Document:

MASTER LOAN AND SECURITY AGREEMENT

Execution Copy

______________________________________________________________________________

FRANKLIN AUTO TRUST 2005-1

$75,000,000 CLASS A-1 4.49625% Asset-Backed Notes

$82,000,000 CLASS A-2 4.84% Asset-Backed Notes

$102,000,000 CLASS A-3 4.91% Asset-Backed Notes

$46,375,000 CLASS A-4 5.01% Asset-Backed Notes

$21,000,000 CLASS B 5.12% Asset-Backed Notes

$23,625,000 CLASS C 5.44% Asset-Backed Notes

________________________________

INDENTURE

among

FRANKLIN AUTO TRUST 2005-1,

 as Issuer,

WILMINGTON TRUST COMPANY,

as Indenture Trustee and as Indenture Collateral Agent,

and

CITIBANK, N.A.,

as Indenture Administrator

Dated as of December 1, 2005

______________________________________________________________________________

CROSS REFERENCE TABLE

	   TIA

Section

	Indenture

 Section

	 	 	 	 
	310

	(a)

	(1)

	6.11

	 	(a)

	(2)

	6.11

	 	(a)

	(3)

	6.10; 6.11

	 	(a)

	(4)

	N.A.

	 	(a)

	(5)

	6.11

	 	(b)

	

	6.8; 6.11

	 	(c)

	

	N.A.

	311

	(a)

	

	6.12

	 	(b)

	

	6.12

	 	(c)

	

	N.A.

	312

	(a)

	

	7.1

	 	(b)

	

	7.2

	 	(c)

	

	7.2

	313

	(a)

	

	7.4

	 	(b)

	(1)

	7.4

	 	(b)

	(2)

	7.4

	 	(c)

	

	11.5

	 	(d)

	

	7.3

	314

	(a)

	

	3.9; 7.3

	 	(b)

	

	11.15

	 	(c)

	(1)

	11.1

	 	(c)

	(2)

	11.1

	 	(c)

	(3)

	11.1

	 	(d)

	

	11.1

	 	(e)

	

	1.1; 11.1

	 	(f)

	

	11.1

	315

	(a)

	

	6.1

	 	(b)

	

	6.5; 11.5

	 	(c)

	

	6.1

	 	(d)

	

	6.1

	 	(e)

	

	5.14

	316

	(a)

	(last sentence) 

	1.1

	 	(a)

	(1)(A)

	5.12

	 	(a)

	(1)(B)

	5.13

	 	(a)

	(2)

	N.A.

	 	(b)

	

	5.7; 5.8

	 	(c)

	

	N.A

	317

	(a)

	(1)

	5.3

	 	(a)

	(2)

	5.3

	 	(b)

	

	3.3

	318

	(a)

	

	11.7

	 	(b)

	

	N.A.

	 	(c)

	

	11.7

______________________

1

Note:  This Cross Reference Table shall not, for any purpose, be deemed to be part of this Indenture.

2.

N.A. means Not Applicable.

TABLE OF CONTENTS

Page

ARTICLE I

Definitions and Incorporation by Reference

SECTION 1.1

Definitions

3

SECTION 1.2

Incorporation by Reference of Trust Indenture Act

11

SECTION 1.3

Rules of Construction

12

ARTICLE II

The Notes

SECTION 2.1

Form

12

SECTION 2.2

Execution, Authentication and Delivery

12

SECTION 2.3

Temporary Notes

13

SECTION 2.4

Registration; Registration of Transfer and Exchange

13

SECTION 2.5

Mutilated, Destroyed, Lost or Stolen Notes

15

SECTION 2.6

Persons Deemed Owner

16

SECTION 2.7

Payment of Principal and Interest; Defaulted Interest

16

SECTION 2.8

Cancellation

17

SECTION 2.9

Release of Collateral

17

SECTION 2.10

Book-Entry Notes

17

SECTION 2.11

Notices to Clearing Agency

18

SECTION 2.12

Definitive Notes

18

ARTICLE III

Covenants

SECTION 3.1

Payment of Principal and Interest

19

SECTION 3.2

Maintenance of Office or Agency

19

SECTION 3.3

Money for Payments To Be Held in Trust

19

SECTION 3.4

Existence

21

SECTION 3.5

Protection of Trust Estate

21

SECTION 3.6

Opinions as to Trust Estate

22

SECTION 3.7

Performance of Obligations; Servicing of Receivables

22

SECTION 3.8

Negative Covenants

23

SECTION 3.9

Annual Statement as to Compliance

24

SECTION 3.10

Issuer May Consolidate, Etc. Only on Certain Terms

24

SECTION 3.11

Successor or Transferee

26

SECTION 3.12

No Other Business

26

SECTION 3.13

No Borrowing

26

SECTION 3.14

Servicer’s Obligations

26

SECTION 3.15

Guarantees, Loans, Advances and Other Liabilities

27

SECTION 3.16

Capital Expenditures

27

SECTION 3.17

Compliance with Laws

27

SECTION 3.18

Restricted Payments

27

SECTION 3.19

Notice of Events of Default

27

SECTION 3.20

Further Instruments and Acts

27

SECTION 3.21

Amendments of Sale and Servicing Agreement and Trust Agreement

27

SECTION 3.22

Income Tax Characterization

28

SECTION 3.23

Article Nine Provisions

28

ARTICLE IV

Satisfaction and Discharge

SECTION 4.1

Satisfaction and Discharge of Indenture

29

SECTION 4.2

Application of Trust Money

30

SECTION 4.3

Repayment of Moneys Held by Paying Agent

30

ARTICLE V

Remedies

SECTION 5.1

Events of Default

31

SECTION 5.2

Rights Upon Event of Default

32

SECTION 5.3

Collection of Indebtedness and Suits for Enforcement by Indenture Trustee

33

SECTION 5.4

Remedies

35

SECTION 5.5

Optional Preservation of the Receivables

36

SECTION 5.6

Priorities

36

SECTION 5.7

Limitation of Suits

37

SECTION 5.8

Unconditional Rights of Noteholders

38

SECTION 5.9

Restoration of Rights and Remedies

38

SECTION 5.10

Rights and Remedies Cumulative

38

SECTION 5.11

Delay or Omission Not a Waiver

39

SECTION 5.12

Control by Noteholders

39

SECTION 5.13

Waiver of Past Defaults

39

SECTION 5.14

Undertaking for Costs

40

SECTION 5.15

Waiver of Stay or Extension Laws

40

SECTION 5.16

Action on Notes

40

SECTION 5.17

Performance and Enforcement of Certain Obligations

40

ARTICLE VI

The Indenture Trustee, the Indenture Collateral Agent and the Indenture Administrator

SECTION 6.1

Duties of Indenture Trustee

41

SECTION 6.2

Rights of Indenture Trustee

43

SECTION 6.3

Individual Rights of Indenture Trustee

44

SECTION 6.4

Indenture Trustee’s Disclaimer

44

SECTION 6.5

Notice of Defaults

45

SECTION 6.6

Reports by Indenture Trustee to Holders

45

SECTION 6.7

Compensation and Indemnity

45

SECTION 6.8

Replacement of Indenture Trustee

46

SECTION 6.9

Successor Indenture Trustee by Merger

47

SECTION 6.10

Appointment of Co-Trustee or Separate Trustee

47

SECTION 6.11

Eligibility; Disqualification

49

SECTION 6.12

Preferential Collection of Claims Against Issuer

50

SECTION 6.13

Appointment and Powers

50

SECTION 6.14

Performance of Duties

50

SECTION 6.15

Limitation on Liability

50

SECTION 6.16

Reliance Upon Documents

52

SECTION 6.17

Successor Indenture Collateral Agent

52

SECTION 6.18

Compensation and Indemnity

53

SECTION 6.19

Representations and Warranties of the Indenture Collateral Agent

53

SECTION 6.20

Waiver of Setoffs

54

SECTION 6.21

[RESERVED]

54

SECTION 6.22

Appointment and Powers of the Indenture Administrator

54

SECTION 6.23

Performance of Duties of the Indenture Administrator

54

SECTION 6.24

Limitation on Liability of the Indenture Administrator

55

SECTION 6.25

Reliance Upon Documents of the Indenture Administrator

55

SECTION 6.26

Successor Indenture Administrator

55

SECTION 6.27

Compensation and Indemnity of the Indenture Administrator

56

SECTION 6.28

Representations and Warranties of the Indenture Administrator

57

ARTICLE VII

Noteholders’ Lists and Reports

SECTION 7.1

Issuer To Furnish To Indenture Trustee Names and Addresses of Noteholders

58

SECTION 7.2

Preservation of Information; Communications to Noteholders

58

SECTION 7.3

Reports by Issuer

58

SECTION 7.4

Reports by Trustee

59

ARTICLE VIII

Accounts, Disbursements and Releases

SECTION 8.1

Collection of Money

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

62

ARTICLE IX

Supplemental Indentures

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

65

SECTION 9.4

Effect of Supplemental Indenture

65

SECTION 9.5

Conformity With Trust Indenture Act

65

SECTION 9.6

Reference in Notes to Supplemental Indentures

65

ARTICLE X

Redemption of Notes

SECTION 10.1

Redemption

66

SECTION 10.2

Form of Redemption Notice

66

SECTION 10.3

Notes Payable on Redemption Date

67

ARTICLE XI

Miscellaneous

SECTION 11.1

Compliance Certificates and Opinions, etc.

67

SECTION 11.2

Form of Documents Delivered to Trustee

69

SECTION 11.3

Acts of Noteholders

70

SECTION 11.4

Notices, etc., to Indenture Trustee, Issuer and Rating Agencies

70

SECTION 11.5

Notices to Noteholders; Waiver

71

SECTION 11.6

Alternate Payment and Notice Provisions

71

SECTION 11.7

Conflict with Trust Indenture Act

72

SECTION 11.8

Effect of Headings and Table of Contents

72

SECTION 11.9

Successors and Assigns

72

SECTION 11.10

Separability

72

SECTION 11.11

Benefits of Indenture

72

SECTION 11.12

Legal Holidays

72

SECTION 11.13

GOVERNING LAW

72

SECTION 11.14

Counterparts

73

SECTION 11.15

Recording of Indenture

73

SECTION 11.16

Trust Obligation

73

SECTION 11.17

No Petition

73

SECTION 11.18

Inspection

74

SECTION 11.19

No Joint Venture

74

EXHIBITS

EXHIBIT A

-

SCHEDULE OF RECEIVABLES

EXHIBIT B

-

SALE AND SERVICING AGREEMENT

EXHIBIT C

-

NOTE DEPOSITORY AGREEMENT

EXHIBIT D-1 - 

FORM OF CLASS A-1 NOTES

EXHIBIT D-2 - 

FORM OF CLASS A-2 NOTES

EXHIBIT D-3 - 

FORM OF CLASS A-3 NOTES

EXHIBIT D-4 - 

FORM OF CLASS A-4 NOTES

EXHIBIT D-5 - 

FORM OF CLASS B NOTES

EXHIBIT D-6 - 

FORM OF CLASS C NOTES

INDENTURE dated as of December 1, 2005, among FRANKLIN AUTO TRUST 2005-1, a Delaware statutory trust, as issuer (the “Issuer”), WILMINGTON TRUST COMPANY, as indenture trustee (the “Indenture Trustee”) and as indenture collateral agent (the “Indenture Collateral Agent”), and CITIBANK, N.A., as indenture administrator (the “Indenture Administrator”).

Each party agrees as follows for the benefit of the other party, and the equal and ratable benefit of the Holders of the Issuer’s Class A-1 4.49625% Asset-Backed Notes (the “Class A-1 Notes”), Class A-2 4.84% Asset-Backed Notes (the “Class A-2 Notes”), Class A-3 4.91% Asset-Backed Notes (the “Class A-3 Notes”), Class A-4 5.01% Asset-Backed Notes (the “Class A-4 Notes”), Class B 5.12% Asset-Backed Notes (the “Class B Notes”) and Class C 5.44% Asset-Backed Notes (the “Class C Notes” and, together with the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and the Class B Notes, the “Notes”):

As security for the payment and performance by the Issuer of its obligations under this Indenture and the Notes, the Issuer has agreed to assign the Collateral (as defined below) as collateral to the Indenture Collateral Agent for the benefit of the Indenture Trustee on behalf of the Noteholders.

GRANTING CLAUSE

The Issuer hereby Grants to the Indenture Collateral Agent at the Closing Date, for the benefit of the Issuer Secured Parties to secure the Issuer Secured Obligations, all of the Issuer’s right, title and interest in and to, whether now owned or existing or hereafter acquired or arising, (a) the Receivables and all monies received thereon on and after the Cutoff Date; (b)  the security interests in the Financed Vehicles granted by Obligors pursuant to the Receivables and any other interest of the Issuer in the Financed Vehicles; (c) any proceeds with respect to the Receivables repurchased by a Dealer, pursuant to a Dealer Agreement, as a result of a breach of representation or warranty in the related Dealer Agreement; (d) any proceeds with respect to the Receivables from claims on any physical damage, credit life or disability insurance policies covering Financed Vehicles or Obligors and any proceeds from the liquidation of the Receivables; (e) any extended warranty service contracts on the related Financed Vehicles; (f) all funds on deposit from time to time in the Trust Accounts, and in all investments and proceeds thereof and all rights of the Issuer therein (including all income thereon); (g) the Receivables Files; (h) the Issuer’s rights and benefits, but none of its obligations or burdens, under the Sale and Servicing Agreement (including all rights of the Depositor under the Purchase Agreement assigned to the Issuer pursuant to the Sale and Servicing Agreement); and (i) all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all of the foregoing, including all proceeds of the conversion, voluntary or involuntary, into cash or other liquid property, 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 of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the foregoing (collectively, the “Collateral”).

The foregoing Grant is made in trust to secure the payment of principal of and interest on, and any other amounts owing in respect of, the Notes, equally and ratably without prejudice, priority or distinction except as set forth herein, and to secure compliance with the provisions of this Indenture, all as provided in this Indenture.

The Indenture Collateral Agent, for the benefit of the Indenture Trustee on behalf of the Holders of the Notes and for the benefit of the Letter of Credit Provider acknowledges such Grant, accepts the trusts under this Indenture in accordance with the provisions of this Indenture and agrees to perform its duties required in this Indenture to the best of its ability to the end that the interests of the Holders of the Notes may be adequately and effectively protected.

ARTICLE I

Definitions and Incorporation by Reference

SECTION 1.1   Definitions.  Except as otherwise specified herein, the following terms have the respective meanings set forth below for all purposes of this Indenture.

“Act” has the meaning specified in Section 11.3(a).

“Affiliate” means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person.  For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.  A Person shall not be deemed to be an Affiliate of any person solely because such other Person has the contractual right or obligation to manage such Person unless such other Person controls such Person through equity ownership or otherwise.

“Authorized Officer” means, with respect to the Issuer and the Servicer, any officer (or agent acting under a power of attorney) of the Owner Trustee or the Servicer, as applicable, who is authorized to act for the Owner Trustee or the Servicer, as applicable, in matters relating to the Issuer or the Servicer and who is identified on the list of Authorized Officers delivered by each of the Owner Trustee and the Servicer to the Indenture Trustee and the Indenture Administrator on the Closing Date (as such list may be modified or supplemented from time to time thereafter).

“Basic Documents” means the Certificate of Trust, the Trust Agreement, the Sale and Servicing Agreement, this Indenture, the Note Depository Agreement, the Purchase Agreement, the Letter of Credit, the Letter of Credit Reimbursement Agreement, the Servicer Deposit Support Agreement  and other documents and certificates delivered in connection therewith.

“Book Entry Notes” means a beneficial interest in the Notes, ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 2.10.

“Business Day” means a day other than a Saturday, a Sunday or other day on which commercial banks located in the states of California, Delaware, New York or Utah are authorized or obligated to be closed.

“Certificate of Trust” means the certificate of trust of the Issuer substantially in the form of Exhibit B to the Trust Agreement.

“Class A-1 Notes” means the Class A-1 4.49625% Asset-Backed Notes, substantially in the form of Exhibit D-1.

“Class A-1 Interest Rate” means 4.49625% per annum (computed on the basis of the actual number of days elapsed and a 360-day year).

“Class A-2 Notes” means the Class A-2 4.84% Asset-Backed Notes, substantially in the form of Exhibit D-2.

“Class A-2 Interest Rate” means 4.84% per annum (computed on the basis of a 360-day year of twelve 30-day months).

“Class A-3 Notes” means the Class A-3 4.91% Asset-Backed Notes, substantially in the form of Exhibit D-3.

“Class A-3 Interest Rate” means 4.91% per annum (computed on the basis of a 360-day year of twelve 30-day months).

“Class A-4 Notes” means the Class A-4 5.01% Asset-Backed Notes, substantially in the form of Exhibit D-4.

“Class A-4 Interest Rate” means 5.01% per annum (computed on the basis of a 360-day year of twelve 30-day months).

“Class B Notes” means the Class B 5.12% Asset-Backed Notes, substantially in the form of Exhibit D-5.

“Class B Interest Rate” means 5.12% per annum (computed on the basis of a 360-day year of twelve 30-day months).

“Class C Notes” means the Class C 5.44% Asset-Backed Notes, substantially in the form of Exhibit D-6.

“Class C Interest Rate” means 5.44% per annum (computed on the basis of a 360-day year of twelve 30-day months).

“Clearing Agency” means an organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act.

“Clearing Agency Participant” means a broker, dealer, bank, other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency.

“Closing Date” means December 8, 2005.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and Treasury Regulations promulgated thereunder.

“Collateral” has the meaning specified in the Granting Clause of this Indenture.

“Corporate Trust Office” means the principal office of the Indenture Trustee at which at any particular time its corporate trust business shall be administered, which office at date of the execution of this Agreement is located at 1100 North Market Street, Wilmington, Delaware 19890-0001, or at such other address as the Indenture Trustee may designate from time to time by notice to the Noteholders, the Indenture Administrator, the Servicer and the Issuer, or the principal corporate trust office of any successor Indenture Trustee (the address of which the successor Indenture Trustee will notify the Indenture Administrator, the Servicer, the Noteholders and the Issuer).

“Default” means any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default.

“Definitive Notes” has the meaning specified in Section 2.10.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Event of Default” has the meaning specified in Section 5.1.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Executive Officer” means, with respect to any corporation, the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, President, Executive Vice President, any Vice President, the Secretary or the Treasurer of such corporation; and with respect to any partnership, any general partner thereof.

“Grant” means mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, create, grant a lien upon or a security interest in or right of set-off against, deposit, or set over and confirm pursuant to this Indenture.  A Grant of the Collateral or of any other agreement or instrument shall include all rights, powers and options (but none of the obligations) of the Granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for principal and interest payments in respect of the Collateral and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring proceedings in the name of the Granting party or otherwise and generally to do and receive anything that the Granting party is or may be entitled to do or receive thereunder or with respect thereto.

“Holder” or “Noteholder” means the Person in whose name a Note is registered on the Note Register.

“Indebtedness” means, with respect to any Person at any time, (a) indebtedness or liability of such Person for borrowed money whether or not evidenced by bonds, debentures, notes or other instruments, or for the deferred purchase price of property or services (including trade obligations); (b) obligations of such Person as lessee under leases which should have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases; (c) current liabilities of such Person in respect of unfunded vested benefits under plans covered by Title IV of ERISA; (d) obligations issued for or liabilities incurred on the account of such Person; (e) obligations or liabilities of such Person arising under acceptance facilities; (f) obligations of such Person under any guarantees, endorsements (other than for collection or deposit in the ordinary course of business) and other contingent obligations to purchase, to provide funds for payment, to supply funds to invest in any Person or otherwise to assure a creditor against loss; (g) obligations of such Person secured by any lien on property or assets of such Person, whether or not the obligations have been assumed by such Person; or (h) obligations of such Person under any interest rate or currency exchange agreement.

“Indenture” means this Indenture as amended and supplemented from time to time.

“Indenture Administrator” means Citibank, N.A., a national banking association, or any successor under this Indenture.

 “Indenture Collateral Agent” means, initially, Wilmington Trust Company, in its capacity as collateral agent on behalf of the Issuer Secured Parties, including its successors in interest, until and unless a successor Person shall have become the Indenture Collateral Agent pursuant to Section 6.17 hereof, and thereafter “Indenture Collateral Agent” shall mean such successor Person.

“Indenture Trustee” means Wilmington Trust Company, a Delaware banking corporation, not in its individual capacity but as indenture trustee under this Indenture, or any successor Indenture Trustee under this Indenture.

“Independent” means, when used with respect to any specified Person, that the person (a) is in fact independent of the Issuer, any other obligor upon the Notes, the Depositor and any Affiliate of any of the foregoing persons, (b) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Depositor or any Affiliate of any of the foregoing Persons and (c) is not connected with the Issuer, any such other obligor, the Depositor or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or Person performing similar functions.

“Independent Certificate” means a certificate or opinion to be delivered to the Indenture Collateral Agent, Indenture Trustee, or the Indenture Administrator under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.1, prepared by an Independent appraiser or other expert appointed by an Issuer Order and approved by the Indenture Administrator in the exercise of reasonable care, and such opinion or certificate shall state that the signer has read the definition of “Independent” in this Indenture and that the signer is Independent within the meaning thereof.

“Interest Rate” means, with respect to the (i) Class A-1 Notes, the Class A-1 Interest Rate, (ii) Class A-2 Notes, the Class A-2 Interest Rate, (iii) Class A-3 Notes, the Class A-3 Interest Rate, (iv) Class A-4 Notes, the Class A-4 Interest Rate, (v) Class B Notes, the Class B Interest Rate and (vi) Class C Notes, the Class C Interest Rate.

“Issuer” means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained herein and required by the TIA, each other obligor on the Notes.

“Issuer Order” and “Issuer Request” means a written order or request signed in the name of the Issuer by any one of its Authorized Officers and delivered to the Indenture Trustee.

“Issuer Secured Obligations” means the Letter of Credit Provider Issuer Secured Obligations and the Trustee Issuer Secured Obligations.

“Issuer Secured Parties” means the Indenture Trustee in respect of the Trustee Issuer Secured Obligations and the Letter of Credit Provider in respect of the Letter of Credit Provider Issuer Secured Obligations.

“Letter of Credit Provider Issuer Secured Obligations” means all amounts and obligations which the Issuer may at any time owe to the Letter of Credit Provider under any of the Basic Documents.

“Note” means a Class A-1 Note, a Class A-2 Note, a Class A-3 Note, a Class A-4 Note, a Class B Note and a Class C Note.

“Note Depository Agreement” means the agreement between the Issuer and The Depository Trust Company, as the initial Clearing Agency, dated December 7, 2005 substantially in the form of Exhibit C.

“Note Owner” means, with respect to a Book-Entry Note, the person who is the owner of such Book-Entry Note, as reflected on the books of the Clearing Agency, or on the books of a Person maintaining an account with such Clearing Agency (directly as a Clearing Agency Participant or as an indirect participant, in each case in accordance with the rules of such Clearing Agency).

“Note Register” and “Note Registrar” have the respective meanings specified in Section 2.4.

“Notice” has the meaning specified in Section 5.18(b).

“Officer’s Certificate” means a certificate signed by any Authorized Officer of the Owner Trustee, under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.1 and TIA § 314, and delivered to the Indenture Trustee and Indenture Administrator. Unless otherwise specified, any reference in this Indenture to an Officer’s Certificate shall be to an Officer’s Certificate of any Authorized Officer of the Owner Trustee.

“Opinion of Counsel” means one or more written opinions of counsel who may, except as otherwise expressly provided in this Indenture, be employees of or counsel to the Issuer, the Depositor or the Servicer and who shall be satisfactory to the Indenture Administrator as an agent of the Indenture Trustee and addressed to the Indenture Trustee, and which shall comply with any applicable requirements of Section 11.01, and shall be in form and substance satisfactory to the Indenture Administrator as an agent of the Indenture Trustee, and shall be addressed to the Indenture Trustee.

“Outstanding” means, as of the date of determination, all Notes theretofore authenticated and delivered under this Indenture except:

(i)

Notes theretofore canceled by the Note Registrar or delivered to the Note Registrar for cancellation;

(ii)

Notes or portions thereof the payment for which money in the necessary amount has been theretofore deposited with the Indenture Trustee or any Paying Agent in trust for the Holders of such Notes (provided, however, that if such Notes are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor, satisfactory to the Indenture Trustee); and

(iii)

Notes in exchange for or in lieu of other Notes which have been authenticated and delivered pursuant to this Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Notes are held by a bona fide purchaser;

provided, however, that in determining whether the Holders of the requisite Outstanding Amount of the Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any Basic Document, Notes owned by the Issuer, any other obligor upon the Notes, the Depositor or any Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that a Responsible Officer of the Indenture Trustee either actually knows to be so owned or has received written notice thereof shall be so disregarded.  Notes so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee the pledgee’s right so to act with respect to such Notes and that the pledgee is not the Issuer, any other obligor upon the Notes, the Depositor or any Affiliate of any of the foregoing Persons.

“Outstanding Amount” means the aggregate principal amount of all Notes, or class of Notes, as applicable, Outstanding at the date of determination.

“Paying Agent” means initially Citibank, N.A., in its capacity as paying agent on behalf of the Indenture Trustee, including its successors in interest until and unless a successor person, that meets the eligibility standards for the Indenture Trustee specified in Section 6.11 and is authorized by the Issuer to make the payments to and distributions from the Collection Account, the Note Distribution Account and the Spread Account, including payment of principal of or interest on the Notes on behalf of the Issuer, shall have become paying agent.

“Payment Date” means a Distribution Date.

“Plan” means an employee benefit plan, as defined in section 3(3) of ERISA, that is subject to Title I of ERISA or a plan, as defined in section 4975(e)(1) of the Code.

“Predecessor Note” means, with respect to any particular Note, every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purpose of this definition, any Note authenticated and delivered under Section 2.5 in lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note.

“Proceeding” means any suit in equity, action at law or other judicial or administrative proceeding.

“Record Date” means, with respect to a Payment Date or Redemption Date, the close of business on the last Business Day immediately preceding such Payment Date or Redemption Date.

“Redemption Date” means in the case of a redemption of the Notes pursuant to Section 10.1(a) or a payment to Noteholders pursuant to Section 10.1(c), the Payment Date specified by the Servicer or the Issuer pursuant to Section 10.1(a) or (c) as applicable.

“Redemption Price” means (a) in the case of a redemption of the Notes pursuant to Section 10.1(a), an amount equal to the unpaid principal amount of each class of Notes being redeemed plus accrued and unpaid interest thereon to but excluding the Redemption Date or (b) in the case of a payment made to Noteholders pursuant to Section 10.1(c), the amount on deposit in the Note Distribution Account, but not in excess of the amount specified in clause (a) above.

“Responsible Officer” means, with respect to the Indenture Trustee and Indenture Administrator, respectively, any officer within the Corporate Trust Office of the Indenture Trustee or the office of the Indenture Administrator, as applicable, including any Vice President, Assistant Vice President, Assistant Treasurer, Assistant Secretary, or any other officer of the Indenture Trustee or the Indenture Administrator customarily performing functions similar to those performed by any of the above designated officers and having direct responsibility for this Indenture and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

“Sale and Servicing Agreement” means the Sale and Servicing Agreement dated as of December 1, 2005, among the Issuer, the Representative, the Depositor and the Servicer, substantially in the form of Exhibit B as the same may be amended or supplemented from time to time.

“Schedule of Receivables” means the listing of the Receivables set forth in Exhibit A (which Exhibit may be in the form of microfiche).

“State” means any one of the 50 states of the United States of America or the District of Columbia.

“Successor Servicer” has the meaning specified in Section 3.7(e).

“Termination Date” means the later of (i) the date on which the Indenture Trustee shall have received payment and performance of all Trustee Issuer Secured Obligations and (ii) the date on which the Letter of Credit Provider shall have received payment and performance of all Letter of Credit Provider Issuer Secured Obligations.

“Trust Estate” means all money, instruments, rights and other property that are subject or intended to be subject to the lien and security interest of this Indenture for the benefit of the Noteholders and the Letter of Credit Provider (including all property and interests Granted to the Indenture Collateral Agent for the benefit of the Issuer Secured Parties), including all proceeds thereof.

“Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939 as in force on the date hereof, unless otherwise specifically provided.

“Trustee Issuer Secured Obligations” means all amounts and obligations which the Issuer may at any time owe to the Indenture Trustee for the benefit of the Noteholders under this Indenture or the Notes.

“UCC” means, unless the context otherwise requires, the Uniform Commercial Code, as in effect in the relevant jurisdiction, as amended from time to time.

(a)

Except as otherwise specified herein, the following terms have the respective meanings set forth in the Sale and Servicing Agreement as in effect on the Closing Date for all purposes of this Indenture, and the definitions of such terms are equally applicable both to the singular and plural forms of such terms:

	Term

	Section of Sale and Servicing Agreement

	Annual Percentage Rate or APR

	Section 1.1

	Capitalized Interest Account

	Section 1.1

	Certificateholders

	Section 1.1

	Closing Date

	Section 1.1

	Collection Account

	Section 1.1

	Collection Period

	Section 1.1

	Contract

	Section 1.1

	Controlling Class

	Section 1.1

	Depositor

	Section 1.1

	Determination Date

	Section 1.1

	Distribution Amount

	Section 1.1

	Distribution Date

	Section 1.1

	Eligible Deposit Account

	Section 1.1

	Eligible Investments

	Section 1.1

	Final Scheduled Distribution Date

	Section 1.1

	Final Scheduled Maturity Date

	Section 1.1

	Financed Vehicle

	Section 1.1

	First Priority Principal Distribution Amount

	Section 1.1

	Interest Period

	Section 1.1

	Insolvency Proceeds

	Section 1.1

	Interest Period

	Section 1.1

	Letter of Credit

	Section 1.1

	Letter of Credit Provider

	Section 1.1

	Letter of Credit Reimbursement Agreement

	Section 1.1

	Monthly Period

	Section 1.1

	Note Distribution Account

	Section 1.1

	Noteholders’ Distributable Amount

	Section 1.1

	Noteholders’ Interest Distributable Amount

	Section 1.1

	Noteholders’ Percentage

	Section 1.1

	Obligor

	Section 1.1

	Original Pool Balance

	Section 1.1

	Owner Trustee

	Section 1.1

	Person

	Section 1.1

	Pool Balance

	Section 1.1

	Purchase Agreement

	Section 1.1

	Purchased Receivable

	Section 1.1

	Rating Agency

	Section 1.1

	Rating Agency Condition

	Section 1.1

	Receivables

	Section 1.1

	Regular Principal Distribution Amount

	Section 1.1

	Second Priority Principal Distribution Amount

	Section 1.1

	Servicer

	Section 1.1

	Servicer Default

	Section 1.1

	Total Distribution Amount

	Section 1.1

	Trust Accounts

	Section 1.1

	Trust Agreement

	Section 1.1

(b)

Capitalized terms used herein and not otherwise defined herein or in the Sale and Servicing Agreement have the meanings assigned to them in the Trust Agreement.

SECTION 1.2   Incorporation by Reference of Trust Indenture Act.  Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.  The following TIA terms used in this Indenture have the following meanings:

“Commission” means the Securities and Exchange Commission.

“indenture securities” means the Notes.

“indenture security holder” means a Noteholder.

“indenture to be qualified” means this Indenture.

“indenture trustee” or “institutional trustee” means the Indenture Trustee.

“obligor” on the indenture securities means the Issuer and any other obligor on the indenture securities.

All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule have the meaning assigned to them by such definitions.

SECTION 1.3   Rules of Construction.  Unless the context otherwise requires:

(i)

a term has the meaning assigned to it;

(ii)

an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles as in effect from time to time;

(iii)

“or” is not exclusive;

(iv)

“including” means including without limitation; and

(v)

words in the singular include the plural and words in the plural include the singular.

ARTICLE II

The Notes

SECTION 2.1   Form.  The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes and the Class C Notes and in each case together with the Indenture Trustee’s certificate of authentication, shall be in substantially the form set forth in Exhibits D-1, D-2, D-3, D-4, D-5 and D-6, respectively, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the officers executing such Notes, as evidenced by their execution of the Notes.  Any portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Note.

The Definitive Notes shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods (with or without steel engraved borders), all as determined by the officers executing such Notes, as evidenced by their execution of such Notes.

Each Note shall be dated the date of its authentication.  The terms of the Notes set forth in Exhibits D-1, D-2, D-3, D-4, D-5 and D-6, respectively, are part of the terms of this Indenture.

SECTION 2.2   Execution, Authentication and Delivery.  The Notes shall be executed on behalf of the Issuer or by any of its Authorized Officers.  The signature of any such Authorized Officer on the Notes may be manual or facsimile.

Notes bearing the manual or facsimile signature of individuals who were at any time Authorized Officers of the Issuer shall bind the Issuer, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of such Notes.

The Indenture Administrator shall upon receipt of the Issuer Order authenticate and deliver Class A-1 Notes for original issue in an aggregate principal amount of $75,000,000, Class A-2 Notes for original issue in an aggregate principal amount of $82,000,000, Class A-3 Notes for original issue in an aggregate principal amount of $102,000,000, Class A-4 Notes for original issue in an aggregate principal amount of $46,375,000, Class B Notes for original issue in an aggregate principal amount of $21,000,000 and Class C Notes for original issue in an aggregate principal amount of $23,625,000.  The aggregate principal amounts of the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, Class B Notes and Class C Notes outstanding at any time may not exceed such amounts except as provided in Section 2.5.

Each Note shall be dated the date of its authentication.  The Notes shall be issuable as registered Notes in the minimum denomination of $100,000 and in integral multiples of $1,000 thereof (except for one Note of each class which may be issued in a denomination other than an integral multiple of $1,000).

No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by the Indenture Trustee by the manual signature of one of its authorized signatories, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.

SECTION 2.3   Temporary Notes.  Pending the preparation of Definitive Notes, the Issuer may execute, and upon receipt of an Issuer Order, the Indenture Administrator shall authenticate and deliver, temporary Notes which are printed, lithographed, typewritten, mimeographed or otherwise produced, of the tenor of the Definitive Notes in lieu of which they are issued and with such variations not inconsistent with the terms of this Indenture as the officers executing such Notes may determine, as evidenced by their execution of such Notes.

If temporary Notes are issued, the Issuer will cause Definitive Notes to be prepared without unreasonable delay. After the preparation of Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes upon surrender of the temporary Notes at the office or agency of the Issuer to be maintained as provided in Section 3.2, without charge to the Holder.  Upon surrender for cancellation of any one or more temporary Notes, the Issuer shall execute and the Indenture Administrator shall authenticate and deliver in exchange therefor a like principal amount of Definitive Notes of authorized denominations.  Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits under this Indenture as Definitive Notes.

SECTION 2.4   Registration; Registration of Transfer and Exchange.  (a)   The Issuer shall cause to be kept a register (the “Note Register”) in which, subject to such reasonable regulations as it may prescribe, the Issuer shall provide for the registration of Notes and the registration of transfers of Notes.  The Indenture Administrator shall be “Note Registrar” for the purpose of registering Notes and transfers of Notes as herein provided.  Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a successor or, if it elects not to make such an appointment, assume the duties of Note Registrar.

If a Person other than the Indenture Trustee or the Indenture Administrator is appointed by the Issuer as Note Registrar, the Issuer will give the Indenture Trustee and the Indenture Administrator prompt written notice of the appointment of such Note Registrar and of the location, and any change in the location, of the Note Register, and the Indenture Trustee and the Indenture Administrator shall have the right to inspect the Note Register at all reasonable times and to obtain copies thereof, and the Indenture Trustee and the Indenture Administrator shall have the right to rely upon a certificate executed on behalf of the Note Registrar by an Executive Officer thereof as to the names and addresses of the Holders of the Notes and the principal amounts and number of such Notes.

Upon surrender for registration of transfer of any Note at the office or agency of the Issuer to be maintained as provided in Section 3.2, if the requirements of Section 8-401(1) of the UCC are met, the Issuer shall execute and upon its request the Indenture Administrator shall authenticate and the Noteholder shall obtain from the Indenture Administrator, in the name of the designated transferee or transferees, one or more new Notes, in any authorized denominations, of the same class and a like aggregate principal amount.

At the option of the Holder, Notes may be exchanged for other Notes in any authorized denominations, of the same class and a like aggregate principal amount, upon surrender of the Notes to be exchanged at such office or agency.  Whenever any Notes are so surrendered for exchange, if the requirements of Section 8-401(1) of the UCC are met the Issuer shall execute and upon its request the Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee, the Notes which the Noteholder making the exchange is entitled to receive.

All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration of transfer or exchange.

Every Note presented or surrendered for registration of transfer or exchange shall be (i) duly endorsed by, or be accompanied by a written instrument of transfer in form satisfactory to the Indenture Administrator duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar which requirements include membership or participation in Securities Transfer Agents Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act, and (ii) accompanied by such other documents as the Indenture Administrator may require.

No service charge shall be made to a Holder for any registration of transfer or exchange of Notes, but the Note Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Section 2.3 or 9.6 not involving any transfer.

The preceding provisions of this section notwithstanding, the Issuer shall not be required to make and the Note Registrar need not register transfers or exchanges of Notes selected for redemption or of any Note for a period of 15 days preceding the due date for any payment with respect to the Note.

(b)   

Each Person that acquires a Note will be deemed to represent by its acceptance of the Note, that (i) it is not, and is not acquiring the Note on behalf of or with the assets of a Plan, or any employee benefit plan subject to any applicable similar law (“Similar Law”), or (ii) its acquisition and holding of the Note are eligible for relief under Prohibited Transaction Class Exemption (“PTCE”) 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23 or a similar exemption, or, in the case of an employee benefit plan subject to Similar Law, do not result in a nonexempt violation of Similar Law.  Any transfer with respect to which the representation in clause (i) or (ii) above is not true shall be void ab initio.

SECTION 2.5   Mutilated, Destroyed, Lost or Stolen Notes.  If (i) any mutilated Note is surrendered to the Indenture Administrator, or the Indenture Administrator receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (ii) there is delivered to the Indenture Administrator such security or indemnity as may be required by it to hold the Issuer and the Indenture Administrator harmless, then, in the absence of notice to the Issuer, the Note Registrar or the Indenture Administrator that such Note has been acquired by a bona fide purchaser, and provided that the requirements of Section 8-405 of the UCC are met, the Issuer shall execute and upon its request the Indenture Administrator shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note; provided, however, that if any such destroyed, lost or stolen Note, but not a mutilated Note, shall have become or within seven days shall be due and payable, or shall have been called for redemption, instead of issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so due or payable or upon the Redemption Date without surrender thereof.  If, after the delivery of such replacement Note or payment of a destroyed, lost or stolen Note pursuant to the proviso to the preceding sentence, a bona fide purchaser of the original Note in lieu of which such replacement Note was issued presents for payment such original Note, the Issuer and the Indenture Administrator shall be entitled to recover such replacement Note (or such payment) from the Person to whom it was delivered or any Person taking such replacement Note from such Person to whom such replacement Note was delivered or any assignee of such Person, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer or the Indenture Administrator in connection therewith.

Upon the issuance of any replacement Note under this Section, the Issuer may require the payment by the Holder of such Note of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Indenture Administrator) connected therewith.

Every replacement Note issued pursuant to this Section in replacement of any mutilated, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Issuer, whether or not the mutilated, destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.

SECTION 2.6   Persons Deemed Owner.  Prior to due presentment for registration of transfer of any Note, the Issuer, the Indenture Administrator, any agent of the Issuer, or the Indenture Administrator and any of their respective agents may treat the Person in whose name any Note is registered (as of the day of determination) as the owner of such Note for the purpose of receiving payments of principal of and interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note be overdue, and none of the Issuer, the Indenture Administrator nor any agent of the Issuer or the Indenture Administrator shall be affected by notice to the contrary.

SECTION 2.7   Payment of Principal and Interest; Defaulted Interest.  (a)   The Notes shall accrue interest as provided in the forms of the Class A-1 Note, the Class A-2 Note, the Class A-3 Note, the Class A-4 Note, the Class B Note and the Class C Note set forth in Exhibits D-1, D-2, D-3, D-4, D-5 and D-6, respectively, and such interest shall be payable on each Payment Date as specified therein.  Any installment of interest or principal, if any, payable on any Note which is punctually paid or duly provided for by the Issuer on the applicable Payment Date shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered on the Record Date, by check mailed first-class, postage prepaid, to such Person’s address as it appears on the Note Register on such Record Date, except that, unless Definitive Notes have been issued pursuant to Section 2.12, with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payment will be made by wire transfer in immediately available funds to the account designated by such nominee and except for the final installment of principal payable with respect to such Note on a Payment Date or on the Final Scheduled Distribution Date (and except for the Redemption Price for any Note called for redemption pursuant to Section 10.1(a)) which shall be payable as provided below.  The funds represented by any such checks returned undelivered shall be held in accordance with Section 3.3.

(b)   

The principal of each Note shall be payable in installments on each Payment Date as provided in the forms of the Class A-1 Note, the Class A-2 Note, the Class A-3 Note, the Class A-4 Note, the Class B Note and the Class C Note set forth in Exhibits D-1, D-2, D-3, D-4, D-5 and D-6, respectively.  Notwithstanding the foregoing, the entire unpaid principal amount of the Notes shall be due and payable, if not previously paid, on the date on which an Event of Default shall have occurred and be continuing, if the Indenture Trustee or the Holders of the Notes representing not less than a majority of the Outstanding Amount of the Notes of the Controlling Class have declared the Notes to be immediately due and payable in the manner provided in Section 5.2.  All principal payments on each class of Notes shall be made pro rata to the Noteholders of such class entitled thereto.  The Indenture Trustee or the Indenture Administrator shall notify the Person in whose name a Note is registered at the close of business on the Record Date preceding the Payment Date on which the Issuer expects that the final installment of principal of and interest on such Note will be paid.  Such notice shall be mailed or transmitted by facsimile prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of such Note and shall specify the place where such Note may be presented and surrendered for payment of such installment.  Notices in connection with redemptions of Notes shall be mailed to Noteholders as provided in Section 10.2.

(c)   

If the Issuer defaults in a payment of interest on the Notes, the Issuer shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful) at the applicable Interest Rate.  The Issuer may pay such defaulted interest to the Persons who are Noteholders on a subsequent special record date, which date shall be at least five Business Days prior to the payment date.  The Issuer shall fix or cause to be fixed any such special record date and payment date, and, at least 15 days before any such special record date, the Issuer shall mail to each Noteholder, the Indenture Trustee and the Indenture Administrator a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.

SECTION 2.8   Cancellation.  Subject to Section 2.7(d), all Notes surrendered for payment, registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Indenture Administrator, be delivered to the Indenture Administrator and shall be promptly canceled by the Indenture Administrator.  Subject to Section 2.7(d), the Issuer may at any time deliver to the Indenture Administrator for cancellation any Notes previously authenticated and delivered hereunder which the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly canceled by the Indenture Administrator.  No Notes shall be authenticated in lieu of or in exchange for any Notes canceled as provided in this Section, except as expressly permitted by this Indenture.  Subject to Section 2.7(d), all canceled Notes may be held or disposed of by the Indenture Administrator in accordance with its standard retention or disposal policy as in effect at the time unless the Issuer shall direct by an Issuer Order that they be destroyed or returned to it; provided that such Issuer Order is timely and the Notes have not been previously disposed of by the Indenture Administrator.

SECTION 2.9   Release of Collateral.  The Indenture Collateral Agent shall, on or after the Termination Date, release any remaining portion of the Trust Estate from the lien created by this Indenture and the Indenture Administrator shall deposit in the Collection Account any funds then on deposit in any other Trust Account.  The Indenture Collateral Agent shall release property from the lien created by this Indenture pursuant to this Section 2.9 only upon receipt of an Issuer Request accompanied by an Officer’s Certificate, an Opinion of Counsel and Independent Certificates in accordance with TIA Sections 314(c) and 314(d)(1) meeting the applicable requirements of Section 11.1.

SECTION 2.10   Book-Entry Notes.  The Notes, upon original issuance, will be issued in the form of typewritten Notes representing the Book-Entry Notes, to be delivered to The Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the Issuer.  Such Notes shall initially be registered on the Note Register in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Note Owner will receive a Definitive Note representing such Note Owner’s interest in such Note, except as provided in Section 2.12.  Unless and until definitive, fully registered Notes (the “Definitive Notes”) have been issued to Note Owners pursuant to Section 2.12:

(i)   

the provisions of this Section shall be in full force and effect;

(ii)   

the Issuer, the Note Registrar, the Indenture Administrator and the Indenture Trustee shall be entitled to deal with the Clearing Agency for all purposes of this Indenture (including the payment of principal of and interest on the Notes and the giving of instructions or directions hereunder) as the sole Holder of the Notes, and shall have no obligation to the Note Owners;

(iii)   

to the extent that the provisions of this Section conflict with any other provisions of this Indenture, the provisions of this Section shall control;

(iv)   

the rights of Note Owners shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Note Owners and the Clearing Agency and/or the Clearing Agency Participants.  Pursuant to the Note Depository Agreement, unless and until Definitive Notes are issued pursuant to Section 2.12, the initial Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit payments of principal of and interest on the Notes to such Clearing Agency Participants;

(v)   

whenever this Indenture requires or permits actions to be taken based upon instructions or directions of Holders of Notes evidencing a specified percentage of the Outstanding Amount of the Notes (or any Class thereof, including the Controlling Class), the Clearing Agency shall be deemed to represent such percentage only to the extent that it has received instructions to such effect from Note Owners and/or Clearing Agency Participants or Persons acting through Clearing Agency Participants owning or representing, respectively, such required percentage of the beneficial interest in the Notes (or Class thereof, including the Controlling Class) and has delivered such instructions to the Indenture Trustee and the Indenture Administrator; and

(vi)   

Note Owners may receive copies of any reports sent to Noteholders pursuant to this Indenture, upon written request, together with a certification that they are Note Owners and payment of reproduction and postage expenses associated with the distribution of such reports, from the Indenture Trustee or the Indenture Administrator.

SECTION 2.11   Notices to Clearing Agency.  Whenever a notice or other communication to the Noteholders is required under this Indenture, unless and until Definitive Notes shall have been issued to Note Owners pursuant to Section 2.12, the Indenture Administrator shall give all such notices and communications specified herein to be given to Holders of the Notes to the Clearing Agency, and shall have no obligation to the Note Owners.

SECTION 2.12   Definitive Notes.  If (i) the Servicer advises the Indenture Trustee and the Indenture Administrator in writing that the Clearing Agency is no longer willing or able to properly discharge its responsibilities with respect to the Notes, and the Servicer is unable to locate a qualified successor or (ii) after the occurrence of an Event of Default, Note Owners representing beneficial interests aggregating at least a majority of the Outstanding Amount of the Notes advise the Indenture Trustee and the Indenture Administrator through the Clearing Agency in writing that the continuation of a book entry system through the Clearing Agency is no longer in the best interests of the Note Owners, then the Clearing Agency shall notify all Note Owners and the Indenture Trustee and the Indenture Administrator of the occurrence of any such event and of the availability of Definitive Notes to Note Owners requesting the same.  Upon surrender to the Indenture Administrator of the typewritten Note or Notes representing the Book-Entry Notes by the Clearing Agency, accompanied by registration instructions, the Issuer shall execute and the Indenture Administrator shall authenticate the Definitive Notes in accordance with the instructions of the Clearing Agency.  None of the Issuer, the Note Registrar, the Indenture Administrator or the Indenture Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions.  Upon the issuance of Definitive Notes, the Indenture Trustee and the Indenture Administrator shall recognize the Holders of the Definitive Notes as Noteholders.

ARTICLE III

Covenants

SECTION 3.1   Payment of Principal and Interest.  The Issuer will duly and punctually pay the principal of and interest on the Notes in accordance with the terms of the Notes and this Indenture.  Without limiting the foregoing, the Issuer will cause to be distributed all amounts on deposit in the Note Distribution Account on a Payment Date deposited therein pursuant to the Sale and Servicing Agreement (i) for the benefit of the Class A-l Notes, to Class A-1 Noteholders, (ii) for the benefit of the Class A-2 Notes, to Class A-2 Noteholders, (iii) for the benefit of the Class A-3 Notes, to Class A-3 Noteholders, (iv) for the benefit of the Class A-4 Notes, to Class A-4 Noteholders, (v) for the benefit of the Class B Notes, to Class B Noteholders and (vi) for the benefit of the Class C Notes, to Class C Noteholders.  Amounts properly withheld under the Code by any Person from a payment to any Noteholder of interest and/or principal shall be considered as having been paid by the Issuer to such Noteholder for all purposes of this Indenture.

SECTION 3.2   Maintenance of Office or Agency.  The Issuer will maintain in the Borough of Manhattan, The City of New York, an office or agency where Notes may be surrendered for registration of transfer or exchange, and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served.  The Issuer hereby initially appoints the Indenture Administrator to serve as its agent for the foregoing purposes.  The Issuer will give prompt written notice to the Indenture Administrator of the location, and of any change in the location, of any such office or agency.  If at any time the Issuer shall fail to maintain any such office or agency or shall fail to furnish the Indenture Administrator with the address thereof, such surrenders, notices and demands may be made or served at the office of the Indenture Administrator at 111 Wall Street, 15th Floor, New York, New York 10005, and the Issuer hereby appoints the Indenture Administrator as its agent to receive all such surrenders, notices and demands.

SECTION 3.3   Money for Payments To Be Held in Trust.  As provided in Sections 8.2(a) and (b), all payments of amounts due and payable with respect to any Notes that are to be made from amounts withdrawn from the Collection Account and the Note Distribution Account shall be made on behalf of the Issuer by the Indenture Trustee or by another Paying Agent, and no amounts so withdrawn from the Collection Account, the Spread Account and the Note Distribution Account for payments of Notes shall be paid over to the Issuer except as provided in this Section.

At least one Business Day before each Payment Date and Redemption Date, the Issuer shall deposit or cause to be deposited in immediately available funds in the Note Distribution Account an aggregate sum sufficient to pay the amounts then becoming due under the Notes, such sum to be held in trust for the benefit of the Persons entitled thereto and (unless the Paying Agent is the Indenture Trustee) shall promptly notify the Indenture Trustee of its action or failure so to act.

The Issuer will cause each Paying Agent other than the Indenture Trustee and the initial Paying Agent to execute and deliver to the Indenture Trustee an instrument in which such Paying Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of this Section, that such Paying Agent will:

(i)   

hold all sums held by it for the payment of amounts due with respect to the Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;

(ii)   

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

(iii)   

at any time during the continuance of any such default, upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent;

(iv)   

immediately resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for the payment of Notes if at any time it ceases to meet the standards required to be met by a Paying Agent at the time of its appointment; and

(v)   

comply with all requirements of the Code with respect to the withholding from any payments made by it on any Notes of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith.

The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, by Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts as those upon which the sums were held by such Paying Agent; and upon such a payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be released from all further liability with respect to such money.

Subject to applicable laws with respect to the escheat of funds, any money held by the Indenture Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Note and remaining unclaimed for two years after such amount has become due and payable shall be discharged from such trust and be paid to the Issuer on Issuer Request, and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Issuer for payment 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 to such trust money shall thereupon cease; provided, however, that the Indenture Trustee or such Paying Agent, before being required to make any such repayment, shall at the expense of the Issuer cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Issuer.  The Indenture Trustee shall also adopt and employ, at the expense of the Issuer, any other reasonable means of notification of such repayment (including, but not limited to, mailing notice of such repayment to Holders whose Notes have been called but have not been surrendered for redemption or whose right to or interest in moneys due and payable but not claimed is determinable from the records of the Indenture Trustee or of any Paying Agent, at the last address of record for each such Holder).

SECTION 3.4   Existence.  Except as otherwise permitted by the provisions of Section 3.10, the Issuer will keep in full effect its existence, rights and franchises as a statutory trust under the laws of the State of Delaware (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 will keep in full effect its existence, rights and franchises under the laws of such other jurisdiction) and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes, the Collateral and each other instrument or agreement included in the Trust Estate.

SECTION 3.5   Protection of Trust Estate.  The Issuer intends the security interest Granted pursuant to this Indenture in favor of the Issuer Secured Parties to be prior to all other liens in respect of the Trust Estate (other than tax liens, mechanics’ liens, and other liens specified in Section 3.8(iii)(B)), and the Issuer shall take all actions necessary to obtain and maintain, in favor of the Indenture Collateral Agent, for the benefit of the Issuer Secured Parties, a first lien on and a first priority, perfected security interest in the Trust Estate (other than with respect to tax liens, mechanics’ liens, and other liens specified in Section 3.8(iii)(B)).  The Issuer will from time to time prepare (or shall cause to be prepared), authorize and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, and will take such other action necessary or advisable to:

(i)   

Grant more effectively all or any portion of the Trust Estate;

(ii)   

maintain or preserve the lien and security interest (and the priority thereof) in favor of the Indenture Collateral Agent for the benefit of the Issuer Secured Parties created by this Indenture or carry out more effectively the purposes hereof;

(iii)   

perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture;

(iv)   

enforce the rights of the Indenture Collateral Agent, the Issuer Secured Parties and the Noteholders in any of the Collateral;

(v)   

preserve and defend title to the Trust Estate and the rights of the Indenture Collateral Agent in such Trust Estate against the claims of all persons and parties; and

(vi)   

pay all taxes or assessments levied or assessed upon the Trust Estate when due.

The Issuer hereby designates the Indenture Collateral Agent its agent and attorney-in-fact to execute any financing statement or continuation statement reasonably required pursuant to this Section.

SECTION 3.6   Opinions as to Trust Estate.  (a)     On the Closing Date, the Issuer shall furnish to the Indenture Trustee, the Indenture Collateral Agent and the Indenture Administrator an Opinion of Counsel if then required by the TIA either stating that, in the opinion of such counsel, such action has been taken with respect to the recording and filing of this Indenture, any indentures supplemental hereto, and any other requisite documents, and with respect to the authorization and filing of any financing statements and continuation statements, as are necessary to perfect and make effective the first priority lien and security interest in favor of the Indenture Collateral Agent, for the benefit of the Issuer Secured Parties, created by this Indenture and reciting the details of such action, or stating that, in the opinion of such counsel, no such action is necessary to make such lien and security interest effective.

(b)   

Within 30 days after the beginning of each calendar year, beginning with the first calendar year beginning more than three months after the Closing Date, the Issuer shall cause the Servicer to furnish to the Indenture Trustee, the Indenture Administrator and the Indenture Collateral Agent an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and with respect to the authorization and filing of any financing statements and continuation statements as are necessary to maintain the lien and perfected first priority security interest created by this Indenture and reciting the details of such action or stating that in the opinion of such counsel no such action is necessary to maintain such lien and security interest.  Such Opinion of Counsel shall also describe the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and the authorization and filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required to maintain such lien and security interest of this Indenture until January 30 in the following calendar year.

SECTION 3.7   Performance of Obligations; Servicing of Receivables.  (a)     The Issuer will not take any action and will use its best efforts not to permit any action to be taken by others that would release any Person from any of such Person’s material covenants or obligations under any instrument or agreement included in the Trust Estate or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such instrument or agreement, except as ordered by any bankruptcy or other court or as expressly provided in this Indenture, the Basic Documents or such other instrument or agreement.

(b)   

The Issuer may contract with other Persons, such Person being an Eligible Institution or being acceptable to the Rating Agencies, to assist it in performing its duties under this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee and the Indenture Administrator in an Officer’s Certificate of the Issuer shall be deemed to be action taken by the Issuer.  Initially, the Issuer has contracted with the Servicer to assist the Issuer in performing its duties under this Indenture.

(c)   

The Issuer will punctually perform and observe all of its obligations and agreements contained in this Indenture, the Basic Documents and in the instruments and agreements included in the Trust Estate, including but not limited to preparing (or causing to be prepared) and filing (or causing to be filed) all UCC financing statements and continuation statements required to be filed by the terms of this Indenture and the Sale and Servicing Agreement in accordance with and within the time periods provided for herein and therein.  Except as otherwise expressly permitted herein or therein, the Issuer shall not waive, amend, modify, supplement or terminate any Basic Document or any provision thereof without the consent of the Indenture Trustee or the Holders of at least a majority of the Outstanding Amount of the Notes.

(d)   

If a responsible officer of the Owner Trustee shall have actual knowledge of the occurrence of a Servicer Default under the Sale and Servicing Agreement, the Issuer shall promptly notify the Indenture Trustee, Indenture Administrator and the Rating Agencies thereof in accordance with Section 11.4, and shall specify in such notice the action, if any, the Issuer is taking in respect of such default.  If a Servicer Default shall arise from the failure of the Servicer to perform any of its duties or obligations under the Sale and Servicing Agreement or Insurance Agreement, the Issuer shall take all reasonable steps available to it to remedy such failure.

(e)   

If either the Indenture Trustee or the Indenture Administrator has given notice of termination to the Servicer of the Servicer’s rights and powers pursuant to Section 8.1 of the Sale and Servicing Agreement, as promptly as possible thereafter, the Indenture Trustee or the Indenture Administrator shall appoint a successor servicer in accordance with Section 8.2 of the Sale and Servicing Agreement.

(f)   

Upon any termination of the Servicer’s rights and powers pursuant to the Sale and Servicing Agreement, the Issuer shall promptly notify the Indenture Trustee and the Indenture Administrator.  As soon as a Successor Servicer (other than the Indenture Trustee) is appointed, the Issuer shall notify the Indenture Trustee and the Indenture Administrator of such appointment, specifying in such notice the name and address of such Successor Servicer.

(g)   

The Issuer agrees that it will not waive timely performance or observance by the Servicer, the Depositor or the Representative of their respective duties under the Basic Documents if the effect thereof would adversely affect the Holders of the Notes.

SECTION 3.8   Negative Covenants.  So long as any Notes are Outstanding, the Issuer shall not:

(i)   

except as expressly permitted by this Indenture or the other Basic Documents, sell, transfer, exchange or otherwise dispose of any of the properties or assets of the Issuer, including those included in the Trust Estate, unless directed to do so by the Indenture Trustee or the Indenture Administrator;

(ii)   

claim any credit on, or make any deduction from the principal or interest payable in respect of, the Notes (other than amounts properly withheld from such payments under the Code) or assert any claim against any present or former Noteholder by reason of the payment of the taxes levied or assessed upon any part of the Trust Estate;

(iii)   

(A)  permit the validity or effectiveness of this Indenture to be impaired, or permit the lien in favor of the Indenture Collateral Agent created by this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to the Notes under this Indenture except as may be expressly permitted hereby, (B) permit any lien, charge, excise, claim, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Trust Estate or any part thereof or any interest therein or the proceeds thereof (other than tax liens, mechanics’ liens and other liens, in each case on a Financed Vehicle and arising solely as a result of an action or omission of the related Obligor) or (C) permit the lien of this Indenture not to constitute a valid first priority (other than with respect to any such tax, mechanics’ or other lien) perfected security interest in the Trust Estate; or

(iv)   

dissolve or liquidate in whole or in part.

SECTION 3.9   Annual Statement as to Compliance.  The Issuer will deliver to the Indenture Trustee and the Indenture Administrator, within 120 days after the end of each fiscal year of the Issuer (commencing with the fiscal year ended September 30, 2006), and otherwise in compliance with the requirements of TIA Section 314(a)(4) an Officer’s Certificate stating, as to the Authorized Officer signing such Officer’s Certificate, that

(i)   

a review of the activities of the Issuer during such year and of performance under this Indenture has been made under such Authorized Officer’s supervision; and

(ii)   

to the best of such Authorized Officer’s knowledge, based on such review, the Issuer has complied with all conditions and covenants under this Indenture throughout such year, or, if there has been a default in the compliance of any such condition or covenant, specifying each such default known to such Authorized Officer and the nature and status thereof.

SECTION 3.10   Issuer May Consolidate, Etc. Only on Certain Terms.  (a)     The Issuer shall not consolidate or merge with or into any other Person, unless

(i)   

the Person (if other than the Issuer) formed by or surviving such consolidation or merger shall be a Person organized and existing under the laws of the United States of America or any state and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee and the Indenture Administrator, in form satisfactory to the Indenture Trustee and the Indenture Administrator, the due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed, all as provided herein;

(ii)   

immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

(iii)   

the Rating Agency Condition shall have been satisfied with respect to such transaction;

(iv)   

the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee and the Indenture Administrator) to the effect that such transaction will not have any material adverse tax consequence to the Trust, any Noteholder or any Certificateholder;

(v)   

any action as is necessary to maintain the lien and security interest created by this Indenture shall have been taken; and

(vi)   

the Issuer shall have delivered to the Indenture Trustee and the Indenture Administrator an Officer’s Certificate and an Opinion of Counsel each stating that such consolidation or merger and such supplemental indenture comply with this Article III and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act);

(b)   

The Issuer shall not convey or transfer all or substantially all of its properties or assets, including those included in the Trust Estate, to any Person, unless

(i)   

the Person that acquires by conveyance or transfer the properties and assets of the Issuer the conveyance or transfer of which is hereby restricted shall (A) be a United States citizen or a Person organized and existing under the laws of the United States of America or any state, (B) expressly assume, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form satisfactory to the Indenture Trustee, the due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture and each of the Basic Documents on the part of the Issuer to be performed or observed, all as provided herein, (C) expressly agree by means of such supplemental indenture that all right, title and interest so conveyed or transferred shall be subject and subordinate to the rights of Holders of the Notes, (D) unless otherwise provided in such supplemental indenture, expressly agree to indemnify, defend and hold harmless the Issuer against and from any loss, liability or expense arising under or related to this Indenture and the Notes and (E) expressly agree by means of such supplemental indenture that such Person (or if a group of persons, then one specified Person) shall prepare (or cause to be prepared) and make all filings with the Commission (and any other appropriate Person) required by the Exchange Act in connection with the Notes;

(ii)   

immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

(iii)   

the Rating Agency Condition shall have been satisfied with respect to such transaction;

(iv)   

the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee and the Indenture Administrator) to the effect that such transaction will not have any material adverse tax consequence to the Trust, any Noteholder or any Certificateholder;

(v)   

any action as is necessary to maintain the lien and security interest created by this Indenture shall have been taken; and

(vi)   

the Issuer shall have delivered to the Indenture Trustee and the Indenture Administrator an Officers’ Certificate and an Opinion of Counsel each stating that such conveyance or transfer and such supplemental indenture comply with this Article III and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act).

SECTION 3.11   Successor or Transferee.  (a)     Upon any consolidation or merger of the Issuer in accordance with Section 3.10(a), the Person formed by or surviving such consolidation or merger (if other than the Issuer) shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such Person had been named as the Issuer herein.

(b)   

Upon a conveyance or transfer of all the assets and properties of the Issuer pursuant to Section 3.10 (b), Franklin Auto Trust 2005-1 will be released from every covenant and agreement of this Indenture to be observed or performed on the part of the Issuer with respect to the Notes immediately upon the delivery of written notice to the Indenture Trustee stating that Franklin Auto Trust 2005-1 is to be so released.

SECTION 3.12   No Other Business.  The Issuer shall not engage in any business other than financing, purchasing, owning, selling and managing the Receivables in the manner contemplated by this Indenture and the other Basic Documents and activities incidental thereto.

SECTION 3.13   No Borrowing.  The Issuer shall not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any Indebtedness except for (i) the Notes, (ii) obligations owing from time to time to the Letter of Credit Provider under the Letter of Credit and the Letter of Credit Reimbursement Agreement and (iii) any other Indebtedness permitted by or arising under the Basic Documents or the Issuer’s compliance therewith.  The proceeds of the Notes shall be used exclusively to fund the Issuer’s purchase of the Receivables and the other assets specified in the Sale and Servicing Agreement and to pay the Issuer’s organizational, transactional and start-up expenses.

SECTION 3.14   Servicer’s Obligations.  The Issuer shall cause the Servicer to comply with Sections 4.9, 4.10, 4.11 and 5.8 of the Sale and Servicing Agreement.

SECTION 3.15   Guarantees, Loans, Advances and Other Liabilities.  Except as contemplated by the Sale and Servicing Agreement or this Indenture, the Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another’s payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other Person.

SECTION 3.16   Capital Expenditures.  The Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personalty) other than the purchase of the Receivables and the related property pursuant to the Sale and Servicing Agreement.

SECTION 3.17   Compliance with Laws.  The Issuer shall comply with the requirements of all applicable laws, the non-compliance with which would, individually or in the aggregate, materially and adversely affect the ability of the Issuer to perform its obligations under the Notes, this Indenture or any Basic Document.

SECTION 3.18   Restricted Payments.  The Issuer shall not, directly or indirectly, (i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to the Owner Trustee or any owner of a beneficial interest in the Issuer or otherwise with respect to any ownership or equity interest or security in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that the Issuer may make, or cause to be made, distributions to the Servicer, the Owner Trustee, the Indenture Administrator, the Indenture Trustee, the Letter of Credit Provider, the Indenture Collateral Agent and the Certificateholders as permitted by, and to the extent funds are available for such purpose under, the Sale and Servicing Agreement, the Trust Agreement or this Indenture.  The Issuer will not, directly or indirectly, make payments to or distributions from the Collection Account except in accordance with this Indenture and the other Basic Documents.

SECTION 3.19   Notice of Events of Default.  Upon a responsible officer of the Owner Trustee having actual knowledge thereof, the Issuer agrees to give the Indenture Administrator, Indenture Trustee, the Letter of Credit Provider and the Rating Agencies prompt written notice of each Event of Default hereunder, and each default on the part of the Servicer or the Depositor of its obligations under the Sale and Servicing Agreement.

SECTION 3.20   Further Instruments and Acts.  Upon request of the Indenture Trustee or the Indenture Administrator, the Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

SECTION 3.21   Amendments of Sale and Servicing Agreement and Trust Agreement.  The Issuer shall not agree to any amendment to Section 11.1 of the Sale and Servicing Agreement or Section 11.1 of the Trust Agreement to eliminate the requirements thereunder that the Indenture Trustee, the Letter of Credit Provider or the Holders of the Notes consent to amendments thereto as provided therein.

SECTION 3.22   Income Tax Characterization.  The Issuer, the Indenture Trustee, the Indenture Administrator and the Indenture Collateral Agent hereby agree, and each Noteholder by its acceptance of a Note agrees, to treat the Notes as indebtedness for federal income tax purposes and for purposes of applicable state, local, or any other income tax, franchise tax, or other tax imposed upon or measured by net income.  Each Noteholder agrees (by its acceptance of a Note) that it will cause any person acquiring an interest in a Note through it to comply with this Section 3.22 relating to the treatment of the Notes as indebtedness.  Subject to the following sentence of this Section 3.22, the Issuer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent and each Noteholder (by its acceptance of a Note) agree and acknowledge their intention that the Issuer shall, for federal income tax purposes and, to the extent permitted by law, applicable state income or franchise tax purposes, be disregarded as an entity apart from its owner, the Depositor, in the event the Depositor is the sole Certificateholder, or treated as a partnership if there is more than one Certificateholder.  Notwithstanding the foregoing provisions of this Section 3.22, if any Class of Notes is deemed for federal income tax purposes (or for purposes of any state, local, or other income tax, franchise tax or other tax imposed upon or measured by net income) to represent an equity interest in the Issuer it is the intent and agreement of the parties hereto (and of each Noteholder by its acceptance of a Note) that the Issuer shall, to the extent permitted by law, be treated for purposes of any such tax which treats Notes in such manner as a partnership among the affected Class of Noteholders and the Certificateholder.  If such a partnership is deemed to exist for applicable tax purposes, the taxable income of the Issuer shall be allocated in such manner as to cause, to the greatest extent possible, the Certificateholder and each affected Noteholder to recognize taxable income or loss at such time, and in such amounts, as each such person would have recognized such income or loss if such Class of Notes had not been recharacterized as an equity interest in the Issuer.

SECTION 3.23   Article Nine Provisions.  The representations and warranties set forth in this Section 3.23 speak as of the execution and delivery of this Agreement and as of the Closing Date, but shall survive the pledge of the Receivables to the Indenture Collateral Agent.  The representations set forth in this Section 3.23 may not be waived.

(a)   

This Indenture creates a valid and continuing security interest (as defined in the applicable UCC) in the Receivables in favor of the Indenture Collateral Agent, which security interest is prior to all other Liens, and is enforceable as such as against creditors of and purchasers from the Issuer.

(b)   

The Issuer has taken all steps necessary to perfect its security interest against the Depositor in the Receivables.

(c)   

The Receivables constitute “tangible chattel paper” within the meaning of the applicable UCC.

(d)   

The Issuer owns and has good and marketable title to the Receivables free and clear of any Lien, claim or encumbrance of any Person.

(e)   

The Issuer has caused or will have caused, within ten days, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Receivables granted to the Indenture Collateral Agent hereunder.

(f)   

Other than the security interest granted to the Indenture Collateral Agent pursuant to this Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Receivables.  The Issuer has not authorized the filing of and is not aware of any financing statements against the Issuer that include a description of collateral covering the Receivables other than any financing statement relating to the security interest granted to the Indenture Collateral Agent hereunder or that has been terminated. The Issuer is not aware of any judgment or tax lien filings against the Issuer.

(g)   

Franklin Capital has in its possession all original copies of Receivables Files that constitute or evidence the Receivables.  The Receivables Files that constitute or evidence the Receivables do not have any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Indenture Collateral Agent.  All financing statements filed or to be filed against the Depositor, the Trust or the Issuer in favor of the Indenture Collateral Agent in connection herewith describing the Receivables contain a statement to the following effect:  “A purchase of or security interest in any collateral described in this financing statement will violate the rights of the Indenture Collateral Agent.”

ARTICLE IV

Satisfaction and Discharge

SECTION 4.1   Satisfaction and Discharge of Indenture. This Indenture shall cease to be of further effect with respect to the Notes except as to (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments of principal thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8, 3.10, 3.12, 3.13, and 3.22, (v) the rights, obligations and immunities of the Indenture Trustee and the Indenture Administrator hereunder (including the rights of the Indenture Trustee and the Indenture Administrator under Section 6.7 and the obligations of the Indenture Administrator under Section 4.2) and (vi) the rights of Noteholders as beneficiaries hereof with respect to the property so deposited with the Indenture Trustee and the Indenture Administrator payable to all or any of them, and the Indenture Administrator, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Notes, when

(A)

either

(1)

all Notes theretofore authenticated and delivered (other than (i) Notes that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.5 and (ii) Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 3.3) have been delivered to the Indenture Administrator for cancellation; or

(2)

all Notes not theretofore delivered to the Indenture Administrator for cancellation

(i)

have become due and payable,

(ii)

will become due and payable at their respective Final Scheduled Distribution Dates within one year, or

(iii)

are to be called for redemption within one year under arrangements satisfactory to the Indenture Administrator for the giving of notice of redemption by the Indenture Administrator in the name, and at the expense, of the Issuer,

and the Issuer, in the case of (i), (ii) or (iii) above, has irrevocably deposited or caused to be irrevocably deposited with the Indenture Collateral Agent cash or direct obligations of or obligations guaranteed by the United States of America (which will mature prior to the date such amounts are payable), in trust for such purpose, in an amount sufficient to pay and discharge the entire indebtedness on such Notes not theretofore delivered to the Indenture Administrator for cancellation when due to the Final Scheduled Distribution Date or Redemption Date (if Notes shall have been called for redemption pursuant to Section 10.1(a)), as the case may be;

(B)

the Issuer has paid or caused to be paid all Issuer Secured Obligations; and

(C)

the Issuer has delivered to the Indenture Trustee, the Indenture Collateral Agent and the Indenture Administrator an Officer’s Certificate, an Opinion of Counsel and, if required by the TIA, the Indenture Trustee, the Indenture Collateral Agent or the Indenture Administrator an Independent Certificate from a firm of certified public accountants, each meeting the applicable requirements of Section 11.1(a) and each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

SECTION 4.2   Application of Trust Money.  All moneys deposited with the Indenture Administrator pursuant to Section 4.1 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent, as the Indenture Administrator may determine, to the Holders of the particular Notes for the payment or redemption of which such moneys have been deposited with the Indenture Administrator, of all sums due and to become due thereon for principal and interest; but such moneys need not be segregated from other funds except to the extent required herein or in the Sale and Servicing Agreement or required by law.

SECTION 4.3   Repayment of Moneys Held by Paying Agent.  In connection with the satisfaction and discharge of this Indenture with respect to the Notes, all moneys then held by any Paying Agent other than the Indenture Trustee under the provisions of this Indenture with respect to such Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held and applied according to Section 3.3 and thereupon such Paying Agent shall be released from all further liability with respect to such moneys.

ARTICLE V

Remedies

SECTION 5.1   Events of Default.  “Event of Default”, wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or 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 any administrative or governmental body):

(i)   

default in the payment of any interest on any Note of the Controlling Class when the same becomes due and payable, and such default shall continue for a period of five days after receipt of notice thereof from the Indenture Trustee or the Indenture Administrator; or

(ii)   

default in the payment of the principal of or any installment of the principal of any Note when the same becomes due and payable on the related Final Scheduled Distribution Date; or

(iii)   

default in the observance or performance of any covenant or agreement of the Issuer made in this Indenture (other than a covenant or agreement, a default in the observance or performance of which is elsewhere in this Section specifically dealt with), or any representation or warranty of the Issuer made in this Indenture or in any certificate or other writing delivered pursuant hereto or in connection herewith proving to have been incorrect in any material respect as of the time when the same shall have been made, and such default shall continue or not be cured, or the circumstance or condition in respect of which such misrepresentation or warranty was incorrect shall not have been eliminated or otherwise cured, for a period of 30 days (or for such longer period, not in excess of 90 days, as may be reasonably necessary to remedy such default; provided that such default is capable of remedy within 90 days or less and the Servicer on behalf of the Issuer delivers an Officer’s Certificate to the Indenture Trustee to the effect that the Issuer has commenced, or will promptly commence and diligently pursue, all reasonable efforts to remedy such default) after there shall have been given, by registered or certified mail, to the Issuer by the Indenture Administrator or to the Issuer, the Indenture Trustee and the Indenture Administrator by the Holders of at least 25% of the Outstanding Amount of the Notes of the Controlling Class, a written notice specifying such default or incorrect representation or warranty and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or

(iv)   

the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of the Issuer or any substantial part of the Trust Estate in an involuntary case under any applicable Federal or state 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 of the Trust Estate, or ordering the winding-up or liquidation of the Issuer’s affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or

(v)   

the commencement by the Issuer of a voluntary case under any applicable Federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the Issuer to the entry of an order for relief in an involuntary case under any such law, or the consent by the Issuer to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Trust Estate, or the making by the Issuer of any general assignment for the benefit of creditors, or the failure by the Issuer generally to pay its debts as such debts become due, or the taking of action by the Issuer in furtherance of any of the foregoing.

The Issuer shall deliver to the Indenture Trustee and the Indenture Administrator, within five days after the occurrence thereof, written notice in the form of an Officer’s Certificate of any event which with the giving of notice and the lapse of time would become an Event of Default under clause (iii), its status and what action the Issuer is taking or proposes to take with respect thereto.

SECTION 5.2   Rights Upon Event of Default.  (a)   If the Notes shall have been declared immediately due and payable following an Event of Default, the Holders of Notes representing a majority of the Outstanding Amount of the Notes of the Controlling Class may exercise any of the remedies specified in Section 5.4(a).

(b)   

If an Event of Default shall have occurred and be continuing, the Indenture Trustee in its discretion may, or if so requested in writing by Holders holding Notes representing not less than a majority of the Outstanding Amount of the Notes of the Controlling Class, declare by written notice to the Issuer that the Notes become, whereupon they shall become, immediately due and payable at par, together with accrued interest thereon.

(c)   

If an Event of Default shall have occurred and be continuing, then at any time after such declaration of acceleration of maturity has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee or the Indenture Administrator as hereinafter in this Article V provided, the Holders of Notes representing a majority of the Outstanding Amount of the Notes of the Controlling Class, by written notice to the Issuer and the Indenture Trustee, may rescind and annul such declaration and its consequences if:

(i)   

the Issuer has paid or deposited with the Indenture Administrator as an agent of the Indenture Trustee a sum sufficient to pay

(A)

all payments of principal of and interest on all Notes and all other amounts that would then be due hereunder or upon such Notes if the Event of Default giving rise to such acceleration had not occurred; and

(B)

all sums paid or advanced by the Indenture Administrator as an agent of the Indenture Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and the Indenture Administrator and their agents and counsel; and

(ii)   

all Events of Default, other than the nonpayment of the principal of the Notes that has become due solely by such acceleration, have been cured or waived as provided in Section 5.12.

(d)   

Promptly after the occurrence of an Event of Default and after the Notes becoming immediately due and payable, the Indenture Administrator shall direct the Indenture Trustee to send notice of such event to the Rating Agencies.

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

SECTION 5.3   Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.  (a)     The Issuer covenants that if (i) default is made in the payment of any interest on any Note when the same becomes due and payable, and such default continues for a period of five days, or (ii) default is made in the payment of the principal of or any installment of the principal of any Note when the same becomes due and payable, the Issuer will, upon demand of the Indenture Trustee, pay to the Indenture Administrator, for the benefit of the Holders of the Notes, the whole amount then due and payable on such Notes for principal and interest, with interest upon the overdue principal, and, to the extent payment at such rate of interest shall be legally enforceable, upon overdue installments of interest, at the applicable Interest Rate and in addition thereto such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Indenture Administrator and its agents and counsel.

(b)   

In case the Issuer shall fail forthwith to pay such amounts upon such demand, the Indenture Trustee, in its own name and as trustee of an express trust, may institute a proceeding for the collection of the sums so due and unpaid, and may prosecute such proceeding to judgment or final decree, and may enforce the same against the Issuer or other obligor upon such Notes and collect in the manner provided by law out of the property of the Issuer or other obligor upon such Notes, wherever situated, the monies adjudged or decreed to be payable.

(c)   

If an Event of Default occurs and is continuing, the Indenture Trustee may, as more particularly provided in Section 5.4, in its discretion, proceed to protect and enforce its rights and the rights of the Noteholders, by such appropriate proceedings as the Indenture Trustee shall deem most effective to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or by law.

(d)   

Reserved.

(e)   

In case there shall be pending, relative to the Issuer or any other obligor upon the Notes or any Person having or claiming an ownership interest in the Trust Estate, proceedings under Title 11 of the United States Code or any other applicable Federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or its property or such other obligor or Person, or in case of any other comparable judicial proceedings relative to the Issuer or other obligor upon the Notes, or to the creditors or property of the Issuer or such other obligor, the Indenture Administrator as an agent of the Indenture Trustee, irrespective of whether the principal of any Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand pursuant to the provisions of this Section, shall be entitled and empowered, by intervention in such proceedings or otherwise:

(i)   

to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Indenture Trustee or the Indenture Administrator and each predecessor Indenture Trustee or the Indenture Administrator, except as a result of negligence, bad faith or willful misconduct) and of the Noteholders allowed in such proceedings;

(ii)   

unless prohibited by applicable law and regulations, to vote on behalf of the Holders of Notes in any election of a trustee, a standby trustee or person performing similar functions in any such proceedings;

(iii)   

to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Noteholders and of the Indenture Trustee on their behalf; and

(iv)   

to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee or the Holders of Notes allowed in any judicial proceedings relative to the Issuer, its creditors and its property;

and any trustee, receiver, liquidator, custodian or other similar official in any such proceeding is hereby authorized by each of such Noteholders to make payments to the Indenture Administrator, and, in the event that the Indenture Administrator shall consent to the making of payments directly to such Noteholders, to pay to the Indenture Administrator such amounts as shall be sufficient to cover reasonable compensation to the Indenture Administrator, each predecessor Indenture Administrator and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Indenture Administrator and each predecessor Indenture Administrator except as a result of negligence, bad faith or willful misconduct.

(f)   

Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof or to authorize the Indenture Trustee to vote in respect of the claim of any Noteholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar person.

(g)   

All rights of action and of asserting claims under this Indenture or under any of the Notes, may be enforced by the Indenture Trustee without the possession of any of the Notes or the production thereof in any trial or other proceedings relative thereto, and any such action or proceedings instituted by the Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Notes.

(h)   

In any proceedings brought by the Indenture Trustee (and also any proceedings involving the interpretation of any provision of this Indenture), the Indenture Trustee shall be held to represent all the Holders of the Notes, and it shall not be necessary to make any Noteholder a party to any such proceedings.

SECTION 5.4   Remedies.  (a)   If the Notes shall have been declared immediately due and payable following an Event of Default, the Indenture Trustee may and shall, at the direction of Holders of a majority of the Outstanding Amount of the Notes of the Controlling Class, do one or more of the following (subject to Section 5.5):

(i)   

institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the Notes or under this Indenture with respect thereto, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Issuer and any other obligor upon such Notes moneys adjudged due;

(ii)   

institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Trust Estate;

(iii)   

exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee and the Holders of the Notes; and

(iv)   

direct the Indenture Collateral Agent to sell the Trust Estate or any portion thereof or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by law; provided, however, that the Indenture Collateral Agent shall not, sell or otherwise liquidate the Trust Estate following an Event of Default unless:

(A)

such Event of Default is of the type described in Section 5.1(i) or (ii); or

(B)

any of

(x)

the Holders of 100% of the Outstanding Amount of the Notes consent thereto;

(y)

the proceeds of such sale or liquidation distributable to the Noteholders are sufficient to discharge in full all amounts then due and unpaid upon such Notes for principal and interest; or

(z)

the Indenture Trustee determines that the Trust Estate will not continue to provide sufficient funds for the payment of principal of and interest on the Notes as they would have become due if the Notes had not been declared due and payable, and the Indenture Trustee provides prior written notice to the Rating Agencies and obtains the consent of Holders of 66-2/3% of the Outstanding Amount of the Notes of the Controlling Class.

In determining such sufficiency or insufficiency with respect to clause (B) (y) and (z), the Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose.

SECTION 5.5   Optional Preservation of the Receivables.  If the Notes have been declared to be due and payable under Section 5.2 following an Event of Default and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee may, but need not, elect to cause the Indenture Collateral Agent to maintain possession of the Trust Estate on behalf of the Indenture Trustee for the benefit of the Noteholders.  In determining whether to cause the Indenture Collateral Agent so to maintain possession of the Trust Estate, the Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose.

SECTION 5.6   Priorities.

(a)   

Following (1) the acceleration of the Notes pursuant to Section 5.2 (and the related declaration of acceleration has not been rescinded or annulled) or (2) the receipt of Insolvency Proceeds pursuant to Section 9.1(b) of the Sale and Servicing Agreement, the Distribution Amount, including any money or property collected pursuant to Section 5.4 of the Indenture and any such Insolvency Proceeds, shall be applied by the Indenture Administrator on behalf of the Indenture Trustee on the related Payment Date in the following order of priority:

FIRST:

to pay any amounts due and owing to the Indenture Trustee, the Owner Trustee, the Indenture Administrator and the Indenture Collateral Agent for compensation, reimbursement of expenses or indemnification as provided hereunder or the other Basic Documents and to the Servicer pursuant to Section 5.6(a)(i) of the Sale and Servicing Agreement and to the Letter of Credit Provider the amounts pursuant to Section 5.6(a) (ii) of the Sale and Servicing Agreement;

SECOND:

to Class A Noteholders for amounts due and unpaid on the Notes for interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for interest;

THIRD:

to Class A Noteholders for amounts due and unpaid on the Notes for principal, first to the Class A-1 Notes, until the entire unpaid principal amount of the Class A-1 Notes shall have been paid in full, and then ratably, without preference or priority of any kind, according to the amounts due and payable on the Class A-2 Notes, Class A-3 Notes and Class A-4 Notes, to the Class A-2 Notes, Class A-3 Notes and Class A-4 Notes until the entire unpaid principal amount of such Notes shall have been paid in full;

FOURTH: 

to the Class B Noteholders first for amounts due and unpaid on the Class B Notes for interest and then for amounts due and unpaid on the Class B Notes for principal until the entire unpaid principal amount of the Class B Notes shall have been paid in full;

FIFTH:

to the Class C Noteholders first for amounts due and unpaid on the Class C Notes for interest and then for amounts due and unpaid on the Class C Notes for principal until the entire unpaid principal amount of the Class C Notes shall have been paid in full;

SIXTH:

amounts due and owing and required to be distributed to the Letter of Credit Provider pursuant to Section 5.6(a)(xi) of the Sale and Servicing Agreement and not previously distributed; and

SEVENTH:

to or upon the order of the Owner Trustee for distribution pursuant to Section 5.2(a) of the Trust Agreement.

(b)   

The Indenture Trustee may fix a record date and payment date for any payment to Noteholders pursuant to this Section.  At least 15 days before such record date the Issuer shall mail to each Noteholder and the Indenture Trustee a notice that states the record date, the payment date and the amount to be paid.

SECTION 5.7   Limitation of Suits.  No Holder of any Note shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

(i)   

such Holder has previously given written notice to the Indenture Trustee of a continuing Event of Default;

(ii)   

the Holders of not less than 25% of the Outstanding Amount of the Notes of the Controlling Class have made written request to the Indenture Trustee to institute such proceeding in respect of such Event of Default in its own name as Indenture Trustee hereunder;

(iii)   

such Holder or Holders have offered to the Indenture Trustee indemnity reasonably satisfactory to it against the costs, expenses and liabilities to be incurred in complying with such request;

(iv)   

the Indenture Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute such proceedings;

(v)   

no direction inconsistent with such written request has been given to the Indenture Trustee during such 60-day period by the Holders of a majority of the Outstanding Amount of the Notes of the Controlling Class; and

(vi)   

such Event of Default actually shall have occurred and be continuing;

it being understood and intended that no one or more Holders of Notes shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Notes or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided.

In the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Holders of Notes of the Controlling Class, each representing less than a majority of the Outstanding Amount of the Notes, the Indenture Trustee shall proceed in accordance with the request of the greater majority of the Outstanding Amount of the Notes of the Controlling Class, as determined by reference to such requests.

SECTION 5.8   Unconditional Rights of Noteholders. To Receive Principal and Interest.  Notwithstanding any other provisions in this Indenture, the Holder of any Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest, if any, on such Note on or after the respective due dates thereof expressed in such Note or in this Indenture (or, in the case of redemption, on or after the Redemption Date) and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder.

SECTION 5.9   Restoration of Rights and Remedies.  If Indenture Trustee or any Noteholder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason or has been determined adversely to the Indenture Trustee or to such Noteholder, then and in every such case the Issuer, the Indenture Trustee and the Noteholders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee and the Noteholders shall continue as though no such proceeding had been instituted.

SECTION 5.10   Rights and Remedies Cumulative.  No right or remedy herein conferred upon or reserved to the Indenture Trustee or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

SECTION 5.11   Delay or Omission Not a Waiver.  No delay or omission of the Indenture Trustee or any Holder of any Note to exercise any right or remedy accruing upon any Default or Event of Default shall impair any such right or remedy or constitute a waiver of any such Default or Event of Default or an acquiescence therein.  Every right and remedy given by this Article V or by law to the Indenture Trustee or to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as the case may be.

SECTION 5.12   Control by Noteholders of the Controlling Class.  The Holders of a majority of the Outstanding Amount of the Notes of the Controlling Class shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Indenture Trustee with respect to the Notes or exercising any trust or power conferred on the Indenture Trustee; provided that:

(i)   

such direction shall not be in conflict with any rule of law or with this Indenture;

(ii)   

any direction to the Indenture Trustee to cause the Indenture Collateral Agent to sell or liquidate the Trust Estate shall be governed by the provisions of Section 5.4(a)(iv);

(iii)   

if the conditions set forth in Section 5.5 have been satisfied and the Indenture Trustee elects to retain the Trust Estate pursuant to such Section, then any direction to the Indenture Trustee by Holders of Notes representing less than 100% of the Outstanding Amount of the Notes of the Controlling Class to cause the Indenture Collateral Agent to sell or liquidate the Trust Estate shall be of no force and effect; and

(iv)   

the Indenture Trustee may take any other action deemed proper by the Indenture Trustee that is not inconsistent with such direction;

provided, however, that, subject to Section 6.1, the Indenture Trustee need not take any action that it determines might involve it in liability or might materially adversely affect the rights of any Noteholders not consenting to such action.

SECTION 5.13   Waiver of Past Defaults.  Prior to the declaration of the acceleration of the maturity of the Notes as provided in Section 5.2(c), the Holders of Notes of not less than a majority of the Outstanding Amount of the Notes of the Controlling Class may waive any past Default or Event of Default and its consequences except a Default (a) in payment of principal of or interest on any of the Notes or (b) in respect of a covenant or provision hereof which cannot be modified or amended without the consent of the Holder of each Note.  In the case of any such waiver, the Issuer, the Indenture Trustee and the Holders of the Notes shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto.

Upon any such waiver, such Default shall cease to exist and be deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to have 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 of Default or impair any right consequent thereto.

SECTION 5.14   Undertaking for Costs.  All parties to this Indenture agree, and each Holder of 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 enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to (a) any suit instituted by the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of Noteholders, in each case holding in the aggregate more than 10% of the Outstanding Amount of the Notes (or in the case of a right or remedy under this Indenture which is instituted by the Controlling Class, more than 10% of the Outstanding Amount of the Notes of the Controlling Class) or (c) any suit instituted by any Noteholder for the enforcement of the payment of principal of or interest on any Note on or after the respective due dates expressed in such Note and in this Indenture (or, in the case of redemption, on or after the Redemption Date).

SECTION 5.15   Waiver of Stay or Extension Laws.  The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any manner whatsoever, claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

SECTION 5.16   Action on Notes.  The Indenture Trustee’s right to seek and recover judgment on 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 this Indenture.  Neither the lien of this Indenture nor any rights or remedies of the Indenture Trustee or the Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Trust Estate or upon any of the assets of the Issuer.

SECTION 5.17   Performance and Enforcement of Certain Obligations.  (a)   Promptly following a request from the Indenture Trustee to do so and at the Servicer’s expense, the Issuer agrees to take all such lawful action as the Indenture Trustee may request to compel or secure the performance and observance by the Representative, the Depositor and the Servicer, as applicable, of each of their obligations to the Issuer under or in connection with the Sale and Servicing Agreement in accordance with the terms thereof, and to exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with the Sale and Servicing Agreement to the extent and in the manner directed by the Indenture Trustee, including the transmission of notices of default on the part of the Depositor or the Servicer thereunder and the institution of legal or administrative actions or proceedings to compel or secure performance by the Depositor or the Servicer of each of their obligations under the Sale and Servicing Agreement.

(b)   

If an Event of Default has occurred and is continuing, the Indenture Trustee may, and, at the direction (which direction shall be in writing or by telephone (confirmed in writing promptly thereafter)) of the Holders of 66-2/3% of the Outstanding Amount of the Notes of the Controlling Class shall, exercise all rights, remedies, powers, privileges and claims of the Issuer against the Depositor or the Servicer under or in connection with the Sale and Servicing Agreement, including the right or power to take any action to compel or secure performance or observance by the Depositor or the Servicer of each of their obligations to the Issuer thereunder and to give any consent, request, notice, direction, approval, extension or waiver under the Sale and Servicing Agreement, and any right of the Issuer to take such action shall be suspended.

ARTICLE VI

The Indenture Trustee, the Indenture Collateral Agent and the Indenture Administrator

SECTION 6.1   Duties of Indenture Trustee.  (a)   If an Event of Default has occurred and is continuing, and of which a Responsible Officer of the Indenture Trustee or the Indenture Collateral Agent shall have actual knowledge, the Indenture Trustee and the Indenture Collateral Agent, as applicable, shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(b)   

Except during the continuance of an Event of Default of which a Responsible Officer of the Indenture Trustee shall have actual knowledge:

(i)   

the Indenture Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee; and

(ii)   

in the absence of negligence or bad faith on its part, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of this Indenture; however, the Indenture Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture and, if applicable, the Basic Documents to which the Indenture Trustee is a party; provided, however, that the Indenture Trustee shall not be responsible for the accuracy or content of any of the aforementioned documents and the Indenture Trustee shall have no obligation to verify or re-compute any numeric information provided to it pursuant to the Basic Documents.

(c)   

Neither the Indenture Trustee nor the Indenture Collateral Agent may be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

(i)   

this paragraph does not limit the effect of paragraph (b) of this Section;

(ii)   

the Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless it is proven that the Indenture Trustee was negligent in ascertaining the pertinent facts; and

(iii)   

the Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 5.12.

(d)   

The Indenture Trustee shall not be liable for interest on any money received by it except as the Indenture Trustee may agree in writing with the Issuer.

(e)   

Money held in trust by the Indenture Trustee or the Indenture Collateral Agent need not be segregated from other funds except to the extent required by law or the terms of this Indenture or the Sale and Servicing Agreement.

(f)   

No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(g)   

Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Indenture Trustee shall be subject to the provisions of this Section and to the provisions of the TIA.

(h)   

The Indenture Trustee shall, and hereby agrees that it will, perform all of the obligations and duties required of it under the Sale and Servicing Agreement.

(i)   

[Reserved].

(j)   

Without limiting the generality of this Section 6.1 and except during such time, if any, as the Indenture Trustee shall be successor to, and be vested with the rights, duties, powers and privileges of, the Servicer in accordance with the terms of this Indenture and the Sale and Servicing Agreement and subject to the other provisions of this Indenture, the Indenture Trustee shall have no duty (i) to see to any recording, filing or depositing of this Indenture or any agreement referred to herein or any financing statement evidencing a security interest in the Financed Vehicles, or to see to the maintenance of any such recording or filing or depositing or to any recording, refiling or redepositing of any thereof, (ii) to see to any insurance of the Financed Vehicles or Obligors or to effect or maintain any such insurance, (iii) to see to the payment or discharge of any tax, assessment or other governmental charge or any Lien or encumbrance of any kind owing with respect to, assessed or levied against any part of the Trust, (iv) to confirm or verify the contents of any reports or certificates delivered to the Indenture Trustee pursuant to this Indenture or the Sale and Servicing Agreement believed by the Indenture Trustee to be genuine and to have been signed or presented by the proper party or parties, or (v) to inspect the Financed Vehicles at any time or ascertain or inquire as to the performance or observance of any of the Issuer’s, the Depositor’s or the Servicer’s representations, warranties or covenants or the Servicer’s duties and obligations as Servicer and as custodian of the Receivable Files under the Sale and Servicing Agreement.

(k)   

Whenever any action under the Basic Documents requires the approval or disapproval of Certificateholders, the Indenture Trustee shall, in accordance with, and subject to, Section 2.13 of the Trust Agreement, instruct the Certificateholders to act in accordance with the written directions, received from Holders of a majority of the Outstanding Amount of the Notes.

(l)   

Except as otherwise required or permitted by the TIA, nothing contained herein shall be deemed to authorize the Indenture Trustee (in its capacity as such) to engage in any business operations or any activities other than those set forth in this Indenture.  Specifically, the Indenture Trustee (in its capacity as such) shall have no authority to engage in any business operations, acquire any assets other than those specifically included in the Collateral under this Indenture or otherwise vary the assets held by the Issuer.

(m)   

The Indenture Trustee shall not be required to take notice or be deemed to have notice or knowledge of any Default or Event of Default unless a Responsible Officer of the Indenture Trustee shall have received written notice thereof.  In the absence of receipt of such notice, the Indenture Trustee may conclusively assume that there is no Default or Event of Default.

(n)   

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

SECTION 6.2   Rights of Indenture Trustee.  (a)   Subject to Section 6.1, the Indenture Trustee may conclusively rely on and shall be protected in acting upon or refraining from acting upon any document believed by it to be genuine and to have been signed or presented by the proper person.  Subject to Section 6.1, the Indenture Trustee need not investigate any fact or matter stated in the document.

(b)   

Before the Indenture Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel.  The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officer’s Certificate or Opinion of Counsel.

(c)   

The Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or a custodian or nominee, and the Indenture Trustee shall not be responsible for any misconduct or negligence on the part of, or for the supervision of, any such agent, attorney, custodian or nominee appointed with due care by it hereunder.

(d)   

The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Indenture Trustee’s conduct does not constitute willful misconduct, negligence or bad faith.

(e)   

The Indenture Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

(f)   

The Indenture Trustee shall be under no obligation to institute, conduct or defend any litigation under this Indenture or in relation to this Indenture, at the request, order or direction of any of the Holders of Notes, pursuant to the provisions of this Indenture, unless such Holders of Notes shall have offered to the Indenture Trustee reasonable security or indemnity against the costs, expenses and liabilities that may be incurred therein or thereby; provided, however, that the Indenture Trustee shall, upon the occurrence of an Event of Default (that has not been cured) of which a Responsible Officer of the Indenture Trustee shall have actual knowledge, exercise the rights and powers vested in it by this Indenture with reasonable care and skill.

(g)   

The Indenture Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing to do so by the Holders of Notes evidencing not less than 25% of the Outstanding Amount thereof; provided, however, that if the payment within a reasonable time to the Indenture Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Indenture Trustee, not reasonably assured to the Indenture Trustee by the security afforded to it by the terms of this Indenture or the Sale and Servicing Agreement, the Indenture Trustee may require reasonable indemnity against such cost, expense or liability as a condition to so proceeding; the reasonable expense of every such examination shall be paid by the Person making such request, or, if paid by the Indenture Trustee, shall be reimbursed by the Person making such request upon demand.

SECTION 6.3   Individual Rights of Indenture Trustee.  The Indenture Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Indenture Trustee.  Any Paying Agent, Note Registrar, co-registrar or co-paying agent may do the same with like rights.  However, the Indenture Trustee must comply with Sections 6.11 and 6.12.

SECTION 6.4   Indenture Trustee’s Disclaimer.  The Indenture Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Trust Estate or the Notes, it shall not be accountable for the Issuer’s use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuer in the Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Indenture Trustee’s certificate of authentication.

SECTION 6.5   Notice of Defaults.  If a Default occurs and is continuing and if it is either known by, or written notice of the existence thereof has been delivered to, a Responsible Officer of the Indenture Trustee, the Indenture Trustee shall mail to each Noteholder notice of the Default within 90 days after such knowledge or notice occurs.  Except in the case of a Default in payment of principal of or interest on any Note (including payments pursuant to the mandatory partial prepayment provisions of such Note), the Indenture Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of Noteholders.

SECTION 6.6   Reports by Indenture Trustee to Holders.  The Indenture Trustee shall deliver to each Noteholder such information as may be reasonably required to enable such Holder to prepare its Federal and state income tax returns.

SECTION 6.7   Compensation and Indemnity.  (a)   The Issuer shall or shall cause the Servicer to, pay to the Indenture Trustee from time to time compensation for its services in accordance with a separate agreement between the Servicer and the Indenture Trustee.  The Indenture Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust.  The Issuer shall or shall cause the Servicer to reimburse the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Indenture Trustee’s agents, counsel, accountants and experts.  The Issuer shall or shall cause the Servicer to indemnify the Indenture Trustee, the Indenture Collateral Agent and their respective officers, directors, employees and agents against any and all loss, liability or expense (including attorneys’ fees and expenses) incurred by it in connection with the acceptance or the administration of this trust and the performance of its duties hereunder.  The Indenture Trustee shall notify the Issuer and the Servicer promptly of any claim for which it may seek indemnity.  Failure by the Indenture Trustee to so notify the Issuer and the Servicer shall not relieve the Issuer of its obligations hereunder or the Servicer of its obligations under Article X of the Sale and Servicing Agreement.  The Issuer shall or shall cause the Servicer to defend the claim, the Indenture Trustee may have separate counsel and the Issuer shall or shall cause the Servicer to pay the fees and expenses of such counsel.  Neither the Issuer nor the Servicer need reimburse any expense or indemnify against any loss, liability or expense incurred by the Indenture Trustee through the Indenture Trustee’s own willful misconduct, negligence or bad faith. Notwithstanding anything provided herein, the indemnification provided herein shall not constitute a claim against the Issuer other than in accordance with Section 5.6(a)(xii) of the Sale and Servicing Agreement or 5.6(a) hereof.

(b)   

The Issuer’s obligations to the Indenture Trustee pursuant to this Section shall survive the discharge of this Indenture.  When the Indenture Trustee incurs expenses after the occurrence of a Default specified in Section 5.1(iv) or (v) with respect to the Issuer, the expenses are intended to constitute expenses of administration under Title 11 of the United States Code or any other applicable Federal or state bankruptcy, insolvency or similar law.  Notwithstanding anything else set forth in this Indenture or the Basic Documents, the Indenture Trustee agrees that the obligations of the Issuer (but not the Servicer) to the Indenture Trustee hereunder and under the Basic Documents shall be recourse to the Trust Estate only and specifically shall not be recourse to the assets of any Certificateholder.  Subject to Section 5.6 of this Indenture, the Indenture Trustee agrees that its recourse to the Issuer, the Trust Estate, the Certificateholders and the Depositor shall be limited to the right to receive the distributions referred to in Section 5.6(a)(xii) of the Sale and Servicing Agreement and Section 5.6(a) hereof.

SECTION 6.8   Replacement of Indenture Trustee.  No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee shall become effective until the acceptance of appointment by the successor Indenture Trustee pursuant to this Section 6.8.  The Indenture Trustee may resign at any time by so notifying the Issuer and the Indenture Administrator.  The Holders of a majority in Outstanding Amount of the Notes may remove the Indenture Trustee by so notifying the Indenture Trustee and may appoint a successor Indenture Trustee. The Issuer shall remove the Indenture Trustee, if:

(i)   

the Indenture Trustee fails to comply with Section 6.11;

(ii)   

a court having jurisdiction in the premises in respect of the Indenture Trustee in an involuntary case or proceeding under federal or state banking or bankruptcy laws, as now or hereafter constituted, or any other applicable federal or state bankruptcy, insolvency or other similar law, shall have entered a decree or order granting relief or appointing a receiver, liquidator, assignee, custodian, trustee, conservator, sequestrator (or similar official) for the Indenture Trustee or for any substantial part of the Indenture Trustee’s property, or ordering the winding-up or liquidation of the Indenture Trustee’s affairs;

(iii)   

an involuntary case under the federal bankruptcy laws, as now or hereafter in effect, or another present or future federal or state bankruptcy, insolvency or similar law is commenced with respect to the Indenture Trustee and such case is not dismissed within 60 days;

(iv)   

the Indenture Trustee commences a voluntary case under any federal or state banking or bankruptcy laws, as now or hereafter constituted, or any other applicable federal or state bankruptcy, insolvency or other similar law, or consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, conservator, sequestrator (or other similar official) for the Indenture Trustee or for any substantial part of the Indenture Trustee’s property, or makes any assignment for the benefit of creditors or fails generally to pay its debts as such debts become due or takes any corporate action in furtherance of any of the foregoing; or

(v)   

the Indenture Trustee otherwise becomes incapable of acting.

If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of Indenture Trustee for any reason (the Indenture Trustee in such event being referred to herein as the retiring Indenture Trustee), the Issuer shall promptly appoint a successor Indenture Trustee.

A successor Indenture Trustee shall deliver a written acceptance of its appointment to the retiring Indenture Trustee and to the Issuer.  Thereupon the resignation or removal of the retiring Indenture Trustee shall become effective, and the successor Indenture Trustee shall have all the rights, powers and duties of the Indenture Trustee under this Indenture subject to satisfaction of the Rating Agency Condition.  The successor Indenture Trustee shall mail a notice of its succession to Noteholders.  The retiring Indenture Trustee shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee.

If a successor Indenture Trustee does not take office within 60 days after notice of resignation or removal of the retiring Indenture Trustee, the retiring Indenture Trustee, the Issuer, or the Holders of a majority in Outstanding Amount of the Notes of the Controlling Class may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee.

If the Indenture Trustee fails to comply with Section 6.11, any Noteholder may petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee.

Any resignation or removal of the Indenture Trustee and appointment of a successor Indenture Trustee pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor Indenture Trustee pursuant to Section 6.8 and payment of all fees and expenses owed to the retiring Indenture Trustee.

Notwithstanding the replacement of the Indenture Trustee pursuant to this Section, the Issuer’s and the Servicer’s obligations under Section 6.7 shall continue for the benefit of the retiring Indenture Trustee.

SECTION 6.9   Successor Indenture Trustee by Merger.  If the Indenture Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Indenture Trustee.  The Indenture Trustee (except if Wilmington Trust Company) shall provide the Rating Agencies prior written notice of any such transaction.

In case at the time such successor or successors by merger, conversion or consolidation to the Indenture Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Indenture Trustee may adopt the certificate of authentication of any predecessor indenture trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Indenture Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Indenture Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Indenture Trustee shall have.

SECTION 6.10   Appointment of Co-Trustee or Separate Indenture Trustee.  (a)   Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the Trust may at the time be located, the Indenture Trustee shall have the power and may execute and deliver all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or a separate trustee or separate trustees, of all or any part of the Trust, and to vest in such Person or Persons, in such capacity and for the benefit of the Noteholders, such title to the Trust, or any part hereof, and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Indenture Trustee may consider necessary or desirable.  No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a sucessor indenture trustee under Section 6.11 and no notice to Noteholders of the appointment of any co-trustee or separate trustee shall be required under Section 6.8 hereof.  The appointment of any co-trustee or separate trustee shall not relieve the Indenture Trustee of any of its obligations hereunder.

(b)   

Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:

(i)   

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

(ii)   

no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder, including acts or omissions of predecessor or sucessor indenture trustees; and

(iii)   

the Indenture Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee.

(c)   

Any notice, request or other writing given to the Indenture Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them.  Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article VI.  Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Indenture Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to, the Indenture Trustee.  Every such instrument shall be filed with the Indenture Trustee.

(d)   

Any separate trustee or co-trustee may at any time constitute the Indenture Trustee, its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Indenture on its behalf and in its name.  If any separate trustee or co-trustee shall die, dissolve, become insolvent, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall invest in and be exercised by the Indenture Trustee, to the extent permitted by law, without the appointment of a new or sucessor indenture trustee.

SECTION 6.11   Eligibility; Disqualification.  (a) The Indenture Trustee shall at all times satisfy the requirements of TIA Section 310(a).  The Indenture Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition and it shall have a long term debt rating of “BBB-” or better by Standard & Poor’s and “Baa3” or better by Moody’s.  The Indenture Trustee shall comply with TIA Section 310(b), including the optional provision permitted by the second sentence of TIA Section 310(b)(9); provided, however, that there shall be excluded from the operation of TIA Section 310(b)(1) any indenture or indentures under which other securities of the Issuer are outstanding if the requirements for such exclusion set forth in TIA Section 310(b)(1) are met.

Within ninety (90) days after ascertaining the occurrence of an Event of Default which shall not have been cured or waived, unless authorized by the Commission, the Indenture Trustee shall resign with respect to the Class A Notes, the Class B Notes or the Class C Notes in accordance with Section 6.8 of this Indenture, and the Issuer shall appoint a successor Indenture Trustee for one or all of such Classes, as applicable, so that there will be separate Indenture Trustees for the Class A Notes, Class B Notes and Class C Notes.   In the event the Indenture Trustee fails to comply with the terms of the preceding sentence, the Indenture Trustee shall comply with clauses (ii) and (iii) of TIA § 310(b).  Each provision of this Indenture shall apply to each Indenture Trustee as if it were the only Indenture Trustee acting under this Indenture, including, without limitation, Section 6.8.  If separate Indenture Trustees have been appointed with respect to the Class A Notes, the Class B Notes and Class C Notes, then, for so long as any amounts remain unpaid with respect to the Class A Notes, only the Indenture Trustee for the Class A Notes shall have the right to exercise the remedies provided for in Section 5.4 and only the Holders of the Class A Notes shall have the right to direct or consent to any action to be taken by any Indenture Trustee (except for the actions specified in Section 5.4 that require the consent of the Holders of 100% of the Outstanding Amount of the Notes) and the Holders of the Class B Notes and Class C Notes shall be entitled to receive amounts collected by the Indenture Trustee for the Class A Notes pursuant to Article V in accordance with the order of priority set forth in Section 5.4.  Upon the payment in full of the Outstanding Amount of the Class A Notes and all other amounts owing in respect of the Class A Notes, only the Indenture Trustee for the Class B Notes shall have the right to exercise the remedies provided for in Section 5.4 and only the Holders of the Class B Notes shall have the right to direct or consent to any action to be taken by any Indenture Trustee (except for the actions specified in Section 5.4 that require the consent of the Holders of 100% of the Outstanding Amount of the Notes) and the Holders of the Class C Notes shall be entitled to receive amounts collected by the Indenture Trustee for the Class B Notes pursuant to Article V in accordance with the order of priority set forth in Section 5.4.  Upon the payment in full of the Outstanding Amount of the Class B Notes and all other amounts owing in respect of the Class B Notes, only the Indenture Trustee for the Class C Notes shall have the right to exercise the remedies provided for in Section 5.4 and only the Holders of the Class C Notes shall have the right to direct or consent to any action to be taken by any Indenture Trustee.   

(b)   

In the case of the appointment hereunder of a successor Indenture Trustee with respect to any Class of Notes pursuant to this Section 6.11, the Issuer, the retiring Indenture Trustee and the successor Indenture Trustee with respect to such Class of Notes shall execute and deliver an indenture supplemental hereto wherein each successor Indenture Trustee shall accept such appointment and which (i) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, the successor Indenture Trustee all the rights, powers, trusts and duties of the retiring Indenture Trustee with respect to the Notes of the Class to which the appointment of such successor Indenture Trustee relates, (ii) if the retiring Indenture Trustee is not retiring with respect to all Classes of Notes, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Indenture Trustee with respect to the Notes of each Class as to which the retiring Indenture Trustee is not retiring shall continue to be vested in the Indenture Trustee and (iii) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Indenture Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Indenture Trustees co-trustees of the same trust and that each such Indenture Trustee shall be a trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Indenture Trustee; and upon the removal of the retiring Indenture Trustee shall become effective to the extent provided herein.

SECTION 6.12   Preferential Collection of Claims Against Issuer.  The Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b).  An Indenture Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated.

SECTION 6.13   Appointment and Powers.  Subject to the terms and conditions hereof, each of the Issuer Secured Parties hereby appoints Wilmington Trust Company as the Indenture Collateral Agent with respect to the Collateral, and Wilmington Trust Company hereby accepts such appointment and agrees to act as Indenture Collateral Agent with respect to the Collateral for the Issuer Secured Parties, to maintain custody and possession of such Collateral (except as otherwise provided hereunder) and to perform the other duties of the Indenture Collateral Agent in accordance with the provisions of this Indenture. Each Issuer Secured Party hereby authorizes the Indenture Collateral Agent to take such action on its behalf, and to exercise such rights, remedies, powers and privileges hereunder, as are specifically authorized to be exercised by the Indenture Collateral Agent by the terms hereof, together with such actions, rights, remedies, powers and privileges as are reasonably incidental thereto.

SECTION 6.14   Performance of Duties.  Except during the continuance of an Event of Default of which a responsible officer of the Indenture Collateral Agent shall have actual knowledge, the Indenture Collateral Agent shall have no duties or responsibilities except those expressly set forth in this Indenture and the other Basic Documents to which the Indenture Collateral Agent is a party in accordance with this Indenture.  The Indenture Collateral Agent shall not be required to take any discretionary actions hereunder. The Indenture Collateral Agent shall, and hereby agrees that it will, perform all of the duties and obligations required of it under the Sale and Servicing Agreement.

SECTION 6.15   Limitation on Liability.  (a)   Neither the Indenture Collateral Agent nor any of its directors, officers or employees shall be liable for any error of judgment, or for any mistake of fact or law or for any action taken or omitted to be taken by it or them hereunder, or in connection herewith, except that the Indenture Collateral Agent shall be liable for its negligence, bad faith or willful misconduct; nor shall the Indenture Collateral Agent be responsible for the validity, effectiveness, value, sufficiency or enforceability against the Issuer of this Indenture or any of the Collateral (or any part thereof).  Subject to Section 6.01(a), the Indenture Collateral Agent shall incur no liability to the Issuer or the Issuer Secured Parties for any action taken or omitted to be taken by the Indenture Collateral Agent in connection with the Collateral, except for the negligence, bad faith or willful misconduct on the part of the Indenture Collateral Agent, and, further, shall incur no liability to the Issuer Secured Parties except for negligence, bad faith or willful misconduct in carrying out its duties to the Issuer Secured Parties.  Subject to Section 6.16, the Indenture Collateral Agent shall be protected and shall incur no liability to any such party in relying upon the accuracy, acting in reliance upon the contents, and assuming the genuineness of any notice, demand, certificate, signature, instrument or other document reasonably believed by the Indenture Collateral Agent to be genuine and to have been duly executed by the appropriate signatory, and (absent actual knowledge to the contrary) the Indenture Collateral Agent shall not be required to make any independent investigation with respect thereto.  The Indenture Collateral Agent shall at all times be free independently to establish to its reasonable satisfaction, but shall have no duty to independently verify, the existence or nonexistence of facts that are a condition to the exercise or enforcement of any right or remedy hereunder or under any of the Basic Documents.  The Indenture Collateral Agent may consult with counsel, and shall not be liable for any action taken or omitted to be taken by it hereunder in good faith and in accordance with the advice of such counsel.  The Indenture Collateral Agent shall not be under any obligation to exercise any of the remedial rights or powers vested in it by this Indenture unless it shall have received reasonable security or indemnity satisfactory to the Indenture Collateral Agent against the costs, expenses and liabilities which might be incurred by it.

(b)   

No provision of this Indenture shall require the Indenture Collateral Agent to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(c)   

Without limiting the generality of this Section 6.15, the Indenture Collateral Agent shall have no duty (i) to see to any recording, filing or depositing of this Indenture or any agreement referred to herein or any financing statement evidencing a security interest in the Financed Vehicles, or to see to the maintenance of any such recording or filing or depositing or to any recording, refiling or redepositing of any thereof, (ii) to see to any insurance of the Financed Vehicles or Obligors or to effect or maintain any such insurance, (iii) to see to the payment or discharge of any tax, assessment or other governmental charge or any Lien or encumbrance of any kind owing with respect to, assessed or levied against any part of the Trust, (iv) to confirm or verify the contents of any reports or certificates delivered to the Indenture Trustee pursuant to this Indenture or the Sale and Servicing Agreement believed by the Indenture Collateral Agent to be genuine and to have been signed or presented by the proper party or parties, or (v) to inspect the Financed Vehicles at any time or ascertain or inquire as to the performance or observance of any of the Issuer’s, the Depositor’s or the Servicer’s representations, warranties or covenants or the Servicer’s duties and obligations as Servicer and as custodian of the Receivable Files under the Sale and Servicing Agreement.

(d)   

The Indenture Collateral Agent will be regarded as making no representations and having no responsibilities (except as expressly set forth herein) as to the validity, sufficiency, value, genuineness, ownership or transferability of any Notes or Collateral represented thereby, and will not be required to and will not make any representations as to the validity, value or genuineness of the Collateral.

(e)   

The Indenture Collateral Agent may execute any of the powers hereunder or perform any duties hereunder either directly or through agents or attorneys; provided, however, that the execution of such powers by any such agents or attorneys shall not diminish or relieve the Indenture Collateral Agent for responsibility therefor to the same degree as if the Indenture Collateral Agent itself had executed such powers.

SECTION 6.16   Reliance Upon Documents.  In the absence of negligence, bad faith or willful misconduct on its part, the Indenture Collateral Agent shall be entitled to rely on any communication, instrument, paper or other document reasonably believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons and shall have no liability in acting, or omitting to act, where such action or omission to act is in reasonable reliance upon any statement or opinion contained in any such document or instrument.

SECTION 6.17   Successor Indenture Collateral Agent.  (a)   Merger.  Any Person into which the Indenture Collateral Agent may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its trust business and assets as a whole or substantially as a whole, or any Person resulting from any such conversion, merger, consolidation, sale or transfer to which the Indenture Collateral Agent is a party, shall (provided it is otherwise qualified to serve as the Indenture Collateral Agent hereunder) be and become a successor Indenture Collateral Agent hereunder and be vested with all of the title to and interest in the Collateral and all of the trusts, powers, discretions, immunities, privileges and other matters as was its predecessor without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding, except to the extent, if any, that any such action is necessary to perfect, or continue the perfection of, the security interest of the Issuer Secured Parties in the Collateral; provided that any such successor shall also be the successor Indenture Trustee under Section 6.9.

(b)   

Resignation.  The Indenture Collateral Agent and any successor Indenture Collateral Agent may resign at any time by so notifying the Issuer; provided that the Indenture Collateral Agent shall not so resign unless it shall also resign as Indenture Trustee hereunder.

(c)   

Removal.  The Indenture Collateral Agent may be removed by the Indenture Trustee at any time (and shall be removed at any time that the Indenture Trustee has been removed), with or without cause, by an instrument or concurrent instruments in writing delivered to the Indenture Collateral Agent, the other Issuer Secured Party and the Issuer.  A temporary successor may be removed at any time to allow a successor Indenture Collateral Agent to be appointed pursuant to subsection (d) below.  Any removal pursuant to the provisions of this subsection (c) shall take effect only upon the date which is the later of (i) the effective date of the appointment of a successor Indenture Collateral Agent and the acceptance in writing by such successor Indenture Collateral Agent of such appointment and of its obligation to perform its duties hereunder in accordance with the provisions hereof, and (ii) receipt by the Indenture Trustee of an Opinion of Counsel to the effect described in Section 3.6.

(d)   

Acceptance by Successor.  The Indenture Trustee shall have the sole right to appoint each successor Indenture Collateral Agent (provided that the discretion of the Indenture Trustee to appoint such a successor Indenture Collateral Agent shall be subject to Section 6.17(e)). Every temporary or permanent successor Indenture Collateral Agent appointed hereunder shall execute, acknowledge and deliver to its predecessor and to the Indenture Trustee, each Issuer Secured Party and the Issuer an instrument in writing accepting such appointment hereunder and the relevant predecessor shall execute, acknowledge and deliver such other documents and instruments as will effectuate the delivery of all Collateral to the successor Indenture Collateral Agent, whereupon such successor, without any further act, deed or conveyance, shall become fully vested with all the estates, properties, rights, powers, duties and obligations of its predecessor.  Such predecessor shall, nevertheless, on the written request of either Issuer Secured Party or the Issuer, execute and deliver an instrument transferring to such successor all the estates, properties, rights and powers of such predecessor hereunder.  In the event that any instrument in writing from the Issuer or an Issuer Secured Party is reasonably required by a successor Indenture Collateral Agent to more fully and certainly vest in such successor the estates, properties, rights, powers, duties and obligations vested or intended to be vested hereunder in the Indenture Collateral Agent, any and all such written instruments shall, at the request of the temporary or permanent successor Indenture Collateral Agent, be forthwith executed, acknowledged and delivered by the Indenture Trustee or the Issuer, as the case may be.  The designation of any successor Indenture Collateral Agent and the instrument or instruments removing any Indenture Collateral Agent and appointing a successor hereunder, together with all other instruments provided for herein, shall be maintained with the records relating to the Collateral and, to the extent required by applicable law, filed or recorded by the successor Indenture Collateral Agent in each place where such filing or recording is necessary to effect the transfer of the Collateral to the successor Indenture Collateral Agent or to protect or continue the perfection of the security interests granted hereunder.

(e)   

Indenture Collateral Agent/Indenture Trustee.  The Indenture Collateral Agent shall, at all times, be the same entity that is also the Indenture Trustee.

SECTION 6.18   Compensation and Indemnity.  The Indenture Collateral Agent shall not be entitled to any compensation for the performance of its duties hereunder other than the compensation it is entitled to receive in its capacity as Indenture Trustee.

SECTION 6.19   Representations and Warranties of the Indenture Collateral Agent.  The Indenture Collateral Agent represents and warrants to the Issuer and to each Issuer Secured Party as follows:

(a)   

Due Organization.  The Indenture Collateral Agent is a Delaware banking corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is duly authorized and licensed under applicable law to conduct its business as presently conducted.

(b)   

Corporate Power.  The Indenture Collateral Agent has all requisite right, power and authority to execute and deliver this Indenture and to perform all of its duties as Indenture Collateral Agent hereunder.

(c)   

Due Authorization.  The execution and delivery by the Indenture Collateral Agent of this Indenture and the other Basic Documents to which it is a party, and the performance by the Indenture Collateral Agent of its duties hereunder and thereunder, have been duly authorized by all necessary corporate proceedings and no further approvals or filings, including any governmental approvals, are required for the valid execution and delivery by the Indenture Collateral Agent, or the performance by the Indenture Collateral Agent, of this Indenture and such other Basic Documents.

(d)   

Valid and Binding Indenture.  The Indenture Collateral Agent has duly executed and delivered this Indenture and each other Basic Document to which it is a party, and each of this Indenture and each such other Basic Document constitutes the legal, valid and binding obligation of the Indenture Collateral Agent, enforceable against the Indenture Collateral Agent in accordance with its terms, except as (i) such enforceability may be limited by bankruptcy, insolvency, reorganization and similar laws relating to or affecting the enforcement of creditors’ rights generally and (ii) the availability of equitable remedies may be limited by equitable principles of general applicability.

SECTION 6.20   Waiver of Setoffs.  The Indenture Collateral Agent, the Indenture Administrator and the Indenture Trustee hereby expressly waive any and all rights of setoff that the Indenture Collateral Agent, the Indenture Administrator or the Indenture Trustee may otherwise at any time have under applicable law with respect to any Trust Account and agrees that amounts in the Trust Accounts shall at all times be held and applied solely in accordance with the provisions hereof.

SECTION 6.21   [RESERVED].

SECTION 6.22   Appointment and Powers of the Indenture Administrator.  Subject to the terms and conditions hereof, the Indenture Trustee hereby appoints as its agent Citibank, N.A. as Indenture Administrator, and Citibank, N.A. hereby accepts such appointment and agrees to act as Indenture Administrator on behalf of the Indenture Trustee and to perform all of the duties of the Indenture Trustee in accordance with the provisions of this Indenture and the other Basic Documents other than the duties set forth below in Section 6.23, the obligations specifically required under the TIA and the obligation to execute any documents, letters or notices. Each of the Issuer and the Indenture Trustee hereby authorizes the Indenture Administrator to take such action on the Indenture Trustee’s behalf, and to exercise such rights, remedies, powers and privileges hereunder, as are specifically authorized to be exercised by the Indenture Trustee by the terms hereof (other than as set forth below in Section 6.23), together with such actions, rights, remedies, powers and privileges as are reasonably incidental thereto.

SECTION 6.23   Performance of Duties of the Indenture Administrator.  The Indenture Administrator shall and hereby agrees that it will, perform all of the duties and obligations required of the Indenture Trustee and receive all of the rights of the Indenture Trustee under this Indenture and the Sale and Servicing Agreement and any other Basic Documents, except for those set forth in:

Section 5.4 of this Indenture relating to execution of the Letter of Credit Demand.

SECTION 6.24   Limitation on Liability of the Indenture Administrator.  (a)   Neither the Indenture Administrator nor any of its directors, officers or employees shall be liable for any error of judgment, or for any mistake of fact or law or for any action taken or omitted to be taken by it or them hereunder, or in connection herewith, except that the Indenture Administrator shall be liable for its negligence, bad faith or willful misconduct; nor shall the Indenture Administrator be responsible for the validity, effectiveness, value, sufficiency or enforceability against the Issuer of this Indenture or any of the Collateral (or any part thereof).   Subject to Section 6.16, the Indenture Administrator shall be protected and shall incur no liability to any such party in relying upon the accuracy, acting in reliance upon the contents, and assuming the genuineness of any notice, demand, certificate, signature, instrument or other document reasonably believed by the Indenture Administrator to be genuine and to have been duly executed by the appropriate signatory, and (absent actual knowledge to the contrary) the Indenture Administrator shall not be required to make any independent investigation with respect thereto.  The Indenture Administrator shall at all times be free independently to establish to its reasonable satisfaction, but shall have no duty to independently verify, the existence or nonexistence of facts that are a condition to the exercise or enforcement of any right or remedy hereunder or under any of the Basic Documents.  The Indenture Administrator may consult with counsel, and shall not be liable for any action taken or omitted to be taken by it hereunder in good faith and in accordance with the advice of such counsel.  The Indenture Administrator shall not be under any obligation to exercise any of the remedial rights or powers vested in it by this Indenture unless it shall have received reasonable security or indemnity satisfactory to the Indenture Administrator against the costs, expenses and liabilities which might be incurred by it.

(b)   

No provision of this Indenture shall require the Indenture Administrator to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(c)   

The Indenture Administrator may execute any of the powers hereunder or perform any duties hereunder either directly or through agents or attorneys; provided, however, that the execution of such powers by any such agents or attorneys shall not diminish or relieve the Indenture Administrator for responsibility therefor to the same degree as if the Indenture Administrator itself had executed such powers.

SECTION 6.25   Reliance Upon Documents of the Indenture Administrator .  In the absence of negligence, bad faith or willful misconduct on its part, the Indenture Administrator shall be entitled to rely on any communication, instrument, paper or other document reasonably believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons and shall have no liability in acting, or omitting to act, where such action or omission to act is in reasonable reliance upon any statement or opinion contained in any such document or instrument.

SECTION 6.26   Successor Indenture Administrator.  (a)   Merger.  Any Person into which the Indenture Administrator may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its trust business and assets as a whole or substantially as a whole, or any Person resulting from any such conversion, merger, consolidation, sale or transfer to which the Indenture Administrator is a party, shall (provided it is otherwise qualified to serve as the Indenture Administrator hereunder) be and become a successor Indenture Administrator hereunder and be vested with all of the trusts, powers, discretions, immunities, privileges and other matters as was its predecessor without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

(b)   

Resignation.  The Indenture Administrator and any successor Indenture Administrator may resign at any time by so notifying the Issuer.  Any resignation pursuant to the provisions of this subsection (b) shall take effect only upon the date which is the later of (i) the effective date of the appointment of a successor Indenture Administrator and the acceptance in writing by such successor Indenture Administrator of such appointment and of its obligation to perform its duties hereunder in accordance with the provisions hereof, and (ii) receipt by the Indenture Trustee of an Opinion of Counsel to the effect described in Section 3.6.

(c)   

Removal.  The Indenture Administrator may be removed by the Indenture Trustee at any time,  with or without cause, by an instrument or concurrent instruments in writing delivered to the Indenture Administrator, the other Issuer Secured Party and the Issuer.  A temporary successor may be removed at any time to allow a successor Indenture Administrator to be appointed pursuant to subsection (d) below.  Any removal pursuant to the provisions of this subsection (c) shall take effect only upon the date which is the later of (i) the effective date of the appointment of a successor Indenture Administrator and the acceptance in writing by such successor Indenture Administrator of such appointment and of its obligation to perform its duties hereunder in accordance with the provisions hereof, and (ii) receipt by the Indenture Trustee of an Opinion of Counsel to the effect described in Section 3.6.

(d)   

Acceptance by Successor.  The Indenture Trustee shall have the sole right to appoint each successor Indenture Administrator (provided that the discretion of the Indenture Trustee to appoint such a successor Indenture Administrator shall be subject to Section 6.17(e)). Every temporary or permanent successor Indenture Administrator appointed hereunder shall execute, acknowledge and deliver to its predecessor and to the Indenture Trustee, each Issuer Secured Party and the Issuer an instrument in writing accepting such appointment hereunder.  Such predecessor shall, nevertheless, on the written request of either Issuer Secured Party or the Issuer, execute and deliver an instrument transferring to such successor all the estates, properties, rights and powers of such predecessor hereunder.  In the event that any instrument in writing from the Issuer or an Issuer Secured Party is reasonably required by a successor Indenture Administrator to more fully and certainly vest in such successor the estates, properties, rights, powers, duties and obligations vested or intended to be vested hereunder in the Indenture Administrator, any and all such written instruments shall, at the request of the temporary or permanent successor Indenture Administrator, be forthwith executed, acknowledged and delivered by the Indenture Trustee or the Issuer, as the case may be.  

SECTION 6.27   Compensation and Indemnity of the Indenture Administrator .  (a)   The Issuer shall, or shall cause the Servicer to, pay to the Indenture Administrator from time to time compensation for its services in accordance with a separate agreement between the Servicer and the Indenture Administrator.  The Indenture Administrator’s compensation shall not be limited by any law on compensation of a trustee of an express trust.  The Issuer shall or shall cause the Servicer to reimburse the Indenture Administrator for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Indenture Administrator’s agents, counsel, accountants and experts.  The Issuer shall or shall cause the Servicer to indemnify the Indenture Administrator and its respective officers, directors, employees and agents against any and all loss, liability or expense (including attorneys’ fees and expenses) incurred by it in connection with the acceptance or the administration of this trust and the performance of its duties hereunder.  The Indenture Administrator shall notify the Issuer and the Servicer promptly of any claim for which it may seek indemnity.  Failure by the Indenture Administrator to so notify the Issuer and the Servicer shall not relieve the Issuer of its obligations hereunder or the Servicer of its obligations under Article X of the Sale and Servicing Agreement.  The Issuer shall or shall cause the Servicer to defend the claim, the Indenture Administrator may have separate counsel and the Issuer shall or shall cause the Servicer to pay the fees and expenses of such counsel.  Neither the Issuer nor the Servicer need reimburse any expense or indemnify against any loss, liability or expense incurred by the Indenture Administrator through the Indenture Administrator’s own willful misconduct, negligence or bad faith. Notwithstanding anything provided herein, the indemnification provided herein shall not constitute a claim against the Issuer other than in accordance with Section 5.6(a)(ix) of the Sale and Servicing Agreement or 5.6(a) hereof.

(b)   

The Issuer’s obligations to the Indenture Administrator pursuant to this Section shall survive the discharge of this Indenture.  When the Indenture Administrator incurs expenses after the occurrence of a Default specified in Section 5.1(v) or (vi) with respect to the Issuer, the expenses are intended to constitute expenses of administration under Title 11 of the United States Code or any other applicable Federal or state bankruptcy, insolvency or similar law.  Notwithstanding anything else set forth in this Indenture or the Basic Documents, the Indenture Administrator agrees that the obligations of the Issuer (but not the Servicer) to the Indenture Administrator hereunder and under the Basic Documents shall be recourse to the Trust Estate only and specifically shall not be recourse to the assets of any Certificateholder.  Subject to Section 5.6 of this Indenture, the Indenture Administrator agrees that its recourse to the Issuer, the Trust Estate, the Certificateholders and the Depositor shall be limited to the right to receive the distributions referred to in Section 5.6(a)(ix) of the Sale and Servicing Agreement and Section 5.6(a) hereof.

SECTION 6.28   Representations and Warranties of the Indenture Administrator.  The Indenture Administrator represents and warrants to the Issuer and to each Issuer Secured Party as follows:

(a)   

Due Organization.  The Indenture Administrator is a national banking association duly organized, validly existing and in good standing under the laws of the United States and is duly authorized and licensed under applicable law to conduct its business as presently conducted.

(b)   

Corporate Power.  The Indenture Administrator has all requisite right, power and authority to execute and deliver this Indenture and to perform all of its duties as Indenture Administrator on behalf of the Indenture Trustee hereunder and under the other Basic Documents.

(c)   

Due Authorization.  The execution and delivery by the Indenture Administrator of this Indenture and the other Basic Documents to which it is a party, and the performance by the Indenture Administrator of its duties hereunder and thereunder, have been duly authorized by all necessary proceedings and no further approvals or filings, including any governmental approvals, are required for the valid execution and delivery by the Indenture Administrator, or the performance by the Indenture Administrator, of this Indenture and such other Basic Documents.

(d)   

Valid and Binding Indenture.  The Indenture Administrator has duly executed and delivered this Indenture and each other Basic Document to which it is a party, and each of this Indenture and each such other Basic Document constitutes the legal, valid and binding obligation of the Indenture Administrator, enforceable against the Indenture Administrator in accordance with its terms, except as (i) such enforceability may be limited by bankruptcy, insolvency, reorganization and similar laws relating to or affecting the enforcement of creditors’ rights generally and (ii) the availability of equitable remedies may be limited by equitable principles of general applicability.

ARTICLE VII

Noteholders’ Lists and Reports

SECTION 7.1   Note Registrar To Furnish Names and Addresses of Noteholders.  The Note Registrar will furnish or cause to be furnished to the Indenture Trustee, the Indenture Administrator, and the Servicer (a) not more than five days after each Record Date a list, in such form as the Indenture Trustee, the Indenture Administrator or the Servicer may reasonably require, of the names and addresses of the Holders as of such Record Date, (b) at such other times as the Indenture Trustee, the Indenture Administrator or the Servicer may request in writing, within 30 days after receipt by the Issuer of any such request, a list of similar form and content as of a date not more than 10 days prior to the time such list is furnished; provided, however, that so long as the Indenture Administrator is the Note Registrar, no such list shall be required to be furnished to the Indenture Administrator.

SECTION 7.2   Preservation of Information; Communications to Noteholders.  (a)   The Indenture Administrator shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders contained in the most recent list furnished to the Indenture Administrator as provided in Section 7.1 and the names and addresses of Holders received by the Indenture Administrator from the Note Registrar.  The Indenture Administrator may destroy any list furnished to it as provided in such Section 7.1 upon receipt of a new list so furnished.

(b)   

Noteholders may communicate in conformity with TIA Section 312(b) with other Noteholders with respect to their rights under this Indenture or under the Notes.

(c)   

The Issuer, the Indenture Trustee and the Note Registrar shall have the protection of TIA Section 312(c).

SECTION 7.3   Reports by Issuer.  (a)   The Issuer shall:

(i)   

deliver to the Indenture Trustee and the Indenture Administrator, at least 2 Business Days prior to the date the Issuer is required to file the same with the Commission, hard and electronic copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Issuer may be required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act;

(ii)   

file with the Indenture Trustee, the Indenture Administrator and the Commission in accordance with rules and regulations prescribed from time to time by the Commission such additional information, documents and reports with respect to compliance by the Issuer with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and

(iii)   

supply to the Indenture Trustee and the Indenture Administrator (and the Indenture Administrator shall transmit by mail to all Noteholders described in TIA Section 313(c)) such summaries of any information, documents and reports required to be filed by the Issuer pursuant to clauses (i) and (ii) of this Section 7.3(a) as may be required by rules and regulations prescribed from time to time by the Commission.

(b)   

Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on September 30 of each year.

SECTION 7.4   Reports by Indenture Trustee.  If required by TIA Section 313(a), within 60 days after each December 1, beginning with December 1, 2006, the Indenture Trustee shall mail to each Noteholder as required by TIA Section 313(c) a brief report dated as of such date that complies with TIA Section 313(a).  The Indenture Trustee also shall comply with TIA Section 313(b).

A copy of each report at the time of its mailing to Noteholders shall be filed by the Indenture Trustee with the Commission and each stock exchange, if any, on which the Notes are listed.  The Issuer shall notify the Indenture Trustee if and when the Notes are listed on any stock exchange and shall provide the appropriate address or addresses to which each report need be sent.

ARTICLE VIII

Accounts, Disbursements and Releases

SECTION 8.1   Collection of Money.  Except as otherwise expressly provided herein, the Indenture Trustee or the Indenture Administrator may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Indenture Administrator pursuant to this Indenture.  The Indenture Administrator shall apply all such money received by it, the Indenture Trustee or the Indenture Collateral Agent as provided in this Indenture.  Except as otherwise expressly provided in this Indenture, if any default occurs in the making of any payment or performance under any agreement or instrument that is part of the Trust Estate, the Indenture Trustee or the Indenture Administrator may take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate Proceedings.  Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture and any right to proceed thereafter as provided in Article V.

SECTION 8.2   Trust Accounts.  (a)   On or prior to the Closing Date, the Issuer shall cause the Servicer to establish and maintain, in the name of the Indenture Collateral Agent, on behalf of the Indenture Administrator as an agent of the Indenture Trustee, for the benefit of the Noteholders, the Certificateholders, and the Letter of Credit Provider, the Trust Accounts as provided in Section 5.1 of the Sale and Servicing Agreement.

(b)   

Subject to Section 5.6 of the Sale and Servicing Agreement, on each Payment Date and Redemption Date, the Indenture Administrator shall distribute all amounts on deposit in the Note Distribution Account and the Principal Distribution Account to Noteholders in respect of the Notes to the extent of amounts due and unpaid on the Notes for principal and interest as follows (except as otherwise provided in Section 5.6 hereof):

(i)   

from the Note Distribution Account, accrued and unpaid interest on the Notes; provided that if there are not sufficient funds in the Note Distribution Account to pay the entire amount of accrued and unpaid interest then due on each class of Notes, the amount in the Note Distribution Account shall be applied to the payment of such interest on each class of Class A Notes pro rata on the basis of the amount of accrued and unpaid interest due on each class of Class A Notes, then to the payment of such interest on the Class B Notes and then to the payment of such interest on the Class C Notes; and

(ii)   

from the Principal Distribution Account, (a) principal to the Holders of the Class A-1 Notes until the Outstanding Amount of the Class A-1 Notes is reduced to zero;

(b)

principal to the Holders of the Class A-2 Notes until the Outstanding Amount of the Class A-2 Notes is reduced to zero;

(c)

principal to the Holders of the Class A-3 Notes until the Outstanding Amount of the Class A-3 Notes is reduced to zero;

(d)

principal to the Holders of the Class A-4 Notes until the Outstanding Amount of the Class A-4 Notes is reduced to zero;

(e)

principal to the Holders of the Class B Notes until the Outstanding Amount of the Class B Notes is reduced to zero; and

(f)

principal to the Holders of the Class C Notes until the Outstanding Amount of the Class C Notes is reduced to zero.

SECTION 8.3   General Provisions Regarding Accounts.  (a)   So long 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 in Eligible Investments and reinvested by the Indenture Collateral Agent on behalf of the Indenture Trustee upon Issuer Order, subject to the provisions of Section 5.1(b) of the Sale and Servicing Agreement.  All income or other gain from investments of moneys deposited in the Trust Accounts shall be deposited (or caused to be deposited) by the Indenture Administrator in the Collection Account, and any loss resulting from such investments shall be charged to such account.  The Issuer will not direct the Indenture Administrator to make any investment of any funds or to sell any investment held in any of the Trust Accounts unless the security interest Granted and perfected in such account will continue to be perfected in such investment or the proceeds of such sale, in either case without any further action by any Person, and, in connection with any direction to the Indenture Administrator to make any such investment or sale, if requested by the Indenture Administrator, the Issuer shall deliver to the Indenture Administrator an Opinion of Counsel, acceptable to the Indenture Administrator, to such effect.

(b)   

[Reserved]

(c)   

Subject to Section 6.1(c), neither the Indenture Trustee nor the Indenture Administrator shall in any way be held liable by reason of any insufficiency in any of the Trust Accounts resulting from any loss on any Eligible Investment included therein except for losses attributable to the Indenture Administrator’s failure to make payments on such Eligible Investments issued by the Indenture Administrator, in its commercial capacity as principal obligor and not as indenture administrator, in accordance with their terms.

(d)   

If (i) the Issuer shall have failed to give investment directions for any funds on deposit in the Trust Accounts to the Indenture Administrator by 12:00 noon Eastern Time (or such other time as may be agreed by the Issuer and the Indenture Administrator) on any Business Day; or (ii) a Default or Event of Default shall have occurred and be continuing with respect to the Notes but the Notes shall not have been declared due and payable pursuant to Section 5.2, or, if such Notes shall have been declared due and payable following an Event of Default, amounts collected or receivable from the Trust Estate are being applied in accordance with Section 5.5 as if there had not been such a declaration; then the Indenture Collateral Agent shall, to the fullest extent practicable, invest and reinvest funds in the Trust Accounts in investments of the type set forth in clause (g) of the definition of Eligible Investments.

SECTION 8.4   Release of Trust Estate.  (a)   Subject to the payment of its fees and expenses pursuant to Section 6.7, the Indenture Collateral Agent may, and when required by the provisions of this Indenture or Sale and Servicing Agreement shall, execute instruments to release property from the, lien of this Indenture, or convey the Indenture Collateral Agent’s interest in the same, in a manner and under circumstances that are not inconsistent with the provisions of this Indenture.  No party relying upon an instrument executed by the Indenture Collateral Agent as provided in this Article VIII shall be bound to ascertain the Indenture Collateral Agent’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys.

(b)   

The Indenture Collateral Agent shall, at such time as there are no Notes outstanding, all sums owing to the Letter of Credit Provider under the Basic Documents, and all sums due the Indenture Trustee pursuant to Section 6.7 and all sums due the Indenture Administrator pursuant to Section 6.27 have been paid, release any remaining portion of the Trust Estate that secured the Notes from the lien of this Indenture and release to the Issuer or any other Person entitled thereto any funds then on deposit in the Trust Accounts.  The Indenture Trustee shall release property from the lien of this Indenture pursuant to this Section 8.4(b) only upon receipt of an Issuer Request accompanied by an Officer’s Certificate, an Opinion of Counsel and (if required by the TIA) Independent Certificates in accordance with TIA Sections 314(c) and 314(d)(1) meeting the applicable requirements of Section 11.1.

SECTION 8.5   Opinion of Counsel.  The Indenture Collateral Agent shall receive at least seven days’ written notice when requested by the Issuer to take any action pursuant to Section 8.4(a), accompanied by copies of any instruments involved, and the Indenture Trustee shall also require as a condition to such action, an Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee and not at the expense of the Indenture Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with and such action will not materially and adversely impair the security for the Notes or the rights of the Noteholders in contravention of the provisions of this Indenture; provided, however, that such Opinion of Counsel shall not be required to express an opinion as to the fair value of the Trust Estate.  Counsel rendering any such opinion may rely, without independent investigation, on the accuracy and validity of any certificate or other instrument delivered to the Indenture Trustee in connection with any such action.

ARTICLE IX

Supplemental Indentures

SECTION 9.1   Supplemental Indentures Without Consent of Noteholders.  (a)   Without the consent of the Holders of any Notes but with the consent of the Letter of Credit Provider to the extent it would be materially and adversely affected and with prior notice to the Rating Agencies by the Issuer, as evidenced to the Indenture Trustee and the Indenture Administrator, the Issuer, the Indenture Trustee and the Indenture Administrator, when authorized by an Issuer Order, at any time and from time to time, may enter into one or more indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as in force at the date of the execution thereof), in form satisfactory to the Indenture Trustee and the Indenture Administrator, for any of the following purposes:

(i)   

to correct or amplify the description of any property at any time subject to the lien of this Indenture, or better to assure, convey and confirm unto the Indenture Collateral Agent any property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of this Indenture additional property;

(ii)   

to evidence the succession, in compliance with the applicable provisions hereof, of another person to the Issuer, and the assumption by any such successor of the covenants of the Issuer herein and in the Notes contained;

(iii)   

to add to the covenants of the Issuer, for the benefit of the Holders of the Notes, or to surrender any right or power herein conferred upon the Issuer;

(iv)   

to convey, transfer, assign, mortgage or pledge any property to or with the Indenture Collateral Agent;

(v)   

to cure any ambiguity, to correct or supplement any provision herein or in any supplemental indenture which may be inconsistent with any other provision herein or in any supplemental indenture or to make any other provisions with respect to matters or questions arising under this Indenture or in any supplemental indenture; provided, that such action shall not adversely affect the interests of the Holders of the Notes;

(vi)   

to evidence and provide for the acceptance of the appointment hereunder by a successor Indenture Trustee with respect to the Notes and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Article VI; or

(vii)   

to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture under the TIA or under any similar federal statute hereafter enacted and to add to this Indenture such other provisions as may be expressly required by the TIA.

The Indenture Trustee and the Indenture Administrator are hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained.

(b)   

The Issuer, the Indenture Trustee and the Indenture Administrator, when authorized by an Issuer Order, may, also without the consent of any of the Holders of the Notes, but with the prior written consent of the Letter of Credit Provider to the extent it would be materially and adversely affected and with prior notice to the Rating Agencies by the Issuer, as evidenced to the Indenture Trustee and the Indenture Administrator, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Notes under this Indenture; provided, however, that such action shall not, adversely affect in any material respect the interests of any Noteholder.  An amendment described in this clause (b) shall be deemed not to adversely affect the interests of any Noteholder if either each Rating Agency confirms in writing that such amendment will not result in a reduction or withdrawal of the then current rating of each Class of Notes or none of the Rating Agencies, within 10 days’ after receipt of notice of such amendment, notifies the Depositor, the Servicer or the Trust in writing that such amendment will result in a reduction or withdrawal of the then current ratings of the Notes.

SECTION 9.2   Supplemental Indentures with Consent of Noteholders.  The Issuer, the Indenture Trustee and the Indenture Administrator, when authorized by an Issuer Order, also may, with prior notice to the Rating Agencies and with the consent of the Letter of Credit Provider to the extent it would be materially and adversely affected and with the consent of the Holders of not less than a majority of the outstanding Amount of the Notes, by Act of such Holders delivered to the Issuer, the Indenture Trustee and the Indenture Administrator, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Notes under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Note affected thereby:

(i)   

change the date of payment of any installment of principal of or interest on any Note, or reduce the principal amount thereof, the interest rate thereon or the Redemption Price with respect thereto, change the provision of this Indenture relating to the application of collections on, or the proceeds of the sale of, the Trust Estate to payment of principal of or interest on the Notes, or change any place of payment where, or the coin or currency in which, any Note or the interest thereon is payable;

(ii)   

impair the right to institute suit for the enforcement of the provisions of this Indenture requiring the application of funds available therefor, as provided in Article V, to the payment of any such amount due on the Notes on or after the respective due dates thereof (or, in the case of redemption, on or after the Redemption Date);

(iii)   

reduce the percentage of the Outstanding Amount of the Notes or the Notes of the Controlling Class, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture;

(iv)   

modify or alter the provisions of the proviso to the definition of the term “Outstanding”;

(v)   

reduce the percentage of the Outstanding Amount of the Notes or the Notes of the Controlling Class required to direct the Indenture Trustee and the Indenture Administrator to direct the Issuer to sell or liquidate the Trust Estate pursuant to Section 5.4;

(vi)   

modify any provision of this Section except to increase any percentage specified herein or to provide that certain additional provisions of this Indenture or the Basic Documents cannot be modified or waived without the consent of the Holder of each Outstanding Note affected thereby;

(vii)   

modify any of the provisions of this Indenture in such manner as to affect the calculation of the amount of any payment of interest or principal due on any Note on any Payment Date (including the calculation of any of the individual components of such calculation) or to affect the rights of the Holders of Notes to the benefit of any provisions for the redemption of the Notes contained herein; or

(viii)   

permit the creation of any lien ranking prior to or on a parity with the lien of this Indenture with respect to any part of the Trust Estate or, except as otherwise permitted or contemplated herein or in any of the Basic Documents, terminate the lien of this Indenture on any property at any time subject hereto or deprive the Holder of any Note of the security provided by the lien of this Indenture.

The Indenture Trustee or the Indenture Administrator may determine whether or not any Notes would be affected by any supplemental indenture and any such determination shall be conclusive upon the Holders of all Notes, whether theretofore or thereafter authenticated and delivered hereunder.  Neither the Indenture Trustee nor the Indenture Administrator shall be liable for any such determination made in good faith.

It shall not be necessary for any Act of Noteholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

Promptly after the execution by the Issuer, the Indenture Trustee and the Indenture Administrator of any supplemental indenture pursuant to this Section, the Indenture Administrator shall mail to the Holders of the Notes to which such amendment or supplemental indenture relates a notice setting forth in general terms the substance of such supplemental indenture.  Any failure of the Indenture Administrator to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

SECTION 9.3   Execution of Supplemental Indentures.  In executing, or permitting the additional trusts created by, any supplemental indenture permitted by this Article IX or the modifications thereby of the trusts created by this Indenture, the Indenture Trustee and the Indenture Administrator shall be entitled to receive, and subject to Sections 6.1 and 6.2, shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture.  Each of the Indenture Trustee and the Indenture Administrator may, but shall not be obligated to, enter into any such supplemental indenture that affects its own rights, duties, liabilities or immunities under this Indenture or otherwise.

SECTION 9.4   Effect of Supplemental Indenture.  Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and be deemed to be modified and amended in accordance therewith with respect to the Notes affected thereby, and the respective rights, limitations of rights, obligations, duties, liabilities and immunities under this Indenture of the Indenture Trustee, the Indenture Administrator, the Issuer and the Holders of the Notes shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

SECTION 9.5   Conformity With Trust Indenture Act.  Every amendment of this Indenture and every supplemental indenture executed pursuant to this Article IX shall conform to the requirements of the Trust Indenture Act as then in effect so long as this Indenture shall then be qualified under the Trust Indenture Act.

SECTION 9.6   Reference in Notes to Supplemental Indentures.  Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX may, and if required by the Indenture Administrator shall, bear a notation in form approved by the Indenture Administrator as to any matter provided for in such supplemental indenture.  If the Issuer or the Indenture Administrator shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Administrator and the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Administrator in exchange for Outstanding Notes.

ARTICLE X

Redemption of Notes

SECTION 10.1   Redemption.  (a)   The Notes are subject to redemption in whole, but not in part, at the direction of the Depositor pursuant to Section 9.1(a) of the Sale and Servicing Agreement, on any Payment Date on which the Servicer exercises its option to purchase the Trust Estate pursuant to said Section 9.1(a), for a purchase price equal to the Redemption Price; provided, however, that the Issuer has available funds sufficient to pay the Redemption Price.  The Servicer or the Issuer shall furnish the Rating Agencies notice of such redemption.  If the Notes are to be redeemed pursuant to this Section 10.1(a), the Servicer or the Issuer shall furnish notice of such election to the Indenture Trustee and the Indenture Administrator not later than 15 days prior to the Redemption Date and the Issuer shall deposit with the Indenture Administrator in the Note Distribution Account the Redemption Price of the Notes to be redeemed whereupon all such Notes shall be due and payable on the Redemption Date upon the furnishing of a notice complying with Section 10.2 to each Holder of Notes.

(b)   

Reserved.

(c)   

In the event that the assets of the Trust are sold pursuant to Section 9.1 of the Sale and Servicing Agreement, all amounts on deposit in the Note Distribution Account shall be paid to the Noteholders up to the Outstanding Amount of the Notes and all accrued and unpaid interest thereon and the Letter of Credit Provider shall receive all amounts then owing to it.  If amounts are to be paid to Noteholders pursuant to this Section 10.1(c), the Servicer or the Issuer shall, to the extent practicable, furnish notice of such event to the Indenture Trustee and the Indenture Administrator not later than 15 days prior to the Redemption Date whereupon all such amounts shall be payable on the Redemption Date.

SECTION 10.2   Form of Redemption Notice.  (a)   Notice of redemption under Section 10.1(a) shall be given by the Indenture Administrator by facsimile or by first-class mail, postage prepaid, transmitted or mailed prior to the applicable Redemption Date to each Holder of Notes, as of the close of business on the last day of the calendar month preceding the applicable Redemption Date, at such Holder’s address appearing in the Note Register.

All notices of redemption shall state:

(i)   

the Redemption Date;

(ii)   

the Redemption Price;

(iii)   

that the Record Date otherwise applicable to such Redemption Date is not applicable and that payments shall be made only upon presentation and surrender of such Notes and the place where such Notes are to be surrendered for payment of the Redemption Price (which shall be the office or agency of the Issuer to be maintained as provided in Section 3.2); and

(iv)   

that interest on the Notes shall cease to accrue on the Redemption Date.

Notice of redemption of the Notes shall be given by the Indenture Administrator in the name and at the expense of the Issuer.  Failure to give notice of redemption, or any defect therein, to any Holder of any Note shall not impair or affect the validity of the redemption of any other Note.

(b)   

Prior notice of redemption under Sections 10.1(b) is not required to be given to Noteholders.

SECTION 10.3   Notes Payable on Redemption Date.  The Notes to be redeemed shall, following notice of redemption as required by Section 10.2 (in the case of redemption pursuant to Section 10.1(a)), on the Redemption Date become due and payable at the Redemption Price and (unless the Issuer shall default in the payment of the Redemption Price) no interest shall accrue on the Redemption Price for any period after the date to which accrued interest is calculated for purposes of calculating the Redemption Price.

ARTICLE XI

Miscellaneous

SECTION 11.1   Compliance Certificates and Opinions, etc.  (a)   Upon any application or request by the Issuer to the Indenture Trustee, the Indenture Administrator or the Indenture Collateral Agent to take any action under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee, the Indenture Administrator or the Indenture Collateral Agent, as the case may be, (i) an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, (ii) an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with and (iii) (if required by the TIA) an Independent Certificate from a firm of certified public accountants meeting the applicable requirements of this Section, except that, in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture, no additional certificate or opinion need be furnished.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

(i)   

a statement that each signatory of such certificate or opinion has read or has caused to be read such covenant or condition and the definitions herein relating thereto;

(ii)   

a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(iii)   

a statement that, in the opinion of each such signatory, such signatory has made such examination or investigation as is necessary to enable such signatory to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(iv)   

a statement as to whether, in the opinion of each such signatory such condition or covenant has been complied with.

(b)   

(i)   Prior to the deposit of any Collateral or other property or securities with the Indenture Collateral Agent that is to be made the basis for the release of any property or securities subject to the lien of this Indenture, the Issuer shall, in addition to any obligation imposed in Section 11.1(a) or elsewhere in this Indenture, furnish to the Indenture Collateral Agent and the Indenture Administrator an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days of such deposit) to the Issuer of the Collateral or other property or securities to be so deposited.

(ii)   

Whenever the Issuer is required to furnish to the Indenture Collateral Agent and the Indenture Administrator an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (i) above, the Issuer shall also deliver to the Indenture Collateral Agent and the Indenture Administrator an Independent Certificate as to the same matters, if the fair value to the Issuer of the securities to be so deposited and of all other such securities made the basis of any such withdrawal or release since the commencement of the then-current fiscal year of the Issuer, as set forth in the certificates delivered pursuant to clause (i) above and this clause (ii), is 10% or more of the Outstanding Amount of the Notes, but such a certificate need not be furnished with respect to any securities so deposited, if the fair value thereof to the Issuer as set forth in the related Officer’s Certificate is less than $25,000 or less than 1% percent of the Outstanding Amount of the Notes.

(iii)   

Other than with respect to the release of any Purchased Receivables or Liquidated Receivables, whenever any property or securities are to be released from the lien of this Indenture, the Issuer shall also furnish to the Indenture Collateral Agent and the Indenture Administrator an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days of such release) of the property or securities proposed to be released and stating that in the opinion of such person the proposed release will not impair the security under this Indenture in contravention of the provisions hereof.

(iv)   

Whenever the Issuer is required to furnish to the Indenture Trustee and the Indenture Administrator an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (iii) above, the Issuer shall also furnish to the Indenture Collateral Agent and the Indenture Administrator an Independent Certificate as to the same matters if the fair value of the property or securities and of all other property other than Purchased Receivables and Defaulted Receivables, or securities released from the lien of this Indenture since the commencement of the then current calendar year, as set forth in the certificates required by clause (iii) above and this clause (iv), equals 10% or more of the Outstanding Amount of the Notes, but such certificate need not be furnished in the case of any release of property or securities if the fair value thereof as set forth in the related Officer’s Certificate is less than $25,000 or less than 1% percent of the then Outstanding Amount of the Notes.

(v)   

Notwithstanding Section 2.9, Section 8.4 or any other provision of this Section, the Issuer may (A) collect, liquidate, sell or otherwise dispose of Receivables, Financed Vehicles or related property as and to the extent permitted or required by the Basic Documents and (B) make cash payments out of the Trust Accounts as and to the extent permitted or required by the Basic Documents and shall not be required in connection therewith to deliver the certificates and opinions described above or in Section 8.5.

SECTION 11.2   Form of Documents Delivered to Indenture Trustee.  In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate 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, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his or her certificate or opinion is based are erroneous.  Any such certificate of an Authorized Officer or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Servicer, the Depositor or the Issuer, stating that the information with respect to such factual matters is in the possession of the Servicer, the Depositor or the Issuer, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

Whenever in this Indenture, in connection with any application or certificate or report to the Indenture Trustee and the Indenture Administrator, it is provided that the Issuer shall deliver any document as a condition of the granting of such application, or as evidence of the Issuer’s compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Issuer to have such application granted or to the sufficiency of such certificate or report.  The foregoing shall not, however, be construed to affect the Indenture Trustee’s and the Indenture Administrator’s right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Article VI.

SECTION 11.3   Acts of Noteholders.  (a)   Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by agents duly appointed in writing; and except as herein otherwise expressly provided such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee and the Indenture Administrator, and, where it is hereby expressly required, to the Issuer.  Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Noteholders signing such instrument or instruments.  Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.1) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section.

(b)   

The fact and date of the execution by any person of any such instrument or writing may be proved in any customary manner of the Indenture Trustee or the Indenture Administrator.

(c)   

The ownership of Notes shall be proved by the Note Register.

(d)   

Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Notes shall bind the Holder of every Note issued upon the registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Administrator or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.

SECTION 11.4   Notices, etc., to Indenture Trustee, Indenture Administrator Issuer and Rating Agencies.  Any request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders or other documents provided or permitted by this Indenture to be made upon, given or furnished to or filed with:

(a)   

The Indenture Trustee and the Indenture Administrator by any Noteholder or by the Issuer shall be sufficient for every purpose hereunder if personally delivered, delivered by overnight courier, mailed certified mail, return receipt requested or sent by facsimile and shall be deemed to have been duly given upon receipt to the Indenture Trustee at its Corporate Trust Office with a copy to the Indenture Administrator at:  Citibank, N.A., 388 Greenwich Street, 14th Floor, New York, New York 10013, or

(b)   

The Issuer by the Indenture Trustee, the Indenture Administrator or by any Noteholder shall be sufficient for every purpose hereunder if personally delivered, delivered by overnight courier or mailed certified mail, return receipt requested and shall be deemed to have been duly given upon receipt to the Issuer addressed to:  Franklin Auto Trust 2005-1, in care of Deutsche Bank Trust Company Delaware, 1011 Centre Road, Suite 200, Wilmington, Delaware 19805-1266, with a copy to Deutsche Bank Trust Company Americas, 60 Wall Street, 26th Floor, New York, New York 10005, Attention:  Corporate Trust and Agency Services, Structured Finance Services, or at any other address previously furnished in writing to the Indenture Trustee and the Indenture Administrator by Issuer.  The Issuer shall promptly transmit any notice received by it from the Noteholders to the Indenture Trustee and the Indenture Administrator.

Notices required to be given to the Rating Agencies by the Issuer, the Indenture Trustee, the Indenture Administrator or the Owner Trustee shall be in writing, personally delivered, delivered by overnight courier, mailed certified mail, return receipt requested or sent by e-mail if an e-mail address is provided to (i) in the case of Moody’s, at either of the following addresses:  Moody’s Investors Service, Inc., 99 Church Street, New York, New York 10004 or ServicerReports@moodys.com and (ii) in the case of Standard and Poor’s, at the following address: Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., 55 Water Street, New York, New York 10041, Attention of Asset-Backed Surveillance Department; or as to each of the foregoing, at such other address as shall be designated by written notice to the other parties.

SECTION 11.5   Notices to Noteholders; Waiver.  Where this Indenture provides for notice to Noteholders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class, postage prepaid to each Noteholder affected by such event, at his address as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice.  In any case where notice to Noteholders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Noteholder shall affect the sufficiency of such notice with respect to other Noteholders, and any notice that is mailed in the manner herein provided shall conclusively be presumed to have been duly given.

Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Noteholders shall be filed with the Indenture Administrator but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver.

In case, 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 of any event to Noteholders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Administrator shall be deemed to be a sufficient giving of such notice.

Where this Indenture provides for notice to the Rating Agencies, failure to give such notice shall not affect any other rights or obligations created hereunder, and shall 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 any of the Notes to the contrary, the Issuer may enter into any agreement with any Holder of a Note providing for a method of payment, or notice by the Indenture Trustee, the Indenture Administrator or any Paying Agent to such Holder, that is different from the methods provided for in this Indenture for such payments or notices, provided that such methods are reasonable and consented to by the Indenture Trustee and the Indenture Administrator (which consent shall not be unreasonably withheld).  The Issuer will furnish to the Indenture Trustee and the Indenture Administrator a copy of each such agreement and the Indenture Trustee will cause payments to be made and notices to be given in accordance with such agreements.

SECTION 11.7   Conflict with Trust Indenture Act.  If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this indenture by any of the provisions of the Trust Indenture Act, such required provision shall control.

The provisions of TIA Sections 310 through 317 that impose duties on any person (including the provisions automatically deemed included herein unless expressly excluded by this Indenture) are a part of and govern this Indenture, whether or not physically contained herein.

SECTION 11.8   Effect of Headings and Table of Contents.  The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

SECTION 11.9   Successors and Assigns.  All covenants and agreements in this Indenture and the Notes by the Issuer shall bind its successors and assigns, whether so expressed or not.  All agreements of the Indenture Trustee in this Indenture shall bind its successors.  All agreements of the Indenture Collateral Agent in this Indenture shall bind its successors.  All agreements of the Indenture Administrator in this Indenture shall bind its successors.

SECTION 11.10   Separability.  In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 11.11   Benefits of Indenture.  The Letter of Credit Provider shall be an express third-party beneficiary to the provisions of this Indenture.  Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the Letter of Credit Provider and the Noteholders, and any other party secured hereunder, and any other person with an ownership interest in any part of the Trust Estate, any benefit or any legal or equitable right, remedy or claim under this Indenture.

SECTION 11.12   Legal Holidays.  In any case where the date on which any payment is due shall not be a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date an which nominally due, and no interest shall accrue for the period from and after any such nominal date.

SECTION 11.13   GOVERNING LAW.  THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND RULE 327(b) OF THE NEW YORK CIVIL PRACTICE LAWS AND RULES, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

SECTION 11.14   Counterparts.  This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

SECTION 11.15   Recording of Indenture.  If this Indenture is subject to recording in any appropriate public recording offices, such recording is to be effected by the Issuer and at its expense accompanied by an Opinion of Counsel (which may be counsel to the Indenture Trustee or any other counsel reasonably acceptable to the Indenture Trustee) to the effect that such recording is necessary either for the protection of the Noteholders or any other person secured hereunder or for the enforcement of any right or remedy granted to the Indenture Trustee or the Indenture Collateral Agent under this Indenture.

SECTION 11.16   Trust Obligation.  No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Depositor, the Servicer, the Owner Trustee, the Indenture Trustee, the Indenture Administrator or the Indenture Collateral Agent on the Notes or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Depositor, the Servicer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent, or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director, employee or agent of the Depositor, the Servicer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Depositor, the Servicer, the Owner Trustee, the Indenture Collateral Agent, the Indenture Administrator or the Indenture Trustee or of any successor or assign of the Depositor, the Servicer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent and the Owner Trustee have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.  For all purposes of this Indenture, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.

SECTION 11.17   No Petition.  The Indenture Trustee, the Indenture Administrator and the Indenture Collateral Agent, by entering into this Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree that they will not prior to one year and one day after the termination of this Agreement institute against the Depositor, or the Issuer, or join in any institution against the Depositor, or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States Federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, this Indenture or any of the Basic Documents.

SECTION 11.18   Inspection.  The Issuer agrees that, on reasonable prior notice, it will permit any representative of the Indenture Trustee and the Indenture Administrator, during the Issuer’s normal business hours, to examine all the books of account, records, reports, and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited by Independent certified public accountants, and to discuss the Issuer’s affairs, finances and accounts with the Issuer’s officers, employees, and independent certified public accountants, all at such reasonable times and as often as may be reasonably requested.  The Indenture Trustee shall and shall cause its representatives to hold in confidence all such information except to the extent disclosure may be required by law (and all reasonable applications for confidential treatment are unavailing) and except to the extent that the Indenture Trustee may reasonably determine that such disclosure is consistent with its Obligations hereunder.

SECTION 11.19   No Joint Venture.  Nothing herein contained shall be deemed or construed to create a co-partnership or joint venture between the parties hereto and the services of the Servicer shall be rendered as an independent contractor and not as agent for the Indenture Trustee.

[THIS SPACE LEFT INTENTIONALLY BLANK]

IN WITNESS WHEREOF, the Issuer, the Indenture Trustee, the Indenture Administrator and the Indenture Collateral Agent have caused this Indenture to be duly executed by their respective officers, thereunto duly authorized, all as of the day and year first above written.

FRANKLIN AUTO TRUST 2005-1,

By:  DEUTSCHE BANK TRUST COMPANY DELAWARE, not in its individual capacity but solely as Owner Trustee

By:  /s/ Jenna Kaufman

Name: Jenna Kaufman

Title:   Attorney-in-fact

WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Indenture Trustee and as Indenture Collateral Agent

By: /s/ James J. McGinley

Name: James J. McGinley

Title:   Authorized Signer

CITIBANK, N.A., as Indenture Administrator

By: /s/ Jennifer H. McCourt

Name: Jennifer H. McCourt

Title:   Vice President

EXHIBIT A

SCHEDULE OF RECEIVABLES

(ON FILE WITH INDENTURE ADMINISTRATOR)

EXHIBIT B

SALE AND SERVICING AGREEMENT

(SEE TAB 20)

EXHIBIT C

NOTE DEPOSITORY AGREEMENT

(SEE TAB 68)

EXHIBIT D-1

[Form of Note]

FRANKLIN AUTO TRUST 2005-1

CLASS A-1 4.49625% ASSET-BACKED NOTES

REGISTERED

$75,000,000

No. 1

SEE REVERSE FOR CERTAIN DEFINITIONS

CUSIP No. [_______]

ISIN No. [_______]

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE 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 SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THE ACQUISITION OF THIS NOTE WILL BE DEEMED A REPRESENTATION BY THE ACQUIRER THAT IT IS: (i) NOT ACQUIRING THE NOTE ON BEHALF OF OR WITH THE ASSETS OF AN EMPLOYEE BENEFIT PLAN AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT SECURITY ACT OF 1974, AS AMENDED (“ERISA”), THAT IS SUBJECT TO TITLE I OF ERISA OR A PLAN AS DEFINED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR ANY EMPLOYEE BENEFIT PLAN SUBJECT TO ANY APPLICABLE SIMILAR LAW (“SIMILAR LAW”) OR (ii) ITS ACQUISITION AND HOLDING OF THE NOTE ARE ELIGIBLE FOR RELIEF UNDER PROHIBITED TRANSACTION CLASS EXEMPTION (“PTCE”) 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23 OR A SIMILAR EXEMPTION, OR IN THE CASE OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO A SIMILAR LAW, DO NOT RESULT IN A NONEXEMPT VIOLATION OF ANY SIMILAR LAW.

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

Franklin Auto Trust 2005-1, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of SEVENTY-FIVE MILLION DOLLARS payable on each Payment Date in an amount equal to the result obtained by multiplying (i) a fraction, the numerator of which is $75,000,000 and the denominator of which is $75,000,000 by (ii) the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class A-1 Notes pursuant to Section 3.1 of the Indenture, provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the December 2006 Payment Date (the “Class A-1 Final Scheduled Payment Date”).  The Issuer will pay interest on this Note at the rate per annum shown above on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date (after giving effect to all payments of principal made on the preceding Payment Date).  Interest on this Note will accrue for each Payment Date from and including the preceding Payment Date (or in the case of the first Payment Date, from and including the Closing Date) to but excluding the related Payment Date.  Interest will be computed on the basis of the actual number of days elapsed and a 360-day year.  Such principal of and interest on this Note shall be paid in the manner specified on the reverse hereof.

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.

Unless the certificate of authentication hereon has been executed by the Indenture Administrator whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer as of the date set forth below.

FRANKLIN AUTO TRUST 2005-1

By: 

DEUTSCHE BANK TRUST COMPANY DELAWARE, not in its individual capacity but solely as Owner Trustee under the Trust Agreement,

By:

______________________________

Name:

Title:

Date:

INDENTURE ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION

This is one of the Class A-1 Notes designated above and referred to in the within-mentioned Indenture.

Date:  December 8, 2005

CITIBANK, N.A., as Indenture Administrator,

By:

________________________________

Authorized Signatory

[REVERSE OF NOTE]

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its Class A-1 4.49625% Asset-Backed Notes (herein called the “Class A-1 Notes”), all issued under an Indenture dated as of December 1, 2005 (such indenture, as supplemented or amended, is herein called the “Indenture”) among the Issuer, Wilmington Trust Company, as indenture trustee and as indenture collateral agent (the “Indenture Trustee,” which term includes any successor Indenture Trustee under the Indenture, and the “Indenture Collateral Agent,” which term includes any successor Indenture Collateral Agent under the Indenture), and Citibank, N.A., as indenture administrator (the “Indenture Administrator,” which term includes any successor Indenture Administrator under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee, the Indenture Administrator and the Holders of the Notes.  The Notes are subject to all terms of the Indenture.  All terms used in this Note that are defined in the Indenture, as supplemented or amended, shall have the meanings assigned to them in or pursuant to the Indenture, as so supplemented or amended.

The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes and the Class C Notes (together, the “Notes”) are and will be equally and ratably secured by the collateral pledged as security therefor as provided in the Indenture.

Principal of the Class A-1 Notes will be payable on each Payment Date in an amount described on the face hereof.  “Payment Date” means the twentieth day of each month, or if any such date is not a Business Day, the next succeeding Business Day, commencing in January 2006.

As described above, the entire unpaid principal amount of this Note shall be due and payable on the earlier of the Class A-1 Final Scheduled Payment Date and the Redemption Date, if any, pursuant to Section 10.1(a) or 10.1(c) of the Indenture.  Notwithstanding the foregoing, the entire unpaid principal amount of the Notes shall be due and payable on the date on which an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders of the Notes representing at least 66-2/3% of the Outstanding Amount of the Notes of the Controlling Class have declared the Notes to be immediately due and payable in the manner provided in Section 5.2 and Section 5.6 of the Indenture.  All principal payments on the Class A-1 Notes shall be made pro rata to the Class A-1 Noteholders entitled thereto.

Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by check mailed to the Person whose name appears as the Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of 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 the account designated by such nominee.  Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Administrator, in the name of and on behalf of the Issuer, will notify the Person who was the Holder hereof as of the Record Date preceding such Payment Date by notice mailed prior to such Payment Date and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the Indenture Administrator’s office specified in Section 3.2 of the Indenture.

The Issuer shall pay interest on overdue installments of interest at the Class A-1 Interest Rate to the extent lawful.

As provided in the Indenture, the Notes may be redeemed pursuant to Section 10.1(a) of the Indenture, in whole, but not in part, at the option of the Servicer, on any Payment Date on or after the date on which the Pool Balance is less than or equal to 10% of the Original Pool Balance.

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Administrator duly executed by, the Holder hereof or his attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar which requirements include membership or participation in Securities Transfer Agents Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act, and (ii) accompanied by such other documents as the Indenture Administrator may require, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange.

Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee, the Indenture Collateral Agent, the Indenture Administrator or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Depositor, the Servicer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Depositor, the Servicer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Depositor, the Servicer, the Owner Trustee, the Indenture Trustee or the Indenture Administrator or of any successor or assign of the Depositor, the Servicer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent and the Owner Trustee have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note covenants and agrees that by accepting the benefits of the Indenture that such Noteholder will not at any time institute against the Depositor, or the Issuer or join in any institution against the Depositor, or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings, under any United States Federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the Basic Documents.

The Issuer and the Noteholder (by acceptance of this Note) intend and agree, and the Issuer hereby instructs the Indenture Trustee, to treat and to take no action inconsistent with the treatment of, this Note as indebtedness for federal income tax purposes and for purposes of applicable state or local income taxes, franchise taxes, and any other taxes imposed upon or measured by net income.  

It is the agreement and intent of the Issuer and each Noteholder (by acceptance of this Note) that the Issuer shall, for federal income tax purposes and, to the extent permitted by law, for purposes of applicable state or local income taxes, franchise taxes and any other taxes imposed upon or measured by net income, be disregarded as an entity apart from its owner, the Depositor, if the Depositor is the sole Certificateholder, or treated as a partnership if there is more than one Certificateholder; provided, however, that if any Class of Notes is deemed for federal income tax purposes (or for purposes of any state or local income tax, franchise tax or other tax imposed upon or measured by net income) to represent an equity interest in the Issuer, it is the intent and agreement of the Issuer and each Noteholder (by its acceptance of this Note) that the Issuer shall, to the extent permitted by law, be treated for purposes of any such tax which treats Notes in such manner as a partnership among the affected Class of Noteholders and the Certificateholder.  The Issuer and each Noteholder (by acceptance of this Note) intend and agree, and the Issuer hereby instructs the Indenture Trustee, to treat and to take no action inconsistent with the treatment of the Issuer, the Certificate and the Notes for federal income tax purposes, and for purposes of state, local or other income tax, franchise tax or other tax based upon or measured by net income, in the manner set forth above.

Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and the Indenture Administrator and any agent of the Issuer, the Indenture Trustee or the Indenture Administrator may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Administrator, the Indenture Trustee or any such agent shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes representing a majority of the Outstanding Amount of all Notes at the time Outstanding.  The Indenture also contains provisions permitting the Holders of Notes representing specified percentages of the Outstanding Amount of the Notes of the Controlling Class, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.  The Indenture also permits the Indenture Trustee and the Indenture Administrator to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder.

The term “Issuer” as used in this Note includes any successor to the Issuer under the Indenture.

The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Holders of Notes under the Indenture.

The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

This Note and the Indenture shall be construed in accordance with the laws of the State of New York including, without limitation, Sections 5-1401 and 5-1402 of the New York General Obligations Law and Rule 327(b) of the New York Civil Practice Laws and Rules, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this 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 Indenture or the Basic Documents, neither Deutsche Bank Trust Company Delaware in its individual capacity, any owner of a beneficial interest in the Issuer, nor any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on, or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in this Note or the Indenture, it being expressly understood that said covenants, obligations and indemnifications have been made by the Owner Trustee for the sole purposes of binding the interests of the Owner Trustee in the assets of the Issuer.  The Holder of this Note by the acceptance hereof agrees that except as expressly provided in the Indenture or the Basic 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 nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

ASSIGNMENT

Social Security or taxpayer 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 Note and 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:____________

_______________________1

Signature Guaranteed:

______________________________________________________

_________________________

1

NOTE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever.

.

EXHIBIT D-2

[Form of Note]

FRANKLIN AUTO TRUST 2005-1

CLASS A-2 4.84% ASSET-BACKED NOTES

REGISTERED

$82,000,000

No. 1

SEE REVERSE FOR CERTAIN DEFINITIONS

CUSIP No. [______]

ISIN No. [______]

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE 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 SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN.

THE ACQUISITION OF THIS NOTE WILL BE DEEMED A REPRESENTATION BY THE ACQUIRER THAT IT IS: (i) NOT ACQUIRING THE NOTE ON BEHALF OF OR WITH THE ASSETS OF AN EMPLOYEE BENEFIT PLAN AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT SECURITY ACT OF 1974, AS AMENDED (“ERISA”), THAT IS SUBJECT TO TITLE I OF ERISA OR A PLAN AS DEFINED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR ANY EMPLOYEE BENEFIT PLAN SUBJECT TO ANY APPLICABLE SIMILAR LAW (“SIMILAR LAW”) OR (ii) ITS ACQUISITION AND HOLDING OF THE NOTE ARE ELIGIBLE FOR RELIEF UNDER PROHIBITED TRANSACTION CLASS EXEMPTION (“PTCE”) 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23 OR A SIMILAR EXEMPTION, OR IN THE CASE OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO A SIMILAR LAW, DO NOT RESULT IN A NONEXEMPT VIOLATION OF ANY SIMILAR LAW.

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

Franklin Auto Trust 2005-1, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of EIGHTY-TWO MILLION DOLLARS payable on each Payment Date in an amount equal to the result obtained by multiplying (i) a fraction the numerator of which is $82,000,000 and the denominator of which is $82,000,000 by (ii) the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class A-2 Notes pursuant to Section 3.1 of the Indenture; provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the September 2008 Payment Date (the “Class A-2 Final Scheduled Payment Date”).  The Issuer will pay interest on this Note at the rate per annum shown above on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date (after giving effect to all payments of principal made on the preceding Payment Date).  Interest on this Note will accrue for each Payment Date from and including the twentieth day of the calendar month preceding the related Payment Date (or in the case of the first Payment Date, from and including the Closing Date) to but excluding the twentieth day of the calendar month of the related Payment Date.  Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months.  Such principal of and interest on this Note shall be paid in the manner specified on the reverse hereof.

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.

Unless the certificate of authentication hereon has been executed by the Indenture Administrator whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer as of the date set forth below.

FRANKLIN AUTO TRUST 2005-1

By:

DEUTSCHE BANK TRUST COMPANY DELAWARE, not in its individual capacity but solely as Owner Trustee under the Trust Agreement,

By:

________________________________

Name: 

Title: 

Date:

INDENTURE ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION

This is one of the Class A-2 Notes designated above and referred to in the within-mentioned Indenture.

Date:  December 8, 2005

CITIBANK, N.A., as Indenture Administrator,

By:

_________________________________

Authorized Signatory

[REVERSE OF NOTE]

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its Class A-2 4.84% Asset-Backed Notes (herein called the “Class A-2 Notes”), all issued under an Indenture dated as of December 1, 2005 (such indenture, as supplemented or amended, is herein called the “Indenture”) among the Issuer, Wilmington Trust Company, as indenture trustee and as indenture collateral agent (the “Indenture Trustee,” which term includes any successor Indenture Trustee under the Indenture, and the “Indenture Collateral Agent,” which term includes any successor Indenture Collateral Agent under the Indenture), and Citibank, N.A., as indenture administrator (the “Indenture Administrator,” which term includes any successor Indenture Administrator under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee, the Indenture Administrator and the Holders of the Notes.  The Notes are subject to all terms of the Indenture.  All terms used in this Note that are defined in the Indenture, as supplemented or amended, shall have the meanings assigned to them in or pursuant to the Indenture, as so supplemented or amended.

The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes and the Class C Notes (together, the “Notes”) are and will be equally and ratably secured by the collateral pledged as security therefor as provided in the Indenture.

Principal of the Class A-2 Notes will be payable on each Payment Date in an amount described on the face hereof.  “Payment Date” means the twentieth day of each month, or if any such date is not a Business Day, the next succeeding Business Day, commencing in January 2006.

As described above, the entire unpaid principal amount of this Note shall be due and payable on the earlier of the Class A-2 Final Scheduled Payment Date and the Redemption Date, if any, pursuant to Section 10.1(a) or 10.1(c) of the Indenture.  Notwithstanding the foregoing, the entire unpaid principal amount of the Notes shall be due and payable on the date on which an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders of the Notes representing at least 66-2/3% of the Outstanding Amount of the Notes of the Controlling Class have declared the Notes to be immediately due and payable in the manner provided in Section 5.2 and Section 5.6 of the Indenture.  All principal payments on the Class A-2 Notes shall be made pro rata to the Class A-2 Noteholders entitled thereto.

Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by check mailed to the Person whose name appears as the Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of 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 the account designated by such nominee.  Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Administrator, in the name of and on behalf of the Issuer, will notify the Person who was the Holder hereof as of the Record Date preceding such Payment Date by notice mailed prior to such Payment Date and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the Indenture Administrator’s office specified in Section 3.2 of the Indenture.

The Issuer shall pay interest on overdue installments of interest at the Class A-2 Interest Rate to the extent lawful.

As provided in the Indenture, the Notes may be redeemed pursuant to Section 10.1(a) of the Indenture, in whole, but not in part, at the option of the Servicer, on any Payment Date on or after the date on which the Pool Balance is less than or equal to 10% of the Original Pool Balance.

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Administrator duly executed by, the Holder hereof or his attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar which requirements include membership or participation in Securities Transfer Agents Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act, and (ii) accompanied by such other documents as the Indenture Administrator may require, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange.

Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee, the Indenture Collateral Agent, the Indenture Administrator or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Depositor, the Servicer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Depositor, the Servicer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Depositor, the Servicer, the Owner Trustee, the Indenture Trustee or the Indenture Administrator or of any successor or assign of the Depositor, the Servicer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent and the Owner Trustee have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note covenants and agrees that by accepting the benefits of the Indenture that such Noteholder will not at any time institute against the Depositor, or the Issuer or join in any institution against the Depositor, or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings, under any United States Federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the Basic Documents.

The Issuer and the Noteholder (by acceptance of this Note) intend and agree, and the Issuer hereby instructs the Indenture Trustee, to treat and to take no action inconsistent with the treatment of, this Note as indebtedness for federal income tax purposes and for purposes of applicable state or local income taxes, franchise taxes, and any other taxes imposed upon or measured by net income.  

It is the agreement and intent of the Issuer and each Noteholder (by acceptance of this Note) that the Issuer shall, for federal income tax purposes and, to the extent permitted by law, for purposes of applicable state or local income taxes, franchise taxes and any other taxes imposed upon or measured by net income, be disregarded as an entity apart from its owner, the Depositor, if the Depositor is the sole Certificateholder, or treated as a partnership if there is more than one Certificateholder; provided, however, that if any Class of Notes is deemed for federal income tax purposes (or for purposes of any state or local income tax, franchise tax or other tax imposed upon or measured by net income) to represent an equity interest in the Issuer, it is the intent and agreement of the Issuer and each Noteholder (by its acceptance of this Note) that the Issuer shall, to the extent permitted by law, be treated for purposes of any such tax which treats Notes in such manner as a partnership among the affected Class of Noteholders and the Certificateholder.  The Issuer and each Noteholder (by acceptance of this Note) intend and agree, and the Issuer hereby instructs the Indenture Trustee, to treat and to take no action inconsistent with the treatment of the Issuer, the Certificate and the Notes for federal income tax purposes, and for purposes of state, local or other income tax, franchise tax or other tax based upon or measured by net income, in the manner set forth above.

Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and the Indenture Administrator and any agent of the Issuer, the Indenture Trustee or the Indenture Administrator may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Administrator, the Indenture Trustee or any such agent shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes representing a majority of the Outstanding Amount of all Notes at the time Outstanding.  The Indenture also contains provisions permitting the Holders of Notes representing specified percentages of the Outstanding Amount of the Notes of the Controlling Class, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.  The Indenture also permits the Indenture Trustee and the Indenture Administrator to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder.

The term “Issuer” as used in this Note includes any successor to the Issuer under the Indenture.

The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Holders of Notes under the Indenture.

The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

This Note and the Indenture shall be construed in accordance with the laws of the State of New York including, without limitation, Sections 5-1401 and 5-1402 of the New York General Obligations Law and Rule 327(b) of the New York Civil Practice Laws and Rules, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this 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 Indenture or the Basic Documents, neither Deutsche Bank Trust Company Delaware in its individual capacity, any owner of a beneficial interest in the Issuer, nor any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on, or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in this Note or the Indenture, it being expressly understood that said covenants, obligations and indemnifications have been made by the Owner Trustee for the sole purposes of binding the interests of the Owner Trustee in the assets of the Issuer.  The Holder of this Note by the acceptance hereof agrees that except as expressly provided in the Indenture or the Basic 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 nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

ASSIGNMENT

Social Security or taxpayer 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 Note and 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:

__________________________________1

Signature Guaranteed:

______________________________________________________

_________________________

1

NOTE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever.

.

EXHIBIT D-3

[Form of Note]

FRANKLIN AUTO TRUST 2005-1

CLASS A-3 4.91% ASSET-BACKED NOTES

REGISTERED

$102,000,000

No. 1

SEE REVERSE FOR CERTAIN DEFINITIONS

CUSIP No. [________]

ISIN No. [_________]

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE 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 SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THE ACQUISITION OF THIS NOTE WILL BE DEEMED A REPRESENTATION BY THE ACQUIRER THAT IT IS: (i) NOT ACQUIRING THE NOTE ON BEHALF OF OR WITH THE ASSETS OF AN EMPLOYEE BENEFIT PLAN AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT SECURITY ACT OF 1974, AS AMENDED (“ERISA”), THAT IS SUBJECT TO TITLE I OF ERISA OR A PLAN AS DEFINED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR ANY EMPLOYEE BENEFIT PLAN SUBJECT TO ANY APPLICABLE SIMILAR LAW (“SIMILAR LAW”) OR (ii) ITS ACQUISITION AND HOLDING OF THE NOTE ARE ELIGIBLE FOR RELIEF UNDER PROHIBITED TRANSACTION CLASS EXEMPTION (“PTCE”) 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23 OR A SIMILAR EXEMPTION, OR IN THE CASE OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO A SIMILAR LAW, DO NOT RESULT IN A NONEXEMPT VIOLATION OF ANY SIMILAR LAW.

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF 

THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

Franklin Auto Trust 2005-1, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of ONE HUNDRED TWO MILLION DOLLARS payable on each Payment Date in an amount equal to the result obtained by multiplying (i) a fraction the numerator of which is $102,000,000 and the denominator of which is $102,000,000 by (ii) the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class A-3 Notes pursuant to Section 3.1 of the Indenture; provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the April 2010 Payment Date (the “Class A-3 Final Scheduled Payment Date”).  The Issuer will pay interest on this Note at the rate per annum shown above on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date (after giving effect to all payments of principal made on the preceding Payment Date).  Interest on this Note will accrue for each Payment Date from and including the twentieth day of the calendar month preceding the related Payment Date (or in the case of the first Payment date, from and including the Closing Date) to but excluding the twentieth day of the calendar month of the related Payment Date.  Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months.  Such principal of and interest on this Note shall be paid in the manner specified on the reverse hereof.

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.

Unless the certificate of authentication hereon has been executed by the Indenture Administrator whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer as of the date set forth below.

FRANKLIN AUTO TRUST 2005-1

By:

DEUTSCHE BANK TRUST COMPANY DELAWARE, not in its individual capacity but solely as Owner Trustee under the Trust Agreement,

By:____________________________

Name:

Title:

Date:

INDENTURE ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION

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

Date:  December 8, 2005

CITIBANK, N.A., as Indenture Administrator,

By:

_________________________________

Authorized Signatory

[REVERSE OF NOTE]

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its Class A-3 4.91% Asset-Backed Notes (herein called the “Class A-3 Notes”), all issued under an Indenture dated as of December 1, 2005 (such indenture, as supplemented or amended, is herein called the “Indenture”) among the Issuer, Wilmington Trust Company, as indenture trustee and as indenture collateral agent (the “Indenture Trustee,” which term includes any successor Indenture Trustee under the Indenture, and the “Indenture Collateral Agent,” which term includes any successor Indenture Collateral Agent under the Indenture), and Citibank, N.A., as indenture administrator (the “Indenture Administrator,” which term includes any successor Indenture Administrator under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee, the Indenture Administrator and the Holders of the Notes.  The Notes are subject to all terms of the Indenture.  All terms used in this Note that are defined in the Indenture, as supplemented or amended, shall have the meanings assigned to them in or pursuant to the Indenture, as so supplemented or amended.

The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes and the Class C Notes (together, the “Notes”) are and will be equally and ratably secured by the collateral pledged as security therefor as provided in the Indenture.

Principal of the Class A-3 Notes will be payable on each Payment Date in an amount described on the face hereof.  “Payment Date” means the twentieth day of each month, or if any such date is not a Business Day, the next succeeding Business Day, commencing in January 2006.

As described above, the entire unpaid principal amount of this Note shall be due and payable on the earlier of the Class A-3 Final Scheduled Payment Date and the Redemption Date, if any, pursuant to Section 10.1(a) or 10.1(c) of the Indenture.  Notwithstanding the foregoing, the entire unpaid principal amount of the Notes shall be due and payable on the date on which an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders of the Notes representing at least 66-2/3% of the Outstanding Amount of the Notes of the Controlling Class have declared the Notes to be immediately due and payable in the manner provided in Section 5.2 and Section 5.6 of the Indenture.  All principal payments on the Class A-3 Notes shall be made pro rata to the Class A-3 Noteholders entitled thereto.

Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by check mailed to the Person whose name appears as the Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of 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 the account designated by such nominee.  Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Administrator, in the name of and on behalf of the Issuer, will notify the Person who was the Holder hereof as of the Record Date preceding such Payment Date by notice mailed prior to such Payment Date and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the Indenture Administrator’s office specified in Section 3.2 of the Indenture.

The Issuer shall pay interest on overdue installments of interest at the Class A-3 Interest Rate to the extent lawful.

As provided in the Indenture, the Notes may be redeemed pursuant to Section 10.1(a) of the Indenture, in whole, but not in part, at the option of the Servicer, on any Payment Date on or after the date on which the Pool Balance is less than or equal to 10% of the Original Pool Balance.

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Administrator duly executed by, the Holder hereof or his attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar which requirements include membership or participation in Securities Transfer Agents Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act, and (ii) accompanied by such other documents as the Indenture Administrator may require, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange.

Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee, the Indenture Collateral Agent, the Indenture Administrator or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Depositor, the Servicer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Depositor, the Servicer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Depositor, the Servicer, the Owner Trustee, the Indenture Trustee or the Indenture Administrator or of any successor or assign of the Depositor, the Servicer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent and the Owner Trustee have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note covenants and agrees that by accepting the benefits of the Indenture that such Noteholder will not at any time institute against the Depositor, or the Issuer or join in any institution against the Depositor, or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings, under any United States Federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the Basic Documents.

The Issuer and the Noteholder (by acceptance of this Note) intend and agree, and the Issuer hereby instructs the Indenture Trustee, to treat and to take no action inconsistent with the treatment of, this Note as indebtedness for federal income tax purposes and for purposes of applicable state or local income taxes, franchise taxes, and any other taxes imposed upon or measured by net income.  

It is the agreement and intent of the Issuer and each Noteholder (by acceptance of this Note) that the Issuer shall, for federal income tax purposes and, to the extent permitted by law, for purposes of applicable state or local income taxes, franchise taxes and any other taxes imposed upon or measured by net income, be disregarded as an entity apart from its owner, the Depositor, if the Depositor is the sole Certificateholder, or treated as a partnership if there is more than one Certificateholder; provided, however, that if any Class of Notes is deemed for federal income tax purposes (or for purposes of any state or local income tax, franchise tax or other tax imposed upon or measured by net income) to represent an equity interest in the Issuer, it is the intent and agreement of the Issuer and each Noteholder (by its acceptance of this Note) that the Issuer shall, to the extent permitted by law, be treated for purposes of any such tax which treats Notes in such manner as a partnership among the affected Class of Noteholders and the Certificateholder.  The Issuer and each Noteholder (by acceptance of this Note) intend and agree, and the Issuer hereby instructs the Indenture Trustee, to treat and to take no action inconsistent with the treatment of the Issuer, the Certificate and the Notes for federal income tax purposes, and for purposes of state, local or other income tax, franchise tax or other tax based upon or measured by net income, in the manner set forth above.

Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and the Indenture Administrator and any agent of the Issuer, the Indenture Trustee or the Indenture Administrator may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Administrator, the Indenture Trustee or any such agent shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes representing a majority of the Outstanding Amount of all Notes at the time Outstanding.  The Indenture also contains provisions permitting the Holders of Notes representing specified percentages of the Outstanding Amount of the Notes of the Controlling Class, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.  The Indenture also permits the Indenture Trustee and the Indenture Administrator to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder.

The term “Issuer” as used in this Note includes any successor to the Issuer under the Indenture.

The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Holders of Notes under the Indenture.

The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

This Note and the Indenture shall be construed in accordance with the laws of the State of New York including, without limitation, Sections 5-1401 and 5-1402 of the New York General Obligations Law and Rule 327(b) of the New York Civil Practice Laws and Rules, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this 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 Indenture or the Basic Documents, neither Deutsche Bank Trust Company Delaware in its individual capacity, any owner of a beneficial interest in the Issuer, nor any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on, or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in this Note or the Indenture, it being expressly understood that said covenants, obligations and indemnifications have been made by the Owner Trustee for the sole purposes of binding the interests of the Owner Trustee in the assets of the Issuer.  The Holder of this Note by the acceptance hereof agrees that except as expressly provided in the Indenture or the Basic 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 nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

ASSIGNMENT

Social Security or taxpayer 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 Note and 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:

__________________________________1

Signature Guaranteed:

______________________

_________________________

1

NOTE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever.

EXHIBIT D-4

[Form of Note]

FRANKLIN AUTO TRUST 2005-1

CLASS A-4 5.01% ASSET-BACKED NOTES

REGISTERED

$46,375,000

No. 1

SEE REVERSE FOR CERTAIN DEFINITIONS

CUSIP No. [_______]

ISIN No. [_________]

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE 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 SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THE ACQUISITION OF THIS NOTE WILL BE DEEMED A REPRESENTATION BY THE ACQUIRER THAT IT IS: (i) NOT ACQUIRING THE NOTE ON BEHALF OF OR WITH THE ASSETS OF AN EMPLOYEE BENEFIT PLAN AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT SECURITY ACT OF 1974, AS AMENDED (“ERISA”), THAT IS SUBJECT TO TITLE I OF ERISA OR A PLAN AS DEFINED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR ANY EMPLOYEE BENEFIT PLAN SUBJECT TO ANY APPLICABLE SIMILAR LAW (“SIMILAR LAW”) OR (ii) ITS ACQUISITION AND HOLDING OF THE NOTE ARE ELIGIBLE FOR RELIEF UNDER PROHIBITED TRANSACTION CLASS EXEMPTION (“PTCE”) 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23 OR A SIMILAR EXEMPTION, OR IN THE CASE OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO A SIMILAR LAW, DO NOT RESULT IN A NONEXEMPT VIOLATION OF ANY SIMILAR LAW.

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

Franklin Auto Trust 2005-1, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of FORTY-SIX MILLION THREE HUNDRED SEVENTY-FIVE THOUSAND DOLLARS payable on each Payment Date in an amount equal to the result obtained by multiplying (i) a fraction the numerator of which is $46,375,000 and the denominator of which is $46,375,000 by (ii) the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class A-4 Notes pursuant to Section 3.1 of the Indenture; provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the May 2013 Payment Date (the “Class A-4 Final Scheduled Payment Date”).  The Issuer will pay interest on this Note at the rate per annum shown above on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date (after giving effect to all payments of principal made on the preceding Payment Date).  Interest on this Note will accrue for each Payment Date from and including the twentieth day of the calendar month preceding the related Payment Date (or in the case of the first Payment Date, from and including the Closing Date) to but excluding the twentieth day of the calendar month of the related Payment Date.  Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months.  Such principal of and interest on this Note shall be paid in the manner specified on the reverse hereof.

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.

Unless the certificate of authentication hereon has been executed by the Indenture Administrator whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer as of the date set forth below.

FRANKLIN AUTO TRUST 2005-1

By:

DEUTSCHE BANK TRUST COMPANY DELAWARE, not in its individual capacity but solely as Owner Trustee under the Trust Agreement,

By:____________________________

Name:

Title:

Date:

INDENTURE ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION

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

Date:  December 8, 2005

CITIBANK, N.A., as Indenture Administrator,

By:

_________________________________

Authorized Signatory

[REVERSE OF NOTE]

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its Class A-4 5.01% Asset-Backed Notes (herein called the “Class A-4 Notes”), all issued under an Indenture dated as of December 1, 2005 (such indenture, as supplemented or amended, is herein called the “Indenture”) among the Issuer, Wilmington Trust Company, as indenture trustee and as indenture collateral agent (the “Indenture Trustee,” which term includes any successor Indenture Trustee under the Indenture, and the “Indenture Collateral Agent,” which term includes any successor Indenture Collateral Agent under the Indenture), and Citibank, N.A., as indenture administrator (the “Indenture Administrator,” which term includes any successor Indenture Administrator under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee, the Indenture Administrator and the Holders of the Notes.  The Notes are subject to all terms of the Indenture.  All terms used in this Note that are defined in the Indenture, as supplemented or amended, shall have the meanings assigned to them in or pursuant to the Indenture, as so supplemented or amended.

The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes and the Class C Notes (together, the “Notes”) are and will be equally and ratably secured by the collateral pledged as security therefor as provided in the Indenture.

Principal of the Class A-4 Notes will be payable on each Payment Date in an amount described on the face hereof.  “Payment Date” means the twentieth day of each month, or if any such date is not a Business Day, the next succeeding Business Day, commencing in January 2006.

As described above, the entire unpaid principal amount of this Note shall be due and payable on the earlier of the Class A-4 Final Scheduled Payment Date and the Redemption Date, if any, pursuant to Section 10.1(a) or 10.1(c) of the Indenture.  Notwithstanding the foregoing, the entire unpaid principal amount of the Notes shall be due and payable on the date on which an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders of the Notes representing at least 66-2/3% of the Outstanding Amount of the Notes of the Controlling Class have declared the Notes to be immediately due and payable in the manner provided in Section 5.2 and Section 5.6 of the Indenture.  All principal payments on the Class A-4 Notes shall be made pro rata to the Class A-4 Noteholders entitled thereto.

Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by check mailed to the Person whose name appears as the Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of 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 the account designated by such nominee.  Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Administrator, in the name of and on behalf of the Issuer, will notify the Person who was the Holder hereof as of the Record Date preceding such Payment Date by notice mailed prior to such Payment Date and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the Indenture Administrator’s office specified in Section 3.2 of the Indenture.

The Issuer shall pay interest on overdue installments of interest at the Class A-4 Interest Rate to the extent lawful.

As provided in the Indenture, the Notes may be redeemed pursuant to Section 10.1(a) of the Indenture, in whole, but not in part, at the option of the Servicer, on any Payment Date on or after the date on which the Pool Balance is less than or equal to 10% of the Original Pool Balance.

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Administrator duly executed by, the Holder hereof or his attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar which requirements include membership or participation in Securities Transfer Agents Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act, and (ii) accompanied by such other documents as the Indenture Administrator may require, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange.

Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee, the Indenture Collateral Agent, the Indenture Administrator or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Depositor, the Servicer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Depositor, the Servicer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Depositor, the Servicer, the Owner Trustee, the Indenture Trustee or the Indenture Administrator or of any successor or assign of the Depositor, the Servicer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent and the Owner Trustee have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note covenants and agrees that by accepting the benefits of the Indenture that such Noteholder will not at any time institute against the Depositor, or the Issuer or join in any institution against the Depositor, or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings, under any United States Federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the Basic Documents.

The Issuer and the Noteholder (by acceptance of this Note) intend and agree, and the Issuer hereby instructs the Indenture Trustee, to treat and to take no action inconsistent with the treatment of, this Note as indebtedness for federal income tax purposes and for purposes of applicable state or local income taxes, franchise taxes, and any other taxes imposed upon or measured by net income.  

It is the agreement and intent of the Issuer and each Noteholder (by acceptance of this Note) that the Issuer shall, for federal income tax purposes and, to the extent permitted by law, for purposes of applicable state or local income taxes, franchise taxes and any other taxes imposed upon or measured by net income, be disregarded as an entity apart from its owner, the Depositor, if the Depositor is the sole Certificateholder, or treated as a partnership if there is more than one Certificateholder; provided, however, that if any Class of Notes is deemed for federal income tax purposes (or for purposes of any state or local income tax, franchise tax or other tax imposed upon or measured by net income) to represent an equity interest in the Issuer, it is the intent and agreement of the Issuer and each Noteholder (by its acceptance of this Note) that the Issuer shall, to the extent permitted by law, be treated for purposes of any such tax which treats Notes in such manner as a partnership among the affected Class of Noteholders and the Certificateholder.  The Issuer and each Noteholder (by acceptance of this Note) intend and agree, and the Issuer hereby instructs the Indenture Trustee, to treat and to take no action inconsistent with the treatment of the Issuer, the Certificate and the Notes for federal income tax purposes, and for purposes of state, local or other income tax, franchise tax or other tax based upon or measured by net income, in the manner set forth above.

Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and the Indenture Administrator and any agent of the Issuer, the Indenture Trustee or the Indenture Administrator may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Administrator, the Indenture Trustee or any such agent shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes representing a majority of the Outstanding Amount of all Notes at the time Outstanding.  The Indenture also contains provisions permitting the Holders of Notes representing specified percentages of the Outstanding Amount of the Notes of the Controlling Class, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.  The Indenture also permits the Indenture Trustee and the Indenture Administrator to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder.

The term “Issuer” as used in this Note includes any successor to the Issuer under the Indenture.

The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Holders of Notes under the Indenture.

The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

This Note and the Indenture shall be construed in accordance with the laws of the State of New York including, without limitation, Sections 5-1401 and 5-1402 of the New York General Obligations Law and Rule 327(b) of the New York Civil Practice Laws and Rules, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this 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 Indenture or the Basic Documents, neither Deutsche Bank Trust Company Delaware in its individual capacity, any owner of a beneficial interest in the Issuer, nor any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on, or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in this Note or the Indenture, it being expressly understood that said covenants, obligations and indemnifications have been made by the Owner Trustee for the sole purposes of binding the interests of the Owner Trustee in the assets of the Issuer.  The Holder of this Note by the acceptance hereof agrees that except as expressly provided in the Indenture or the Basic 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 nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

ASSIGNMENT

Social Security or taxpayer 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 Note and 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 Guaranteed:

______________________

_________________________

1

NOTE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever.

EXHIBIT D-5

[Form of Note]

FRANKLIN AUTO TRUST 2005-1

CLASS B 5.12% ASSET-BACKED NOTES

REGISTERED

$21,000,000

No. 1

SEE REVERSE FOR CERTAIN DEFINITIONS

CUSIP No. [_________]

ISIN No. [_________]

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE 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 SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THE ACQUISITION OF THIS NOTE WILL BE DEEMED A REPRESENTATION BY THE ACQUIRER THAT IT IS: (i) NOT ACQUIRING THE NOTE ON BEHALF OF OR WITH THE ASSETS OF AN EMPLOYEE BENEFIT PLAN AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT SECURITY ACT OF 1974, AS AMENDED (“ERISA”), THAT IS SUBJECT TO TITLE I OF ERISA OR A PLAN AS DEFINED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR ANY EMPLOYEE BENEFIT PLAN SUBJECT TO ANY APPLICABLE SIMILAR LAW (“SIMILAR LAW”) OR (ii) ITS ACQUISITION AND HOLDING OF THE NOTE ARE ELIGIBLE FOR RELIEF UNDER PROHIBITED TRANSACTION CLASS EXEMPTION (“PTCE”) 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23 OR A SIMILAR EXEMPTION, OR IN THE CASE OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO A SIMILAR LAW, DO NOT RESULT IN A NONEXEMPT VIOLATION OF ANY SIMILAR LAW.

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

Franklin Auto Trust 2005-1, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of TWENTY-ONE MILLION DOLLARS payable on each Payment Date in an amount equal to the result obtained by multiplying (i) a fraction the numerator of which is $21,000,000 and the denominator of which is $21,000,000 by (ii) the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class B Notes pursuant to Section 3.1 of the Indenture; provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the May 2013 Payment Date (the “Class B Final Scheduled Payment Date”).  The Issuer will pay interest on this Note at the rate per annum shown above on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date (after giving effect to all payments of principal made on the preceding Payment Date).  Interest on this Note will accrue for each Payment Date from and including the twentieth day of the calendar month preceding the related Payment Date (or in the case of the first Payment Date, from and including the Closing Date) to but excluding the twentieth day of the calendar month of the related Payment Date.  Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months.  Such principal of and interest on this Note shall be paid in the manner specified on the reverse hereof.

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.

Unless the certificate of authentication hereon has been executed by the Indenture Administrator whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer as of the date set forth below.

FRANKLIN AUTO TRUST 2005-1

By:

DEUTSCHE BANK TRUST COMPANY DELAWARE, not in its individual capacity but solely as Owner Trustee under the Trust Agreement,

By:____________________________

Name:

Title:

Date:

INDENTURE ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION

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

Date:  December 8, 2005

 

CITIBANK, N.A., as Indenture Administrator,

By:_________________________________

Authorized Signatory

[REVERSE OF NOTE]

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its Class B 5.12% Asset-Backed Notes (herein called the “Class B Notes”), all issued under an Indenture dated as of December 1, 2005 (such indenture, as supplemented or amended, is herein called the “Indenture”) among the Issuer, Wilmington Trust Company, as indenture trustee and as indenture collateral agent (the “Indenture Trustee,” which term includes any successor Indenture Trustee under the Indenture, and the “Indenture Collateral Agent,” which term includes any successor Indenture Collateral Agent under the Indenture), and Citibank, N.A., as indenture administrator (the “Indenture Administrator,” which term includes any successor Indenture Administrator under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee, the Indenture Administrator and the Holders of the Notes.  The Notes are subject to all terms of the Indenture.  All terms used in this Note that are defined in the Indenture, as supplemented or amended, shall have the meanings assigned to them in or pursuant to the Indenture, as so supplemented or amended.

The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes and the Class C Notes (together, the “Notes”) are and will be equally and ratably secured by the collateral pledged as security therefor as provided in the Indenture.

Principal of the Class B Notes will be payable on each Payment Date in an amount described on the face hereof.  “Payment Date” means the twentieth day of each month, or if any such date is not a Business Day, the next succeeding Business Day, commencing in January 2006.

As described above, the entire unpaid principal amount of this Note shall be due and payable on the earlier of the Class B Final Scheduled Payment Date and the Redemption Date, if any, pursuant to Section 10.1(a) or 10.1(c) of the Indenture.  Notwithstanding the foregoing, the entire unpaid principal amount of the Notes shall be due and payable on the date on which an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders of the Notes representing at least 66-2/3% of the Outstanding Amount of the Notes of the Controlling Class have declared the Notes to be immediately due and payable in the manner provided in Section 5.2 and Section 5.6 of the Indenture.  All principal payments on the Class B Notes shall be made pro rata to the Class B Noteholders entitled thereto.

Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by check mailed to the Person whose name appears as the Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of 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 the account designated by such nominee.  Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Administrator, in the name of and on behalf of the Issuer, will notify the Person who was the Holder hereof as of the Record Date preceding such Payment Date by notice mailed prior to such Payment Date and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the Indenture Administrator’s office specified in Section 3.2 of the Indenture.

The Issuer shall pay interest on overdue installments of interest at the Class B Interest Rate to the extent lawful.

As provided in the Indenture, the Notes may be redeemed pursuant to Section 10.1(a) of the Indenture, in whole, but not in part, at the option of the Servicer, on any Payment Date on or after the date on which the Pool Balance is less than or equal to 10% of the Original Pool Balance.

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Administrator duly executed by, the Holder hereof or his attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar which requirements include membership or participation in Securities Transfer Agents Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act, and (ii) accompanied by such other documents as the Indenture Administrator may require, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange.

Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee, the Indenture Collateral Agent, the Indenture Administrator or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Depositor, the Servicer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Depositor, the Servicer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Depositor, the Servicer, the Owner Trustee, the Indenture Trustee or the Indenture Administrator or of any successor or assign of the Depositor, the Servicer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent and the Owner Trustee have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note covenants and agrees that by accepting the benefits of the Indenture that such Noteholder will not at any time institute against the Depositor, or the Issuer or join in any institution against the Depositor, or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings, under any United States Federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the Basic Documents.

The Issuer and the Noteholder (by acceptance of this Note) intend and agree, and the Issuer hereby instructs the Indenture Trustee, to treat and to take no action inconsistent with the treatment of, this Note as indebtedness for federal income tax purposes and for purposes of applicable state or local income taxes, franchise taxes, and any other taxes imposed upon or measured by net income.  

It is the agreement and intent of the Issuer and each Noteholder (by acceptance of this Note) that the Issuer shall, for federal income tax purposes and, to the extent permitted by law, for purposes of applicable state or local income taxes, franchise taxes and any other taxes imposed upon or measured by net income, be disregarded as an entity apart from its owner, the Depositor, if the Depositor is the sole Certificateholder, or treated as a partnership if there is more than one Certificateholder; provided, however, that if any Class of Notes is deemed for federal income tax purposes (or for purposes of any state or local income tax, franchise tax or other tax imposed upon or measured by net income) to represent an equity interest in the Issuer, it is the intent and agreement of the Issuer and each Noteholder (by its acceptance of this Note) that the Issuer shall, to the extent permitted by law, be treated for purposes of any such tax which treats Notes in such manner as a partnership among the affected Class of Noteholders and the Certificateholder.  The Issuer and each Noteholder (by acceptance of this Note) intend and agree, and the Issuer hereby instructs the Indenture Trustee, to treat and to take no action inconsistent with the treatment of the Issuer, the Certificate and the Notes for federal income tax purposes, and for purposes of state, local or other income tax, franchise tax or other tax based upon or measured by net income, in the manner set forth above.

Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and the Indenture Administrator and any agent of the Issuer, the Indenture Trustee or the Indenture Administrator may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Administrator, the Indenture Trustee or any such agent shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes representing a majority of the Outstanding Amount of all Notes at the time Outstanding.  The Indenture also contains provisions permitting the Holders of Notes representing specified percentages of the Outstanding Amount of the Notes of the Controlling Class, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.  The Indenture also permits the Indenture Trustee and the Indenture Administrator to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder.

The term “Issuer” as used in this Note includes any successor to the Issuer under the Indenture.

The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Holders of Notes under the Indenture.

The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

This Note and the Indenture shall be construed in accordance with the laws of the State of New York including, without limitation, Sections 5-1401 and 5-1402 of the New York General Obligations Law and Rule 327(b) of the New York Civil Practice Laws and Rules, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this 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 Indenture or the Basic Documents, neither Deutsche Bank Trust Company Delaware in its individual capacity, any owner of a beneficial interest in the Issuer, nor any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on, or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in this Note or the Indenture, it being expressly understood that said covenants, obligations and indemnifications have been made by the Owner Trustee for the sole purposes of binding the interests of the Owner Trustee in the assets of the Issuer.  The Holder of this Note by the acceptance hereof agrees that except as expressly provided in the Indenture or the Basic 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 nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

ASSIGNMENT

Social Security or taxpayer 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 Note and 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 Guaranteed:

______________________

_________________________

1

NOTE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever.

EXHIBIT D-6

[Form of Note]

FRANKLIN AUTO TRUST 2005-1

CLASS C 5.44% ASSET-BACKED NOTES

REGISTERED

$23,625,000

No. 1

SEE REVERSE FOR CERTAIN DEFINITIONS

CUSIP No. [____]

ISIN No. [____]

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE 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 SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THE ACQUISITION OF THIS NOTE WILL BE DEEMED A REPRESENTATION BY THE ACQUIRER THAT IT IS: (i) NOT ACQUIRING THE NOTE ON BEHALF OF OR WITH THE ASSETS OF AN EMPLOYEE BENEFIT PLAN AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT SECURITY ACT OF 1974, AS AMENDED (“ERISA”), THAT IS SUBJECT TO TITLE I OF ERISA OR A PLAN AS DEFINED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR ANY EMPLOYEE BENEFIT PLAN SUBJECT TO ANY APPLICABLE SIMILAR LAW (“SIMILAR LAW”) OR (ii) ITS ACQUISITION AND HOLDING OF THE NOTE ARE ELIGIBLE FOR RELIEF UNDER PROHIBITED TRANSACTION CLASS EXEMPTION (“PTCE”) 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23 OR A SIMILAR EXEMPTION, OR IN THE CASE OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO A SIMILAR LAW, DO NOT RESULT IN A NONEXEMPT VIOLATION OF ANY SIMILAR LAW.

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

Franklin Auto Trust 2005-1, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of TWENTY-ONE MILLION SIX HUNDRED TWENTY-FIVE THOUSAND DOLLARS payable on each Payment Date in an amount equal to the result obtained by multiplying (i) a fraction the numerator of which is $23,625,000 and the denominator of which is $23,625,000 by (ii) the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class C Notes pursuant to Section 3.1 of the Indenture; provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the May 2013 Payment Date (the “Class C Final Scheduled Payment Date”).  The Issuer will pay interest on this Note at the rate per annum shown above on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date (after giving effect to all payments of principal made on the preceding Payment Date).  Interest on this Note will accrue for each Payment Date from and including the twentieth day of the calendar month preceding the related Payment Date (or in the case of the first Payment Date, from and including the Closing Date) to but excluding the twentieth day of the calendar month of the related Payment Date.  Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months.  Such principal of and interest on this Note shall be paid in the manner specified on the reverse hereof.

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.

Unless the certificate of authentication hereon has been executed by the Indenture Administrator whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer as of the date set forth below.

FRANKLIN AUTO TRUST 2005-1

By:

DEUTSCHE BANK TRUST COMPANY DELAWARE, not in its individual capacity but solely as Owner Trustee under the Trust Agreement,

By:____________________________

Name:

Title:

Date:

INDENTURE ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION

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

Date:  December 8, 2005

CITIBANK, N.A., as Indenture Administrator,

By:_________________________________

Authorized Signatory

[REVERSE OF NOTE]

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its Class C 5.44% Asset-Backed Notes (herein called the “Class C Notes”), all issued under an Indenture dated as of December 1, 2005 (such indenture, as supplemented or amended, is herein called the “Indenture”) among the Issuer, Wilmington Trust Company, as indenture trustee and as indenture collateral agent (the “Indenture Trustee,” which term includes any successor Indenture Trustee under the Indenture, and the “Indenture Collateral Agent,” which term includes any successor Indenture Collateral Agent under the Indenture), and Citibank, N.A., as indenture administrator (the “Indenture Administrator,” which term includes any successor Indenture Administrator under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee, the Indenture Administrator and the Holders of the Notes.  The Notes are subject to all terms of the Indenture.  All terms used in this Note that are defined in the Indenture, as supplemented or amended, shall have the meanings assigned to them in or pursuant to the Indenture, as so supplemented or amended.

The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes and the Class C Notes (together, the “Notes”) are and will be equally and ratably secured by the collateral pledged as security therefor as provided in the Indenture.

Principal of the Class C Notes will be payable on each Payment Date in an amount described on the face hereof.  “Payment Date” means the twentieth day of each month, or if any such date is not a Business Day, the next succeeding Business Day, commencing in January 2006.

As described above, the entire unpaid principal amount of this Note shall be due and payable on the earlier of the Class C Final Scheduled Payment Date and the Redemption Date, if any, pursuant to Section 10.1(a) or 10.1(c) of the Indenture.  Notwithstanding the foregoing, the entire unpaid principal amount of the Notes shall be due and payable on the date on which an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders of the Notes representing at least 66-2/3% of the Outstanding Amount of the Notes of the Controlling Class have declared the Notes to be immediately due and payable in the manner provided in Section 5.2 and Section 5.6 of the Indenture.  All principal payments on the Class C Notes shall be made pro rata to the Class C Noteholders entitled thereto.

Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by check mailed to the Person whose name appears as the Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of 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 the account designated by such nominee.  Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Administrator, in the name of and on behalf of the Issuer, will notify the Person who was the Holder hereof as of the Record Date preceding such Payment Date by notice mailed prior to such Payment Date and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the Indenture Administrator’s office specified in Section 3.2 of the Indenture.

The Issuer shall pay interest on overdue installments of interest at the Class C Interest Rate to the extent lawful.

As provided in the Indenture, the Notes may be redeemed pursuant to Section 10.1(a) of the Indenture, in whole, but not in part, at the option of the Servicer, on any Payment Date on or after the date on which the Pool Balance is less than or equal to 10% of the Original Pool Balance.

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Administrator duly executed by, the Holder hereof or his attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar which requirements include membership or participation in Securities Transfer Agents Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act, and (ii) accompanied by such other documents as the Indenture Administrator may require, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange.

Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee, the Indenture Collateral Agent, the Indenture Administrator or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Depositor, the Servicer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Depositor, the Servicer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Depositor, the Servicer, the Owner Trustee, the Indenture Trustee or the Indenture Administrator or of any successor or assign of the Depositor, the Servicer, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent and the Owner Trustee have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note covenants and agrees that by accepting the benefits of the Indenture that such Noteholder will not at any time institute against the Depositor, or the Issuer or join in any institution against the Depositor, or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings, under any United States Federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the Basic Documents.

The Issuer and the Noteholder (by acceptance of this Note) intend and agree, and the Issuer hereby instructs the Indenture Trustee, to treat and to take no action inconsistent with the treatment of, this Note as indebtedness for federal income tax purposes and for purposes of applicable state or local income taxes, franchise taxes, and any other taxes imposed upon or measured by net income.  

It is the agreement and intent of the Issuer and each Noteholder (by acceptance of this Note) that the Issuer shall, for federal income tax purposes and, to the extent permitted by law, for purposes of applicable state or local income taxes, franchise taxes and any other taxes imposed upon or measured by net income, be disregarded as an entity apart from its owner, the Depositor, if the Depositor is the sole Certificateholder, or treated as a partnership if there is more than one Certificateholder; provided, however, that if any Class of Notes is deemed for federal income tax purposes (or for purposes of any state or local income tax, franchise tax or other tax imposed upon or measured by net income) to represent an equity interest in the Issuer, it is the intent and agreement of the Issuer and each Noteholder (by its acceptance of this Note) that the Issuer shall, to the extent permitted by law, be treated for purposes of any such tax which treats Notes in such manner as a partnership among the affected Class of Noteholders and the Certificateholder.  The Issuer and each Noteholder (by acceptance of this Note) intend and agree, and the Issuer hereby instructs the Indenture Trustee, to treat and to take no action inconsistent with the treatment of the Issuer, the Certificate and the Notes for federal income tax purposes, and for purposes of state, local or other income tax, franchise tax or other tax based upon or measured by net income, in the manner set forth above.

Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and the Indenture Administrator and any agent of the Issuer, the Indenture Trustee or the Indenture Administrator may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Administrator, the Indenture Trustee or any such agent shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes representing a majority of the Outstanding Amount of all Notes at the time Outstanding.  The Indenture also contains provisions permitting the Holders of Notes representing specified percentages of the Outstanding Amount of the Notes of the Controlling Class, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.  The Indenture also permits the Indenture Trustee and the Indenture Administrator to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder.

The term “Issuer” as used in this Note includes any successor to the Issuer under the Indenture.

The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Holders of Notes under the Indenture.

The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

This Note and the Indenture shall be construed in accordance with the laws of the State of New York including, without limitation, Sections 5-1401 and 5-1402 of the New York General Obligations Law and Rule 327(b) of the New York Civil Practice Laws and Rules, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this 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 Indenture or the Basic Documents, neither Deutsche Bank Trust Company Delaware in its individual capacity, any owner of a beneficial interest in the Issuer, nor any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on, or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in this Note or the Indenture, it being expressly understood that said covenants, obligations and indemnifications have been made by the Owner Trustee for the sole purposes of binding the interests of the Owner Trustee in the assets of the Issuer.  The Holder of this Note by the acceptance hereof agrees that except as expressly provided in the Indenture or the Basic 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 nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

ASSIGNMENT

Social Security or taxpayer 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 Note and 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 Guaranteed:

______________________

_________________________

1

NOTE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever.Franklin 2005-1 Sale and Servicing Agreement

Execution Copy

SALE AND SERVICING

AGREEMENT

among

FRANKLIN AUTO TRUST 2005-1,

as Issuer,

FRANKLIN RECEIVABLES LLC,

as Depositor,

FRANKLIN CAPITAL CORPORATION,

as Servicer,

and

FRANKLIN RESOURCES, INC.,

as Representative

Dated as of December 1, 2005

Table of Contents

Page

ARTICLE I

Definitions

SECTION 1.1

Definitions

1

SECTION 1.2

Other Definitional Provisions.

20

ARTICLE II

Conveyance of Receivables

SECTION 2.1

Conveyance of Receivables

21

ARTICLE III

The Receivables

SECTION 3.1

Representations and Warranties of the Depositor

22

SECTION 3.2

Repurchase upon Breach

27

SECTION 3.3

Custody of Receivable Files

28

SECTION 3.4

Duties of Servicer as Custodian

29

SECTION 3.5

Instructions; Authority To Act

30

SECTION 3.6

Custodian’s Indemnification

30

SECTION 3.7

Effective Period and Termination

30

SECTION 3.8

Article Nine Provisions

30

ARTICLE IV

Administration and Servicing of Receivables

SECTION 4.1

Duties of Servicer

31

SECTION 4.2

Collection and Allocation of Receivable Payments

32

SECTION 4.3

Realization upon Receivables

34

SECTION 4.4

Financed Vehicle Insurance

35

SECTION 4.5

Maintenance of Security Interests in Financed Vehicles

35

SECTION 4.6

Covenants of Servicer

35

SECTION 4.7

Purchase of Receivables upon Breach

35

SECTION 4.8

Servicing Fee

36

SECTION 4.9

Servicer’s Certificate

36

SECTION 4.10

Annual Statement as to Compliance; Notice of Default

37

SECTION 4.11

Annual Independent Certified Public Accountants’ Report

38

SECTION 4.12

Access to Certain Documentation and Information Regarding 

Receivables

38

SECTION 4.13

Servicer Expenses

38

SECTION 4.14

Appointment of Subservicer

39

SECTION 4.15

Obligations under Basic Documents

39

SECTION 4.16

Reports to the Rating Agencies

39

ARTICLE V

Distributions; Statements to Certificateholders and Noteholders

SECTION 5.1

Establishment of Trust Accounts.

39

SECTION 5.2

Collections

42

SECTION 5.3

Application of Collections

42

SECTION 5.4

Letter of Credit

42

SECTION 5.5

Additional Deposits

43

SECTION 5.6

Distributions

44

SECTION 5.7

Spread Account

45

SECTION 5.8

Statements to Certificateholders and Noteholders

45

SECTION 5.9

Net Deposits

47

SECTION 5.10

Control of Trust Accounts and Spread Account.

47

ARTICLE VI

The Depositor

SECTION 6.1

Representations of the Depositor

50

SECTION 6.2

Corporate Existence

51

SECTION 6.3

Liability of Depositor; Indemnities

52

SECTION 6.4

Merger or Consolidation of, or Assumption of the Obligations 

of, the Depositor

53

SECTION 6.5

Limitation on Liability of Depositor and Others

54

SECTION 6.6

Depositor May Own Certificates or Notes

54

ARTICLE VII

The Servicer

SECTION 7.1

Representations of Servicer

54

SECTION 7.2

Indemnities of Servicer

56

SECTION 7.3

Merger or Consolidation of, or Assumption of the Obligations 

of, the Servicer

57

SECTION 7.4

Limitation on Liability of the Servicer and Others

57

SECTION 7.5

Servicer Not To Resign

58

ARTICLE VIIA

The Representative

SECTION 7A.1     Representations of Franklin Resources.

58

SECTION 7A.2     Limitation on Liability of Franklin Resources and Others.

60

ARTICLE VIII

Default

SECTION 8.1

Servicer Default

60

SECTION 8.2

Appointment of Successor

62

SECTION 8.3

[RESERVED].

63

SECTION 8.4

Notification to Noteholders and Certificateholders

63

SECTION 8.5

Waiver of Past Defaults

63

ARTICLE IX

Termination

SECTION 9.1

Optional Purchase of All Receivables

63

ARTICLE X

Administrative Duties of the Servicer

SECTION 10.1

Administrative Duties.

64

SECTION 10.2

Records

67

SECTION 10.3

Additional Information to be Furnished to the Issuer

67

SECTION 10.4

[RESERVED]

67

SECTION 10.5

Relocation of Receivables

67

ARTICLE XI

Miscellaneous Provisions

SECTION 11.1

Amendment

67

SECTION 11.2

Protection of Title to Trust

68

SECTION 11.3

Notices

71

SECTION 11.4

Assignment

71

SECTION 11.5

Limitations on Rights of Others

72

SECTION 11.6

Severability

72

SECTION 11.7

Separate Counterparts

72

SECTION 11.8

Headings

72

SECTION 11.9

Governing Law

72

SECTION 11.10

Assignment to Indenture Trustee

72

SECTION 11.11

Nonpetition Covenants

72

SECTION 11.12

Limitation of Liability of Owner Trustee, Indenture Trustee, 

the Indenture Administrator and Indenture Collateral Agent

73

SECTION 11.13

Independence of the Servicer

73

SECTION 11.14

No Joint Venture

74

SECTION 11.15

Third-Party Beneficiaries

74

SCHEDULES

	Schedule A

	-

	Schedule of Receivables

	Schedule B

	-

	Location of Receivables

	 	 	 

EXHIBITS

	Exhibit A

	-

	Reserved

	Exhibit B

	-

	Reserved

	Exhibit C

	-

	Form of Monthly Noteholder and Certificateholder Statement

	Exhibit D

	-

	Form of Servicer’s Certificate

SALE AND SERVICING AGREEMENT, dated as of December 1, 2005 among FRANKLIN AUTO TRUST 2005-1, a Delaware statutory trust (the “Issuer”), FRANKLIN RECEIVABLES LLC, a Delaware limited liability company (the “Depositor”), FRANKLIN CAPITAL CORPORATION, a Utah corporation (the “Servicer” or “Franklin Capital”), and FRANKLIN RESOURCES, INC., a Delaware corporation (“Franklin Resources” or the “Representative”).

WHEREAS, the Issuer desires to purchase a portfolio of receivables arising in connection with motor vehicle retail installment sale contracts acquired by Franklin Capital and Franklin SPE LLC (“Franklin SPE”);

WHEREAS, the Depositor has purchased such receivables from Franklin Capital and Franklin SPE and is willing to sell such receivables to the Issuer; and

WHEREAS, the Servicer is willing to service all such receivables.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.1

Definitions.  Whenever used in this Agreement, the following words and phrases shall have the following meanings:

“Additional Servicing Fee” means, with respect to any Distribution Date, the fee payable to the Servicer for services rendered, which shall be equal to one-twelfth (or in the case of the January 2006 Distribution Date, 42/360) of the excess, if any of (a) the applicable Servicing Fee Rate multiplied by the Pool Balance applicable to Prime Receivables, Non-Prime Receivables and Sub-Prime Receivables, as applicable as of the last day of the second Monthly Period preceding such Distribution Date over (b) 1.25% multiplied by the Pool Balance as of the last day of the second Monthly Period preceding such Distribution Date.

“Affiliate” means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person.  For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.  A Person shall not be deemed to be an Affiliate of any person solely because such other Person has the contractual right or obligation to manage such Person unless such other Person controls such Person through equity ownership or otherwise.

“Agreement” means this Sale and Servicing Agreement, as the same may be amended and supplemented from time to time.

“Amount Financed” means, with respect to a Receivable, the aggregate amount advanced under such Receivable toward the purchase price of the Financed Vehicle and any related costs, including amounts advanced in respect of accessories, insurance premiums, service, car club and warranty contracts, other items customarily financed as part of retail automobile installment sale contracts or promissory notes, and related costs.

“Annual Percentage Rate” or “APR” of a Receivable means the annual percentage rate of finance charges as stated in the related Contract or as recalculated based upon the terms of such Contract.

“Available Collections” means, with respect to any Determination Date, the sum (without double counting) of (i) the Collected Funds for such Determination Date, (ii) all Purchase Amounts deposited in the Collection Account during the related Monthly Period, and proceeds of any repurchase by a Dealer pursuant to Dealer Agreement, (iii) following the acceleration of the Notes pursuant to Section 5.2 of the Indenture, the amount of money or property collected pursuant to Section 5.4 of the Indenture since the preceding Determination Date by the Indenture Trustee for distribution pursuant to Section 5.6 of the Indenture, and (iv) any Insolvency Proceeds received pursuant to Section 9.1(b) of this Agreement.

“Available Funds” means, with respect to any Distribution Date, the sum, for such Determination Date, of (i) the Available Collections for the immediately preceding Determination Date, (ii) the Spread Account Transfer Amount, if any and (iii) the Letter of Credit Draw Amount, if any.

“Base Servicing Fee” means, with respect to Distribution Date, the fee payable to the Servicer for services rendered, which shall be equal to one-twelfth (or in the case of the January 2006 Distribution Date, 42/360) of the applicable Servicing Fee Rate multiplied by the Pool Balance applicable to Prime Receivables, Non-Prime Receivables and Sub-Prime Receivables, as applicable as of the last day of the second Monthly Period preceding such Distribution Date; provided that the Base Servicing Fee shall not be greater than one-twelfth of 1.25% per annum multiplied by the Pool Balance as of the last day of the second Monthly Period preceding such Distribution Date.

“Basic Documents” means the Certificate of Trust, the Trust Agreement, this Agreement, the Indenture, the Letter of Credit Reimbursement Agreement, the Letter of Credit, the Servicer Deposit Support Agreement, the Purchase Agreement, the Depository Agreement and other documents and certificates delivered in connection therewith.

“Business Day” means a day other than a Saturday, a Sunday or other day on which commercial banks located in the states of California, Delaware, New York or Utah are authorized or obligated to be closed.

“Certificate” means a certificate evidencing the beneficial interest of a Certificateholder in the Trust.

“Certificate Distribution Account” has the meaning assigned to such term in the Trust Agreement.

“Certificateholder” means each person in whose name a Certificate is registered.

“Class” means the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, Class B Notes or Class C Notes, as the context requires.

“Class A Notes” means the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class A-4 Notes.

 “Class A-1 Notes” has the meaning assigned to such term in the Indenture.

“Class A-2 Notes” has the meaning assigned to such term in the Indenture.

“Class A-3 Notes” has the meaning assigned to such term in the Indenture.

“Class A-4 Notes” has the meaning assigned to such term in the Indenture.

“Class A Noteholders’ Interest Distributable Amount” means, with respect to any Distribution Date, the sum of the Noteholders’ Monthly Interest Distributable Amount for each class of Class A Notes for such Distribution Date and the Noteholders’ Interest Carryover Shortfall for each class of Class A Notes for such Distribution Date.  

“Class B Noteholders’ Interest Distributable Amount” means, with respect to any Distribution Date, the sum of the Noteholders’ Monthly Interest Distributable Amount for the Class B Notes for such Distribution Date and the Noteholders’ Interest Carryover Shortfall for the Class B Notes for such Distribution Date.

“Class B Notes” has the meaning assigned to such term in the Indenture.

“Class C Noteholders’ Interest Distributable Amount” means, with respect to any Distribution Date, the sum of the Noteholders’ Monthly Interest Distributable Amount for the Class C Notes for such Distribution Date and the Noteholders’ Interest Carryover Shortfall for the Class C Notes for such Distribution Date.

“Class C Notes” has the meaning assigned to such term in the Indenture.

“Closing Date” means December 8, 2005.

“Code” means the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder.

“Collected Funds” means, with respect to any Determination Date, the amount of funds in or to be deposited in the Collection Account representing collections (excluding amounts constituting the Supplemental Servicing Fee) on the Receivables during the related Monthly Period, including all Net Liquidation Proceeds collected during the related Monthly Period (but excluding any Purchase Amounts).

“Collection Account” means the account designated as such, established and maintained pursuant to Section 5.1 of this Agreement.

“Computer Tape” means the computer tapes or other electronic media furnished by or on behalf of the Depositor to the Issuer and its assigns describing certain characteristics of the Receivables as of the Cutoff Date.

“Contract” means a motor vehicle retail installment sale contract.

“Control” has the meaning specified in Section 8-106 of the New York UCC.

 “Controlling Class” will be the Class A Notes until they are paid in full; thereafter the Class B Notes until they are paid in full; and thereafter the Class C Notes.

“Corporate Trust Office” means (i) with respect to the Owner Trustee, the principal corporate trust office of the Owner Trustee, which at the time of execution of this Agreement is 1011 Centre Road, Suite 200, Wilmington, Delaware 10985, Attention:  Corporate Trust Department and (ii) with respect to the Indenture Trustee and the Indenture Collateral Agent, the principal corporate office of the Indenture Trustee, which at the time of execution of this Agreement is Rodney Square North, 1100 North Market Street, Wilmington, Delaware, 19890-0001.

“Cram Down Loss” means, with respect to a Receivable, if a court of appropriate jurisdiction in an insolvency proceeding shall have issued an order reducing the amount owed on such Receivable or otherwise modifying or restructuring the scheduled payments to be made on such Receivable, an amount equal to the excess of (i) the principal balance of such Receivable immediately prior to such order over (ii) the principal balance of such Receivable as so reduced.  A “Cram Down Loss” shall be deemed to have occurred on the date of issuance of such order.

“Credit Enhancement Target Amount” means, with respect to any Distribution Date, the lesser of (1) the aggregate outstanding principal amount of the Notes immediately after all distributions on such Distribution Date and (2) the greatest of (a) 5.25% of the Pool Balance as of the end of the related Monthly Period, (b) 1.50% of the Original Pool Balance and (c) if a Cumulative Net Loss Trigger is in effect for such Distribution Date, the sum of the amount on deposit in the Spread Account immediately after the prior Distribution Date and the Letter of Credit Available Amount for the prior Distribution Date less any Letter of Credit Draw Amounts on the prior Distribution Date.

“Cumulative Net Loss Trigger” will be in effect for a Distribution Date if the percentage equivalent of a fraction, the numerator of which is the difference of (1) the aggregate Principal Balance of all Receivables that became Liquidated Receivables from the Cutoff Date through and including the end of the related Monthly Period and (2) all amounts collected with respect to such Receivables after they became Liquidated Receivables, and the denominator of which is the Original Pool Balance, exceeds the percentage set forth below for such Distribution Date:

	Distribution Date

	Cumulative Net

Loss Percentage

	 	Distribution Date

	Cumulative Net

Loss Percentage

	January 2006

	0.20%

	 	June 2007

	3.35%

	February 2006

	0.20%

	 	July 2007

	3.60%

	March 2006

	0.20%

	 	August 2007

	3.85%

	April 2006

	0.20%

	 	September 2007

	4.05%

	May 2006

	0.40%

	 	October 2007

	4.30%

	June 2006

	0.60%

	 	November 2007

	4.55%

	July 2006

	0.80%

	 	December 2007

	4.80%

	August 2006

	1.05%

	 	January 2008

	5.00%

	September 2006

	1.25%

	 	February 2008

	5.20%

	October 2006

	1.45%

	 	March 2008

	5.40%

	November 2006

	1.65%

	 	April 2008

	5.60%

	December 2006

	1.85%

	 	May 2008

	5.80%

	January 2007

	2.15%

	 	June 2008

	6.05%

	February 2007

	2.40%

	 	July 2008

	6.25%

	March 2007

	2.65%

	 	August 2008

	6.45%

	April 2007

	2.90%

	 	 September 2008

 and thereafter

	6.50%

	May 2007

	3.10%

	 	 	 

“Cutoff Date” means December 1, 2005.

“Dealer” means a dealer who sold a Financed Vehicle and who originated and assigned the respective Receivable to Franklin Capital under an existing agreement between such dealer and Franklin Capital.

“Dealer Agreement” means any agreement between a Dealer and Franklin Capital relating to the acquisition of Receivables from a Dealer by Franklin Capital.

“Delivery” when used with respect to Trust Account Property means:

(a)

with respect to bankers’ acceptances, commercial paper, negotiable certificates of deposit and other obligations that constitute instruments and are susceptible of physical delivery (“Physical Property”):

(i)

transfer of possession thereof to the Indenture Trustee, endorsed to, or registered in the name of, the Indenture Trustee or its nominee or endorsed in blank;

(b)

with respect to a certificated security:

(i)

delivery thereof in bearer form to the Indenture Collateral Agent; or

(ii)

delivery thereof in registered form to the Indenture Collateral Agent and

(A)

the certificate is endorsed to the Indenture Collateral Agent or in blank by effective endorsement; or

(B)

the certificate is registered in the name of the Indenture Collateral Agent, upon original issue or registration of transfer by the Issuer;

(c)

with respect to an uncertificated security:

(i)

the delivery of the uncertificated security to the Indenture Collateral Agent; or

(ii)

the Issuer has agreed that it will comply with instructions originated by the Indenture Collateral Agent without further consent by the registered owner;

(d)

with respect to any security issued by the U.S. Treasury that is a book-entry security held through the Federal Reserve System pursuant to Federal book-entry regulations:

(i)

a Federal Reserve Bank by book entry credits the book-entry security to the securities account (as defined in 31 CFR Part 357) of a participant (as defined in 31 CFR Part 357) which is also a securities intermediary; and

(ii)

the participant indicates by book entry that the book-entry security has been credited to the Indenture Collateral Agent securities account; and

(e)

with respect to a security entitlement:

(i)

the Indenture Collateral Agent becomes the entitlement holder; or

(ii)

the securities intermediary has agreed that it will comply with entitlement orders originated by the Indenture Collateral Agent without further consent by the entitlement holder.

(f)

For the purpose of  (b) and (c) hereof “delivery” means:

(i)

with respect to a certificated security:

(A)

the Indenture Collateral Agent acquires possession thereof;

(B)

another person (other than a securities intermediary) either acquires possession thereof on behalf of the Indenture Collateral Agent or, having previously acquired possession thereof, acknowledges that it holds for the Indenture Collateral Agent; or

(C)

a securities intermediary acting on behalf of the Indenture Collateral Agent acquires possession thereof, only if the certificate is in registered form and has been specially endorsed to the Indenture Collateral Agent by an effective endorsement;

(ii)

with respect to an uncertificated security:

(A)

the issuer registers the Indenture Collateral Agent as the registered owner, upon original issue or registration of transfer; or

(B)

another person (other than a securities intermediary) either becomes the registered owner thereof on behalf of the Indenture Collateral Agent or, having previously become the registered owner, acknowledges that it holds for the Indenture Collateral Agent;

(g)

for purposes of this definition, except as otherwise indicated, the following terms shall have the meaning assigned to each such term in the UCC:

(i)

“certificated security”

(ii)

“effective endorsement”

(iii)

“entitlement holder”

(iv)

“instrument”

(v)

“securities account”

(vi)

“securities entitlement”

(vii)

“securities intermediary”

(viii)

“uncertificated security”

(h)

in each case of Delivery contemplated herein, the Indenture Collateral Agent shall make appropriate notations on its records, and shall cause the same to be made on the records of its nominees, indicating that securities are held in trust pursuant to and as provided in this Agreement.

“Depositor” means Franklin Receivables LLC, a Delaware limited liability company, and its successors in interest to the extent permitted hereunder.

“Depositor Indemnification Cap” has the meaning assigned thereto in Section 6.3 of this Agreement.

 “Depository Agreement” means the Note Depository Agreement.

“Determination Date” means, with respect to any Distribution Date, the fifth Business Day immediately preceding such Distribution Date.

“Discounted Receivable” means each of the 31 Receivables that would have had an interest rate of less than 4.50% if not for the discounting of these Receivables by the Depositor as of the Cutoff Date.

“Distribution Date” means, with respect to each Monthly Period, the twentieth day of the following calendar month, or if such day is not a Business Day, the immediately following Business Day, commencing in January 2006.

“Eligible Deposit Account” means either (a) an account with an Eligible Institution or (b) a segregated trust account with the corporate trust department of a depository institution organized under the laws of the United States of America or any one of the states thereof or the District of Columbia (or any domestic branch of a foreign bank), having corporate trust powers and acting as trustee for funds deposited in such account, so long as any of the securities of such depository institution have a credit rating from each Rating Agency in one of its generic rating categories which signifies investment grade.

“Eligible Institution” means (a) the corporate trust department of the Indenture Trustee, the Indenture Administrator or any other entity specified in this Agreement or (b) a depository institution organized under the laws of the United States of America, or any one of the states thereof or the District of Columbia (or any domestic branch of a foreign bank), which (i) has either (A) a long-term unsecured debt rating of “AA-” or better by Standard & Poor’s and “Aa2” or better by Moody’s or (B) a certificate of deposit rating of “A-1+” or better by Standard & Poor’s and “Prime-1” or better by Moody’s, or any other short-term or certificate of deposit rating acceptable to the Rating Agencies and (ii) whose deposits are insured by the FDIC.  If so qualified under clause (b) above, the Owner Trustee, the Indenture Administrator or the Indenture Trustee may be considered an Eligible Institution.

“Eligible Investments” mean book-entry securities, negotiable instruments or securities represented by instruments in bearer or registered form which evidence:

(a)

direct obligations of, and obligations fully guaranteed as to timely payment by, the United States of America;

(b)

demand deposits, time deposits or certificates of deposit of any depository institution or trust company incorporated under the laws of the United States of America, or any state thereof or the District of Columbia (or any domestic branch of a foreign bank) and subject to supervision and examination by Federal or state banking or depository institution authorities (including depository receipts issued by any such institution or trust company as custodian with respect to any obligation referred to in clause (a) above or portion of such obligation for the benefit of the holders of such depository receipts); provided, however, that at the time of the investment or contractual commitment to invest therein (which shall be deemed to be made again each time funds are reinvested following each Distribution Date), the commercial paper or other short-term senior unsecured debt obligations (other than such obligations the rating of which is based on the credit of a Person other than such depository institution or trust company) of such depository institution or trust company shall have a credit rating from Standard & Poor’s of “A-1+” and from Moody’s of “Prime-1”;

(c)

commercial paper having, at the time of the investment or contractual commitment to invest therein, a rating from Standard & Poor’s of “A-1+” and from Moody’s of “Prime-1”;

(d)

investments in money market funds (including funds managed or advised by the Indenture Trustee, the Indenture Administrator or the Owner Trustee or for which any of their respective Affiliates is investment manager or advisor) having a rating from Standard & Poor’s of “AAA-m” or “AAAm-G” and from Moody’s of “Aaa”;

(e)

bankers’ acceptances issued by any depository institution or trust company referred to in clause (b) above;

(f)

repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the United States of America, in either case entered into with a depository institution or trust company (acting as principal) referred to in clause (b) above;

(g)

any demand deposit in a trust account maintained by Citibank, N.A.; provided that such deposits shall consist of direct obligations of, and obligations guaranteed as to timely payment by, Citibank, N.A.; provided, further, that Citibank, N.A. is rated at least “A-1” by Standard & Poor’s and “P-1” by Moody’s and that such deposits shall not represent more than 20% of the outstanding amount of the Notes; and

(h)

any other investment which would satisfy the Rating Agency Condition and is consistent with the ratings of the Notes.

Any of the foregoing Eligible Investments may be purchased by or through the Owner Trustee, the Indenture Trustee, the Indenture Administrator or any of their Affiliates.

“Eligible Letter of Credit Bank” means an institution with (i) a short-term unsecured debt rating at least equal to “A-1+” from Standard & Poor's and “Prime-1” from Moody’s (in either case, such lower ratings as may be permitted by Standard & Poor’s or Moody’s) and (ii) a long-term unsecured debt rating at least equal to “A1” by Moody’s (or such lower rating as may be permitted by Moody’s).

 “Entitlement Order” shall have the meaning specified in Section 8-102 of the New York UCC.

 “FCC Receivables” shall mean the Receivables listed on Schedule A hereto on the Closing Date.

“FDIC” means the Federal Deposit Insurance Corporation.

“Final Scheduled Distribution Date” means with respect to (i) the Class A-1 Notes, the December 2006 Distribution Date, (ii) the Class A-2 Notes, the September 2008 Distribution Date, (iii) the Class A-3 Notes, the April 2010 Distribution Date, and (iv) the Class A-4 Notes, Class B Notes and Class C Notes, the May 2013 Distribution Date.

“Final Scheduled Maturity Date” means April 30, 2013.

“Financed Vehicle” means a new or used automobile or light-truck, together with all accessions thereto, securing an Obligor’s indebtedness under the respective Receivable.

“Financial Asset” has the meaning specified in Section 8-102(a)(9) of the New York UCC.

 “First Payment Default” means any Receivable for which the first scheduled payment remains unpaid as of the date upon which the second scheduled payment has become due.

“First Priority Principal Distribution Amount” means, with respect to any Distribution Date, the excess of (i) the aggregate Outstanding Amount of the Class A Notes as of the preceding Distribution Date (after giving effect to distributions thereon) or in the case of the first Distribution Date, as of the Closing Date, over (ii) the Pool Balance as of the end of the related Monthly Period; provided, however that such amount shall not be less than zero; provided, further, that, on the Final Scheduled Distribution Date for a Class of Class A Notes, the First Priority Principal Distributable Amount will not be less than the aggregate Outstanding Amount of such Class of Notes and all earlier maturing Class A Notes.

“Franklin SPE” means Franklin SPE LLC and its successors in interest.

“Indenture” means the Indenture dated as of December 1, 2005 among the Issuer, the Indenture Collateral Agent, the Indenture Trustee and the Indenture Administrator, as the same may be amended and supplemented from time to time.

“Indenture Administrator” means Citibank, N.A., its successors in interest and any successor Indenture Administrator under the Indenture.

“Indenture Collateral Agent” means the Person acting as Indenture Collateral Agent under the Indenture, its successors in interest and any successor Indenture Collateral Agent under the Indenture.

“Indenture Trustee” means the Person acting as Indenture Trustee under the Indenture, its successors in interest and any successor trustee under the Indenture.

“Insolvency Event” means, with respect to a specified Person, (a) the filing of a petition against such Person or the entry of a decree or order for relief by a court having jurisdiction in the premises in respect of such Person or any substantial part of its property in an involuntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator, or similar official for such Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person’s affairs, and such petition, decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (b) the commencement by such Person of a voluntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment of or taking possession by, a receiver, liquidator, assignee, custodian, trustee, sequestrator, or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or the failure by such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing.

“Insolvency Proceeds” shall have the meaning set forth in Section 9.1(b) of this Agreement.

“Interest Period” means, with respect to any Distribution Date (i) with respect to the Class A-1 Notes, from and including the most recent Distribution Date on which interest has been paid (or from and including the Closing Date in the case of the first Distribution Date) to but excluding the following Distribution Date and (ii) with respect to each Class of Notes other than the Class A-1 Notes, from and including the twentieth day of the calendar month preceding each Distribution Date (or from and including the Closing Date in the case of the first Distribution Date) to but excluding, the twentieth day of the following calendar month.

“Interest Rate” means, with respect to (i) the Class A-1 Notes, 4.49625% per annum, (ii) the Class A-2 Notes, 4.84% per annum, (iii) the Class A-3 Notes, 4.91% per annum, (iv) the Class A-4 Notes, 5.01% per annum, (v) the Class B Notes, 5.12% per annum, (vi) the Class C Notes, 5.44% per annum (in the case of the Class A-1 Notes, computed on the actual number of days elapsed and a 360-day year, and in the case of all other Classes of Notes, computed on the basis of a 360-day year consisting of twelve 30-day months).

“Investment Earnings” means, with respect to any Distribution Date, the investment earnings (net of losses and investment expenses) on amounts on deposit in the Trust Accounts (other than the Spread Account) and the Certificate Distribution Account.

“Issuer” means Franklin Auto Trust 2005-1.

“Letter of Credit”  means the letter of credit dated December 8, 2005 provided by the Letter of Credit Provider.

“Letter of Credit Available Amount”  means, for any Distribution Date, the least of (1) the aggregate outstanding principal amount of the Notes immediately after giving effect to all distributions on the prior Distribution Date, (2) the Letter of Credit Available Amount for the prior Distribution Date less any Letter of Credit Draw Amounts on the previous Distribution Date and (3) so long as a Cumulative Net Loss Trigger is not in effect for the Distribution Date, the greater of (a) 5.25% of the Pool Balance as of the end of the Monthly Period preceding the related Monthly Period and (b) 1.50% of the Original Pool Balance, minus the lesser of (i) 0.50% of the Original Pool Balance and (ii) the amount on deposit in the Spread Account immediately after the preceding Distribution Date.

“Letter of Credit Commitment Fee”  means, for any Distribution Date, a monthly fee equal to the product of (a) one-twelfth of 0.25% per annum and (b) the Letter of Credit Available Amount for such Distribution Date.

“Letter of Credit Demand” shall have the meaning set forth in Section 5.4(a) of this Agreement.

“Letter of Credit Draw Amount” means, (1) with respect to any Distribution Date, an amount equal to the lesser of (a) the excess, if any, of the Total Required Payment over Available Funds (excluding any Letter of Credit Draw Amounts) and (b) the Letter of Credit Available Amount for that Distribution Date and (2) with respect to all other events allowing the Letter of Credit to be drawn upon, the Letter of Credit Available Amount for the preceding Distribution Date less any Letter of Credit Draw Amount for the preceding Distribution Date.

“Letter of Credit Draw Amount Claim Date” means, (1) with respect to the Letter of Credit Draw Amount for any Distribution Date, the fourth Business Day immediately preceding such Distribution Date, (2) the sixth Business Day following the receipt of a Moody’s Down-Grade Notice by the Indenture Trustee if an Eligible Letter of Credit Bank has not entered into a replacement Letter of Credit by such day, (3) the fourth Business Day immediately preceding the thirtieth day following the receipt of an S&P Down-Grade Notice by the Indenture Trustee if an Eligible Letter of Credit Bank has not entered into a replacement Letter of Credit by such day and (4) the fourth Business Day immediately preceding the Letter of Credit Stated Termination Date.

“Letter of Credit Provider” means Citibank, N.A., its successors in interest and any successor Letter of Credit Provider under the Letter of Credit.

“Letter of Credit Reduction Amount” means with respect to any Distribution Date (1) the Letter of Credit Available Amount for the preceding Distribution Date less any Letter of Credit Draw Amounts for such Distribution Date minus (2) the Letter of Credit Available Amount for the Current Distribution Date.

“Letter of Credit Reimbursement Agreement” means the agreement dated as of December 8, 2005 among the Letter of Credit Provider, the Issuer, Franklin Resources and the Servicer.

“Letter of Credit Stated Termination Date” means the date on which the Letter of Credit terminates which automatically extends unless the Letter of Credit Provider provides notice as provided in the Letter of Credit.

 “Lien” means a security interest, lien, charge, pledge, equity, or encumbrance of any kind, other than tax liens, mechanics’ liens and any liens that attach to the respective Receivable by operation of law as a result of any act or omission by the related Obligor.

“Lien Certificate” means, with respect to a Financed Vehicle, an original certificate of title, certificate of lien or other notification issued by the Registrar of Titles of the applicable state to a secured party which indicates that the lien of the secured party on the Financed Vehicle is recorded on the original certificate of title.  In any jurisdiction in which the original certificate of title is required to be given to the Obligor, the term “Lien Certificate” shall mean only a certificate or notification, if any, issued to a secured party.

“Liquidated Receivable” means, with respect to any Determination Date, a Receivable as to which, as of the last day of the related Monthly Period, any of the following events has occurred (i.e., the earliest to occur of the following events):  (i) the Servicer has determined in good faith that all amounts it expects to recover have been received, (ii) other than with respect to a Receivable for which the related Obligor is subject to a bankruptcy proceeding, more than $25.00 of a scheduled payment is 120 or more days delinquent and the Financed Vehicle has been in the Servicer’s possession for a period of at least 45 days, (iii) more than $25.00 of a scheduled payment is 120 or more days delinquent, the Servicer has not repossessed the Financed Vehicle and the Obligor has not declared bankruptcy or (iv) the Financed Vehicle has been sold and the proceeds received.  In any case, if more than $25.00 of principal and interest on a Receivable as of the last day of the related Monthly Period is 180 or more days delinquent, then such Receivable shall be a Liquidated Receivable and shall have a Principal Balance of zero.

“Monthly Period” means, with respect to each Distribution Date, the calendar month preceding the month in which such Distribution Date occurs.

“Moody’s” means Moody’s Investors Service, Inc., or its successor.

“Moody’s Down-Grade” means the short-term unsecured debt rating of the Letter of Credit Bank has been downgraded below “Prime-1” by Moody’s or the long-term senior unsecured debt rating of the Letter of Credit Bank has been withdrawn or downgraded below “A1” by Moody’s.

“Moody’s Down-Grade Notice” means the notice that the Servicer shall provide to the Indenture Trustee within one Business Day after a Moody’s Down-Grade.

 “Net Liquidation Proceeds” means, with respect to Liquidated Receivables, (i) proceeds from the disposition of the Financed Vehicles relating to the Liquidated Receivables, less reasonable Servicer out-of-pocket costs, including repossession and resale expenses not already deducted from such proceeds, and any amounts required by law to be remitted to the Obligor, (ii) any proceeds from an Insurance Policy or (iii) other monies received from the Obligor or otherwise.

“Non-Prime Receivables” means those Receivables indicated on Schedule A hereto as non-prime.

“Note Distribution Account” means the account designated as such, established and maintained pursuant to Section 5.1(a)(ii) of this Agreement.

“Note Pool Factor” means, with respect to each Class of Notes and the close of business on any Distribution Date, a seven-digit decimal figure equal to the outstanding principal amount of such Class of Notes as of such Distribution Date after giving effect to principal distributions on such date divided by the original outstanding principal amount of such Class of Notes.  

“Noteholder” or “Holder” means the Person in whose name a Note is registered on the Note Register.

“Noteholders’ Interest Carryover Shortfall” means, with respect to the first Distribution Date and a Class of Notes, zero, and with respect to any other Distribution Date and a Class of Notes, the excess of the Noteholders’ Interest Distributable Amount for such Class for the preceding Distribution Date, over the amount in respect of interest that was actually deposited in the Note Distribution Account with respect to such Class on such preceding Distribution Date, plus interest on the amount of interest due but not paid to Noteholders of such Class on the preceding Distribution Date, to the extent permitted by law, at the respective Interest Rate borne by such Class of Notes and calculated for the related Interest Period.

“Noteholders’ Interest Distributable Amount” means, with respect to any Distribution Date and a Class of Notes; the sum of the Noteholders’ Monthly Interest Distributable Amount for such Class of Notes for such Distribution Date and the Noteholders’ Interest Carryover Shortfall for such Class of Notes for such Distribution Date.

“Noteholders’ Monthly Interest Distributable Amount” means, with respect to any Distribution Date and any Class of Notes, interest accrued during the related Interest Period at the Interest Rate borne by such Class of Notes on the outstanding principal amount of the Notes of such Class immediately preceding such Distribution Date, calculated (i) in the case of the Class A-1 Notes, on the basis of the actual number of days elapsed in the related Interest Period and a 360-day year and (ii) in the case of all other Classes of Notes, on the basis of a 360-day year consisting of twelve 30-day months.

“Notes” means the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, Class B Notes and Class C Notes.

“Obligor” on a Receivable means the purchaser or co-purchasers of the Financed Vehicle and any other Person who owes payments under the Receivable.

“Officer’s Certificate” means a certificate signed by the (a) chairman of the board, the president, any executive vice president or any vice president and (b) any executive vice president, vice president, treasurer, assistant treasurer, controller, secretary or assistant secretary of the Representative, the Depositor or the Servicer, as appropriate.

“Opinion of Counsel” means one or more written opinions of counsel who may be an employee of or counsel to the Representative, the Depositor or the Servicer, which counsel shall be reasonably acceptable to the addressees.

“Original Pool Balance” means the aggregate Principal Balance of the Receivables as of the Cutoff Date.

“Owner Trust Estate” has the meaning assigned to such term in the Trust Agreement.

“Owner Trustee” means Deutsche Bank Trust Company Delaware, not in its individual capacity but solely as Owner Trustee under the Trust Agreement, its successors in interest or any successor Owner Trustee under the Trust Agreement.

“Person” means any individual, corporation, estate, partnership, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization or government or any agency or political subdivision thereof.

“Physical Property” has the meaning assigned to such term in the definition of “Delivery” above.

“Pool Balance” means, as of the end of any Monthly Period (other than the initial Monthly Period), the Pool Balance for the immediately preceding Monthly Period, or in the case of the initial Monthly Period the Original Pool Balance, less an amount equal to the sum of the following amounts with respect to the related Monthly Period, computed in accordance with the Simple Interest Method:  (i) that portion of all collections on Receivables allocable to principal, including full and partial principal prepayments, received during such Monthly Period, (ii) the Principal Balance of each Receivable that was purchased or repurchased by Franklin Capital, the Depositor, the Servicer or any affiliate of any of them as of the last day of such Monthly Period, (iii) without duplication of amounts in clause (ii), the Principal Balance of each Receivable that became a Liquidated Receivable during such Monthly Period and (iv) the aggregate amount of Cram Down Losses during such Monthly Period.

 “Prime Receivables” means those Receivables indicated on Schedule A hereto as prime.

“Principal Balance” means, with respect to any Receivable, as of any date, the Amount Financed (as reduced for a Discounted Receivable by the amount discounted as of the Cutoff Date) minus (i) that portion of all amounts received on or prior to such date and allocable to principal in accordance with the terms of the Receivable (and in the case of a Discounted Receivable, the discounting of the Receivable) and (ii) any Cram Down Loss in respect of such Receivable.

“Purchase Agreement” means the Purchase Agreement dated as of December 1, 2005 among the Depositor, Franklin Capital and Franklin SPE LLC pursuant to which the Depositor acquired the Receivables, as such Agreement may be amended from time to time.

“Purchase Amount” means, with respect to any Receivable required to be repurchased or purchased pursuant to Section 3.2 or Section 4.7 of this Agreement or as to which the Servicer has exercised the purchase option pursuant to Section 9.1(a) of this Agreement, an amount equal to the sum of (i) 100% of the Principal Balance thereof and (ii) all accrued and unpaid interest thereon (including one month’s interest thereon, in the month of payment, at the APR less, so long as Franklin Capital is the Servicer, the Base Servicing Fee) after giving effect to the receipt of any amounts collected (from whatever source) on such Receivable, if any.

“Purchased Receivable” means a Receivable purchased as of the close of business on the last day of a Monthly Period by the Servicer pursuant to Section 4.7 of this Agreement, repurchased by the Depositor, or the Representative pursuant to Section 3.2 of this Agreement or purchased by Franklin Capital pursuant to the Purchase Agreement.

“Rating Agency” means Moody’s and Standard & Poor’s.

“Rating Agency Condition” means, with respect to any action or amendment that either (i) each Rating Agency confirms in writing that such amendment will not result in a reduction or withdrawal of such rating or (ii) none of the Rating Agencies, within 10 days after receipt of notice of such action or amendment, shall have notified the Depositor, the Servicer or the Owner Trustee in writing that such action or amendment will result in a reduction or withdrawal of the then current rating of any Class of the Notes.

“Realized Losses” means, with respect to any Receivable that becomes a Liquidated Receivable, the excess of the Principal Balance of such Liquidated Receivable (immediately prior to it becoming a Liquidated Receivable) over the Net Liquidation Proceeds to the extent allocable to principal.

“Receivable” means any Contract listed on Schedule A, (which Schedule may be in electronic form or in the form of microfiche).

“Receivable Files” means the documents specified in Section 3.3 of this Agreement.

“Receivables Property” shall have the meaning specified in Section 2.1.

“Record Date” means, with respect to each Distribution Date, the day immediately preceding such Distribution Date, unless otherwise specified in this Agreement.

“Registrar of Titles” means, with respect to any state, the governmental agency or body responsible for the registration of, and the issuance of certificates of title relating to, motor vehicles and liens thereon.

“Regular Principal Distribution Amount” means, with respect to any Distribution Date, the excess of (i) the aggregate Outstanding Amount of the Notes as of the preceding Distribution Date (after giving effect to distributions thereon) or in the case of the first Distribution Date, as of the Closing Date, over (ii) the sum of (a) the Pool Balance, (b) the First Priority Principal Distribution Amount and (c) the Second Priority Principal Distribution Amount; provided, however that such amount shall not be less than zero; provided, further, that, on the Final Scheduled Distribution Date for the Class C Notes, the Regular Principal Distribution Amount will not be less than the Outstanding Amount of the Class C Notes.

“Representative” means Franklin Resources, Inc., a Delaware corporation, and its successors and assigns.

“S&P Down-Grade” means the short-term unsecured debt rating of the Letter of Credit Bank has been withdrawn or downgraded below “A-1+” by Standard & Poor’s.

“S&P Down-Grade Notice” means the notice that the Servicer is required to provide to the Indenture Trustee promptly after it has learned the Letter of Credit Provider is subject to a S&P Down-Grade.

 “Schedule of Receivables” has the meaning assigned thereto in Section 3.1(d) of this Agreement.

“Second Priority Principal Distribution Amount” means, with respect to any Distribution Date, the excess of (i) the aggregate Outstanding Amount of the Class A Notes and Class B Notes as of the preceding Distribution Date (after giving effect to distributions thereon) or in the case of the first Distribution Date, as of the Closing Date, over (ii) the sum of (a) the Pool Balance and (b) the First Priority Principal Distribution Amount; provided, however that such amount shall not be less than zero; provided, further, that, on the Final Scheduled Distribution Date for any Class of Notes, the Second Priority Principal Distribution Amount will not be less than the Outstanding Amount of the Class B Notes.

“Servicer” means Franklin Capital, as the servicer of the Receivables, and each successor Servicer pursuant to Section 7.3 or 8.2 of this Agreement.

“Servicer Default” means an event specified in Section 8.1 of this Agreement.  

“Servicer Deposit Support Agreement” means the Servicer Deposit Support Agreement dated December 8, 2005, made by Franklin Resources in favor of the Indenture Trustee under the Indenture.

“Servicer’s Certificate” means an Officer’s Certificate of the Servicer delivered pursuant to Section 4.9 of this Agreement, substantially in the form of Exhibit D to this Agreement.

“Servicing Fee” has the meaning specified in Section 4.8 of this Agreement.

“Servicing Fee Rate” means with respect to (i) Prime Receivables, 1.0% per annum, (ii) Non-Prime Receivables, 1.50% per annum and (iii) Sub-Prime Receivables, 2.0% per annum.

“Simple Interest Method” means the method of allocating a fixed level payment to principal and interest, pursuant to which the portion of such payment that is allocated to interest is equal to the product of the fixed rate of interest multiplied by the unpaid principal balance multiplied by the period of time elapsed since the preceding payment of interest was made (in some states assuming 30 day months), divided by the actual number of days in a year (360 days in states which assume 30 day months) and the remainder of such payment is allocable to principal.

“Simple Interest Receivable” means any Receivable under which the portions of a payment allocable to interest and principal are determined in accordance with the Simple Interest Method.

“Specified Spread Account Balance” means for each Distribution Date, the Credit Enhancement Target Amount for such Distribution Date minus the Letter of Credit Available Amount for such Distribution Date.

“Spread Account” means the account designated as such, established and maintained pursuant to Section 5.1 of this Agreement.

“Spread Account Deposit Amount” means with respect to any Distribution Date the Specified Spread Account Balance for such Distribution Date less the amount on deposit in the Spread Account immediately prior to such Distribution Date.

“Spread Account Excess Amount” means, with respect to any Distribution Date, an amount equal to the excess, if any, of (a) the amount of cash or other immediately available funds in the Spread Account on that Distribution Date, after giving effect to any other withdrawals from and deposits to the Spread Account relating to that Distribution Date, over (b) the Specified Spread Account Balance with respect to that Distribution Date.

“Spread Account Transfer Amount” means, with respect to any Distribution Date, an amount equal to the lesser of (a) the amount of cash or other immediately available funds on deposit in the Spread Account on such Distribution Date, before giving effect to any other withdrawals therefrom relating to such Distribution Date, and (b) the amount, if any, by which (1) the Total Required Payments for such Distribution Date exceeds (2) the Available Collections for such Distribution Date.

“Standard & Poor’s” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.

“Sub-Prime Receivables” means those Receivables indicated on Schedule A hereto as sub-prime.

“Supplemental Servicing Fee” means, with respect to any Monthly Period, charges collected (from whatever source) on the Receivables during such Monthly Period including late fees, prepayment fees, administrative fees and expenses or similar charges allowed by applicable law with respect to Receivables, plus reinvestment proceeds on any payments received in respect of Receivables during the related Monthly Period.

“Total Required Payment” means, with respect to any Distribution Date, the sum of all amounts due and payable under Section 5.6(a)(i) through (viii); provided, however, that following the occurrence and during the continuation of an Event of Default which has resulted in an acceleration of the Notes, on any Distribution Date until the Distribution Date on which the outstanding principal amount of all the Notes has been paid in full, the Total Required Payment shall mean the sum of specified amounts payable under clauses FIRST through FIFTH of Section 5.6(a) of the Indenture.

“Trust” means the Issuer.

“Trust Account Property” means the Trust Accounts, all amounts and investments held from time to time in any Trust Account (whether in the form of deposit accounts, Physical Property, book-entry securities, uncertificated securities or otherwise), and all proceeds of the foregoing.

“Trust Accounts” has the meaning assigned thereto in Section 5.1(b) of this Agreement.

“Trust Agreement” means the Amended and Restated Trust Agreement dated as of December 8, 2005 between the Depositor and the Owner Trustee, as the same may be amended and supplemented from time to time.

“Trust Officer” means, (i) in the case of the Indenture Trustee, the chairman or vice-chairman of the board of directors, the chairman or vice-chairman of the executive committee of the board of directors, the president, any vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any trust officer or assistant trust officer, the controller and any assistant controller or any other officer of the Indenture Trustee customarily performing functions similar to those performed by any of the above designated officers having direct responsibility for the administration of this Agreement and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject, and (ii) in the case of the Owner Trustee, any officer in the corporate trust office of the Owner Trustee with direct responsibility for the administration of this Agreement or any of the Basic Documents on behalf of the Owner Trustee.

“Trust Property” has the meaning assigned thereto in Section 2.1 of this Agreement.

“UCC” means the Uniform Commercial Code as in effect in any relevant jurisdiction.

SECTION 1.2

Other Definitional Provisions.

(a)

Capitalized terms used herein and not otherwise defined herein have the meanings assigned to them in the Indenture, or, if not defined therein, in the Trust Agreement.

(b)

All terms defined in this Agreement shall have the defined meanings when used in any instrument governed hereby and in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.

(c)

As used in this Agreement, in any instrument governed hereby and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in this Agreement or in any such instrument, certificate or other document, and accounting terms partly defined in this Agreement or in any such instrument, certificate or other document to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles as in effect on the date of this Agreement or any such instrument, certificate or other document, as applicable.  To the extent that the definitions of accounting terms in this Agreement or in any such instrument, certificate or other document are inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained in this Agreement or in any such instrument, certificate or other document shall control.

(d)

The words “hereof,” “herein,” “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Section, Schedule and Exhibit references contained in this Agreement are references to Sections, Schedules and Exhibits in or to this Agreement unless otherwise specified; and the term “including” shall mean “including without limitation.”

(e)

The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.

(f)

Any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a Person are also to its permitted successors and assigns.

ARTICLE II

Conveyance of Receivables

SECTION 2.1

Conveyance of Receivables.  In consideration of the Issuer’s delivery to or upon the order of the Depositor on the Closing Date of (x) the net proceeds from the sale of the Notes, (y) the Certificates and (z) the other amounts to be distributed from time to time to the Depositor in accordance with the terms of this Agreement, the Depositor does hereby transfer, assign, set over and otherwise convey to the Issuer, without recourse (subject to the obligations set forth herein), all right, title and interest of the Depositor in and to, whether now owned or existing or hereafter acquired or arising (collectively, the “Receivables Property” or the “Trust Property”):

(a)

the Receivables and all monies received thereunder on and after the Cutoff Date;

(b)

the security interests in the Financed Vehicles granted by Obligors pursuant to the Receivables and any other interest of the Depositor in such Financed Vehicles;

(c)

any proceeds with respect to the Receivables from claims on any physical damage, credit life or disability insurance policies covering Financed Vehicles or Obligors and any proceeds from the liquidation of the Receivables;

(d)

any proceeds from any Receivable repurchased by a Dealer, pursuant to a Dealer Agreement, as a result of a breach of representation or warranty in the related Dealer Agreement;

(e)

all funds on deposit from time to time in the Trust Accounts and in all investments and proceeds thereof and all rights of the Issuer therein;

(f)

any extended warranty service contracts on the related Financed Vehicles;

(g)

the related Receivable Files;

(h)

the Depositor’s rights and benefits, but none of its obligations or burdens, under the Purchase Agreement, including the delivery requirements, the representations and warranties and the cure and repurchase obligations of Franklin Capital and Franklin SPE under the Purchase Agreement; and

(i)

the proceeds of any and all of the foregoing.

It is the intention of the Depositor that the transfer and assignment contemplated by this Agreement shall constitute a sale of the Receivables and other Trust Property from the Depositor to the Issuer for non-tax purposes and the beneficial interest in and title to the Receivables and the other Trust Property shall not be part of the Depositor’s estate in the event of the filing of a bankruptcy petition by or against the Depositor under any bankruptcy law.  In the event that, notwithstanding the intent of the Depositor, the transfer and assignment contemplated hereby is held not to be a sale, this Agreement shall constitute a security agreement, and the Depositor hereby grants to the Issuer for the benefit of the Noteholders, the Certificateholders and the Indenture Trustee, a security interest in the property referred to in Section 2.1 whether now owned or existing or hereafter acquired or arising.

ARTICLE III

The Receivables

SECTION 3.1

Representations and Warranties of the Depositor.  The Depositor makes the following representations and warranties as to the Receivables on which the Issuer is deemed to have relied in acquiring the Receivables.  Such representations and warranties speak as of the execution and delivery of this Agreement and as of the Closing Date (unless another date or time period is otherwise specified or indicated in the particular representation or warranty), but shall survive the sale, transfer and assignment of the Receivables to the Issuer and the pledge thereof to the Indenture Trustee pursuant to the Indenture.  The representations set forth in Sections 3.1(a), (b), (h), (i) and (r) may not be waived.

(a)

Title.  Immediately prior to the transfer and assignment herein contemplated, the Depositor had good and marketable title to each Receivable, free and clear of all Liens and, immediately upon the transfer thereof, the Trust shall have good and marketable title to each such Receivable, free and clear of all Liens (or a valid first priority perfected security interest in such Receivable); and the transfer of the Receivables to the Trust has been perfected under the UCC.  No Dealer or any other Person has any right to receive proceeds of any Receivables.

(b)

All Filings Made.  All filings (including, without limitation, UCC filings) necessary in any jurisdiction to give the Trust a first priority perfected ownership interest in the Receivables, and to give the Indenture Collateral Agent a first priority perfected security interest therein, on behalf of the Issuer Secured Parties shall have been made.  All financing statements filed or to be filed against the Depositor in favor of the Trust in connection herewith describing the Receivables contain a statement to the following effect “A purchase of or security interest in any collateral described in this financing statement will violate the rights of the Trust.”

(c)

Characteristics of Receivables.  Each Receivable (i) was originated in the United States of America and is denominated in United States dollars by a Dealer in connection with the retail sale of a Financed Vehicle in the ordinary course of such Dealer’s business, was fully and properly executed by the parties thereto, was purchased by the Depositor from Franklin Capital or Franklin SPE, which in turn shall have been purchased by Franklin Capital from such Dealer under an existing dealer agreement with Franklin Capital, and shall have been validly assigned by Franklin Capital or Franklin SPE to the Depositor in accordance with its terms, (ii) shall have created a valid, subsisting and enforceable first priority perfected security interest in favor of Franklin Capital or Franklin SPE in the Financed Vehicle, which security interest has been assigned by Franklin Capital or Franklin SPE, as applicable, to the Depositor, which in turn has been assigned by the Depositor to the Trust, (iii) shall contain customary and enforceable provisions such that the rights and remedies of the holder thereof shall be adequate for realization against the collateral of the benefits of the security, (iv) shall provide for level monthly payments (provided that the payment in the first or last month in the life of the Receivable may be different from the level payment) that fully amortize the Amount Financed by maturity and (v) provides for calculation of interest in accordance with the Simple Interest Method. Except as otherwise evidenced in the Receivable File relating thereto, the terms of each Receivable have not been amended and collections relating to such Receivable have not been waived.

(d)

Schedule of Receivables.  The information set forth in Schedule A to this Agreement (the “Schedule of Receivables”) is true and correct in all material respects as of the Cutoff Date, and no selection procedures believed by the Depositor to be adverse to the Noteholders were utilized in selecting the Receivables.  The Computer Tape regarding the Receivables is true and correct in all material respects as of the Cutoff Date.

(e)

Compliance With Law.  Each Receivable complied at the time it was originated or made and, complies at the execution of this Agreement in all material respects with all requirements of applicable Federal, state and local laws and regulations thereunder, including, without limitation, usury laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade Commission Act, the Magnuson-Moss Warranty Act, the Rees-Levering Act, the Federal Reserve Board’s Regulations B and Z, state adaptations of the National Consumer Act and other consumer credit laws and equal credit opportunity and disclosure laws.

(f)

Binding Obligation.  Each Receivable represents the legal, valid and binding payment obligation in writing of the Obligor thereunder, enforceable by the holder thereof in accordance with its terms except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and similar laws now or hereafter in effect related to or affecting creditors’ rights generally and subject to general principles of equity (whether applied in a proceeding at law or in equity); and all parties to each Receivable had full legal capacity to execute and deliver such Receivable and all other documents related thereto and to grant the security interest purported to be granted thereby.

(g)

No Government Obligor.  None of the Receivables are due from the United States of America or any State or from any agency, department or instrumentality of the United States of America or any State.

(h)

Valid and Continuing Security Interest; No other pledges.  This Agreement creates a valid and continuing security interest in the Receivables in favor of the Trust, which security interest is prior to all other Liens, and is enforceable against such creditors of and purchasers from the Depositor to the Trust.  Other than the security interest granted to the Trust pursuant to this Agreement, the Depositor has not pledged, assigned, sold or granted a security interest in, or otherwise conveyed any of the Receivables.  The Depositor has not authorized the filing of and is not aware of any financing statements against the Depositor that include a description of collateral covering the Receivables other than any financing statement related to the security interest granted to the Trust pursuant to this Agreement.

(i)

Security Interest in Financed Vehicle.  Immediately prior to the sale, assignment and transfer thereof to the Trust, each FCC Receivable and each Franklin SPE Receivable is secured by a validly perfected first priority security interest in the Financed Vehicle in favor of Franklin Capital and Franklin SPE, respectively, as secured parties or all necessary and appropriate actions have been commenced that would result in the valid perfection of a first priority security interest in the Financed Vehicle in favor of Franklin Capital and Franklin SPE, respectively, as secured parties.  Immediately after the sale, assignment and transfer thereof to the Trust pursuant to this Agreement, although the Lien Certificate will indicate Franklin Capital as lienholder and will not indicate the Trust or Owner Trustee as secured party, each Receivable will be secured by an enforceable and perfected security interest in the Financed Vehicle in favor of the Trust as secured party for the benefit of the Noteholders, which security interest is prior to all other Liens in such Financed Vehicle.

(j)

Receivables in Force.  As of the Closing Date, no Receivable has been satisfied, subordinated or rescinded, nor has any related Financed Vehicle been released from the Lien granted by the related Receivable in whole or in part.  

(k)

No Waiver.  No provision of a Receivable has been waived except as reflected in the Receivable File relating to such Receivable.

(l)

No Defenses.  As of the Closing Date, no right of rescission, setoff, counterclaim or defense, including, without limitation, the defense of usury, has been asserted or threatened with respect to any Receivable.

(m)

No Liens.  To the best of the Depositor’s knowledge, as of the Closing Date there are no Liens or claims, including Liens for work, labor, materials or unpaid state or federal taxes relating to any Financed Vehicle securing the related Receivable, that are or may be prior to or equal to the Lien granted by such Receivable.

(n)

No Default.  No Receivable has a payment that is more than 30 days delinquent as of the Cutoff Date and, except for any delinquency in payment on any Receivable not more than 30 days delinquent, no default, breach, violation or event (in any such case) permitting acceleration under the terms of any Receivable has occurred; and except for any delinquency in payment on any Receivable not more than 30 days delinquent, no continuing condition that with notice or the lapse of time would constitute a default, breach, violation or event (in any such case) permitting acceleration under the terms of any Receivable shall have arisen as of the Cutoff Date; and the Depositor has not waived and shall not waive any of the foregoing.  For purposes of this clause (n), a Receivable is considered 30 days delinquent if 30 days have elapsed since the date on which a scheduled payment had been due but not been made.  As of the Closing Date, no Receivable has had an uncured First Payment Default.  

(o)

No Bankruptcies.  No Obligor on any Receivable was the subject of a bankruptcy proceeding commenced following the execution of the related Contract except an Obligor that has received a discharge or dismissal under the United States Bankruptcy Code.

(p)

No Repossessions.  As of the Cutoff Date, no Financed Vehicle securing any Receivable is in repossession status.

(q)

Adverse Selection.  No selection procedures adverse to the Noteholders were utilized in selecting the Receivables from those owned by Franklin Capital or Franklin SPE, as applicable, which met the selection criteria contained in this Agreement.

(r)

Chattel Paper.  Each Receivable constitutes “tangible chattel paper” as defined in the UCC.  The Receivables do not have any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Trust or the Indenture Trustee.  

(s)

Insurance.  Under the terms of each Receivable the Obligor is required to maintain physical damage insurance or comprehensive and collision insurance covering the Financed Vehicle.

(t)

Lawful Assignment.  No Receivable was originated in, as of the Cutoff Date, or is subject to the laws of, any jurisdiction under which the sale, transfer and assignment of such Receivable or this Agreement is unlawful, void or voidable.

(u)

Reserved.

(v)

One Original.  There is only one original executed copy of each Receivable; immediately prior to the delivery thereof to the Indenture Trustee pursuant to Section 3.3, such copy shall have been in the custody and possession of the Depositor, Franklin SPE or Franklin Capital.

(w)

Location of Receivable Files.  The Receivable Files are kept at one or more of the locations listed in Schedule C and each item required to be in a Receivable File is in such Receivable File.

(x)

Computer Records.  As of the Closing Date, the accounting and computer records relating to the Receivables of the Depositor have been marked to show the absolute ownership by the Owner Trustee on behalf of the Trust of the Receivables.

(y)

Taxes.  To the knowledge of the Depositor, there are no state or local taxing jurisdictions which have asserted that nonresident holders of notes issued by a trust which holds assets similar to the assets to be held by the Trust are subject to the jurisdiction’s income or other taxes solely by reason of the location in the jurisdiction of the Owner Trustee, the Depositor, the Servicer, the Representative or the obligors on or the assets securing the Receivables held by the Trust.

(z)

Maturity of Receivables.  As of the Cutoff Date, each Receivable has a final maturity date not later than April 24, 2013; each Receivable has an original term to maturity of not more than 84 months; the weighted average original term of the Receivables is approximately 68 months; and the weighted average remaining term of the Receivables is approximately 61 months.  No Receivable shall have a remaining term of less than six months as of the Cutoff Date.

(aa)

Financing.  As of the Cutoff Date, approximately 48.23% of the aggregate Principal Balance of the Receivables represent new vehicles; the remainder of the Receivables represent used vehicles; and 100% of the aggregate Principal Balance of the Receivables represent Simple Interest Receivables.  As of the Cutoff Date, approximately 48.71% of the aggregate Principal Balance of the Receivables represent Prime Receivables, approximately 48.76% of the aggregate Principal Balance of the Receivables represent Non-Prime Receivables and approximately 2.53% of the aggregate Principal Balance of the Receivables represent Sub-Prime Receivables.  As of the Cutoff Date, the aggregate Principal Balance of the Receivables is $350,000,000.08.

(bb)

APR.  As of the Cutoff Date, the weighted average Annual Percentage Rate of the Receivables is approximately 9.97% (after giving effect to the discounting of the Discounted Receivables).  Each Receivable has an APR equal to or greater than 4.50% (after giving effect to the discounting of the Discounted Receivables).

(cc)

Number.  As of the Cutoff Date, there are 21,142 Receivables.

(dd)

Balance.  As of the Cutoff Date, each Receivable has a remaining Principal Balance of not less than $1,001.50 and not more than $148,391.78, and as of the Cutoff Date the average Principal Balance of the Receivables is $16,554.73.

(ee)

Finance Charge.  Each Receivable provides for the payment of a finance charge calculated on the basis of the APR stated in the related Contract and such APR has not been modified except as otherwise required under the Servicemembers Civil Relief Act, as amended.

(ff)

Force Placed Insurance. No Receivable is subject to a force placed insurance policy on the related Financed Vehicle.

SECTION 3.2

Repurchase upon Breach.  (a)  The Representative, the Depositor, the Servicer or the Issuer, as the case may be, shall inform the other parties to this Agreement and the Indenture Trustee or the Indenture Administrator promptly, in writing, upon the discovery of any breach of the Representative’s or the Depositor’s representations and warranties made pursuant to Section 3.1.  The Representative, the Depositor, the Servicer or the Issuer, as the case may be shall inform Franklin Capital, promptly, in writing, upon the discovery of any breach of Franklin Capital’s or Franklin SPE’s representations and warranties made pursuant to Section 3.02(a) or Section 3.02(b) of the Purchase Agreement.  As of the last day of the second (or, if the Representative or the Depositor so elects, the first) month following the discovery by the Representative or the Depositor or receipt by the Representative or the Depositor of notice from any of the Representative, the Depositor, the Servicer or the Issuer of such breach, unless such breach is cured by such date, the Representative and the Depositor shall jointly and severally have an obligation to repurchase any Receivable in which the interests of the Noteholders are materially and adversely affected by any such breach as of such date.  The “second month” shall mean the month following the month in which discovery occurs or notice is given, and the “first month” shall mean the month in which discovery occurs or notice is given.  In consideration of and simultaneously with the repurchase of the Receivable, the Representative and/or the Depositor shall remit, or the Depositor shall cause Franklin Capital or Franklin SPE, as applicable, to remit pursuant to the Purchase Agreement, to the Collection Account the Purchase Amount in the manner specified in Section 5.5 and the Issuer shall execute such assignments and other documents reasonably requested by such person in order to effect such repurchase.  The sole remedy of the Issuer, the Owner Trustee, the Indenture Trustee, or the Indenture Administrator, the Noteholders or the Certificateholders with respect to a breach of representations and warranties pursuant to Section 3.1 and the agreement contained in this Section shall be the repurchase of Receivables pursuant to this Section, subject to the conditions contained herein or to enforce the obligations of Franklin Capital or Franklin SPE, as applicable, to the Depositor to repurchase such Receivables pursuant to the Purchase Agreement.  None of the Owner Trustee, the Indenture Trustee or the Indenture Administrator shall have a duty to conduct any affirmative investigation as to the occurrence of any conditions requiring the repurchase of any Receivable pursuant to this Section.

(b)

Pursuant to Section 2.1 of this Agreement, the Depositor conveyed to the Trust all of the Depositor’s right, title and interest in its rights and benefits, but none of its obligations or burdens, under the Purchase Agreement including the Depositor’s rights under the Purchase Agreement and the delivery requirements, the representations and warranties of Franklin Capital and Franklin SPE and the cure or repurchase obligations of Franklin Capital thereunder.  The Depositor hereby represents and warrants to the Trust that such assignment is valid, enforceable and effective to permit the Trust to enforce such obligations of Franklin Capital and Franklin SPE under the Purchase Agreement.

SECTION 3.3

Custody of Receivable Files.  To assure uniform quality in servicing the Receivables and to reduce administrative costs, the Issuer hereby revocably appoints the Servicer, and the Servicer hereby accepts such appointment, to act as the agent of the Issuer and the Indenture Trustee as custodian of the following documents or instruments which are hereby constructively delivered to the Indenture Trustee and the Indenture Administrator, as of the Cutoff Date as pledgee of the Issuer with respect to each Receivable:

(a)

the original Receivable;

(b)

a record of the information supplied by the Obligor in the original credit application;

(c)

the original certificate of title or such documents that the Servicer shall keep on file, in accordance with its customary procedures, evidencing the security interest of Franklin Capital in the Financed Vehicle (it being understood that (i) the original certificates of title generally are not delivered to Franklin Capital for 120 days but that promptly upon delivery they shall be delivered to the Servicer as custodian hereunder and (ii) in California, Franklin Capital participates in the California electronic lien and title system and does not receive physical documentation); and

(d)

any and all other documents that the Servicer shall keep on file, in accordance with its customary procedures, relating to a Receivable, an Obligor or a Financed Vehicle.

SECTION 3.4

Duties of Servicer as Custodian.  (a)  Safekeeping.  The Servicer shall hold the Receivable Files on behalf of the Issuer, the Indenture Collateral Agent, the Indenture Administrator and the Indenture Trustee and maintain such accurate and complete accounts, records and computer systems pertaining to each Receivable File as shall enable the Issuer to comply with this Agreement.  In performing its duties as custodian the Servicer shall act with reasonable care, using that degree of skill and attention that the Servicer exercises with respect to the Receivable Files relating to all comparable automotive receivables that the Servicer services for itself or others, except that the Servicer shall not be obligated, and does not currently intend, to (i) pay any premium of force-placed insurance concerning any Financed Vehicle or (ii) monitor any Obligor’s maintenance of such insurance.  The Servicer shall conduct, or cause to be conducted, periodic audits of the Receivable Files held by it under this Agreement and of the related accounts, records and computer systems, in such a manner as shall enable the Issuer, the Indenture Administrator or the Indenture Trustee to verify the accuracy of the Servicer’s record keeping.  The Servicer shall promptly report to the Issuer, the Indenture Administrator and the Indenture Trustee any failure on its part to hold the Receivable Files and maintain its accounts, records and computer systems as herein provided and promptly take appropriate action to remedy any such failure.

(b)

Maintenance of Records.  The Servicer shall maintain each Receivable File at the offices specified in Schedule C to this Agreement or at such other office as shall be specified to the Issuer, the Indenture Administrator and the Indenture Trustee by written notice not later than 10 days after any change in location.  The Servicer shall at all times maintain the original of the fully executed Receivable and store such original Receivable in a fireproof facility.  Additionally, the Servicer shall maintain the Receivable Files in an organized and orderly manner.

(c)

Access to Records.  The Servicer will provide to the Indenture Trustee, the Indenture Administrator, the Issuer and the Depositor, on the Closing Date, an Officer’s Certificate stating that the Receivable Files with respect to the Receivables contain all materials which are required to be kept therein by Section 3.3(a), (b), (c) and (d).  

Upon reasonable prior notice, the Servicer shall make available to the Issuer, the Indenture Administrator, the Indenture Trustee or any duly authorized representatives, attorneys or auditors of any of the foregoing, a list of locations of, and access to, the Receivable Files and records and computer systems maintained by the Servicer at such times during normal business hours as the Issuer, the Indenture Administrator or the Indenture Trustee shall instruct.

(d)

Release of Documents.  Upon written instruction from the Indenture Trustee or the Indenture Administrator at any time following a Servicer Default or termination of the Servicer’s appointment pursuant to Section 3.7 the Servicer shall release any Receivable File to the Indenture Trustee, the Indenture Trustee’s agent, or the Indenture Trustee’s designee, as the case may be, at such place or places as the Indenture Trustee may designate, as soon as practicable.

SECTION 3.5

Instructions; Authority To Act.  The Servicer shall be deemed to have received proper instructions with respect to the Receivable Files upon its receipt of written instructions signed by a Trust Officer of the Indenture Trustee.  The Indenture Trustee shall not have any duty or obligation to provide the Servicer with any such instructions with respect to the Receivable Files.

SECTION 3.6

Custodian’s Indemnification.  The Servicer as custodian shall indemnify and hold harmless the Trust, the Owner Trustee, the Indenture Administrator and the Indenture Trustee and each of their officers, directors, employees and agents for any and all liabilities, obligations, losses, compensatory damages, payments, costs or expenses (including reasonable attorneys’ fees and expenses) that may be imposed on, incurred by or asserted against the Trust, the Owner Trustee, the Indenture Administrator or the Indenture Trustee or any of their officers, directors, employees and agents as the result of any improper act or omission in any way relating to the maintenance and custody by the Servicer as custodian of the Receivable Files; provided, however, that the Servicer shall not be liable to the Trust, the Owner Trustee, the Indenture Administrator or the Indenture Trustee, as the case may be, for any portion of any such amount resulting from the willful misfeasance, bad faith or negligence of the Owner Trustee, the Indenture Administrator or the Indenture Trustee, as the case may be.  This provision shall not be considered to limit the Servicer’s or any other party’s rights, obligations, liabilities, claims or defenses which arise as a matter of law or pursuant to any other provision of this Agreement.

SECTION 3.7

Effective Period and Termination.  The Servicer’s appointment as custodian shall become effective as of the Cutoff Date and shall continue in full force and effect until terminated pursuant to this Section 3.7.  If Franklin Capital shall resign as Servicer in accordance with the provisions of this Agreement or if all of the rights and obligations of any Servicer shall have been terminated under Section 8.1, the appointment of such Servicer as custodian shall be terminated, in the same manner as the Servicer may be terminated under Section 8.1. As soon as practicable after any termination of such appointment, the Servicer shall deliver the Receivable Files to the Indenture Trustee or the Indenture Trustee’s agent at such place or places as the Indenture Trustee shall reasonably designate in writing.  If the Servicer shall be terminated as custodian hereunder for any reason but shall continue to serve as Servicer, the Indenture Trustee shall, or shall cause its agent to, make the Receivable Files available to the Servicer during normal business hours upon reasonable notice so as to permit the Servicer to perform its obligations as Servicer hereunder.

SECTION 3.8

Article Nine Provisions.  The representations and warranties set forth in this Section 3.8 speak as of the Closing Date in the case of Receivables, but shall survive the sale, transfer and assignment of the Receivables to the Issuer and pledge thereof to the Indenture Trustee pursuant to the Indenture.  The representations set forth in this Section 3.8 may not be waived.

(a)

This Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in the Receivables in favor of the Issuer, which security interest is prior to all other Liens, and is enforceable as such as against creditors of and purchasers from the Depositor.

(b)

The Depositor has taken all steps necessary to perfect its security interest against Franklin Capital and Franklin SPE in the Receivables.

(c)

The Receivables constitute “tangible chattel paper” within the meaning of the applicable UCC.

(d)

The Depositor owns and has good and marketable title to the Receivables free and clear of any Lien, claim or encumbrance of any Person.

(e)

The Depositor has caused or will have caused, within ten days, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Receivables granted to the Issuer hereunder.

(f)

Other than the security interest granted to the Issuer pursuant to this Agreement, the Depositor has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Receivables.  The Depositor has not authorized the filing of and is not aware of any financing statements against the Depositor that include a description of collateral covering the Receivables other than any financing statement relating to the security interest granted to the Issuer hereunder or that has been terminated.  The Depositor is not aware of any judgment or tax lien filings against the Depositor.

(g)

Franklin Capital has in its possession all original copies of the Receivables Files that constitute or evidence the Receivables.  The Receivables Files that constitute or evidence the Receivables do not have any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Issuer.  All financing statements filed or to be filed against Depositor, in favor of the Issuer in connection herewith describing the Receivables contain a statement to the following effect:  “A purchase of or security interest in any collateral described in this financing statement will violate the rights of the Issuer.”

ARTICLE IV

Administration and Servicing of Receivables

SECTION 4.1

Duties of Servicer.  The Servicer, as agent for the Issuer, shall manage, service, administer and make collections on the Receivables (other than Purchased Receivables) with reasonable care, using that degree of skill and attention that the Servicer exercises with respect to all comparable automotive receivables that it services for itself or others, except that the Servicer shall not be obligated, and does not currently intend, to (i) pay any premium of force-placed insurance concerning any Financed Vehicle or (ii) monitor any Obligor’s maintenance of such insurance.  The Servicer’s duties shall include collection and posting of all payments, responding to inquiries of Obligors on such Receivables, investigating delinquencies, sending payment statements or coupon books to Obligors, accounting for collections and furnishing monthly and annual statements to the Owner Trustee, Indenture Trustee and the Indenture Administrator with respect to distributions.  Subject to the provisions of Section 4.2(b), the Servicer shall follow its customary standards, policies and procedures in performing its duties as Servicer.  Without limiting the generality of the foregoing, the Servicer is authorized and empowered to execute and deliver, on behalf of itself, the Issuer, the Owner Trustee, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent, the Indenture Trustee, the Certificateholders and the Noteholders or any of them, any and all instruments of satisfaction or cancellation, or partial or full release or discharge, and all other comparable instruments, with respect to such Receivables or to the Financed Vehicles securing such Receivables.  If the Servicer shall commence a legal proceeding to enforce a Receivable, the Issuer (in the case of a Receivable other than a Purchased Receivable) shall thereupon be deemed to have automatically assigned, solely for the purpose of collection, such Receivable to the Servicer.  If in any enforcement suit or legal proceeding it shall be held that the Servicer may not enforce a Receivable on the ground that it shall not be a real party in interest or a holder entitled to enforce such Receivable the Owner Trustee shall, at the Servicer’s expense and direction, take steps to enforce such Receivable, including bringing suit in its name or the name of the Trust, the Indenture Administrator, the Indenture Trustee, the Certificateholders or the Noteholders.  The Owner Trustee shall upon the written request of the Servicer furnish the Servicer with any powers of attorney and other documents reasonably necessary or appropriate (as certified to the Owner Trustee by the Servicer) to enable the Servicer to carry out its servicing and administrative duties hereunder.

SECTION 4.2

Collection and Allocation of Receivable Payments.  (a)  The Servicer shall make reasonable efforts to collect all payments called for under the terms and provisions of the Receivables as and when the same shall become due and shall follow such collection procedures as it follows with respect to all comparable automotive receivables that it services for itself or others.  The Servicer shall allocate collections between principal and interest in accordance with its customary servicing procedures and, in the case of Discounted Receivables, in accordance with the discounting thereof.

(b)

The Servicer may, in accordance with its customary servicing policies grant extensions, rebates or adjustments on a Receivable; provided, however, that the Servicer shall not modify the original due day of any Receivable by any period in excess of 25 days, shall not reduce the amount of the scheduled payments on a Receivable (unless the related Obligor is in default on such Receivable or, in the judgment of the Servicer, such default is imminent), and shall not extend the final payment date of any Receivable beyond the Final Scheduled Maturity Date; provided further that if the Servicer extends the date for final payment by the Obligor of any Receivable beyond the Final Scheduled Maturity Date or grants any other extension, rebate or adjustment on a Receivable contrary to the limitations set forth in this Section 4.2, it shall promptly repurchase such Receivable from the Trust in accordance with Section 4.7.  The Servicer may in its discretion waive any late payment charge or any other fees that may be collected in the ordinary course of servicing a Receivable.  The Servicer shall not, except as provided in clause (c) below, voluntarily agree to any alteration of the interest rate on any Receivable.  The Servicer covenants that it will not intentionally extend the final payment of a Receivable past the Final Scheduled Maturity Date with the intention of purchasing such Receivable as this Agreement would require.

(c)

The Servicer may modify the interest rate and extend the terms on a Receivable under the following circumstances:

(1)

The Servicer determines that payment in full on the Receivable is unlikely at the current interest rate of the Receivable and authorizes repossession of the related Financed Vehicle;

(2)

Based on published Manheim data, the Servicer estimates the Realized Loss that would be incurred as a result of repossession of the related Financed Vehicle exceeds $3,000;

(3)

The Receivable must have been originated at least twelve months prior to an interest rate modification;

(4)

The Obligor must have experienced a “qualifying event” of one or more of the following:

·

Divorce or separation;

·

Death in immediate family;

·

Job loss or reduction of income exceeding 10% of the income amount disclosed on original loan application;

·

Medical expenses exceeding $1,000;

·

Automotive repairs exceeding $1,000; or

·

Home repairs exceeding $1,000;

(5)

Each Obligor that satisfies the criteria set forth in this clause (c) must be offered the option (subject to the 2% cap described at the end of this clause (c) below) to apply for a loan modification;

(6)

The Servicer determines with the customer the terms of the modification.  The only parameters are that the loan modification will not result in any loan maturity after the Final Scheduled Maturity Date;

(7)

The Obligor formally applies for loan modification by completing an updated application and communicating to the Servicer its desire and intent to pay.  The Servicer shall obtain updated credit bureau information to determine that the Obligor meets the following loan modification criteria:

·

Debt to income ratio not exceeding 55%; and

·

Payment to Income ratio not exceeding 22%;

(8)

If the above requirement are met the Servicer must verify the following information:

·

Income; 

·

Qualifying event; and

·

Home address and telephone number.

Upon satisfaction of the foregoing conditions, the Servicer may modify the Receivable (provided that it may not lower the interest rate to a rate less than the sum of (1) the weighted average interest rate on the Notes, (2) the Servicing Fee Rate and (3) 1.25%).  The sum total of the loan modifications (by Principal Balance of the modified Receivables as of the applicable Cutoff Date) may not exceed 2% of the Original Pool Balance.

(d)

The Servicer shall, subject to clause (b) above and in accordance with its customary procedures, offer one-month holiday extensions to all eligible Obligors.  An Obligor would be eligible for a one month holiday extension if (1) it is an Obligor with respect to a Simple Interest Receivable, (2) no extension was previously given to the Obligor during the then-current calendar year, (3) the Obligor has not been delinquent for thirty or more days on any payment due during the six months prior to October 31 of the then-current calendar year, (4) the related Receivable is less than thirty days past due as of October 31 of the then-current calendar year and (5) the date of origination of the related Receivable is no later than April 30 of the then-current calendar year.  The one-month holiday extension shall (1) enable the Obligor to skip one monthly payment due and remain current on the related Receivable and (2) extend the date for final payment by the Obligor by one month.

SECTION 4.3

Realization upon Receivables.  (a)  On behalf of the Issuer, the Servicer shall use its best efforts, consistent with its customary servicing procedures, to repossess or otherwise convert the ownership of the Financed Vehicle securing any Receivable as to which the Servicer shall have determined eventual payment in full is unlikely.  From time to time, as appropriate for servicing or foreclosing upon any Receivable, the Owner Trustee shall, upon written request of the Servicer, execute such documents as shall be reasonably necessary to prosecute any such proceedings.  The Servicer shall follow such customary and usual practices and procedures as it shall deem necessary or advisable in its servicing of automotive receivables, which may include reasonable efforts to realize proceeds from Receivables repurchased by a Dealer, pursuant to a Dealer Agreement, as a result of a breach of representation or warranty in the related Dealer Agreement or a default by an Obligor resulting in the repossession of the Financed Vehicle under such Dealer Agreement.  The foregoing shall be subject to the provision that, in any case in which the Financed Vehicle shall have suffered damage, the Servicer shall not expend funds in connection with the repair or the repossession of such Financed Vehicle unless it shall determine in its reasonable discretion that such repair and/or repossession will increase the Net Liquidation Proceeds by an amount greater than the amount of such expenses.

(b)

After the Servicer has directly or indirectly repossessed a Financed Vehicle, it shall attempt to maximize realization of Net Liquidation Proceeds for the Financed Vehicle.  The Servicer may, in attempting to maximize Net Liquidation Proceeds, attempt to cause the Financed Vehicle to be sold at an auction run by an auction house.  The Servicer shall establish in a commercially reasonable manner a minimum acceptable price at which the Financed Vehicle may be sold, provided that the Servicer may lower or raise such minimum price during the course of the auction, if lowering the minimum price will maximize Net Liquidation Proceeds.  The auction house will coordinate the bidding process until such time as (1) a price that exceeds the minimum price is bid and no other bids are received, (2) the Servicer accepts a bid below the initial minimum price or (3) no bids are received that are either in excess of the initial minimum price or are otherwise accepted by the Servicer. If the Financed Vehicle is not sold at an auction, the Financed Vehicle may be presented for auction by the Servicer at a future auction and/or another auction location in efforts to maximize Net Liquidation Proceeds.

SECTION 4.4

Financed Vehicle Insurance.  In the event of a loss or claim under a physical damages insurance policy or comprehensive and collision insurance policy, the Servicer shall, in accordance with its customary servicing procedures take all necessary action to enforce all available rights and claims under such insurance policy.  Notwithstanding the foregoing, the Servicer shall not be obligated to, and does not (a) monitor the placement or maintenance of such insurance by Obligors or (b) pay any premium of force-placed insurance concerning any Financed Vehicle.

SECTION 4.5

Maintenance of Security Interests in Financed Vehicles.  (a)  The Servicer shall, in accordance with its customary servicing procedures, take such steps as are necessary to maintain perfection of the security interest created by each Receivable in the related Financed Vehicle in favor of the Depositor.  The Servicer is hereby authorized to take such steps as are necessary to reperfect such security interest on behalf of the Issuer and the Indenture Collateral Agent in the event of the relocation of a Financed Vehicle or for any other reason.

SECTION 4.6

Covenants of Servicer.  The Servicer shall not release the Financed Vehicle securing any Receivable from the security interest granted by such Receivable in whole or in part except in the event of payment in full by the Obligor thereunder or payment in full less a deficiency which the Servicer would not attempt to collect in accordance with its customary procedures or in connection with repossession or except as may be required by an insurer in order to receive proceeds from insurance covering such Financed Vehicle, nor shall the Servicer impair the rights of the Issuer, the Indenture Trustee, the Indenture Collateral Agent, the Indenture Administrator, the Certificateholders or the Noteholders in such Receivables (it being understood that no action of the Servicer taken in compliance with the terms of this Agreement shall be deemed to impair such rights), nor shall the Servicer extend or modify the terms of a Receivable except as provided in Section 4.2.

SECTION 4.7

Purchase of Receivables upon Breach.  The Representative, the Depositor, the Servicer or the Issuer shall inform the other parties, Indenture Administrator and the Indenture Trustee, promptly, in writing, upon the discovery of any breach of the Servicer’s covenants pursuant to Sections 4.2(b), 4.4, 4.5 or 4.6, or of any breach of the Servicer’s representations and warranties made pursuant to Section 7.1(b).  As of the last day of the second (or, if the Servicer so elects, the first) month following the discovery by the Servicer or receipt by the Servicer of notice from any of the Representative, the Depositor, the Servicer, the Issuer, the Indenture Administrator or the Indenture Trustee of such breach, unless such breach is cured by such date, the Servicer shall be obligated to purchase any Receivable in which the interests of the Noteholders or the Certificateholders are materially and adversely affected by such breach as of such date.  The “second month” shall mean the month following the month in which discovery occurs or notice is given, and the “first month” shall mean the month in which discovery occurs or notice is given.  In consideration of the purchase of any such Receivable pursuant to the preceding sentence, the Servicer shall remit the Purchase Amount in the manner specified in Section 5.5.  The sole remedy of the Issuer, the Indenture Trustee, the Indenture Administrator, the Noteholders or the Certificateholders with respect to a breach pursuant to Sections 4.2(b), 4.4, 4.5 or 4.6, or to a breach of representations and warranties pursuant to Section 7.1(b), shall be limited to the purchase of Receivables in accordance with this Section 4.7.  The Indenture Trustee, the Indenture Administrator and the Owner Trustee shall have no duty to conduct any affirmative investigation as to the occurrence of any condition requiring the purchase of any Receivable pursuant to this Section 4.7.  A successor Servicer shall not have repurchase obligations for breaches by the predecessor servicer.

SECTION 4.8

Servicing Fee.  The “Servicing Fee” for a Distribution Date shall equal the sum of the Base Servicing Fee, the Supplemental Servicing Fee, any Additional Servicing Fee, all Investment Earnings on the Collection Account (excluding Investment Earnings with respect to the two days prior to such Distribution Date), plus any reimbursement pursuant to Section 5.2(b); provided, that the Servicing Fee for a Distribution Date shall not include amounts consisting of the Base Servicing Fee that reduced a Purchase Amount with respect to a related Collection Period.  The Servicer shall be entitled to retain from collections the Base Servicing Fee and the Investment Earnings as provided herein.  The Servicer shall also be entitled to retain the Supplemental Servicing Fee.  The Servicer, in its discretion at its election, may defer receipt of all or any portion of the Servicing Fee for any Monthly Period to and until a later Monthly Period for any reason (other than for the purpose of evading the priorities set forth in Section 5.6(a)), including in order to avoid a shortfall in any payments due on any Notes.  Any such deferred amount shall be payable to (or may be retained from subsequent collections by) the Servicer on demand.

SECTION 4.9

Servicer’s Certificate.  (a)  No later than 12:00 noon New York City time on each Determination Date, the Servicer shall deliver to the Owner Trustee, the Indenture Administrator, the Indenture Trustee, the Indenture Collateral Agent, the Letter of Credit Provider and each Rating Agency a Servicer’s Certificate containing, among other things, (i) all information necessary to enable the Indenture Trustee or the Indenture Administrator to make any withdrawal and deposit required by Sections 5.6(a) and 5.6(b), to give any notice required by Section 5.4 and to make the distributions required by Section 5.6, (ii) all information necessary to enable the Indenture Administrator to send the statements required by Section 5.8 to the Owner Trustee, the Noteholders, the Certificateholders, each Rating Agency and the Letter of Credit Provider, (iii) a listing of all Receivables purchased during the related Monthly Period, identifying the Receivables so purchased, (iv) all information necessary to enable the Indenture Administrator to reconcile all deposits to, and withdrawals from, the Collection Account and the Spread Account for the related Monthly Period and Distribution Date, including the accounting required by Section 5.9, (v) the amount of Covered Amounts (as defined in the Servicer Deposit Support Agreement) to be deposited to the Collection Account for the related Distribution Date pursuant to the Servicer Deposit Support Agreement, (vi) all information necessary to enable the Owner Trustee to make the distribution required by the Trust Agreement, (vii) a statement of the then current long-term rating and short-term rating of the Representative maintained by each Rating Agency and (viii) a statement setting forth the number of modifications, extensions or deferrals granted by the Servicer during the prior calendar month and the aggregate principal balance as of the end of the related Monthly Period of all Contracts on which an extension, deferral or modification has been granted by the Servicer during the prior calendar month pursuant to Section 4.2(b) herein.  Receivables purchased by the Servicer, the Depositor or the Representative and each Receivable which became a Liquidated Receivable or which was paid in full during the related Monthly Period shall be identified by account number (as set forth in Schedule A hereto).  A copy of such certificate may be obtained by any Noteholder or Certificateholder by a request in writing to the Indenture Trustee addressed to the Corporate Trust Office, the Indenture Administrator or from the Servicer.  None of the Indenture Trustee, the Indenture Administrator or the Owner Trustee shall be under any obligation to confirm or reconcile the information provided pursuant to Section 4.9(a)(iv).

SECTION 4.10

Annual Statement as to Compliance; Notice of Default.  (a)  The Servicer shall deliver to the Owner Trustee, the Letter of Credit Provider, the Indenture Administrator, the Indenture Trustee, and the Indenture Administrator, on or before November 30 of each year beginning November 30, 2006, an Officer’s Certificate, dated as of the preceding September 30, stating that (i) a review of the activities of the Servicer during the preceding 12-month period (or, for the initial report, for such longer period or shorter period as shall have elapsed from the date of issuance of the Notes) and of its performance under this Agreement has been made under such officer’s supervision and (ii) to the best of such officer’s knowledge, based on such review, the Servicer has fulfilled all its obligations under this Agreement throughout such year or, if there has been a default in the fulfillment of any such obligation, specifying each such default known to such officers and the nature and status thereof.  The Indenture Administrator shall send a copy of such certificate and the report referred to in Section 4.11 to the Rating Agencies.  A copy of such certificate and the report referred to in Section 4.11 may be obtained by any Certificateholder by a request in writing to the Owner Trustee addressed to the Corporate Trust Office or by any Noteholder by a request in writing to the Indenture Trustee addressed to the Corporate Trust Office or the Indenture Administrator.  Upon the telephone request of the Owner Trustee, the Indenture Administrator will promptly furnish the Owner Trustee a list of Noteholders as of the date specified by the Owner Trustee.  Each Noteholder, by its acceptance of a Note, shall be deemed to agree that the Indenture Administrator shall be under no liability for providing the list of Noteholders to the Owner Trustee as described in the immediately preceding sentence.

(b)

The Servicer shall deliver to the Owner Trustee, the Indenture Trustee, Indenture Administrator, the Letter of Credit Provider and the Rating Agencies, promptly after having obtained knowledge thereof, but in no event later than five Business Days thereafter, written notice in an Officer’s Certificate of any event which with the giving of notice or lapse of time, or both, would become a Servicer Default under Section 8.1(a) or (b).

SECTION 4.11

Annual Independent Certified Public Accountants’ Report.  The Servicer shall cause a firm of independent certified public accountants, which may also render other services to the Servicer or the Depositor, to deliver to the Depositor, the Owner Trustee, the Letter of Credit Provider, the Indenture Trustee and the Indenture Administrator on or before November 30 of each year beginning November 30, 2006 an agreed-upon procedures report addressed to the Servicer, the Depositor, the Owner Trustee, the Indenture Trustee and the Indenture Administrator and each Rating Agency, expressing a summary of findings, (based on certain procedures performed on the documents, records and accounting records that such accountants considered appropriate under the circumstances) relating to the servicing of the Receivables, or the administration of the Receivables and of the Trust, as the case may be, during the preceding year ended September 30 (or, for the initial report, for such longer period or shorter period as shall have elapsed from the date of issuance of the Notes), and that, on the basis of the accounting and auditing procedures considered appropriate under the circumstances, such firm is of the opinion that such servicing or administration was conducted in compliance with the terms of this Agreement, except for (i) such exceptions as such firm shall believe to be immaterial and (ii) such other exceptions as shall be set forth in such report.

Such report will also indicate that the firm is independent of the Servicer within the meaning of the Code of Professional Ethics of the American Institute of Certified Public Accountants.

SECTION 4.12

Access to Certain Documentation and Information Regarding Receivables.  The Servicer shall provide to representatives of the Indenture Trustee, the Owner Trustee and the Indenture Administrator reasonable access to the Receivable Files.  The Servicer shall provide to the Certificateholders and Noteholders access to the Receivable Files in such cases where the Certificateholders or Noteholders shall be required by applicable statutes or regulations to review such documentation as demonstrated by evidence satisfactory to the Servicer in its reasonable judgment.  Access shall be afforded without charge, but only upon reasonable request and during the normal business hours at the respective offices of the Servicer.  Nothing in this Section shall affect the obligation of the Servicer to observe any applicable law prohibiting disclosure of information regarding the Obligors and the failure of the Servicer to provide access to information as a result of such obligation shall not constitute a breach of this Section.

SECTION 4.13

Servicer Expenses.  The Servicer shall be required to pay all expenses incurred by it in connection with its activities hereunder and under any of the Basic Documents, including fees and disbursements of independent accountants, taxes imposed on the Servicer and expenses incurred in connection with distributions and reports to Certificateholders and Noteholders.

SECTION 4.14

Appointment of Subservicer.  The Servicer may at any time appoint a subservicer to perform all or any portion of its obligations as Servicer hereunder; provided, however, that the Servicer shall remain obligated and be liable to the Issuer, the Owner Trustee, the Indenture Trustee, the Indenture Administrator, the Certificateholders and the Noteholders for the servicing and administering of the Receivables in accordance with the provisions hereof without diminution of such obligation and liability by virtue of the appointment of such subservicer and to the same extent and under the same terms and conditions as if the Servicer alone were servicing and administering the Receivables.  The fees and expenses of the subservicer shall be as agreed between the Servicer and its subservicer from time to time and none of the Issuer, the Owner Trustee, the Indenture Trustee, the Indenture Administrator, the Certificateholders or the Noteholders shall have any responsibility therefor.

SECTION 4.15

Obligations under Basic Documents.  (a)  The Servicer shall perform all of its obligations under the Basic Documents.

(b)

The Servicer shall notify the Certificateholders in writing of any appointment of a successor Note Registrar, Certificate Paying Agent or Certificate Registrar within five Business Days thereof.

SECTION 4.16

Reports to the Rating Agencies.  The Servicer shall deliver to each Rating Agency a copy of all reports or notices furnished or delivered pursuant to this Article and a copy of any amendments, supplements or modifications to this Agreement and any other information reasonably requested by such Rating Agency to monitor this transaction.

ARTICLE V

Distributions;

Statements to Certificateholders and Noteholders

SECTION 5.1

Establishment of Trust Accounts.  

(a)

(i)  The Servicer, for the benefit of the Indenture Administrator as an agent of the Indenture Trustee and the Indenture Trustee on behalf of the Noteholders, the Owner Trustee on behalf of the Certificateholders, shall establish and maintain in the name of the Indenture Collateral Agent an Eligible Deposit Account (the “Collection Account”), bearing a designation clearly indicating that the funds deposited therein are held on behalf of the Noteholders, the Owner Trustee on behalf of the Certificateholders.  Investment Earnings on funds in the Collection Account (excluding Investment Earnings with respect to the two days prior to such Distribution Date) shall be paid to the Servicer.

(ii)

The Servicer, for the benefit of the Indenture Administrator as an agent of the Indenture Trustee, on behalf of the Noteholders, shall establish and maintain in the name of the Indenture Collateral Agent an Eligible Deposit Account (the “Note Distribution Account”), bearing a designation clearly indicating that the funds deposited therein are held on behalf of the Noteholders.  The Note Distribution Account shall initially be established with the Indenture Administrator.  

(iii)

The Servicer, for the benefit of the Indenture Administrator as an agent of the Indenture Trustee on behalf of the Noteholders, the Owner Trustee on behalf of the Certificateholders, shall establish and maintain in the name of the Indenture Collateral Agent a sub-account of the Note Distribution Account (the “Principal Distribution Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Noteholders.

(b)

Funds on deposit in the Collection Account, the Note Distribution Account and the Spread Account (collectively, the “Trust Accounts”) and the Certificate Distribution Account shall be invested by the Indenture Administrator with respect to Trust Accounts and by the Owner Trustee with respect to the Certificate Distribution Account (or any custodian with respect to funds on deposit in any such account) in Eligible Investments selected in writing by the Servicer (pursuant to standing instructions or otherwise); provided, however, it is understood and agreed that neither the Indenture Administrator nor the Owner Trustee shall be liable for any loss arising from such investment in Eligible Investments.  All such Eligible Investments shall be held by or on behalf of the Indenture Administrator or the Owner Trustee, as applicable, for the benefit of the Noteholders and/or the Certificateholders, as applicable.  Other than as permitted by the Rating Agencies, funds on deposit in the Collection Account, the Note Distribution Account and the Certificate Distribution Account shall be invested in Eligible Investments that will mature so that such funds will be available at the close of business on the Business Day immediately preceding the Distribution Date next succeeding the date of such investment.  Funds deposited in a Trust Account or the Certificate Distribution Account on the day immediately preceding a Distribution Date upon the maturity of any Eligible Investments are not required to be invested overnight.

(c)

(i)

The Indenture Collateral Agent shall possess all right, title and interest in all funds on deposit from time to time in the Trust Accounts and in all proceeds thereof (excluding all Investment Earnings on the Collection Account) and all such funds, investments, proceeds and income shall be part of the Owner Trust Estate.  Except as otherwise provided herein, the Trust Accounts shall be under the sole dominion and control of the Indenture Administrator or the Owner Trustee on behalf of the Indenture Collateral Agent for the benefit of the Noteholders and the Certificateholders, as the case may be.  If, at any time, any of the Trust Accounts or the Certificate Distribution Account ceases to be an Eligible Deposit Account, the Indenture Administrator (or the Servicer on its behalf) or the Owner Trustee, as applicable, shall within 10 Business Days (or such longer period as to which each Rating Agency may consent) establish a new Trust Account or a new Certificate Distribution Account, as applicable, as an Eligible Deposit Account and shall transfer any cash and/or any investments to such new Trust Account or a new Certificate Distribution Account, as applicable.  In connection with the foregoing, the Servicer agrees that, in the event that any of the Trust Accounts are not accounts with the Indenture Administrator, the Servicer shall notify a Trust Officer of the Indenture Trustee in writing promptly upon any of such Trust Accounts ceasing to be an Eligible Deposit Account.

(ii)

With respect to the Trust Account Property, the Indenture Administrator, and with respect to the Certificate Distribution Account, the Issuer agrees, by its respective acceptance hereof, that:

A.

any Trust Account Property or any property in the Certificate Distribution Account that is held in deposit accounts shall be held solely in Eligible Deposit Accounts subject to the penultimate sentence of Section 5.1(c)(i); and, except as otherwise provided herein, each such Eligible Deposit Account shall be subject to the exclusive custody and control of the Indenture Administrator with respect to the Trust Accounts and the Issuer with respect to the Certificate Distribution Account, and the Indenture Administrator or the Issuer, as applicable, shall have sole signature authority with respect thereto;

B.

any Trust Account Property shall be Delivered to the Indenture Administrator in accordance with the definition of “Delivery” and shall be held, pending maturity or disposition, solely by the Indenture Administrator or such other Person acting solely for the Indenture Administrator as required for Delivery; and

C.

in the event that the Indenture Administrator has or subsequently obtains by agreement, operation of law or otherwise a security interest in the Trust Accounts or any security entitlement credited thereto, the Indenture Administrator hereby agrees that such security interest shall be subordinate to the security interest of the Indenture Administrator.  The financial assets and other items deposited to the Trust Accounts will not be subject to deduction, set-off, banker’s lien, or any other right in favor of any person (except that the Indenture Administrator may set off the face amount of any checks which have been credited to the Trust Accounts but are subsequently returned unpaid because of uncollected or insufficient funds).

(d)

The Servicer shall have the power to instruct the Indenture Administrator, in writing, to make withdrawals and payments from the Trust Accounts for the purpose of permitting the Servicer or the Issuer to carry out its respective duties hereunder or permitting the Indenture Trustee and the Indenture Administrator to carry out their respective duties under the Indenture.

(e)

The Servicer shall on or prior to each Distribution Date transfer from the Collection Account to the Spread Account all amounts constituting a part of the Supplemental Servicing Fee not retained by the Servicer pursuant to Section 4.8.

SECTION 5.2

Collections.  (a)  The Servicer shall remit within two Business Days of receipt thereof to the Collection Account all payments by or on behalf of the Obligors with respect to the Receivables (other than Purchased Receivables) and all Net Liquidation Proceeds, both as collected during the Monthly Period less any payments owed thereon to the Servicer.  Notwithstanding the foregoing, for so long as (i) Franklin Capital remains the Servicer, (ii) no Servicer Default shall have occurred and be continuing, (iii) the Servicer’s (or if the Servicer is Franklin Capital, and the Representative has entered into an agreement, guaranty, surety or other arrangement backing Franklin Capital’s obligations acceptable to the Rating Agencies, then the Representative’s) short term obligations are rated at least “A-1” by Standard & Poor’s and “Prime-1” by Moody’s and (iv) the Rating Agency Condition shall have been satisfied (and any conditions or limitations imposed by the Rating Agencies in connection therewith are complied with), the Servicer may remit such collections with respect to the preceding calendar month to the Collection Account on the second Business Day immediately preceding the related Distribution Date.  If, however, one of the conditions in clauses (i) through (iv) of the preceding sentence is not satisfied, then the Servicer shall remit such collections with respect to the preceding calendar month to the Collection Account within two Business Days of receipt thereof or, if the Servicer has already held such collections for two Business Days, it shall remit such collections to the Collection Account immediately.  Pending deposit thereof into the Collection Account, the Servicer may use or invest collections at its own risk and for its own benefit and need not segregate collections from its own funds.  For purposes of this Article V the phrase “payments by or on behalf of Obligors” shall mean payments made with respect to the Receivables by Persons other than the Servicer or the Depositor.

(b)

The Servicer will be entitled to be reimbursed from amounts on deposit in the Collection Account with respect to a Monthly Period for amounts previously deposited in the Collection Account but later determined by the Servicer to have resulted from mistaken deposits or postings or checks returned for insufficient funds.  The amount to be reimbursed hereunder shall be paid to the Servicer on the related Distribution Date pursuant to Section 5.6(a)(i) upon certification by the Servicer of such amounts and the provision of such information to the Indenture Trustee and the Indenture Administrator.

SECTION 5.3

Application of Collections.  All collections for the Monthly Period shall be applied by the Servicer as follows:

With respect to each Receivable (other than a Purchased Receivable), payments by or on behalf of the Obligor (other than Supplemental Servicing Fees with respect to such Receivable, to the extent collected), shall be applied to interest and principal in accordance with the Simple Interest Method.

SECTION 5.4

Letter of Credit.  (a)  In the event that the Servicer’s Certificate with respect to any Determination Date shall state that a Letter of Credit Draw Amount is to be drawn on the Letter of Credit, then on the Letter of Credit Draw Amount Claim Date immediately preceding such Distribution Date, the Indenture Trustee, based solely on the information provided in the Servicer’s Certificate, shall deliver to the Indenture Collateral Agent, the Indenture Administrator, the Owner Trustee, the Letter of Credit Provider and the Servicer, by hand delivery or facsimile transmission, a written certificate (a “Letter of Credit Demand”) in accordance with the terms of the Letter of Credit specifying the Letter of Credit Draw Amount for such Distribution Date.

(b)

In the event that a Letter of Credit Draw Amount Claim Date occurs as a result of clause (2), (3) or (4) of the definition thereof then on the applicable Letter of Credit Draw Amount Claim Date, the Indenture Trustee shall deliver to the Indenture Collateral Agent, Indenture Administrator, the Owner Trustee, the Letter of Credit Provider and the Servicer, by hand delivery or facsimile transmission, a Letter of Credit Demand in accordance with the terms of the Letter of Credit specifying the applicable Letter of Credit Draw Amount.

(c)

Upon the occurrence of a Moody's Down-Grade or an S&P Down-Grade, the Servicer shall send a Moody's Down-Grade Notice or an S&P Down-Grade Notice within one Business Day, as applicable, to the Indenture Trustee.

(d)

Promptly upon learning (1) of a Moody's Down-Grade or an S&P Down-Grade, (2) that the Letter of Credit Provider is not extending the Letter of Credit Stated Termination Date or (3) that the Letter of Credit Provider seeks to recover reimbursement for increased costs, taxes or similar amounts, the Servicer shall seek to locate a replacement Letter of Credit Provider under the terms of the existing Letter of Credit. First, the Servicer shall solicit indications of interest from the entities that it understands are likely candidates to enter into an agreement identical to the Letter of Credit. Second, it shall confirm that any interested parties are Eligible Letter of Credit Banks. Third, it shall show the interested parties the Letter of Credit. Fourth, it shall request the Indenture Trustee to enter into a replacement Letter of Credit with one of the interested parties identified as an Eligible Letter of Credit Bank willing to agree to the identical terms as the Letter of Credit.

(e)

In the event that there is a Letter of Credit Reduction Amount with respect to any Distribution Date, the Indenture Trustee shall deliver to the Indenture Collateral Agent, the Indenture Administrator, the Owner Trustee, the Letter of Credit Provider and the Servicer, by hand delivery or facsimile transmission, a written certificate in accordance with the terms of the Letter of Credit specifying the applicable Letter of Credit Draw Amount.

(f)

Any Letter of Credit Demand shall be delivered by 1:00 p.m., New York City time, on the related Letter of Credit Draw Amount Claim Date.  The amounts distributed to the Indenture Administrator pursuant to (i) clause (1) of the definition of Letter of Credit Draw Amount under a Letter of Credit Demand shall be deposited by the Indenture Administrator into the Note Distribution Account and (ii) clause (2) of the definition of Letter of Credit Draw Amount under a Letter of Credit Demand shall be deposited by the Indenture Administrator into the Spread Account.

SECTION 5.5

Additional Deposits.  The Servicer, the Depositor, and the Representative, as applicable, shall deposit or cause to be deposited in the Collection Account on the second Business Day immediately prior to the Distribution Date following the date on which such obligations are due the aggregate Purchase Amount with respect to Purchased Receivables.  The Indenture Administrator, in accordance with the written instructions of the Servicer, shall, on each Distribution Date make a withdrawal from the Spread Account (i) first, in an amount equal to the Spread Account Transfer Amount and (ii) second, in an amount equal to the Spread Account Excess Amount for such Distribution Date.

SECTION 5.6

Distributions.  (a)  On each Distribution Date, the Indenture Administrator shall (based solely on the information contained in the Servicer’s Certificate delivered with respect to the related Determination Date) distribute from Available Funds the following amounts in the following order of priority:

(i)

to the Servicer, the Base Servicing Fee for the related Monthly Period, any amounts constituting the Base Servicing Fee for previous Monthly Periods which have not been paid and any amounts specified in Section 5.2(b), to the extent the Servicer has not reimbursed itself in respect of such amounts pursuant to Section 5.9;

(ii)

to the Letter of Credit Provider, the Letter of Credit Commitment Fee for such Distribution Date;

(iii)

to the Note Distribution Account, the Class A Noteholders’ Interest Distributable Amount;

(iv)

to the Principal Distribution Account, the First Priority Principal Distribution Amount;

(v)

to the Note Distribution Account, the Class B Noteholders’ Interest Distributable Amount;

(vi)

to the Principal Distribution Account, the Second Priority Principal Distribution Amount;

(vii)

to the Note Distribution Account, the Class C Noteholders’ Interest Distributable Amount;

(viii)

to the Principal Distribution Account, the Regular Principal Distribution Amount;

(ix)

to the Spread Account, the Spread Account Deposit Amount;

(x)

to the Servicer, the Additional Servicing Fee for the related Monthly Period and any overdue Additional Servicing Fees;

(xi)

to the Letter of Credit Provider, to the extent of available funds, all outstanding fees, expenses and indemnification not previously paid to it by the Servicer as well as any Repayment Amount, as defined in the Letter of Credit Reimbursement Agreement, not previously paid by the Representative;

(xii)

pro rata, to the Indenture Trustee, the Owner Trustee, the Indenture Collateral Agent and the Indenture Administrator to the extent of available funds, all outstanding fees, expenses and indemnification not previously paid to them by the Servicer; and

(xiii)

to the Certificate Distribution Account for distribution to the Certificateholders or their designees, any remaining funds.

provided, however, that, following an acceleration of the Notes pursuant to Section 5.2 of the Indenture (and the related declaration of acceleration has not been rescinded or annulled) or the receipt of Insolvency Proceeds, amounts will be distributed pursuant to Section 5.6 of the Indenture instead of pursuant to this Section.  Notwithstanding item (x) above, for so long as the Servicer and/or its affiliates are the owners of the Certificates, amounts to be remitted pursuant to such item (x) to the Certificate Distribution Account may instead be distributed directly to the Certificateholders by the Servicer.

(b)

In the event that the Collection Account is maintained with an institution other than the Indenture Collateral Agent, the Servicer shall instruct and cause such institution to make all deposits and distributions pursuant to Section 5.6(a) on the related Distribution Date.

SECTION 5.7

Spread Account.  (a) The Servicer, for the benefit of the Indenture Administrator as an agent of the Indenture Trustee, on behalf of the Noteholders and the Letter of Credit Provider, shall establish and maintain in the name of the Indenture Collateral Agent an Eligible Deposit Account (the “Spread Account”), bearing a designation clearly indicating that the funds deposited therein are held on behalf of the Noteholders and the Letter of Credit Provider.  The Spread Account shall initially be established with the Indenture Administrator as an agent of the Indenture Trustee.  

(b)

Investment earnings attributable to the Spread Account Property and proceeds therefrom shall be held by the Indenture Administrator in the Spread Account.

SECTION 5.8

Statements to Certificateholders and Noteholders.  On or prior to each Determination Date, the Servicer shall provide to the Indenture Trustee and the Indenture Administrator (with a copy to the Letter of Credit Provider and the Rating Agencies) for the Indenture Administrator to forward to each Noteholder of record, to each Paying Agent, if any, and to the Owner Trustee for the Owner Trustee to forward to each Certificateholder of record, a statement in the form of Exhibit C, which shall include the following information with respect to distributions on the related Distribution Date as to the Notes and the Certificates to the extent applicable:

(i)

the amount of such distribution allocable to principal of each Class of Notes;

(ii)

the amount of such distribution allocable to interest on or with respect to each Class of Notes;

(iii)

the Pool Balance as of the close of business on the last day of the preceding Monthly Period;

(iv)

the aggregate outstanding principal amount of each Class of the Notes and the Note Pool Factor for each such Class, after giving effect to payments allocated to principal reported under (i) above;

(v)

the amount of the Servicing Fee paid to the Servicer with respect to the related Monthly Period and/or due but unpaid with respect to such Monthly Period or prior Monthly Periods, as the case may be;

(vi)

the Noteholders’ Interest Carryover Shortfall;

(vii)

the amount of the aggregate Realized Losses, if any, for the related Monthly Period;

(viii)

the aggregate Purchase Amounts for Receivables, if any, that were repurchased in such period;

(ix)

the amounts which were collected by the Servicer;

(x)

the aggregate amount which was received by the Trust from the Servicer;

(xi)

delinquency information relating to Receivables which are 30, 60 or 90 days delinquent;

(xii)

the Spread Account Transfer Amount, the Spread Account Excess Amount and the amount on deposit in the Spread Account before the Distribution Date;

(xiii)

the Letter of Credit Draw Amount;

(xiv)

the Letter of Credit Commitment Fee paid to the Letter of Credit Provider;

(xv)

the Letter of Credit Available Amount;

(xvi)

the Letter of Credit Reduction Amount;

(xvii)

the Credit Enhancement Target Amount;

(xviii)

the Specified Spread Account Balance;

(xix)

the Spread Account Deposit Amount;

(xx)

the Total Required Payment;

(xxi)

the aggregate amount distributed to the Certificateholders; and

(xxii)

the amounts on deposit and the amounts required to be on deposit in the Spread Account on such Distribution Date, before and after giving effect to deposits thereto and withdrawals therefrom to be made in respect of such Distribution Date.

Each amount set forth pursuant to paragraph (i), (ii), (vi), (ix) and (x) above shall be expressed as a dollar amount per $1,000 of the initial principal balance of the Notes (or Class thereof).

On each Determination Date, the Servicer shall also provide to the Indenture Trustee and the Indenture Administrator the information necessary to fill out each Letter of Credit Demand.

SECTION 5.9

Net Deposits.  As an administrative convenience, unless the Servicer is required to remit collections within two Business Days of receipt thereof, the Servicer will be permitted to make the deposit of collections on the Receivables and Purchase Amounts for or with respect to each Monthly Period net of distributions to be made to the Servicer with respect to such Monthly Period.  The Servicer, however, will account to the Owner Trustee, the Indenture Trustee, the Indenture Administrator, the Indenture Collateral Agent, the Noteholders and the Certificateholders as if all deposits, distributions and transfers were made individually.

SECTION 5.10

Control of Trust Accounts and Spread Account.

(a)

The Indenture Administrator hereby expressly agrees with the Indenture Trustee and the Indenture Collateral Agent that all matters relating to the Trust Accounts (collectively, the “Controlled Accounts”) shall be governed by the laws of the State of New York.  Amounts held from time to time in the Trust Accounts will continue to be held by the Indenture Administrator for the benefit of the Indenture Collateral Agent, for the benefit of the Noteholders and the Certificateholders and, if applicable, the Letter of Credit Provider.  Citibank, N.A. hereby accepts such appointment as Indenture Administrator.  If at any time any of the Controlled Accounts are moved to another institution, which move shall only be allowed in accordance with Section 5.1(d) of this Agreement, such institution shall be appointed the Indenture Administrator.

(b)

With respect to the Trust Account Property credited to the Trust Accounts or any property credited to the Spread Account (the “Spread Account Property” and together with the Trust Account Property, the “Controlled Property”), the Indenture Administrator agrees that:

(i)

with respect to any Controlled Property that is held in deposit accounts, each such deposit account shall be subject to the exclusive custody and control of the Indenture Administrator, and the Indenture Administrator shall have sole signature authority with respect thereto;

(ii)

the sole assets permitted in the Controlled Accounts shall be those as the Indenture Administrator agrees to treat as Financial Assets; and

(iii)

any such Controlled Property that is, or is treated as, a Financial Asset shall be physically delivered (accompanied by any required endorsements) to, or credited to an account in the name of, the Indenture Administrator or other eligible institution maintaining any Controlled Account in accordance with the Indenture Administrator’s customary procedures such that the Indenture Administrator or such other institution establishes a Security Entitlement in favor of the Indenture Collateral Agent with respect thereto over which the Indenture Administrator or such other institution has Control.

(c)

The Indenture Administrator hereby confirms that (i) each Controlled Account is an account to which Financial Assets are or may be credited, and the Indenture Administrator shall, subject to the terms of this Agreement, treat the Indenture Trustee and the Indenture Collateral Agent as entitled to exercise the rights that comprise any Financial Asset credited to any Controlled Account, (ii) all Controlled Property in respect of any Controlled Account will be promptly credited by the Indenture Administrator to such account, and (iii) all securities or other property underlying any Financial Assets credited to any Controlled Account shall be registered in the name of the Indenture Administrator, endorsed to the Indenture Administrator or in blank or credited to another securities account maintained in the name of the Indenture Administrator and in no case will any Financial Asset credited to any Controlled Account be registered in the name of the Servicer, the Depositor or the Issuer, payable to the order of the Servicer, the Depositor or the Issuer or specially endorsed to the Servicer, the Depositor or the Issuer, except to the extent the foregoing have been specially endorsed to the Indenture Administrator or in blank.

(d)

The Indenture Administrator hereby agrees that each item of property (whether investment property, security, instrument, any Eligible Investment or cash) credited to any Controlled Account shall be treated as a Financial Asset.

(e)

If at any time the Indenture Administrator shall receive an Entitlement Order from the Indenture Trustee or the Indenture Collateral Agent, the Indenture Administrator shall comply with such Entitlement Order without further consent by the Servicer, the Depositor, the Issuer or any other Person.

(f)

In the event that the Indenture Administrator has obtained or subsequently obtains by agreement, operation of law or otherwise a security interest in any Controlled Account or any Financial Asset credited thereto, the Indenture Administrator hereby agrees that such security interest shall be subordinate to the security interest of the Indenture Trustee.  The Financial Assets credited to the Controlled Accounts will not be subject to deduction, setoff, banker’s lien, or any other right in favor of any Person other than the Indenture Trustee and the Indenture Collateral Agent (except that the Indenture Administrator may setoff (i) all amounts due to it in respect of its customary fees and expenses for the routine maintenance and operation of the Controlled Accounts, and (ii) the face amount of any checks which have been credited to any Controlled Account but are subsequently returned unpaid because of uncollected or insufficient funds).

(g)

There are no other agreements entered into between the Indenture Administrator in such capacity and the Servicer, the Depositor or the Issuer with respect to any Controlled Account.  In the event of any conflict with respect to any Controlled Account between this Agreement (or any provision of this Agreement) and any other agreement now existing or hereafter entered into, the terms of this Agreement shall prevail.

(h)

The rights and powers granted under the Indenture and herein to the Indenture Trustee and the Indenture Collateral Agent have been granted in order to perfect its security interest in the Controlled Accounts and the Security Entitlements to the Financial Assets credited thereto, and are powers coupled with an interest and will neither be affected by the bankruptcy of the Servicer, the Depositor, or the Issuer nor by the lapse of time.  The obligations of the Indenture Administrator hereunder shall continue in effect until the security interest of the Indenture Trustee and the Indenture Collateral Agent in the Controlled Accounts, and in such Security Entitlements, has been terminated pursuant to the terms of this Agreement and the Indenture Trustee or the Indenture Collateral Agent has notified the Indenture Administrator of such termination in writing.

(i)

Notwithstanding anything else contained herein, the Depositor and the Issuer agree that the Controlled Accounts will be established only with the Indenture Administrator or another institution meeting the requirements of this Section, which by acceptance of its appointment as Indenture Administrator agrees substantially as follows:  (1) it will comply with Entitlement Orders related to the Controlled Accounts issued by the Indenture Collateral Agent without further consent by the Servicer, the Depositor, or the Issuer; (2) until discharge of the Indenture, it will not enter into any other agreement related to such accounts pursuant to which it agrees to comply with Entitlement Orders of any Person other than the Indenture Collateral Agent; and (3) all assets delivered or credited to it in connection with such accounts and all investments thereof will be promptly credited to the applicable account.

(j)

None of the Indenture Administrator or any director, officer, employee or agent of the Indenture Administrator shall be under any liability to the Indenture Collateral Agent or the Noteholders or the Certificateholders for any action taken, or not taken, in good faith pursuant to this Agreement, or for errors in judgment; provided, however, that this provision shall not protect the Indenture Administrator against any liability to the Indenture Collateral Agent or the Noteholders or the Certificateholders which would otherwise be imposed by reason of the Indenture Administrator’s willful misconduct, bad faith or negligence in the performance of its obligations or duties hereunder.  The Indenture Administrator and any director, officer, employee or agent of the Indenture Administrator may rely in good faith on any document of any kind which, prima facie, is properly executed and submitted by any Person respecting any matters arising hereunder.  The Indenture Administrator shall be under no duty to inquire into or investigate the validity, accuracy or content of such document.  The Issuer shall indemnify the Indenture Administrator for and hold it harmless against any loss, liability or expense arising out of or in connection with this Agreement and carrying out its duties hereunder, including the costs and expenses of defending itself against any claim of liability, except in those cases where the Indenture Administrator has been guilty of willful misconduct, bad faith or negligence.  The foregoing indemnification shall survive any termination of this Agreement.

ARTICLE VI

The Depositor

SECTION 6.1

Representations of the Depositor.  The Depositor makes the following representations.  The representations speak as of the execution and delivery of this Agreement and as of the Closing Date, (unless another date or time period is otherwise specified or indicated in the particular representation or warranty), and shall survive the sale to the Issuer and the pledge thereof to the Indenture Collateral Agent pursuant to the Indenture.

(a)

Organization and Good Standing.  The Depositor is duly organized and validly existing as a Delaware limited liability company with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted, and had at all relevant times, and has, the power, authority and legal right to acquire and own the Receivables.

(b)

Due Qualification.  The Depositor is duly qualified to do business as a limited liability company in good standing, and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of property, including the Receivables, or the conduct of its business shall require such qualifications.

(c)

Power and Authority of the Depositor.  The Depositor has the power and authority to execute and deliver this Agreement and to perform its obligations under each of the Basic Documents to which the Depositor is a party; the Depositor has full power and authority to sell and assign the property to be sold and assigned to and deposited with the Issuer and the Depositor has duly authorized such sale and assignment to the Issuer by all necessary action; and the execution, delivery and performance of each of the Basic Documents to which the Depositor is a party has been duly authorized by the Depositor by all necessary action.

(d)

Binding Obligation.  This Agreement and each of the Basic Documents to which the Depositor is a party constitute legal, valid and binding obligations of the Depositor, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and similar laws now or hereafter in effect relating to creditors’ rights generally and subject to general principles of equity (whether applied in a proceeding at law or in equity).

(e)

No Violation.  The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time or both) a default under, the certificate of formation or limited liability company agreement of the Depositor, or any indenture, agreement or other instrument to which the Depositor is a party or by which it is bound; nor result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than pursuant to the Basic Documents); nor violate any law or, to the best of its knowledge, any order, rule or regulation applicable to the Depositor of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties.

(f)

No Proceedings.  There are no proceedings or investigations pending against the Depositor or, to its best knowledge, threatened against the Depositor, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties:  (i) asserting the invalidity of this Agreement or any of the Basic Documents, the Notes or the Certificates, (ii) seeking to prevent the issuance of the Notes or the Certificates or the consummation of any of the transactions contemplated by this Agreement or any of the Basic Documents, (iii) seeking any determination or ruling that could reasonably be expected to have a material and adverse effect on the performance by the Depositor of its obligations under, or the validity or enforceability of, the Basic Documents, the Notes or the Certificates or (iv) that might adversely affect the federal income tax attributes of the Issuer, the Notes or the Certificates.

(g)

All Consents.  All authorizations, consents, orders or approvals of or registrations or declarations with any court, regulatory body, administrative agency or other government instrumentality required to be obtained, effected or given by the Depositor in connection with the execution and delivery by the Depositor of this Agreement or any of the Basic Documents to which it is a party and the performance by the Depositor of the transactions contemplated by this Agreement or any of the Basic Documents to which it is a party, have been duly obtained, effected or given and are in full force and effect, except where failure to obtain the same would not have a material and adverse effect upon the rights of the Issuer, the Noteholders or the Certificateholders.

(h)

Chief Executive Office.  The chief executive office of the Depositor is at 47 West 200 South, Suite 500, Salt Lake City, Utah 84101.

SECTION 6.2

Corporate Existence.  (a)  During the term of this Agreement, the Depositor will keep in full force and effect its existence, rights and franchises as a limited liability company under the laws of the jurisdiction of its formation and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement, the Basic Documents and each other instrument or agreement necessary or appropriate to the proper administration of this Agreement and the transactions contemplated hereby.

(b)

During the term of this Agreement, the Depositor shall observe the applicable legal requirements for the recognition of the Depositor as a legal entity separate and apart from its Affiliates, including as follows:

(i)

the Depositor shall maintain records and books of account separate from those of its Affiliates;

(ii)

except as otherwise provided in this Agreement, the Depositor shall not commingle its assets and funds with those of its Affiliates;

(iii)

the Depositor shall hold such appropriate meetings of its members as are necessary to authorize all the Depositor’s actions required by law to be authorized by the members, shall keep minutes of such meetings and of meetings of its stockholder(s) and observe all other customary formalities (and any successor Depositor not a corporation shall observe similar procedures in accordance with its governing documents and applicable law);

(iv)

the Depositor shall at all times hold itself out to the public under the Depositor’s own name as a legal entity separate and distinct from its Affiliates; and

(v)

all transactions and dealings between the Depositor and its Affiliates will be conducted on an arm’s-length basis.

SECTION 6.3

Liability of Depositor; Indemnities.  (a) The Depositor shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Depositor under this Agreement.  Notwithstanding anything set forth in this Section 6.3, the Depositor shall only be required to indemnify the parties listed below to the extent of any Available Funds remaining following distributions made pursuant to clauses (i) through (xi) of Section 5.6(a) (the “Depositor Indemnification Cap”); provided, however, that if the aggregate amount of indemnification for which the Depositor would otherwise be required to indemnify the parties listed below pursuant to this Section 6.3 exceeds the Depositor Indemnification Cap, the Servicer shall indemnify the parties listed below for the difference.  In addition, the indemnification provided herein shall not constitute a claim (as defined in Section 101(5) of the Code) and recourse against the Depositor.

(a)

The Depositor shall indemnify, defend and hold harmless the Issuer, the Owner Trustee, the Trust, the Letter of Credit Provider, the Indenture Trustee, the Indenture Administrator and the Indenture Collateral Agent from and against any taxes that may at any time be asserted against any such Person with respect to the transactions contemplated in this Agreement and any of the Basic Documents (except any income taxes arising out of fees paid to any of them and except any taxes to which the Owner Trustee, the Indenture Administrator or the Indenture Trustee may otherwise be subject to), including any sales, gross receipts, general corporation, tangible personal property, privilege or license taxes (but, in the case of the Issuer, not including any taxes asserted with respect to, federal or other income taxes arising out of distributions on the Certificates and the Notes) and costs and expenses in defending against the same.

(b)

The Depositor shall indemnify, defend and hold harmless the Issuer, the Owner Trustee, the Indenture Trustee, the Indenture Administrator, the Letter of Credit Provider, the Indenture Collateral Agent, and the Noteholders from and against any loss, liability or expense incurred by reason of (i) the Depositor’s willful misfeasance, bad faith or negligence in the performance of its duties under this Agreement or the other Basic Documents, or by reason of reckless disregard of its obligations and duties under this Agreement and (ii) the Depositor’s or the Issuer’s violation of Federal or state securities laws in connection with the offering and sale of the Notes.

(c)

The Depositor shall indemnify, defend and hold harmless the Owner Trustee and its officers, directors, employees and agents from and against any and all costs, expenses, losses, claims, damages and liabilities arising out of, or incurred in connection with the acceptance or performance of the trusts and duties set forth herein and in the Basic Documents except to the extent that such cost, expense, loss, claim, damage or liability shall be due to the willful misfeasance, bad faith or negligence (except for errors in judgment) of the Owner Trustee.

Indemnification under this Section shall survive the resignation or removal of the Owner Trustee, the Indenture Trustee, the Letter of Credit Provider, Indenture Administrator or the Indenture Collateral Agent and the termination of this Agreement, the Indenture or the Trust Agreement, as applicable, and shall include reasonable fees and expenses of counsel and other expenses of litigation.  If the Depositor shall have made any indemnity payments pursuant to this Section and the Person to or on behalf of whom such payments are made thereafter shall collect any of such amounts from others, such Person shall promptly repay such amounts to the Depositor, without interest.

SECTION 6.4

Merger or Consolidation of, or Assumption of the Obligations of, the Depositor.  Any Person (a) into which the Depositor may be merged or consolidated, (b) which may result from any merger or consolidation to which the Depositor shall be a party or (c) which may succeed to the properties and assets of the Depositor substantially as a whole, which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Depositor under this Agreement, shall be the successor to the Depositor hereunder without the execution or filing of any document or any further act by any of the parties to this Agreement; provided, however, that (i) immediately after giving effect to such transaction, no representation or warranty made pursuant to Section 3.1 shall have been breached and no Servicer Default, and no event which, after notice or lapse of time, or both, would become a Servicer Default shall have happened and be continuing, (ii) the Depositor shall have delivered to the Owner Trustee, the Indenture Trustee, the Letter of Credit Provider and the Indenture Administrator an Officer’s Certificate and an Opinion of Counsel each stating that such consolidation, merger or succession and such agreement of assumption comply with this Section and that all conditions precedent, if any, provided for in this Agreement relating to such transaction have been complied with, (iii) the Rating Agency Condition shall have been satisfied with respect to such transaction and (iv) the Depositor shall have delivered to the Owner Trustee, the Indenture Trustee, the Letter of Credit Provider and the Indenture Administrator an Opinion of Counsel stating that, in the opinion of such counsel, either (A) all financing statements and continuation statements and amendments thereto have been executed and filed that are necessary fully to preserve and protect the interest of the Owner Trustee and the Indenture Trustee, respectively, in the Receivables and reciting the details of such filings or (B) no such action shall be necessary to preserve and protect such interest.  Notwithstanding anything herein to the contrary, the execution of the foregoing agreement of assumption and compliance with clauses (i), (ii), (iii) and (iv) above shall be conditions to the consummation of the transactions referred to in clauses (a), (b) or (c) above.

SECTION 6.5

Limitation on Liability of Depositor and Others.  The Depositor and any member or officer or employee or agent of the Depositor may rely in good faith on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person respecting any matters arising under any Basic Document.  The Depositor shall not be under any obligation to appear in, prosecute or defend any legal action that shall not be incidental to its obligations under this Agreement, and that in its opinion may involve it in any expense or liability.

SECTION 6.6

Depositor May Own Certificates or Notes.  The Depositor and any Affiliate thereof may in its individual or any other capacity become the owner or pledgee of Certificates or Notes with the same rights as it would have if it were not the Depositor or an Affiliate thereof, except as expressly provided herein or in any Basic Document.  Notes or Certificates so owned by the Depositor or such Affiliate shall have an equal and proportionate benefit under the provisions of the Basic Documents, without preference, priority, or distinction as among all of the Notes or Certificates; provided, however, that any Notes or Certificates owned by the Depositor or any Affiliate thereof, during the time such Notes or Certificates are owned by them, shall be without voting rights for any purpose set forth in the Basic Documents.  The Depositor shall notify the Owner Trustee, the Indenture Trustee, and the Indenture Administrator promptly after it or any of its Affiliates become the owner of a Certificate or a Note.  The Depositor hereby notifies the Owner Trustee that immediately following the issuance of the Certificates it will own all the Certificates.

ARTICLE VII

The Servicer

SECTION 7.1

Representations of Servicer.  Franklin Capital, in its capacity as Servicer on which the Issuer is deemed to have relied in acquiring the Receivables.  The representations speak as of the execution and delivery of this Agreement and as of the Closing Date and shall survive the sale of the Receivables to the Issuer and the pledge thereof to the Indenture Collateral Agent pursuant to the Indenture.

(a)

Organization and Good Standing.  Franklin Capital is duly organized and validly existing as a corporation in good standing under the laws of the state of its incorporation, with the corporate power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted, and had at all relevant times, and has, the power, authority and legal right to acquire, own, sell and service the Receivables and to hold the Receivable Files as custodian.

(b)

Due Qualification.  Franklin Capital is duly qualified to do business and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of property or the conduct of its business (including the servicing of the Receivables as required by this Agreement) shall require such qualifications, and was duly qualified and had all licenses in all relevant jurisdictions required for the origination of the Receivables.

(c)

Power and Authority of the Servicer.  Franklin Capital has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and the execution, delivery and performance of this Agreement have been duly authorized by Franklin Capital by all necessary corporate action.  All authorizations, consents, orders or approvals of or registrations or declarations with any court, regulatory body, administrative agency or other government instrumentality required to be obtained, effected or given by Franklin Capital in connection with the execution and delivery by the Servicer of this Agreement or any of the Basic Documents to which it is a party and the performance by the Servicer of the transactions contemplated by this Agreement or any of the Basic Documents to which it is a party, have been duly obtained, effected or given and are in full force and effect, except where failure to obtain the same would not have a material adverse effect upon the rights of the Issuer or the Noteholders.

(d)

Binding Obligation.  This Agreement constitutes a legal, valid and binding obligation of Franklin Capital, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and similar laws now or hereafter in effect relating to creditors’ rights generally, and subject to general principles of equity (whether applied in a proceeding at law or in equity).

(e)

No Violation.  The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under the articles of incorporation or by-laws of Franklin Capital, or any indenture, agreement or other instrument to which Franklin Capital is a party or by which it shall be bound; or result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than pursuant to the Basic Documents); or violate any law or, to the best of Franklin Capital’s knowledge, any order, rule or regulation applicable to Franklin Capital of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over Franklin Capital or its properties.

(f)

No Proceedings.  There are no proceedings or investigations pending against Franklin Capital, or, to its best knowledge, threatened against Franklin Capital, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over Franklin Capital or its properties:  (i) asserting the invalidity of this Agreement or any of the Basic Documents or the Notes, (ii) seeking to prevent the issuance of the Notes or the consummation of any of the transactions contemplated by this Agreement or any of the Basic Documents, (iii) seeking any determination or ruling that might materially and adversely affect the performance by Franklin Capital of its obligations under, or the validity or enforceability of this Agreement or any of the Basic Documents or the Notes or (iv) relating to Franklin Capital and which might adversely affect the federal income tax or ERISA attributes of the Issuer or the Notes.

SECTION 7.2

Indemnities of Servicer.  (a)  The Servicer shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Servicer under this Agreement and the representations made by the Servicer herein.

(b)

The Servicer shall defend, indemnify and hold harmless the Owner Trustee, the Indenture Trustee, the Trust, the Letter of Credit Provider, the Indenture Collateral Agent, the Indenture Administrator, the Noteholders and the Depositor from and against any and all costs, expenses, losses, damages, claims, and liabilities, arising out of or resulting from the use, ownership or operation by the Servicer or any Affiliate thereof of a Financed Vehicle.

(c)

The Servicer shall indemnify, defend and hold harmless the Owner Trustee, the Indenture Trustee, the Depositor, the Trust, the Indenture Collateral Agent, the Letter of Credit Provider, the Indenture Administrator, their respective officers, directors, agents and employees and the Noteholders from and against any and all costs, expenses, losses, claims, damages, and liabilities to the extent that such costs, expenses, losses, claims, damages, or liabilities arose out of, or were imposed upon any such Person through, the negligence, willful misfeasance or bad faith of the Servicer in the performance of its duties under this Agreement or the other Basic Documents or by reason of reckless disregard of its obligations and duties under this Agreement.

(d)

The Servicer shall indemnify, defend and hold harmless the Owner Trustee, the Indenture Trustee, the Letter of Credit Provider, the Indenture Administrator and the Indenture Collateral Agent and their officers, directors, employees and agents from and against all costs, expenses, losses, claims, damages and liabilities arising out of or incurred in connection with the acceptance or performance of the trusts and duties herein, the Indenture and in the Trust Agreement, except to the extent that such costs, expenses, losses, claims, damages or liabilities shall be due to the willful misfeasance, bad faith or negligence (except for errors in judgment) of the Owner Trustee, the Letter of Credit Provider, the Indenture Trustee, the Indenture Administrator or the Indenture Collateral Agent, as applicable.

(e)

The Servicer shall pay, reimburse and indemnify the Indenture Trustee and Indenture Collateral Agent in accordance with Section 6.7 of the Indenture.

(f)

The Servicer shall pay, reimburse and indemnify the Indenture Administrator in accordance with Section 6.27 of the Indenture.

For purposes of this Section, in the event of the termination of the rights and obligations of Franklin Capital (or any successor thereto pursuant to Section 7.3) as Servicer pursuant to Section 8.1, or a resignation by such Servicer pursuant to this Agreement, such Servicer shall be deemed to be the Servicer pending appointment of a successor Servicer (other than the Indenture Trustee) pursuant to Section 8.2.

Indemnification under this Section shall survive the resignation or removal of the Owner Trustee, the Indenture Administrator or the Indenture Trustee or the termination of this Agreement, the Indenture or the Trust Agreement, as applicable, and shall include reasonable fees and expenses of counsel and expenses of litigation.  If the Servicer shall have made any indemnity payments pursuant to this Section and the recipient thereafter collects any of such amounts from others, such Person shall promptly repay such amounts to the Servicer, without interest.

SECTION 7.3

Merger or Consolidation of, or Assumption of the Obligations of, the Servicer.  Any Person (a) into which the Servicer may be merged or consolidated, (b) which may result from any merger or consolidation to which the Servicer shall be a party, (c) which may succeed to the properties and assets of the Servicer, substantially as a whole or (d) with respect to the Servicer’s obligations hereunder, which is a corporation 50% or more of the voting stock of which is owned, directly or indirectly, by Franklin Resources, which Person executed an agreement of assumption to perform every obligation of the Servicer hereunder shall be the successor to the Servicer under this Agreement without further act on the part of any of the parties to this Agreement; provided, however, that (i) immediately after giving effect to such transaction, no Servicer Default and no event which, after notice or lapse of time, or both, would become a Servicer Default shall have happened and be continuing, (ii) the Servicer shall have delivered to the Owner Trustee, the Letter of Credit Provider, the Indenture Trustee and the Indenture Administrator an Officer’s Certificate and an Opinion of Counsel each stating that such consolidation, merger or succession and such agreement of assumption comply with this Section and that all conditions precedent provided for in this Agreement relating to such transaction have been complied with, (iii) the Rating Agency Condition shall have been satisfied with respect to such transaction and (iv) the Servicer shall have delivered to the Owner Trustee, the Letter of Credit Provider, the Indenture Trustee and the Indenture Administrator an Opinion of Counsel stating that, in the opinion of such counsel, either (A) all financing statements and continuation statements and amendments thereto have been executed and filed that are necessary fully to preserve and protect the interest of the Owner Trustee and the Indenture Collateral Agent, respectively, in the Receivables and reciting the details of such filings or (B) no such action shall be necessary to preserve and protect such interest.  Notwithstanding anything herein to the contrary, the execution of the foregoing agreement of assumption and compliance with clauses (i), (ii), (iii) and (iv) above shall be conditions to the consummation of the transactions referred to in clause (a), (b), (c) or (d) above.

SECTION 7.4

Limitation on Liability of the Servicer and Others.  Neither the Servicer nor any of its directors, officers, employees or agents shall be under any liability to the Issuer, the Noteholders or the Certificateholders, except as provided under this Agreement, for any action taken or for refraining from the taking of any action pursuant to this Agreement or for errors in judgment; provided, however, that this provision shall not protect the Servicer or any such person against any liability that would otherwise be imposed by reason of willful misfeasance, bad faith or negligence (except for errors in judgment) in the performance of duties or by reason of reckless disregard of obligations and duties under this Agreement.  The Servicer or any subservicer and any of their respective directors, officers, employees or agents may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising under this Agreement.

Except as provided in this Agreement, the Servicer shall not be under any obligation to appear in, prosecute or defend any legal action that shall not be incidental to its duties to service the Receivables in accordance with this Agreement, and that in its opinion may involve it in any expense or liability; provided, however, that the Servicer, may (but shall not be required to) undertake any reasonable action that it may deem necessary or desirable to protect the interests of the Certificateholders under the Trust Agreement and the Noteholders under the Indenture.

SECTION 7.5

Servicer Not To Resign.  Subject to the provisions of Section 7.3, the Servicer may not resign from the obligations and duties hereby imposed on it as Servicer under this Agreement or the other Basic Documents except upon determination that by reason of a change in legal requirements the performance of its duties under this Agreement would cause it to be in violation of such legal requirements in a manner which would result in a material adverse effect on the Servicer does not elect to waive the obligations of the Servicer to perform the duties which render it legally unable to act or does not elect to delegate those duties to another Person.  Notice of any such determination permitting the resignation of the Servicer shall be communicated to the Owner Trustee, the Indenture Trustee and the Indenture Administrator at the earliest practicable time (and, if such communication is not in writing, shall be confirmed in writing at the earliest practicable time) and any such determination shall be evidenced by an Opinion of Counsel to such effect delivered to and satisfactory to the Owner Trustee, the Indenture Trustee and the Indenture Administrator concurrently with or promptly after such notice.  No such resignation of the Servicer shall become effective until a successor servicer shall have assumed the responsibilities and obligations of Franklin Capital in accordance with Section 8.2 of this Agreement.

ARTICLE VIIA

The Representative

SECTION 7A.1  Representations of Franklin Resources.  Franklin Resources makes the following representations on which the Issuer is deemed to have relied in acquiring the Receivables.  The representations speak as of the execution and delivery of this Agreement and as of the Closing Date and shall survive the sale of the Receivables to the Issuer and the pledge thereof to the Indenture Collateral Agent pursuant to the Indenture.

(a)

Organization and Good Standing. Franklin Resources is duly organized and validly existing as a corporation in good standing under the laws of the state of its incorporation, with the corporate power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted.

(b)

Due Qualification.  Franklin Resources is duly qualified to do business and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of property or the conduct of its business shall require such qualifications and the failure to do so would have a material adverse effect upon the business or the ownership or lease of its property.

(c)

Power and Authority.  Franklin Resources has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and the execution, delivery and performance of this Agreement have been duly authorized by Franklin Resources by all necessary corporate action.  All authorizations, consents, orders or approvals of or registrations or declarations with any court, regulatory body, administrative agency or other government instrumentality required to be obtained, effected or given by Franklin Resources in connection with the execution and delivery by Franklin Resources of this Agreement or any of the Basic Documents to which it is a party and the performance by Franklin Resources of the transactions contemplated by this Agreement or any of the Basic Documents to which it is a party, have been duly obtained, effected or given and are in full force and effect, except where failure to obtain the same would not have a material adverse effect upon the rights of the Issuer or the Noteholders.

(d)

Binding Obligation.  This Agreement constitutes a legal, valid and binding obligation of Franklin Resources, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and similar laws now or hereafter in effect relating to creditors’ rights generally, and subject to general principles of equity (whether applied in a proceeding at law or in equity).

(e)

No Violation.  The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under the articles of incorporation or by-laws of Franklin Resources, or any indenture, agreement or other instrument to which Franklin Resources is a party or by which it shall be bound; or result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than pursuant to the Basic Documents); or violate any law or, to the best of Franklin Resources’ knowledge, any order, rule or regulation applicable to Franklin Resources of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over Franklin Resources or its properties.

(f)

No Proceedings.  There are no proceedings or investigations pending against Franklin Resources or, to its best knowledge, threatened against Franklin Resources, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over Franklin Resources or its properties:  (i) asserting the invalidity of this Agreement or any of the Basic Documents or the Notes, (ii) seeking to prevent the issuance of the Notes or the consummation of any of the transactions contemplated by this Agreement or any of the Basic Documents, (iii) seeking any determination or ruling that might materially and adversely affect the performance by Franklin Resources of its obligations under, or the validity or enforceability of, this Agreement or any of the Basic Documents or the Notes or (iv) relating to Franklin Resources and which might adversely affect the federal income tax or ERISA attributes of the Issuer or the Notes.

SECTION 7A.2  Limitation on Liability of Franklin Resources and Others.

  Neither Franklin Resources nor any of its directors, officers, employees or agents shall be under any liability to the Issuer, the Noteholders or the Certificateholders, except as provided under this Agreement, for any action taken or for refraining from the taking of any action pursuant to this Agreement or for errors in judgment; provided, however, that this provision shall not protect Franklin Resources or any such person against any liability that would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of duties or by reason of reckless disregard of obligations and duties under this Agreement. Franklin Resources and any of its directors, officers, employees or agents may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising under this Agreement.

ARTICLE VIII

Default

SECTION 8.1

Servicer Default.  If any one of the following events (a “Servicer Default”) shall occur and be continuing:

(a)

Any failure by the Servicer to deliver to the Owner Trustee or the Indenture Trustee for deposit in any of the Trust Accounts or the Certificate Distribution Account any payment required to be so delivered under the terms of the Notes, the Certificates or this Agreement that shall continue unremedied for a period of 3 Business Days after written notice of such failure is received by the Servicer from the Letter of Credit Provider, the Owner Trustee or the Indenture Trustee or after discovery of such failure by an Officer of the Servicer; or

(b)

Failure by the Servicer or the Depositor (as the case may be) duly to observe or to perform in any material respect any other covenants or agreements of the Servicer or the Depositor (as the case may be) set forth in the Notes, the Certificates, this Agreement or any other Basic Document, which failure shall (i) materially and adversely affect the rights of the Certificateholders or the Noteholders and (ii) continue unremedied for a period of 30 days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given (A) to the Servicer by the Owner Trustee or the Indenture Trustee or (B) to the Servicer, the Owner Trustee and the Indenture Trustee by the Holders of Notes evidencing not less than 25% of the Outstanding Amount of the Notes of the Controlling Class as applicable; or

(c)

An Insolvency Event occurs with respect to the Servicer or any successor;

(d)

any representation, warranty or statement of the Servicer, made in this Agreement or any certificate, report or other writing delivered by the Servicer prepared based on      information provided by the Servicer pursuant hereto shall prove to be incorrect in any material respect as of the time when the same shall have been made (excluding, however, any representation or warranty to which Section 4.6 shall be applicable so long as the Servicer shall be in compliance with Section 4.7), and the incorrectness of such representation, warranty or statement has a material adverse effect on the Noteholders and, within 30 days after written notice thereof shall have been given to the Servicer by the Indenture Trustee or the Owner Trustee or by the Holders of Notes evidencing not less than 25% of the Outstanding Amount of the Notes of the Controlling Class, the circumstance or condition in respect of which such representation, warranty or statement was incorrect shall not have been eliminated or otherwise cured;

(e)

any failure by the Servicer to deliver to the Indenture Trustee or the Owner Trustee a report in accordance with Section 4.9 by the fifth Business Day after the date that the report is required to be delivered or the Servicer shall have defaulted in the due observance of any provision of Section 7.3 (other than failure to enter into an assumption agreement under Section 7.3, which is a Servicer Default only if such failure continues for ten Business Days);

then, and in each and every case, any of the Indenture Trustee or the Holders of Notes evidencing not less than a majority of the Outstanding Amount of the Notes of the Controlling Class then outstanding or Holders of Certificates of Percentage Interests greater than 50% in the case of any default that does not adversely affect the Indenture Trustee or the Noteholders, in any case by notice given in writing to the Servicer may terminate all of the rights and obligations of the Servicer under this Agreement. For the purposes of Section 8.1(b), any determination of an adverse effect on the interest of the Certificateholders or the Noteholders pursuant to Section 8.1(b) shall be made without consideration of the availability of funds under the Letter of Credit.  On or after the receipt by the Servicer of such written notice, all authority, power, obligations and responsibilities of the Servicer under this Agreement, whether with respect to the Notes, the Certificates or the Receivables or otherwise, automatically shall pass to, be vested in and become obligations and responsibilities of the Indenture Administrator in its capacity as successor Servicer or another entity appointed by the Indenture Administrator and acceptable to the Rating Agencies; provided, however, that the Indenture Administrator shall have no liability with respect to any obligation which was required to be performed by the prior Servicer prior to the date that the Indenture Administrator becomes the Servicer or any claim of a third party based on any alleged action or inaction of the prior Servicer.  The Indenture Administrator is authorized and empowered by this Agreement, as successor Servicer to execute and deliver, on behalf of the prior Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement of the Receivables and the other Trust Property and related documents, to show the Indenture Trustee as lienholder or secured party on the related Lien Certificates, or otherwise.  The prior Servicer agrees to cooperate with the successor Servicer in effecting the termination of the responsibilities and rights of the prior Servicer under this Agreement, including, without limitation, the transfer to the successor Servicer for administration by it of all cash amounts that shall at the time be held by the prior Servicer for deposit, or have been deposited by the prior Servicer, in the Collection Account or thereafter received with respect to the Receivables and the delivery to the successor Servicer of all Receivable Files, records and a computer tape in readable form containing all information necessary to enable the successor Servicer to service the Receivables and the other Trust Property.  The terminated Servicer shall grant the Indenture Trustee, the Indenture Administrator (in its capacity as Indenture Administrator and/or successor Servicer) and the Owner Trustee reasonable access to the terminated Servicer’s premises at the Servicer’s reasonable expense.  All reasonable costs and expenses (including attorneys’ fees) incurred in connection with transferring the Receivable Files to the Successor Servicer and amending this Agreement to reflect such succession as servicer pursuant to this Section shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses.

SECTION 8.2

Appointment of Successor.  (a) Upon the Servicer’s receipt of notice of termination, pursuant to Section 8.1 or the Servicer’s resignation in accordance with the terms of this Agreement, the predecessor Servicer shall continue to perform its functions as Servicer under this Agreement, in the case of termination, only until the date specified in such termination notice or, if no such date is specified in a notice of termination, until receipt of such notice and, in the case of resignation, until the later of (x) the date 45 days from the delivery to the Owner Trustee and the Indenture Trustee of written notice of such resignation (or written confirmation of such notice) in accordance with the terms of this Agreement and (y) the date upon which the predecessor Servicer shall become unable to act as Servicer, as specified in the notice of resignation and accompanying Opinion of Counsel.  In the event of the Servicer’s termination hereunder, the Indenture Administrator shall become the successor Servicer and assume the obligations of the Servicer hereunder or the Indenture Administrator shall appoint any established institution having a net worth of not less than $50,000,000 and whose regular business shall include the servicing of automotive receivables similar to the receivables as the successor to the Servicer under this Agreement.

(b)

Upon appointment, the successor Servicer (including the Indenture Administrator acting as successor Servicer) shall be the successor in all respects to the predecessor Servicer and shall be subject to all the responsibilities, duties and liabilities arising thereafter relating thereto placed on the predecessor Servicer, subject to the exceptions set forth in Section 8.2(a) hereof, and shall be entitled to the Servicing Fee and all the rights granted to the predecessor Servicer by the terms and provisions of this Agreement.  No successor Servicer (including the Indenture Administrator, in its capacity as successor Servicer) shall be deemed to be in default hereunder by reason of any failure to make, or any delay in making, any distribution hereunder or any portion thereof caused by (i) the failure of the outgoing Servicer to deliver, or delay delivery, cash, documents or records to it, or (ii) the failure of the outgoing Servicer to cooperate as required by this Agreement.

SECTION 8.3

[RESERVED].

SECTION 8.4

Notification to Noteholders and Certificateholders.  Upon any termination of, or appointment of a successor to, the Servicer pursuant to this Article VIII, the Owner Trustee shall give prompt written notice thereof to Certificateholders and the Indenture Trustee, and the Indenture Trustee shall give prompt written notice thereof to Indenture Administrator, Noteholders and the Rating Agencies.

SECTION 8.5

Waiver of Past Defaults.  The Holders of Notes evidencing not less than a majority of the Outstanding Amount of the Notes of the Controlling Class, or Holders of Certificates of Percentage Interests greater than 50% in the case of any default which does not adversely affect the Indenture Trustee or the Noteholders may, on behalf of all Noteholders and Certificateholders, waive any default by the Servicer in the performance of its obligations hereunder and its consequences, except a default in making any required deposits to or payments from any of the Trust Accounts in accordance with this Agreement.  Upon any such waiver of a past default, such default shall cease to exist, and any Servicer Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement.  No such waiver shall extend to any subsequent or other default or impair any right consequent thereto.

ARTICLE IX

Termination

SECTION 9.1

Optional Purchase of All Receivables.  (a)  On the last day of any Monthly Period as of which the Pool Balance shall be less than or equal to 10% of the Original Pool Balance, the Servicer shall have the option to purchase the Owner Trust Estate, other than the Trust Accounts and the Certificate Distribution Account; provided, however, that the amount to be paid for such purchase (as set forth in the following sentence) shall be sufficient to pay the full amount of principal, premium and other amounts owing to the Letter of Credit Provider if any, and interest then due and payable on the Notes.  To exercise such option, the Servicer shall deposit pursuant to Section 5.5 in the Collection Account an amount equal to the aggregate Purchase Amount for the Receivables, plus any amounts then due and owing to the Letter of Credit Provider plus the appraised value of any other property held by the Trust, such value to be determined by an appraiser mutually agreed upon by the Servicer, the Owner Trustee and the Indenture Trustee, and shall succeed to all interests in and to the Trust.

(b)

Upon any sale of the assets of the Trust pursuant to the Trust Agreement, the Servicer shall instruct the Indenture Administrator to deposit the proceeds from such sale after all payments and reserves therefrom (including the expenses of such sale) have been made (the “Insolvency Proceeds”) in the Collection Account.  On the Distribution Date on which the Insolvency Proceeds are deposited in the Collection Account (or, if such proceeds are not so deposited on a Distribution Date, on the Distribution Date immediately following such deposit), the Servicer shall instruct the Indenture Administrator to make, and the Indenture Administrator shall make, the following deposits and distributions (after the application on such Distribution Date of the Distribution Amount pursuant to Section 5.6(a)) from the Insolvency Proceeds and the Distribution Amount for such Distribution Date:

(i)

to the Note Distribution Account, any portion of the Noteholders’ Interest Distributable Amount for each Class of Notes not otherwise deposited into the Note Distribution Account on such Distribution Date; and

(ii)

to the Note Distribution Account, the Outstanding Amount of the Notes (after giving effect to the reduction in the Outstanding Amount of the Notes to result from the deposits made in the Note Distribution Account on such Distribution Date).

Any Insolvency Proceeds remaining after the deposits described above shall be paid first to the Letter of Credit Provider to the extent of any amounts owing to the Letter of Credit Provider under the Letter of Credit Reimbursement Agreement and not paid, and second, to the extent of any remaining funds, to the Certificateholders.

(c)

Notice of any termination of the Trust shall be given by the Servicer to the Owner Trustee, the Indenture Trustee, the Indenture Collateral Agent, the Indenture Administrator, the Letter of Credit Provider and the Rating Agencies as soon as practicable.

(d)

Following the satisfaction and discharge of the Indenture and the payment in full of the principal of and interest on the Notes, the Certificateholders will succeed to the rights of the Noteholders hereunder and the Owner Trustee will succeed to the rights of the Indenture Trustee pursuant to this Agreement.

ARTICLE X

Administrative Duties of the Servicer

SECTION 10.1

Administrative Duties.  

(a)

Duties with Respect to the Indenture and Depository Agreements.  The Servicer shall perform all its duties and the duties of the Issuer under the Indenture and the other Basic Documents.  In addition, the Servicer shall consult with the Owner Trustee as the Servicer deems appropriate regarding the duties of the Issuer under the Indenture and the other Basic Documents. The Servicer shall monitor the performance of the Issuer and shall advise the Owner Trustee when action is necessary to comply with the Issuer’s duties under the Indenture and the other Basic Documents.  The Servicer shall prepare for execution by the Issuer or shall cause the preparation by other appropriate Persons of all such documents, reports, filings, instruments, certificates and opinions as it shall be the duty of the Issuer to prepare, file or deliver pursuant to the Indenture and the other Basic Documents.  In furtherance of the foregoing, the Servicer shall take all necessary action that is the duty of the Issuer to take pursuant to the Indenture and the other Basic Documents, including, without limitation, pursuant to Sections 2.7, 3.5, 3.6, 3.7, 3.9, 6.7, 7.2, 7.3, 11.1 and 11.15 of the Indenture.

(b)

Duties with Respect to the Issuer.  

(i)

In addition to the duties of the Servicer set forth in this Agreement or any of the Basic Documents, the Servicer shall perform such calculations and shall prepare for execution by the Issuer or the Owner Trustee or shall cause the preparation by other appropriate Persons of all such documents, reports, filings, instruments, certificates and opinions as it shall be the duty of the Issuer or the Owner Trustee to prepare, file or deliver pursuant to this Agreement or any of the Basic Documents or state or Federal securities laws, and at the request of the Owner Trustee shall take all appropriate action that it is the duty of the Issuer to take pursuant to this Agreement or any of the Basic Documents, including, without limitation, pursuant to Sections 2.6 and 2.13 of the Trust Agreement.  In accordance with the directions of the Issuer or the Owner Trustee, the Servicer shall administer, perform or supervise the performance of such other activities in connection with the Collateral (including the Basic Documents) as are not covered by any of the foregoing provisions and as are expressly requested by the Issuer or the Owner Trustee and are reasonably within the capability of the Servicer.

(ii)

Notwithstanding anything in this Agreement or any of the Basic Documents to the contrary, the Servicer shall be responsible for promptly notifying the Owner Trustee in the event that any withholding tax is imposed on the Issuer’s payments (or allocations of income) to an Owner (as defined in the Trust Agreement) as contemplated in Section 5.2(c) of the Trust Agreement.  Any such notice shall be in writing and specify the amount of any withholding tax required to be withheld by the Owner Trustee pursuant to such provision.

(iii)

Notwithstanding anything in this Agreement or the Basic Documents to the contrary, the Servicer shall be responsible for performance of the duties of the Issuer or the Owner Trustee set forth in Section 5.6(a), (b), (c) and (d) of the Trust Agreement with respect to, among other things, accounting and reports to Holders (as defined in the Trust Agreement); provided, however, that once prepared by the Servicer and filed with the appropriate tax authorities, the Owner Trustee shall retain responsibility for the distribution of the Schedule K-1s necessary to enable each Certificateholder to prepare its federal and state income tax returns.

(iv)

The Servicer shall perform the duties of the Servicer specified in Section 10.2 of the Trust Agreement required to be performed in connection with the resignation or removal of the Owner Trustee, and any other duties expressly required to be performed by the Servicer under this Agreement or any of the Basic Documents.

(v)

In carrying out the foregoing duties or any of its other obligations under this Agreement, the Servicer may enter into transactions with or otherwise deal with any of its Affiliates; provided, however, that the terms of any such transactions or dealings shall be in accordance with any directions received from the Issuer and shall be, in the Servicer’s opinion, no less favorable to the Issuer in any material respect.

(vi)

The Servicer shall prepare, execute and deliver all certificates or other documents required to be delivered by the Issuer pursuant to the Sarbanes-Oxley Act of 2002 or the rules and regulations promulgated thereunder.

(c)

Tax Matters.  The Servicer shall prepare and file, on behalf of the Depositor, so long as it is a Certificateholder, all tax returns, tax elections, financial statements and such annual or other reports of the Issuer as are necessary for preparation of tax reports as provided in Article V of the Trust Agreement, including without limitation Forms 1099.  All tax returns will be signed by Depositor, so long as it is a Certificateholder.

(d)

Non-Ministerial Matters.  With respect to matters that in the reasonable judgment of the Servicer are non-ministerial, the Servicer shall not take any action pursuant to this Article X unless within a reasonable time before the taking of such action, the Servicer shall have notified the Owner Trustee, the Indenture Administrator and the Indenture Trustee of the proposed action and the Owner Trustee and, with respect to items (A), (B), (C) and (D) below, the Indenture Trustee shall not have withheld consent or provided an alternative direction.  For the purpose of the preceding sentence, “non-ministerial matters” shall include:

A.

the amendment of or any supplement to the Indenture;

B.

the initiation of any claim or lawsuit by the Issuer and the compromise of any action, claim or lawsuit brought by or against the Issuer (other than in connection with the collection of the Receivables);

C.

the amendment, change or modification of this Agreement or any of the Basic Documents;

D.

the appointment of successor Note Registrars, successor Paying Agents and successor Indenture Trustees pursuant to the Indenture or the appointment of Successor Servicers or the consent to the assignment by the Note Registrar, Paying Agent or Indenture Trustee of its obligations under the Indenture; and

E.

the removal of the Indenture Trustee.

(e)

Exceptions.  Notwithstanding anything to the contrary in this Agreement, except as expressly provided herein or in the other Basic Documents, the Servicer, in its capacity hereunder, shall not be obligated to, and shall not, (1) make any payments to the Noteholders or Certificateholders under the Basic Documents, (2) sell the Owner Trust Estate pursuant to Section 5.5 of the Indenture, (3) take any other action that the Issuer directs the Servicer not to take on its behalf or (4) in connection with its duties hereunder assume any indemnification obligation of any other Person.

SECTION 10.2

Records.  The Servicer shall maintain appropriate books of account and records relating to services performed under this Agreement, which books of account and records shall be accessible for inspection by the Issuer at any time during normal business hours.

SECTION 10.3

Additional Information to be Furnished to the Issuer.  The Servicer shall furnish to the Issuer from time to time such additional information regarding the Collateral as the Issuer shall reasonably request.

SECTION 10.4

[RESERVED]

SECTION 10.5

Relocation of Receivables.  The Servicer agrees that it will not move the Receivable Files from the locations listed in Schedule C, unless the Servicer shall have delivered to the Owner Trustee, the Indenture Trustee, the Indenture Collateral Agent and the Indenture Administrator an Opinion of Counsel stating that, in the opinion of such counsel, either (a) all financing statements and continuation statements and amendments thereto have been executed and filed that are necessary fully to preserve and protect the interest of the Owner Trustee, the Indenture Collateral Agent and the Indenture Trustee, respectively, in the Receivables and reciting the details of such filings or (b) no such action shall be necessary to preserve and protect such interest.

ARTICLE XI

Miscellaneous Provisions

SECTION 11.1

Amendment.  This Agreement may be amended from time to time by the Representative, the Depositor, the Servicer and the Owner Trustee, with the consent of the Indenture Trustee (which consent may not be unreasonably withheld), but without the consent of any of the Noteholders or the Certificateholders, to cure any ambiguity, to correct or supplement any provisions in this Agreement, to comply with any changes in the Code, or to make any other provisions with respect to matters or questions arising under this Agreement which shall not be inconsistent with the provisions of this Agreement; provided, however, that such action shall not, adversely affect in any material respect the interests of any Noteholder, Certificateholder or the Letter of Credit Provider.  An amendment shall be deemed not to adversely affect the interests of any such holder if the Rating Agency Condition shall have been satisfied.

This Agreement may also be amended from time to time by the Representative, the Depositor, the Servicer and the Owner Trustee, the consent of the Indenture Trustee, the Letter of Credit Provider, the consent of the Holders of Notes evidencing not less than a majority of the outstanding principal amount of the Notes and the consent of the Holders of Certificates evidencing not less than a Percentage Interest greater than 50% for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Noteholders or the Certificateholders; provided, however, that no such amendment shall (a) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on Receivables or distributions that shall be required to be made for the benefit of the Noteholders or the Certificateholders or (b) reduce the aforesaid percentage of the outstanding principal amount of the Notes and the Percentage Interests, the Holders of which are required to consent to any such amendment, without the consent of the Holders of all the outstanding Notes and the Certificates, of each Class affected thereby.

Promptly after the execution of any such amendment or consent pursuant to either of the preceding paragraphs, the Owner Trustee shall furnish written notification of the substance of such amendment or consent to each Certificateholder, the Letter of Credit Provider and the Rating Agencies.

It shall not be necessary for the consent of Certificateholders or Noteholders pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof.  The manner of obtaining such consents (and any other consents of Noteholders or Certificateholders provided for in this Agreement) and of evidencing the authorization of any action by Noteholders or Certificateholders shall be subject to such reasonable requirements as the Indenture Trustee or the Owner Trustee, as applicable, may prescribe.

Prior to the execution of any amendment to this Agreement, the Owner Trustee and the Indenture Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and the Opinion of Counsel referred to in Section 11.2(i)(1) has been delivered.  The Owner Trustee and the Indenture Trustee may, but shall not be obligated to, enter into any such amendment which affects the Issuer’s, the Owner Trustee’s or the Indenture Trustee’s, as applicable, own rights, duties or immunities under this Agreement or otherwise.

SECTION 11.2

Protection of Title to Trust.  (a)  The Servicer shall authorize and file or cause to be filed such financing statements and cause to be executed and filed such continuation statements, all in such manner and in such places as may be required by law fully to preserve, maintain and protect the interest of the Issuer and the interests of the Indenture Collateral Agent on behalf of the Noteholders and the Certificateholders in the Receivables and in the proceeds thereof.  The Servicer shall deliver (or cause to be delivered) to the Indenture Administrator, the Owner Trustee and the Indenture Collateral Agent file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following such filing.

(b)

Neither the Depositor nor the Servicer shall change its name, identity or corporate structure in any manner that would, could or might make any financing statement or continuation statement filed in accordance with paragraph (a) above seriously misleading within the meaning of Section 9-506 of the UCC or any successor provision, unless it shall have given, the Owner Trustee, the Indenture Administrator and the Indenture Trustee at least five days’ prior written notice thereof and shall have promptly filed appropriate amendments to all previously filed financing statements or continuation statements.  Promptly upon such filing, the Depositor or the Servicer, as the case may be, shall deliver to the Owner Trustee, Indenture Administrator and the Indenture Trustee an Opinion of Counsel in form and substance reasonably satisfactory to the Indenture Trustee stating either (A) all financing statements and continuation statements have been executed and filed that are necessary fully to preserve and protect the interest of the Trust and the Indenture Trustee in the Receivables, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (B) no such action shall be necessary to preserve and protect such interest.

(c)

Each of the Depositor and the Servicer shall have an obligation to give the Indenture Administrator, the Owner Trustee and the Indenture Trustee at least 60 days’ prior written notice of any change of the Depositor’s or the Servicer’s “location” (determined as provided in Section 9-307 of the UCC or any successor provision) or jurisdiction of organization if, as a result of such relocation, the applicable provisions of the UCC would require the filing of any amendment of any previously filed financing or continuation statement or of any new financing statement and shall promptly file any such amendment.  The Servicer shall at all times maintain each office from which it shall service Receivables, and its principal place of business and “location” (determined as provided in Section 9-307 of the UCC or any successor provision), within the United States of America.

(d)

The Servicer shall maintain accounts and records as to each Receivable accurately and in sufficient detail to permit (i) the reader thereof to know at any time the status of such Receivable, including payments and recoveries made and payments owing (and the nature of each) and (ii) reconciliation between payments or recoveries on (or with respect to) each Receivable and the amounts from time to time deposited in the Collection Account in respect of such Receivable.

(e)

The Servicer shall maintain its computer systems so that, from and after the time of sale under this Agreement of the Receivables to the Issuer, the Servicer’s master computer records (including any backup archives) that refer to a Receivable shall indicate clearly the interest of the Issuer and the Indenture Trustee on behalf of the Certificateholders and the Noteholders in such Receivable and that such Receivable is owned by the Issuer and has been pledged to the Indenture Trustee.  Indication of the Issuer’s and the Indenture Trustee’s interest in a Receivable shall be deleted from or modified on the Servicer’s computer systems when, and only when, the related Receivable shall have been paid in full or repurchased.

(f)

If at any time the Depositor or the Servicer shall propose to sell, grant a security interest in or otherwise transfer any interest in automotive receivables to any prospective purchaser, lender or other transferee, the Servicer shall give to such prospective purchaser, lender or other transferee computer tapes, records or printouts (including any restored from backup archives) that, if they shall refer in any manner whatsoever to any Receivable, shall indicate clearly that such Receivable has been sold and is owned by the Issuer and has been pledged to the Indenture Collateral Agent on behalf of the Letter of Credit Provider and the Indenture Trustee on behalf of the Noteholders.

(g)

The Servicer shall permit the Indenture Trustee and the Indenture Administrator and their respective agents at any time during normal business hours to inspect, audit and make copies of and abstracts from the Servicer’s records regarding any Receivable or any other portion of the Trust Property.  The preceding sentence shall not create any duty or obligation on the part of the Indenture Trustee to perform any such acts.

(h)

Upon request, the Servicer shall furnish to the Indenture Administrator, the Owner Trustee or the Indenture Trustee, within five Business Days, a list of all Receivables (by contract number and name of Obligor) then held as part of the Trust, together with a reconciliation of such list to the Schedule of Receivables and to each of the Servicer’s Certificates furnished before such request indicating removal of Receivables from the Trust.

(i)

The Servicer shall deliver to the Indenture Administrator, the Owner Trustee and the Indenture Trustee:

(1)

Upon the execution and delivery of this Agreement and, if required pursuant to Section 11.1, of each amendment, an Opinion of Counsel stating that, in the opinion of such Counsel, either (A) all financing statements and continuation statements have been executed and filed that are necessary fully to preserve and protect the interest of the Trust and the Indenture Collateral Agent in the Receivables, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given or (B) no such action shall be necessary to preserve and protect such interest; and

(2)

On or before October 30 of each calendar year, a certificate signed by the Secretary or Assistant Secretary of the Servicer and an authorized officer of the managing member of the Depositor stating that, to such officer’s knowledge, following consultation with counsel, the Servicer or the Depositor, as applicable, has determined that it was not necessary or desirable to file any continuation UCC financing statement or other UCC financing statement during such fiscal year in order to maintain the perfection of the Indenture Collateral Agent’s security interest, for the benefit of the Noteholders, in the Trust Property or if the Servicer or the Depositor has determined that any such filing was necessary or desirable, describing the reason for any such filing and attaching a copy thereof to such certificate.

Each Opinion of Counsel referred to in clause (l) or (2) above shall specify any action necessary (as of the date of such opinion) to be taken in the following year to preserve and protect such interest.

(j)

The Depositor shall, to the extent required by applicable law, cause the Certificates and the Notes to be registered with the Commission pursuant to Section 12(b) or Section 12(g) of the Exchange Act within the time periods specified in such sections.

(k)

On or before December 31 of each year, the Servicer shall forward to the Owner Trustee a list of the scheduled holidays in California for the following calendar year.

SECTION 11.3

Notices.  All demands, notices and communications upon or to the Depositor, the Servicer, the Owner Trustee, the Indenture Trustee, the Indenture Administrator, the Letter of Credit Provider or the Rating Agencies under this Agreement shall be in writing, personally delivered, delivered by overnight courier, mailed by certified mail, return receipt requested, or sent by e-mail if an e-mail address is provided and shall be deemed to have been duly given upon receipt (a) in the case of the Depositor, to 47 West 200 South, Suite 500, Salt Lake City, Utah 84101, Attention:  Harold E. Miller, Jr., with a copy to Franklin Resources, One Franklin Parkway, San Mateo, California 94403, Attention:  Jennifer Bolt; (b) in the case of the Servicer, to 47 West 200 South, Suite 500, Salt Lake City, Utah 84101, Attention:  Harold E. Miller, Jr., with a copy to Franklin Resources, One Franklin Parkway, San Mateo, California 94403, Attention:  Jennifer Bolt; (c) in the case of the Representative, to One Franklin Parkway, San Mateo, California 94403, Attention:  Jennifer Bolt; (d) in the case of the Issuer or the Owner Trustee, at the Corporate Trust Office of the Owner Trustee (as defined in the Trust Agreement), with a copy to Deutsche Bank Trust Company Americas, 60 Wall Street, 26th Floor, New York, New York 10005; Attention: Structured Finance Series – Trust & Securities Services (e) in the case of the Indenture Trustee or the Indenture Collateral Agent, at the Corporate Trust Office, with a copy to the Indenture Administrator; (f) in the case of the Indenture Administrator, to 388 Greenwich Street, 14th Floor, New York, New York 10013, Attention: Agency and Trust – Franklin Auto Trust 2005-1; (g) in the case of the Letter of Credit Provider, Citibank, N.A. 388 Greenwich Street, 14th Floor, New York, New York 10013, Attention: Agency and Trust – Franklin Auto Trust 2005-1; (h) in the case of Moody’s, either to Moody’s Investors Service, Inc., ABS Monitoring Department, 99 Church Street, New York, New York 10007 or ServicerReports@moodys.com; and (i) in the case of Standard & Poor’s, to Standard & Poor’s Ratings Group, 55 Water Street, New York, New York 10041, Attention:  Asset Backed Surveillance Department.  Any notice required or permitted to be mailed to a Noteholder or Certificateholder shall be given by first class mail, postage prepaid, at the address of such Holder as shown in the Certificate Register or Note Register, as applicable.  Any notice so mailed within the time prescribed in this Agreement shall be conclusively presumed to have been duly given, whether or not the Certificateholder or Noteholder shall receive such notice.

SECTION 11.4

Assignment.  Notwithstanding anything to the contrary contained herein, except as provided in Sections 6.4 and 7.3 and as provided in the provisions of this Agreement concerning the resignation of the Servicer, this Agreement may not be assigned by the Depositor or the Servicer without the prior written consent of the Owner Trustee and the Indenture Trustee, the Letter of Credit Provider and the Holders of Notes evidencing not less than 66% of the Outstanding Amount of the Notes of the Controlling Class.

SECTION 11.5

Limitations on Rights of Others.  The provisions of this Agreement are solely for the benefit of the Depositor, the Servicer, the Issuer, the Owner Trustee and for the benefit of the Certificateholders, Indenture Administrator, the Indenture Trustee and the Noteholders, as third-party beneficiaries.  Nothing in this Agreement, whether express or implied, shall be construed to give to any other Person, other than express third-party beneficiaries, any legal or equitable right, remedy or claim in the Owner Trust Estate or under or in respect of this Agreement or any covenants, conditions or provisions contained herein.

SECTION 11.6

Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

SECTION 11.7

Separate Counterparts.  This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

SECTION 11.8

Headings.  The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.

SECTION 11.9

Governing Law.  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

SECTION 11.10

Assignment to Indenture Trustee.  The Depositor hereby acknowledges and consents to any mortgage, pledge, assignment and grant of a security interest by the Issuer to the Indenture Trustee or the Indenture Collateral Agent pursuant to the Indenture for the benefit of the Issuer Secured Parties (as defined in the Indenture) of all right, title and interest of the Issuer in, to and under the Receivables, the other Receivables Property and/or the assignment of any or all of the Issuer’s rights and obligations hereunder to the Indenture Trustee or the Indenture Collateral Agent.

SECTION 11.11

Nonpetition Covenants.  (a)  Notwithstanding any prior termination of this Agreement, the parties hereto shall not, prior to the date which is one year and one day after the termination of this Agreement with respect to the Issuer, acquiesce, petition, or otherwise invoke or cause the Issuer to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Issuer under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer.

(b)

Notwithstanding any prior termination of this Agreement, the parties hereto shall not, prior to the date that is one year and one day after the termination of this Agreement with respect to the Depositor, acquiesce to, petition or otherwise invoke or cause the Depositor to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Depositor under any federal or state bankruptcy, insolvency or similar law, appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator, or other similar official of the Depositor or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Depositor.

SECTION 11.12

Limitation of Liability of Owner Trustee, Indenture Trustee, the Indenture Administrator and Indenture Collateral Agent.  (a)  Notwithstanding anything contained herein to the contrary, this Agreement has been countersigned by Deutsche Bank Trust Company Delaware not in its individual capacity but solely in its capacity as Owner Trustee of the Issuer and in no event shall Deutsche Bank Trust Company Delaware in its individual capacity or, except as expressly provided in the Trust Agreement, as Owner Trustee have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer.  For all purposes of this Agreement, in the performance of its duties or obligations hereunder or in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Articles VI, VII and VIII of the Trust Agreement.

(b)

Notwithstanding anything contained herein to the contrary, this Agreement has been accepted by Wilmington Trust Company, not in its individual capacity but solely as Indenture Trustee and as Indenture Collateral Agent, and in no event shall Wilmington Trust Company have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer.

(c)

Notwithstanding anything contained herein to the contrary, this Agreement has been accepted by Citibank, N.A., not in its individual capacity but solely as Indenture Administrator, and in no event shall Citibank, N.A. have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer.

SECTION 11.13

Independence of the Servicer.  For all purposes of this Agreement, the Servicer shall be an independent contractor and shall not be subject to the supervision of the Issuer or the Owner Trustee with respect to the manner in which it accomplishes the performance of its obligations hereunder.  Unless expressly authorized by the Issuer, the Servicer shall have no authority to act for or represent the Issuer or the Owner Trustee in any way and shall not otherwise be deemed an agent of the Issuer or the Owner Trustee.

SECTION 11.14

No Joint Venture.  Nothing contained in this Agreement (i) shall be deemed to confer on the Servicer and either of the Issuer or the Owner Trustee membership in any partnership, joint venture, association, syndicate, unincorporated business or other separate entity, (ii) shall be construed to impose any liability as such on any of them or (iii) shall be deemed to confer on any of them any express, implied or apparent authority to incur any obligation or liability on behalf of the others.

SECTION 11.15

Third-Party Beneficiaries.  This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns. Each of the Letter of Credit Provider, the Indenture Trustee, the Indenture Administrator and the Indenture Collateral Agent and its successors and assigns shall be a third-party beneficiary to the provisions of this Agreement, and shall be entitled to rely upon and directly to enforce such provisions of this Agreement, except as expressly limited by the terms hereof.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective duly authorized officers as of the day and year first above written.

FRANKLIN AUTO TRUST 2005-1

By:

DEUTSCHE BANK TRUST COMPANY DELAWARE,

not in its individual capacity but solely as Owner Trustee on behalf of the Trust,

By:

/s/ Jenna Kaufman 

Name: Jenna Kaufman

Title:   Attorney-in-fact

FRANKLIN RECEIVABLES LLC,

Depositor 

By:  FRANKLIN CAPITAL CORPORATION,

as managing member

By:

/s/ Harold E. Miller, Jr.

Name:

Harold E. Miller, Jr.

Title:

President and CEO

FRANKLIN CAPITAL CORPORATION,

Servicer

By:

/s/ Harold E. Miller, Jr.

Name:

Harold E. Miller, Jr.

Title

President and CEO

FRANKLIN RESOURCES, INC.,

Representative

By:

/s/ Jennifer J. Bolt

Name: Jennifer J. Bolt

Title:

Executive Vice President – Technology and Operations

Acknowledged and Accepted:

WILMINGTON TRUST COMPANY, not

in its individual capacity

but solely as Indenture Trustee

By:

/s/ James J. McGinley

Name:

James J. McGinley

Title:

Authorized Signer

Acknowledged and Accepted:

DEUTSCHE BANK TRUST COMPANY DELAWARE,

not in its individual capacity

but solely as Owner Trustee

By:

/s/ Jenna Kaufman

Name:

Jenna Kaufman

Title:

Attorney-in-fact

Acknowledged and Accepted:

WILMINGTON TRUST COMPANY,

not in its individual capacity

but solely as Indenture Collateral 

Agent

By:

/s/ James J. McGinley

Name:

James J. McGinley

Title:

Authorized Signer

Acknowledged and Accepted:

CITIBANK, N.A.,

not in its individual capacity

but solely as Indenture Administrator

By:/s/Jennifer H. McCourt

Name:

Jennifer H. McCourt

Title:

Vice President

SCHEDULE A

Schedule of the Receivables

(Delivered to Indenture Trustee at Closing)

SCHEDULE B

Location of Receivables

Franklin Capital Corporation

47 West 200 South, Suite 500

Salt Lake City, Utah  84101 

Downtown Self Storage

255 West 200 South

Salt Lake City, Utah  84101 

Exhibit A

[Reserved]

Exhibit B

[Reserved]

Exhibit C

FORM OF MONTHLY NOTEHOLDER STATEMENT

FRANKLIN AUTO TRUST 2005-1

Class A-1 4.49625% Asset-Backed Notes

Class A-2 4.84% Asset-Backed Notes

Class A-3 4.91% Asset-Backed Notes 

Class A-4 5.01% Asset-Backed Notes

Class B 5.12% Asset-Backed Notes

Class C 5.44% Asset-Backed Notes

Distribution Date:

Monthly Period:

Under the Sale and Servicing Agreement dated as of December 1, 2005 (the “Sale and Servicing Agreement”) among Franklin Capital Corporation, as servicer, Franklin Receivables LLC, as seller, Franklin Resources, Inc., as representative, and Franklin Auto Trust 2005-1, as issuer, the Servicer is required to prepare certain information each month regarding current distributions to Noteholders and the performance of the Trust during the previous month.  The information that is required to be prepared with respect to the Distribution Date and Monthly Period listed above is set forth below.  Certain of the information is presented on the basis of an original principal amount of $1,000 per Note, and certain other information is presented based upon the aggregate amounts for the Trust as a whole.  Capitalized terms used herein and not otherwise defined herein have the meanings assigned to those terms in the Sale and Servicing Agreement.

A.  Information Regarding the Current Monthly Distribution.

1.  Notes.

(a)

The aggregate amount of the

distribution with respect to:

the Class A-1 Notes

$________

the Class A-2 Notes

$________

the Class A-3 Notes

$________

the Class A-4 Notes

$________

the Class B Notes

$________

the Class C Notes

$________

(b)

The amount of the distribution set

forth in paragraph A.1.(a) above in

respect of interest on:

the Class A-1 Notes

$________

the Class A-2 Notes

$________

the Class A-3 Notes

$________

the Class A-4 Notes

$________

the Class B Notes

$________

the Class C Notes

$________

(c)

The amount of the distribution set

forth in paragraph A.1.(a) above in 

respect of principal of:

the Class A-1 Notes

$________

the Class A-2 Notes

$________

the Class A-3 Notes

$________

the Class A-4 Notes

$________

the Class B Notes

$________

the Class C Notes

$________

(d)

 [Reserved]

(e)

The amount of the distribution set

forth in paragraph A.1.(a) above 

per $1,000 interest in:

the Class A-1 Notes

$________

the Class A-2 Notes

$________

the Class A-3 Notes

$________

the Class A-4 Notes

$________

the Class B Notes

$________

the Class C Notes

$________

(f)

The amount of the distribution set

forth in paragraph A.1.(b) above 

per $1,000 interest in:

the Class A-1 Notes

$________

the Class A-2 Notes

$________

the Class A-3 Notes

$________

the Class A-4 Notes

$________

the Class B Notes

$________

the Class C Notes

$________

(g)

The amount of the distribution set

forth in paragraph A.1.(c) above

per $1,000 interest in:

the Class A-1 Notes

$________

the Class A-2 Notes

$________

the Class A-3 Notes

$________

the Class A-4 Notes

$________

the Class B Notes

$________

the Class C Notes

$________

(h)

The amount of the distribution set

forth in paragraph A.1.(d) above 

per $1,000 interest in:

the Class A-1 Notes

$________

the Class A-2 Notes

$________

the Class A-3 Notes

$________

the Class A-4 Notes

$________

the Class B Notes

$________

the Class C Notes

$________

B.  Information Regarding the Performance of the Trust.

1.  Pool Balance and Note Principal Balance.

(a)

The Pool Balance at the close of business on

the last day of the Monthly Period

$________

(b)

The aggregate outstanding principal amount

of each Class of Notes after giving effect

to payments allocated to principal as set

forth in Paragraph A.1(c) above with respect

to:

the Class A-1 Notes

$________

the Class A-2 Notes

$________

the Class A-3 Notes

$________

the Class A-4 Notes

$________

the Class B Notes

$________

the Class C Notes

$________

(c)

The Note Pool Factor for each Class of Notes 

after giving affect to the 

payments set forth in paragraph A.1(c) with respect to:

the Class A-1 Notes

$________

the Class A-2 Notes

$________

the Class A-3 Notes

$________

the Class A-4 Notes

$________

the Class B Notes

$________

the Class C Notes

$________

(d)

The amount of aggregate Realized Losses for 

the second preceding Monthly Period

$________

(e)

The aggregate Purchase Amount for

all Receivables that were repurchased

in the Monthly Period

$________

2.  Servicing Fee.

The aggregate amount of the Servicing

Fee paid to the Servicer with respect

to the preceding Monthly Period 

$_________

3.  Payment Shortfalls.

(a)

The amount of the Noteholders’ Interest

Carryover Shortfall after giving effect

to the payments set forth in paragraph

A.1(b) above with respect to:

the Class A-1 Notes

$________

the Class A-2 Notes

$________

the Class A-3 Notes

$________

the Class A-4 Notes

$________

the Class B Notes

$________

the Class C Notes

$________

(b)

The amount of the Noteholders’ Interest

Carryover Shortfall set forth in paragraph 

B.3.(a) above per $1,000 interest with 

respect to:

the Class A-1 Notes

$________

the Class A-2 Notes

$________

the Class A-3 Notes

$________

the Class A-4 Notes

$________

the Class B Notes

$________

the Class C Notes

$________

4.  Extensions, Deferrals and Modifications.

(a)

The number of extensions and deferrals

granted by the Servicer during the

preceding Monthly Period

$________

(b)

The aggregate principal balance (as of the end

of the Monthly Period) of all Contracts on which

an extension or deferral has been granted by 

the Servicer during the preceding Monthly Period

$________

(c)

The aggregate principal balance (as of the end of

the Monthly Period) of all Contracts on which 

modifications has been granted by the Servicer

during the preceding Monthly Period

$________

(d)

The aggregate principal balance (as of the

end of the Monthly Period) of all Contracts

on which modifications has been granted by

the Servicer during the preceding Monthly Period

$________

5.  Other Information.

(a)

The aggregate amount of collections by 

the Servicer during the preceding Monthly Period

$________

(b)

The aggregate amount which was

received by the Trust from the Servicer

during the preceding Monthly Period

$________

(c)

The aggregate amount of reimbursements to 

the Letter of Credit Provider during the preceding Monthly Period

$________

(d)

The number of Receivables that are delinquent 

for over:

30 days

_________

60 days

_________

90 days

_________

6.  Letter of Credit.

(a)

The Letter of Credit Available Amount

$________

(b)

The Letter of Credit Commitment Fee

$________

(c)

The Letter of Credit Draw Amount

$________

(d)

The Letter of Credit Reduction Amount

$________

7.  Spread Account

(a)

The Specified Spread Account Balance

$________

(b)

The Spread Account Excess Amount

$________

(c)

The Spread Account Transfer Amount

$________

(d)

The Spread Account Deposit Amount

$________

8.  Miscellaneous

(a)

Credit Enhancement Target Amount

$________

(b)

Total Required Payment

$________

(c)

Cumulative Net Loss Percentage

_______%

(d)

Cumulative Net Loss Trigger in effect (Yes/No)

________

Exhibit D

Form of Servicer’s Certificate

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