicable herein.

 

The Issuer shall payinterest on this Class A-3 Note at the rate per annum shown above on each PaymentDate until the principal of this Class A-3 Note is paid or made available forpayment, on the principal amount of this Class A-3 Note outstanding on thepreceding Payment Date (after giving effect to all payments of principal madeon the preceding Payment Date), subject to certain limitations contained inSection 3.1 of the Indenture. Interest on this Class A-3 Note will accrue foreach Payment Date from and including the previous Payment Date (or, in the caseof the initial Payment Date or if no interest has been paid, from the ClosingDate) to but excluding such Payment Date. Interest will be computed on the basis of a 360-day year of twelve 30day months.  Such principal of andinterest on this Class A-3 Note shall be paid in the manner specified on thereverse hereof.

 

The principal of andinterest on this Class A-3 Note are payable in such coin or currency of theUnited States of America as at the time of payment is legal tender for paymentof public and private debts.  All paymentsmade by the Issuer with respect to this Class A-3 Note shall be applied firstto interest due and payable on this Class A-3 Note as provided above and thento the unpaid principal of this Class A-3 Note.

 

Reference is made to thefurther provisions of this Class A-3 Note set forth on the reverse hereof,which shall have the same effect as though fully set forth on the face of thisClass A-3 Note.

 

Unless the certificate ofauthentication hereon has been executed by the Indenture Trustee whose nameappears below by manual signature, this Class A-3 Note shall not be entitled toany

 

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benefit under the Indenture referred to on the reverse hereof, or bevalid or obligatory for any purpose.

 

This Class A-3 Note is oneof a duly authorized issue of Class A-3 Notes of the Issuer, designated as itsClass A-3 Asset-Backed Notes, are issued under the Indenture, to whichIndenture and all indentures supplemental thereto reference is hereby made fora statement of the respective rights and obligations thereunder of the Issuer,the Indenture Trustee and the Holders of the Class A-3 Notes.  The Class A-3 Notes are subject to all termsof the Indenture.

 

This Class A-3 Note is andwill be secured by the Collateral pledged as security therefor as provided inthe Indenture.

 

Principal of this Class A-3Note is payable on each Payment Date as described on the face hereof.  “*PaymentDate*” means the fifteenth day of each month or, if any such dayis not a Business Day, the next succeeding Business Day, commencing February15, 2006.

 

The entire unpaid principalamount of this Class A-3 Note shall be due and payable on the earlier of theFinal Note Payment Date and the Redemption Date, if any, pursuant to Section10.1 of the Indenture.  Notwithstandingthe foregoing, the entire unpaid principal amount of this Note shall be due andpayable on the date on which an Event of Default shall have occurred and theNotes have to be immediately due and payable in the manner provided in Section5.2 of the Indenture.  Notwithstandingthe foregoing sentence, this Class A-3 Note shall become immediately due andpayable without declaration, notice or demand by or to any Person upon theoccurrence of an Event of Default specified in Section 5.1(i) of the Indenturewith respect to the Issuer.  Allprincipal payments on the Class A-3 Notes shall be made pro rata to the ClassA-3 Holders entitled thereto.

 

Payments of interest on thisClass A-3 Note due and payable on each Payment Date, together with theinstallment of principal, if any, to the extent not in full payment of thisNote, shall be made by check mailed to the Person in whose name this Class A-3Note is registered appears as the Registered Holder of this Class A-3 Note (orone or more Predecessor Notes) on the related Record Date by check mailedfirst-class postage prepaid to such Person’s address as it appears on the NoteRegister on such Record Date; provided, however, that, unless Definitive Noteshave been issued pursuant to Section 2.13 of the Indenture, if this Class A-3Note is registered in the name of the nominee of the Clearing Agency(initially, such nominee to be Cede & Co.), payments will be made by wiretransfer in immediately available funds to the account designated by suchnominee.  Any reduction in the principalamount of this Class A-3 Note effected by any payments made on any Payment Dateshall be binding upon all future Holders of this Class A-3 Note and of anyClass A-3 Note issued upon the registration of transfer hereof or in exchange hereofor in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, forpayment in full of the then remaining unpaid principal amount of this Class A-3Note on a Payment Date, then the Indenture Trustee, in the name of and onbehalf of the Issuer, will notify the Person who was the registered Holderhereof as of the Record Date preceding such Payment Date by notice mailed ortransmitted by facsimile prior to such Payment Date, and the amount then due andpayable shall be payable only upon presentation and surrender of this Class A-3Note at the Indenture Trustee’s Corporate Trust Office or at the office of theIndenture Trustee’s agent appointed for such purposes located at

 

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Sixth Street and Marquette Avenue MAC N9311-161, Minneapolis,Minnesota  55479, Attention:  Corporate Trust Services Asset-BackedAdministration or such other address as the Indenture Trustee may designatefrom time to time as its Corporate Trust Offices in accordance with theIndenture.

 

The Issuer shall payinterest on overdue installments of interest at the Note Rate applicable to theClass A-3 Notes to the extent permitted by law.

 

The Class A-3 Notes areentitled to the benefits of the Policy issued by the Insurer.  The Insurer is obligated to pay, inaccordance with the terms of the Policy as described in the “Statement ofInsurance” attached hereto.

 

As provided in theIndenture, the Notes may be redeemed in the manner and to the extent describedin Section 10.1 of the Indenture.

 

As provided in theIndenture, and subject to certain limitations set forth therein, the transferof this Class A-3 Note may be registered on the Note Register upon surrender ofthis Class A-3 Note for registration of transfer at the office or agencydesignated by the Issuer pursuant to the Indenture, duly endorsed by, oraccompanied by a written instrument of transfer in form satisfactory to theIndenture Trustee duly executed by, the Holder hereof or such Holder’s attorneyduly authorized in writing, and thereupon one or more new Class A-3 Notes ofauthorized denominations and in the same aggregate principal amount will beissued to the designated transferee or transferees.  No service charge will be charged for anyregistration of transfer or exchange of this Class A-3 Note, but the transferormay be required to pay a sum sufficient to cover any tax or other governmentalcharge that may be imposed in connection with any such registration of transferor exchange.

 

Each Noteholder or NoteOwner, by its acceptance of this Class A-3 Note or, in the case of a NoteOwner, a beneficial interest in this Class A-3 Note, covenants and agrees thatno recourse may be taken, directly or indirectly, with respect to theobligations of the Issuer, the Owner Trustee or the Indenture Trustee on thisClass A-3 Note or under the Indenture or any certificate or other writingdelivered in connection therewith, against (i) the Indenture Trustee or theOwner Trustee, each in its individual capacity, (ii) any owner of a beneficialinterest in the Issuer or (iii) any partner, owner, beneficiary, agent,officer, director or employee of the Indenture Trustee or the Owner Trustee,each in its individual capacity, any holder of a beneficial interest in theIssuer, the Owner Trustee or the Indenture Trustee or of any successor orassign of the Indenture Trustee or the Owner Trustee, each in its individualcapacity, except as any such Person may have expressly agreed (it being understoodthat the Indenture Trustee and the Owner Trustee have no such obligations intheir individual capacities) and except that any such partner, owner orbeneficiary shall be fully liable, to the extent provided by applicable law,for any unpaid consideration for stock, unpaid capital contribution for stock,unpaid capital contribution or failure to pay any installment or call owing tosuch entity.

 

Each Noteholder or NoteOwner, by accepting this Class A-3 Note or a beneficial interest in this ClassA-3 Note, as the case may be, hereby covenants and agrees that it will not atany time institute against, join in any institution against, or knowingly orintentionally cooperate or encourage any other Person in instituting against,the Depositor or the Issuer, any bankruptcy,

 

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reorganization, arrangement, insolvency or liquidation proceedings orother proceedings under any United States federal or state bankruptcy orsimilar law in connection with any obligations relating to the Notes, theIndenture or any of the other Transaction Documents.

 

The Issuer has entered intothe Indenture and this Class A-3 Note is issued with the intention that, forfederal, state and local income, and franchise tax purposes, the Class A-3Notes will qualify as indebtedness of the Issuer secured by the TrustEstate.  The Issuer, by entering into theIndenture and this Class A-3 Note, and each Noteholder, by its acceptance ofthis Class A-3 Note (and each Note Owner by its acceptance of a beneficialinterest in this Class A-3 Note), agree to treat this Class A-3 Note asindebtedness of the Issuer for federal, state and local income and franchisetax purposes.

 

Prior to the due presentmentfor registration of transfer of this Class A-3 Note, the Issuer, the IndentureTrustee and any agent of the Issuer or the Indenture Trustee may treat thePerson in whose name this Class A-3 Note (as of the day of determination or asof such other date as may be specified in the Indenture) is registered as theowner hereof for all purposes, whether or not this Class A-3 Note be overdue,and none of the Issuer, the Indenture Trustee or any such agent shall beaffected by notice to the contrary.

 

The Indenture allows, withcertain exceptions as therein provided, the Issuer and the Indenture Trustee toenter into one or more indentures that are supplemental to the Indenture andwhich effect a modification of the rights and obligations of the Issuer and therights of the Holders of the Class A Notes under the Indenture at any time bythe Issuer with the consent of the Noteholders evidencing not less than 51% ofthe Class A Note Balance (subject to the right of the Insurer to exercise suchconsent provided that no Insurer Default shall have occurred and be continuing).  The Indenture also permits the IndentureTrustee and the Issuer to enter into supplemental indentures with respect tocertain terms and conditions set forth in the Indenture without the consent ofHolders of the Class A Notes issued thereunder.

 

The term “Issuer,” as usedin this Class A-3 Note, includes any successor to the Issuer under theIndenture.

 

The Class A-3 Notes areissuable only in registered form in denominations as provided in the Indenture,subject to certain limitations therein set forth.

 

This Class A-3 Note and theIndenture shall be governed by, and construed in accordance with the laws ofthe State of New York, without reference to its conflict of law provisions, andthe obligations, rights and remedies of the parties hereunder and thereundershall be determined in accordance with such laws.

 

No reference herein to theIndenture, and no provision of this Class A-3 Note or of the Indenture, shallalter or impair the obligation of the Issuer, which is absolute andunconditional, to pay the principal of and interest on this Class A-3 Note atthe times, place and rate, and in the coin or currency herein prescribed.

 

Anything herein to thecontrary notwithstanding, except as expressly provided in the TransactionDocuments, none of Wells Fargo Bank, National Association, in its individualcapacity, Wells Fargo Delaware Trust Company, in its individual capacity, anyowner of a

 

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beneficial interest in the Issuer, or any of their respective partners,beneficiaries, agents, officers, directors, employees or successors or assignsshall be personally liable for, nor shall recourse be had to any of them for,the payment of principal or of interest on this Class A-3 Note or performanceof, or omission to perform, any of the covenants, obligations orindemnifications contained in the Indenture. The Holder of this Class A-3 Note, by its acceptance hereof (and eachNote Owner, by its acceptance of a beneficial interest herein), agrees that,except as expressly provided in the Transaction Documents, in the case of anEvent of Default under the Indenture, the Holder shall have no claim againstany of the foregoing for any deficiency, loss or claim therefrom; provided,however, that nothing contained herein shall be taken to preventrecourse to, and enforcement against, the assets of the Issuer for any and allliabilities, obligations and undertakings contained in the Indenture or in thisClass A-3 Note.

 

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IN WITNESS WHEREOF, theIssuer has caused this instrument to be signed as of the date set forth below.

 
| Date:  January 26, 2006 |                                    |
|------------------------------|-----------------------------------------|
|                         |                                    |
|                         | FIRST INVESTORS AUTO OWNER TRUST 2006-A |
|                         |                                    |   |
|                         | By:                                     | WELLS FARGO DELAWARE TRUST  COMPANY, not in its individual capacity but  solely as Owner Trustee under the Trust Agreement |
|                         |                                    |   |
|                         | By:                                     |   |   |
|                         |                                    | Authorized Signatory |

 

A-2-8

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INDENTURE TRUSTEE’SCERTIFICATE OF AUTHENTICATION

 

This is one of the Class A-3 Notes designated above and referred to inthe within-mentioned Indenture.

 
|   | WELLS FARGO BANK, NATIONAL ASSOCIATION,  not in its individual capacity but solely as Indenture Trustee |
|--------|---------------------------------------------------------------------------------------------------------|
|   |                                                                                                    |   |
|   | By:                                                                                                     |   |   |
|   |                                                                                                    | Authorized Signatory |

 

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ASSIGNMENT

 

Social Security or taxpayer I.D. or other identifying number ofassignee:

 

 

 

FOR VALUE RECEIVED, theundersigned hereby sells, assigns and transfers unto:

 

 

(name and address ofassignee)

 

the within Note and all rights thereunder, and hereby irrevocablyconstitutes and appoints                             ,attorney, to transfer said Note on the books kept for registration thereof,with full power of substitution in the premises.

 

 
| Dated: |   |                  |   |   |
|--------|--------|-----------------------|--------|--------|
|   |   |                  |
|   |   | */                    |
|   |   | Signature of Assignor |
|   |   |                  |
|   |   | */                    |
|   |   | Signature Guaranteed  |
|        |        |                       |        |        |  |  |

 

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*/                                     NOTICE: The signature to this assignment must correspond with the name of theregistered owner as it appears on the face of the within Class A-3 Note inevery particular, without alteration, enlargement or any change whatever.  Such signature must be guaranteed by an“eligible guarantor institution” meeting the requirements of the NoteRegistrar.

 

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STATEMENT OF INSURANCE

 

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Exhibit A-4

$36,060,000

 

UNLESS THIS CLASS A-4 NOTEIS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, ANEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OFTRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OFCEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZEDREPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCHOTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANYTRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSONIS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS ANINTEREST HEREIN.

 

THIS CLASS A-4 NOTE HAS NOTBEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED(THE “SECURITIES ACT”), OR THE APPLICABLE SECURITIES LAWS OF ANY STATE.  ACCORDINGLY, TRANSFER OF THIS CLASS A-4 NOTEIS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN SECTION 2.15 OF THE INDENTURE.  BY ITS ACCEPTANCE OF THIS CLASS A-4 NOTE, THEHOLDER OF THIS CLASS A-4 NOTE IS DEEMED TO REPRESENT TO THE TRUST AND THEINDENTURE TRUSTEE THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED INRULE 144A UNDER THE SECURITIES ACT AND IS ACQUIRING THIS NOTE FOR ITS OWNACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOROTHERS (WHICH OTHERS ALSO ARE QUALIFIED INSTITUTIONAL BUYERS).

 

NO SALE, PLEDGE OR OTHERTRANSFER OF THIS CLASS A-4 NOTE SHALL BE MADE UNLESS SUCH SALE, PLEDGE OR OTHERTRANSFER IS (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THESECURITIES ACT, (B) FOR SO LONG AS THE CLASS A-4 NOTES ARE ELIGIBLE FOR RESALEPURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO A PERSON THE TRANSFERORREASONABLY BELIEVES AFTER DUE INQUIRY IS A “QUALIFIED INSTITUTIONAL BUYER” ASDEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF AQUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER ISBEING MADE IN RELIANCE ON RULE 144A, OR (C) PURSUANT TO ANOTHER AVAILABLEEXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, THEINVESTMENT COMPANY ACT OF 1940, AS AMENDED AND ANY APPLICABLE STATE SECURITIESAND BLUE SKY LAWS OR IS MADE IN ACCORDANCE WITH EACH SUCH ACT AND STATE LAWS.THE INDENTURE TRUSTEE MAY REQUIRE AN OPINION OF COUNSEL TO BE DELIVERED TO ITIN CONNECTION WITH ANY SALE, PLEDGE OR OTHER TRANSFER OF THIS CLASS A-4 NOTEPURSUANT TO CLAUSES (A) OR (C) ABOVE. ALL OPINIONS OF COUNSEL REQUIRED IN CONNECTION WITH ANY TRANSFER SHALLBE BY COUNSEL REASONABLY ACCEPTABLE TO THE INDENTURE TRUSTEE.

 

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EACH INVESTOR IN THIS CLASSA-4 NOTE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED ANDWARRANTED THAT EITHER (I) IT IS NOT, AND IS NOT DIRECTLY OR INDIRECTLYACQUIRING THIS CLASS A-4 NOTE FOR, ON BEHALF OF OR WITH ANY ASSETS OF, ANEMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEERETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), A PLAN SUBJECT TOSECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), ORA PLAN OR OTHER ARRANGEMENT SUBJECT TO ANY PROVISIONS UNDER ANY FEDERAL, STATE,LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIVELY SIMILAR TOTHE FOREGOING PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAW”) OR (II) ITSACQUISITION AND HOLDING OF SUCH CLASS A-4 NOTE OR ANY INTEREST THEREIN WILL NOTCONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA ORSECTION 4975 OF THE CODE, OR A VIOLATION OF SIMILAR LAW.

 

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| REGISTERED |   |                |
|------------|--------|---------------------|
| No. A-4    |   | CUSIP NO. 32057TAK7 |

 

FIRST INVESTORS AUTO OWNERTRUST 2006-AFORM OF 5.00% CLASS A-4 ASSET-BACKED NOTES

 

First Investors Auto OwnerTrust 2006-A, a statutory trust organized and existing under the laws of theState of Delaware (herein referred to as the “*Issuer*”), for value received, hereby promises to pay toCede & Co., or its registered assigns, the principal sum of $36,060,000(THIRTY SIX MILLION SIXTY THOUSAND DOLLARS) payable on each Payment Date in theaggregate amount, if any, payable from the Class A Note Payment Account inrespect of principal on the Class A Notes pursuant to and in accordance withSection 2.8 of the Indenture, dated as of January 26, 2006 (as amended,supplemented or otherwise modified and in effect from time to time, the “*Indenture*”), between the Issuer andWells Fargo Bank, National Association, a national banking association, asIndenture Trustee and Custodian (in such capacities the “*Indenture Trustee*” and the “*Custodian*”) and Section 3.5 of theSale and Allocation Agreement; provided, however, that if notpaid prior to such date, the entire unpaid principal amount of this Note shallbe due and payable on the earlier of April 15, 2013 (the “*Final Note Payment Date*”) and theRedemption Date, if any, pursuant to Section 10.1 of the Indenture.  Capitalized terms used but not defined hereinare defined in Article I of the Indenture, which also contains rules as toconstruction that shall be applicable herein.

 

The Issuer shall payinterest on this Class A-4 Note at the rate per annum shown above on eachPayment Date until the principal of this Class A-4 Note is paid or madeavailable for payment, on the principal amount of this Class A-4 Noteoutstanding on the preceding Payment Date (after giving effect to all paymentsof principal made on the preceding Payment Date), subject to certainlimitations contained in Section 3.1 of the Indenture. Interest on this ClassA-4 Note will accrue for each Payment Date from and including the previousPayment Date (or, in the case of the initial Payment Date or if no interest hasbeen paid, from the Closing Date) to but excluding such Payment Date.  Interest will be computed on the basis of a360-day year of twelve 30 day months. Such principal of and interest on this Class A-4 Note shall be paid inthe manner specified on the reverse hereof.

 

The principal of andinterest on this Class A-4 Note are payable in such coin or currency of theUnited States of America as at the time of payment is legal tender for paymentof public and private debts.  Allpayments made by the Issuer with respect to this Class A-4 Note shall beapplied first to interest due and payable on this Class A-4 Note as providedabove and then to the unpaid principal of this Class A-4 Note.

 

Reference is made to thefurther provisions of this Class A-4 Note set forth on the reverse hereof,which shall have the same effect as though fully set forth on the face of thisClass A-4 Note.

 

Unless the certificate ofauthentication hereon has been executed by the Indenture Trustee whose nameappears below by manual signature, this Class A-4 Note shall not be entitled toany

 

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benefit under the Indenture referred to on the reverse hereof, or bevalid or obligatory for any purpose.

 

This Class A-4 Note is oneof a duly authorized issue of Class A-4 Notes of the Issuer, designated as itsClass A-4 Asset-Backed Notes, are issued under the Indenture, to whichIndenture and all indentures supplemental thereto reference is hereby made fora statement of the respective rights and obligations thereunder of the Issuer,the Indenture Trustee and the Holders of the Class A-4 Notes.  The Class A-4 Notes are subject to all termsof the Indenture.

 

This Class A-4 Note is andwill be secured by the Collateral pledged as security therefor as provided inthe Indenture.

 

Principal of this Class A-4Note is payable on each Payment Date as described on the face hereof.  “*PaymentDate*” means the fifteenth day of each month or, if any such dayis not a Business Day, the next succeeding Business Day, commencing February15, 2006.

 

The entire unpaid principalamount of this Class A-4 Note shall be due and payable on the earlier of theFinal Note Payment Date and the Redemption Date, if any, pursuant to Section10.1 of the Indenture.  Notwithstandingthe foregoing, the entire unpaid principal amount of this Note shall be due andpayable on the date on which an Event of Default shall have occurred and theNotes have to be immediately due and payable in the manner provided in Section5.2 of the Indenture.  Notwithstandingthe foregoing sentence, this Class A-4 Note shall become immediately due andpayable without declaration, notice or demand by or to any Person upon theoccurrence of an Event of Default specified in Section 5.1(i) of the Indenturewith respect to the Issuer.  Allprincipal payments on the Class A-4 Notes shall be made pro rata to the ClassA-4 Holders entitled thereto.

 

Payments of interest on thisClass A-4 Note due and payable on each Payment Date, together with theinstallment of principal, if any, to the extent not in full payment of thisNote, shall be made by check mailed to the Person in whose name this Class A-4Note is registered appears as the Registered Holder of this Class A-4 Note (orone or more Predecessor Notes) on the related Record Date by check mailedfirst-class postage prepaid to such Person’s address as it appears on the NoteRegister on such Record Date; provided, however, that, unless Definitive Noteshave been issued pursuant to Section 2.13 of the Indenture, if this Class A-4Note is registered in the name of the nominee of the Clearing Agency(initially, such nominee to be Cede & Co.), payments will be made by wiretransfer in immediately available funds to the account designated by suchnominee.  Any reduction in the principalamount of this Class A-4 Note effected by any payments made on any Payment Dateshall be binding upon all future Holders of this Class A-4 Note and of anyClass A-4 Note issued upon the registration of transfer hereof or in exchangehereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, asprovided in the Indenture, for payment in full of the then remaining unpaidprincipal amount of this Class A-4 Note on a Payment Date, then the IndentureTrustee, in the name of and on behalf of the Issuer, will notify the Person whowas the registered Holder hereof as of the Record Date preceding such PaymentDate by notice mailed or transmitted by facsimile prior to such Payment Date, andthe amount then due and payable shall be payable only upon presentation andsurrender of this Class A-4 Note at the Indenture Trustee’s Corporate TrustOffice or at the office of the Indenture Trustee’s agent appointed for suchpurposes located at

 

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Sixth Street and Marquette Avenue MAC N9311-161, Minneapolis,Minnesota  55479, Attention:  Corporate Trust Services Asset-BackedAdministration or such other address as the Indenture Trustee may designatefrom time to time as its Corporate Trust Offices in accordance with theIndenture.

 

The Issuer shall payinterest on overdue installments of interest at the Note Rate applicable to theClass A-4 Notes to the extent permitted by law.

 

The Class A-4 Notes areentitled to the benefits of the Policy issued by the Insurer.  The Insurer is obligated to pay, inaccordance with the terms of the Policy as described in the “Statement ofInsurance” attached hereto.

 

As provided in theIndenture, the Notes may be redeemed in the manner and to the extent describedin Section 10.1 of the Indenture.

 

As provided in theIndenture, and subject to certain limitations set forth therein, the transferof this Class A-4 Note may be registered on the Note Register upon surrender ofthis Class A-4 Note for registration of transfer at the office or agencydesignated by the Issuer pursuant to the Indenture, duly endorsed by, oraccompanied by a written instrument of transfer in form satisfactory to theIndenture Trustee duly executed by, the Holder hereof or such Holder’s attorneyduly authorized in writing, and thereupon one or more new Class A-4 Notes ofauthorized denominations and in the same aggregate principal amount will beissued to the designated transferee or transferees.  No service charge will be charged for anyregistration of transfer or exchange of this Class A-4 Note, but the transferormay be required to pay a sum sufficient to cover any tax or other governmentalcharge that may be imposed in connection with any such registration of transferor exchange.

 

Each Noteholder or NoteOwner, by its acceptance of this Class A-4 Note or, in the case of a NoteOwner, a beneficial interest in this Class A-4 Note, covenants and agrees thatno recourse may be taken, directly or indirectly, with respect to theobligations of the Issuer, the Owner Trustee or the Indenture Trustee on thisClass A-4 Note or under the Indenture or any certificate or other writingdelivered in connection therewith, against (i) the Indenture Trustee or theOwner Trustee, each in its individual capacity, (ii) any owner of a beneficialinterest in the Issuer or (iii) any partner, owner, beneficiary, agent,officer, director or employee of the Indenture Trustee or the Owner Trustee,each in its individual capacity, any holder of a beneficial interest in theIssuer, the Owner Trustee or the Indenture Trustee or of any successor orassign of the Indenture Trustee or the Owner Trustee, each in its individualcapacity, except as any such Person may have expressly agreed (it beingunderstood that the Indenture Trustee and the Owner Trustee have no suchobligations in their individual capacities) and except that any such partner,owner or beneficiary shall be fully liable, to the extent provided byapplicable law, for any unpaid consideration for stock, unpaid capitalcontribution for stock, unpaid capital contribution or failure to pay anyinstallment or call owing to such entity.

 

Each Noteholder or NoteOwner, by accepting this Class A-4 Note or a beneficial interest in this ClassA-4 Note, as the case may be, hereby covenants and agrees that it will not atany time institute against, join in any institution against, or knowingly orintentionally cooperate or encourage any other Person in instituting against,the Depositor or the Issuer, any bankruptcy,

 

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reorganization, arrangement, insolvency or liquidation proceedings orother proceedings under any United States federal or state bankruptcy orsimilar law in connection with any obligations relating to the Notes, theIndenture or any of the other Transaction Documents.

 

The Issuer has entered intothe Indenture and this Class A-4 Note is issued with the intention that, forfederal, state and local income, and franchise tax purposes, the Class A-4Notes will qualify as indebtedness of the Issuer secured by the TrustEstate.  The Issuer, by entering into theIndenture and this Class A-4 Note, and each Noteholder, by its acceptance ofthis Class A-4 Note (and each Note Owner by its acceptance of a beneficialinterest in this Class A-4 Note), agree to treat this Class A-4 Note asindebtedness of the Issuer for federal, state and local income and franchisetax purposes.

 

Prior to the due presentmentfor registration of transfer of this Class A-4 Note, the Issuer, the IndentureTrustee and any agent of the Issuer or the Indenture Trustee may treat thePerson in whose name this Class A-4 Note (as of the day of determination or asof such other date as may be specified in the Indenture) is registered as theowner hereof for all purposes, whether or not this Class A-4 Note be overdue,and none of the Issuer, the Indenture Trustee or any such agent shall beaffected by notice to the contrary.

 

The Indenture allows, withcertain exceptions as therein provided, the Issuer and the Indenture Trustee toenter into one or more indentures that are supplemental to the Indenture andwhich effect a modification of the rights and obligations of the Issuer and therights of the Holders of the Class A Notes under the Indenture at any time bythe Issuer with the consent of the Noteholders evidencing not less than 51% ofthe Class A Note Balance (subject to the right of the Insurer to exercise suchconsent provided that no Insurer Default shall have occurred and becontinuing).  The Indenture also permitsthe Indenture Trustee and the Issuer to enter into supplemental indentures withrespect to certain terms and conditions set forth in the Indenture without theconsent of Holders of the Class A Notes issued thereunder.

 

The term “Issuer,” as usedin this Class A-4 Note, includes any successor to the Issuer under theIndenture.

 

The Class A-4 Notes areissuable only in registered form in denominations as provided in the Indenture,subject to certain limitations therein set forth.

 

This Class A-4 Note and theIndenture shall be governed by, and construed in accordance with the laws ofthe State of New York, without reference to its conflict of law provisions, andthe obligations, rights and remedies of the parties hereunder and thereundershall be determined in accordance with such laws.

 

No reference herein to theIndenture, and no provision of this Class A-4 Note or of the Indenture, shallalter or impair the obligation of the Issuer, which is absolute andunconditional, to pay the principal of and interest on this Class A-4 Note atthe times, place and rate, and in the coin or currency herein prescribed.

 

Anything herein to thecontrary notwithstanding, except as expressly provided in the TransactionDocuments, none of Wells Fargo Bank, National Association, in its individualcapacity, Wells Fargo Delaware Trust Company, in its individual capacity, anyowner of a

 

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beneficial interest in the Issuer, or any of their respective partners,beneficiaries, agents, officers, directors, employees or successors or assignsshall be personally liable for, nor shall recourse be had to any of them for,the payment of principal or of interest on this Class A-4 Note or performanceof, or omission to perform, any of the covenants, obligations orindemnifications contained in the Indenture. The Holder of this Class A-4 Note, by its acceptance hereof (and eachNote Owner, by its acceptance of a beneficial interest herein), agrees that,except as expressly provided in the Transaction Documents, in the case of anEvent of Default under the Indenture, the Holder shall have no claim againstany of the foregoing for any deficiency, loss or claim therefrom; provided,however, that nothing contained herein shall be taken to preventrecourse to, and enforcement against, the assets of the Issuer for any and allliabilities, obligations and undertakings contained in the Indenture or in thisClass A-4 Note.

 

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IN WITNESS WHEREOF, theIssuer has caused this instrument to be signed as of the date set forth below.

 
| Date: January 26, 2006 |                                    |                                                                                                                       |
|------------------------|-----------------------------------------|----------------------------------------------------------------------------------------------------------------------------|
|                   |                                    |                                                                                                                       |
|                   | FIRST INVESTORS AUTO OWNER TRUST 2006-A |
|                   |                                    |
|                   | By:                                     | WELLS FARGO DELAWARE TRUST  COMPANY, not in its individual capacity but  solely as Owner Trustee under the Trust Agreement |
|                   |                                    |                                                                                                                       |
|                   | By:                                     |                                                                                                                       |   |
|                   |                                    | Authorized Signatory                                                                                                       |
|                        |                                         |                                                                                                                            |  |  |

 

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INDENTURE TRUSTEE’SCERTIFICATE OF AUTHENTICATION

 

This is one of the Class A-4 Notes designated above and referred to inthe within-mentioned Indenture.

 
|   | WELLS FARGO BANK, NATIONAL ASSOCIATION,  not in its individual capacity but solely as Indenture Trustee |
|--------|---------------------------------------------------------------------------------------------------------|
|   |                                                                                                    |
|   | By:                                                                                                     |   |   |
|   |                                                                                                    | Authorized Signatory |

 

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ASSIGNMENT

 

Social Security or taxpayer I.D. or other identifying number ofassignee:

 

 

 

FOR VALUE RECEIVED, theundersigned hereby sells, assigns and transfers unto:

 

 

(name and address ofassignee)

 

the within Note and all rights thereunder, and hereby irrevocablyconstitutes and appoints                             ,attorney, to transfer said Note on the books kept for registration thereof,with full power of substitution in the premises.

 
| Dated: |                  |   |   |   |
|--------|-----------------------|--------|--------|--------|
|   |                  |   |
|   |                  | */     |
|   | Signature of Assignor |   |
|   |                  |   |
|   |                  |   |
|   | Signature Guaranteed  | */     |
|        |                       |        |        |        |  |

 

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*/                                     NOTICE: The signature to this assignment must correspond with the name of theregistered owner as it appears on the face of the within Class A-4 Note inevery particular, without alteration, enlargement or any change whatever.  Such signature must be guaranteed by an“eligible guarantor institution” meeting the requirements of the NoteRegistrar.

 

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STATEMENT OF INSURANCE

 

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Exhibit B

$2,879,112.45

 

THIS CLASS B NOTE HAS NOTBEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIESACT”) OR ANY STATE SECURITIES OR “BLUE SKY” LAWS.  THE HOLDER HEREOF, BY PURCHASING THIS CLASS BNOTE, AGREES THAT THIS NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERREDONLY (1) TO AN AFFILIATE OF THE DEPOSITOR, (2) PURSUANT TO AN EFFECTIVEREGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (3) IN RELIANCE ON ANEXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUBJECTTO THE ISSUER’S AND THE INDENTURE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALEOR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONAND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.  ANY NOTEHOLDER WILL, AND EACH SUBSEQUENTNOTEHOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THERESALE RESTRICTIONS REFERRED TO ABOVE. THE ISSUER IS NOT OBLIGATED TO REGISTER THIS CLASS B NOTE UNDER THESECURITIES ACT OR ANY STATE SECURITIES OR BLUE SKY LAWS.  NO TRANSFER OF THIS CLASS B NOTE SHALL BEPERMITTED TO THE EXTENT THAT SUCH TRANSFER WOULD RESULT IN MORE THAN 80 HOLDERS(WITHIN THE MEANING OF TREASURY REGULATION SECTION 1.7704-1(H)) OF CLASS BNOTES AND BENEFICIAL INTERESTS IN THE ISSUER IN THE AGGREGATE.  NO TRANSFER OF THIS CLASS B NOTE MAY BE MADETO ANY PERSON (A “PASS-THROUGH ENTITY”) THAT IS A PARTNERSHIP (INCLUDING ANYOTHER ENTITY TREATED AS A PARTNERSHIP FOR INCOME TAX PURPOSES), S CORPORATIONOR GRANTOR TRUST UNLESS SUCH PASS-THROUGH ENTITY IS ABLE TO REPRESENT THAT THISCLASS B NOTE REPRESENTS LESS THAN 50% OF THE FAIR MARKET VALUE OF ALL ASSETS OFSUCH ENTITY.  NOTWITHSTANDING THEFOREGOING, NO TRANSFER OF THIS CLASS B NOTE SHALL BE MADE EXCEPT IN ACCORDANCEWITH THE RESTRICTIONS SET FORTH IN THE INDENTURE AND IN THIS CLASS B NOTE.  TRANSFER OF THIS CLASS B NOTE IS SUBJECT TOADDITIONAL TRANSFER RESTRICTIONS CONTAINED IN SECTION 2.16 OF THEINDENTURE.  EACH HOLDER OF THIS CLASS BNOTE AGREES THAT THIS CLASS B NOTE IS SUBJECT TO THE PROVISIONS OF ARTICLE 8 OFTHE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ALL APPLICABLE JURISDICTIONS.

 

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No. B-1

 

FIRST INVESTORS AUTO OWNERTRUST 2006-AFORM OF CLASS B ASSET-BACKED NOTES

 

First Investors Auto OwnerTrust 2006-A, a statutory trust organized and existing under the laws of theState of Delaware (herein referred to as the “*Issuer*”), for value received, hereby promises to pay to **First Investors Auto Funding Corporation**orits registered assigns, the principal sum of $2,879,112.45 (TWO MILLION EIGHTHUNDRED SEVENTY NINE THOUSAND ONE HUNDRED TWELVE DOLLARS AND FORTY FIVE CENTS)payable on each Payment Date in the aggregate amount, if any, payable from theClass B Note Payment Account in respect of principal on the Class B Notespursuant to and in accordance with Section 2.8 of the Indenture, dated as ofJanuary 26, 2006 (as amended, supplemented or otherwise modified and in effectfrom time to time, the “*Indenture*”),between the Issuer and Wells Fargo Bank, National Association, a national bankingassociation, as Indenture Trustee and Custodian (in such capacities the “*Indenture Trustee*” and the “*Custodian*”) and Section 3.5 of theSale and Allocation Agreement; provided, however, that if notpaid prior to such date, the entire unpaid principal amount of this Note shallbe due and payable on the earlier of April 15, 2013 (the “*Final Note Payment Date*”) and theRedemption Date, if any, pursuant to Section 10.1 of the Indenture.  Capitalized terms used but not defined hereinare defined in Article I of the Indenture, which also contains rules as toconstruction that shall be applicable herein.

 

Principal of this Class BNote shall be paid in the manner specified on the reverse hereof.

 

The principal of this ClassB Note is payable in such coin or currency of the United States of America asat the time of payment is legal tender for payment of public and private debts.

 

This Class B Note shall notaccrue interest.

 

Reference is made to thefurther provisions of this Class B Note set forth on the reverse hereof, whichshall have the same effect as though fully set forth on the face of this ClassB Note.

 

Unless the certificate ofauthentication hereon has been executed by the Indenture Trustee whose nameappears below by manual signature, this Class B Note shall not be entitled toany benefit under the Indenture referred to on the reverse hereof, or be validor obligatory for any purpose.

 

[REMAINDER OF THIS PAGE LEFTINTENTIONALLY BLANK.]

 

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This Class B Note is one ofa duly authorized issue of Class B Notes of the Issuer, designated as its ClassB Asset-Backed Notes, are issued under the Indenture, to which Indenture andall indentures supplemental thereto reference is hereby made for a statement ofthe respective rights and obligations thereunder of the Issuer, the IndentureTrustee and the Holders of the Notes. The Class B Notes are subject to all terms of the Indenture.

 

This Class Note is and willbe equally and ratably secured by the Collateral pledged as security thereforas provided in the Indenture.

 

Principal of this Class BNote is due and payable on each Payment Date as described on the facehereof.  “*Payment Date*” means the fifteenth day of each month or,if any such day is not a Business Day, the next succeeding Business Day,commencing February 15, 2006.

 

As described above, theentire unpaid principal amount of this Class B Note shall be due and payable onthe earlier of the Final Note Payment Date and the Redemption Date, if any,pursuant to Section 10.1 of the Indenture. Notwithstanding the foregoing, the entire unpaid principal amount ofthis Note shall be due and payable on the date on which an Event of Defaultshall have occurred and the Notes have been declared to be immediately due andpayable in the manner provided in Section 5.2 of the Indenture.  Notwithstanding the foregoing sentence, thisClass B Note shall become immediately due and payable without declaration,notice or demand by or to any Person upon the occurrence of an Event of Defaultspecified in Section 5.1(i) of the Indenture with respect to the Issuer.  All principal payments on the Class B Notesshall be made pro rata to the Class B Holders entitled thereto.

 

Installments of principal,if any, to the extent not in full payment of this Note, shall be made by checkmailed to the Person in whose name this Class B Note is registered appears asthe Registered Holder of this Class B Note (or one or more Predecessor Notes)on the related Record Date by wire transfer in immediately available funds tothe account designated by such Holder. Any reduction in the principal amount of this Class B Note effected byany payments made on any Payment Date shall be binding upon all future Holders ofthis Class B Note and of any Class B Note issued upon the registration oftransfer hereof or in exchange hereof or in lieu hereof, whether or not notedhereon.  If funds are expected to beavailable, as provided in the Indenture, for payment in full of the thenremaining unpaid principal amount of this Class B Note on a Payment Date, thenthe Indenture Trustee, in the name of and on behalf of the Issuer, will notifythe Person who was the registered Holder hereof as of the Record Date precedingsuch Payment Date by notice mailed or transmitted by facsimile prior to suchPayment Date, and the amount then due and payable shall be payable only uponpresentation and surrender of this Note at the Indenture Trustee’s CorporateTrust Office or at the office of the Indenture Trustee’s agent appointed forsuch purposes located at Sixth Street and Marquette Avenue MAC N9311-161,Minneapolis, Minnesota 55479, Attention: Corporate Trust Services Asset-BackedAdministration or such other address as the Indenture Trustee may designatefrom time to time as its Corporate Trust Offices in accordance with theIndenture.

 

As provided in theIndenture, the Notes may be redeemed in the manner and to the extent describedin Section 10.1 of the Indenture.

 

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As provided in theIndenture, and subject to certain limitations set forth therein, the transferof this Class B Note may be registered on the Note Register upon surrender ofthis Note for registration of transfer at the office or agency designated bythe Issuer pursuant to the Indenture, duly endorsed by, or accompanied by awritten instrument of transfer in form satisfactory to the Indenture Trusteeduly executed by, the Holder hereof or such Holder’s attorney duly authorizedin writing, and thereupon one or more new Class B Notes of authorizeddenominations and in the same aggregate principal amount will be issued to thedesignated transferee or transferees.  Noservice charge will be charged for any registration of transfer or exchange ofthis Class B Note, but the transferor may be required to pay a sum sufficientto cover any tax or other governmental charge that may be imposed in connectionwith any such registration of transfer or exchange.

 

Each Noteholder, by itsacceptance of this Class B Note, covenants and agrees that no recourse may betaken, directly or indirectly, with respect to the obligations of the Issuer,the Owner Trustee or the Indenture Trustee on this Class B Note or under theIndenture or any certificate or other writing delivered in connectiontherewith, against (i) the Indenture Trustee or the Owner Trustee, each in itsindividual capacity, (ii) any owner of a beneficial interest in the Issuer or(iii) any partner, owner, beneficiary, agent, officer, director or employee ofthe Indenture Trustee or the Owner Trustee, each in its individual capacity,any holder of a beneficial interest in the Issuer, the Owner Trustee or theIndenture Trustee or of any successor or assign of the Indenture Trustee or theOwner Trustee, each in its individual capacity, except as any such Person mayhave expressly agreed (it being understood that the Indenture Trustee and theOwner Trustee have no such obligations in their individual capacities) andexcept that any such partner, owner or beneficiary shall be fully liable, tothe extent provided by applicable law, for any unpaid consideration for stock,unpaid capital contribution for stock, unpaid capital contribution or failureto pay any installment or call owing to such entity.

 

Each Noteholder, byaccepting this Class B Note hereby covenants and agrees that it will not at anytime institute against, join in any institution against, or knowingly orintentionally cooperate or encourage any other Person in instituting against,the Depositor or the Issuer, any bankruptcy, reorganization, arrangement,insolvency or liquidation proceedings or other proceedings under any UnitedStates federal or state bankruptcy or similar law in connection with anyobligations relating to the Notes, the Indenture or any of the other TransactionDocuments.

 

The Issuer has entered intothe Indenture and this Class B Note is issued with the intention that, forfederal, state and local income, and franchise tax purposes, the Class B Noteswill qualify as indebtedness of the Issuer secured by the Trust Estate.  The Issuer, by entering into the Indentureand this Class B Note, and each Noteholder, by its acceptance of this Class BNote, agree to treat this Class B Note as indebtedness of the Issuer for federal,state and local income and franchise tax purposes.

 

Prior to the due presentmentfor registration of transfer of this Class B Note, the Issuer, the IndentureTrustee and any agent of the Issuer or the Indenture Trustee may treat thePerson in whose name this Class B Note (as of the day of determination or as ofsuch other date as may be specified in the Indenture) is registered as theowner hereof for all purposes, whether or not this

 

B-4

----

 

Class B Note be overdue, and none of the Issuer, the Indenture Trusteeor any such agent shall be affected by notice to the contrary.

 

As provided in theIndenture, this Class B Note may not be transferred to a person that is, orthat is directly or indirectly acquiring this Class B Note for, on behalf of orwith any assets of, an employee benefit plan or other arrangement subject toTitle I of the Employee Retirement Income Security Act of 1974, as amended(“ERISA”), a plan subject to Section 4975 of the Code, or a plan or otherarrangement subject to any provisions under any federal, state, local, non-U.S.or other laws or regulations that are substantively similar to the foregoingprovisions of ERISA or the Code.

 

The Indenture allows, withcertain exceptions as therein provided, the Issuer and the Indenture Trustee toenter into one or more indentures that are supplemental to the Indenture andwhich effect a modification of the rights and obligations of the Issuer and therights of the Holders of the Notes under the Indenture at any time by theIssuer with the consent of the Noteholders evidencing not less than 51% of theClass A Note Balance (subject to the right of the Insurer to exercise suchconsent provided that no Insurer Default shall have occurred and becontinuing).  The Indenture also permitsthe Indenture Trustee and the Issuer to enter into supplemental indentures withrespect to certain terms and conditions set forth in the Indenture without theconsent of Holders of the Notes issued thereunder.

 

The term “Issuer,” as usedin this Class B Note, includes any successor to the Issuer under the Indenture.

 

The Class B Notes areissuable only in certificated form in denominations as provided in theIndenture, subject to certain limitations therein set forth.

 

This Class B Note and theIndenture shall be governed by, and construed in accordance with the laws ofthe State of New York without reference to its conflict of law provisions, andthe obligations, rights and remedies of the parties hereunder and thereundershall be determined in accordance with such laws.

 

No reference herein to theIndenture, and no provision of this Class B Note or of the Indenture, shallalter or impair the obligation of the Issuer, which is absolute andunconditional, to pay the principal of and interest on this Class B Note at thetimes, place and rate, and in the coin or currency herein prescribed.

 

Anything herein to thecontrary notwithstanding, except as expressly provided in the TransactionDocuments, none of Wells Fargo Bank, National Association, in its individualcapacity, Wells Fargo Delaware Trust Company in its individual capacity, anyowner of a beneficial interest in the Issuer, or any of their respectivepartners, beneficiaries, agents, officers, directors, employees or successorsor assigns shall be personally liable for, nor shall recourse be had to any ofthem for, the payment of principal or of interest on this Class B Note orperformance of, or omission to perform, any of the covenants, obligations orindemnifications contained in the Indenture. The Holder of this Class B Note, by its acceptance hereof, agrees that,except as expressly provided in the Transaction Documents, in the case of anEvent of Default under the Indenture, the Holder shall have no claim againstany of the foregoing for any

 

B-5

----

 

deficiency, loss or claim therefrom; provided, however, that nothingcontained herein shall be taken to prevent recourse to, and enforcementagainst, the assets of the Issuer for any and all liabilities, obligations andundertakings contained in the Indenture or in this Class B Note.

 

B-6

----

 

WITNESS WHEREOF, the Issuerhas caused this instrument to be signed as of the date set forth below.

 
| Date: January 26, 2006 |                                    |                                                                                                                       |
|------------------------|-----------------------------------------|----------------------------------------------------------------------------------------------------------------------------|
|                   |                                    |                                                                                                                       |
|                   | FIRST INVESTORS AUTO OWNER TRUST 2006-A |
|                   |                                    |
|                   | By:                                     | WELLS FARGO DELAWARE TRUST  COMPANY, not in its individual capacity but  solely as Owner Trustee under the Trust Agreement |
|                   |                                    |                                                                                                                       |
|                   | By:                                     |                                                                                                                       |   |
|                   |                                    | Authorized Signatory                                                                                                       |
|                        |                                         |                                                                                                                            |  |  |

 

B-7

----

 

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Notes designated above and referred to in thewithin-mentioned Indenture.

 
|   | WELLS FARGO BANK, NATIONAL ASSOCIATION,  not in its individual capacity but solely as Indenture Trustee |
|--------|---------------------------------------------------------------------------------------------------------|
|   |                                                                                                    |   |
|   | By:                                                                                                     |   |   |
|   |                                                                                                    | Authorized Signatory |

 

B-8

----

 

ASSIGNMENT

 

Social Security or taxpayer I.D. or other identifying number ofassignee:

 

 

 

FOR VALUE RECEIVED, theundersigned hereby sells, assigns and transfers unto:

 

 

(name and address ofassignee)

 

the within Note and all rights thereunder, and hereby irrevocablyconstitutes and appoints                             ,attorney, to transfer said Note on the books kept for registration thereof,with full power of substitution in the premises.

 

 
| Dated: |                  |   |   |   |
|--------|-----------------------|--------|--------|--------|
|   |                  |   |
|   |                  | */     |
|   | Signature of Assignor |   |
|   |                  |   |
|   |                  | */     |
|   | Signature Guaranteed  |   |

 

----

*/                                     NOTICE: The signature to this assignment must correspond with the name of theregistered owner as it appears on the face of the within Class B Note in everyparticular, without alteration, enlargement or any change whatever.  Such signature must be guaranteed by an“eligible guarantor institution” meeting the requirements of the NoteRegistrar.

 

B-9

----

 

Exhibit C

 

[RESERVED]

 

----

 

Exhibit D

 

REQUEST FOR RELEASE OFCONTRACT

 

[Date]

 

TO:                            Wells Fargo Bank, National Associationas CustodianABS Custody Vault751 Kasota AvenueMAC N9328-011Minneapolis, Minnesota  55414

Attention:                                         Corporate Trust Services —Asset-BackedAdministration

 

In connection with theContract Files which are owned by First Investors Auto Owner Trust 2006-A (the“*Issuer*”) and are pledgedby the Issuer to Wells Fargo Bank, National Association, as Indenture Trustee(the “*Indenture Trustee*”),the undersigned, as **[IndentureTrustee][Servicer]**, requests the release of the Contract Filerelated to the Contract identified below by its number.  The undersigned shall return the documents toyou when the undersigned’s need therefor no longer exists, except where theContract is paid in full or otherwise disposed of.  Capitalized terms used but not otherwisedefined herein shall have the respective meanings assigned to such terms in theIndenture, dated as of January 26, 2006, between Wells Fargo Bank, NationalAssociation, as Indenture Trustee and Custodian, and the Issuer.

 
| Reason for Document Request: (check one) |   |   |   |         |
|------------------------------------------|--------|--------|--------|--------------|
|                                     |   |   |   |         |
| Code                                     |   |   |   | Reason       |   |   |
| 5                                        |   | o      |   | Liquidation  |   |   |
| 1                                        |   | o      |   | Paid Off     |   |   |
| 4                                        |   | o      |   | Repurchase   |   |   |
| 19                                       |   | o      |   | Servicing    |   |   |
| 3                                        |   | o      |   | Substitution |   |   |
|                                          |        |        |        |              |  |  |  |  |  |  |

 
|                                   | By              |   |
|----------------------------------------|-----------------|--------|
|                                   |            | Name:  |
|                                   |            | Title: |
|                                   |            |
|                                   | CONTRACT NUMBER |   |
|                                   | CUSTOMER        |   |
| Address where files are to be shipped: |            |
|                                   |            |   |
|                                   |            |   |
|                                   |            |   |
|                                   |            |   |
|                                   |            |
| Shipping Number:                       |            |   |   |
| Carrier:                               |            |   |   |
|                                        |                 |        |  |  |  |  |  |

 

----

 

**TABLEOF CONTENTS**

 
| ** **    |        |                                                | **Page** |
|---------------|-------------|-----------------------------------------------------|----------|
|          |        |                                                |     |
| ARTICLE I     | DEFINITIONS | 2                                                   |
|          |        |                                                |     |
| Section 1.1.  |        | Definitions                                         | 2        |
|          |        |                                                |     |
| Section 1.2.  |        | Rules of Construction                               | 9        |
|          |        |                                                |     |
| ARTICLE II    | THE NOTES   | 9                                                   |
|          |        |                                                |     |
| Section 2.1.  |        | Form                                                | 9        |
|          |        |                                                |     |
| Section 2.2.  |        | Execution, Authentication and Delivery              | 10       |
|          |        |                                                |     |
| Section 2.3.  |        | Temporary Class A Notes                             | 10       |
|          |        |                                                |     |
| Section 2.4.  |        | Tax Treatment                                       | 11       |
|          |        |                                                |     |
| Section 2.5.  |        | Registration; Registration of Transfer and Exchange | 11       |
|          |        |                                                |     |
| Section 2.6.  |        | Mutilated, Destroyed, Lost or Stolen Notes          | 12       |
|          |        |                                                |     |
| Section 2.7.  |        | Persons Deemed Owners                               | 13       |
|          |        |                                                |     |
| Section 2.8.  |        | Payments of Interest and Principal                  | 13       |
|          |        |                                                |     |
| Section 2.9.  |        | Cancellation                                        | 16       |
|          |        |                                                |     |
| Section 2.10. |        | Release of Collateral                               | 16       |
|          |        |                                                |     |
| Section 2.11. |        | Book-Entry                                          | 16       |
|          |        |                                                |     |
| Section 2.12. |        | Notices to Clearing Agency                          | 17       |
|          |        |                                                |     |
| Section 2.13. |        | Definitive Notes                                    | 17       |
|          |        |                                                |     |
| Section 2.14. |        | Authenticating Agents                               | 18       |
|          |        |                                                |     |
| Section 2.15. |        | Restrictions on Transfers of Class A Notes          | 18       |
|          |        |                                                |     |
| Section 2.16. |        | Restrictions on Transfers of Class B Notes          | 21       |
|          |        |                                                |     |
| Section 2.17. |        | Regarding Owner Trustee                             | 22       |
|          |        |                                                |     |
| ARTICLE  III  | COVENANTS   | 22                                                  |
|          |        |                                                |     |
| Section  3.1. |        | Payment Covenant                                    | 22       |
|          |        |                                                |     |
| Section 3.2.  |        | Maintenance of Office or Agency                     | 23       |
|          |        |                                                |     |
| Section 3.3.  |        | Money for Payments to be Held in Trust              | 23       |
|          |        |                                                |     |
| Section 3.4.  |        | Existence                                           | 24       |
|          |        |                                                |     |
| Section 3.5.  |        | Protection of Trust Estate                          | 25       |
|          |        |                                                |     |
| Section 3.6.  |        | Opinions as to Trust Estate                         | 25       |
|          |        |                                                |     |
| Section 3.7.  |        | Performance of Obligations                          | 26       |
|          |        |                                                |     |
| Section 3.8.  |        | Negative Covenants                                  | 27       |
|               |             |                                                     |          |  |

 

i

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| ** **    |                       |                                                                       | **Page** |
|---------------|----------------------------|----------------------------------------------------------------------------|----------|
|          |                       |                                                                       |     |
| Section 3.9.  |                       | Annual Statement as to Compliance                                          | 28       |
|          |                       |                                                                       |     |
| Section 3.10. |                       | Issuer May Not Merge                                                       | 28       |
|          |                       |                                                                       |     |
| Section 3.11. |                       | [Reserved]                                                                 | 29       |
|          |                       |                                                                       |     |
| Section 3.12. |                       | Successor                                                                  | 29       |
|          |                       |                                                                       |     |
| Section 3.13. |                       | Servicer’s Obligation                                                 | 29       |
|          |                       |                                                                       |     |
| Section 3.14. |                       | Guarantees, Loans, Advances and Other Liabilities                          | 29       |
|          |                       |                                                                       |     |
| Section 3.15. |                       | Capital Expenditures                                                       | 29       |
|          |                       |                                                                       |     |
| Section 3.16. |                       | Restricted Payments                                                        | 30       |
|          |                       |                                                                       |     |
| Section 3.17. |                       | Notice of Events of Default                                                | 30       |
|          |                       |                                                                       |     |
| Section 3.18. |                       | Removal of Administrator                                                   | 30       |
|          |                       |                                                                       |     |
| Section 3.19. |                       | Further Instruments and Acts                                               | 30       |
|          |                       |                                                                       |     |
| Section 3.20. |                       | Rule 144A Information                                                      | 30       |
|          |                       |                                                                       |     |
| Section 3.21. |                       | Perfection Representations, Warranties and Covenants                       | 31       |
|          |                       |                                                                       |     |
| ARTICLE IV    | SATISFACTION AND DISCHARGE | 31                                                                         |
|          |                       |                                                                       |     |
| Section 4.1.  |                       | Satisfaction and Discharge of Indenture                                    | 31       |
|          |                       |                                                                       |     |
| Section 4.2.  |                       | Satisfaction, Discharge and Defeasance of the Notes                        | 32       |
|          |                       |                                                                       |     |
| Section 4.3.  |                       | Application of Trust Money                                                 | 33       |
|          |                       |                                                                       |     |
| Section 4.4.  |                       | Repayment of Monies Held by Paying Agent                                   | 33       |
|          |                       |                                                                       |     |
| Section 4.5.  |                       | Continuing Obligations of Indenture Trustee                                | 33       |
|          |                       |                                                                       |     |
| ARTICLE V     | REMEDIES                   | 34                                                                         |
|          |                       |                                                                       |     |
| Section 5.1.  |                       | Events of Default                                                          | 34       |
|          |                       |                                                                       |     |
| Section 5.2.  |                       | Acceleration of Maturity; Rescission and Annulment                         | 37       |
|          |                       |                                                                       |     |
| Section 5.3.  |                       | Collection of Indebtedness and Suits for Enforcement by Indenture  Trustee | 38       |
|          |                       |                                                                       |     |
| Section 5.4.  |                       | Remedies                                                                   | 40       |
|          |                       |                                                                       |     |
| Section 5.5.  |                       | Optional Preservation of the Contracts                                     | 42       |
|          |                       |                                                                       |     |
| Section 5.6.  |                       | Limitation of Suits                                                        | 42       |
|          |                       |                                                                       |     |
| Section 5.7.  |                       | Unconditional Rights of Noteholders to Receive Principal and Interest      | 43       |
|          |                       |                                                                       |     |
| Section 5.8.  |                       | Restoration of Rights and Remedies                                         | 43       |
|          |                       |                                                                       |     |
| Section 5.9.  |                       | Rights and Remedies Cumulative Rights                                      | 44       |
|          |                       |                                                                       |     |
| Section 5.10. |                       | Delay or Omission Not a Waiver                                             | 44       |
|          |                       |                                                                       |     |
| Section 5.11. |                       | Control by Noteholders                                                     | 44       |
|               |                            |                                                                            |          |  |

 

ii

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| ** **    |                                 |                                                                    | **Page** |
|---------------|--------------------------------------|-------------------------------------------------------------------------|----------|
|          |                                 |                                                                    |     |
| Section 5.12. |                                 | Waiver of Past Defaults                                                 | 45       |
|          |                                 |                                                                    |     |
| Section 5.13. |                                 | Undertaking for Costs                                                   | 45       |
|          |                                 |                                                                    |     |
| Section 5.14. |                                 | Waiver of Stay or Extension Laws                                        | 45       |
|          |                                 |                                                                    |     |
| Section 5.15. |                                 | Action on Notes                                                         | 46       |
|          |                                 |                                                                    |     |
| Section 5.16. |                                 | Performance and Enforcement of Certain Obligations                      | 46       |
|          |                                 |                                                                    |     |
| ARTICLE VI    | THE INDENTURE TRUSTEE                | 46                                                                      |
|          |                                 |                                                                    |     |
| Section 6.1.  |                                 | Duties of Indenture Trustee                                             | 46       |
|          |                                 |                                                                    |     |
| Section 6.2.  |                                 | Rights of Indenture Trustee                                             | 48       |
|          |                                 |                                                                    |     |
| Section 6.3.  |                                 | Individual Rights of Indenture Trustee                                  | 49       |
|          |                                 |                                                                    |     |
| Section 6.4.  |                                 | Indenture Trustee’s Disclaimer                                     | 49       |
|          |                                 |                                                                    |     |
| Section 6.5.  |                                 | Notice of Default                                                       | 49       |
|          |                                 |                                                                    |     |
| Section 6.6.  |                                 | Reports by Indenture Trustee to Holders                                 | 49       |
|          |                                 |                                                                    |     |
| Section 6.7.  |                                 | Compensation and Indemnity                                              | 50       |
|          |                                 |                                                                    |     |
| Section 6.8.  |                                 | Replacement of Indenture Trustee                                        | 51       |
|          |                                 |                                                                    |     |
| Section 6.9.  |                                 | Successor Indenture Trustee                                             | 52       |
|          |                                 |                                                                    |     |
| Section 6.10. |                                 | Eligibility; Disqualification                                           | 52       |
|          |                                 |                                                                    |     |
| ARTICLE VII   | NOTEHOLDERS’ LISTS AND REPORTS  | 59                                                                      |
|          |                                 |                                                                    |     |
| Section 7.1.  |                                 | Issuer to Furnish Indenture Trustee Names and Addresses of  Noteholders | 59       |
|          |                                 |                                                                    |     |
| Section 7.2.  |                                 | Preservation of Information; Communications to Noteholders              | 59       |
|          |                                 |                                                                    |     |
| Section 7.3.  |                                 | Fiscal Year                                                             | 59       |
|          |                                 |                                                                    |     |
| ARTICLE VIII  | ACCOUNTS, DISBURSEMENTS AND RELEASES | 59                                                                      |
|          |                                 |                                                                    |     |
| Section 8.1.  |                                 | Collection of Money Collection                                          | 59       |
|          |                                 |                                                                    |     |
| Section 8.2.  |                                 | Trust Accounts                                                          | 60       |
|          |                                 |                                                                    |     |
| Section 8.3.  |                                 | General Provisions Regarding Accounts                                   | 60       |
|          |                                 |                                                                    |     |
| Section 8.4.  |                                 | Release of Trust Estate                                                 | 61       |
|          |                                 |                                                                    |     |
| Section 8.5.  |                                 | Opinion of Counsel                                                      | 61       |
|          |                                 |                                                                    |     |
| ARTICLE  IX   | SUPPLEMENTAL INDENTURES              | 62                                                                      |
|          |                                 |                                                                    |     |
| Section 9.1.  |                                 | Supplemental Indentures Without Consent of Noteholders                  | 62       |
|          |                                 |                                                                    |     |
| Section 9.2.  |                                 | Supplemental Indentures with Consent of Noteholders                     | 63       |
|          |                                 |                                                                    |     |
| Section 9.3.  |                                 | Execution of Supplemental Indentures                                    | 64       |
|          |                                 |                                                                    |     |
| Section 9.4.  |                                 | Effect of Supplemental Indenture                                        | 65       |
|               |                                      |                                                                         |          |  |

 

iii

----

 
| ** **     |                |                                                  | **Page** |
|----------------|---------------------|-------------------------------------------------------|----------|
|           |                |                                                  |     |
| Section 9.5.   |                | Reference in Notes to Supplemental Indentures         | 65       |
|           |                |                                                  |     |
| ARTICLE X      | REDEMPTION OF NOTES | 65                                                    |
|           |                |                                                  |     |
| Section 10.1.  |                | Redemption                                            | 65       |
|           |                |                                                  |     |
| Section 10.2.  |                | Form of Redemption Notice                             | 66       |
|           |                |                                                  |     |
| Section 10.3.  |                | Notes Payable on Redemption Date                      | 66       |
|           |                |                                                  |     |
| ARTICLE XI     | MISCELLANEOUS       | 66                                                    |
|           |                |                                                  |     |
| Section 11.1.  |                | Compliance Certificates and Opinions, etc             | 66       |
|           |                |                                                  |     |
| Section 11.2.  |                | Form of Documents Delivered to Indenture Trustee      | 68       |
|           |                |                                                  |     |
| Section 11.3.  |                | Acts of Noteholders                                   | 69       |
|           |                |                                                  |     |
| Section 11.4.  |                | Notices, etc. to Indenture Trustee                    | 69       |
|           |                |                                                  |     |
| Section 11.5.  |                | Notices to Noteholders; Waiver Notices to Noteholders | 70       |
|           |                |                                                  |     |
| Section 11.6.  |                | Alternate Payment and Notice Provisions               | 70       |
|           |                |                                                  |     |
| Section 11.7.  |                | Effect of Headings and Table of Contents              | 71       |
|           |                |                                                  |     |
| Section 11.8.  |                | Successors and Assigns                                | 71       |
|           |                |                                                  |     |
| Section 11.9.  |                | Severability                                          | 71       |
|           |                |                                                  |     |
| Section 11.10. |                | Benefits of Indenture                                 | 71       |
|           |                |                                                  |     |
| Section 11.11. |                | Legal Holiday                                         | 71       |
|           |                |                                                  |     |
| Section 11.12. |                | Governing Law                                         | 71       |
|           |                |                                                  |     |
| Section 11.13. |                | Counterparts                                          | 71       |
|           |                |                                                  |     |
| Section 11.14. |                | Recording of Indenture                                | 72       |
|           |                |                                                  |     |
| Section 11.15. |                | Trust Obligation                                      | 72       |
|           |                |                                                  |     |
| Section 11.16. |                | No Petition                                           | 72       |
|           |                |                                                  |     |
| Section 11.17. |                | Inspection                                            | 72       |
|           |                |                                                  |     |
| Section 11.18. |                | Certain Matters Regarding the Insurer                 | 73       |
|           |                |                                                  |     |
| Section 11.19. |                | Acknowledgment of Multiple Roles                      | 73       |
|                |                     |                                                       |          |  |

 

iv

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