S-3/A

<R>As filed with the Securities and Exchange Commission on February 22, 2007

Registration No. 333-131866

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 2 to

FORM S-3

REGISTRATION STATEMENT

Under

THE SECURITIES ACT OF 1933

ACE SECURITIES CORP.

(Exact name of registrant as specified in its charter)

Delaware	56-2088493
(State or Other Jurisdiction of Incorporation or Organization	(I.R.S. Employer Identification No.)

6525 Morrison Boulevard - Suite 318

Charlotte, North Carolina 28211

(704) 365-0569

(Address, including zip code, and telephone number, including area code,

of registrant’s principal executive offices)

Evelyn Echevarria

ACE Securities Corp.

6525 Morrison Boulevard - Suite 318

Charlotte, North Carolina 28211

(704) 365-0569

(Name, address, including zip code and telephone number,

including area code, of agent for service)

Copy to:

Reed D. Auerbach

McKee Nelson LLP

One Battery Park Plaza, 34th Floor

New York, New York 10004

(917) 777-4200

Approximate date of commencement of proposed sale to the public:  From time to time after this Registration Statement becomes effective.

If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.[  ]

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [x]

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [  ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  [ ]

If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box.   [ ]

If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box.   [ ]

CALCULATION OF REGISTRATION FEE

Title of Securities to be Registered(1)	Amount to be Registered	Proposed Maximum Aggregate Price Per Unit(2)	Proposed Maximum Aggregate Offering Price	Amount of Registration Fee(3)
Notes and Certificates	$2,000,000,000	100%	$2,000,000,000	$61,293

(1) The securities are also being registered for the purpose of market making.

(2) Estimated solely for the purpose of calculating the registration fee.

(3) $107.00 was previously paid.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

EXPLANATORY NOTE

This Registration Statement contains four base Prospectuses (each, a “Prospectus”) relating to the offering of one or more series of securities each of which will include one or more classes of certificates and/or one or more classes of notes.

The first Prospectus (the “Automobile and Boat Prospectus”) contemplates the securitization of assets which may include (1) (a) certain new and used boat, boat motor, jet ski and wave runner receivables or (b) asset backed certificates or notes, each representing an interest in a trust fund consisting of a pool of such receivables and (2) (a) certain new and used automobile, recreational vehicle, including motor homes, campers, motorcycles, all terrain vehicles, and snow mobiles, van, truck, bus and trailer receivables or (b) asset backed certificates or notes, each representing an interest in a trust fund consisting of a pool of such receivables.

The second Prospectus (the “Automobile Prospectus”) contemplates the securitization of assets which may include (1) certain new and used automobile, recreational vehicle, including motor homes, campers, motorcycles, all terrain vehicles, and snow mobiles, van, truck, bus and trailer receivables or (2) asset backed certificates or notes, each representing an interest in a trust fund consisting of a pool of such receivables.

The third Prospectus (the “Boat Prospectus”) contemplates the securitization of assets which may include (1) certain new and used boat, boat motor, jet ski and wave runner receivables or (2) asset backed certificates or notes, each representing an interest in a trust fund consisting of a pool of such receivables.

The fourth Prospectus (the “Equipment Prospectus”) contemplates the securitization of assets that may include a pool of receivables arising from time to time in the ordinary course of business in one or more designated portfolios of equipment receivables.

This Registration Statement also contains three forms of prospectus supplement with respect to the Automobile and Boat Prospectus, three forms of prospectus supplement with respect to the Automobile Prospectus, three forms of prospectus supplement with respect to the Boat Prospectus and one form of prospectus supplement with respect to the Equipment Prospectus.</R>

The information in this prospectus supplement is not complete and may be changed.  We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective.  This prospectus supplement is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED [_________]

PROSPECTUS SUPPLEMENT (to prospectus dated [            ])

$[               ] (Approximate)

ACE SECURITIES CORP., [______] Auto and Boat Owner Trust [______], Series  [       ]

Asset Backed Notes

[______] Auto and Boat Owner Trust [______]

Issuing Entity

[DB Structured Products, Inc.]

Sponsor

ACE Securities Corp.

Depositor

 [               ]

Servicer

Notes Offered • $[      ], [     ]% Class A-1 Asset Backed Notes • $[      ], [     ]% Class A-2 Asset Backed Notes Assets • Retail automobile and boat receivables Credit Enhancement Class A-1 Notes • Subordination of Class A-2 Notes • Reserve account • [Financial guaranty insurance policy issued by [         ]] Class A-2 Notes • [Financial guaranty insurance policy issued by [         ]] [Describe other credit enhancement provided by [_____]] Expected Ratings • [      ] or equivalent for the Class A -1 Notes • [      ] or equivalent for the Class A -2 Notes Consider carefully the risk factors beginning on page S-[  ] of this prospectus supplement and on page [  ] of the prospectus. For a list of capitalized terms used in this prospectus supplement and the prospectus, see the index of defined terms beginning on page S-[  ] of this prospectus supplement and on page [  ] of the prospectus. The notes will represent interests in the Issuing Entity only and will not represent interests in or obligations of the sponsor, the depositor or any of their affiliates. Distributions on the notes will be made on the [__]th day of each month, or, if such day is not a business day, on the next succeeding business day, beginning in [__]. This prospectus supplement may be used to offer and sell the notes only if accompanied by the prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these notes or determined if this prospectus supplement or the attached prospectus is accurate or complete.  Making any contrary representation is a criminal offense.

[Deutsche Bank Securities Inc.] is purchasing the class A-1 notes from the Issuing Entity at approximately [   ]% of the principal amount of the class A-1 notes plus accrued interest from [     ], [      ] and the class A-2 notes at approximately [____]% of the principal amount of the class A-2 notes plus accrued interest from [                ].  [Deutsche Bank Securities Inc.] is offering the class A-1 notes and class A-2 notes from time to time in negotiated transactions or at varying prices which will be determined at the time of sale.  The aggregate proceeds to the Issuing Entity, before deducting expenses payable by or on behalf of the Issuing Entity estimated at $[     ], will be $[     ].

 [Deutsche Bank Securities]

The date of this prospectus supplement is [         ].

Important Notice About Information Presented in this
Prospectus Supplement and the Accompanying Prospectus:

We provide information to you about the notes offered by this prospectus supplement in two separate documents that progressively provide more detail: (1) the accompanying prospectus, which provides general information, some of which may not apply to your notes, and (2) this prospectus supplement, which describes the specific terms of your notes.

If the information regarding the notes is more specific in this prospectus supplement than in the prospectus, then you should rely on the information in this prospectus supplement.

You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus.  We have not authorized anyone to provide you with different information.

We are not offering the notes in any state where the offer is not permitted.  We do not claim that the information in this prospectus supplement and prospectus is accurate as of any date other than the dates stated on their respective covers.

Dealers will deliver a prospectus supplement and prospectus when acting as underwriters of the notes and with respect to their unsold allotments or subscriptions.  In addition, all dealers selling the notes will be required to deliver a prospectus supplement and prospectus for ninety days following the date of this prospectus supplement.

We include cross-references in this prospectus supplement and the accompanying prospectus to captions in these materials where you can find further related discussions.  The following table of contents and the table of contents included in the accompanying prospectus provide the pages on which these captions are located.

TABLE OF CONTENTS

Prospectus Supplement

Caption

Page

Summary of Terms

1

Risk Factors

1

Formation of the Issuing Entity

4

The Trust Property

6

The Receivables Pool

7

Static Pool Information

15

The Originators

15

The Servicer

15

The Backup Servicer

16

Maturity and prepayment considerations

17

Yield Considerations

19

Use of Proceeds

20

Description of the Notes

20

Description of the Transaction Documents

37

[Other Credit Enhancement Provider]

52

[Derivative Instruments]

52

Federal Income Tax Consequences

52

Certain State Tax Consequences

52

ERISA Considerations

52

Underwriting

52

Ratings

54

Legal Proceedings

54

Affiliations, Relationships and Related Transactions

55

[Experts

55

Legal Matters

55

SUMMARY OF TERMS

This summary highlights selected information from this prospectus supplement and does not contain all of the information that you need to consider in making your investment decision.  To understand all of the terms of the offering of the notes, it is necessary that you read carefully this entire prospectus supplement and accompanying prospectus.

While this summary contains an overview of certain calculations, cash flow priorities, and other information to aid your understanding, you should read carefully the full description of these calculations, cash flow priorities and other information in this prospectus supplement and the accompanying prospectus before making any investment decision.

Issuing Entity	[      ] Auto and Boat Owner Trust [      ]-[      ], a Delaware business trust.
Depositor	Ace Securities Corp.  See “The Depositor” in the Prospectus.
Servicer	[      ].
Sponsor	[      ].  See “The Sponsor” in the Prospectus.
Originators	[_________________________], with respect to approximately [__]% of the receivables by aggregate principal balance as of the Cut-off Date. The remainder of the receivables were originated by various originators, none of which have originated more than 10% of the receivables.  See “The Originators” in this prospectus supplement.
Owner Trustee	[      ].
Indenture Trustee	[      ].
Backup Servicer	[      ].
[The Insurer	[________] is a [          ] financial guaranty insurance company. [          ] will issue a policy, which will guarantee the payment of timely interest and principal due on the class A-1 notes and class A-2 notes but only as set forth in the section of this prospectus supplement titled “The Policy.”]
[Any credit enhancement provider referenced in Items 1114(b) and 1115 of Regulation AB]	[      ].
Closing Date	On or about [      ].
[Initial] Cut-off Date	The [close] [opening] of business on [      ].

Description of the Notes

The issuing entity will issue three classes of asset backed notes.  The class A-1 notes will be designated as the “Class A-1 Notes” and the class A-2 notes will be designated as the “Class A-2 Notes”.  The Class A-1 Notes together with the Class A-2 Notes will be designated as the “Class A Notes”. The class B notes will be designated as the “Class B Notes.” Only the Class A Notes are offered to you pursuant to this prospectus supplement.  Any information in this prospectus supplement relating to the Class B Notes is presented solely to provide you with a better understanding of the Class A Notes.

Each of the Class A-1 Notes and Class A-2 Notes will have the initial principal amount and the interest rate set forth in the following table. The dates on which the final payment of principal and interest on each of the Class A-1 Notes and Class A-2 Notes is scheduled to be made are also set forth in the following table.

Class	Initial Note Principal Balance	Interest Rate	Final Scheduled Payment Date
A-1	$ [          ]	[       ]%	[          ]
A-2	$ [          ]	[       ]%	[          ]

The Class A Notes will initially be issued in book-entry form only. The Class A Notes will be issued in minimum denominations of $1,000 and multiples of $1,000 in excess of $1,000.

The Class A-[  ] Notes will not receive any payment of principal on a payment date until the full amount of the Class A-[  ] Notes principal has been paid in full.  On each payment date, the Class B Notes will not receive any payment of interest or principal until all amounts due the Class A Notes on the payment date have been paid in full.

Payment Dates

The payment date will be the [  ]th day of each month, or, if that day is not a business day, on the next succeeding business day. The first payment date will be [          ].

The record date for all payment dates is the [   ]th day of each month, or, if that day is not a business day, on the prior business day.

Interest

In the case of the first payment date, interest will accrue from [          ] through and excluding the first payment date of [          ]. For any subsequent payment interest will accrue on the Class A Notes during the month preceding each payment date. Interest on the notes will be calculated on a “30/360” basis.

Principal

Prior to achieving a required level of

overcollateralization, the amount of principal

available to be distributed to the Class A Notes is generally equal to (1) the amount of collections on the auto and boat loan pool allocable to principal during the prior calendar month plus any losses recognized on the auto and boat loan pool during the prior calendar month and (2) a specified amount of excess interest received on the auto and boat loan pool during the prior calendar month, after paying specific expenses of the issuing entity, interest on the Class A Notes and funding the reserve account to the required level, necessary to achieve the required level of overcollateralization.

Once the required level of overcollateralization has been reached, the amount of principal available to be distributed to the Class A Notes will be equal to (1) the amount of collections on the auto and boat loan pool allocable to principal during the prior calendar month plus any losses recognized on the auto and boat loan pool during the prior calendar month less (2) the excess of (a) the amount of overcollateralization on the payment date less (b) the required level of overcollateralization on the payment date.  Additionally, once the required level of overcollateralization has been reached, excess interest will no longer be used to create any further overcollateralization.

Principal distributable to the Class A Notes will be distributed first to the Class A-1 Notes until its principal balance is reduced to zero and then will be distributed to the Class A-2 Notes until its principal balance has been reduced to zero.

In addition, the outstanding principal amount of the Class A Notes, to the extent not previously paid, will be payable on the final scheduled payment date of the related class of notes.

The Trust Fund’s Assets

The trust fund’s assets will include:

●

[non-prime] retail installment sale contracts secured by new and used automobiles and light duty trucks and boats, boat motors, jet skis and waverunners;

●

monies due on, or received under the receivables, after [          ];

●

an assignment of the security interests in the vehicles and boats, boat motors, jet skis and waverunners securing the auto and boat loan pool;

●

the related files;

●

all rights to proceeds from claims on physical damage, credit life and disability insurance policies covering the vehicles and boats or the obligors;

●

all rights to liquidation proceeds with respect to the auto and boat loan pool;

●

an assignment of the rights of the depositor under a receivables purchase agreement with [          ];

●

an assignment of the rights of [          ] against dealers under agreements between [          ] and these dealers;

●

specific bank accounts;

●

all proceeds of the foregoing; and

●

particular rights under the principal transaction documents for this offering.

The Auto and Boat Loan Pool

The auto and boat loans consist of [non-prime] retail installment sale contracts originated by dealers and then acquired by [          ] pursuant to its contract acquisition program. [The retail installment sale contracts consist primarily of contracts with individuals with less than perfect credit due to various factors. These factors include the manner in which the individuals have handled previous credit, the limited extent of their prior credit history and/or their limited financial resources.]

The depositor expects that the receivables will have the following characteristics as of [   ].  As of the closing date, no more than 5% of the receivables will have characteristics that differ from those described in this prospectus supplement as of [   ].

Number of contracts

[   ]

Principal Amount

$[   ]

Annual Percentage Rates

[   ]% to [    ]%

Weighted Average Annual
Percentage Rate

[   ]%

Original term

[   ] months to [   ] months

Weighted Average
original term

[   ] months

Remaining term

[   ] months to [__] months

Weighted Average
remaining term

[   ]%

New

[   ]

Used

[   ]

States

      [______]

[   ]%

      [______]

[   ]%

Balloon Loans

[   ]

[For approximately [      ]% of the principal amount of the receivables, the amount of the receivable was more than the value of the financed vehicle or boat at the time the loan was made.]

[Pre-Funding Feature

Approximately $[          ] of the proceeds of the notes will be held by [          ]in an account which is formed solely to hold this money, and used to purchase additional auto and boat loans with the prior written consent of [          ] in each case. The Issuing Entity will purchase from the depositor additional [non-prime] auto and boat loans from time to time on or before [          ], [          ], from funds on deposit in this account. The obligation of the depositor to sell additional auto and boat loans to the issuing entity is conditioned on these loans having been sold to the depositor from [          ].

The auto and boat loans acquired by the issuing entity during the period between the day of the closing and [          ], will also be originated or acquired by [          ]. The characteristics of the subsequently-acquired auto and boat loans are not expected to differ to any great extent from the auto and boat loans acquired by the issuing entity on the day of the closing.]

Removal and Substitution of a Receivable

[Regulation AB Item 1103(a)(6) compliant description of removal or substitution of receivables in connection with material document defects or breaches of representations and warranties].

[Trigger Events]

[Regulation AB Item 1103(a)(3)(vii) compliant description of any events in the transaction agreements that can trigger liquidation or amortization of the receivables or other performance triggers that would alter the transaction structure or the flow of funds].

 [Other Credit Enhancement]

[Regulation AB Item 1103(a)(3)(ix) compliant description of any other credit enhancement].

[Additional Series or Classes Backed by Receivables]

[Regulation AB Item 1103(a)(4) compliant description of any outstanding series or classes of notes that are backed by the receivables or otherwise have claims on the receivables.  Regulation AB compliant description of any circumstances in which additional series or classes of notes may be issued that are backed by the receivables, with specification if noteholder approval is necessary for such issuances and if noteholders will receive notice of such issuances].

[Revolving Periods]

[Regulation AB Item 1103(a)(5) compliant description of any revolving periods].

Fees and Expenses

Prior to the distribution of any interest to the noteholders, the servicer will be entitled to receive a servicing fee for each collection period in an amount equal to the product of one-twelfth of [    ]% per annum for so long as [               ] or an affiliate thereof is the servicer, and [    ]% per annum if [               ] or an affiliate thereof is no longer the servicer and the aggregate principal balance of the receivables as of the first day of the collection period.  See “Description of the Transfer and Servicing Agreement--Servicing Compensation and Payment of Expenses” in the Prospectus.

[Regulation AB Item 1103(a)(7) compliant description of any other fees and expenses].

Optional Termination

When the principal amount of the receivables is 10% or less than it was on the cut-off date, the servicer may buy the receivables.  If the servicer does not do so, the indenture trustee will try to sell the receivables to another buyer.  In either case, you must receive the principal amount of your notes and all accrued but unpaid interest or the receivables will not be sold.

Final Scheduled Maturity Dates

The final scheduled maturity date of the notes is [__________].  The actual date on which the aggregate outstanding principal amount of the notes is paid may be earlier than the final scheduled maturity date based on a variety of factors.

Expected Final Distribution Dates

The expected final distribution date of each class of notes is [

], based on the assumption that the servicer has exercised its option to purchase all the receivables as described in “Optional Termination” above.  Due to losses and prepayments on the receivables, the final distribution dates on each class of notes may be substantially earlier or later than such date.

[The Insurance Policy

On the day of the closing, [          ] will issue a financial guaranty insurance policy for the benefit of the Class A noteholders. Pursuant to this policy, [_________] will unconditionally and irrevocably guarantee the payments of interest and principal for each payment date with respect to the Class A Notes required to be made during the term of the policy, subject to the further provisions of the policy as described in this prospectus supplement. The Class B Notes do not have the benefit of the policy.]

Optional Redemption

The notes, if still outstanding, may be redeemed in whole, but not in part, on any payment date on which [          ] exercises its “clean-up call” option to purchase the auto and boat loan pool. This can only occur after the pool balance declines to 10% or less of the original pool balance. [          ]’s exercise of the “clean-up call” is also subject to the satisfaction of particular conditions[, including obtaining the prior written consent, in some circumstances, of [          ]]. The redemption price is equal to the unpaid principal amount of the notes plus accrued and unpaid interest on the notes.

Mandatory Redemption

[If Pre-Funding Account Is Not Depleted

Each of the Class A-1 Notes and Class A-2 Notes will be redeemed in part on a pro rata basis if any portion of the $[          ] deposited in a segregated pre-funding account with [          ] remains on deposit in that account on [          ], or prior to this date if the amount remaining in the account is less than $[_________], provided, however if the amount remaining in the pre-funding account is less than $[_________], only the Class A-1 Notes will be redeemed.]

Upon Event Of Default

The notes may be accelerated and subject to immediate payment at par upon the occurrence of an event of default under the indenture. [So long as [          ] is not in default, the power to declare an event of default will be held by [          ]].  In the case of an event of default, the notes will automatically be accelerated and subject to immediate payment at par. [The policy issued by [          ] does not guarantee payment of any amounts that become due on an accelerated basis, unless [          ] elects, in its sole discretion, to pay the amounts in whole or in part.]

Tax Consequences

McKee Nelson LLP, special federal tax counsel, will deliver an opinion of counsel that, for federal income tax purposes, the Class A Notes will be treated as indebtedness and the issuing entity will not be an association, or publicly traded partnership, taxable as a corporation. Each noteholder, by accepting a Class A Note, will agree to treat the notes as indebtedness.

The tax code is complex, and we recommend that you and your tax advisors review the information under the caption “Federal Income Tax Consequences” in this prospectus supplement and under the caption “Material Federal Income Tax Consequences” in the prospectus.

ERISA Considerations

Subject to particular considerations discussed in this prospectus supplement under “ERISA Considerations,” the Class A Notes are eligible for purchase by employee benefit plans.  See “ERISA Considerations” in this prospectus supplement and the prospectus.

Ratings

It is a condition to the issuance of the Class A Notes that the Class A Notes receive at least the following ratings from [______________] and [_________________]:

Notes	[____]	[____]
Class A-1 Notes	[__]	[__]
Class A-2 Notes	[__]	[__]

RISK FACTORS

The following information, which you should carefully consider, identifies certain significant sources of risk associated with an investment in the securities.  You should also carefully consider the information set forth under “Risk Factors” in the prospectus.

The information relating to the auto and boat loans may not reflect actual experience.	There can be no assurance that the net loss experience calculated and presented in this prospectus supplement by [       ] with respect to its portfolio of serviced contracts will reflect actual experience with respect to the auto and boat loans included in the issuing entity. In addition, there can be no assurance that the future delinquency or loan loss experience of the servicer with respect to the auto and boat loans will be better or worse than that set forth in this prospectus supplement with respect to [       ]’s servicing portfolio.
The [       ] finance program and the nature of obligors may increase the risk of delinquencies and losses.	[       ]generally originated by automobile and boat dealers for sale and assignment to [       ]. [       ] purchases retail installment sale contracts which may not meet the credit standards of traditional primary lenders. As a result, the underwriting standards applied by [       ] are not as stringent as those of the finance companies of motor vehicle and boat manufacturers or other financial institutions. The [       ] finance program focuses on the non-prime market, including borrowers with sub-standard credit profiles who may not be able to receive financing from more traditional sources. The borrowers may have had credit problems in the past, including prior delinquencies, repossessions, bankruptcy filings or charge-offs by other credit companies. Accordingly, borro wers may have greater difficulty or be less likely to make their scheduled payments. The number of delinquencies and losses on the auto and boat loans is expected to be higher than would be the case with lower risk borrowers. Due to the credit quality of these borrowers, the auto and boat loans have been originated with higher annual percentage interest rates than more traditional lenders charge lower risk borrowers. Any increase in losses on the auto and boat loans will result in accelerated prepayments on the Class A Notes. Any reinvestment risks associated with prepayment will be borne by the noteholders. Additionally, if [       ], as the security insurer, defaults under the policy, you will bear the risk of loss on the auto and boat loans. You are urged to consider the credit quality of the auto and boat loans when analyzing an investment in the notes.
A change in servicer may adversely affect collections on the auto and boat loans.	[       ] believes that its credit loss and delinquency experience reflect in part its trained staff and collection procedures. If a servicer termination event occurs under the sale and servicing agreement and [       ] is removed as servicer, or if [       ] resigns or is terminated as servicer, the backup servicer has agreed to assume the obligations of successor servicer. Typically, a change in servicers results in a temporary disruption of servicing. There can be no assurance, however, that collections with respect to the auto and boat loans will not be adversely affected by any change in servicer.
The rate at which the Class A Notes will amortize cannot be predicted.	Interest on the auto and boat loans will be payable to the holders of the Class A Notes on each payment date. This amount will equal one-twelfth of the interest rate on the note balance of the class as of the close of business on the last day of the month immediately preceding the payment date. The auto and boat loans have different APRs. All of the auto and boat loans are prepayable at any time. The rate of prepayments on the auto and boat loans may be influenced by a variety of economic, social and other factors. These factors include the fact that a consumer obligor generally may not sell or transfer the related financed vehicle or boat securing an auto and boat loan without the consent of [       ] unless the loan is repaid by the Obligor at the time of the sale or transfer. The rate of prepayment on the auto and boat loans may also may be influenced by the structure of the loan, the nature of the consumer obligors and the related financed vehicles or boats and servicing decisions. In addition, under some circumstances, [       ] is obligated to purchase auto and boat loans as a result of breaches of particular representations and warranties, pursuant to the sale and servicing agreement and the receivab les purchase agreement. Under some circumstances, the servicer is obligated to purchase auto and boat loans pursuant to the sale and servicing agreement as a result of specified uncured breaches of covenants by it. The servicer may also purchase all the auto and boat loans if the pool balance has declined to less than 10% of the original pool balance, subject to specified limitations in the sale and servicing agreement. [       ] is not aware of publicly available industry statistics that set forth principal prepayment experience for retail installment contracts similar to the auto and boat loans. None of the issuing entity, the depositor or [       ] make any representation as to the actual prepayment rates on the auto and boat loans. [       ], however, believes that the actual rate of prepayments will result in the Class A Notes being repaid prior to their respective final scheduled payment date. The amounts paid to noteholders will include prepayments on the auto and boat loans. The noteholders will bear all reinvestment risk resulting from the timing of payments on the notes.
Effect of litigation on [       ]’s financial condition.	Due to the consumer-oriented nature of [       ]’s industry and the application of particular laws and regulations, industry participants are regularly named as defendants in litigation alleging violations of federal and state laws and regulations and consumer law torts, including fraud. Many of these actions involve alleged violations of consumer protection laws. A significant judgment against [       ] or others within the industry could have a material adverse effect on [       ]. It could affect [       ]’s financial condition, results of operations and/or its ability to perform its obligations under the receivables purchase agreement, the sale and servicing agreement and the trust agreement.
Events of default under the indenture may result in an acceleration.	Upon the occurrence of an event of default under the indenture, so long as [       ] shall not have defaulted and the default is not continuing, [       ] as indenture trustee, will continue to submit claims under the insurance policy as necessary in accordance with the terms of the insurance policy to enable the issuing entity to continue to make payments due with respect to the Class A Notes on each payment date. However, following the occurrence of an event of default, [       ] may, at its option, elect to cause the liquidation of the assets of the issuing entity, in whole or in part, and pay all or any portion of the outstanding amount of the Class A Notes, plus accrued interest on the Class A Notes.
[If the Issuing Entity does not use all of the money in the pre-funding account a mandatory redemption of a portion of the Class A Notes could result.	If the issuing entity has not used all of the money deposited in the pre-funding account to purchase additional auto and boat loans by [       ], [       ], then the holders of each of the Class A-1 Notes and the Class A-2 Notes will receive a pro rata prepayment of principal in an amount equal to the unused amount or if the amount remaining in the pre-funding account is less than $[____________], only the Class A-1 Notes will be redeemed. Any reinvestment risk from the mandatory redemption of a portion of the Class A Notes from the unused amount will be borne by the holders of the Class A Notes.]
The concentration of the receivables in specific geographic areas may increase the risk of loss.	Economic conditions in the states where obligors reside may affect the delinquency, loan loss and repossession experience of the trust fund with respect to the receivables.  As of the cut-off date, the billing addresses of the obligors with respect to approximately [      ]%, [      ]%, and [      ]% of the principal amount of the receivables were located in [      ],  [      ]  and [      ], respectively.  Economic conditions in any state or region may decline over time and from time to time.  Because of the concentration of the obligors in certain states, any adverse economic conditions in those states may have a greater effect on the performance of the notes than if the concentration did not exist.
[Additional Applicable Risk Factors]	[____________________]

FORMATION OF THE ISSUING ENTITY

The Issuing Entity

[      ] Auto and Boat Owner Trust [    ]-[    ] is a [business] trust to be formed by the Depositor under the laws of the State of Delaware pursuant to a trust agreement between the Depositor and the Owner Trustee, dated as of [________] (the “Trust Agreement”) for the transactions described in the Prospectus.  [The Trust Agreement constitutes the “governing instrument” under the laws of the State of Delaware.]   On or about [       ] (the “Closing Date”), the Issuing Entity will issue Class A-1 [       ]% Asset Backed Notes (the “Class A-1 Notes”), Class A-2 [       ]% Asset Backed Notes (the “Class A-2 Notes”, and together with the Class A-1 Notes, the “Class A Notes”) and Class B [       ]% Asset Backed Notes (the “Class B Notes” and, together with the Class A Notes, the “Notes.”) The Class A-1 Notes will have an aggregate original principal amount of $[       ], the Class A-2 Notes will have an aggregate original principal amount of $[       ] and the Class B Notes will have an aggregate original principal amount of $[       ]. Only the Class A Notes are offered to you pursuant to this prospectus supplement. Any information in this prospectus supplement relating to the Class B Notes is presented solely to provide you with a better understanding of the Class A Notes. On the Closing Date, the Issuing Entity will also issue an Asset Backed Certificate (the “Certificate”) which represents the equity ownership in the issuing entity and is subordinate in right of payment to the Notes. The Certificate is not being offered by this prospectus supplement.

 After its formation, the Issuing Entity will not engage in any activity other than:

·

acquiring, holding and managing retail installment sales contracts secured by new and used automobiles, recreational vehicles, including motor homes, campers, motorcycles, all terrain vehicles and snowmobiles, vans, trucks, buses and boats, boat motors, jet skis and waverunners and the related trailers financed by  these retail installment sales contracts (the “Receivables”) and the other assets of the Issuing Entity and proceeds therefrom,

·

issuing the Notes and the Certificate,

·

making payments on the Notes and

·

engaging in other activities that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith.

The foregoing restrictions are contained in the Trust Agreement.  [These restrictions cannot be amended without the consent of holders of Notes evidencing at least 51% of the voting rights].  For a description of other provisions relating to amending the Trust Agreement, see “[[_______________]]” in the base prospectus.

The assets of the Issuing Entity will consist of the Receivables and certain related assets.

The Issuing Entity’s fiscal year end is [______].

The proceeds from the initial sale of the Notes will be used by the Issuing Entity to purchase the Initial Receivables from the Depositor pursuant to the Sale and Servicing Agreement [and to fund deposits in the Pre-Funding Account and the Capitalized Interest Account].  The Servicer will service the Receivables pursuant to the Sale and Servicing Agreement and will be compensated for acting as Servicer. See “Description of the Transaction Documents—Servicing Compensation” in this prospectus supplement.

The Issuing Entity’s principal offices are located in Wilmington, Delaware, in care of [       ], as Owner Trustee, at the address listed below under “—The Owner Trustee.”

Capitalization of the Issuing Entity

The following table illustrates the capitalization of the Issuing Entity as of the [Initial] Cut-off Date, as if the issuance and sale of the Notes had taken place on such date:

Class A-1 Notes	$[      ]
Class A-2 Notes	$[      ]
Class B Notes	$[      ]
Total	$[      ]

The Owner Trustee

[       ], the Owner Trustee (the “Owner Trustee”) under the Trust Agreement dated as of [       ], as amended as of [       ] among the Sponsor, the Depositor and the Owner Trustee (the “Trust Agreement”) is a [       ] and its principal offices are located at [       ]. The Owner Trustee will perform limited administrative functions under the Trust Agreement. The Owner Trustee’s liability in connection with the issuance and sale of the Notes is limited solely to the express obligations of the Owner Trustee set forth in the Trust Agreement and the Sale and Servicing Agreement.

[Provide Reg AB Item 1109(b) compliant description of the extent of the Owner Trustee’s prior experience serving as a trustee for asset-backed securities transactions involving asset pools of retail automobile and boat receivables.]

[Provide Reg AB Item 1109(c) compliant description of the Owner Trustee’s duties and responsibilities regarding the asset-backed securities under the governing documents and under applicable law, and of any actions required by the Owner Trustee, including whether notices are required to investors, rating agencies or other third parties, upon an event of default, potential event of default (and how defined) or other breach of a transaction covenant and any required percentage of a class or classes of asset-backed securities that is needed to require the Owner Trustee to take action.]

[Provide Reg AB Item 1109(d) compliant description of any limitations on the Owner Trustee’s liability under the transaction agreements regarding the asset-backed securities transaction.]

[Provide Reg AB Item 1109(e) compliant description of any indemnification provisions that entitle the Owner Trustee to be indemnified from the cash flow that otherwise would be used to pay the asset-backed securities.]

[Provide Reg AB Item 1109(f) compliant description of any contractual provisions or understandings regarding the Owner Trustee’s removal, replacement or resignation, as well as how the expenses associated with changing from one owner trustee to another owner trustee will be paid.]

The Indenture Trustee

 [          ], a [national banking association], will be the Indenture Trustee under the Indenture dated as of [________] among the Issuing Entity and the Indenture Trustee (the “Indenture”)..  The Depositor maintains normal commercial banking relations with the Indenture Trustee.

[Provide Reg AB Item 1109(b) compliant description of the extent of the Indenture Trustee’s prior experience serving as a trustee for asset-backed securities transactions involving asset pools of retail automobile and boat receivables.]

[Provide Reg AB Item 1109(c) compliant description of the Indenture Trustee’s duties and responsibilities regarding the asset-backed securities under the governing documents and under applicable law, and of any actions required by the Indenture Trustee, including whether notices are required to investors, rating agencies or other third parties, upon an event of default, potential event of default (and how defined) or other breach of a transaction covenant and any required percentage of a class or classes of asset-backed securities that is needed to require the Indenture Trustee to take action.]

[Provide Reg AB Item 1109(d) compliant description of any limitations on the Indenture Trustee’s liability under the transaction agreements regarding the asset-backed securities transaction.]

[Provide Reg AB Item 1109(e) compliant description of any indemnification provisions that entitle the Indenture Trustee to be indemnified from the cash flow that otherwise would be used to pay the asset-backed securities.]

[Provide Reg AB Item 1109(f) compliant description of any contractual provisions or understandings regarding the Indenture Trustee’s removal, replacement or resignation, as well as how the expenses associated with changing from one Indenture trustee to another Indenture trustee will be paid.]

THE TRUST PROPERTY

The Notes will be collateralized by the Trust Property. Each Note represents a limited obligation of the Issuing Entity secured by the Trust Property.  On the Closing Date, the Depositor will buy the Receivables from the Sponsor and the Depositor will sell the Receivables to the Issuing Entity.  The Servicer will, directly or through subservicers, service the Receivables.  The Trust Property also includes:

·

[non-prime] retail installment sale contracts (the “[Initial] Receivables”) secured by new and used automobiles and light duty trucks and boats, boat motors, jet skis and waverunners (the “[Initial] Financed Vehicles and Boats”);

·

monies due or received under the Initial Receivables [(a)] with respect to the [Initial] Receivables, after [       ] (the “[Initial] Cutoff Date”), [or (b) with respect to the Subsequent Receivables after the related cutoff date (each a “Subsequent Cutoff Date”);]

·

amounts as from time to time may be held in one or more separate trust accounts established and maintained by the Indenture Trustee, including the Collection Account, [the Pre-Funding Account and the Capitalized Interest Account], and the proceeds of these accounts, as described below (see “Description of the Transaction Documents—Accounts”);

·

security interests in the Financed Vehicles and Boats granted by the obligors (the “Obligors”) pursuant to the Receivables and any accessions;

·

the interest of the Sponsor in any proceeds from claims on any credit life, credit disability, and physical damage insurance policies or other insurance policies covering the Financed Vehicles and Boats or Obligors;

·

specific rights under the Sale and Servicing Agreement and the Receivables Purchase Agreement;

·

amounts payable to the Sponsor under all Dealer Recourse obligations;

·

all items contained in the related receivable files and any and all other documents that the Sponsor keeps on file in accordance with its customary procedures relating to the Receivables;

·

property, including the right to receive future Liquidation Proceeds, that secures any of the Receivables and that has been acquired pursuant to the liquidation of any Receivable; and

·

any and all payments on and proceeds of the foregoing.

[Additional [non-prime] retail installment sale contracts (the “Subsequent Receivables”) secured by new and used automobiles and light duty trucks and boats, boat motors, jet skis and waverunners (the “Subsequent Financed Vehicles and Boats”) and related property are intended to be purchased by the Issuing Entity from the Sponsor from time to time on or before [       ], from funds on deposit in the Pre-Funding Account. The Subsequent Receivables will be purchased by the Depositor from the Sponsor pursuant to one or more subsequent purchase agreements (each, a “Subsequent Purchase Agreement”) between the Depositor and the Sponsor, and from the Depositor by the Issuing Entity pursuant to one or more subsequent transfer agreements. The purchase by the Issuing Entity of the Initial Receivables and the Subsequent Receivables are in this prospectus supplement referred to as the “Receiva bles,” and the Initial Financed Vehicles and Boats and the Subsequent Financed Vehicles and Boats are in this prospectus supplement referred to as the “Financed Vehicles and Boats.”]

Pursuant to the dealer agreement between the Dealer and the Sponsor, a Dealer generally is obligated to pay the Sponsor for the unpaid balance of those Receivables which do not meet limited representations made by the Dealers (these obligations referred to in this prospectus supplement as “Dealer Recourse”). These representations and warranties relate primarily to the origination of the contracts and the perfection of the security interests in the related Financed Vehicles and Boats, and do not typically relate to the creditworthiness of the related Obligors or the collectability of the relevant contracts. Although the Dealer Agreements with respect to the Receivables will not be assigned to the Issuing Entity or Indenture Trustee, the Receivables Purchase Agreement and the Sale and Servicing Agreement will require the Sponsor to cause the amount of any recovery in respect to any Receivable pursuant to any Dealer Recourse to be deposit ed in the Collection Account in satisfaction of the Sponsor’s obligations under the Sale and Servicing Agreement. The sales by the Dealers of installment sale contracts to the Sponsor do not generally provide for recourse against the Dealers for unpaid amounts in the event of a default by an Obligor under the installment sales contract, other than in connection with the breach of the foregoing representations and warranties. There can be no assurance that the Sponsor will pursue all claims under the Dealer Agreements nor that the Sponsor will prevail if any claim is made.

The Receivables were generally originated by Dealers in accordance with the Sponsor’s requirements under agreements with Dealers for assignment to the Sponsor and were so assigned. All the [Initial] Receivables will be sold and assigned by the Sponsor to the Depositor pursuant to the Receivables Purchase Agreement and by the Depositor to the Issuing Entity pursuant to the Sale and Servicing Agreement on or prior to the Closing Date. [The Subsequent Receivables will be sold and assigned on one or more future dates occurring no later than [       ] (each, a “Subsequent Transfer Date”).] The Indenture Trustee, as custodian, will hold the original installment sales contract or promissory note as well as copies of documents and instruments relating to each Receivable (the “Receivables File”).

Pursuant to the Indenture, the Issuing Entity will grant a security interest in the Trust Property in favor of the Indenture Trustee on behalf of the Noteholders and for the benefit of the [       ] (the “Insurer”) in support of the obligations owing to it under the Insurance and Indemnity Agreement, dated as of [       ], between the Sponsor, the Issuing Entity, the Certificateholder and the Insurer. Any proceeds of the security interest in the Trust Property would be distributed according to the Indenture as described under “The Notes—Priority of Distribution Amounts.” The Insurer would be entitled to the distributions only after payment of amounts owing to, among others, Noteholders.

THE RECEIVABLES POOL

Pursuant to the Receivables Purchase Agreement, the Sponsor will sell and assign to the Depositor all of its right, title and interest in and to the Receivables and the other Trust Property, and the Depositor, pursuant to the Sale and Servicing Agreement, will sell and assign to the Issuing Entity all of its right, title and interest in and to the Receivables and any other Trust Property. The Issuing Entity will then pledge all of its right, title and interest in and to the Receivables to the Indenture Trustee for the benefit of the Noteholders and the Insurer pursuant to the Indenture. The Receivables consist of [non-prime] retail installment sales contracts. The Receivables were purchased by the Sponsor in the ordinary course of its business pursuant to its finance programs and underwriting standards. As detailed in this prospectus supplement, credit guidelines may be less stringent than those applied in the origination of other automobile and boat loans by other lenders. See “The Originators.”

No selection procedures adverse to the Noteholders [or the Insurer] were utilized in selecting the [Initial] Receivables sold and assigned to the Depositor and then sold and assigned to the Issuing entity. The Receivables existing as of the [Initial] Cutoff Date were selected from the Sponsor’s portfolio according to several criteria. Among the criteria, each Receivable:

(1)

arises from the delivery and acceptance of a Financed Vehicle or Boat and which delivery and acceptance has been fully performed by the Obligor and the Dealer party to the transaction,

(2)

arises from the normal course of the Dealer’s business,

(3)

is not in default,

(4)

the Obligor of which is a natural person residing in any state or the District of Columbia,

(5)

the Obligor of which is not a government or a governmental subdivision or agency,

(6)

met the Sponsor’s underwriting criteria at the time of purchase,

(7)

is denominated and payable in Dollars in the United States,

(8)

is in full force and effect and constitutes the legal, valid and binding obligation of the Obligor in accordance with its terms,

(9)

is not subject to any dispute, litigation, counterclaim or defense, or any offset or right of offset at the time of purchase by the Sponsor, any exercisable right of rescission,

(10)

is not more than [       ] days past due,

(11)

has an original term to scheduled maturity of not less than [       ] or more than [____] months,

(12)

has a remaining term to scheduled maturity of not less than [       ] months or greater than [____] months,

(13)

provides for equal monthly payments which will cause the Receivable to fully amortize [       ] during its term,

(14)

has a remaining principal balance of not less than $[       ] or more than $[       ],

(15)

has an APR of not less than [       ]% and

(16)

the model year of the related Financed [Vehicle][Boat] is not earlier than [       ].

As of the Cut-off Date, no Obligor on any Receivable was noted in the related records of the Servicer as being the subject of any pending bankruptcy or insolvency proceeding.  The latest scheduled maturity of any Receivable is not later than [      ].  No selection procedures believed by the Depositor to be adverse to the Noteholders were used in selecting the Receivables.

The Depositor considers an account past due if any portion of the payment due on a due date is not received by the succeeding due date for that account.

Payments on the Receivables

All of the Receivables provide for the payment by the related Obligor of a specific total amount of payments, payable in substantially equal monthly installments on each scheduled payment date, which total represents the amount financed plus interest charges on the amount financed for the term of the Receivable. Each Receivable provides for repayment of the Amount Financed by an Obligor according to:

·

the Rule of 78’s (a “Rule of 78’s Receivables”),

·

the actuarial method (an “Actuarial Receivable” and together with Rule of 78’s Receivables, the “Precomputed Receivables”) or

·

the simple interest method (a “Simple Interest Receivable”).

Under a Rule of 78’s Receivable, the rate at which the amount of finance charges is earned and, correspondingly, the amount of each scheduled monthly payment allocated to reduction of the outstanding principal balance of the related Receivable are calculated in accordance with the “Rule of 78’s”. Under the Rule of 78’s, the portion of a payment allocable to interest earned during that month is determined by multiplying the total amount of interest payable over the term of the Receivable by a fraction, the denominator of which is equal to the sum of a series of numbers beginning with one and ending with the number of scheduled monthly payments due under the related Receivable, and the numerator of which is the number of payments remaining under the Receivable before giving effect to the payment to which the fraction is being applied. The difference between the amount of the scheduled monthly payment made by the Obligor and the amount of earned interest calculated for the month is applied to principal reduction.

An Actuarial Receivable provides for amortization of the loan over a series of fixed level monthly installments. Each scheduled monthly payment is deemed to consist of an amount of interest equal to one-twelfth of the stated APR of the Receivable multiplied by the outstanding principal balance of the Receivable and an amount of principal equal to the remainder of the scheduled monthly payment.

All payments received by the Servicer on or in respect of Precomputed Receivables, including the final scheduled payment, will be allocated pursuant to the Sale and Servicing Agreement on an actuarial basis. No adjustment will be made in the event of early or late payments, although in the latter case, the Obligor may be subject to a late charge.

“Simple Interest Receivables” provide for the amortization of the amount financed under the Receivable over a series of fixed level monthly payments. However, unlike the monthly payment under Rule of 78s Receivables, each monthly payment consists of an installment of interest which is calculated on the basis of the outstanding principal balance of the receivable multiplied by the stated APR and further multiplied by the period elapsed, as a fraction of a calendar year, since the preceding payment of interest was made. As payments are received under a Simple Interest Receivable, the amount received is applied first to interest accrued to the date immediately preceding the date of payment and the balance is applied to reduce the unpaid principal balance. Accordingly, if an Obligor pays a fixed monthly installment before its scheduled due date, the portion of the payment allocable to interest for the period since the pre ceding payment was made will be less than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly greater. Conversely, if an Obligor pays a fixed monthly installment after its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be greater than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly less. In either case, the Obligor pays a fixed monthly installment until the final scheduled payment date, at which time the amount of the final installment is increased or decreased as necessary to repay the then outstanding principal balance.

In the event of a prepayment in full, voluntarily or by acceleration, of a Precomputed Receivable, a “rebate” in the loan accounting records of the Servicer may be made to the Obligor of that portion of the total amount of payments under the relevant Receivable allocable to “unearned” finance charges. In the event of the prepayment in full, voluntarily or by acceleration, of a Simple Interest Receivable, a “rebate” will not be made to the Obligor, but the Obligor will be required to pay interest only to the date immediately preceding the date of prepayment. The amount of a rebate under a Precomputed Receivable generally will be less than or equal to the remaining scheduled payments of interest that would have been due under a Simple Interest Receivable for which all remaining payments were made on schedule.

The amount of a rebate under a Rule of 78’s Receivable calculated in accordance with the Rule of 78’s generally will be less than the amount of a rebate on an Actuarial Receivable calculated in accordance with the actuarial method. Distributions to Noteholders will not be affected by Rule of 78’s rebates under the Rule of 78’s Receivables because pursuant to the Sale and Servicing Agreements distributions will be determined using the actuarial method. Amounts received upon prepayment in full of a Rule of 78’s Receivable in excess of the then outstanding principal balance of the Receivable and accrued interest on the then outstanding principal balance of the Receivable, calculated pursuant to the actuarial method, will not be passed through to Noteholders.

Purchase or Replacement Obligations

Pursuant to the Receivables Purchase Agreement and the Sale and Servicing Agreement, the Sponsor will be obligated to repurchase or replace, subject to limits on replacement set forth in the Sale and Servicing Agreement, any Receivable sold and assigned to the Issuing Entity as to which a breach has occurred as to particular representations or warranties made by the Sponsor with respect to the Receivable, if the breach has not been cured by the last day of the first full calendar month following the discovery by or notice to the Sponsor of the breach, if the breach will materially and adversely affect the interests of the Noteholders, the Insurer or the Issuing Entity in the relevant Receivable. The Indenture Trustee will also have rights to enforce the obligations of the Sponsor under the Receivables Purchase Agreement. See “Description of the Transaction Documents—Sale and Assignment of Receivables” and “T rust Property” in this prospectus supplement.

The Sale and Servicing Agreement also provides that if the Servicer breaches certain of its servicing obligations under the Sale and Servicing Agreement, including but not limited to its obligation to maintain perfection of the first priority security interest of the Sponsor created by each Receivable in the related Financed Vehicle or Boat, or other covenants with regard to the Servicer, in each case only in a manner that materially and adversely affects the interests of the Noteholders, the Insurer or the Issuing Entity in any Receivable, the Servicer will purchase or replace the relevant Receivable from the Issuing Entity, unless the breach has been cured by the last day of the first full calendar month following the discovery by or notice to the Servicer of the breach.

Composition of the Pool of Initial Receivables

The tables below set forth information regarding the composition and characteristics of the pool of Receivables as of the [Initial] Cutoff Date. It is expected that the composition and characteristics of the Receivables on the Closing Date will be similar to the information set forth below. However, some Receivables may be excluded on the Closing Date as of a result of particular administrative considerations. The Sponsor does not believe that the characteristics of the Receivables included in the Issuing Entity on the Closing Date in the aggregate will differ materially from the information set forth in this prospectus supplement.

Composition of the Receivables as of the [Initial] Cut-off Date
	New Financed Vehicles or Boats	Used Financed Vehicles or Boats	Total
Aggregate Principal Balance	$[__________]	$[__________]	$[__________]
Number of Receivables	[__________]	[__________]	[__________]
Average Principal Balance	$[__________]	$[__________]	$[__________]
Average Original Balance	$[__________]	$[__________]	$[__________]
Weighted Average Contract Rate	[_______]%	[_______]%	[_______]%
Contract Rate (Range)	[___]% - [___]%	[___]% - [___]%	[___]% - [___]%
Weighted Average Original Term (months)	[_______]	[_______]	[_______]
Original Term (Range) (months)	[____] to [_____]	[____] to [_____]	[____] to [_____]
Weighted Average Remaining Term (months)	[_______]	[_______]	[_______]
Remaining Term (Range) (months)	[____] to [_____]	[____] to [_____]	[____] to [_____]
Weighted Average FICO score	[_______]	[_______]	[_______]
FICO score (Range)	[____] to [_____]	[____] to [_____]	[____] to [_____]

Distribution by Remaining Term of the Receivables as of the [Initial] Cut-off Date
Remaining Term (Range)	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
Less than [_____] months	[____________]	$[__________]	[___________]%
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
Total		$	100.00%

Distribution by Annual Percentage Rate of the Receivables as of the [Initial] Cut-off Date
Annual % Rate Range	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
[_____]% to below	[____________]	$	%
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[____]% and above	[____________]	[____________]	[____________]
Total		$	100.00%

Geographic Distribution of the Receivables as of the [Initial] Cut-off Date
State1	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
[      ]	[____________]	$	%
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
Others2
Total		$	100.00%

____________________

1.

Based on billing addresses of the Obligors as of the Cut-off Date, which may differ from the state of origination of the Receivable.

2.

Includes [    ] other states and [    ] none of which have a concentration of Receivables in excess of [    ]% of the aggregate principal balance.

Distribution by Remaining Principal Balance of the Receivables as of the [Initial] Cut-off  Date
Remaining Principal Balance (Range)	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
$ 2,500 to $ 4,999	[____________]	$	%
$ 5,000 to $ 7,499	[____________]	[____________]	[____________]
$ 7,500 to $ 9,999	[____________]	[____________]	[____________]
$10,000 to $12,499	[____________]	[____________]	[____________]
$12,500 to $14,999	[____________]	[____________]	[____________]
$15,000 to $17,499	[____________]	[____________]	[____________]
$17,500 to $19,999	[____________]	[____________]	[____________]
$20,000 to $22,499	[____________]	[____________]	[____________]
$22,500 to $24,999	[____________]	[____________]	[____________]
$25,000 to $27,499	[____________]	[____________]	[____________]
$27,500 to $29,999	[____________]	[____________]	[____________]
$30,000 to $32,499	[____________]	[____________]	[____________]
$32,500 to $34,999	[____________]	[____________]	[____________]
$35,000 to $37,499	[____________]	[____________]	[____________]
$37,500 to $39,999	[____________]	[____________]	[____________]
$40,000 to $41,499	[____________]	[____________]	[____________]
$42,500 to $44,999	[____________]	[____________]	[____________]
$45,000 to $47,499	[____________]	[____________]	[____________]
$47,500 to $49,999	[____________]	[____________]	[____________]
$50,000 to $52,499	[____________]	[____________]	[____________]
$52,500 to $54,999	[____________]	[____________]	[____________]
Total		$	100.00%

Distribution by FICO Score of the Receivables as of the [Initial] Cut-off Date
Annual % Rate Range	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
[______] to [______]	[____________]	$	%
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] and above	[____________]	[____________]	[____________]
Total		$	100.00%

Receivable Delinquencies and Losses

For information regarding delinquencies and losses on the Receivables, see the tables below.  A Receivable is considered to be delinquent when a payment due on any due date remains unpaid as of the close of business on the last business day immediately prior to the next monthly due date.  The determination as to whether a loan falls into this category is made as of the close of business on the last business day of each month.

30 -  59 Days (times):	Number of Receivables	% by Receivable Count	Principal Balance Outstanding as of the Cutoff Date	% of Aggregate Principal Balance Outstanding as of the Cutoff Date
0	[________]	[______]%	[_______._]	[__.__]
1	[________]	[______]%	[_______._]	[__.__]
2	[________]	[______]%	[_______._]	[__.__]
Total	[________]	100.00%	[_______._]	100.00

60 -  89 Days (times):	Number of Receivables	% by Receivable Count	Principal Balance Outstanding as of the Cutoff Date	% of Aggregate Principal Balance Outstanding as of the Cutoff Date
0	[________]	[______]	[_______._]	[__.__]
1	[________]	[______]	[_______._]	[__.__]
2	[________]	[______]	[_______._]	[__.__]
Total	[________]	100.00	[_______._]	100.00

[No Receivable has been delinquent more than 90 days since origination.]

STATIC POOL INFORMATION

Static pool information material to this offering may be found at [website address].

Information provided through the Internet address above will not be deemed to be a part of this prospectus or the registration statement for the notes offered hereby if it relates to any prior notes pool or vintage formed before January 1, 2006, or with respect to the mortgage pool (if applicable) any period before January 1, 2006.

THE ORIGINATORS

General

[____], [____] and  [____] are the originators of the receivables with respect to approximately [___]%, [___]% and [___]%, respectively, of the receivables by aggregate principal balance as of the Cut-off Date, along with various other originators, none of which originated more than 10% of the receivables by aggregate principal balance as of the Cut-off Date (each, an “Originator”).

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

THE SERVICER

[____________], a [describe form of organization of the servicer], (the “Servicer”) will initially service the Receivables pursuant to a sale and servicing agreement, to be dated as of [      ] (the “Sale and Servicing Agreement”), among the Sponsor, the Depositor, the Issuing Entity and the Servicer.  

The Servicer will perform the functions of a third-party servicer of automobile and boat loans as an agent for their beneficial owner.  [These servicer functions will include:

·

collecting and posting all payments;

·

responding to obligor inquiries regarding the automobile and boat loans;

·

investigating delinquencies;

·

reporting tax information to obligors;

·

paying vehicle or boat disposition costs with respect to defaulted accounts;

·

monitoring the collateral;

·

accounting for collections;

·

furnishing monthly and annual statements to the Issuing Entity with respect to distributions; and

·

generating federal income tax information. ]

 [Regulation AB Item 1108 compliant description of the Servicer.]

Delinquency Experience (Dollars in Thousands)
	At December 31,
	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]
	Number of Loans	Dollars	Percent	Number of Loans	Dollars	Percent	Number of Loans	Dollars	Percent
Principal Amount Outstanding1
Delinquencies2
30-59 Days
60-89 Days
90-119 Days
over 120 days
Total Delinquencies as a  Percentage of the Total Amount Outstanding

________________________

1.

Principal Amount Outstanding is the aggregate remaining principal balance of all Receivables serviced, net of unearned interest.

2.

The period of delinquency is based on the number of days scheduled payments are contractually past due.  Includes repossessions on hand which have not been charged-off.  A receivable is 30 days contractually past due if a scheduled payment has not been received by the subsequent calendar month’s scheduled payment date.

THE BACKUP SERVICER

If a Servicer Termination Event occurs and remains unremedied and the Sponsor is terminated as Servicer or resigns as Servicer, in each case in accordance with the Sale and Servicing Agreement, [       ], a [       ], will serve as Backup Servicer.

The Backup Servicer will receive a fee on each Payment Date equal to one-twelfth the product of [       ] basis points and the then outstanding Note Balance as compensation for, among other things, (1) standing by to act as successor Servicer and (2) confirming particular calculations made by the Servicer on the monthly statement to Noteholders, including but not limited to (a) interest and principal payments due to the Noteholders and (b) some of the Receivables performance ratios. In addition, following the resignation or removal of the Servicer, the Backup Servicer will be reimbursed for particular costs and expenses associated with the transition of the Backup Servicer to Servicer (the “Servicer Transition Expenses”).

 [Regulation AB Item 1108 compliant description of the Backup Servicer.]

MATURITY AND PREPAYMENT CONSIDERATIONS

All the Receivables are prepayable at any time. The rate of prepayments on the Receivables may be influenced by a variety of economic, social and other factors, including the fact that an Obligor generally may not sell or transfer the Financed Vehicle or Boat securing a Receivable without the consent of the Sponsor unless the loan is repaid by the Obligor at the time of the sale or transfer.  For this purpose the term “prepayments” includes prepayments in full, or in part, including, without limitation, some partial prepayments related to refunds of extended service contract costs and unearned insurance premiums, liquidations due to default, as well as receipts of proceeds from physical damage, credit life and credit accident and health insurance policies and other Receivables repurchased for administrative reasons.  The rate of prepayment on the Receivables may also be influenced by the structure of the loa n, the nature of the Obligors and the Financed Vehicles or Boats and servicing decisions as discussed above. In addition, under some circumstances, the Sponsor is obligated to repurchase or replace Receivables as a result of breaches of representations and warranties pursuant to the Sale and Servicing Agreement and the Receivables Purchase Agreement, and under some circumstances, the Servicer is obligated to purchase Receivables pursuant to the Sale and Servicing Agreement as a result of breaches of specific covenants. Subject to particular conditions, the Servicer has the option to purchase the Receivables when the aggregate principal balance of the Receivables is 10% or less of the Original Pool Balance.

If prepayments are received on the Receivables, the actual weighted average life of the Receivables may be shorter than the scheduled weighted average life, i.e., the weighted average life assuming that payments will be made as scheduled and that no prepayments will be made. “Weighted Average Life” means the average amount of time during which each dollar of principal on a Receivable is outstanding.

Any reinvestment risks resulting from a faster or slower incidence of prepayment of Receivables will be borne by the Noteholders. See also “The Notes—Optional Purchase of Receivables” regarding the Servicer’s right to purchase the Receivables and the other Trust Property on any Determination Date as of which the Aggregate Principal Balance has declined to less than 10% of the Original Pool Balance.

[Prepayments on automotive and boat receivables can be measured relative to a prepayment standard or model.  The model used in this Prospectus, the Absolute Prepayment Model (“ABS”), represents an assumed rate of prepayment each month relative to the original number of receivables in a pool of receivables.   ABS further assumes that all the receivables are the same size and amortize at the same rate and that each receivable in each month of its life will either be paid as scheduled or be prepaid in full.   For example, in a pool of receivables originally containing 10,000 receivables, a 1% ABS rate means that 100 receivables prepay each month.   ABS does not purport to be an historical description of prepayment experience or a prediction of the anticipated rate of prepayment of any pool of receivables, including the Receivables.

The table captioned “Percent of Initial Note Principal Balance at Various ABS Percentages” (the “ABS Table”) has been prepared on the basis of the characteristics of the Receivables.   The ABS Table assumes that

·

the Issuing Entity includes two pools of Receivables with the characteristics set forth in the following table;

·

the Receivables prepay in full at the specified constant percentage of ABS monthly, with no defaults, losses or repurchases;

·

each scheduled monthly payment on the Receivables is made on the last day of each month and each month has 30 days;

·

the initial principal amount of each of the Class A-1 Notes and Class A-2 Notes are as set forth on the cover page of this prospectus supplement;

·

interest accrues during each Interest Period at the following assuming coupon rates; Class A-1 Notes, [______]% and Class A-2 Notes, [______]%;

·

payments on the Notes are made on each Distribution Date (and each such date is assumed to be the [   ] day of each applicable month);

·

the Class A Notes are purchased on [       ];

·

the scheduled monthly payment for each Receivable has been calculated on the basis of the assumed characteristics in the following table so that each Receivable will amortize in amounts sufficient to repay the Principal Balance of the Receivable by its indicated remaining term to maturity;

·

the first due date for each Receivable is the last day of the month of the assumed cutoff date for each Receivable as set forth in the following table;

·

[the entire Pre-Funded Amount is used to purchase Subsequent Receivables;]

·

the Servicer does exercise its option to purchase the Receivables; and

·

the difference between the gross APR and the net APR is equal to the Servicer Fee, and the net APR is further reduced by the fees due to the Indenture Trustee, the Backup Servicer [and the Insurer].

Pool	Aggregate Principal Balance	Gross APR (%)	Assumed Cutoff Date	Original Term to Maturity (in Months)	Remaining Term to Scheduled Maturity (in Months)
1	$[______]	[       ]	[       ]	[       ]	[       ]
2	$[______]	[       ]	[       ]	[       ]	[       ]
Total	$[______]

The ABS Table sets forth the percent of the initial principal amount of the Notes that would be outstanding after each of the Distribution Dates shown and the corresponding weighted average lives thereof at various constant ABS percentages.

The actual characteristics and performance of the Receivables will differ from the assumptions used in constructing the ABS Table.   The assumptions used are hypothetical and have been provided only to give a general sense of how the principal cash flows might behave under varying prepayment scenarios.   For example, it is very unlikely that the Receivables will prepay at a constant level of ABS until maturity or that all of the Receivables will prepay at the same level of ABS or that the coupon rates on the Notes will remain constant.   Moreover, the diverse terms of Receivables could produce slower or faster principal distributions than indicated in the ABS Table at the various constant percentages of ABS specified, even if the original and remaining terms to maturity of the Receivables are as assumed.  Any difference between such assumptions and the actual characteristics and performance of the Receivables, including actual prepayment experience or losses, will affect the percentages of initial balances outstanding over time and the weighted average lives of the Notes.]

Percent of Initial Note Principal Balance at Various ABS Percentages(1)
	Class A-1 Notes Assumed ABS Percentage
Payment Dates	[   ]%	[   ]%	[   ]%	[   ]%
Closing Date	100	100	100	100
[                        ]
[                        ]
[                        ]
Weighted Average Life (years) (2)

_______________________

(1)The percentages in this table have been rounded to nearest whole number.

(2)The weighted average life of a note is determined by (1) multiplying the amount of each principal payment on a note by the number of years from the date of the Issuance of the note to the related Payment Date, (b) adding the results and (c) dividing the sum by the related initial principal amount of the note.

Percent of Initial Note Principal Balance at Various ABS Percentages(1)
	Class A-2 Notes Assumed ABS Percentage
Payment Dates	[   ]%	[   ]%	[   ]%	[   ]%
Closing Date	100	100	100	100
[                        ]
[                        ]
[                        ]
Weighted Average Life (years) (2)

_______________________

(1)The percentages in this table have been rounded to nearest whole number.

(2)The weighted average life of a note is determined by (a) multiplying the amount of each principal payment on a note by the number of years from the date of the Issuance of the note to the related Payment Date, (b) adding the results and (c) dividing the sum by the related initial principal amount of the note.

YIELD CONSIDERATIONS

Other than on the first Payment Date, on each Payment Date, interest on the Receivables will be passed through to the Noteholders in an amount equal to one-twelfth of the Interest Rate multiplied by the Note Balance of the applicable Class on the last day of the immediately preceding Collection Period. In the event of prepayments on Receivables, Noteholders will nonetheless be entitled to receive interest for the full month on the Notes. See also “The Receivables—Payments on the Receivables” in this prospectus supplement.

USE OF PROCEEDS

The Issuing Entity will use the net proceeds from the sale of the Notes to purchase Receivables from the Depositor [and to make the initial deposit into the Capitalized Interest Account and the Pre-Funding Account]. The Depositor will use the net proceeds paid to the Depositor by the Issuing Entity to purchase Receivables from the Sponsor, which in turn will use the proceeds to pay related expenses and repay specific warehouse loans and any additional proceeds will be added to the Sponsor’s general funds and used for its general corporate purposes.

DESCRIPTION OF THE NOTES

The Notes will be issued pursuant to the terms of the Indenture, substantially in the form filed as an exhibit to the Registration Statement.  The following information summarizes all material provisions of the Notes and the Indenture.  The following summary supplements the description of the general terms and provisions of the Notes of any given Series and the related Indenture set forth in the Prospectus, to which description reference is hereby made.

The Notes

The Class A Notes initially will be represented by notes registered in the name of Cede & Co., as the nominee of The Depository Trust Company (“DTC”), and will only be available in the form of book-entries on the records of DTC and participating members of DTC in denominations of $1,000. All references to “Holders” or “Noteholders” and to authorized denominations, when used with respect to the Notes, shall reflect the rights of Note Owners, and limitations of Note Owners, as they may be indirectly exercised through DTC and its participating members, except as otherwise specified in this prospectus supplement. See “Certain Information Regarding the Securities—Book-Entry Regulation” in the prospectus supplement and Annex I to the prospectus.

In general, the Class A-1 Noteholders will be entitled to receive, on each Payment Date, the Class A-1 Principal Payment Amount and the Class A-1 Interest Payment Amount and the Class A-2 Noteholders will be entitled to receive, on each Payment Date, the Class A-2 Principal Payment Amount and the Class A-2 Interest Payment Amount, subject to the priority of payments as described in “—Priority of Distribution Amounts.” Payments on the Notes will be made from the Note Distribution Account.

In general, the Class A-1 Noteholders will be entitled to receive, on each Payment Date, the Class A-1 Principal Payment Amount and the Class A-1 Interest Payment Amount and the Class A-2 Noteholders will be entitled to receive, on each Payment Date, the Class A-2 Principal Payment Amount and the Class A-2 Interest Payment Amount, subject to the priority of payments as described in “—Priority of Distribution Amounts.” Payments on the Notes will be made from the Note Distribution Account.

[Mandatory Redemption

The Class A Notes will be redeemed in part on the Mandatory Redemption Date in the event that any portion of the Pre-Funded Amount remains on deposit in the Pre-Funding Account at the end of the Funding Period. The aggregate principal amount of the Class A Notes to be redeemed will be an amount equal to the remaining Pre-Funded Amount on that date (the “Class A Mandatory Redemption Amount”). The Class A Mandatory Redemption Amount will be distributed pro rata to each of the Class A-1 Notes and the Class A-2 Notes, based on the current principal balance of each Class, provided, however, that if the amount remaining in the Pre-Funding Account is less than $[_____________], only the Class A-1 Notes will be redeemed.]

Optional Purchase of Receivables

As an administrative convenience, the Servicer may purchase all the Receivables and other Trust Property on any Payment Date if, as of the last day of the related Collection Period, the Aggregate Principal Balance has declined to less than 10% of [the sum of (1)] the Aggregate Principal Balance as of the [Initial] Cutoff Date [plus (2) the aggregate principal balances of the Subsequent Receivables added to the Issuing Entity as of their respective Cutoff Dates] (the “Original Pool Balance”). To exercise this option, the Servicer must pay the aggregate Purchase Amounts for the Receivables [and obtain the prior written consent of the Insurer, or if the redemption would result in a claim under the Policy or if the redemption would result in any amount owing to the Insurer remaining unpaid.] Upon exercising the option, the Servicer will succeed to all interests in and to the Trust Property. The purchase price paid by the Servicer will be d eposited into the Collection Account and distributed pursuant to “—Priority of Distribution Amounts” below. See “Certain Matters Regarding the Servicer—Termination” in the accompanying prospectus.

This purchase will cause a redemption of the Notes; provided, however, that the Servicer will provide the Indenture Trustee, the Backup Servicer, [the Insurer] and the Rating Agencies at least 10 days’ prior written notice of any redemption. The Indenture Trustee will give notice to each Noteholder at least five days prior to any redemption. The redemption price for each Note will be no less than the outstanding principal balance of the relevant Note on the date of redemption plus accrued and unpaid interest on the outstanding principal balance (the “Redemption Price”). The Servicer will deposit the Redemption Price into the Collection Account, and the Indenture Trustee will distribute the amounts so deposited in accordance with the “Priority of Distribution Amounts” below.

Distributions from the Issuing Entity

No later than 12:00 p.m. New York City time on each Determination Date, the Servicer will inform the Indenture Trustee of the amount of aggregate collections on the Receivables and the aggregate Purchase Amount of Receivables to be purchased by the Servicer with respect to the related Collection Period. The Servicer will determine prior to the Determination Date, the Class A-1 Interest Payment Amount, the Class A-1 Principal Payment Amount, the Class A-2 Interest Payment Amount, the Class A-2 Principal Payment Amount, the Payment Amount, the amounts, if any, required to be deposited in the Class A Reserve Account, the Class A Overcollateralization Amount and the Class A Target Overcollateralization Amount.

For purposes of this prospectus supplement, the following terms shall have the following meanings:

“Aggregate Principal Balance” means, with respect to the Closing Date, the Cutoff Date Principal Balance, and with respect to any Determination Date, the sum of the Principal Balances, computed as of the last day of the related Collection Period end date, for all Receivables, other than Liquidated Receivables and Purchased Receivables.

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

“Available Funds” means, with respect to any Determination Date, the sum of

(1)

the “Collected Funds” received by the Servicer during the related Collection Period,

(2)

all Purchase Amounts deposited in the Collection Account for the related Collection Period,

(3)

all income received from investments of funds in the Collection Account during the related Collection Period,

[(4)

the Monthly Capitalized Interest Amount with respect to the Payment Date,]

[(5)

the Insurer Optional Deposit, if any, and]

[(6)

any remaining Pre-Funded Amount applied to the mandatory redemption of Notes.]

“Certificateholder” means the holder of a Certificate

“Class” means a class of Notes.

“Class A Interest Carryover Shortfall” means, as of the close of business on any Payment Date, the sum of (1) the Class A-1 Interest Carryover Shortfall and (2) the Class A-2 Interest Carryover Shortfall.

“Class A Interest Payment Amount” means, with respect to any Payment Date, the sum of (1) the Class A-1 Interest Payment Amount and (2) the Class A-2 Interest Payment Amount.

[“Class A Mandatory Redemption Amount” means the amount, if any, remaining of the Pre-Funded Amount on the Mandatory Redemption Date.]

“Class A Overcollateralization Amount” means, with respect to any Payment Date, an amount equal to the excess, if any, of:

[(1)

the sum of,

(a)]

 the remaining Aggregate Principal Balance as of the last day of the related Collection Period [and

(b)

 all amounts, if any, in the Pre-Funding Account,] over

(2)

 the remaining Class A Note Balance, after giving effect to the amounts payable on the Payment Date pursuant to clauses (1) through (5) under “—Priority of Distribution Amounts” on the Payment Date.

“Class A Principal Payment Amount” means, with respect to any Payment Date, the sum of the Class A-1 Principal Payment Amount and the Class A-2 Principal Payment Amount.

“Class A Target Overcollateralization Amount” means, with respect to any Payment Date, an amount equal to the product of (1) [       ]%[, or any lesser percentage as the Insurer may decide in its sole discretion,] and (2) [the sum of (a)] the remaining Aggregate Principal Balance[, and (b) amounts, if any, in the Pre-Funded Account, each] determined as of the last day of the related Collection Period.

“Class A-1 Final Scheduled Payment Date” means [       ] or, if this day is not a Business Day, the next succeeding Business Day.

 “Class A-1 Interest Carryover Shortfall” means, as of the close of business on any Payment Date, the excess of (a) the Class A-1 Interest Payment Amount for the Payment Date and any outstanding Class A-1 Interest Carryover Shortfall from the immediately preceding Payment Date plus interest on this outstanding Class A-1 Interest Carryover Shortfall, to the extent permitted by law, at the Class A-1 Interest Rate from the preceding Payment Date through the current Payment Date, calculated on the basis of a 360-day year consisting of twelve 30-day months, over (b) the amount of interest that the Holders of the Class A-1 Notes actually received on the current Payment Date.

“Class A-1 Interest Payment Amount” means, with respect to any Payment Date, 30 days’ interest, calculated on the basis of a 360-day year consisting of twelve 30-day months or, in the case of the first Payment Date, the number of days (on a “30/360” basis) from and including [       ], to but excluding [       ], at the Class A-1 Interest Rate on the Class A-1 Note Balance as of the close of business on the last day of the related Collection Period.

[“Class A-1 Mandatory Redemption Amount” means, (1) with respect to the Mandatory Redemption Date on which the Class A Mandatory Redemption Amount is less than $100,000, the Class A Mandatory Redemption Amount, and (2) with respect to any Payment Date on which the Class A Mandatory Redemption Amount is greater than $[__________], the product of (A) the Class A Mandatory Redemption Amount and (B) a fraction, the numerator of which is the Class A-1 Note Balance as of the class of business on the date prior to the related Payment Date and the denominator of which is the Class A Note Balance as of the class of business on the date prior to the related Payment Date.]

“Class A-1 Principal Carryover Shortfall” means, as of the close of business on any Payment Date, the excess of (a) the Class A-1 Principal Payment Amount and any outstanding Class A-1 Principal Carryover Shortfall from the immediately preceding Payment Date, over (b) the amount of principal that the Holders of the Class A-1 Notes actually received on the current Payment Date.

“Class A-1 Principal Payment Amount” means:

(a)

with respect to any Payment Date other than the Class A-1 Final Scheduled Payment Date: the lesser of,

(1)

the Class A-1 Note Balance immediately prior to the Payment Date and

[(2)

the sum of

(A)]

the Principal Payment Amount [and

(B)

the Class A-1 Mandatory Redemption Amount] and

(b)

with respect to the Class A-1 Final Scheduled Payment Date, the then outstanding Class A-1 Note Balance.

“Class A-2 Final Scheduled Payment Date” means [       ], or, if this day is not a Business Day, the next succeeding Business Day.

“Class A-2 Interest Payment Amount” means, with respect to any Payment Date, 30 days’ interest, calculated on the basis of a 360-day year consisting of twelve 30-day months or, in the case of the first Payment Date, the number of days (on a “30/360” basis) from and including [       ], to but excluding [       ], at the Class A-2 Interest Rate on the Class A-2 Note Balance as of the close of business on the last day of the related Collection Period.

 “Class A-2 Interest Carryover Shortfall” means, as of the close of business on any Payment Date, the excess of (a) the Class A-2 Interest Payment Amount for the Payment Date and any outstanding Class A-2 Interest Carryover Shortfall from the immediately preceding Payment Date plus interest on the outstanding Class A-2 Interest Carryover Shortfall, to the extent permitted by law, at the Class A-2 Interest Rate from the preceding Payment Date through the current Payment Date, calculated on the basis of a 360-day year consisting of twelve 30-day months, over (b) the amount of interest that the Holders of the Class A-2 Notes actually received on the current Payment Date.

[“Class A-2 Mandatory Redemption Amount” means, with respect to the Mandatory Redemption Payment Date, the positive difference, if any, between the Class A Mandatory Redemption Amount and the Class A-1 Mandatory Redemption Amount.]

“Class A-2 Principal Carryover Shortfall” means, as of the close of business on any Payment Date, the excess of (a) the Class A-2 Principal Payment Amount and any outstanding Class A-2 Principal Carryover Shortfall from the immediately preceding Payment Date, over (b) the amount of principal that the Holders of the Class A-2 Notes actually received on the current Payment Date.

“Class A-2 Principal Payment Amount” means:

(a)

with respect to any Payment Date other than the Class A-2 Final Scheduled Payment Date: the lesser of,

(1)

the Class A-2 Note Balance immediately prior to the Payment Date, and

[(2)

the difference between

(A)]

[the sum of] the Principal Payment Amount [and the Class A-2 Mandatory Redemption Amount] and

(B)

the Class A-1 Principal Payment Amount and

(b)

with respect to the Class A-2 Final Scheduled Payment Date, the then outstanding Class A-2 Note Balance.

“Class B Interest Carryover Shortfall” means, as of the close of business on any Payment Date, the excess of (a) the Class B Interest Payment Amount for the Payment Date and any outstanding Class B Interest Carryover Shortfall from the immediately preceding Payment Date plus interest on the outstanding Class B Interest Carryover Shortfall, to the extent permitted by law, at the Class B Interest Rate from the preceding Payment Date through the current Payment Date, calculated on the basis of a 360-day year consisting of twelve 30-day months, over (b) the amount of interest that the Holders of the Class B Notes actually received on the current Payment Date.

“Class B Interest Payment Amount” means, with respect to any Payment Date, 30 days’ interest, calculated on the basis of a 360-day year consisting of twelve 30-day months or, in the case of the first Payment Date, the number of days (on a “30/360” basis) from and including [       ] to but excluding [       ], at the Class B Interest Rate on the Class B Note Balance as of the close of business on the last day of the related Collection Period.

“Class B Note Balance” means an amount equal to $[       ] on the Closing Date and after, an amount equal to the initial Class B Note Balance reduced by all amounts distributed to the Class B Noteholders that are allocable to principal.

“Class B Principal Payment Amount” means:

(a)

with respect to any Payment Date other than the Class B Final Scheduled Payment Date: the lesser of,

(x)

the Class B Note Balance immediately prior to the Payment Date, and

(y)

amounts remaining from the sum of,

(A)

Available Funds and

(B)

amounts available from the Class A Reserve Account in accordance with the terms of the Sale and Servicing Agreement, after application of priorities First through Ninth under “—Priority of Distribution Amounts,” and

(b)

with respect to the Class B Final Scheduled Payment Date, the then outstanding Class B Note Balance.

“Collected Funds” means with respect to any Determination Date, the amount of funds in the Collection Account representing collections on the Receivables received by the Servicer during the related Collection Period, including all Liquidation Proceeds collected during the related Collection Period, but excluding any Purchase Amounts, and all amounts paid by Dealers under Dealer Agreements or Dealer Assignments with respect to the Receivables during the related Collection Period.

“Collection Period” means with respect to any Payment Date or Determination Date, the calendar month preceding the month in which the Payment Date or Determination Date occurs.

“Contract Scheduled Payment” means, for any Collection Period for any Receivable, the amount indicated in the Receivable as required to be paid by the Obligor in the relevant Collection Period, without giving effect to deferments of payments granted to Obligors by the Servicer pursuant to the Sale and Servicing Agreement or any rescheduling of payments in an insolvency or similar proceeding.

“Controlling Party” means [the Insurer, so long as an Insurer Default shall not have occurred and be continuing, otherwise,] the Indenture Trustee for the benefit of the Noteholders; provided, however, that the Owner Trustee for the benefit of the Certificateholder will be the Controlling Party after all unpaid principal and interest on the Notes shall have been paid in full and all amounts due to the Insurer have been paid and the Policy has expired in accordance with its terms.

“Corporate Trust Office” means the office of the Indenture Trustee at which its corporate trust business shall be principally administered, which office as of the date of this prospectus supplement is located at [       ].

“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 a Receivable or otherwise modifying or restructuring the Contract Scheduled Payments to be made on a Receivable, an amount equal to (1) the excess of the Principal Balance of the Receivable immediately prior to the order over the Principal Balance of the Receivable as so reduced and/or (2) if the court shall have issued an order reducing the effective rate of interest on the Receivable, the net present value, using as the discount rate the higher of the APR on the Receivable or the rate of interest, if any, specified by the court in the order, of the Contract Scheduled Payments as so modified or restructured. A Cram Down Loss shall be deemed to have occurred on the date of issuance of the order.

“Cutoff Date” means [with respect to the Initial Receivables, the Initial Cutoff Date, and with respect to the Subsequent Receivables, the Subsequent Cutoff Date.]

“Dealer Agreement” means an agreement generally between the Sponsor and a Dealer relating to the sale of retail installment contracts to the Sponsor and all documents and instruments relating to that agreement.

“Dealer Assignment” means with respect to a Receivable, the executed assignment conveying a Receivable to the Sponsor.

“Defaulted Receivable” means any Receivable with respect to which any of the following shall have occurred:

·

for which the related Financed Vehicle or Boat has been repossessed by the Servicer;

·

for which all or more than 10% of any payment is 120 days or more past due; or

·

a Contract with respect to which the Servicer has determined in good faith that all amounts expected to be recovered have been received.

“Deficiency Claim Amount” means with respect to any Determination Date, the positive difference, if any, of (1) the sum of the related Scheduled Payments plus the amounts described in clauses (1), (2) and (3) under the heading “The Notes—Priority of Distribution Amounts” minus (2) the amount of Available Funds with respect to the Determination Date, which amount will be withdrawn from the Class A Reserve Account to the extent funds are on deposit tin this prospectus supplement in accordance with the terms of the Class A Reserve Account Agreement and deposited into the Collection Account on the related Payment Date.

“Determination Date” means with respect to a Collection Period, the [___]th Business Day preceding the Payment Date in the next calendar month; provided, however that the first Determination Date will be the Closing Date.

“Draw Date” means, with respect to any Payment Date the third business Day (as defined in the Policy) immediately preceeding the Payment Date.

“Excess Overcollateralization Amount” means, with respect to any Payment Date, the excess, if any, of

(1)

the Class A Overcollateralization Amount calculated for this purpose only without deduction for any Excess Overcollateralization Amount (i.e., assuming that the entire amount described in clause (x) of the definition of “Principal Payment Amount” is distributed as principal on the Class A Notes) over

(2)

the Class A Target Overcollateralization Amount on the Payment Date.

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

[“Insurer Optional Deposit” means, with respect to any Payment Date, an amount delivered by the Insurer, at its sole option, other than amounts in respect of a Policy Claim Amount, for deposit into the Collection Account for any of the following purposes:

(1)

to provide funds in respect of the payment of fees or expenses of any provider of services to the Issuing Entity with respect to the Payment Date; or

(2)

to include this amount as part of the Additional Funds Available for the Payment Date to the extent that without this amount a draw would be required to be made on the Policy.]

“Liquidated Receivable” means any Receivable with respect to which any of the following shall have occurred with respect to any Collection Period:

·

the sale of the Financed Vehicle or Boat;

·

for which all or more than 10% of any Contract Scheduled Payment is 120 days or more past due, except in the case of repossessed Financed Vehicles or Boats,

·

the Servicer has determined in good faith that all amounts it expects to be recovered have been received, or

·

90 days have elapsed since the Servicer repossessed the Financed Vehicle or Boat.

“Liquidation Proceeds” means with respect to a Liquidated Receivable,

·

proceeds from the disposition of Financed Vehicles or Boats securing the Liquidated Receivables,

·

any insurance proceeds or rebates, or

·

other monies received from the Obligor or otherwise, less amounts required to be refunded to the Obligor.

“Managed Receivable” means any retail installment contract, including any related promissory note, for a Financed Vehicle or Boat, and all rights and obligations under the retail installment contract, generally originated by and currently serviced by the Sponsor for Obligors.

“Note Balance” means the sum of the Class A Note Balance and Class B Note Balance.

“Note Majority” means as of any date of determination, Holders of Class A-1 Notes and Class A-2 Notes and Class B Notes representing more than 50% of the Note Balance.

“OC Stabilization Date” means the first Payment Date on which the Class A Overcollateralization Amount equals the Class A Target Overcollateralization Amount.

“Payment Amount” means with respect to a Payment Date, the sum of (1) the Available Funds as of the last day of a Collection Period, plus (2) the Deficiency Claim Amount, if any, with respect to the Payment Date.

“Person” means any legal person, including any individual, corporation, limited liability company, partnership, joint venture, estate, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision of these or any other entity.

[“Policy Claim Amount” means, for any Payment Date, the excess, if any, of

(1)

the sum of the Class A Interest Payment Amount and the Class A Principal Payment Amount for the Payment Date over

(2)

the sum of

(a)

the amounts actually deposited into the Class A Note Distribution Account on the related Payment Date and

(b)

the Additional Funds Available to pay the Class A Interest Payment Amount or the Class A Principal Payment Amount if any, for the Payment Date.]

“Principal Balance” of a Receivable:

·

as of the Cutoff Date, means the Amount Financed minus

(1)

in the case of a Precomputed Receivable, that portion of all payments, including all Contract Scheduled Payments and any prepayments in full or partial prepayments, actually received on or prior to that date and allocable to principal in accordance with the actuarial method and

(2)

in the case of a Simple Interest Receivable, that portion of all payments, including all Contract Scheduled Payments and any prepayments in full or partial prepayments, actually received on or prior to that date and allocable to principal in accordance with the simple interest method, and

·

as of any date after the Cutoff Date, means the Principal Balance as of the Cutoff Date minus

(1)

in the case of a Precomputed Receivable, that portion of all payments, including all Contract Scheduled Payments and any prepayments in full or partial prepayments, actually received on or prior to that date, but after the Cutoff Date, and allocable to principal in accordance with the actuarial method,

(2)

in the case of a Simple Interest Receivable, that portion of all payments, including all Contract Scheduled Payments and any prepayments in full or partial prepayments, actually received on or prior to that date, but after the Cutoff Date, and allocable to principal in accordance with the simple interest method and

(3)

any Cram Down Loss in respect of the Receivable. The Principal Balance of a Liquidated Receivable for purposes other than the definition of Principal Payment Amount shall be equal to $0.

“Principal Payment Amount” means the amount equal to the excess, if any, of (x) the sum of the following amounts, without duplication:

·

the principal portion of all Contract Scheduled Payments received during the Collection Period on Precomputed Receivables, calculated in accordance with the actuarial method, and all payments of principal received on Simple Interest Receivables, calculated in accordance with the simple interest method, during the Collection Period;

·

the principal portion of all prepayments received during the related Collection Period;

·

the portion of the Purchase Amount allocable to principal of each Receivable that became a Purchased Receivable as of the last day of the related Collection Period and, at the option of the Insurer, the Principal Balance of each Receivable that was required to be but was not so purchased or repurchased;

·

the Principal Balance of each Receivable that first became a Liquidated Receivable during the related Collection Period; and

·

the aggregate amount of Cram Down Losses with respect to the Receivables that have occurred during the related Collection Period, over

(y) the Excess Overcollateralization Amount, if any, for the Payment Date.

“Purchase Amount” means, with respect to a Receivable, the Principal Balance plus interest on the Principal Balance at the respective APR from the last day through which interest has been paid to the last day of the immediately preceding Collection Period if purchased prior to the Determination Date immediately following the end of the Collection Period, and otherwise through the last day of the month of repurchase.

“Purchased Receivable” means a Receivable that was purchased as of the close of business on the last day of a Collection Period by the Sponsor or the Servicer as the result of the violation of particular representations or warranties of the Sponsor under the Sale and Servicing Agreement or a breach by the Servicer of some of the Servicer’s obligations.

“Rating Agency Condition” means with respect to any action, that the Rating Agency has been given prior notice of and that the Rating Agency has notified the Sponsor, the Sponsor, the Servicer and the Indenture Trustee in writing that the action will not result in a reduction or withdrawal of the then current rating of the Notes.

“Sale and Servicing Agreement” means the Sale and Servicing Agreement between the Sponsor, in its individual capacity and as Servicer, the Depositor, the Issuing Entity, as purchaser, and [       ], as Indenture Trustee and Backup Servicer.

“Servicer’s Certificate” means with respect to each Collection Period, a certificate, completed by and executed on behalf of the Servicer, in accordance with the applicable Sale and Servicing Agreement provisions.

“Servicer Receivables Files” means the following documents or instruments in the Servicer’s possession with respect to each Receivable: (1) documents evidencing or relating to any Insurance Policy; and (2) any and all other documents, in original or electronic form, that the Servicer keeps on file in accordance with its customary procedures relating to the individual Receivable, Obligor or Financed Vehicle or Boat.

“State” means any state of the United States or the District of Columbia.

“Transaction Documents” means the Sale and Servicing Agreement, the Indenture, the Trust Agreement, the Notes, the Receivables Purchase Agreement, the Underwriting Agreement and the other agreements executed in connection with the closing of the transactions described in this prospectus supplement.

“Trust Agreement” means the Trust Agreement between the Depositor, the Certificateholder, the Sponsor, and [       ], as Owner Trustee.

Calculation of Payment Amounts.  The Class A-1 Noteholders will be entitled to receive, to the extent funds are available, the Class A-1 Principal Payment Amount and the Class A-1 Interest Payment Amount with respect to each Payment Date. The Class A-2 Noteholders will be entitled to receive to the extent funds are available, the Class A-2 Principal Payment Amount and the Class A-2 Interest Payment Amount with respect to each Payment Date, subject to the priority of payments as described in “—Priority of Distribution Amounts”. The “Class A-1 Note Balance” will initially represent $[       ], and afterward, an amount equal to the initial Class A-1 Note Balance reduced by all amounts distributed to the Noteholders that are allocable to principal. The “Class A-2 Note Balance” will initially represent $[       ], and afterward, an amount equal to the initial Class A-2 Note Balance reduced by all amounts distributed to the Class A-2 Noteholders that are allocable to principal.

Priority of Distribution Amounts

On each Payment Date, the Indenture Trustee will, based on the information contained in the Servicer’s Certificate delivered on the related Determination Date, distribute the following amounts in the following order of priority:

(1)

first, from the Available Funds, to the Servicer, the Servicer Fee (as defined in this prospectus supplement) for the related Collection Period, and any Servicer Expenses for the related or any prior Collection Period and other amounts mistakenly deposited in the Collection Account belonging to the Servicer, if any, or otherwise required to be distributed to the Servicer in accordance with the Sale and Servicing Agreement;

(2)

second, from the remaining Available Funds, to the Lockbox Bank, the Indenture Trustee, the Owner Trustee and the Backup Servicer, any accrued and unpaid fees and in the case of the Backup Servicer, Servicer Transition Expenses, if any, up to an amount specified in the Sale and Servicing Agreement, in each case, to the extent the Person (as defined in this prospectus supplement) has not previously received this amount from the Servicer;

(3)

third, from the remaining Available Funds, pro rata in respect of the amounts due, (a) to the Class A-1 Noteholders, the Class A-1 Interest Payment Amount for the Payment Date and the Class A-1 Interest Carryover Shortfall, if any, and (b) to the Class A-2 Noteholders, the Class A-2 Interest Payment Amount for the Payment Date and the Class A-2 Interest Carryover Shortfall, if any;

(4)

fourth, from the remaining Available Funds, to the Class A-1 Noteholders, the Class A-1 Principal Payment Amount for the Payment Date, and the Class A-1 Principal Carryover Shortfall, if any;

(5)

fifth, from the remaining Available Funds, to the Class A-2 Noteholders, the Class A-2 Principal Payment Amount for the Payment Date, and the Class A-2 Principal Carryover Shortfall, if any;

[(6)

sixth, from the remaining Available Funds, to the Insurer to the extent of any amounts owing the Insurer under the Insurance Agreement;]

(7)

seventh, from the remaining Available Funds, to the Class A Reserve Account to the extent necessary to increase the amount on deposit tin this prospectus supplement to its then required level;

(8)

eighth, on or prior to the OC Stabilization Date, from the remaining Available Funds, and together with amounts, if any, available in accordance with the terms of the Class A Reserve Account Agreement, sequentially, to the Class A-1 Noteholders and to the Class A-2 Noteholders, as principal, until the Class A Target Overcollateralization Amount is achieved;

(9)

ninth, from the remaining Available Funds, to the Class B Noteholders, the Class B Interest Payment Amount for the Payment Date and the Class B Interest Carryover Shortfall, if any;

(10)

tenth, from the remaining Available Funds, and together with amounts, if any, available from the Class A Reserve Account in accordance with the terms of the Sale and Servicing Agreement, to the Class B Noteholders, the Class B Principal Payment Amount; and

(11)

eleventh, from the remaining Available Funds, to the Class A Reserve Account, or as otherwise specified in the Trust Documents, any remaining funds.

Payment Date Calculations and Payments

In the event that any Servicer’s Certificate delivered by the Servicer indicates that the Available Funds with respect to a Payment Date are insufficient to fund in full the related Scheduled Payments plus the amounts described in clauses (1), (2) [and (6)] above in “—Priority of Distribution Amounts”, the Indenture Trustee shall request the Deficiency Claim Amount from the Class A Reserve Account, at the time required by and pursuant to, the Class A Reserve Account Agreement. Any funds received by the Indenture Trustee pursuant to this request will be deposited in the Collection Account and paid on the related Payment Date to the persons entitled to the funds, in the amounts described in clauses (1) through [(6)] of “—Priority of Distributions” in accordance with the priority of payment. [Further, in the event that any Servicer’s Certificate delivered by the Servicer indicates that the sum of (1) the Avai lable Funds with respect to a Payment Date, plus (2) any related Deficiency Claim Amount funds deposited in the Collection Account or otherwise received by the Indenture Trustee is insufficient to fund in full the related Scheduled Payments, the Indenture Trustee shall furnish to the Insurer no later than 12:00 noon New York City time on the related Draw Date a completed notice of claim in the amount of the Policy Claim Amount.  Amounts paid by the Insurer pursuant to any notice of claim shall be deposited by the Insurer into the Note Distribution Account for payment to Noteholders on the Payment Date.]

Statements to Noteholders

On each Payment Date, the Indenture Trustee must provide to each Class A Noteholder[, the Insurer] and the Rating Agencies a statement prepared by the Servicer based on the information in the related Servicer’s Certificate, which statement sets forth the information required under the Sale and Servicing Agreement. Each statement will include the following information with respect to the Payment Date or the immediately preceding Collection Period, as applicable:

(1)

the amount of the payment allocable to interest with respect to the Class A-1 Notes, the Class A-2 Notes and the Class B Notes, as applicable;

(2)

the amount of the payment allocable to principal on or with respect to the Class A-1 Notes, the Class A-2 Notes and the Class B Notes;

(3)

the amount of the payment pursuant to a claim on the Policy;

(4)

the amount of fees paid by the Issuing Entity with respect to the related Collection Period, including any Servicer Fee and Servicer Expenses;

(5)

the Class A-1 Note Balance, the Class A-2 Note Balance and the Class B Note Balance;

(6)

the Class A-1 Interest Carryover Shortfall, the Class A-2 Interest Carryover Shortfall and the Class B Interest Carryover Shortfall, if any, and the Class A-1 Principal Carryover Shortfall, the Class A-2 Principal Carryover Shortfall and the Class B Principal Carryover Shortfall, if any;

(7)

the Class A-1 Note Factor, the Class A-2 Note Factor and the Class B Note Factor;

[(8)

for each date during the Pre-Funding Period, the remaining Pre-Funded Amount, the amount in the Pre-Funding Account and the amount remaining the Capitalized Interest Account;]

(9)

the number of Receivables and the aggregate Principal Balance due of the Receivables, for which the related Obligors are delinquent in making Contract Scheduled Payments (A) between 31 and 60 days, (B) between 61 and 90 Days, (C) between 91 and 120 days and (D) more than 120 days;

(10)

the number of Receivables which became Liquidated Receivables, and the aggregate principal amount of the Receivables which became Liquidated Receivables net of Recoveries;

(11)

the number of Receivables which became Defaulted Receivables, and the aggregate principal amount of these Receivables;

(12)

the number and the aggregate Purchase Amount of Receivables that became Purchased Receivables during the related Collection Period and the number and aggregate Purchase Amount of Receivables that were required to be repurchased during the related Collection Period but were not so repurchased;

(13)

the Principal Balance, APR and model year of each Receivable that was replaced and the Principal Balance, APR and model year of the corresponding Replacement Receivable;

(14)

the number and the aggregate Principal Balance of Receivables with respect to which, to the knowledge of the Servicer, Obligors became the subject of bankruptcy proceedings during the Collection Period, or during a prior Collection Period, if the Servicer first became aware of the proceeding during the current Collection Period;

(15)

the amount of any Deficiency Claim Amounts deposited in the Collection Account from the Class A Reserve Account;

(16)

the Class A Overcollateralization Amount and the Class A Target Overcollateralization Amount; and

(17)

the beginning balance, amount of claims paid, amount of deposits made, and ending balance of the applicable collateral self-insurance fund, if any.

Each amount set forth pursuant to subclauses (1), (2) and (5) will be expressed as a dollar amount per $1,000 of the initial principal amount of a Note.

Unless and until Definitive Notes are issued, the reports will be sent on behalf of the Trust to Cede & Co., as registered holder of the Class A Notes and the nominee of DTC. See “Reports to Securityholders” and “Description of the Notes” in the prospectus. Within the required period of time after the end of each calendar year, the Indenture Trustee will furnish to each person who at any time during the calendar year was a Noteholder, a statement as to the aggregate amounts of interest and principal paid to that Noteholder and any other information as the Servicer deems necessary to enable the Noteholder to prepare its tax returns. See “Certain Federal Income Tax Consequences.”

Credit Support

The Class A Overcollaterization Amount and the Class A Reserve Account (a funded cash reserve account (the “Class A Reserve Account”)), result in credit support for the Class A Notes. This credit support is required to be increased to, and subsequently maintained at, a level established by the Insurer. This level changes over time. [The Insurer may permit the required level of credit support provided by the Class A Reserve Account and the Class A Overcollateralization Amount to be reduced, or “step down”, over time without the consent of Noteholders.]

Overcollaterization.

Overcollaterization for the Class A Notes is created as a result of the application of “excess interest” and “excess principal” to the payment of principal on the Class A Notes. The “excess interest” is interest which is collected on the Receivables in excess of the amount of interest that is paid on the Class A Notes, used to pay specific fees, or, under some circumstances, deposited to the Class A Reserve Account. This application of excess interest results in the outstanding principal balance of the Class A Notes amortizing more quickly than the Pool Balance. The “excess principal” is the principal allocated to the Class A Notes which is in excess of the principal the Class A Notes would receive if the principal collected on the Receivables were distributed pro rata to the Class A Notes and Class B Notes based on their relative outstanding principal balances. This application of the “excess princip al” results in the outstanding principal balance on the Class A Notes amortizing more quickly than the Aggregate Principal Balance on a percentage basis.

[If the Insurer permits the required level of overcollaterization to step down, principal collections which would otherwise be paid through to the Class A Noteholders as part of the Class A Principal Payment Amount may be instead released to the Class B Noteholders or the Certificateholder.]

Subordination.

As of the Closing Date, the principal balance of the Class B Notes equals [____]% of the Note Balance. The transaction is structured so that until the OC Stabilization Date, the Class B Note Balance will grow as a percentage of the Note Balance. The Class B Notes are subordinated in right of payment to the payment of the Class A Notes. No payments of principal will be made to the Class B Notes until the OC Stabilization Date. Payment of interest on the Class B Notes is subordinated to payment of interest and principal on the Class A Notes, the funding of the Class A Reserve Account and, until the OC Stabilization Date, the payment of excess interest as additional principal to the Class A Notes. If there are losses on the Receivables, those losses will be borne entirely by the Certificateholder and by the Class B Notes before there are any losses on the Class A Notes.

Class A Reserve Account.

The Class A Reserve Account will be funded with an initial cash deposit on the Closing Date. On each subsequent Payment Date, the Indenture Trustee will be required to deposit additional amounts into the Class A Reserve Account from payments on the Receivables as described under “The Notes—Priority of Distribution Amounts” above to the extent that the balance on deposit tin this prospectus supplement is below the then required level. Amounts, if any, on deposit in the Class A Reserve Account on a Payment Date will be available to the extent provided in the Class A Reserve Account Agreement to fund any Deficiency Claim Amount with respect to the Payment Date. Amounts on deposit in the Class A Reserve Account on any Payment Date on or prior to the OC Stabilization Date, after giving effect to all distributions made on the Payment Date, in excess of the specified Class A Reserve Account Requirements for the Payment Date shall be dist ributed to Class A Noteholders as a prepayment of principal on the Class A Notes. On any Payment Date after the OC Stabilization Date, the excess funds may be released to the Class B Noteholders or the Certificateholder without the consent of the Class A Noteholders.

In addition, the Certificateholder, [the Insurer] and the Collateral Agent under the Class A Reserve Account Agreement may amend the Class A Reserve Account Agreement, [and any provisions in the Insurance Agreement relating to the Class A Reserve Account], in any respect, including, without limitation, reducing or eliminating the funding requirements of the Class A Reserve Account or permitting these funds to be used for the benefit of persons other than Class A Noteholders, without the consent of, or notice to, the Trustee, the Owner Trustee or the Noteholders. The Collateral Agent shall not withhold or delay its consent with respect to any amendment that does not adversely affect the Collateral Agent in its individual capacity. [Notwithstanding any reduction in or elimination of the funding requirements of the Class A Reserve Account or the depletion of the Class A Reserve Account, the Insurer will be obligated on each Payment Date to fund the full amount of each Scheduled Payment required to be paid by the Payment Date, and which would not be in the absence of a payment under the Policy. If the Insurer breaches its obligations, any losses on the Receivables will be borne first by the Class B Noteholders and then by the Noteholders.]

The Indenture

The Indenture Trustee. [       ] is the Indenture Trustee under the Indenture. For the purpose of meeting the legal requirements of some jurisdictions, the Indenture Trustee may appoint co-trustees or separate trustees of all or any part of the trust estate and confer upon this party any powers, duties, obligations, rights and trusts as the Indenture Trustee deems necessary, or desirable. In the event of an appointment, all rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee by the Indenture will be conferred or imposed upon the Indenture Trustee and the separate trustee or co-trustee jointly, or, in any jurisdiction in which the Indenture Trustee shall be incompetent or unqualified to perform particular acts, singly upon the separate trustee or co-trustee who will exercise and perform these rights, powers, duties, and obligations solely at the direction of the Indent ure Trustee.

The Indenture Trustee may resign at any time after 60 days’ written notice to the Issuing Entity, [the Insurer] and Noteholders in which event the Controlling Party will be obligated to appoint a successor trustee. The Controlling Party may remove the Indenture Trustee if, among other reasons, the Indenture Trustee ceases to be eligible to continue as the Indenture Trustee under the Indenture, becomes legally unable to act or becomes insolvent. In these circumstances, the Controlling Party will be obligated to appoint a successor trustee. Any resignation or removal of the Indenture Trustee and appointment of a successor trustee will not become effective until acceptance of the appointment of a successor trustee.

The Sale and Servicing Agreement will provide that the Indenture Trustee will be entitled to indemnification by the Servicer for, and will be held harmless against, any loss, liability, fee, disbursement or expense incurred by the Indenture Trustee not resulting from the Indenture Trustee’s own willful misfeasance, bad faith or negligence and other than by reason of a breach of any of the Indenture Trustee’s representations or warranties set forth in the Sale and Servicing Agreement. The Sale and Servicing Agreement will further provide that the Servicer will indemnify the Indenture Trustee for some of the taxes that may be asserted in connection with the transaction.

The Indenture Trustee makes no representations as to the validity or sufficiency of the Sale and Servicing Agreement, the Notes, other than the authentication of the Notes, or any Receivables or the Related Documents and is not accountable for the use or application by the Sponsor or the Servicer of any funds paid to the Sponsor or the Servicer in respect of the Notes or the Receivables, or the investment of any monies received by the Servicer before the monies are deposited in the Collection Account. The Indenture Trustee has not independently verified the Receivables. The Indenture Trustee is required to perform only those duties specifically required of it under the Sale and Servicing Agreement and the Indenture. The Indenture Trustee shall determine whether the certificates, reports or other instruments required to be furnished to the Indenture Trustee under the Sale and Servicing Agreement and the Indenture conform to the requirements of th e Sale and Servicing Agreement and the Indenture, respectively.

Modification of Indenture Without Noteholder Consent.  The Issuing Entity and Indenture Trustee may, [with the prior written consent of the Insurer, prior to the occurrence and continuance of an Insurer Default, but without consent of the Noteholders,] enter into one or more supplemental indentures for any of the following purposes:

·

to correct or amplify the description of the property subject to the lien of the Indenture or add additional property to it;

·

to evidence the succession of another Person to the Issuing Entity and the assumption by the successor of the covenants of the Issuing Entity;

·

to add additional covenants for the benefit of the Noteholders or to surrender any right or power conferred on the Issuing Entity;

·

to convey, transfer, assign, mortgage or pledge any additional property to or with the Indenture Trustee;

·

to cure any ambiguity, or to correct or supplement any provision in the Indenture or in any supplemental indenture that may be inconsistent with any other provision of the Indenture or any supplemental indenture;

·

to add to or change any of the provisions of the Indenture as shall be necessary and permitted to facilitate the administration by more than one trustee; and

·

to add any provisions to, change in any manner or eliminate any of the provisions of the Indenture or modify in any manner the rights of Noteholders under the Indenture; provided that any action must not, as evidenced by an opinion of counsel, adversely affect in any material respect the interests of any Noteholder.

Modification of Indenture With Noteholder Consent.  With the prior written consent of [the Insurer, prior to the occurrence and continuance of an Insurer Default,] and the Note Majority, the Issuing Entity and the Indenture Trustee may execute one or more supplemental indentures to add, change or eliminate any other provisions of the Indenture, modify in any manner the rights of the Noteholders or provide for the acceptance of the appointment of a successor Indenture Trustee. Without the prior written consent of [the Insurer, prior to the occurrence and continuance of an Insurer Default,] and the Holder of each outstanding related Note affected, however, no supplemental indenture will:

·

change the due date of any installment of principal of or interest on any Note or reduce the principal amount of any Note, the interest rate on the Note or the redemption price with respect to the Note, change the provisions of the Indenture relating to the application of collections on, or the proceeds of the sale of, the collateral to the payment of principal of or interest on the Notes, change any place of payment where or the coin or currency in which any Note or any interest on the Note is payable;

·

impair the right to institute suit for the enforcement of particular provisions of the Indenture regarding payment;

·

reduce the percentage of the aggregate amount of the outstanding Notes the consent of the Holders of which is required for any supplemental indenture or the consent of the Holders of which is required for any waiver of compliance with particular provisions of the Indenture or of some of the defaults under the Indenture and their consequences as provided for in the Indenture;

·

modify or alter the provisions of the Indenture regarding particular aspects of what constitutes an “Outstanding” Note;

·

reduce the percentage of the aggregate outstanding amount of the Notes the consent of the Holders of which is required to direct the Indenture Trustee to sell or liquidate the Receivables if the proceeds of the sale would be insufficient to pay the principal amount and accrued but unpaid interest on the outstanding Notes;

·

modify the provision of the Indenture requiring consent of Noteholders except to increase the percentage of the aggregate principal amount of the Notes required to amend the sections of the Indenture or to provide additional provisions requiring the consent of each Noteholder prior to modification or waiver;

·

modify any of the provisions of the Indenture affecting the calculation of the amount of any payment of interest or principal due on any Note on any Payment Date;

·

permit the creation of any lien ranking prior to or on a parity with the lien of the Indenture with respect to any of the collateral for the Notes or, except as otherwise permitted or contemplated in the Indenture, terminate the lien of the Indenture on any collateral or deprive the Holder of any Note of the security afforded by the lien of the Indenture; or

·

become effective if the Rating Agency Condition has not been satisfied with respect to it.

Note Factors; Statement to Noteholders; Servicer Reports to the Indenture Trustee.

The “Class A-1 Note Factor” will be a seven-digit decimal number that the Servicer will compute each month indicating the Class A-1 Note Balance as of the close of business on the last day of the related Collection Period in that month as a fraction of the respective original outstanding principal balance of the Class A-1 Notes. The Class A-1 Note Factor will be 1.0000000 as of the Cutoff Date; and afterward, the Class A-1 Note Factor will decline to reflect reductions in the Class A-1 Note Balance as a result of scheduled payments collected, partial prepayments, prepayments and liquidations of the Receivables. The amount of a Class A-1 Noteholder’s pro rata share of the Class A-1 Note Balance can be determined on any date by multiplying the original denomination of the Holder’s Note by the Class A-1 Note Factor as of the close of business on the most recent Payment Date.

The “Class A-2 Note Factor” will be a seven-digit decimal number that the Servicer will compute each month indicating the Class A-2 Note Balance as of the close of business on the last day of the related Collection Period in that month as a fraction of the respective original outstanding principal balance of the Class A-2 Notes. The Class A-2 Note Factor will be 1.0000000 as of the Cutoff Date; and afterward, the Class A-2 Note Factor will decline to reflect reductions in the Class A-2 Note Balance as a result of scheduled payments collected, partial prepayments, prepayments and liquidations of the Receivables. The amount of a Class A-2 Noteholder’s pro rata share of the Class A-2 Note Balance can be determined on any date by multiplying the original denomination of the Holder’s Note by the Class A-2 Note Factor as of the close of business on the most recent Payment Date.

Under the Sale and Servicing Agreement, the Servicer will perform some monitoring and reporting functions for the Issuing Entity, including the preparation and delivery of the Servicer’s certificate on each Determination Date to the Indenture Trustee, the Backup Servicer,[ the Insurer,] and the Rating Agencies setting forth specified information with respect to the preceding Collection Period.

Within the prescribed period of time for tax reporting purposes after the end of each calendar year during the term of the Sale and Servicing Agreement, the Indenture Trustee will be required to mail to each person who at any time during the relevant calendar year will have been a Noteholder, a statement containing information related to the Noteholder’s preparation of federal income tax returns.

Fees and Expenses of the Trust Fund

In consideration of their duties on behalf of the Trust Fund, the Servicer, the Backup Servicer, the Owner Trustee and the Indenture Trustee will receive from the assets of the Trust Fund certain fees as set forth in the following table:

Fee Payable to:	Frequency of Payment:	Amount of Fee:	How and When Fee Is Paid:
Servicer	[monthly]	[(a) A monthly fee paid to the Servicer out of interest collections received from the Receivables in an amount equal to the product of one-twelfth of [    ]% per annum (the “Servicing Fee Rate”) and the Pool Balance as of the first day of the Collection Period.] [(b) any late fees, prepayment charges and other administrative fees or similar charges allowed by applicable law with respect to the Receivables, and will be entitled to reimbursement from the Issuing Entity for various expenses.]	[Deducted by the Servicer from interest collections in respect of each Receivable serviced by the Servicer, before payment of any amounts to noteholders.]
Owner Trustee	[monthly]	[A monthly fee paid to the Owner Trustee by the Servicer out of the Servicer’s fee.]	[Paid by the Servicer before payment of any amounts to noteholders.]
Indenture Trustee	[monthly]	[A monthly fee paid to the Indenture Trustee by the Servicer out of the Servicer’s fee.]	[Paid by the Servicer before payment of any amounts to noteholders.]
Backup Servicer	[monthly]	[(a) A monthly fee paid to the Backup Servicer out of interest collections received from the Receivables in an amount equal to the product of one-twelfth of [    ]% per annum (the “Servicing Fee Rate”) and the Pool Balance as of the first day of the Collection Period.] [(b) any late fees, prepayment charges and other administrative fees or similar charges allowed by applicable law with respect to the Receivables, and will be entitled to reimbursement from the Issuing Entity for various expenses.]	[Deducted by the Backup Servicer from interest collections in respect of each Receivable serviced by the Backup Servicer, before payment of any amounts to noteholders.]
[Other Applicable Party]	[_____]	[_____]	[_____]

 [[None of the fees set forth in table above may be changed without amendment of the related Transaction Agreement]].

[[Expenses of the Servicer, the Backup Servicer, the Owner Trustee and the Indenture Trustee will be reimbursed before payments are made on the notes.]]

Example of Distributions

The following sets forth an example of collection of payments from Obligors on the Receivables, transfer of amounts among the Trust Accounts, and distributions on the notes for the Distribution Date in [_______]:

[On or before the earlier of the [eighth] business day of the month in which a Distribution Date occurs and the [fourth] business day preceding such Distribution Date]	Determination Date	[The Servicer will calculate the Total Distribution Amount, the Interest Distribution Amount, the Available Principal, the Principal Distribution Amount, the Total Servicing Fee, the Noteholders’ Interest Distributable Amount, the Noteholders’ Principal Distributable Amount, the Advances, if any, to be made by the Servicer of interest and principal due on the Actuarial Receivables, the amount, if any, to be withdrawn from the Payahead Account and deposited in the Collection Account, the amount, if any, to be withdrawn from the Reserve Account and deposited in the Collection Account and the amount, if any, to be withdrawn from the Reserve Account and paid to the Depositor, in each case, with respect to such Distribution Date.]
[On or before each Distribution Date]	[Servicer Remittance Date]	[The Servicer will cause the Indenture Trustee to withdraw from the Payahead Account and deposit into the Collection Account in immediately available funds, the portion of Payaheads constituting scheduled payments on Actuarial Receivables or that are to be applied to prepay Actuarial Receivable in full and distribute to the Depositor, in immediately available funds, all investment earnings on funds in the Payahead Account with respect to the preceding Collection Period.] [The Servicer will deposit any advances for such Distribution Date into the Collection Account.] [The Servicer shall cause the Indenture Trustee to withdraw from the Reserve Account and deposit in the Collection Account the Reserve Account Transfer Amount.]
[On or before the business day preceding each Distribution Date]	[Servicer Remittance Date]	the Servicer will cause the Interest Distribution Amount and the Available Principal for such Distribution Date to be deposited into the Collection Account.
Last day of the month prior to the related Distribution Date	Record Date:	[Distributions will be made to noteholders of record for all applicable classes as of the Record Date].
The [__]th day of each month (or if the [__]h day is not a business day, the next business day),	Distribution Date:	[The Servicer will cause the Indenture Trustee to withdraw the Total Distribution Amount for deposit into the Note Distribution Account and the Indenture Trustee will make distributions to Noteholders from amounts on deposit in the Note Distribution Account.]

Succeeding months follow the same pattern.

DESCRIPTION OF THE TRANSACTION DOCUMENTS

The following summary describes some of the terms of the Transaction Documents. Forms of the Transaction Documents have been filed as exhibits to the Registration Statement. This summary does not purport to be complete and is subject to, and qualified in its entirety by reference to, all the provisions in the Transaction Documents. The following summary supplements the description of the general terms and provisions of the Transfer and Servicing Agreements (as this term is used in the prospectus) set forth in the prospectus, to which description reference is made by this prospectus supplement.

Sale and Assignment of Receivables

Certain information regarding the conveyance of the Receivables by the Sponsor to the Depositor and by the Depositor to the Issuing Entity on the Closing Date pursuant to the Sale and Servicing Agreement is set forth in the Prospectus under “Description of the Transfer and Servicing Agreements--Sale and Assignment of Receivables.”  See also “The Receivables” in this prospectus supplement and “The Receivables Pools” in the prospectus for additional information regarding the Receivables and some of the obligations of the Sponsor and the Servicer with respect to the Receivables.

At the time of issuance of the Notes, the Sponsor will sell and assign to the Depositor, the Sponsor’s entire interest in the Receivables, including its security interests in the Financed Vehicles and Boats, and the Depositor will sell and assign to the Issuing Entity the Depositor’s entire interest in the Receivables, including the security interests in the Financed Vehicles and Boats. On or before the Closing Date, the Issuing Entity will pledge the Receivables to the Indenture Trustee for the benefit of the Noteholders and the Insurer pursuant to the Indenture. Each Receivable will be identified in a schedule to the Sale and Servicing Agreement. The Indenture Trustee will, concurrently with the pledge, authenticate and deliver the Notes, which have been executed on behalf of the Issuing Entity.

[Any conveyance of Subsequent Receivables is subject to the satisfaction, on or before the related Subsequent Transfer Date, of the following conditions, among others:

(1)

each Subsequent Receivable satisfies the eligibility criteria specified in the Sale and Servicing Agreement;

[(2)

the Insurer, so long as no Insurer Default shall have occurred and be continuing, shall in its absolute and sole discretion have approved the transfer of the Subsequent Receivables to the Issuing Entity;]

(3)

the Sponsor will not have selected the Subsequent Receivable in a manner that it believes is adverse to the interests of the Noteholders or the Insurer;

(4)

as of each applicable Subsequent Cutoff Date, the Receivables in the Issuing Entity together with the Subsequent Receivables to be conveyed by the Sponsor as of the Subsequent Cutoff Date, meet the following criteria, computed based on the characteristics of the Initial Receivables on the Initial Cutoff Date and any Subsequent Receivables on the related Subsequent Cutoff Date:

(a)

the weighted average APR of the Receivables will not be less than one percent less than the weighted average APR of the Initial Receivables on the Initial Cutoff Date;

(b)

the remaining term of the Receivables will not be greater than [___] months nor less than [       ] months;

(c)

not more than [       ]% of the Principal Balances of the Receivables will be attributable to Loans for the purchase of used Financed [Vehicles][Boats];

(d)

the APR is not less than [       ]% nor more than [       ]%; and

(e)

no auto and boat is older than a [       ] model year, and the Issuing Entity, the Indenture Trustee, the Owner Trustee

[(f)

and the Insurer shall have received written confirmation from a firm of certified independent public accountants as to the satisfaction of the criteria in clauses (a) through (e) above;]

(5)

the Sponsor shall have executed and delivered to the Issuing Entity, with a copy to the Indenture Trustee, a Subsequent Transfer Agreement conveying the Subsequent Receivable to the Issuing Entity, including a schedule identifying the Subsequent Receivables;

(6)

the Sponsor shall have delivered certain opinions of counsel to the Indenture Trustee, [the Insurer,] the Owner Trustee and the Rating Agencies with respect to the validity of the conveyance of the Subsequent Receivables; and

(7)

the Rating Agencies shall have each notified the Sponsor, the Owner Trustee, the Indenture Trustee [and the Insurer] in writing that, following the addition of all of the Subsequent Receivables, each of the Class A-1 Notes and the Class A-2 Notes will be rated [       ] by [       ] and [       ] by [       ].]

Pursuant to the Receivables Purchase Agreement and the Sale and Servicing Agreement, the Sponsor will represent and warrant that, among other things:

·

as of [each] [the] Cutoff Date, the information provided in the schedule to the Sale and Servicing Agreement with respect to the Receivables is correct in all material respects;

·

at the date of issuance of the Notes[ and any Subsequent Transfer Date], the Receivables are free and clear of all liens or claims and no right of setoff, counterclaim or rescission has been asserted or, to the best of its knowledge, threatened with respect to the Receivables;

·

at the date of issuance of the Notes [and any Subsequent Transfer Date], each of the Receivables is secured by, or will be when all necessary steps have been taken to result in, a first priority perfected security interest in the Financed Vehicle or Boat in favor of the Sponsor and this security interest has been validly assigned to the Sponsor, the Issuing Entity and the Indenture Trustee; and

·

each Receivable, at the time it was originated, complied, and at the date of issuance of the Notes [and any Subsequent Transfer Date], complies in all material respects with applicable federal, state and local laws, including consumer credit, truth in lending, equal credit opportunity and disclosure laws.

Pursuant to the Receivables Purchase Agreement and the Sale and Servicing Agreement, the Sponsor will be obligated to repurchase or replace subject to limits on replacement set forth in the Sale and Servicing Agreement a Receivable from the Issuing Entity, if the interests of the Noteholders,[ the Insurer] or the Issuing Entity in the Receivable are materially adversely affected by a breach of any representation or warranty made by the Sponsor, with respect to the Receivable, if the breach has not been cured following discovery by or notice to the Sponsor of the breach. Pursuant to the Sale and Servicing Agreement, the Servicer will be obligated to purchase or replace a Receivable from the Issuing Entity if the interests of the Noteholders, [the Insurer] or the Issuing Entity in the Receivables are materially adversely affected by a breach of some of its servicing obligations under the Sale and Servicing Agreement, including its obligation to ma intain perfection of the first priority security interest created by each Receivable in the related Financed Vehicle or Boat or other covenants with respect to the Servicer, if the breach has not been cured following the discovery or notice to the Servicer of the breach. Each Receivable will be purchased from the Issuing Entity or replaced by the Sponsor or the Servicer, as the case may be, at a price equal to the Purchase Amount. The purchase or replacement obligations will constitute the sole remedy available to the Noteholders or the Indenture Trustee for any uncured breaches.

Pursuant to the Sale and Servicing Agreement, the Servicer will service and administer the Receivables. The documents evidencing the Receivables will be delivered to the Indenture Trustee on the Closing Date. In addition, the Sponsor’s accounting records and computer systems will be marked to reflect the sale and assignment, and UCC financing statements reflecting the sale and assignment will be filed. See “Certain Legal Aspects of the Receivables—Security Interests in Financed Vehicles and Boats” in the accompanying prospectus.

Accounts

Each Obligor has been instructed to make payments with respect to the Receivables after the applicable Cutoff Date to a Lockbox which has been established and will be maintained by [                  ] (the “Lockbox Bank”). Upon receipt of payments in the Lockbox, the Lockbox Bank will deposit funds into an account maintained by the Lockbox Bank at a depository institution (the “Lockbox Account”) acceptable to the [Indenture Trustee][Insurer]. The Indenture Trustee will establish the Collection Account (the “Collection Account”) in the name of the Indenture Trustee for the benefit of the Noteholders [and the Insurer]. All payments made on or with respect to the Receivables previously deposited in the Lockbox Account will be transferred to the Collection Account within two Business Days of the receipt of available funds tin this pros pectus supplement. Upon receipt, but in no event later than two Business Days after the receipt of amounts in respect of Receivables, each of the Servicer and the Sponsor will remit all amounts received by it in respect of the Receivables in the form of checks with payment coupons directly to the Lockbox. Other payments received by each of the Servicer and the Sponsor will be deposited into a local servicing account for processing, and then transferred to the Collection Account within two Business Days of the receipt of available funds tin this prospectus supplement. The Collection Account will be maintained with the Indenture Trustee as long as the Indenture Trustee’s deposits have a rating acceptable to the Insurer and the Rating Agencies. If the deposits of the Indenture Trustee no longer have an acceptable rating, the Indenture Trustee shall cause the accounts to be moved to a bank or trust company having acceptable ratings.

The Indenture Trustee will also establish and maintain an account, in its name, on behalf of Noteholders and the Insurer, in which amounts released from the Collection Account for distribution to Noteholders will be deposited and from which all distributions to Noteholders will be made (the “Note Distribution Account”).

[On the Closing Date, a cash amount equal to approximately $[       ] (the “Initial Pre-Funded Amount”) will be deposited in an account (the “Pre-Funding Account”) which will be established with the Indenture Trustee. The “Funding Period” is the period from the Closing Date until the earliest of the date on which:

(1)

the amount on deposit in the Pre-Funding Account is less than $100,000,

(2)

a Servicer Termination Event occurs under the Sale and Servicing Agreement or an Insurance Agreement Event of Default occurs, or

(3)

the Payment Date in [       ].

The Initial Pre-Funded Amount, as reduced from time to time during the Funding Period by the amount used to purchase Subsequent Receivables in accordance with the Sale and Servicing Agreement, is referred to in this prospectus supplement as the “Pre-Funded Amount.” The Sponsor expects that the Pre-Funded Amount will be reduced to less than $[___________] on or before the Payment Date in [       ]. Any Pre-Funded Amount remaining at the end of the Funding Period will be payable to the Noteholders as described in this prospectus supplement. The “Mandatory Redemption Date” is the earlier of (1) the Payment Date in [       ] and (2) if the last day of the Funding Period occurs on or prior to the Determination Date in [       ], then the [       ] Payment Date.

On the Closing Date, a cash amount shall be deposited in an account (the “Capitalized Interest Account”) which will be established with the Indenture Trustee. The amount, if any, deposited in the Capitalized Interest Account will be applied on the Payment Dates occurring in [       ], [       ] and [       ], and to fund an amount (the “Monthly Capitalized Interest Amount”) equal to the amount of interest accrued for each Payment Date at the excess of (1) the weighted average interest rate on the Class A Notes over (2) [       ]%, on the portion of the Class A Notes having a principal balance in excess of the Aggregate Principal Balances of the Receivables. Any amounts remaining in the Capitalized Interest Account on the Mandatory Redemption Date and not used for these purposes are required to be paid to the Class A Noteholders on the relevant date. See “Description of the Transaction Documents—Accounts.”]

All of these Accounts shall be Eligible Deposit Accounts (as defined in the prospectus) acceptable to the Insurer, so long as no Insurer Default has occurred and is continuing.

Consistent with the Sale and Servicing Agreement and its normal collection practices and procedures, the Servicer may, in its discretion, arrange with the Obligor on a Receivable to extend or modify the payment schedule, subject to particular limitations. No extension or modification in accordance with the Sale and Servicing Agreement will result in a repurchase obligation for the Servicer.

Servicing Procedures

The Servicer will make all reasonable efforts to collect all payments due with respect to the Receivables and will continue these collection procedures as it follows with respect to all comparable motor vehicle or boat receivables that it services for itself or others, in a manner consistent with the Sale and Servicing Agreement. If the Servicer determines that eventual payment in full of a Receivable is unlikely, the Servicer will follow its normal collection practices and procedures, including the repossession and disposition of the Financed Vehicle or Boat securing the Receivable at a public or private auction, or the taking of any other action permitted by applicable law.

The Servicer will not be required under the Sale and Servicing Agreement to make any advances of principal or interest due on any Receivable.

Collections

The Servicer or the Sponsor, as the case may be, will remit or cause to be remitted the aggregate Purchase Amount of any Receivables required to be purchased by it from the Issuing Entity to the Collection Account. Under the Sale and Servicing Agreement, the amounts of any recoveries in respect of any Receivables repurchased by Dealers pursuant to any Dealer Recourse constitute collections on the Receivables.

For purposes of the Sale and Servicing Agreement, collections on a Receivable, other than a Receivable purchased by the Servicer or the Sponsor, which are not late fees or other administrative fees and expenses collected during a Collection Period are required to be applied first to the Contract Scheduled Payment. To the extent that the collections on a Receivable during a Collection Period exceed the Contract Scheduled Payment on the Receivable, the collections are required to be applied to prepay the Receivable in full. If the collections are insufficient to prepay the Receivable in full, any partial prepayment of principal during a Collection Period will be immediately applied to reduce the principal balance of the Receivable during that Collection Period.

Servicing Compensation

The Servicer is entitled under the Sale and Servicing Agreement to receive on each Payment Date a fee (the “Servicer Fee”) equal to the sum of (a) the product of one-twelfth and [       ]% (the “Servicing Fee Rate”) and the Principal Balance outstanding at the beginning of the calendar month immediately preceding the month in which the Payment Date occurs and (b) any late fees. If the Backup Servicer, or any other entity becomes the successor Servicer, it will receive compensation at the Servicing Fee Rate. The Servicer will also be reimbursed for particular expenses related to the repossession of Financed Vehicles or Boats (the “Servicer Expenses”). The Servicer Fee and Servicer Expenses will be paid out of collections from the Receivables pursuant to the distribution described under “The Notes—Priority of Distribution Amounts”.

The Servicer Fee and the Servicer Expenses will compensate the Servicer for performing the functions of a third-party servicer of the Receivables as an agent for the Issuing Entity, including collecting and posting all payments, responding to inquiries of Obligors on the Receivables, investigating delinquencies, reporting any required tax information to Obligors, paying costs of collections and monitoring the collateral. In addition, the Servicer Fee will (a) compensate the Servicer for administering the Receivables, including accounting for collections, furnishing monthly and annual statements with respect to payments and generating federal income tax information, if any, and (b) reimburse the Servicer for some of the taxes, independent accountants’ fees and other costs incurred in connection with administering the Receivables.

Backup Servicing and Backup Servicing Compensation

Pursuant to the Sale and Servicing Agreement, [       ] will perform particular duties as the Backup Servicer. In addition, following the resignation or removal of the Servicer, the Backup Servicer has agreed to serve as the successor Servicer under the Sale and Servicing Agreement. The Backup Servicer will be required to carry out its duties in accordance with the customary and usual procedures of institutions which perform similar functions. On each Payment Date, the Backup Servicer will be entitled to receive a fee for acting as Backup Servicer (the “Backup Servicer Fee”) equal to one-twelfth the product of [       ] basis points and the outstanding Note Balance. In addition, following the resignation or removal of the Servicer, the Backup Servicer will be reimbursed for particular costs and expenses associated with the transition of the Backup Servicer to Servicer (the
47;Servicer Transition Expenses”).

The Sale and Servicing Agreement will provide that the Backup Servicer may not resign from its obligations and duties as Backup Servicer under the Sale and Servicing Agreement, except upon determination that, by reason of a change in legal requirements, the Backup Servicer’s performance of these duties would be in violation of particular legal requirements and the Controlling Party does not elect to waive the obligations of the Backup Servicer to perform the duties that render it legally unable to act or to delegate those duties to another Person. No resignation will become effective until a successor backup servicer has assumed the Backup Servicer’s servicing obligations and duties under the Sale and Servicing Agreement. Notwithstanding the foregoing, the Backup Servicer may resign for any reason, provided an entity acceptable to the Controlling Party has assumed the Backup Servicer’s obligations and duties under the Sale and Ser vicing Agreement prior to the effectiveness of any resignation and the Rating Agency Condition is also satisfied with respect to the resignation and assumption of the Backup Servicer’s obligations.

Certain Matters Regarding the Servicer

The Sale and Servicing Agreement will provide that the Servicer may not resign from its obligations and duties as Servicer under the Sale and Servicing Agreement, except (1) upon determination that, by reason of a change in legal requirements, the Servicer’s performance of these duties would be in violation of particular legal requirements and (2) [the Insurer, or, if an Insurer Default has occurred and is continuing,] a Note Majority, does not elect to waive the obligations of the Servicer to perform the duties that render it legally unable to act or to delegate those duties to another Person. No resignation will become effective until the Backup Servicer or a successor servicer has assumed the Servicer’s servicing obligations and duties under the Sale and Servicing Agreement.

The Sale and Servicing Agreement will further provide that neither the Servicer nor any of its stockholders, directors, officers, employees or agents, will be liable to the Issuing Entity or the Indenture Trustee for taking any action or for refraining from taking any action pursuant to the Sale and Servicing Agreement; provided, however, that neither the Servicer nor any Person will be protected against any liability that would otherwise be imposed by reason of the Servicer’s material breach of the Sale and Servicing Agreement, willful misfeasance, bad faith or negligence, other than errors in judgment, in the performance of its duties.

Subject to the provisions of the Sale and Servicing Agreement, any entity into which the Servicer may be merged or consolidated, resulting from any merger, conversion or consolidation to which the Servicer is a party, which acquires all or substantially all of the assets of the Servicer, or succeeding to the business of the Servicer, which in any case assumes the obligations of the Servicer, will be the successor of the Servicer, under the Sale and Servicing Agreement. [The Servicer may at any time perform specific duties as Servicer through other subcontractors with the prior written consent of the Insurer.]

Servicer Termination Events; Rights Upon Servicer Termination Event

A “Servicer Termination Event” under the Sale and Servicing Agreement will include:

·

the Servicer’s failure to make deposits into the Collection Account or to deliver to the Indenture Trustee any proceeds or payments payable to the Noteholders or the Insurer required to be so deposited or delivered in accordance with the Sale and Servicing Agreement, which failure continues unremedied for a period of two Business Days, one Business Day with respect to payment of Purchase Amounts, after the earlier of (x) discovery of the failure by the Servicer and (y) notice of the failure is given by the Indenture Trustee to the Servicer;

·

the Servicer’s failure or failures to satisfy any other covenant or agreement set forth in the Sale and Servicing Agreement, which failure or failures, individually or in the aggregate, materially and adversely affect the rights of Noteholders or the Insurer and remains uncured for a period of 60 days after the earlier of the date on which [(a)] it obtains actual knowledge of the failure [or (b) it receives written notice of the failure from (1) the Insurer or the Indenture Trustee or (2) if an Insurer Default has occurred and is continuing, the Note Majority];

·

particular events of insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings with respect to the Servicer indicating its insolvency;

·

[Insurer Events of Default]

·

any representation or warranty shall prove to be incorrect in any material respect and this incorrectness shall have a material adverse effect on the interest of the Issuing Entity, the Noteholders [or the Insurer] in the Receivables, which has not been cured within 30 days.

As long as a Servicer Termination Event under the Sale and Servicing Agreement remains unremedied, [(x) provided that no Insurer Default shall have occurred and be continuing, the Insurer in its sole and absolute discretion, or (y) if an Insurer Default shall have occurred and be continuing,] then the Note Majority may terminate all of the rights and obligations of the Servicer under the Sale and Servicing Agreement. Upon termination, all authority, power, obligations and responsibilities of the Servicer under the Sale and Servicing Agreement, other than obligations and responsibilities arising prior to the termination, will automatically pass to the Backup Servicer, or other successor servicer [appointed by the Insurer, provided that no Insurer Default shall have occurred and be continuing.]

Waiver of Past Defaults

As set forth under “Certain Matters Regarding Servicer—Waiver of Past Defaults” in the prospectus, the Insurer may, so long as no Insurer Default shall have occurred and be continuing, on behalf of the Noteholders, waive any default by the Servicer in the performance of its obligations under the Sale and Servicing Agreement and its consequences. No waiver will impair the Noteholders’ rights with respect to subsequent defaults.

Amendment

The Sale and Servicing Agreement may be amended by the Issuing Entity, the Sponsor, the Servicer, the Depositor, the Indenture Trustee and the Backup Servicer, [with the prior written consent of the Insurer, so long as no Insurer Default has occurred and is continuing,] but without the consent of any of the Certificateholders or the Noteholders, to cure any ambiguity, to correct or supplement any provision in this prospectus supplement or for the purpose of adding any provision to or changing in any manner or eliminating any provision of this prospectus supplement or modifying in any manner the rights of the Noteholders; provided, however, that the action must not, as evidenced by an opinion of counsel, adversely affect in any material respect the interests of the Noteholders. The Sponsor, the Issuing Entity, the Servicer, the Depositor, the Backup Servicer and the Indenture Trustee may also amend the Sale and Servicing Agreement with the prior written consent of [the Insurer, so long as no Insurer Default has occurred and is continuing, and] a Note Majority to add, change or eliminate any provisions of the Sale and Servicing Agreement or to modify the rights of the Noteholders; provided, however, that the action will not:

·

increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on Receivables or distributions that are required to be made for the benefit of the Noteholders or Certificateholders;

·

reduce the aforesaid percentage of the Noteholders or Certificateholders which is required to consent to any amendment, without, in either case, the consent of the Holders of all Notes and Certificates outstanding; [provided, further, that if an Insurer Default has occurred and is continuing, the action shall not materially adversely affect the interest of the Insurer;] or

·

result in a downgrade or withdrawal of the then current rating of the Notes by the Rating Agencies without the consent of each Noteholder.

The above should in no way be construed to require the consent of the Noteholders or Certificateholders to a reduction in the Target Overcollateralization Amount or the required level of the Class A Reserve Account.

List of Noteholders; Voting of Notes

Upon written request by three or more Noteholders or any one or more Noteholders with an aggregate principal balance evidencing not less than 25% of the Note Balance and upon compliance by these Noteholders with other provisions of the Sale and Servicing Agreement, the Indenture Trustee will afford the Noteholders, within five Business Days after receipt of the request, access during business hours to the current list of Noteholders for purposes of communicating with other Noteholders with respect to their rights under the Sale and Servicing Agreement and the Notes.

If the Sponsor or the Servicer or any of their affiliates owns any Notes, the Note will not have voting rights under the Sale and Servicing Agreement or the other Related Documents.

The Sale and Servicing Agreement will not provide for the holding of any annual or other meetings of Noteholders.

Termination

The respective obligations of the Issuing Entity, the Sponsor, the Servicer, the Depositor, the Backup Servicer and the Indenture Trustee pursuant to the Sale and Servicing Agreement will terminate upon the latest of:

·

the maturity or other liquidation of the last Receivable and the payment to Noteholders and the Insurer of amounts required to be paid under the Notes, the Indenture [and the Insurance Agreement];

·

[the expiration of the Policy in accordance with its terms; or]

·

the payment to Noteholders of all amounts required to be paid to them pursuant to the Indenture and the expiration of any related preference period.

In order to avoid excessive administrative expense, the Servicer has the option to purchase from the Issuing Entity, as of the last day of any month as of which the Aggregate Principal Balance with respect to the Receivables is less than or equal to 10% of the Original Pool Balance, all remaining Receivables at a price equal to the aggregate of the Purchase Amounts of the Receivables as of that last day, plus the appraised value of any other property held by the Issuing Entity, [with the prior written consent of the Insurer, if the redemption would result in a claim under the Policy or if the redemption would result in any amount owing to the Insurer remaining unpaid.] The Indenture Trustee will give written notice of termination to each Noteholder of record. The final distribution to any Noteholder will be made only upon surrender and cancellation of that Holder’s Note at the office or agency of the Indenture Trustee specified in the notic e of termination; provided, however, that if on the Payment Date upon which final payment of the Notes is to be made, there are five or fewer Noteholders of record, the final payment to that Noteholder will be made by check or wire transfer as described above and each Noteholder shall present and surrender its Note at the office or agency designated in the notice of final distribution referred to above within 30 days after the Payment Date.

 [THE INSURER]

[General]

[[_______________] (the “Insurer” or “[_______________]”) is a monoline financial guaranty insurance company incorporated under the laws of the State of New York.  The Insurer is currently licensed to do insurance business in, and is subject to the insurance regulation and supervision by, all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Singapore.]

[The Insurer is an indirect wholly owned subsidiary of [_______________], a [___________] (“[_______________]”).  Through its subsidiaries, [_______________] is a leading provider of insurance and reinsurance coverages and financial products and services to industrial, commercial and professional service firms, insurance companies and other enterprises on a worldwide basis.  The ordinary shares of [_______________] are publicly traded in the United States and listed on the New York Stock Exchange (NYSE: [_________]).  [_______________] is not obligated to pay the debts of or claims against the Insurer.]

[Reinsurance]

[The Insurer has entered into a facultative quota share reinsurance agreement with [____________] (“[_______________]”), an insurance company organized under the laws of [______________], and an affiliate of the Insurer.  Pursuant to this reinsurance agreement, the Insurer expects to cede up to 90% of its business to [_______________].  The Insurer may also cede reinsurance to third parties on a transaction-specific basis, which cessions may be any or a combination of quota share, first loss or excess of loss.  Such reinsurance is used by the Insurer as a risk management device and to comply with statutory and rating agency requirements and does not alter or limit the Insurer's obligations under any financial guaranty insurance policy.  With respect to any transaction insured by [_______________], the percentage of risk ceded to [_______________] may be less than 90% depending on certain factors including, without l imitation, whether [_______________] has obtained third party reinsurance covering the risk.  As a result, there can be no assurance as to the percentage reinsured by [_______________] of any given financial guaranty insurance policy issued by [_______________], including the Policy.]

[Based on the audited financials of [_______________], as of December 31, 2004, [_______________] had total assets, liabilities, redeemable preferred shares and shareholders’ equity of $[___________], $[___________], $[___________] and $[___________], respectively, determined in accordance with generally accepted accounting principles in the United States (“US GAAP”). [_______________]’s insurance financial strength is rated “Aaa” by Moody’s and “AAA” by S&P and Fitch Inc. In addition, [_______________] has obtained a financial enhancement rating of “AAA” from S&P.]  

[The obligations of [_______________] to the Insurer under the reinsurance agreement described above are unconditionally guaranteed by [___________] ("[_______________]"), a Bermuda exempted company and one of the world's leading excess commercial insurers.  [_______________] is a wholly owned indirect subsidiary of [_______________].  In addition to A.M. Best’s financial strength rating of “A+” and issuer credit rating of “aa-”, [_______________]’s insurance financial strength rating is “Aa2” (as of September 13, 2005, [_______________] is on review for downgrade) by Moody’s, “AA-” by Standard & Poor’s (on September 20, 2005, Standard & Poor’s placed [_______________] on CreditWatch with negative implications) and “AA-” (Outlook Stable) by Fitch.]  

[The rating agencies have taken certain actions with respect to [_______________] and various insurance operating subsidiaries of [_______________], as described below.  Moody’s placed the “A2” senior debt rating of [_______________] and the other insurance financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) on review for possible downgrade on September 13, 2005.  Standard & Poor’s placed the “A” senior debt rating of [_______________] and the other financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) on CreditWatch with negative implications on September 20, 2005.  Fitch downgraded the long term issuer rating of [_______________] and the insurer financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) from “A” to “A-” on October 26, 2005.  A.M. Best placed each of [___________]’s (which does not include [_______________] or [_______________]) and [_______________]’s respective financial strength ratings of “A+” and their issuer credit ratings of “aa-” under review with negative implications on September 15, 2005. ]

[The ratings of [_______________], [_______________] or any other member of the [_______________] group of companies are not recommendations to buy, sell or hold notes, including the notes and are subject to revision or withdrawal at any time by Moody’s, Standard & Poor’s or Fitch.]

[Notwithstanding the capital support provided to the Insurer described in this section, the noteholders will have direct recourse against the Insurer only, and neither [_______________] nor [_______________] will be directly liable to the noteholders.]

[Financial Strength and Financial Enhancement Ratings of [_______________]]

[The Insurer's insurance financial strength is rated “Aaa” by Moody’s and “AAA” by Standard & Poor’s and Fitch, Inc. (“Fitch”).  In addition, [_______________] has obtained a financial enhancement rating of “AAA” from Standard & Poor’s.  These ratings reflect Moody’s, Standard & Poor’s and Fitch's current assessment of the Insurer's creditworthiness and claims-paying ability as well as the reinsurance arrangement with [_______________] described under "Reinsurance" above.]

[The above ratings are not recommendations to buy, sell or hold notes, including the notes and are subject to revision or withdrawal at any time by Moody’s, Standard & Poor’s or Fitch.  Any downward revision or withdrawal of these ratings may have an adverse effect on the market price of the notes.  The Insurer does not guaranty the market price of the notes nor does it guaranty that the ratings on the notes will not be revised or withdrawn.]

[Capitalization of the Insurer]

[Based on the audited financials of [_______________], as of December 31, 2004, [_______________] had total assets, liabilities, and shareholder’s equity of $[______________], $[______________], and $[______________], respectively, determined in accordance with U.S. GAAP.]

Based on the audited statutory financial statements for [_______________] as of December 31, 2004 filed with the State of New York Insurance Department, [_______________] has total admitted assets of $[______________], total liabilities of $[______________] and total capital and surplus of $[______________] determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities (“SAP”).  

[Incorporation by Reference of Financials

]

For further information concerning [_______________] and [_______________], see the financial statements of [_______________] and [_______________], and the notes thereto, incorporated by reference in this prospectus supplement.  The financial statements of [_______________] and [_______________] are included as exhibits to the periodic reports filed with the Securities and Exchange Commission (the “Commission”) by [_______________] and may be reviewed at the EDGAR website maintained by the Commission.  All financial statements of  [_______________] and [_______________] included in, or as exhibits to, documents filed by [_______________] pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 on or prior to the date of this prospectus supplement, or after the date of this prospectus supplement but prior to termination of the offering of the notes, shall be deemed incorporated by reference in this prospectus supplement.  Except for the financial statements of [_______________] and [_______________], no other information contained in [_______________]'s reports filed with the Commission is incorporated by reference. Copies of the statutory quarterly and annual statements filed with the State of New York Insurance Department by [_______________] are available upon request to the State of New York Insurance Department.]

[Regulation of the Insurer]

[The Insurer is regulated by the Superintendent of Insurance of the State of New York.  In addition, the Insurer is subject to regulation by the insurance laws and regulations of the other jurisdictions in which it is licensed.  As a financial guaranty insurance company licensed in the State of New York, the Insurer is subject to Article 69 of the New York Insurance Law, which, among other things, limits the business of each insurer to financial guaranty insurance and related lines, prescribes minimum standards of solvency, including minimum capital requirements, establishes contingency, loss and unearned premium reserve requirements, requires the maintenance of minimum surplus to policyholders and limits the aggregate amount of insurance which may be written and the maximum size of any single risk exposure which may be assumed.  The Insurer is also required to file detailed annual financial statements with the New York Insurance Department and similar supervisory agencies in each of the other jurisdictions in which it is licensed.]

[The extent of state insurance regulation and supervision varies by jurisdiction, but New York and most other jurisdictions have laws and regulations prescribing permitted investments and governing the payment of dividends, transactions with affiliates, mergers, consolidations, acquisitions or sales of assets and incurrence of liabilities for borrowings.]

 [THE FINANCIAL GUARANTY INSURANCE POLICIES ISSUED BY THE INSURER, INCLUDING THE INSURANCE POLICY, ARE NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.]

[The principal executive offices of the Insurer are located at [____________] and its telephone number at this address is [____________].]

[THE POLICY

The following summary of the terms of the Policy does not purport to be complete and is qualified in its entirety by reference to the Policy.

Simultaneously with the issuance of the Class A Notes, the Insurer will deliver the Policy to the Indenture Trustee for the benefit of each Class A Noteholder. Under the Policy, the Insurer will unconditionally and irrevocably guarantee to the Indenture Trustee, on each Payment Date, for the benefit of each Class A Noteholder the full and complete payment of (1) Scheduled Payments on the Class A Notes and (2) the amount of any Scheduled Payment which subsequently is avoided in whole or in part as a preference payment under applicable law. In the event the Indenture Trustee fails to make a claim under the Policy, Class A Noteholders do not have the right to make a claim directly under the Policy, but may sue to compel the Indenture Trustee to do so.

“Scheduled Payments” means payments which are scheduled to be made on the Class A Notes during the term of the Policy in accordance with the original terms of the Class A Notes when issued and without regard to any subsequent amendment or modification of the Class A Notes, the Sale and Servicing Agreement or the Indenture that has not been consented to by the Insurer, which “Scheduled Payments”, are

(1)

the Class A Interest Payment Amount, with respect to a Payment Date and

(2)

the Class A Principal Payment Amount with respect to a Payment Date. Scheduled Payments do not include payments which become due on an accelerated basis as a result of

·

a default by the Issuing Entity,

·

an election by the Issuing Entity to pay principal on an accelerated basis,

·

the occurrence of an Event of Default under the Indenture or

·

any other cause,

unless the Insurer elects, in its sole discretion, to pay in whole or in part the principal due upon acceleration, together with any accrued interest to the date of acceleration.

In the event the Insurer does not so elect, the Policy will continue to guarantee Scheduled Payments due on the Class A Notes in accordance with their original terms. Scheduled Payments shall not include

(1)

any portion of a Class A Interest Payment Amount due to the Class A Noteholders because the appropriate notice and certificate for payment in proper form was not timely Received by the Insurer,

(2)

any portion of a Class A Interest Payment Amount due to Class A Noteholders representing interest on any Class A Interest Carryover Shortfall or

(3)

any Class A Mandatory Redemption Amounts,

unless the Insurer elects, in its sole discretion, to pay the amount in whole or in part. Scheduled Payments shall not include, any amounts due in respect of the Class A Notes attributable to any increase in interest rate, penalty or other sum payable by the Issuing Entity by reason of any default or event of default in respect of the Class A Notes or by reason of any deterioration of the creditworthiness of the Issuing Entity nor shall coverage be provided under the Policy in respect of any taxes, withholding or other charge imposed with respect to any Noteholder by any governmental authority due in connection with the payment of any Scheduled Payment to a Class A Noteholder.

Payment of claims on the Policy made in respect of Scheduled Payments will be made by the Insurer following Receipt by the Insurer of the appropriate notice for payment on the later to occur of (1) 12:00 noon, New York City time, on the third Business Day following Receipt of notice for payment, and (2) 12:00 noon, New York City time, on the date on which the payment was due on the Class A Notes.

If payment of any amount avoided as a preference under applicable bankruptcy, insolvency, receivership or similar law is required to be made under the Policy, the Insurer shall cause the payment to be made on the later of

(a)

the date when due to be paid pursuant to the Order referred to below or

(b)

the first to occur of

(1)

the fourth Business Day following Receipt by the Insurer from the Indenture Trustee of

(A)

a certified copy of the order (the “Order”) of the court or other governmental body that exercised jurisdiction to the effect that the Class A Noteholder is required to return Scheduled Payments made with respect to the Class A Notes during the term of the Policy because the payments were avoidable as preference payments under applicable bankruptcy law,

(B)

a certificate of the Class A Noteholder that the Order has been entered and is not subject to any stay and

(C)

an assignment duly executed and delivered by the Class A Noteholder, in a form as is reasonably required by the Insurer and provided to the Class A Noteholder by the Insurer, irrevocably assigning to the Insurer all rights and claims of the Class A Noteholder relating to or arising under the Class A Notes against the Issuing Entity or otherwise with respect to the preference payment, or

(2)

the date of Receipt by the Insurer from the Indenture Trustee of the items referred to in clauses (A), (B) and (C) above if, at least four Business Days prior to the date of Receipt, the Insurer shall have Received written notice from the Indenture Trustee that these items were to be delivered on that date and the date was specified in the notice.

This payment shall be disbursed to the receiver, conservator, debtor-in-possession or trustee in bankruptcy named in the Order and not to the Indenture Trustee or any Class A Noteholder directly, unless a Class A Noteholder has previously paid the amount to the receiver, conservator, debtor-in-possession or trustee in bankruptcy named in the Order, in which case the payment shall be disbursed to the Indenture Trustee for distribution to the Class A Noteholder upon proof of the payment reasonably satisfactory to the Insurer. In connection with the foregoing, the Insurer shall have the rights provided pursuant to the Sale and Servicing Agreement including, without limitation, the right to direct all matters relating to any preference claim and subrogation to the rights of the Indenture Trustee and each Class A Noteholder in the conduct of any proceeding with respect to a preference claim.

Other Provisions of the Policy

The terms “Receipt” and “Received” with respect to the Policy shall mean actual delivery to the Insurer and to its fiscal agent, if any, prior to 12:00 noon, New York City time, on a Business Day; delivery either on a day that is not a Business Day or after 12:00 noon, New York City time, shall be deemed to be Received on the next succeeding Business Day. If any notice or certificate given under the Policy by the Indenture Trustee is not in proper form or is not properly completed, executed or delivered, it shall be denied not to have been Received, and the Insurer or its fiscal agent shall promptly so advise the Indenture Trustee, and the Indenture Trustee may submit an amended notice.

Under the Policy, “Business Day” means any day other than a Saturday, Sunday, legal holiday or other day on which commercial banking institutions in Wilmington, Delaware, the City of New York or any other location of any successor Servicer, successor Owner Trustee or successor Indenture Trustee are authorized or obligated by law, executive order or governmental decree to be closed.

The Insurer’s obligations under the Policy in respect of Scheduled Payments shall be discharged to the extent funds are transferred to the Indenture Trustee as provided in the Policy whether or not the funds are properly applied by the Indenture Trustee.

The Insurer shall be subrogated to the rights of each Class A Noteholder to receive payments of principal and interest to the extent of any payment by the Insurer under the Policy.

Claims under the Policy constitute direct, unsecured and unsubordinated obligations of the Insurer ranking not less than pari passu with other unsecured and unsubordinated indebtedness of the Insurer for borrowed money. Claims against the Insurer under the Policy and each other financial guaranty insurance policy issued by the Policy constitute pari passu claims against the general assets of the Insurer. The terms of the Policy cannot be modified or altered by any other agreement or instrument, or by the merger, consolidation or dissolution of the Issuing Entity. The Policy may not be canceled or revoked prior to distribution in full of all Scheduled Payments with respect to the Notes. The Policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law. The Policy is governed by the laws of the State of New York.

It is a condition to issuance that the Class A Notes be rated [       ] by [       ] and [       ] by [       ]. The ratings by the Rating Agencies of the Class A Notes will be based on the issuance of the Policy. A rating is not a recommendation to purchase, hold or sell Class A Notes. In the event that the rating initially assigned to any of the Class A Notes is subsequently lowered or withdrawn for any reason, including by reason of a downgrading of the claims-paying ability of the Insurer, no person or entity will be obligated to provide any additional credit enhancement with respect to the Class A Notes. Any reduction or withdrawal of a rating may have an adverse effect on the liquidity and market price of the Notes. See “Ratings” in this prospectus supplement.]

[OTHER CREDIT ENHANCEMENT PROVIDER]

[Regulation AB Item 1114 compliant description of any other credit enhancement provider.]

[DERIVATIVE INSTRUMENTS]

[The Interest Rate Swap Agreement and the Swap Provider]

[The Offered Certificates and Class B Certificates will have the benefit of an interest rate swap agreement.  On or before the Closing Date, the Trustee will enter into an interest rate swap agreement (the “Interest Rate Swap Agreement”) with [_______] (the “Swap Provider”).  A separate trust created under the pooling and servicing agreement (the "Supplemental Interest Trust") will hold the Interest Rate Swap Agreement documented by a 1992 ISDA Master Agreement (Multicurrency-Cross Border), together with a Schedule and Confirmation between The Trustee, on behalf of the Supplemental Interest Trust, and the Swap Provider. ]

[The significance percentage, as calculated in accordance with Item 1115 of Regulation AB is less than 10%.]

[If significance percentage, as calculated in accordance with Item 1115 of Regulation AB, is 10% or more, provide financial information required by Item 1115 of Regulation AB.]

[Pursuant to the Interest Rate Swap Agreement, on each Distribution Date, (i) the Securities Administrator (on behalf of the Supplemental Interest Trust and from funds of such trust) will be obligated to pay to the Swap Provider, a fixed amount equal to the product of (x) [__]%, (y) the Swap Notional Amount for that Distribution Date set forth in the Interest Rate Swap Agreement and (z) a fraction, the numerator of which is 30 (or, for the first Distribution Date, the number of days elapsed from the Closing Date to but excluding the first Distribution Date on a 30/360 basis), and the denominator of which is 360 (the “Securities Administrator Swap Payment”); and (ii) the Swap Provider will be obligated to pay to the Supplemental Interest Trust for the benefit of the holders of the Offered Certificates and the Class B Certificates (the “Swap Provider Payment”), a floating amount equal to the product of (x) one-mon th LIBOR (as determined pursuant to the Interest Rate Swap Agreement), (y) the Swap Notional Amount for that Distribution Date set forth in the Interest Rate Swap Agreement, and (z) a fraction, the numerator of which is the actual number of days elapsed from the previous Distribution Date to but excluding the current Distribution Date (or, for the first Distribution Date, the actual number of days elapsed from the Closing Date to but excluding the first Distribution Date), and the denominator of which is 360.  A net payment will be required to be made on each Distribution Date (each such net payment, a “Net Swap Payment”) (a) by the Securities Administrator to the Swap Provider, to the extent that the fixed amount exceeds the corresponding floating amount, or (b) by the Swap Provider to the Securities Administrator, to the extent that the floating amount exceeds the corresponding fixed amount. Payments received by the Supplemental Interest Trust pursuant to the Interest Rate Swap Agreement wil l be available for distributions of Interest Carry Forward Amounts, Net WAC Rate Carryforward Amounts, amounts necessary to maintain the Required Overcollateralization Amount and Allocated Realized Loss Amounts.]

[The “Swap Notional Amount” with respect to each Distribution Date commencing in [______, __], is set forth below (which will be substantially the same schedule as set forth in the Interest Rate Swap Agreement).  The Interest Rate Swap Agreement will terminate immediately following the Distribution Date in [______, __], unless terminated earlier upon the occurrence of a Swap Default, an Early Termination Event or an Additional Termination Event (each as defined below).]

Distribution Date	Swap Notional Amount
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]

[The respective obligations of the Swap Provider and the Supplemental Interest Trust to pay specified amounts due under the Interest Rate Swap Agreement will be subject to the following conditions precedent: (1) no Swap Default or event that with the giving of notice or lapse of time or both would become a Swap Default, in each case, in respect of the other party, shall have occurred and be continuing with respect to the Interest Rate Swap Agreement and (2) no “Early Termination Date” (as defined in the ISDA Master Agreement) has occurred or been effectively designated with respect to the Interest Rate Swap Agreement.]

[An Interest Rate Cap Agreement]

[The Class [__] certificates will have the benefit of the Interest Rate Cap Agreement. Pursuant to the Interest Rate Cap Agreement, with respect to any Distribution Date, commencing with the Distribution Date in [__], 20[ ], on or prior to the Distribution Date in [__], 20[ ], [_______], (the “Cap Provider”), will be obligated to pay to the trust administrator, an amount equal to the product of (a) the excess, if any, of (i) the then current one-month LIBOR rate (determined in accordance with the Interest Rate Cap Agreement) up to a maximum of [__]% (the “Maximum Cap Rate”) and (ii) a specified strike rate of [__]% (the “Cap Strike Rate”) and (b) the Interest Rate Cap Agreement Notional Amount set forth on the schedule attached as Annex B hereto for that Distribution Date, determined on a 30/360 Basis. (each such payment, the “Cap Agreement Payment”). The Interest Rate Cap Agreement will terminate after th e Distribution Date in [__], 20[ ].

The obligations of the Cap Provider are limited to those specifically set forth in the Interest Rate Cap Agreement. The Cap Provider conducts business in the over-the-counter derivatives market, engaging in a variety of derivatives products, including interest rate swaps, currency swaps, credit default swaps and interest rate options with institutional clients.

For the Class [__] certificates and each Distribution Date prior to and including the Distribution Date in [__], 20[ ],  any Cap Agreement Payment received by the trust administrator will be used to pay the related Cap Amount to such classes of certificates, as described below under “––The Reserve Funds.”  Amounts received on  the Interest Rate Cap Agreement will not be available to make distributions on any class of Certificates other than the Class [__] certificates.

The Interest Rate Cap Agreement will be governed by and construed in accordance with the law of the State of New York. The obligations of the Cap Provider are limited to those specifically set forth in the Interest Rate Cap Agreement. The Class [__] certificates do not represent an obligation of the Cap Provider. The holders of the Class [__] certificates are not parties to or beneficiaries under the Interest Rate Cap Agreement and will not have any right to proceed directly against the cap provider in respect of its obligations under the Interest Rate Cap Agreement.]

[A Yield Maintenance Agreement]

The Issuing Entity will enter into a Yield Maintenance Agreement for the benefit of the Class [__] Certificates.  Under the Yield Maintenance Agreement, the Counterparty will agree to pay to the Issuing Entity two Business Days prior to each Distribution Date beginning in [__], 20[ ] and to and including the Distribution Date in [__], 20[ ], an amount equal to the product of:

1.

the excess, if any, of LIBOR (as calculated under the related Yield Maintenance Agreement subject to the Rate Cap Ceiling) over the Cap Strike Rate for that Distribution Date;

2.

the related Scheduled Notional Amount for that Distribution Date; and

3.

a fraction, the numerator of which is the actual number of days elapsed from the previous Distribution Date to but excluding the current Distribution Date, and the denominator of which is 360.

The Scheduled Notional Amounts for each Yield Maintenance Agreement decline in accordance with the expected amortization of the Mortgage Loans.  The Yield Maintenance Agreements will terminate immediately following the Distribution Date in [__], 20[ ].

The Yield Maintenance Agreements will be governed by and construed in accordance with the law of the State of New York and will be documented under the ISDA Master Agreement, as supplemented by the schedule and the confirmation.  The obligations of the Counterparty are limited to those specifically set forth in the related Yield Maintenance Agreement.

Any amounts received by the Securities Administrator under a Yield Maintenance Agreement will be distributed as follows:

1.

to the Reserve Fund, in an amount equal to the Basis Risk Shortfall Carryover Amount for the Class [__] Certificates for such Distribution Date;

2.

to the Principal Remittance Amount, the Net Cumulative Realized Loss Amount on such Distribution Date;

3.

to the Class [__] Certificates, any applicable Unpaid Realized Loss Amounts, and

4.

to the Class [__] Certificates, any remaining amounts.

FEDERAL INCOME TAX CONSEQUENCES

The following is a general summary of some of the related Federal income tax consequences of the purchase, ownership and disposition of the Class A Notes. This discussion does not address every aspect of the Federal income tax laws that may be relevant to holders of Class A Notes in light of their personal investment circumstances or to particular types of Class A Noteholders subject to special treatment under the Federal income tax laws, including, without limitation, banks and thrifts, insurance companies, dealers in securities, foreign investors, regulated investment companies, individuals, trusts and estates and pass-through entities, the equity holders of which are any of the foregoing. This discussion is directed to prospective purchasers who purchase Class A Notes in the initial distribution of the Class A Notes and who hold the Class A Notes as “capital assets” within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). Prospective purchasers are urged to consult their own tax advisors in determining the Federal, state, local, foreign and any other tax consequences to them of the purchase, ownership and disposition of the Class A Notes.

The following summary is based upon current provisions of the Code, the Treasury regulations promulgated under the Code, judicial authority, and ruling authority, all of which are subject to change, which change may be retroactive. The Issuing Entity will be provided with an opinion of Federal Tax Counsel regarding some of the related Federal income tax matters discussed below. An opinion of Federal Tax Counsel, however, is not binding on the Internal Revenue Service (the “IRS”) or the courts. Moreover, there are no cases or IRS rulings on similar transactions with terms similar to those of the Class A Notes. As a result, the IRS may disagree with all or a part of the discussion below. No ruling on any of the issues discussed below will be sought from the IRS.

Tax Characterization of the Issuing Entity

McKee Nelson LLP will deliver its opinion that the Issuing Entity will not be classified as an association, or publicly traded partnership taxable as a corporation for Federal income tax purposes. This opinion will be based on the assumption of compliance by all parties with the terms of the Trust Agreement and related documents.

If the Issuing Entity were taxable as a corporation for Federal income tax purposes, the Issuing Entity would be subject to corporate income tax on its taxable income. The Issuing Entity’s taxable income would include all its income on the Receivables, possibly reduced by its interest expense on the Class A Notes. Any corporate income tax could materially reduce cash available to make payments on the Class A Notes and distributions on the Certificates, and Certificateholders, could be liable for any tax that is not paid by the Issuing Entity.

Tax Consequences to Holders of the Class A Notes

Treatment of the Class A Notes as Indebtedness.  The Issuing Entity will agree, and the Class A Noteholders will agree by their purchase of Class A Notes, to treat the Class A Notes as debt for Federal, state and local income and franchise tax purposes. Federal Tax Counsel will advise the Issuing Entity that in its opinion the Class A Notes will be classified as debt for Federal income tax purposes.

The prepayment assumption that is used in determining the accrual of original issue discount, market discount or premium with respect to the Notes is [100% Prepayment Assumption], as defined below.  However, no representation is made that the loans will prepay in accordance with this assumption or in accordance with any other assumption.  The [100% Prepayment Assumption] assumes a [constant prepayment rate of ___%].

Alternatively, if, contrary to the opinion of Federal Tax Counsel, the Class A Notes were not properly classified as debt and Issuing Entity were treated as a publicly traded partnership taxable as a corporation, it would be subject to Federal income tax, and any similar state or local taxes, at corporate tax rates on its taxable income generated by ownership of the Receivables.  This tax could result in reduced distributions to Class A Noteholders. Distributions to Class A Noteholders generally would not be deductible in computing the taxable income of the publicly traded partnership. In addition, all or a portion of any distributions would, to the extent of the current and accumulated earnings and profits of the corporation, be treated as dividend income to the Class A Noteholders, and in the case of Class A Noteholders that are foreign persons would be subject to withholding tax.

Interest Income and OID on the Class A Notes.

It is not anticipated that the Class A Notes will be issued with original issue discount (“OID”) within the meaning of Section 1273 of the Code. The stated interest on the Class A Notes will be taxable to a Class A Noteholder as ordinary interest income when received or accrued in accordance with the Class A Noteholder’s method of tax accounting. If the Class A Notes were treated as being issued with OID, the excess of the “stated redemption price at maturity” of the Class A Notes over their issue price would constitute OID. Under the OID Regulations, a holder of a Class A Note issued with a de minimis amount of OID must include this OID in income, on a pro rata basis, as principal payments are made on the Class A Note. A subsequent purchaser who buys a Class A Note for more or less than its principal amount will generally be subject, respectively, to the premium amortization or market discount rules of the Code.

Sale or Other Disposition.

If a Class A Noteholder sells a Class A Note, the holder will recognize gain or loss in an amount equal to the difference between the amount realized on the sale and the holder’s adjusted tax basis in the Class A Note. The adjusted tax basis of a Class A Note to a particular Class A Noteholder will equal the holder’s cost for the Class A Note, increased by any market discount, and gain previously included by the Class A Noteholder in income with respect to the Class A Note and decreased by the amount of premium, if any, previously amortized and by the amount of principal payments previously received by the Class A Noteholder with respect to the related Class A Note. Any gain or loss will be capital gain or loss, except for gain representing accrued interest, including OID, and accrued market discount not previously included in income. Capital losses generally may be used by a corporate taxpayer only to offset capital gains, and by an i ndividual taxpayer only to the extent of capital gains plus $3,000 of other income.

Foreign Holders.

Except as discussed below, a Class A Noteholder that is not a “United States person” (as defined below) generally will not be subject to United States income or withholding tax in respect of a distribution on a Class A Note provided that (i) the holder complies to the extent necessary with certain certification requirements, which generally relate to the identity of the beneficial owner and the status of the beneficial owner as a person that is not a United States person (as defined below), (ii) the holder is not a “10-percent shareholder” within the meaning of Section 871(h)(3)(B) of the Code, which could be interpreted to include a person that directly or indirectly owns 10% or more of the certificates in the Issuing Entity or the equity in the Sponsor or the Depositor, (iii) the holder is not a “controlled foreign corporation” (as defined in the Code) related to the Issuing Entity or related to a 10 percent holde r of certificates in the Issuing Entity or equity in the Sponsor or the Depositor, and (iv) the holder is not engaged in a United States trade or business, or otherwise subject to Federal income tax as a result of any direct or indirect connection to the United States other than through its ownership of a Class A Note.  For these purposes, the term “United States person” means (i) a citizen or resident of the United States, (ii) a corporation or partnership (or other entity properly treated as a corporation or partnership for Federal income tax purposes) created or organized in or under the laws of the United States or any State thereof or the District of Columbia, (iii) an estate whose income is includable in gross income for United States Federal income taxation regardless of its source, and (iv) a trust for which one or more United States persons have the authority to control all substantial decisions and for which a court of the United States can exercise primary supervision over the trust ’s administration and certain eligible trusts that elect to be treated as United States persons.  A “Foreign Person” is any person that is not a United States person.  Each Class A Noteholder should consult its tax advisors regarding the tax documentation and certifications that must be provided to secure the exemption from United States withholding taxes.

Any capital gain realized on the sale, redemption, retirement or other taxable disposition of a Class A Note by a Foreign Person generally will be exempt from United States Federal income and withholding tax, provided that (i) such gain is not effectively connected with the conduct of a trade or business in the United States by the Foreign Person and (ii) in the case of an individual Foreign Person, the Foreign Person is not present in the United States for 183 days or more in the taxable year.

If the interest, gain or income on a Class A Note held by a Foreign Person is effectively connected with the conduct of a trade or business in the United States by the Foreign Person (although exempt from the withholding tax previously discussed if the holder provides an appropriate statement establishing that such income is so effectively connected), the holder generally will be subject to United States Federal income tax on the interest, gain or income at regular Federal income tax rates.  In addition, if the Foreign Person is a foreign corporation, it may be subject to a branch profits tax equal to 30% of its effectively connected earnings and profits,” within the meaning of the Code, for the taxable year, as adjusted for certain items, unless it qualifies for a lower rate under an applicable tax treaty (as modified by the branch profits tax rules).

If the IRS were to contend successfully that the Class A Notes are interests in a partnership, not taxable as a corporation, a Class A Noteholder that is a foreign person might be required to file a United States. Federal income tax return and pay tax on its share of partnership income at regular United States tax rates, including the branch profits tax, and could be subject to withholding tax on its share of partnership income. If the Class A Notes were recharacterized as interests in a “publicly traded partnership” taxable as a corporation, distributions on the Class A Notes treated as dividends would generally be subject to withholding tax on the gross amount of the dividends at the rate of 30% unless the rate were reduced by an applicable treaty. If the Class A Notes are recharacterized as equity interests in a partnership, or, contrary to the opinion of Federal Tax Counsel, in a publicly traded partnership taxable as a corporation , any taxes required to be so withheld will be treated for all purposes of the Class A Notes as having been paid to the related Class A Noteholder.

Backup Withholding. Distributions made on the Class A Notes and proceeds from the sale of Class A Notes to or through certain brokers may be subject to a “backup” withholding tax on “reportable payments” (including interest accruals, original issue discount, and, under certain circumstances, distributions in reduction of principal amount) if the holder of the Class A Notes fails to comply with certain identification procedures, unless the Class A Noteholder is an exempt recipient under applicable provisions of the Code and, if necessary, demonstrates such status.  Any amounts so withheld from distributions on the Class A Notes would be refunded by the IRS or allowable as a credit against the Class A Noteholder’s Federal income tax.

CERTAIN STATE TAX CONSEQUENCES

In addition to the federal income tax consequences described in “Material Federal Income Tax Consequences” above, potential purchasers should consider the state income tax consequences of the acquisition, ownership and disposition of the Class A Notes. State income tax law may vary substantially from state to state, and this discussion does not purport to describe any aspect of the income tax laws of any state. Therefore, potential purchasers should consult their own tax advisors with respect to the various tax consequences of an investment in the Class A Notes.

ERISA CONSIDERATIONS

General

Section 406 of ERISA prohibits, and Section 4975 of the Code imposes adverse tax consequences on, certain transactions between any benefit plan which is subject to Title I of ERISA and/or Section 4975 of the Code or is an entity which is deemed to hold the assets of the foregoing (the “Plan”) and persons that are “parties in interest” under ERISA or “disqualified persons” under the Code with respect to such Plan.  A violation of these “prohibited transaction” rules may result in excise taxes and other penalties and liabilities under ERISA and the Code for such persons.

Certain transactions involving the assets of an issuing entity might be deemed to constitute prohibited transactions under Section 406 ERISA and Section 4975 of the Code with respect to a Plan that purchased notes issued by that issuing entity if assets of the issuing entity were deemed to be assets of the Plan.  Under the regulation issued by the United States Department of Labor set forth at 29 C.F.R. Section 2510.3-101 governing the definition of “plan assets” for purposes of the fiduciary responsibility and prohibited transaction provisions of ERISA and Section 4975 of the Code (the “Plan Asset Regulations”), the assets of an issuing entity would be treated as plan assets of the Plan for the purposes of ERISA and the Code only if the Plan acquired an “equity interest” in the issuing entity and none of the exceptions contained in the Plan Asset Regulations was applicable.  An equity interest is defined under the Plan Asset Regulations as an interest other than an instrument which is treated as indebtedness under applicable local law and which has no substantial equity features.

Purchases of the Notes

Although there is little guidance on the subject, the notes should be treated as indebtedness without substantial equity features for purposes of the Plan Asset Regulations.  This determination is based in part upon (i) tax counsel’s opinion that notes transferred on the closing date to parties unrelated to the holder of the Residual Certificates will be classified as debt for U. S. federal income tax purposes and that retained notes, if later sold to a party unrelated to the holder of the Residual Certificates for cash, will be classified as debt instruments for U.S. federal income tax purposes as of the date of such sale, based on certain assumptions (including that the rating of the notes as of the closing date has not declined below investment grade) and (ii) the traditional debt features of the notes, including the reasonable expectation of purchasers of the notes that they will be repaid when due, as well as the absence of conversion rights, warrants an d other typical equity features.  Based upon the foregoing and other considerations, subject to the considerations described below, the notes may be purchased by a Plan.

Without regard to whether the notes are considered an “equity interest” in the issuing entity under the Plan Asset Regulations, the acquisition or holding of notes by or on behalf of a Plan could be considered to give rise to a prohibited transaction if the underwriters, the issuing entity, the owner trustee or the indenture trustee, or any of their respective affiliates is or becomes a party in interest or a disqualified person with respect to such Plan.  In that case, PTE 84-14 (relating to transactions effected by a “qualified professional asset manager”); PTE 90-1 (relating to transactions involving insurance company pooled separate accounts); PTE 91-38 (relating to transactions involving bank collective investment funds); PTE 95-60 (relating to transactions involving insurance company general accounts); PTE 96-23 (relating to transactions effected by an “in-house asset manager”); and any other applicable exemption granted by the U.S. Department of Labor (the “Investor Based Exemptions) could be applicable, depending on the type of Plan involved and the circumstances of the plan fiduciary’s decision to acquire a note.  Even if the conditions specified in one or more of the Investor-Based Exemptions are met, the scope of the relief provided by these exemptions might or might not cover all acts that might be construed as prohibited transactions.  There can be no assurance that any of the Investor-Based Exemptions, or any other exemption, will be available with respect to any particular transaction involving the notes.

Certain employee benefit plans, including governmental plans (as defined in Section 3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and foreign plans are not subject to the ERISA requirements but may be subject to federal, state, local or foreign laws that are substantially similar to ERISA or the Code (“Similar Law”), such plans, together with Plans are referred to herein as “Benefit Plans.”

The notes should not be purchased with the assets of a Plan if the depositor, the servicer, the master servicer, the indenture trustee, the owner trustee, the underwriters or any of their affiliates is a fiduciary or gives investment advice with respect to such Plan or is an employer maintaining or contributing to such Plan, unless such purchase and holding of the notes would be covered by an applicable prohibited transaction exemption.

Each purchaser and transferee of a note will be deemed to represent and warrant to the issuing entity that either (i) it is not a Benefit Plan or (ii) it is a Benefit Plan and its acquisition and holding of such notes will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code which is not covered under an Investor-Based Exemption or some other applicable exemption, and will not cause a non-exempt violation of any substantially Similar Law.

Prospective Benefit Plan investors in notes should consult with their legal advisors concerning the impact of ERISA and the Code, the availability of other exemptions from the prohibited transaction rules that may apply to them, and the potential consequences in their specific circumstances, prior to making an investment in the notes.  Each Benefit Plan fiduciary should also determine whether under the general fiduciary standards of investment prudence and diversification, an investment in the notes is appropriate for the Benefit Plan, taking into account the overall investment policy of the Plan and the composition of the Benefit Plan’s investment portfolio.

UNDERWRITING

Subject to the terms and conditions set forth in an underwriting agreement dated [                  ] (the “Underwriting Agreement”), the Depositor has agreed to cause the Issuing Entity to sell to [Deutsche Bank Securities Inc.] (the “Underwriter”), and the Underwriter has agreed to purchase, all of the Class A Notes.

Under the terms and conditions of the Underwriting Agreement, the Underwriter is committed to take and pay for all the Class A Notes offered by this prospectus supplement, if any are taken.

The Sponsor has been advised by the Underwriter that the Underwriter proposes to offer the Class A Notes from time to time for sale in negotiated transactions or otherwise, at prices determined at the time of sale. The Underwriter may effect these transactions by selling Class A Notes to or through dealers and these dealers may receive compensation in the form of underwriting discounts, concessions or commissions from the Underwriter and any purchasers of Class A Notes for whom they may act as agents. The Underwriter and any dealers that participate with the Underwriter in the distribution of the Class A Notes may be deemed to be underwriters, and any discounts or commissions received by them and any profit on the resale of Class A Notes by them may be deemed to be underwriting discounts or commissions under the Securities Act of 1933, as amended (the “Securities Act”).

The Class A Notes are a new issue of securities with no established trading market. The Issuing Entity has been advised by the Underwriter that it intends to make a market in the Class A Notes, but the Underwriter is not obligated to make a market and may discontinue market making at any time without notice. No assurance can be given as to the liquidity of the trading market for the Class A Notes.

An affiliate of the underwriter provides a warehouse facility to the Sponsor.

The Sponsor has agreed to indemnify the Underwriter against particular types of liabilities, including liabilities under the Securities Act.

RATINGS

It is a condition to issuance that each of the Class A-1 Notes and the Class A-2 Notes be rated [       ] by [       ] and [       ] by [       ]. The ratings by the Rating Agencies of the Class A Notes will be based on the issuance of the Policy. A rating is not a recommendation to purchase, hold or sell Class A Notes. In the event that the rating initially assigned to any of the Class A Notes is subsequently lowered or withdrawn for any reason, including by reason of a downgrading of the claims-paying ability of the Insurer, no person or entity will be obligated to provide any additional credit enhancement with respect to the Class A Notes. Any reduction or withdrawal of a rating may have an adverse effect on the liquidity and market price of the Class A Notes.

The rating agencies have stated that it is their standard policy to monitor ratings on publicly offered notes for which a rating has been provided, as to each rating agency rating each class of notes in accordance with the rating agencies’ particular surveillance policies, unless the issuer requests a rating without surveillance.  A rating agency will monitor the rating it issues on an ongoing basis and may update the rating after conducting its regular review of the issuer’s creditworthiness or after conducting a review of the status of the rating upon becoming aware of any information that might reasonably be expected to result in a change of rating.  The depositor has not requested that any rating agency not monitor their ratings of the notes, and the depositor has not requested that any rating agency use any monitoring procedures other than their standard monitoring procedures.

LEGAL PROCEEDINGS

[There are no material legal proceedings pending against the Sponsor, the Depositor, the Owner Trustee, the Indenture Trustee, the Issuing Entity, [any affiliated Servicer, any 20% concentration unaffiliated Servicer, any 20% concentration Originator], or with respect to which the property of any of the foregoing transaction parties is subject, that are material to the noteholders.  No legal proceedings against any of the foregoing transaction parties is known to be contemplated by governmental authorities, that are material to the noteholders.]

AFFILIATIONS, RELATIONSHIPS AND RELATED TRANSACTIONS

[There are no affiliations between the Sponsor, the Depositor or the Issuing Entity and any of [any affiliated Servicer, any 20% concentration unaffiliated Servicer], the Owner Trustee, the Indenture Trustee, [any 10% concentration Originator] or [any credit enhancement provider or derivatives counterparty].  There are no affiliations among [any affiliated Servicer, any 20% concentration unaffiliated Servicer], the Owner Trustee, the Indenture Trustee, [any 10% concentration Originator] or [any credit enhancement provider or derivatives counterparty].  There are currently no business relationships, agreements, arrangements, transactions or understandings between (a) the Sponsor, the Depositor or the Issuing Entity and (b) any of the parties referred to in the preceding sentence, or any of their respective affiliates, that were entered into outside the normal course of business or that contain terms other than would be obtained in an ar m’s length transaction with an unrelated third party and that are material to the investor's understanding of the notes, or that relate to the notes or the pooled assets.  No such business relationship, agreement, arrangement, transaction or understanding has existed during the past two years.]

[EXPERTS

The consolidated balance sheets of Financial Security and Subsidiaries as of December 31, [       ] and [       ] and the related consolidated statements of income, changes in shareholder’s equity and cash flows for each of the three years in the period ended December 31, [       ], incorporated by reference in this prospectus supplement, have been incorporated in this prospectus supplement in reliance on the report of [       ], independent accountants, given on the authority of that firm as experts in accounting and auditing.]

LEGAL MATTERS

Some legal matters relating to the Class A Notes and some related federal income tax and other matters will be passed upon for the Sponsor by [       ].  Some legal matters relating to the Class A Notes will be passed upon for the Underwriter and the Depositor by McKee Nelson LLP, New York, New York.

The information in this prospectus supplement is not complete and may be changed.  We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective.  This prospectus supplement is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED [_________]

PROSPECTUS SUPPLEMENT (to prospectus dated [            ])

$[               ] (Approximate)

ACE SECURITIES CORP., [______] Auto and Boat Trust [______], Series  [       ]

Asset Backed Notes

[______] Auto and Boat Trust [______]

Issuing Entity

[DB Structured Products, Inc.]

Sponsor

ACE Securities Corp.

Depositor

 [               ]

Servicer

Securities Offered • $[      ], [     ]% Class [_____] asset backed notes • $[      ], [     ]% Class [_____] asset backed notes • $[      ], [     ]% asset backed certificates Assets • Retail automobile and boat receivables Credit Enhancement • Subordination of the certificates • Reserve account • [Describe any other credit enhancement provided by [_____]] Expected Ratings • [      ] or equivalent for the notes • [      ] or equivalent for the certificates Consider carefully the risk factors beginning on page S-[  ] of this prospectus supplement and on page [  ] of the prospectus. For a list of capitalized terms used in this prospectus supplement and the prospectus, see the index of defined terms beginning on page S-[  ] of this prospectus supplement and on page [  ] of the prospectus. The notes will represent interests in the Issuing Entity only and will not represent interests in or obligations of the sponsor, the depositor or any of their affiliates. Distributions on the notes will be made on the [__]th day of each month, or, if such day is not a business day, on the next succeeding business day, beginning in [__]. This prospectus supplement may be used to offer and sell the notes only if accompanied by the prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this prospectus supplement or the attached prospectus is accurate or complete.  Making any contrary representation is a criminal offense.

Subject to the satisfaction of certain conditions, the underwriter named below is offering the notes and certificates at the price to public shown.  The securities will be delivered in book entry form only on or about [        ].

	Price to Public	Underwriting Discounts & Commissions	Proceeds to the Depositor(1)
Per Note	[    ]%	[    ]%	[    ]%
Per Certificate	[    ]%	[    ]%	[    ]%
Total	$[     ]	$[     ]	$[     ]

___________________________

1.  Before deducting expenses, estimated to be $ [      ].

[Deutsche Bank Securities]

The date of this prospectus supplement is [         ].

Important Notice About Information Presented in this
Prospectus Supplement and the Accompanying Prospectus:

We provide information to you about the securities offered by this prospectus supplement in two separate documents that progressively provide more detail: (1) the accompanying prospectus, which provides general information, some of which may not apply to your securities, and (2) this prospectus supplement, which describes the specific terms of your securities.

If the information regarding the securities is more specific in this prospectus supplement than in the prospectus, then you should rely on the information in this prospectus supplement.

You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus.  We have not authorized anyone to provide you with different information.

We are not offering the securities in any state where the offer is not permitted.  We do not claim that the information in this prospectus supplement and prospectus is accurate as of any date other than the dates stated on their respective covers.

Dealers will deliver a prospectus supplement and prospectus when acting as underwriters of the securities and with respect to their unsold allotments or subscriptions.  In addition, all dealers selling the securities will be required to deliver a prospectus supplement and prospectus for ninety days following the date of this prospectus supplement.

We include cross-references in this prospectus supplement and the accompanying prospectus to captions in these materials where you can find further related discussions.  The following table of contents and the table of contents included in the accompanying prospectus provide the pages on which these captions are located.

TABLE OF CONTENTS

Prospectus Supplement

Caption

Page

Summary of Terms

1

Risk Factors

1

Formation of the Trust

3

The Trust Property

4

The Receivables Pool

5

STATIC POOL INFORMATION

10

THE ORIGINATORS

11

The Servicer

11

[Weighted Average Life of the Securities]

12

Use of Proceeds

15

Description of the Notes

15

Description of the Certificates

16

Description of the Transfer and Servicing Agreements

17

Federal Income Tax Consequences

27

State and Local Tax Consequences

31

ERISA Considerations

36

Underwriting

38

RATINGS

39

LEGAL PROCEEDINGS

39

AFFILIATIONS, RELATIONSHIPS AND RELATED TRANSACTIONS

39

Legal Matters

40

SUMMARY OF TERMS

This summary highlights selected information from this prospectus supplement and does not contain all of the information that you need to consider in making your investment decision.  To understand all of the terms of the offering of the securities, it is necessary that you read carefully this entire prospectus supplement and accompanying prospectus.

While this summary contains an overview of certain calculations, cash flow priorities, and other information to aid your understanding, you should read carefully the full description of these calculations, cash flow priorities and other information in this prospectus supplement and the accompanying prospectus before making any investment decision.

Issuing Entity	[      ] Auto and Boat Trust [      ]-[      ], a limited purpose Delaware business trust.
Depositor	Ace Securities Corp.  See “The Depositor” in the Prospectus.
Servicer	[      ].
Sponsor	[      ].  See “The Sponsor” in the Prospectus.
Originators	[_________________________], with respect to approximately [__]% of the receivables by aggregate principal balance as of the Cut-off Date. The remainder of the receivables were originated by various originators, none of which have originated more than 10% of the receivables.  See “The Originators” in this prospectus supplement.
Owner Trustee	[      ].
Indenture Trustee	[      ].
[Any credit enhancement provider referenced in Items 1114(b) and 1115 of Regulation AB]	[      ].
Closing Date	On or about [      ].
Cut-off Date	The [close] [opening] of business on [      ].
Distribution Dates	[      ] of each month or the next business day if the [      ] day is not a business day, beginning in [      ].
Record Dates	Last day of the month prior to a distribution date.
Minimum Denominations	$[25,000].
Form	Book-entry.
Interest Accrual Method	30/360.
Final Scheduled Distribution Date	[      ] for the notes and [      ] for the certificates.

The Receivables

The receivables are amounts owed by individuals under retail installment sale contracts to purchase or refinance:  1) new or used automobiles, recreational vehicles, including motor homes, campers, motorcycles, all-terrain-vehicles and snowmobiles, vans trucks, buses and trailers; and 2) new or used boats, boat motors, jet skis and waverunners.

The depositor expects that the receivables will have the following characteristics as of [   ].  As of the closing date, no more than 5% of the receivables will have characteristics that differ from those described in this prospectus supplement as of [   ].

Number of contracts

[   ]

Principal Amount

$[   ]

Annual Percentage Rates

[   ]% to [    ]%

Weighted Average Annual
Percentage Rate

[   ]%

Original term

[   ] months to [   ] months

Weighted Average
original term

[   ] months

Remaining term

[   ] months to [__] months

Weighted Average
remaining term

[   ]%

New

[   ]

Used

[   ]

States

[   ]

[   ]

[   ]

Balloon Loans

[   ]

[For approximately [      ]% of the principal amount of the receivables, the amount of the receivable was more than the value of the financed vehicle at the time the loan was made.]

Removal and Substitution of a Receivable

[Regulation AB Item 1103(a)(6) compliant description of removal or substitution of receivables in connection with material document defects or breaches of representations and warranties].

Interest Distributions

On each distribution date, if the trust fund has sufficient cash, it will pay you the interest accrued on your securities during the related interest period.  Interest periods begin on the prior distribution date and run through the day before the current distribution date. The first interest period, however, begins on the closing date and runs through the day before the first distribution date.  We will assume that each year has 360 days.

Principal Distributions

The trust fund will pay all principal collections to the noteholders until the notes are paid in full.  The trust fund will not pay any principal collections to the certificateholders until the notes are paid in full.

Reserve Account

There will be a reserve account to help cover cash flow shortfalls.  Initially, the account will be $[      ]. On each distribution date amounts remaining after distribution of the total servicing fee and amounts to be paid to the noteholders and certificateholders will be deposited in the reserve account until the amount equals a specified amount.

[Trigger Events]

[Regulation AB Item 1103(a)(3)(vii) compliant description of any events in the transaction agreements that can trigger liquidation or amortization of the receivables or other performance triggers that would alter the transaction structure or the flow of funds].

 [Other Credit Enhancement]

[Regulation AB Item 1103(a)(3)(ix) compliant description of any other credit enhancement].

[Additional Series or Classes Backed by Receivables]

[Regulation AB Item 1103(a)(4) compliant description of any outstanding series or classes of securities that are backed by the receivables or otherwise have claims on the receivables.  Regulation AB compliant description of any circumstances in which additional series or classes of securities may be issued that are backed by the receivables, with specification if security holder approval is necessary for such issuances and if security holders will receive notice of such issuances].

[Revolving Periods]

[Regulation AB Item 1103(a)(5) compliant description of any revolving periods].

[Prefunding Periods]

[Regulation AB Item 1103(a)(5) compliant description of any prefunding periods].

Fees and Expenses

Prior to the distribution of any interest to the noteholders or the certificateholders, the servicer will be entitled to receive a servicing fee for each collection period in an amount equal to the product of one-twelfth of [    ]% per annum for so long as [               ] or an affiliate thereof is the servicer, and [    ]% per annum if [               ] or an affiliate thereof is no longer the servicer and the aggregate principal balance of the receivables as of the first day of the collection period.  See “Description of the Transfer and Servicing Agreement--Servicing Compensation and Payment of Expenses” in the Prospectus.

[Regulation AB Item 1103(a)(7) compliant description of any other fees and expenses].

Optional Termination

When the principal amount of the receivables is 10% or less than it was on the cut-off date, the servicer may buy the receivables.  If the servicer does not do so, the Indenture trustee will try to sell the receivables to another buyer.  In either case, you must receive the principal amount of your securities and all accrued but unpaid interest or the receivables will not be sold.

Final Scheduled Maturity Dates

The final scheduled maturity date of the securities is [__________].  The actual date on which the aggregate outstanding principal amount of the securities is paid may be earlier than the final scheduled maturity date based on a variety of factors.

Expected Final Distribution Dates

The expected final distribution date of each class of securities is [

], based on the assumption that the servicer has exercised its option to purchase all the receivables as described in “Optional Termination” above.  Due to losses and prepayments on the receivables, the final distribution dates on each class of securities may be substantially earlier or later than such date.

Tax Consequences

McKee Nelson LLP, special federal tax counsel to the trust fund, is of the opinion that, for federal income tax purposes the notes will constitute indebtedness and the certificates will constitute interests in a trust fund that will not be treated as an association taxable as a corporation or publicly traded partnership taxable as a corporation. The trust and holders of the certificates will agree by their purchase of certificates, if there is more than one holder of the certificates, to treat the trust as a partnership for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, with the assets of the partnership being the assets held by the trust, the holders of the certificates as partners of the partnership and the notes as debt of the partnership, and if there is one holder of certificates, to treat that holder as the owner of the assets of the trust and to treat the trust as a disregarded entity.

The tax code is complex, and we recommend that you and your tax advisors review the information under the caption “Federal Income Tax Consequences” in this prospectus supplement and under the caption “Material Federal Income Tax Consequences” in the prospectus.

ERISA Considerations

The notes may be purchased by ERISA and other retirement plans if one or more administrative exemptions apply. The certificates may not be purchased by ERISA or other retirement plans.  See “ERISA Considerations” in this prospectus supplement and the prospectus.

Ratings

It is a condition to the issuance of the securities that the securities receive at least the following ratings from [______________] and [_________________]:

Securities	[____]	[____]
Class [__] Notes	[__]	[__]
Class [__] Notes	[__]	[__]
Certificates	[__]	[__]
Class [__]	[__]	[__]

RISK FACTORS

The following information, which you should carefully consider, identifies certain significant sources of risk associated with an investment in the securities.

Certain features of the receivables pool may result in losses.	There are a number of features of the receivables in the pool that create additional risk of loss, including the following:
Certain obligors have little equity in their financed vehicles or boats which may result in more severe losses.	For approximately [      ]% of the principal amount of the receivables, the original principal amount of the loan exceeded the cost of the related vehicle or boat.  Although each such obligor was required to make a downpayment from the obligor’s own funds, those obligors have no equity in their vehicles or boats.  While those borrowers had excellent credit histories at the time, the lack of any equity in the vehicle or boat may make it more likely that those obligors will default if their personal financial conditions change.  In addition, if such an obligor defaults and the vehicle or boat is repossessed, the trust is likely to suffer a loss.
The concentration of the receivables in specific geographic areas may increase the risk of loss.	Economic conditions in the states where obligors reside may affect the delinquency, loan loss and repossession experience of the trust fund with respect to the receivables.  As of the cut-off date, the billing addresses of the obligors with respect to approximately [      ]%, [      ]%, and [      ]% of the principal amount of the receivables were located in [      ],  [      ]  and [      ], respectively.  Economic conditions in any state or region may decline over time and from time to time.  Because of the concentration of the obligors in certain states, any adverse economic conditions in those states may have a greater effect on the performance of the securities than if the concentration did not exist.
Newly originated loans may be more likely to default which may cause losses.	Defaults on automobile and boat loans tend to occur at higher rates during the early years of the automobile and boat loans.  Substantially all of the automobile and boat loans will have been originated within [      ] months prior to the sale to the trust.  As a result, the trust may experience higher rates of default than if the automobile and boat loans had been outstanding for a longer period of time.
Balloon loans may have a higher rates of default which may cause losses.	A balloon loan has monthly payments that will not fully pay off the loan balance by the maturity date.  As a result the borrower usually will have to refinance the balloon loan in order to pay the amount due.  The borrower may not be able to refinance the balloon loan for any number of reasons, including the level of available interest rates, the age or condition of the vehicle or boat, or the borrower’s payment or credit history.  The trust will not have any funds to refinance a balloon loan, and the seller is not obligated to do so.
Certificates will absorb cash shortfalls and losses before the notes.	The certificateholders will not receive any distribution of interest until the full amount of interest on the notes has been paid on each distribution date.  The certificateholders will not receive any distributions of principal until the notes have been repaid in full.  Holders of the certificates must rely for repayment upon payments on the receivables, and, if and to the extent available, amounts on deposit in the reserve account.  If funds in the reserve account are exhausted, the trust fund will depend solely on current distributions on the receivables to make payments on the securities.  Delinquent payments on the receivables may result in a shortfall in the distributions on the certificates on any distribution date due to the priority of payments on the notes.  Although on each distribution date distributions of interest on the certificates ranks senior to payments of pr incipal of the notes, after an event of default or an acceleration of the notes, the principal amount of the notes must be paid in full prior to the distribution of any amounts on the certificates.
Your yield to maturity may be reduced by prepayments.	The pre-tax yield to maturity is uncertain and will depend on a number of factors including the following:
The rate of return of principal is uncertain.	The amount of distributions of principal of the securities and the time when you receive those distributions depends on the amount and the times at which borrowers make principal payments on the receivables.  Those principal payments may be regularly scheduled payments or unscheduled payments resulting from prepayments or defaults of the receivables.
An early termination will shorten the life of your investment which may reduce your yield to maturity.	If the receivables are sold upon exercise of the servicer’s optional termination or the auction call, you will receive the principal amount of your securities plus accrued interest through the related interest period.  Because your securities will no longer be outstanding, you will not receive the additional interest payments that you would have received had the securities remained outstanding.  If you bought your securities at par or at a premium, your yield to maturity will be lower than it would have been if the optional termination or auction call had not been exercised.
[Additional Applicable Risk Factors]	[____________________]

FORMATION OF THE ISSUING ENTITY

The Issuing Entity

[      ] Auto and Boat Trust [    ]-[    ] is a business trust to be formed by the Depositor under the laws of the State of Delaware pursuant to a trust agreement between the Depositor and the Owner Trustee, dated as of [________] (the “Trust Agreement”) for the transactions described in the Prospectus.  The Trust Agreement constitutes the “governing instrument” under the laws of the State of Delaware.  After its formation, the Issuing Entity will not engage in any activity other than:

·

acquiring, holding and managing the Receivables and the other assets of the Issuing Entity and proceeds therefrom,

·

issuing the Certificates and the Notes,

·

making payments on the Certificates and the Notes and

·

engaging in other activities that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith.

The foregoing restrictions are contained in the Trust Agreement.  [These restrictions cannot be amended without the consent of holders of Certificates evidencing at least 51% of the voting rights.]  For a description of other provisions relating to amending the Trust Agreement, see “[[_______________]]” in the base prospectus.

The assets of the Issuing Entity will consist of the Receivables and certain related assets.

The Issuing Entity’s fiscal year end is [______].

The Issuing Entity will initially be capitalized with equity of $[      ], excluding amounts deposited in the Reserve Account, representing the initial principal balance of the Certificates.  The Notes and Certificates will be transferred by the Issuing Entity to the Depositor in exchange for the Receivables.  The Certificates and the Notes will be sold to the Underwriter for cash.  The Servicer will initially service the Receivables pursuant to a sale and servicing agreement, to be dated as of [      ] (the “Sale and Servicing Agreement”), among the Sponsor, the Depositor, the Issuing Entity and the Servicer, and will be compensated for acting as the Servicer.  See “Description of the Transfer and Servicing Agreements--Servicing Compensation” in this prospectus supplement and “--Servicing Compensation and Payment of Expenses” in the Prospectus. & nbsp;To facilitate servicing and to minimize administrative burden and expense, the Servicer will be appointed custodian for the Receivables by the Issuing Entity, but will not stamp the Receivables to reflect the sale and assignment of the Receivables to the Issuing Entity, nor amend the certificates of title of the :  1) new and used automobiles (the “Financed Automobiles”); and 2) new and used boats (the “Financed Boats”, and together with the Financed Automobiles, the “Financed Vehicles”) securing the Receivables.

If the protection provided to the investment of the Securityholders in the Issuing Entity by the Reserve Account is insufficient, the Issuing Entity will look to the Obligors on the Receivables, and the proceeds from the repossession and sale of Financed Vehicles which secure defaulted Receivables.  In such event, there may not be sufficient funds to make distributions with respect to the Securities.

The Issuing Entity’s principal offices are in [      ], in care of [      ], as Owner Trustee, at the address listed below under “--The Owner Trustee.”

Capitalization of the Issuing Entity

The following table illustrates the capitalization of the Issuing Entity as of the Cut-off Date, as if the issuance and sale of the Notes and the Certificates had taken place on such date:

Notes	$[      ]
Certificates	$[      ]
Total	$[      ]

The Owner Trustee

[      ], a [national banking association] is the Owner Trustee under the Trust Agreement. [      ] is a [      ] and its principal offices are located at [      ], [      ].  The Owner Trustee will perform limited administrative functions under the Trust Agreement, including making distributions from the Certificate Distribution Account. The Owner Trustee’s liability in connection with the issuance and sale of the Certificates and the Notes is limited solely to the express obligations of the Owner Trustee set forth in the Trust Agreement.

[Provide Reg AB Item 1109(b) compliant description of the extent of the Owner Trustee’s prior experience serving as a trustee for asset-backed securities transactions involving asset pools of retail automobile receivables.]

[Provide Reg AB Item 1109(c) compliant description of the Owner Trustee’s duties and responsibilities regarding the asset-backed securities under the governing documents and under applicable law, and of any actions required by the Owner Trustee, including whether notices are required to investors, rating agencies or other third parties, upon an event of default, potential event of default (and how defined) or other breach of a transaction covenant and any required percentage of a class or classes of asset-backed securities that is needed to require the Owner Trustee to take action.]

[Provide Reg AB Item 1109(d) compliant description of any limitations on the Owner Trustee’s liability under the transaction agreements regarding the asset-backed securities transaction.]

[Provide Reg AB Item 1109(e) compliant description of any indemnification provisions that entitle the Owner Trustee to be indemnified from the cash flow that otherwise would be used to pay the asset-backed securities.]

[Provide Reg AB Item 1109(f) compliant description of any contractual provisions or understandings regarding the Owner Trustee’s removal, replacement or resignation, as well as how the expenses associated with changing from one owner trustee to another owner trustee will be paid.]

THE TRUST PROPERTY

The Notes will be collateralized by the Trust Property (other than the Certificate Distribution Account). Each Certificate represents a fractional undivided interest in the Trust. The “Trust Property” will include the Receivables, which were originated indirectly by Dealers and purchased indirectly by the Sponsor pursuant to agreements with Dealers (“Dealer Agreements”).  On the Closing Date, the Depositor will buy the Receivables from the Sponsor and the Depositor will sell the Receivables to the Trust.  The Servicer will, directly or through subservicers, service the Receivables.  The Trust Property also includes:

·

all monies received under the Receivables on and after the Cut-off Date and, with respect to Receivables which are Actuarial Receivables, monies received thereunder prior to the Cut-off Date that are due on or after the Cut-off Date;

·

such amounts as from time to time may be held in the Collection Account, the Reserve Account, the Payahead Account, the Note Distribution Account and the Certificate Distribution Account, established and maintained by the Servicer pursuant to the Sale and Servicing Agreement as described below;

·

security interests in the Financed Vehicles;

·

the rights of the Sponsor to receive proceeds from claims under certain insurance policies;

·

the rights of the Trust under the Sale and Servicing Agreement;

·

the rights of the Sponsor to refunds for the costs of extended service contracts and to refunds of unearned premiums with respect to credit life and credit accident and health insurance policies covering the Financed Vehicles or the retail purchasers of, or other persons owing payments on, the Financed Vehicles (the “Obligors”);

·

all right, title and interest of the Sponsor (other than with respect to any Dealer commission) with respect to the Receivables under the related Dealer Agreements;

·

rights with respect to any repossessed Financed Vehicles; and

·

all proceeds (within the meaning of the UCC) of the foregoing.

The Reserve Account will be maintained in the name of the Indenture Trustee for the benefit of the Noteholders and the Certificateholders.

THE RECEIVABLES POOL

Pool Composition

[The receivables pool consists of amounts owed by individuals under retail installment sale contracts to purchase or refinance new or used automobiles, recreational vehicles, including motor homes, campers, motorcycles, all-terrain-vehicles and snowmobiles, vans trucks, buses and trailers (the “Receivables”).]

 The Receivables were selected from the Sponsor’s portfolio by several criteria, including, as of the Cut-off Date, the following:

·

each Receivable has a scheduled maturity of not later than the Final Scheduled Maturity Date;

·

each Receivable was originated in the United States of America;

·

each Receivable has an original term to maturity of not more than [      ] months and a remaining term to maturity of [      ] months or less as of the Cut-off Date;

·

approximately [      ]% of the Initial Pool Balance was secured by new Financed Vehicles, and approximately [      ]% of the Initial Pool Balance was secured by used Financed Vehicles;

·

each Receivable provides for level monthly payments which fully amortize the amount financed except, in the case of Simple Interest Receivables, for the last payment, which may be different from the level payment;

·

each Receivable is not more than [      ] days contractually past due as of the Cut-off Date and is not more than [      ] months paid ahead;

·

each Receivable has an outstanding principal balance between $[      ] and $[      ];

·

the Obligor with respect to each Receivable has a FICO score between [______] and [______];

·

and each Receivable has an APR of no less than [      ]%.

As of the Cut-off Date, no Obligor on any Receivable was noted in the related records of the Servicer as being the subject of any pending bankruptcy or insolvency proceeding.  The latest scheduled maturity of any Receivable is not later than [      ].  No selection procedures believed by the Depositor to be adverse to Certificateholders or the Noteholders were used in selecting the Receivables.

The Depositor considers an account past due if any portion of the payment due on a due date is not received by the succeeding due date for that account.

The composition, distribution by remaining term, distribution by APR, geographic distribution and distribution by remaining principal of the Receivables, in each case, as of the Cut-off Date are set forth in the tables below.  The percentages in the following tables may not add to 100% due to rounding.

Composition of the Receivables as of the Cut-off Date
	New Financed Vehicles	Used Financed Vehicles	Total
Aggregate Principal Balance	$[__________]	$[__________]	$[__________]
Number of Receivables	[__________]	[__________]	[__________]
Average Principal Balance	$[__________]	$[__________]	$[__________]
Average Original Balance	$[__________]	$[__________]	$[__________]
Weighted Average Contract Rate	[_______]%	[_______]%	[_______]%
Contract Rate (Range)	[___]% - [___]%	[___]% - [___]%	[___]% - [___]%
Weighted Average Original Term (months)	[_______]	[_______]	[_______]
Original Term (Range) (months)	[____] to [_____]	[____] to [_____]	[____] to [_____]
Weighted Average Remaining Term (months)	[_______]	[_______]	[_______]
Remaining Term (Range) (months)	[____] to [_____]	[____] to [_____]	[____] to [_____]
Weighted Average FICO score	[_______]	[_______]	[_______]
FICO score (Range)	[____] to [_____]	[____] to [_____]	[____] to [_____]

Distribution by Remaining Term of the Receivables as of the Cut-off Date
Remaining Term (Range)	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
Less than [_____] months	[____________]	$[__________]	[___________]%
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
Total		$	100.00%

Distribution by Annual Percentage Rate of the Receivables as of the Cut-off Date
Annual % Rate Range	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
[_____]% to below	[____________]	$	%
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[____]% and above	[____________]	[____________]	[____________]
Total		$	100.00%

Geographic Distribution of the Receivables as of the Cut-off Date
State(1)	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
[      ]	[____________]	$	%
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
Others2
Total		$	100.00%

____________________

1.

Based on billing addresses of the Obligors as of the Cut-off Date, which may differ from the state of origination of the Receivable.

2.

Includes [    ] other states and [    ] none of which have a concentration of Receivables in excess of [    ]% of the aggregate principal balance.

Distribution by Remaining Principal Balance of the Receivables as of the Cut-off  Date
Remaining Principal Balance (Range)	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
$ 2,500 to $ 4,999	[____________]	$	%
$ 5,000 to $ 7,499	[____________]	[____________]	[____________]
$ 7,500 to $ 9,999	[____________]	[____________]	[____________]
$10,000 to $12,499	[____________]	[____________]	[____________]
$12,500 to $14,999	[____________]	[____________]	[____________]
$15,000 to $17,499	[____________]	[____________]	[____________]
$17,500 to $19,999	[____________]	[____________]	[____________]
$20,000 to $22,499	[____________]	[____________]	[____________]
$22,500 to $24,999	[____________]	[____________]	[____________]
$25,000 to $27,499	[____________]	[____________]	[____________]
$27,500 to $29,999	[____________]	[____________]	[____________]
$30,000 to $32,499	[____________]	[____________]	[____________]
$32,500 to $34,999	[____________]	[____________]	[____________]
$35,000 to $37,499	[____________]	[____________]	[____________]
$37,500 to $39,999	[____________]	[____________]	[____________]
$40,000 to $41,499	[____________]	[____________]	[____________]
$42,500 to $44,999	[____________]	[____________]	[____________]
$45,000 to $47,499	[____________]	[____________]	[____________]
$47,500 to $49,999	[____________]	[____________]	[____________]
$50,000 to $52,499	[____________]	[____________]	[____________]
$52,500 to $54,999	[____________]	[____________]	[____________]
Total		$	100.00%

Distribution by FICO Score of the Receivables as of the Cut-off Date
Annual % Rate Range	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
[______] to [______]	[____________]	$	%
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] and above	[____________]	[____________]	[____________]
Total		$	100.00%

As of the Cut-off Date, approximately [     ]% of the aggregate principal balance of the Receivables, constituting [     ]% of the number of Receivables, were between 1 payment and [    ] payments paid-ahead.

As of the Cut-off Date, approximately [   ]% of the aggregate principal balance of the Receivables, constituting [     ]% of the number of Receivables, are Actuarial Receivables.  ”Actuarial Receivables” are receivables that provide for amortization of the amount financed over a series of fixed, level-payment monthly installments.  Each monthly installment, including the monthly installment representing the final payment on the Receivable, consists of an amount of interest equal to 1/12 of the Annual Percentage Rate (“APR”) of the amount financed multiplied by the unpaid principal balance of the amount financed, and an amount of principal equal to the remainder of the monthly payment.

As of the Cut-off Date, approximately [   ]% of the aggregate principal balance of the Receivables, constituting [   ]% of the number of Receivables, are Simple Interest Receivables.  ”Simple Interest Receivables” are receivables that provide for the amortization of the amount financed under the receivable over a series of fixed level monthly payments. However, unlike the monthly payment under an Actuarial Receivable, each monthly payment includes an installment of interest which is calculated on the basis of the outstanding principal balance of the receivable multiplied by the stated APR and further multiplied by the period elapsed (as a fraction of a calendar year) since the preceding payment of interest was made. As payments are received under a Simple Interest Receivable, the amount received is applied first to interest accrued to the date of payment and the balance is applied to reduce the unpaid principal balance. Accordingly, if an Obligor pays a fixed monthly installment before its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be less than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly greater. Conversely, if an Obligor pays a fixed monthly installment after its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be greater than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly less. In either case, the Obligor pays a fixed monthly installment until the final scheduled payment date, at which time the amount of the final installment is increased or decreased as necessary to repay the then outstanding principal balance.

If an Actuarial Receivable is prepaid in full, with minor variations based upon state law, under the terms of the motor vehicle and boat retail installment sale contract or loan agreement, as the case may be, a “refund” or “rebate” will be made to the borrower of the portion of the total amount of payments then due and payable under such contract or agreement allocable to “unearned” interest, calculated on the basis of a constant interest rate.  If a Simple Interest Receivable is prepaid, rather than receive a rebate, the borrower is required to pay interest only to the date of prepayment.  The amount of a rebate under an Actuarial Receivable generally will be less than the remaining scheduled payments of interest that would have been due under a Simple Interest Receivable for which all payments were made on schedule.

The Servicer may accede to an Obligor’s request to pay scheduled payments in advance, in which event the Obligor will not be required to make another regularly scheduled payment until the time a scheduled payment not paid in advance is due.  The amount of any payment (which are not amounts representing Payaheads) made in advance will be treated as a principal prepayment and will be distributed as part of the Principal Distribution Amount in the month following the Collection Period in which the prepayment was made.  See “Maturity and Prepayment Considerations” in the Prospectus.

Receivable Delinquencies and Losses

For information regarding delinquencies and losses on the Receivables, see the tables below.  A Receivable is considered to be delinquent when a payment due on any due date remains unpaid as of the close of business on the last business day immediately prior to the next monthly due date.  The determination as to whether a loan falls into this category is made as of the close of business on the last business day of each month.

30 -  59 Days (times):	Number of Receivables	% by Receivable Count	Principal Balance Outstanding as of the Cutoff Date	% of Aggregate Principal Balance Outstanding as of the Cutoff Date
0	[________]	[______]%	[_______._]	[__.__]
1	[________]	[______]%	[_______._]	[__.__]
2	[________]	[______]%	[_______._]	[__.__]
Total	[________]	100.00%	[_______._]	100.00

60 -  89 Days (times):	Number of Receivables	% by Receivable Count	Principal Balance Outstanding as of the Cutoff Date	% of Aggregate Principal Balance Outstanding as of the Cutoff Date
0	[________]	[______]	[_______._]	[__.__]
1	[________]	[______]	[_______._]	[__.__]
2	[________]	[______]	[_______._]	[__.__]
Total	[________]	100.00	[_______._]	100.00

[No Receivable has been delinquent more than 90 days since origination.]

STATIC POOL INFORMATION

Static pool information material to this offering may be found at [website address].

Information provided through the Internet address above will not be deemed to be a part of this prospectus or the registration statement for the securities offered hereby if it relates to any prior securities pool or vintage formed before January 1, 2006, or with respect to the mortgage pool (if applicable) any period before January 1, 2006.

THE ORIGINATORS

General

[____], [____] and  [____] are the originators of the receivables with respect to approximately [___]%, [___]% and [___]%, respectively, of the receivables by aggregate principal balance as of the Cut-off Date, along with various other originators, none of which originated more than 10% of the receivables by aggregate principal balance as of the Cut-off Date (each, an “Originator”).

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

THE SERVICER

[____________], a [describe form of organization of the servicer], (the “Servicer”) will initially service the Receivables pursuant to a sale and servicing agreement, to be dated as of [      ] (the “Sale and Servicing Agreement”), among the Sponsor, the Depositor, the Issuing Entity and the Servicer.  

The Servicer will perform the functions of a third-party servicer of automobile loans as an agent for their beneficial owner.  [These servicer functions will include:

·

collecting and posting all payments;

·

responding to obligor inquiries regarding the automobile loans;

·

investigating delinquencies;

·

reporting tax information to obligors;

·

paying vehicle disposition costs with respect to defaulted accounts;

·

monitoring the collateral;

·

accounting for collections;

·

furnishing monthly and annual statements to the Issuing Entity with respect to distributions; and

·

generating federal income tax information. ]

 [Regulation AB Item 1108 compliant description of the Servicer.]

Delinquency Experience (Dollars in Thousands)
	At December 31,
	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]
	Number of Loans	Dollars	Percent	Number of Loans	Dollars	Percent	Number of Loans	Dollars	Percent
Principal Amount Outstanding1
Delinquencies2
30-59 Days
60-89 Days
90-119 Days
over 120 days
Total Delinquencies as a  Percentage of the Total Amount Outstanding

________________________

1.

Principal Amount Outstanding is the aggregate remaining principal balance of all Receivables serviced, net of unearned interest.

2.

The period of delinquency is based on the number of days scheduled payments are contractually past due.  Includes repossessions on hand which have not been charged-off.  A receivable is 30 days contractually past due if a scheduled payment has not been received by the subsequent calendar month’s scheduled payment date.

[WEIGHTED AVERAGE LIFE OF THE SECURITIES]

[Prepayments on automotive and boat receivables can be measured relative to a prepayment standard or model.  The model used in this Prospectus, the Absolute Prepayment Model (“ABS”), represents an assumed rate of prepayment each month relative to the original number of receivables in a pool of receivables.   ABS further assumes that all the receivables are the same size and amortize at the same rate and that each receivable in each month of its life will either be paid as scheduled or be prepaid in full.   For example, in a pool of receivables originally containing 10,000 receivables, a 1% ABS rate means that 100 receivables prepay each month.   ABS does not purport to be an historical description of prepayment experience or a prediction of the anticipated rate of prepayment of any pool of receivables, including the Receivables.

As the rate of payment of principal of the Notes and in respect of the Certificate Balance will depend on the rate of payment (including prepayments) of the principal balance of the Receivables, final payment of  the Notes could occur significantly earlier than the Final Scheduled Maturity Date for the Notes.  The final distribution in respect of the Certificates also could occur prior to the Final Scheduled Distribution Date for the Certificates.  Reinvestment risk associated with early payment of the Notes and the Certificates will be borne exclusively by the Noteholders and the Certificateholders, respectively.

The table captioned “Percent of Initial Note Principal Balance or Initial Certificate Balance at Various ABS Percentages” (the “ABS Table”) has been prepared on the basis of the characteristics of the Receivables.   The ABS Table assumes that

·

the Receivables prepay in full at the specified constant percentage of ABS monthly, with no defaults, losses or repurchases,

·

each scheduled monthly payment on the Receivables is made on the last day of each month and each month has 30 days,

·

payments on the Notes and distributions on the Certificates are made on each Distribution Date (and each such date is assumed to be the [   ] day of each applicable month),

·

the balance in the Reserve Account on each Distribution Date is equal to the Specified Reserve Account Balance, and

·

the Servicer does not exercise its option to purchase the Receivables.   The first two pools have an assumed cut-off date of [   ] and the remaining pools have an assumed cut-off date of [   ].

The ABS Table sets forth the percent of the initial principal amount of the Notes and the percent of the initial Certificate Balance that would be outstanding after each of the Distribution Dates shown and the corresponding weighted average lives thereof at various constant ABS percentages.

The ABS Table also assumes that the Receivables have been aggregated into four hypothetical pools with all of the Receivables within each such pool having the following characteristics and that the level scheduled monthly payment for each of the four pools (which is based on its aggregate principal balance, APR, original term to maturity as of the Cut-off Date) will be such that each pool will fully amortize by the end of its remaining term to maturity.

Pool	Remaining Term to Maturity Range (in months)	Aggregate Principal Balance	Weighted Average Contract Rate	Weighted Average Original Term to Maturity (in Months)	Weighted Average Remaining Term to Maturity (in Months)
1		$	%
2		$	%
3		$	%
4		$	%

The actual characteristics and performance of the Receivables will differ from the assumptions used in constructing the ABS Table.   The assumptions used are hypothetical and have been provided only to give a general sense of how the principal cash flows might behave under varying prepayment scenarios.   For example, it is very unlikely that the Receivables will prepay at a constant level of ABS until maturity or that all of the Receivables will prepay at the same level of ABS.   Moreover, the diverse terms of Receivables within each of the four hypothetical pools could produce slower or faster principal distributions than indicated in the ABS Table at the various constant percentages of ABS specified, even if the original and remaining terms to maturity of the Receivables are as assumed.  Any difference between such assumptions and the actual characteristics and performance of the Receivables, or actual prepay ment experience, will affect the percentages of initial balances outstanding over time and the weighted average lives of the Notes and the Certificates.]

Percent of Initial Note Principal Balance at Various ABS Percentages
	Notes Assumed ABS Percentage1
Distribution Dates	[   ]%	[   ]%	[   ]%	[   ]%
Closing Date	100	100	100	100
[                        ]
[                        ]
[                        ]
Weighted Average Life (years)2

_______________________

1.

An asterisk “*” means a percent of initial Note principal balance of more than zero and less than 0.5%.

2.

The weighted average life of a Note is determined by (i) multiplying the amount of each principal payment of such Note by the number of years from the date of the issuance of such Note to the Distribution Date on which such principal payment is made, (ii) adding the results and (iii) dividing the sum by the initial principal balance of such Note.

The ABS Tables have been prepared based on the assumptions described above (including the assumptions regarding the characteristics and performance of the Receivables which will differ from the actual characteristics and performance thereof) and should be read in conjunction therewith.

Percent of Initial Certificate Balance at Various ABS Percentages
	Certificates Assumed ABS Percentage
Distribution Dates	[   ]%	[   ]%	[   ]%	[   ]%
Closing Date	100	100	100	100
[                        ]
[                        ]
[                        ]
[                        ]

The ABS Tables have been prepared based on the assumptions described above (including the assumptions regarding the characteristics and performance of the Receivables which will differ from the actual characteristics and performance thereof) and should be read in conjunction therewith.

USE OF PROCEEDS

The net proceeds from the sale of the Securities will be applied by the Depositor first, to deposit approximately $[    ] into the Reserve Account and second, the balance to purchase the Receivables and the other Trust Property from the Sponsor.

DESCRIPTION OF THE NOTES

The Notes will be issued pursuant to the terms of the Indenture, substantially in the form filed as an exhibit to the Registration Statement.  The following information summarizes all material provisions of the Notes and the Indenture.  The following summary supplements the description of the general terms and provisions of the Notes of any given Series and the related Indenture set forth in the Prospectus, to which description reference is hereby made.

The Notes

Payments of Interest.  The Notes will constitute [Fixed Rate] Securities, as such term is defined under “Certain Information Regarding the Securities--Fixed Rate Securities” in the Prospectus.  Interest on the outstanding principal amount of the Notes will accrue at the Interest Rate and will be payable to the Noteholders monthly on each Distribution Date, commencing [    ].  Interest will accrue from and including the Closing Date (in the case of the first Distribution Date), or from and including the most recent Distribution Date on which interest has been paid to but excluding the following Distribution Date (each representing an “Interest Period”).  Interest on the Notes will be calculated on the basis of a 360 day year consisting of twelve 30 day months.  Interest payments on the Notes will generally be derived from the Total Distribution Amount remaining after the payment o f the Servicing Fee for the related Collection Period and all accrued and unpaid Servicing Fees for prior Collection Periods (the “Total Servicing Fee”).  See “Description of the Transfer and Servicing Agreements--Distributions” and “--Credit Enhancement--Reserve Account” in this prospectus supplement.  Interest payments to the Noteholders will have the same priority.  Under certain circumstances, the amount available for interest payments could be less than the amount of interest payable on the Notes on any Distribution Date.  Interest accrued as of any Distribution Date but not paid on such Distribution Date will be due on the next Distribution Date, together with interest on such amount at the Interest Rate.

Payments of Principal.   Principal payments will be made to the Noteholders on each Distribution Date in an amount equal to the Noteholders’ Percentage of the Principal Distribution Amount in respect of such Collection Period, subject to certain limitations.  Principal payments on the Notes will be generally derived from the Total Distribution Amount remaining after the payment of the Total Servicing Fee, the Noteholders’ Interest Distributable Amount and the Certificateholders’ Interest Distributable Amount; provided, however, that following the occurrence and during the continuation of certain Events of Default or an acceleration of the Notes, the Noteholders will be entitled to be paid in full before the distributions may be made on the Certificates.  See “Description of the Transfer and Servicing Agreements--Distributions” and “--Credit Enhancement--Reserve Account” in this prospe ctus supplement.

The principal balance of the Notes, to the extent not previously paid, will be due on the Note Final Scheduled Distribution Date.  The actual date on which the aggregate outstanding principal amount of the Notes is paid may be earlier than the Note Final Scheduled Distribution Date based on a variety of factors.

Optional Redemption.   The Notes will be redeemed in whole, but not in part, on any Distribution Date on which the Servicer exercises its option to purchase the Receivables.   The Servicer may purchase the Receivables when the Pool Balance has declined to 5% or less of the Initial Pool Balance.  The redemption price will be equal to the unpaid principal amount of the Notes and the Certificates plus accrued and unpaid interest thereon.  See “Description of the Transfer and Servicing Agreements--Termination” in the Prospectus.

Auction Sale.  In the event of an Auction Sale, the Notes will be redeemed in an amount equal to the unpaid principal amount of the then outstanding Notes plus accrued and unpaid interest thereon at the Interest Rate.  See “Description of the Transfer and Servicing Agreements--Termination” in the Prospectus.

The Indenture Trustee.

 [          ], a [national banking association], will be the Indenture Trustee under the Indenture.  The Depositor maintains normal commercial banking relations with the Indenture Trustee.

[Provide Reg AB Item 1109(b) compliant description of the extent of the Indenture Trustee’s prior experience serving as a trustee for asset-backed securities transactions involving asset pools of retail automobile receivables.]

[Provide Reg AB Item 1109(c) compliant description of the Indenture Trustee’s duties and responsibilities regarding the asset-backed securities under the governing documents and under applicable law, and of any actions required by the Indenture Trustee, including whether notices are required to investors, rating agencies or other third parties, upon an event of default, potential event of default (and how defined) or other breach of a transaction covenant and any required percentage of a class or classes of asset-backed securities that is needed to require the Indenture Trustee to take action.]

[Provide Reg AB Item 1109(d) compliant description of any limitations on the Indenture Trustee’s liability under the transaction agreements regarding the asset-backed securities transaction.]

[Provide Reg AB Item 1109(e) compliant description of any indemnification provisions that entitle the Indenture Trustee to be indemnified from the cash flow that otherwise would be used to pay the asset-backed securities.]

[Provide Reg AB Item 1109(f) compliant description of any contractual provisions or understandings regarding the Indenture Trustee’s removal, replacement or resignation, as well as how the expenses associated with changing from one Indenture trustee to another Indenture trustee will be paid.]

DESCRIPTION OF THE CERTIFICATES

The Certificates will be issued pursuant to the terms of the Trust Agreement, substantially in the form filed as an exhibit to the Registration Statement.  The following information summarizes all material provisions of the Certificates and the Trust Agreement.  The following summary supplements the description of the general terms and provisions of the Certificates of any given Series and the related Trust Agreement set forth in the Prospectus, to which description reference is hereby made.

The Certificates

Distributions of Interest.  Certificateholders will be entitled to distributions of interest in an amount equal to accrued interest on the Certificate Balance at the Pass-Through Rate.  Such amounts will be distributable monthly on each Distribution Date commencing [          ].  [The Certificates will constitute Fixed Rate Securities, as such term is defined under “Certain Information Regarding the Securities--Fixed Rate Securities”] in the Prospectus.  That interest entitlement will accrue from and including the Closing Date (in the case of the first such Distribution Date) or from the most recent Distribution Date on which interest distributions have been made to but excluding such Distribution Date and will be calculated on the basis of a 360-day year of twelve 30-day months. Interest distributions with respect to the Certificates will be funded from the portio n of the Total Distribution Amount remaining after the distribution of the Total Servicing Fee and the Noteholders’ Interest Distributable Amount.  On any Distribution Date, the Certificateholders’ Interest Distributable Amount will equal 30 days’ interest at the Pass-Through Rate on the Certificate Balance (or, in the case of the first Distribution Date, interest accrued from and including the Closing Date to but excluding the first Distribution Date) plus any amounts due but not paid on previous Distribution Dates with interest thereon at the Pass-Through Rate.  See “Description of the Transfer and Servicing Agreements--Distributions” and “--Credit Enhancement--Reserve Account” herein.

Distributions of Principal Payments.   Certificateholders will be entitled to distributions of principal on each Distribution Date commencing on the Distribution Date on which the Notes have been paid in full, in an amount equal to the Certificateholders’ Percentage of the Principal Distribution Amount in respect of the related Collection Period, subject to certain limitations.  Distributions with respect to principal payments will generally be funded from the portion of the Total Distribution Amount remaining after the distribution of the Total Servicing Fee, the Noteholders’ Distributable Amount, if any, and the Certificateholders’ Interest Distributable Amount.  See “Description of the Transfer and Servicing Agreement--Distributions” and “--Credit Enhancement--Reserve Account” in this prospectus supplement.

On and after any Distribution Date on which the Notes have been paid in full, funds in the Reserve Account will be applied to reduce the Certificate Balance to zero if, after giving effect to all distributions to the Servicer, the Noteholders and the Certificateholders on such Distribution Date, the amount on deposit in the Reserve Account is equal to or greater than the Certificate Balance.

Subordination of Certificates.   The rights of Certificateholders to receive distributions of interest are subordinated to the rights of Noteholders to receive payments of interest.  In addition, the Certificateholders have no right to receive distributions of principal until the principal amount of the Notes has been paid in full.   Consequently, funds on deposit in the Collection Account (including amounts deposited therein from the Reserve Account) will be applied to the payment of interest on the Notes before distributions of interest on the Certificates and will be applied to the payment of principal on the Notes before distributions of principal on the Certificates.   In addition, following the occurrence of certain Events of Default or an acceleration of the Notes, the Noteholders will be entitled to be paid in full before the Certificateholders are entitled to any distributions.

Optional Prepayment.  If the Servicer exercises its option to purchase the Receivables when the Pool Balance declines to 5% or less of the Initial Pool Balance, Certificateholders will receive an amount in respect of the Certificates equal to the Certificate Balance together with accrued and unpaid interest thereon, which distribution will effect early retirement of the Certificates.   See “Description of the Transfer and Servicing Agreements--Termination” in the Prospectus.

Auction Sale.  In the event of an Auction Sale, the Certificates will be prepaid at a price equal to the Certificate Balance plus accrued and unpaid interest thereon at the Pass-Through Rate.  See “Description of the Transfer and Servicing Agreements--Termination” in the Prospectus.

DESCRIPTION OF THE TRANSFER AND SERVICING AGREEMENTS

The following information summarizes all material provisions of the Sale and Servicing Agreement, substantially in the form filed as an exhibit to the Registration Statement, pursuant to which the Trust is purchasing and the Servicer is undertaking to service the Receivables and the Trust Agreement pursuant to which the Trust will be created and the Certificates will be issued (collectively the “Transfer and Servicing Agreements”).  The following summary supplements the description of the general terms and provisions of the Transfer and Servicing Agreements set forth in the Prospectus, to which description reference is hereby made.

Sale and Assignment of Receivables

Certain information regarding the conveyance of the Receivables by the Sponsor to the Depositor and by the Depositor to the Trust on the Closing Date pursuant to the Sale and Servicing Agreement is set forth in the Prospectus under “Description of the Transfer and Servicing Agreements--Sale and Assignment of Receivables.”

Accounts

[The assets of the Trust will not include a Pre-Funding Account.]  All other Accounts referred to under “Description of the Transfer and Servicing Agreements--Accounts” in the Prospectus, as well as a Reserve Account, will be established by the Servicer and maintained  with the Indenture Trustee in the name of the Indenture Trustee on behalf of the Noteholders and the Certificateholders.

Distributions

Deposits to the Collection Account.  On or before the earlier of the [eighth] business day of the month in which a Distribution Date occurs and the [fourth] business day preceding such Distribution Date (the “Determination Date”), the Servicer will calculate the Total Distribution Amount, the Interest Distribution Amount, the Available Principal, the Principal Distribution Amount, the Total Servicing Fee, the Noteholders’ Interest Distributable Amount, the Noteholders’ Principal Distributable Amount, the Certificateholders’ Interest Distributable Amount, the Certificateholders’ Principal Distributable Amount, the Advances, if any, to be made by the Servicer of interest and principal due on the Actuarial Receivables, the amount, if any, to be withdrawn from the Payahead Account and deposited in the Collection Account, the amount, if any, to be withdrawn from the Reserve Account and deposited in the Collec tion Account and the amount, if any, to be withdrawn from the Reserve Account and paid to the Depositor, in each case, with respect to such Distribution Date.

On or before each Distribution Date, the Servicer will cause the Indenture Trustee to withdraw from the Payahead Account and

·

deposit into the Collection Account in immediately available funds, the portion of Payaheads constituting scheduled payments on Actuarial Receivables or that are to be applied to prepay Actuarial Receivable in full and

·

distribute to the Depositor, in immediately available funds, all investment earnings on funds in the Payahead Account with respect to the preceding Collection Period.  On or before each Distribution Date the Servicer will deposit any advances for such Distribution Date into the Collection Account.

On or before the business day preceding each Distribution Date, the Servicer will cause the Interest Distribution Amount and the Available Principal for such Distribution Date to be deposited into the Collection Account.  On or before each Distribution Date, the Servicer shall cause the Indenture Trustee to withdraw from the Reserve Account and deposit in the Collection Account an amount (the “Reserve Account Transfer Amount”) equal to the lesser of

·

the amount of cash or other immediately available funds in the Reserve Account on such Distribution Date (before giving effect to any withdrawals therefrom relating to such Distribution Date) or

·

the amount, if any, by which

·

the sum of the Total Servicing Fee, the Noteholders’ Interest Distributable Amount, the Certificateholders’ Interest Distributable Amount, the Noteholders’ Principal Distributable Amount and the Certificateholders’ Principal Distributable Amount for such Distribution Date exceeds

·

the sum of the Interest Distribution Amount and the Available Principal for such Distribution Date.

The “Interest Distribution Amount” for a Distribution Date will be the sum of the following amounts with respect to any Distribution Date, computed, with respect to Simple Interest Receivables, in accordance with the simple interest method, and with respect to Actuarial Receivables, in accordance with the actuarial method:

·

that portion of all collections on the Receivables allocable to interest in respect of the preceding Collection Period (including, with respect to Actuarial Receivables, amounts withdrawn from the Payahead Account and allocable to interest and excluding amounts deposited into the Payahead Account and allocable to interest, in each case, in respect of the preceding Collection Period);

·

all proceeds (other than any proceeds from any Dealer commission) (“Liquidation Proceeds”) of the liquidation of Liquidated Receivables, net of expenses incurred by the Servicer in connection with such liquidation and any amounts required by law to be remitted to the Obligor on such Liquidated Receivables, to the extent attributable to interest due thereon, which became Liquidated Receivables during such Collection Period in accordance with the Servicer’s customary servicing procedures;

·

all advances made by the Servicer of interest due on the Actuarial Receivables in respect of the preceding Collection Period;

·

the Purchase Amount of each Receivable that was repurchased by the Sponsor or purchased by the Servicer during the preceding Collection Period to the extent attributable to accrued interest thereon;

·

all monies collected, from whatever source (other than any proceeds from any Dealer commission), in respect to Liquidated Receivables during any Collection Period following the Collection Period in which such Receivable was written off, net of the sum of any amounts expended by the Servicer for the account of the Obligor and any amounts required by law to be remitted to the Obligor (“Recoveries”); and

·

investment earnings for such Distribution Date;

In calculating the Interest Distribution Amount, the following shall be excluded:  all payments and proceeds (including Liquidation Proceeds) of any Receivables

·

repurchased by the Sponsor or purchased by the Servicer, the Purchase Amount of which has been included in the Interest Distribution Amount on a prior Distribution Date and

·

received on Actuarial Receivables and distributed to the Servicer, with respect to such Distribution Date, as reimbursement for any unreimbursed advances in accordance with the Sale and Servicing Agreement.

The “Available Principal” for a Distribution Date will be the sum of the following amounts with respect to any Distribution Date, computed, with respect to Simple Interest Receivables, in accordance with the simple interest method, and, with respect to Actuarial Receivables, in accordance with the actuarial method:

·

that portion of all collections on the Receivables allocable to principal in respect of the preceding Collection Period (including, with respect to Actuarial Receivables, amounts withdrawn from the Payahead Account and allocable to principal and excluding amounts deposited into the Payahead Account and allocable to principal, in each case, in respect of the preceding Collection Period);

·

Liquidation Proceeds attributable to the principal amount of Receivables which became Liquidated Receivables during the preceding Collection Period in accordance with the Servicer’s customary servicing procedures with respect to such Liquidated Receivables;

·

all advances made by the Servicer of principal due on the Actuarial Receivables in respect of the preceding Collection Period;

·

to the extent attributable to principal, the Purchase Amount of each Receivable repurchased by the Sponsor or purchased by the Servicer during the preceding Collection Period; and

·

partial prepayments on Receivables in respect of the preceding Collection Period relating to refunds of extended service contracts, or of physical damage, credit life, credit accident or health insurance premium, disability insurance policy premiums, but only if such costs or premiums were financed by the respective Obligor and only to the extent not included in the first bullet point above.

In calculating the Available Principal, the following shall be excluded:  all payments and proceeds (including Liquidation Proceeds) of any Receivables

·

repurchased by the Sponsor or purchased by the Servicer the Purchase Amount of which has been included in the Available Principal on a prior Distribution Date, and

·

received on Actuarial Receivables and distributed to the Servicer, with respect to such Distribution Date, as reimbursement for any unreimbursed advances in accordance with the Sale and Servicing Agreement.

The “Principal Distribution Amount” for a Distribution Date will be the sum of the following amounts with respect to the preceding Collection Period:

(1)

(a) with respect to Simple Interest Receivables, that portion of all collections on the Receivable allocable to principal in respect of the preceding Collection Period and (b) with respect to Actuarial Receivables the sum of

(2)

the amount of all scheduled payments allocable to principal due during the preceding Collection Period and

(3)

the portion of all prepayments in full allocable to principal received during the preceding Collection Period,

in the case of both (a) and (b) without regard to any extensions or modifications thereof effected after the Cut-off Date, other than with respect to any extensions or modifications in connection with Cram Down Losses during such Collection Period;

(1)

the principal balance of each Receivable that was repurchased by the Sponsor or purchased by the Servicer in each case during the preceding Collection Period (except to the extent included in (1) above);

(2)

the principal balance of each Liquidated Receivable which became such during the preceding Collection Period (except to the extent included in (1) above);

(3)

partial prepayments on Receivables in respect of the preceding Collection Period relating to refunds of extended service contracts, or of physical damage, credit life, credit accident or health insurance premium, disability insurance policy premiums, but only if such costs or premiums were financed by the respective Obligor and only to the extent not included in clause (1) above; and

(4)

the aggregate amount of Cram Down Losses during such Collection Period.

Monthly Withdrawals from Collection Account.  On each Distribution Date, the Servicer shall instruct the Indenture Trustee to withdraw from the Collection Account and deposit in the Payahead Account in immediately available funds, the aggregate Payaheads collected during the preceding Collection Period.  On each Distribution Date, the Servicer shall instruct the Indenture Trustee to make the following withdrawals, based upon the calculations set forth in “Deposits to the Collection Account” above, deposits and distributions, in the amounts and in the order of priority specified below, to the extent of the sum of the Interest Distribution Amount and the Available Principal in respect of such Distribution Date and the Reserve Account Transfer Amount in respect of such Distribution Date (the “Total Distribution Amount”):

(1)

from the Collection Account to the Servicer, from the Total Distribution Amount, the Total Servicing Fee;

(2)

from the Collection Account to the Note Distribution Account, from the Total Distribution Amount remaining after the application of clause (1), the Noteholders’ Interest Distributable Amount;

(3)

from the Collection Account to the Certificate Distribution Account, from the Total Distribution Amount remaining after the application of clauses (1) and (2), the Certificateholders’ Interest Distributable Amount;

(4)

from the Collection Account to the Note Distribution Account, from the Total Distribution Amount remaining after the application of clauses (1) through (3), the Noteholders’ Principal Distributable Amount;

(5)

from the Collection Account to the Certificate Distribution Account, from the Total Distribution Amount remaining after the application of clauses (1) through (4), the Certificateholders’ Principal Distributable Amount; and

(6)

from the Collection Account to the Reserve Account, any amounts remaining after the application of clauses (1) through (5).

Notwithstanding the foregoing, following the occurrence and during the continuation of certain Events of Default or an acceleration of the Notes, the Total Distribution Amount remaining after the application of clauses (1) and (2) above will be deposited in the Note Distribution Account to the extent necessary to reduce the principal balance of the Notes to zero.

On each Distribution Date, all amounts on deposit in the Note Distribution Account will be paid in the following order of priority:

(1)

first, to the Noteholders, accrued and unpaid interest on the outstanding principal balance of the Notes at the Interest Rate; and

(2)

second, to the Noteholders in reduction of principal until the principal balance of the Notes has been reduced to zero;

On each Distribution Date, all amounts on deposit in the Certificate Distribution Account will be distributed to the Certificateholders in the following order of priority:

(1)

first, to the Certificateholders, accrued and unpaid interest on the Certificate Balance at the Pass-Through Rate; and

(2)

second, to the Certificateholders in reduction of principal until the principal balance of the Certificates has been reduced to zero.

Fees and Expenses of the Trust Fund

In consideration of their duties on behalf of the Trust Fund, the Servicer, the Owner Trustee and the Indenture Trustee will receive from the assets of the Trust Fund certain fees as set forth in the following table:

Fee Payable to:	Frequency of Payment:	Amount of Fee:	How and When Fee Is Paid:
Servicer	[monthly]	[(a) A monthly fee paid to the Servicer out of interest collections received from the Receivables in an amount equal to the product of one-twelfth of [    ]% per annum for so long as [               ] or an affiliate thereof is the Servicer, and [    ]% per annum if [               ] or an affiliate thereof is no longer the Servicer (the “Servicing Fee Rate”) and the Pool Balance as of the first day of the Collection Period.] [(b) any late fees, prepayment charges and other administrative fees or similar charges allowed by applicable law with respect to the Receivables, and will be entitled to reimbursement from the Issuing Entity for various expenses.]	[Deducted by the Servicer from interest collections in respect of each Receivable serviced by the Servicer, before payment of any amounts to securityholders.]
Owner Trustee	[monthly]	[A monthly fee paid to the Owner Trustee by the Servicer out of the Servicer’s fee.]	[Paid by the Servicer before payment of any amounts to securityholders.]
Indenture Trustee	[monthly]	[A monthly fee paid to the Indenture Trustee by the Servicer out of the Servicer’s fee.]	[Paid by the Servicer before payment of any amounts to securityholders.]
[Other Applicable Party]	[_____]	[_____]	[_____]

The Servicing Fee, together with any portion of the Servicing Fee that remains unpaid from prior Distribution Dates (the “Total Servicing Fee”), will be paid from the Total Distribution Amount.  The Total Servicing Fee will be paid prior to the distribution of any portion of the Interest Distribution Amount to the Noteholders or the Certificateholders.  See “Description of the Transfer and Servicing Agreement--Servicing Compensation and Payment of Expenses” in the Prospectus.

[[None of the fees set forth in table above may be changed without amendment of the Pooling Agreement as described under “The Pooling and Servicing Agreement—Amendment”.]]

[[Expenses of the Servicer, the Owner Trustee and the Indenture Trust will be reimbursed before payments are made on the securities.]]

Example of Distributions

The following sets forth an example of collection of payments from Obligors on the Receivables, transfer of amounts among the Trust Accounts, and distributions on the securities for the Distribution Date in [_______]:

[On or before the earlier of the [eighth] business day of the month in which a Distribution Date occurs and the [fourth] business day preceding such Distribution Date]	Determination Date	[The Servicer will calculate the Total Distribution Amount, the Interest Distribution Amount, the Available Principal, the Principal Distribution Amount, the Total Servicing Fee, the Noteholders’ Interest Distributable Amount, the Noteholders’ Principal Distributable Amount, the Certificateholders’ Interest Distributable Amount, the Certificateholders’ Principal Distributable Amount, the Advances, if any, to be made by the Servicer of interest and principal due on the Actuarial Receivables, the amount, if any, to be withdrawn from the Payahead Account and deposited in the Collection Account, the amount, if any, to be withdrawn from the Reserve Account and deposited in the Collection Account and the amount, if any, to be withdrawn from the Reserve Account and paid to the Depositor, in each case, with respect to such Distribution Date.]
[On or before each Distribution Date]	[Servicer Remittance Date]	[The Servicer will cause the Indenture Trustee to withdraw from the Payahead Account and deposit into the Collection Account in immediately available funds, the portion of Payaheads constituting scheduled payments on Actuarial Receivables or that are to be applied to prepay Actuarial Receivable in full and distribute to the Depositor, in immediately available funds, all investment earnings on funds in the Payahead Account with respect to the preceding Collection Period.] [The Servicer will deposit any advances for such Distribution Date into the Collection Account.] [The Servicer shall cause the Indenture Trustee to withdraw from the Reserve Account and deposit in the Collection Account the Reserve Account Transfer Amount.]
[On or before the business day preceding each Distribution Date]	[Servicer Remittance Date]	the Servicer will cause the Interest Distribution Amount and the Available Principal for such Distribution Date to be deposited into the Collection Account.
Last day of the month prior to the related Distribution Date	Record Date:	[Distributions will be made to securityholders of record for all applicable classes as of the Record Date].
The [__]th day of each month (or if the [__]h day is not a business day, the next business day),	Distribution Date:	[The Servicer will cause the Indenture Trustee to withdraw the Total Distribution Amount for deposit into the Note Distribution Account and Certificate Distribution Account, as applicable, and the Indenture Trustee will make distributions to Noteholders and Certificateholders from amounts on deposit in the Note Distribution Account and Certificate Distribution Account, respectively.]

Succeeding months follow the same pattern.

Related Definitions

For purposes hereof, the following terms have the following meanings:

“Collection Period” means, with respect to a Distribution Date, (x) in the case of the initial Distribution Date, the period from and including the Cut-off Date through and including [    ] and (y) thereafter, the calendar month preceding the related Distribution Date.

“Cram Down Loss” means, with respect to a Receivable if a court of appropriate jurisdiction in a bankruptcy or 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 the principal balance of such Receivable immediately prior to such order over the principal balance of such Receivable as so reduced and/or

·

if such court shall have issued an order reducing the effective rate of interest on such Receivable, the net present value (using as the discount rate the higher of the APR on such Receivable or the rate of interest, if any, specified by the court in such order) of the scheduled payments as so modified or restructured.

A “Cram Down Loss” shall be deemed to have occurred on the date of issuance of such order.

The “Pool Balance” at any time will represent the aggregate principal balance of the Receivables at the end of the preceding Collection Period, after giving effect to all payments (other than Payaheads) received from Obligors, Purchase Amounts and advances to be remitted by the Depositor, the Servicer and the Sponsor, as the case may be, all for such Collection Period, all losses realized on Receivables that became Liquidated Receivables during such Collection Period and all Cram Down Losses for such Collection Period.

“Realized Losses” means the excess of the principal balance of a Liquidated Receivable over Liquidation Proceeds to the extent allocable to principal.

“Liquidated Receivables” means, Receivables (1) which have been liquidated by the Servicer through the sale of the related Financed Vehicle, (2) as to which all or a portion representing 10% or more of a scheduled payment due is [150] or more days delinquent or (3) with respect to which proceeds have been received which, in the Servicer’s judgment, constitute the final amounts recoverable in respect of such Receivable.

“Noteholders’ Distributable Amount” means, with respect to any Distribution Date, the sum of the Noteholders’ Principal Distributable Amount and the Noteholders’ Interest Distributable Amount.

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

“Noteholders’ Monthly Interest Distributable Amount” means, with respect to any Distribution Date, the product of (x) one-twelfth of the Interest Rate (or, in the case of the first Distribution Date, the Interest Rate multiplied by a fraction, the numerator of which is the number of days elapsed from and including the Closing Date to but excluding such Distribution Date and the denominator of which is 360) and (y) the outstanding principal balance of the Notes on the immediately preceding Distribution Date, after giving effect to all distributions of principal to the Noteholders on such Distribution Date (or, in the case of the first Distribution Date, on the Closing Date).

“Noteholders’ Interest Carryover Shortfall” means, with respect to any Distribution Date, the excess of the Noteholders’ Monthly Interest Distributable Amount for the preceding Distribution Date and any outstanding Noteholders’ Interest Carryover Shortfall on such preceding Distribution Date over the amount in respect of interest that is actually deposited in the Note Distribution Account on such preceding Distribution Date, plus interest on the amount of interest due but not paid to Noteholders on the preceding Distribution Date, to the extent permitted by law, at the Interest Rate borne by the Notes from such preceding Distribution Date through the current Distribution Date.

“Noteholders’ Principal Distributable Amount” means, with respect to any Distribution Date, the sum of the Noteholders’ Monthly Principal Distributable Amount for such Distribution Date and the Noteholders’ Principal Carryover Shortfall as of the close of the preceding Distribution Date; provided, however, that the Noteholders’ Principal Distributable Amount shall not exceed the outstanding principal balance of the Notes.  In addition, on the Note Final Scheduled Distribution Date, the principal required to be deposited in the Note Distribution Account will include the amount necessary (after giving effect to the other amounts to be deposited in the Note Distribution Account on such Distribution Date and allocable to principal) to reduce the outstanding principal balance of the Notes to zero.

“Noteholders” Monthly Principal Distributable Amount” means, with respect to any Distribution Date, the Noteholders’ Percentage of the Principal Distribution Amount.

“Noteholders’ Percentage” means (a) for each Distribution Date until the principal balance of the Notes is reduced to zero, 100%, and (b) zero for each Distribution Date thereafter.

“Noteholders’ Principal Carryover Shortfall” means, as of the close of any Distribution Date, the excess of the Noteholders’ Monthly Principal Distributable Amount and any outstanding Noteholders’ Principal Carryover Shortfall from the preceding Distribution Date over the amount in respect of principal that is actually deposited in the Note Distribution Account.

“Certificateholders’ Distributable Amount” means, with respect to any Distribution Date, the sum of the Certificateholders’ Principal Distributable Amount and the Certificateholders’ Interest Distributable Amount.

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

“Certificateholders’ Monthly Interest Distributable Amount” means, with respect to any Distribution Date, the product of (x) one-twelfth of the Pass-Through Rate (or, in the case of the first Distribution Date, the Pass-Through Rate multiplied by a fraction, the numerator of which is the number of days elapsed from and including the Closing Date to but excluding such Distribution Date) and the denominator of which is 360) and (y) the Certificate Balance on the immediately preceding Distribution Date, after giving effect to all payments of principal to the Certificateholders on or prior to such Distribution Date (or, in the case of the first Distribution Date, on the Closing Date).

“Certificateholders’ Interest Carryover Shortfall” means, with respect to any Distribution Date, the excess of the Certificateholders’ Monthly Interest Distributable Amount for the preceding Distribution Date and any outstanding Certificateholders’ Interest Carryover Shortfall on such preceding Distribution Date, over the amount in respect of interest at the Pass-Through Rate that is actually deposited in the Certificate Distribution Account on such preceding Distribution Date, plus interest on such excess, to the extent permitted by law, at the Pass-Through Rate from and including such preceding Distribution Date to but excluding the current Distribution Date.

“Certificateholders’ Principal Distributable Amount” means, with respect to any Distribution Date, the sum of the Certificateholders’ Monthly Principal Distributable Amount for such Distribution Date and the Certificateholders’ Principal Carryover Shortfall as of the close of the preceding Distribution Date; provided, however, that the Certificateholders’ Principal Distributable Amount shall not exceed the Certificate Balance.  In addition, on the Certificate Final Scheduled Distribution Date, the principal required to be distributed to Certificateholders will include the lesser of:

·

any payments of principal due and remaining unpaid on each Receivable in the Trust as of the Final Scheduled Maturity Date or

·

the portion of the amount that is necessary (after giving effect to the other amounts to be deposited in the Certificate Distribution Account on such Distribution Date and allocable to principal) to reduce the Certificate Balance to zero, in either case after giving effect to any required distribution of the Noteholders’ Principal Distributable Amount to the Note Distribution Account.  

In addition, on any Distribution Date on which, after giving effect to all distributions to the Servicer, the Noteholders and the Certificateholders on such Distribution Date, the outstanding principal balance of the Notes is zero and the amount on deposit in the Reserve Account is equal to or greater than the Certificate Balance, the Certificateholders’ Principal Distributable Amount shall include an amount equal to such Certificate Balance.

“Certificateholders’ Monthly Principal Distributable Amount” means, with respect to any Distribution Date, the Certificateholders’ Percentage of the Principal Distribution Amount or, with respect to any Distribution Date on or after the Distribution Date on which the outstanding principal balance of the Notes is reduced to zero, 100% of the Principal Distribution Amount (less any amount required on the first such Distribution Date to reduce the outstanding principal balance of the Notes to zero, which shall be deposited into the Note Distribution Account).

“Certificateholders’ Percentage” means 100% minus the Noteholders’ Percentage.

“Certificateholders’ Principal Carryover Shortfall” means, as of the close of any Distribution Date, the excess of the Certificateholders’ Monthly Principal Distributable Amount and any outstanding Certificateholders’ Principal Carryover Shortfall from the preceding Distribution Date, over the amount in respect of principal that is actually deposited in the Certificate Distribution Account on such Distribution Date.

“Certificate Balance” equals, initially, $[          ] and, thereafter, equals the initial Certificate Balance, reduced by all amounts allocable to principal previously distributed to Certificateholders.

“Pass-Through Rate” means, with respect to the Certificates, [    ]% per annum.

Credit Enhancement

Reserve Account.  Pursuant to the Sale and Servicing Agreement, the Reserve Account will be created and maintained with the Indenture Trustee.  On the Closing Date, the Depositor will deposit $[    ] ([    ]% of aggregate initial principal balance of the Notes plus the initial Certificate Balance) (the “Reserve Account Initial Deposit”) in the Reserve Account.  The Reserve Account Initial Deposit will be augmented on each Distribution Date by the deposit in the Reserve Account of amounts remaining after distribution of the Total Servicing Fee and amounts to be paid to the Noteholders and Certificateholders.  If the amount on deposit in the Reserve Account on any Distribution Date (after giving effect to all deposits or withdrawals therefrom on such Distribution Date) is greater than the Specified Reserve Account Balance for such Distribution Date, the Servicer will instruct the I ndenture Trustee to distribute the amount of the excess to the Depositor.  Upon any distribution to the Depositor of amounts from the Reserve Account, neither the Noteholders nor the Certificateholders will have any rights in, or claims to, such amounts.  In certain circumstances, funds in the Reserve Account will be used to reduce the Certificate Balance to zero.

“Specified Reserve Account Balance” with respect to any Distribution Date generally means the greater of

·

[    ]% of the sum of the aggregate outstanding principal amount of the Notes and the outstanding Certificate Balance on such Distribution Date (after giving effect to all payments on the Notes and distributions with respect to the Certificates to be made on such Distribution Date) or

·

[    ]% of the aggregate initial principal balance of the Notes plus the initial Certificate Balance.  In no circumstances will the Depositor be required to deposit any amounts in the Reserve Account other than the Reserve Account Initial Deposit to be made on the Closing Date.

Subordination of the Certificates.  The rights of the Certificateholders to receive distributions will be subordinated to the rights of the Noteholders following the occurrence of certain Events of Default or an acceleration of the Notes.  The subordination of the Certificates is intended to enhance the likelihood of receipt by Noteholders of amounts due them and to decrease the likelihood that the Noteholders will experience losses.  In addition, the Reserve Account is intended to enhance the likelihood of receipt by Noteholders and Certificateholders of amounts due them and to decrease the likelihood that the Noteholders and Certificateholders will experience losses.  However, in certain circumstances, the Reserve Account could be depleted.  If the amount required to be withdrawn from the Reserve Account to cover shortfalls in collections on the Receivables exceeds the amount on deposit in the Reserve Account a temporary shortfall in the amounts distributed to the Noteholders or the Certificateholders could result.  In addition, depletion of the Reserve Account ultimately could result in losses to Noteholders and Certificateholders.

[THE INSURER]

[General]

[[_______________] (the “Insurer” or “[_______________]”) is a monoline financial guaranty insurance company incorporated under the laws of the State of New York.  The Insurer is currently licensed to do insurance business in, and is subject to the insurance regulation and supervision by, all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Singapore.]

[The Insurer is an indirect wholly owned subsidiary of [_______________], a [___________] (“[_______________]”).  Through its subsidiaries, [_______________] is a leading provider of insurance and reinsurance coverages and financial products and services to industrial, commercial and professional service firms, insurance companies and other enterprises on a worldwide basis.  The ordinary shares of [_______________] are publicly traded in the United States and listed on the New York Stock Exchange (NYSE: [_________]).  [_______________] is not obligated to pay the debts of or claims against the Insurer.]

[Reinsurance]

[The Insurer has entered into a facultative quota share reinsurance agreement with [____________] (“[_______________]”), an insurance company organized under the laws of [______________], and an affiliate of the Insurer.  Pursuant to this reinsurance agreement, the Insurer expects to cede up to 90% of its business to [_______________].  The Insurer may also cede reinsurance to third parties on a transaction-specific basis, which cessions may be any or a combination of quota share, first loss or excess of loss.  Such reinsurance is used by the Insurer as a risk management device and to comply with statutory and rating agency requirements and does not alter or limit the Insurer's obligations under any financial guaranty insurance policy.  With respect to any transaction insured by [_______________], the percentage of risk ceded to [_______________] may be less than 90% depending on certain factors including, without l imitation, whether [_______________] has obtained third party reinsurance covering the risk.  As a result, there can be no assurance as to the percentage reinsured by [_______________] of any given financial guaranty insurance policy issued by [_______________], including the Policy.]

[Based on the audited financials of [_______________], as of December 31, 2004, [_______________] had total assets, liabilities, redeemable preferred shares and shareholders’ equity of $[___________], $[___________], $[___________] and $[___________], respectively, determined in accordance with generally accepted accounting principles in the United States (“US GAAP”). [_______________]’s insurance financial strength is rated “Aaa” by Moody’s and “AAA” by S&P and Fitch Inc. In addition, [_______________] has obtained a financial enhancement rating of “AAA” from S&P.]  

[The obligations of [_______________] to the Insurer under the reinsurance agreement described above are unconditionally guaranteed by [___________] ("[_______________]"), a Bermuda exempted company and one of the world's leading excess commercial insurers.  [_______________] is a wholly owned indirect subsidiary of [_______________].  In addition to A.M. Best’s financial strength rating of “A+” and issuer credit rating of “aa-”, [_______________]’s insurance financial strength rating is “Aa2” (as of September 13, 2005, [_______________] is on review for downgrade) by Moody’s, “AA-” by Standard & Poor’s (on September 20, 2005, Standard & Poor’s placed [_______________] on CreditWatch with negative implications) and “AA-” (Outlook Stable) by Fitch.]  

[The rating agencies have taken certain actions with respect to [_______________] and various insurance operating subsidiaries of [_______________], as described below.  Moody’s placed the “A2” senior debt rating of [_______________] and the other insurance financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) on review for possible downgrade on September 13, 2005.  Standard & Poor’s placed the “A” senior debt rating of [_______________] and the other financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) on CreditWatch with negative implications on September 20, 2005.  Fitch downgraded the long term issuer rating of [_______________] and the insurer financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) from “A” to “A-” on October 26, 2005.  A.M. Best placed each of [___________]’s (which does not include [_______________] or [_______________]) and [_______________]’s respective financial strength ratings of “A+” and their issuer credit ratings of “aa-” under review with negative implications on September 15, 2005. ]

[The ratings of [_______________], [_______________] or any other member of the [_______________] group of companies are not recommendations to buy, sell or hold securities, including the notes and are subject to revision or withdrawal at any time by Moody’s, Standard & Poor’s or Fitch.]

[Notwithstanding the capital support provided to the Insurer described in this section, the noteholders will have direct recourse against the Insurer only, and neither [_______________] nor [_______________] will be directly liable to the noteholders.]

[Financial Strength and Financial Enhancement Ratings of [_______________]]

[The Insurer's insurance financial strength is rated “Aaa” by Moody’s and “AAA” by Standard & Poor’s and Fitch, Inc. (“Fitch”).  In addition, [_______________] has obtained a financial enhancement rating of “AAA” from Standard & Poor’s.  These ratings reflect Moody’s, Standard & Poor’s and Fitch's current assessment of the Insurer's creditworthiness and claims-paying ability as well as the reinsurance arrangement with [_______________] described under "Reinsurance" above.]

[The above ratings are not recommendations to buy, sell or hold securities, including the notes and are subject to revision or withdrawal at any time by Moody’s, Standard & Poor’s or Fitch.  Any downward revision or withdrawal of these ratings may have an adverse effect on the market price of the notes.  The Insurer does not guaranty the market price of the notes nor does it guaranty that the ratings on the notes will not be revised or withdrawn.]

[Capitalization of the Insurer]

[Based on the audited financials of [_______________], as of December 31, 2004, [_______________] had total assets, liabilities, and shareholder’s equity of $[______________], $[______________], and $[______________], respectively, determined in accordance with U.S. GAAP.]

Based on the audited statutory financial statements for [_______________] as of December 31, 2004 filed with the State of New York Insurance Department, [_______________] has total admitted assets of $[______________], total liabilities of $[______________] and total capital and surplus of $[______________] determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities (“SAP”).  

[Incorporation by Reference of Financials

]

For further information concerning [_______________] and [_______________], see the financial statements of [_______________] and [_______________], and the notes thereto, incorporated by reference in this prospectus supplement.  The financial statements of [_______________] and [_______________] are included as exhibits to the periodic reports filed with the Securities and Exchange Commission (the “Commission”) by [_______________] and may be reviewed at the EDGAR website maintained by the Commission.  All financial statements of  [_______________] and [_______________] included in, or as exhibits to, documents filed by [_______________] pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 on or prior to the date of this prospectus supplement, or after the date of this prospectus supplement but prior to termination of the offering of the notes, shall be deemed incorporated by reference in this prospectus supplement.  Except for the financial statements of [_______________] and [_______________], no other information contained in [_______________]'s reports filed with the Commission is incorporated by reference. Copies of the statutory quarterly and annual statements filed with the State of New York Insurance Department by [_______________] are available upon request to the State of New York Insurance Department.]

[Regulation of the Insurer]

[The Insurer is regulated by the Superintendent of Insurance of the State of New York.  In addition, the Insurer is subject to regulation by the insurance laws and regulations of the other jurisdictions in which it is licensed.  As a financial guaranty insurance company licensed in the State of New York, the Insurer is subject to Article 69 of the New York Insurance Law, which, among other things, limits the business of each insurer to financial guaranty insurance and related lines, prescribes minimum standards of solvency, including minimum capital requirements, establishes contingency, loss and unearned premium reserve requirements, requires the maintenance of minimum surplus to policyholders and limits the aggregate amount of insurance which may be written and the maximum size of any single risk exposure which may be assumed.  The Insurer is also required to file detailed annual financial statements with the New York Insurance Department and similar supervisory agencies in each of the other jurisdictions in which it is licensed.]

[The extent of state insurance regulation and supervision varies by jurisdiction, but New York and most other jurisdictions have laws and regulations prescribing permitted investments and governing the payment of dividends, transactions with affiliates, mergers, consolidations, acquisitions or sales of assets and incurrence of liabilities for borrowings.]

 [THE FINANCIAL GUARANTY INSURANCE POLICIES ISSUED BY THE INSURER, INCLUDING THE INSURANCE POLICY, ARE NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.]

[The principal executive offices of the Insurer are located at [____________] and its telephone number at this address is [____________].]

[THE POLICY]

[[__________], in consideration of the payment of a premium and subject to the terms of the insurance policy, thereby unconditionally and irrevocably guarantees to any securityholder that an amount equal to each full and complete Insured Amount will be received from [__________] by the Indenture Trustee or its successors, as Indenture Trustee for the securityholders, on behalf of the securityholders, for distribution by the Indenture Trustee to each securityholder of that securityholder’s proportionate share of the Insured Amount.]

[[__________]’s obligations under the insurance policy, with respect to a particular Insured Amount, will be discharged to the extent funds equal to the applicable Insured Amount are deposited in the account specified by the Indenture Trustee, whether or not those funds are properly applied by the Indenture Trustee. Insured Amounts will be paid only at the time set forth in the insurance policy, and no accelerated Insured Amounts will be paid regardless of any acceleration of the notes, unless the acceleration is at the sole option of [__________]. ]

[Notwithstanding the foregoing paragraph, the insurance policy does not cover shortfalls, if any, attributable to the liability of the issuer or the Indenture Trustee for withholding taxes, if any (including interest and penalties in respect of any liability for withholding taxes).]

[[__________] will pay any Insured Amount that is an Avoided Payment on the business day following receipt on a business day by [__________] of the following:

·

a certified copy of the order requiring the return of an avoided payment, with respect to which order the appeal period has expired without an appeal having been filed;  

·

an assignment in a form attached to the insurance policy, irrevocably assigning to [__________] all rights and claims of the securityholder relating to or arising under the notes against the debtor which made the avoided payment or otherwise with respect to the avoided payment; and  

·

an appropriately completed and executed demand for payment in the form attached to the insurance policy;  

provided that if these documents are received after 10:00 a.m., New York time, on that business day, they will be deemed to be received on the following business day. Payments by [__________] will be disbursed to the receiver or the trustee in bankruptcy named in the final order of the court exercising jurisdiction on behalf of the securityholder and not to any securityholder directly unless the securityholder has returned principal or interest paid on the notes to the receiver or trustee in bankruptcy, in which case that payment will be disbursed to the Indenture Trustee for distribution to the securityholder upon proof of such payment reasonably satisfactory to [__________].]

[[__________] will pay any other amount payable under the insurance policy no later than 2:00 p.m., New York time, on the later of the distribution date on which the related Scheduled Payment is due or the business day following receipt in New York, New York by [__________] of a notice from the Indenture Trustee specifying the Insured Amount which is due and owing on the applicable distribution date, provided that if the notice is received after 10:00 a.m., New York time, on that business day, it will be deemed to be received on the following business day.]

[Subject to the terms of the Indenture and the Sale and Servicing Agreement, [__________] will be subrogated to the rights of each securityholder to receive payments under the notes to the extent of any payment by [__________] under the insurance policy.]

[As used in the insurance policy, the following terms shall have the following meanings:

“Avoided Payment” means any amount previously distributed to a securityholder on the notes that is recoverable and sought to be recovered as a voidable payment in an insolvency proceeding, in accordance with a final nonappealable order of a court having competent jurisdiction.

“Insured Amount” means, that portion of Scheduled Payments that shall become due for payment but shall be unpaid by reason of nonpayment.

“Insured Payment” means (a) as of any distribution date, any Scheduled Payment and (b) any Avoided Payment.

“Scheduled Payment” for any distribution date, an amount equal to the excess, if any, of: (a) the sum, without duplication, of (i) the Noteholders’ Interest Distributable Amount and (ii) the Noteholders’ First Principal Distributable Amount (other than the amount specified in clause (2)(b) of the definition thereof) for the related distribution date over (b) the amount actually deposited into the note distribution account on the related distribution date.]

[Capitalized terms used in the insurance policy and not otherwise defined in the insurance policy shall have the meanings set forth in the Indenture and the Sale and Servicing Agreement as of the date of execution of the insurance policy, without giving effect to any subsequent amendment or modification to the Indenture or the Sale and Servicing Agreement unless such amendment or modification has been approved in writing by [__________].]

[The insurance policy is not cancelable for any reason. The premium on the insurance policy is not refundable for any reason including payment, or provision being made for payment, prior to the maturity of the notes.]

[The insurance policy is being issued under and pursuant to, and will be construed under, the laws of the State of New York, without giving effect to the conflict of laws principles thereof.]

[The insurance provided by the insurance policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law.]

[OTHER CREDIT ENHANCEMENT PROVIDER]

[Regulation AB Item 1114 compliant description of any other credit enhancement provider.]

[DERIVATIVE INSTRUMENTS]

[The Interest Rate Swap Agreement and the Swap Provider]

[The Offered Certificates and Class B Certificates will have the benefit of an interest rate swap agreement.  On or before the Closing Date, the Trustee will enter into an interest rate swap agreement (the “Interest Rate Swap Agreement”) with [_______] (the “Swap Provider”).  A separate trust created under the pooling and servicing agreement (the "Supplemental Interest Trust") will hold the Interest Rate Swap Agreement documented by a 1992 ISDA Master Agreement (Multicurrency-Cross Border), together with a Schedule and Confirmation between The Trustee, on behalf of the Supplemental Interest Trust, and the Swap Provider. ]

[The significance percentage, as calculated in accordance with Item 1115 of Regulation AB is less than 10%.]

[If significance percentage, as calculated in accordance with Item 1115 of Regulation AB, is 10% or more, provide financial information required by Item 1115 of Regulation AB.]

[Pursuant to the Interest Rate Swap Agreement, on each Distribution Date, (i) the Securities Administrator (on behalf of the Supplemental Interest Trust and from funds of such trust) will be obligated to pay to the Swap Provider, a fixed amount equal to the product of (x) [__]%, (y) the Swap Notional Amount for that Distribution Date set forth in the Interest Rate Swap Agreement and (z) a fraction, the numerator of which is 30 (or, for the first Distribution Date, the number of days elapsed from the Closing Date to but excluding the first Distribution Date on a 30/360 basis), and the denominator of which is 360 (the “Securities Administrator Swap Payment”); and (ii) the Swap Provider will be obligated to pay to the Supplemental Interest Trust for the benefit of the holders of the Offered Certificates and the Class B Certificates (the “Swap Provider Payment”), a floating amount equal to the product of (x) one-mon th LIBOR (as determined pursuant to the Interest Rate Swap Agreement), (y) the Swap Notional Amount for that Distribution Date set forth in the Interest Rate Swap Agreement, and (z) a fraction, the numerator of which is the actual number of days elapsed from the previous Distribution Date to but excluding the current Distribution Date (or, for the first Distribution Date, the actual number of days elapsed from the Closing Date to but excluding the first Distribution Date), and the denominator of which is 360.  A net payment will be required to be made on each Distribution Date (each such net payment, a “Net Swap Payment”) (a) by the Securities Administrator to the Swap Provider, to the extent that the fixed amount exceeds the corresponding floating amount, or (b) by the Swap Provider to the Securities Administrator, to the extent that the floating amount exceeds the corresponding fixed amount. Payments received by the Supplemental Interest Trust pursuant to the Interest Rate Swap Agreement wil l be available for distributions of Interest Carry Forward Amounts, Net WAC Rate Carryforward Amounts, amounts necessary to maintain the Required Overcollateralization Amount and Allocated Realized Loss Amounts.]

[The “Swap Notional Amount” with respect to each Distribution Date commencing in [______, __], is set forth below (which will be substantially the same schedule as set forth in the Interest Rate Swap Agreement).  The Interest Rate Swap Agreement will terminate immediately following the Distribution Date in [______, __], unless terminated earlier upon the occurrence of a Swap Default, an Early Termination Event or an Additional Termination Event (each as defined below).]

Distribution Date	Swap Notional Amount
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]

[The respective obligations of the Swap Provider and the Supplemental Interest Trust to pay specified amounts due under the Interest Rate Swap Agreement will be subject to the following conditions precedent: (1) no Swap Default or event that with the giving of notice or lapse of time or both would become a Swap Default, in each case, in respect of the other party, shall have occurred and be continuing with respect to the Interest Rate Swap Agreement and (2) no “Early Termination Date” (as defined in the ISDA Master Agreement) has occurred or been effectively designated with respect to the Interest Rate Swap Agreement.]

[An Interest Rate Cap Agreement]

[The Class [__] certificates will have the benefit of the Interest Rate Cap Agreement. Pursuant to the Interest Rate Cap Agreement, with respect to any Distribution Date, commencing with the Distribution Date in [__], 20[ ], on or prior to the Distribution Date in [__], 20[ ], [_______], (the “Cap Provider”), will be obligated to pay to the trust administrator, an amount equal to the product of (a) the excess, if any, of (i) the then current one-month LIBOR rate (determined in accordance with the Interest Rate Cap Agreement) up to a maximum of [__]% (the “Maximum Cap Rate”) and (ii) a specified strike rate of [__]% (the “Cap Strike Rate”) and (b) the Interest Rate Cap Agreement Notional Amount set forth on the schedule attached as Annex B hereto for that Distribution Date, determined on a 30/360 Basis. (each such payment, the “Cap Agreement Payment”). The Interest Rate Cap Agreement will terminate after th e Distribution Date in [__], 20[ ].

The obligations of the Cap Provider are limited to those specifically set forth in the Interest Rate Cap Agreement. The Cap Provider conducts business in the over-the-counter derivatives market, engaging in a variety of derivatives products, including interest rate swaps, currency swaps, credit default swaps and interest rate options with institutional clients.

For the Class [__] certificates and each Distribution Date prior to and including the Distribution Date in [__], 20[ ],  any Cap Agreement Payment received by the trust administrator will be used to pay the related Cap Amount to such classes of certificates, as described below under “––The Reserve Funds.”  Amounts received on  the Interest Rate Cap Agreement will not be available to make distributions on any class of Certificates other than the Class [__] certificates.

The Interest Rate Cap Agreement will be governed by and construed in accordance with the law of the State of New York. The obligations of the Cap Provider are limited to those specifically set forth in the Interest Rate Cap Agreement. The Class [__] certificates do not represent an obligation of the Cap Provider. The holders of the Class [__] certificates are not parties to or beneficiaries under the Interest Rate Cap Agreement and will not have any right to proceed directly against the cap provider in respect of its obligations under the Interest Rate Cap Agreement.]

[A Yield Maintenance Agreement]

The Issuing Entity will enter into a Yield Maintenance Agreement for the benefit of the Class [__] Certificates.  Under the Yield Maintenance Agreement, the Counterparty will agree to pay to the Issuing Entity two Business Days prior to each Distribution Date beginning in [__], 20[ ] and to and including the Distribution Date in [__], 20[ ], an amount equal to the product of:

1.

the excess, if any, of LIBOR (as calculated under the related Yield Maintenance Agreement subject to the Rate Cap Ceiling) over the Cap Strike Rate for that Distribution Date;

2.

the related Scheduled Notional Amount for that Distribution Date; and

3.

a fraction, the numerator of which is the actual number of days elapsed from the previous Distribution Date to but excluding the current Distribution Date, and the denominator of which is 360.

The Scheduled Notional Amounts for each Yield Maintenance Agreement decline in accordance with the expected amortization of the Mortgage Loans.  The Yield Maintenance Agreements will terminate immediately following the Distribution Date in [__], 20[ ].

The Yield Maintenance Agreements will be governed by and construed in accordance with the law of the State of New York and will be documented under the ISDA Master Agreement, as supplemented by the schedule and the confirmation.  The obligations of the Counterparty are limited to those specifically set forth in the related Yield Maintenance Agreement.

Any amounts received by the Securities Administrator under a Yield Maintenance Agreement will be distributed as follows:

1.

to the Reserve Fund, in an amount equal to the Basis Risk Shortfall Carryover Amount for the Class [__] Certificates for such Distribution Date;

2.

to the Principal Remittance Amount, the Net Cumulative Realized Loss Amount on such Distribution Date;

3.

to the Class [__] Certificates, any applicable Unpaid Realized Loss Amounts, and

4.

to the Class [__] Certificates, any remaining amounts.

FEDERAL INCOME TAX CONSEQUENCES

The following is a general summary of some of the related Federal income tax consequences of the purchase, ownership and disposition of the Class A Notes. This discussion does not address every aspect of the Federal income tax laws that may be relevant to holders of Class A Notes in light of their personal investment circumstances or to particular types of Class A Noteholders subject to special treatment under the Federal income tax laws, including, without limitation, banks and thrifts, insurance companies, dealers in securities, foreign investors, regulated investment companies, individuals, trusts and estates and pass-through entities, the equity holders of which are any of the foregoing. This discussion is directed to prospective purchasers who purchase Class A Notes in the initial distribution of the Class A Notes and who hold the Class A Notes as “capital assets” within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). Prospective purchasers are urged to consult their own tax advisors in determining the Federal, state, local, foreign and any other tax consequences to them of the purchase, ownership and disposition of the Class A Notes.

The following summary is based upon current provisions of the Code, the Treasury regulations promulgated under the Code, judicial authority, and ruling authority, all of which are subject to change, which change may be retroactive. The Issuing Entity will be provided with an opinion of Federal Tax Counsel regarding some of the related Federal income tax matters discussed below. An opinion of Federal Tax Counsel, however, is not binding on the Internal Revenue Service (the “IRS”) or the courts. Moreover, there are no cases or IRS rulings on similar transactions with terms similar to those of the Class A Notes. As a result, the IRS may disagree with all or a part of the discussion below. No ruling on any of the issues discussed below will be sought from the IRS.

Tax Characterization of the Issuing Entity

McKee Nelson LLP will deliver its opinion that the Issuing Entity will not be classified as an association, or publicly traded partnership taxable as a corporation for Federal income tax purposes. This opinion will be based on the assumption of compliance by all parties with the terms of the Trust Agreement and related documents.

If the Issuing Entity were taxable as a corporation for Federal income tax purposes, the Issuing Entity would be subject to corporate income tax on its taxable income. The Issuing Entity’s taxable income would include all its income on the Receivables, possibly reduced by its interest expense on the Class A Notes. Any corporate income tax could materially reduce cash available to make payments on the Class A Notes and distributions on the Certificates, and Certificateholders, could be liable for any tax that is not paid by the Issuing Entity.

Tax Consequences to Holders of the Class A Notes

Treatment of the Class A Notes as Indebtedness.  The Issuing Entity will agree, and the Class A Noteholders will agree by their purchase of Class A Notes, to treat the Class A Notes as debt for Federal, state and local income and franchise tax purposes. Federal Tax Counsel will advise the Issuing Entity that in its opinion the Class A Notes will be classified as debt for Federal income tax purposes.

The prepayment assumption that is used in determining the accrual of original issue discount, market discount or premium with respect to the Notes is [100% Prepayment Assumption], as defined below.  However, no representation is made that the loans will prepay in accordance with this assumption or in accordance with any other assumption.  The [100% Prepayment Assumption] assumes a [constant prepayment rate of ___%].

Alternatively, if, contrary to the opinion of Federal Tax Counsel, the Class A Notes were not properly classified as debt and Issuing Entity were treated as a publicly traded partnership taxable as a corporation, it would be subject to Federal income tax, and any similar state or local taxes, at corporate tax rates on its taxable income generated by ownership of the Receivables.  This tax could result in reduced distributions to Class A Noteholders. Distributions to Class A Noteholders generally would not be deductible in computing the taxable income of the publicly traded partnership. In addition, all or a portion of any distributions would, to the extent of the current and accumulated earnings and profits of the corporation, be treated as dividend income to the Class A Noteholders, and in the case of Class A Noteholders that are foreign persons would be subject to withholding tax.

Interest Income and OID on the Class A Notes.

It is not anticipated that the Class A Notes will be issued with original issue discount (“OID”) within the meaning of Section 1273 of the Code. The stated interest on the Class A Notes will be taxable to a Class A Noteholder as ordinary interest income when received or accrued in accordance with the Class A Noteholder’s method of tax accounting. If the Class A Notes were treated as being issued with OID, the excess of the “stated redemption price at maturity” of the Class A Notes over their issue price would constitute OID. Under the OID Regulations, a holder of a Class A Note issued with a de minimis amount of OID must include this OID in income, on a pro rata basis, as principal payments are made on the Class A Note. A subsequent purchaser who buys a Class A Note for more or less than its principal amount will generally be subject, respectively, to the premium amortization or market discount rules of the Code.

Sale or Other Disposition.

If a Class A Noteholder sells a Class A Note, the holder will recognize gain or loss in an amount equal to the difference between the amount realized on the sale and the holder’s adjusted tax basis in the Class A Note. The adjusted tax basis of a Class A Note to a particular Class A Noteholder will equal the holder’s cost for the Class A Note, increased by any market discount, and gain previously included by the Class A Noteholder in income with respect to the Class A Note and decreased by the amount of premium, if any, previously amortized and by the amount of principal payments previously received by the Class A Noteholder with respect to the related Class A Note. Any gain or loss will be capital gain or loss, except for gain representing accrued interest, including OID, and accrued market discount not previously included in income. Capital losses generally may be used by a corporate taxpayer only to offset capital gains, and by an i ndividual taxpayer only to the extent of capital gains plus $3,000 of other income.

Foreign Holders.

Except as discussed below, a Class A Noteholder that is not a “United States person” (as defined below) generally will not be subject to United States income or withholding tax in respect of a distribution on a Class A Note provided that (i) the holder complies to the extent necessary with certain certification requirements, which generally relate to the identity of the beneficial owner and the status of the beneficial owner as a person that is not a United States person (as defined below), (ii) the holder is not a “10-percent shareholder” within the meaning of Section 871(h)(3)(B) of the Code, which could be interpreted to include a person that directly or indirectly owns 10% or more of the certificates in the Issuing Entity or the equity in the Sponsor or the Depositor, (iii) the holder is not a “controlled foreign corporation” (as defined in the Code) related to the Issuing Entity or related to a 10 percent holde r of certificates in the Issuing Entity or equity in the Sponsor or the Depositor, and (iv) the holder is not engaged in a United States trade or business, or otherwise subject to Federal income tax as a result of any direct or indirect connection to the United States other than through its ownership of a Class A Note.  For these purposes, the term “United States person” means (i) a citizen or resident of the United States, (ii) a corporation or partnership (or other entity properly treated as a corporation or partnership for Federal income tax purposes) created or organized in or under the laws of the United States or any State thereof or the District of Columbia, (iii) an estate whose income is includable in gross income for United States Federal income taxation regardless of its source, and (iv) a trust for which one or more United States persons have the authority to control all substantial decisions and for which a court of the United States can exercise primary supervision over the trust ’s administration and certain eligible trusts that elect to be treated as United States persons.  A “Foreign Person” is any person that is not a United States person.  Each Class A Noteholder should consult its tax advisors regarding the tax documentation and certifications that must be provided to secure the exemption from United States withholding taxes.

Any capital gain realized on the sale, redemption, retirement or other taxable disposition of a Class A Note by a Foreign Person generally will be exempt from United States Federal income and withholding tax, provided that (i) such gain is not effectively connected with the conduct of a trade or business in the United States by the Foreign Person and (ii) in the case of an individual Foreign Person, the Foreign Person is not present in the United States for 183 days or more in the taxable year.

If the interest, gain or income on a Class A Note held by a Foreign Person is effectively connected with the conduct of a trade or business in the United States by the Foreign Person (although exempt from the withholding tax previously discussed if the holder provides an appropriate statement establishing that such income is so effectively connected), the holder generally will be subject to United States Federal income tax on the interest, gain or income at regular Federal income tax rates.  In addition, if the Foreign Person is a foreign corporation, it may be subject to a branch profits tax equal to 30% of its effectively connected earnings and profits,” within the meaning of the Code, for the taxable year, as adjusted for certain items, unless it qualifies for a lower rate under an applicable tax treaty (as modified by the branch profits tax rules).

If the IRS were to contend successfully that the Class A Notes are interests in a partnership, not taxable as a corporation, a Class A Noteholder that is a foreign person might be required to file a United States. Federal income tax return and pay tax on its share of partnership income at regular United States tax rates, including the branch profits tax, and could be subject to withholding tax on its share of partnership income. If the Class A Notes were recharacterized as interests in a “publicly traded partnership” taxable as a corporation, distributions on the Class A Notes treated as dividends would generally be subject to withholding tax on the gross amount of the dividends at the rate of 30% unless the rate were reduced by an applicable treaty. If the Class A Notes are recharacterized as equity interests in a partnership, or, contrary to the opinion of Federal Tax Counsel, in a publicly traded partnership taxable as a corporation , any taxes required to be so withheld will be treated for all purposes of the Class A Notes as having been paid to the related Class A Noteholder.

Backup Withholding. Distributions made on the Class A Notes and proceeds from the sale of Class A Notes to or through certain brokers may be subject to a “backup” withholding tax on “reportable payments” (including interest accruals, original issue discount, and, under certain circumstances, distributions in reduction of principal amount) if the holder of the Class A Notes fails to comply with certain identification procedures, unless the Class A Noteholder is an exempt recipient under applicable provisions of the Code and, if necessary, demonstrates such status.  Any amounts so withheld from distributions on the Class A Notes would be refunded by the IRS or allowable as a credit against the Class A Noteholder’s Federal income tax.

STATE AND LOCAL TAX CONSEQUENCES

The discussion above does not address the tax consequences of purchase, ownership or disposition of the Securities under any state or local tax law.  We recommend that investors consult their own tax advisors regarding state and local tax consequences.

ERISA CONSIDERATIONS

The Notes

General

Section 406 of ERISA prohibits, and Section 4975 of the Code imposes adverse tax consequences on, certain transactions between any benefit plan which is subject to Title I of ERISA and/or Section 4975 of the Code or is an entity which is deemed to hold the assets of the foregoing (the “Plan”) and persons that are “parties in interest” under ERISA or “disqualified persons” under the Code with respect to such Plan.  A violation of these “prohibited transaction” rules may result in excise taxes and other penalties and liabilities under ERISA and the Code for such persons.

Certain transactions involving the assets of an issuing entity might be deemed to constitute prohibited transactions under Section 406 ERISA and Section 4975 of the Code with respect to a Plan that purchased notes issued by that issuing entity if assets of the issuing entity were deemed to be assets of the Plan.  Under the regulation issued by the United States Department of Labor set forth at 29 C.F.R. Section 2510.3-101 governing the definition of “plan assets” for purposes of the fiduciary responsibility and prohibited transaction provisions of ERISA and Section 4975 of the Code (the “Plan Asset Regulations”), the assets of an issuing entity would be treated as plan assets of the Plan for the purposes of ERISA and the Code only if the Plan acquired an “equity interest” in the issuing entity and none of the exceptions contained in the Plan Asset Regulations was applicable.  An equity interest is defined under the Plan Asset Regulations as an interest other than an instrument which is treated as indebtedness under applicable local law and which has no substantial equity features.

Purchases of the Notes

Although there is little guidance on the subject, the notes should be treated as indebtedness without substantial equity features for purposes of the Plan Asset Regulations.  This determination is based in part upon (i) tax counsel’s opinion that notes transferred on the closing date to parties unrelated to the holder of the Residual Certificates will be classified as debt for U. S. federal income tax purposes and that retained notes, if later sold to a party unrelated to the holder of the Residual Certificates for cash, will be classified as debt instruments for U.S. federal income tax purposes as of the date of such sale, based on certain assumptions (including that the rating of the notes as of the closing date has not declined below investment grade) and (ii) the traditional debt features of the notes, including the reasonable expectation of purchasers of the notes that they will be repaid when due, as well as the absence of conversion rights, warrants an d other typical equity features.  Based upon the foregoing and other considerations, subject to the considerations described below, the notes may be purchased by a Plan.

Without regard to whether the notes are considered an “equity interest” in the issuing entity under the Plan Asset Regulations, the acquisition or holding of notes by or on behalf of a Plan could be considered to give rise to a prohibited transaction if the underwriters, the issuing entity, the owner trustee or the indenture trustee, or any of their respective affiliates is or becomes a party in interest or a disqualified person with respect to such Plan.  In that case, PTE 84-14 (relating to transactions effected by a “qualified professional asset manager”); PTE 90-1 (relating to transactions involving insurance company pooled separate accounts); PTE 91-38 (relating to transactions involving bank collective investment funds); PTE 95-60 (relating to transactions involving insurance company general accounts); PTE 96-23 (relating to transactions effected by an “in-house asset manager”); and any other applicable exemption granted by the U.S. Department of Labor (the “Investor Based Exemptions) could be applicable, depending on the type of Plan involved and the circumstances of the plan fiduciary’s decision to acquire a note.  Even if the conditions specified in one or more of the Investor-Based Exemptions are met, the scope of the relief provided by these exemptions might or might not cover all acts that might be construed as prohibited transactions.  There can be no assurance that any of the Investor-Based Exemptions, or any other exemption, will be available with respect to any particular transaction involving the notes.

Certain employee benefit plans, including governmental plans (as defined in Section 3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and foreign plans are not subject to the ERISA requirements but may be subject to federal, state, local or foreign laws that are substantially similar to ERISA or the Code (“Similar Law”), such plans, together with Plans are referred to herein as “Benefit Plans.”

The notes should not be purchased with the assets of a Plan if the depositor, the servicer, the master servicer, the indenture trustee, the owner trustee, the underwriters or any of their affiliates is a fiduciary or gives investment advice with respect to such Plan or is an employer maintaining or contributing to such Plan, unless such purchase and holding of the notes would be covered by an applicable prohibited transaction exemption.

Each purchaser and transferee of a note will be deemed to represent and warrant to the issuing entity that either (i) it is not a Benefit Plan or (ii) it is a Benefit Plan and its acquisition and holding of such notes will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code which is not covered under an Investor-Based Exemption or some other applicable exemption, and will not cause a non-exempt violation of any substantially Similar Law.

Prospective Benefit Plan investors in notes should consult with their legal advisors concerning the impact of ERISA and the Code, the availability of other exemptions from the prohibited transaction rules that may apply to them, and the potential consequences in their specific circumstances, prior to making an investment in the notes.  Each Benefit Plan fiduciary should also determine whether under the general fiduciary standards of investment prudence and diversification, an investment in the notes is appropriate for the Benefit Plan, taking into account the overall investment policy of the Plan and the composition of the Benefit Plan’s investment portfolio.

The Certificates

The Certificates may not be acquired (directly or indirectly) by or on behalf of any Benefit Plan or any entity (including an insurance company general account) whose underlying assets include plan assets of the Benefit Plan by reason of a plan’s investment in the entity.  By acceptance of a Certificate, each Certificateholder will be deemed to have represented and warranted that it is not a Benefit Plan.

UNDERWRITING

Subject to the terms and conditions set forth in the Underwriting agreement relating to the Notes and the Certificates (the “Underwriting Agreement”), the Depositor has agreed to sell to Deutsche Bank Securities Inc. (the “Underwriter”), and the Underwriter has agreed to purchase, the Notes and the Certificates, subject to the satisfaction of certain conditions precedent.

The Depositor has been advised by the Underwriter that the Underwriter proposes to offer the Notes to the public initially at the public offering prices set forth on the cover page of this prospectus supplement, and to certain dealers at such prices less a concession of [   ]% per Note, that the Underwriter and such dealers may allow a discount of [   ]% per Note on the sale to certain other dealers; and that after the initial public offering of the Notes, the public offering prices and the concessions and discounts to dealers may be changed by the Underwriter.

The Depositor has been advised by the Underwriter that the Underwriter proposes to offer the Certificates to the public initially at the public offering price set forth on the cover page of this prospectus supplement, and to certain dealers at such price less a concession of [   ]% per Certificate; that the Underwriter and such dealers may allow a discount of [   ]% per Certificate on the sale to certain other dealers; and that after the initial public offering of the Certificates, the public offering price and the concession and discount to dealers may be changed by the Underwriter.

Until the distribution of the Securities is completed, rules of the Securities and Exchange Commission may limit the ability of the Underwriter and certain selling group members to bid for and purchase the Securities.  As an exception to these rules, the Underwriter is permitted to engage in certain transactions that stabilize the prices of the Securities.  Such transactions consist of bids or purchases for the purpose of pegging, fixing or maintaining the price of such Securities.

In general, purchases of a security for the purpose of stabilization or to reduce a short position could cause the price of the security to be higher than it might be in the absence of such purchases.

Neither the Depositor nor the Underwriter makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the prices of the Securities.  In addition, neither the Depositor nor the Underwriter makes any representation that the Underwriter will engage in such transactions or that such transactions, once commenced, will not be discontinued without notice.

The Depositor has agreed to indemnify the Underwriter against certain liabilities, including civil liabilities under the Securities Act, or contribute to payments which the Underwriter may be required to make in respect thereof.  In the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act and, may, therefore, be unenforceable.

The Trust may, from time to time, invest the funds in the Trust Accounts and the Certificate Distribution Account in Eligible Investments acquired from the Underwriter.

The closing of the sale of the Notes is conditioned on the closing of the sale of the Certificates, and the closing of the sale of the Certificates is conditioned on the closing of the sale of the Notes.

RATINGS

It is a condition to the issuance of the securities that the securities receive at least the following ratings from [             ] (“[             ]”) and [             ] (“[             ]”):

Securities	[             ]	[             ]
Class [__] Notes	[___]	[___]
Class [__] Notes	[___]	[___]
Certificates	[___]	[___]

The rating agencies have stated that it is their standard policy to monitor ratings on publicly offered securities for which a rating has been provided, as to each rating agency rating each class of securities in accordance with the rating agencies’ particular surveillance policies, unless the issuer requests a rating without surveillance.  A rating agency will monitor the rating it issues on an ongoing basis and may update the rating after conducting its regular review of the issuer’s creditworthiness or after conducting a review of the status of the rating upon becoming aware of any information that might reasonably be expected to result in a change of rating.  The depositor has not requested that any rating agency not monitor their ratings of the securities, and the depositor has not requested that any rating agency use any monitoring procedures other than their standard monitoring procedures.

LEGAL PROCEEDINGS

[There are no material legal proceedings pending against the Sponsor, the Depositor, the Owner Trustee, the Indenture Trustee, the Issuing Entity, [any affiliated Servicer, any 20% concentration unaffiliated Servicer, any 20% concentration Originator], or with respect to which the property of any of the foregoing transaction parties is subject, that are material to the securityholders.  No legal proceedings against any of the foregoing transaction parties is known to be contemplated by governmental authorities, that are material to the securityholders.]

AFFILIATIONS, RELATIONSHIPS AND RELATED TRANSACTIONS

[There are no affiliations between the Sponsor, the Depositor or the Issuing Entity and any of [any affiliated Servicer, any 20% concentration unaffiliated Servicer], the Owner Trustee, the Indenture Trustee, [any 10% concentration Originator] or [any credit enhancement provider or derivatives counterparty].  There are no affiliations among [any affiliated Servicer, any 20% concentration unaffiliated Servicer], the Owner Trustee, the Indenture Trustee, [any 10% concentration Originator] or [any credit enhancement provider or derivatives counterparty].  There are currently no business relationships, agreements, arrangements, transactions or understandings between (a) the Sponsor, the Depositor or the Issuing Entity and (b) any of the parties referred to in the preceding sentence, or any of their respective affiliates, that were entered into outside the normal course of business or that contain terms other than would be obtained in an ar m’s length transaction with an unrelated third party and that are material to the investor's understanding of the securities, or that relate to the securities or the pooled assets.  No such business relationship, agreement, arrangement, transaction or understanding has existed during the past two years.]

LEGAL MATTERS

Certain legal matters with respect to the Notes and the Certificates will be passed upon for the Depositor by [        ].  Certain legal matters with respect to the Notes and the Certificates will be passed upon for the Underwriter by McKee Nelson LLP, New York, New York.  McKee Nelson LLP also will pass upon the material federal income tax consequences related to the Notes and the Certificates.  Certain legal matters under the laws of the State of Delaware will  be passed upon for the Depositor by [        ], [        ].

The information in this prospectus supplement is not complete and may be changed.  We may not sell these certificates until the registration statement filed with the Certificates and Exchange Commission is effective.  This prospectus supplement is not an offer to sell these certificates and it is not soliciting an offer to buy these certificates in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED [_________]

PROSPECTUS SUPPLEMENT (to prospectus dated [            ])

$[               ] (Approximate)

ACE SECURITIES CORP., [______] Auto and Boat Grantor Trust [______], Series  [       ]

Asset Backed Certificates

[______] Auto and Boat Grantor Trust [______]

Issuing Entity

[DB Structured Products, Inc.]

Sponsor

Ace Securities Corp.

Depositor

[               ]

Servicer

Certificates Offered • $[      ], [     ]% Class A certificates • $[      ], [     ]% Class B certificates Assets • Retail automobile and boat receivables Credit Enhancement Class A Certificates • Subordination of Class B certificates • Reserve account Class B Certificates • Reserve account
[Describe other credit enhancement provided by [_____]] Expected Ratings • [      ] or equivalent for the Class A Certificates • [      ] or equivalent for the Class B Certificates Consider carefully the risk factors beginning on page S-[  ] of this prospectus supplement and on page [  ] of the prospectus. For a list of capitalized terms used in this prospectus supplement and the prospectus, see the index of defined terms beginning on page S-[  ] of this prospectus supplement and on page [  ] of the prospectus. The certificates will represent interests in the Issuing Entity only and will not represent interests in or obligations of the sponsor, the depositor or any of their affiliates. Distributions on the certificates will be made on the [__]th day of each month, or, if such day is not a business day, on the next succeeding business day, beginning in [__]. This prospectus supplement may be used to offer and sell the certificates only if accompanied by the prospectus.

Neither the Certificates and Exchange Commission nor any state certificates commission has approved or disapproved these certificates or determined if this prospectus supplement or the attached prospectus is accurate or complete.  Making any contrary representation is a criminal offense.

Subject to the satisfaction of certain conditions, the underwriter named below is offering the certificates at the price to public shown.  The certificates will be delivered in book entry form only on or about [________].

	Price to Public	Underwriting Discounts & Commissions	Proceeds to the Depositor(1)(2)
Per Class A Certificate	[    ]%	[    ]%	[    ]%
Per Class B Certificate	[    ]%	[    ]%	[    ]%
Total	$[     ]	$[     ]	$[     ]

___________________________

1.  Plus accrued interest from [______].

2.  Before deducting expenses, estimated to be $ [      ].

[Deutsche Bank Certificates]

The date of this prospectus supplement is [         ].

Important Notice About Information Presented in this
Prospectus Supplement and the Accompanying Prospectus:

We provide information to you about the certificates offered by this prospectus supplement in two separate documents that progressively provide more detail: (1) the accompanying prospectus, which provides general information, some of which may not apply to your certificates, and (2) this prospectus supplement, which describes the specific terms of your certificates.

If the information regarding the certificates is more specific in this prospectus supplement than in the prospectus, then you should rely on the information in this prospectus supplement.

You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus.  We have not authorized anyone to provide you with different information.

We are not offering the certificates in any state where the offer is not permitted.  We do not claim that the information in this prospectus supplement and prospectus is accurate as of any date other than the dates stated on their respective covers.

Dealers will deliver a prospectus supplement and prospectus when acting as underwriters of the certificates and with respect to their unsold allotments or subscriptions.  In addition, all dealers selling the certificates will be required to deliver a prospectus supplement and prospectus for ninety days following the date of this prospectus supplement.

We include cross-references in this prospectus supplement and the accompanying prospectus to captions in these materials where you can find further related discussions.  The following table of contents and the table of contents included in the accompanying prospectus provide the pages on which these captions are located.

TABLE OF CONTENTS

Prospectus Supplement

Caption

Page

Summary of Terms

1

Risk Factors

1

FORMATION OF THE ISSUING ENTITY

4

The Trust Property

4

The Receivables Pool

5

STATIC POOL INFORMATION

11

THE ORIGINATORS

12

The Servicer

12

Weighted Average Life of the Certificates

13

Use of Proceeds

16

Description of the certificates

16

[The Insurer]

28

[The Policy]

30

[other credit enhancement provider]

32

[derivative instruments]

32

Federal Income Tax Consequences

32

State and Local Tax Consequences

37

ERISA Considerations

37

Underwriting

39

RATINGS

40

LEGAL PROCEEDINGS

40

AFFILIATIONS, RELATIONSHIPS AND RELATED TRANSACTIONS

40

Legal Matters

41

SUMMARY OF TERMS

This summary highlights selected information from this prospectus supplement and does not contain all of the information that you need to consider in making your investment decision.  To understand all of the terms of the offering of the certificates, it is necessary that you read carefully this entire prospectus supplement and accompanying prospectus.

While this summary contains an overview of certain calculations, cash flow priorities, and other information to aid your understanding, you should read carefully the full description of these calculations, cash flow priorities and other information in this prospectus supplement and the accompanying prospectus before making any investment decision.

Issuing Entity	[      ] Auto and Boat Grantor Trust [      ]-[      ].
Depositor	Ace Securities Corp.  See “The Depositor” in the Prospectus.
Servicer	[      ].
Sponsor	[      ].  See “The Sponsor” in the Prospectus.
Originators	[_________________________], with respect to approximately [__]% of the receivables by aggregate principal balance as of the Cut-off Date. The remainder of the receivables were originated by various originators, none of which have originated more than 10% of the receivables.  See “The Originators” in this prospectus supplement.
Trustee	[      ].
Collateral Agent	[      ].
[Any credit enhancement provider referenced in Items 1114(b) and 1115 of Regulation AB]	[      ].
Closing Date	On or about [      ].
Cut-off Date	The [close] [opening] of business on [      ].
Distribution Dates	[      ] of each month or the next business day if the [      ] day is not a business day, beginning in [      ].
Record Dates	The business day immediately prior to a distribution date or, if definitive certificates are issued, the last day of the month prior to a distribution date.
Minimum Denominations	$[25,000, except for one Class B Certificate].
Form	Book-entry.
Interest Accrual Method	30/360.
Final Scheduled Distribution Date	[      ].

The Receivables

The receivables are amounts owed by individuals under fixed rate simple interest or actuarial retail installment sale contracts to purchase or refinance: 1) new or used automobiles, including passenger cars, minivans, sport utility vehicles and light trucks; and 2) new or used boats, boat motors, jet skis and waverunners; substantially all of which were purchased from motor vehicle or boat dealers.

The depositor expects that the receivables will have the following characteristics as of [   ].  As of the closing date, no more than 5% of the receivables will have characteristics that differ from those described in this prospectus supplement as of [   ].

Number of receivables

[   ]

Principal amount

$[   ]

Annual percentage rates

[   ]% to [    ]%

Weighted average annual percentage rate

[   ]%

Original term

[   ] months to [   ] months

Weighted average original term

[   ] months

Remaining term

[   ] months to [__] months

Weighted average remaining term

[   ]%

New by principal

[   ]%

Used by principal

[   ]%

Simple interest by principal

[   ]%

Actuarial by principal

[   ]%

States

[___] by principal

[   ]%

[___] by principal

[   ]%

Balloon Loans by principal

[   ]%

[For approximately [      ]% of the principal amount of the receivables, the amount of the receivable was more than the value of the financed vehicle at the time the loan was made.]

Removal and Substitution of a Receivable

[Regulation AB Item 1103(a)(6) compliant description of removal or substitution of receivables in connection with material document defects or breaches of representations and warranties].

Interest Distributions

On each distribution date, if the trust fund has sufficient cash, it will pay you the interest accrued on your certificates during the related interest period. The trust will not pay interest on the Class B certificates on any distribution date until the Class A certificateholders have received their full payment of interest on that distribution date. Interest periods begin on the prior distribution date and run through the day before the current distribution date.  The first interest period begins on [                 ] and runs through the day before the first distribution date. We will assume that each year has 360 days consisting of twelve 30 day months.

Principal Distributions

The Class A certificates and Class B certificates will be entitled to a pro rata share of the principal collections.  However, the trust will make principal distributions to the Class A certificates before making principal distributions to the Class B certificates on each distribution date.

Reserve Account

There will be a reserve account to help cover cash flow shortfalls.  Initially, the account will be $[      ]. On each distribution date the trustee will deposit amounts remaining after distribution of the servicing fee and amounts to be paid to the certificateholders in the reserve account until the amount equals a specified amount.

[Trigger Events]

[Regulation AB Item 1103(a)(3)(vii) compliant description of any events in the transaction agreements that can trigger liquidation or amortization of the receivables or other performance triggers that would alter the transaction structure or the flow of funds].

 [Other Credit Enhancement]

[Regulation AB Item 1103(a)(3)(ix) compliant description of any other credit enhancement].

[Additional Series or Classes Backed by Receivables]

[Regulation AB Item 1103(a)(4) compliant description of any outstanding series or classes of certificates that are backed by the receivables or otherwise have claims on the receivables.  Regulation AB compliant description of any circumstances in which additional series or classes of certificates may be issued that are backed by the receivables, with specification if certificateholder approval is necessary for such issuances and if certificateholders will receive notice of such issuances].

[Revolving Periods]

[Regulation AB Item 1103(a)(5) compliant description of any revolving periods].

[Prefunding Periods]

[Regulation AB Item 1103(a)(5) compliant description of any prefunding periods].

Fees and Expenses

Prior to the distribution of any interest to the certificateholders, the servicer will be entitled to receive a servicing fee for each collection period in an amount equal to the product of one-twelfth of [    ]% per annum for so long as [               ] or an affiliate thereof is the servicer, and [    ]% per annum if [               ] or an affiliate thereof is no longer the servicer and the aggregate principal balance of the receivables as of the first day of the collection period.  See “Description of the Transfer and Servicing Agreement--Servicing Compensation and Payment of Expenses” in the Prospectus.

[Regulation AB Item 1103(a)(7) compliant description of any trustee fees and any other fees and expenses].

Optional Termination

When the principal amount of the receivables is 10% or less than it was on the cut-off date, the servicer may buy the receivables.  You must receive the principal amount of your certificates and all accrued but unpaid interest or the receivables will not be sold.

Final Scheduled Maturity Dates

The final scheduled maturity date of the certificates is [__________].  The actual date on which the aggregate outstanding principal amount of the certificates is paid may be earlier than the final scheduled maturity date based on a variety of factors.

Expected Final Distribution Dates

The expected final distribution date of each class of certificates is [

], based on the assumption that the servicer has exercised its option to purchase all the receivables as described in “Optional Termination” above.  Due to losses and prepayments on the receivables, the final distribution dates on each class of certificates may be substantially earlier or later than such date.

Tax Consequences

McKee Nelson LLP, special federal tax counsel to the trust, is of the opinion that the trust will be classified, for federal income tax purposes, as a grantor trust and not as an association taxable as a corporation.  Certificateholders must report their respective allocable shares of income earned on trust assets excluding certain amounts retained by the depositor as described in this prospectus supplement and, subject to the limitations applicable to individuals, estates, trusts and partnerships, may deduct their respective allocable shares of reasonable servicing and other fees.  However, the tax code is complex, and we recommend that you and your tax advisors review the information under the caption “Federal Income Tax Consequences” in this prospectus supplement and “Material Federal Income Tax Consequences -- Grantor Trusts” in the prospectus.

ERISA Considerations

The certificates may be purchased by ERISA and other retirement plans if one or more administrative exemptions apply.  See “ERISA Considerations” in this prospectus supplement and the prospectus.

Ratings

It is a condition to the issuance of the certificates that the certificates receive at least the following ratings from [______________] and [_________________]:

Certificates	[____]	[____]
Class A Certificates	[__]	[__]
Class B Certificates	[__]	[__]

RISK FACTORS

The following information, which you should carefully consider, identifies certain significant sources of risk associated with an investment in the certificates.  You should also carefully consider the information set forth under “Risk Factors” in the prospectus.

Certain features of the receivables pool may result in losses.	There are a number of features of the receivables in the pool that create additional risk of loss, including the following:
Certain obligors have little equity in their financed vehicles which may result in more severe losses.	For approximately [      ]% of the principal amount of the receivables, the original principal amount of the loan exceeded the cost of the related vehicle.  Although each such obligor was required to make a downpayment from the obligor’s own funds, those obligors have no equity in their vehicles.  While those borrowers had excellent credit histories at the time, the lack of any equity in the vehicle may make it more likely that those obligors will default if their personal financial conditions change.  In addition, if such an obligor defaults and the vehicle is repossessed, the trust fund is likely to suffer a loss.
[The concentration of the receivables in specific geographic areas may increase the risk of loss.	Economic conditions in the states where obligors reside may affect the delinquency, loan loss and repossession experience of the trust fund with respect to the receivables.  As of the cutoff date, with respect to approximately [  ]%, [  ]% and [  ]% of the principal amount of the receivables, obligors took initial title to the motor vehicle or boats or boats relating to the receivables in [                 ], [                 ] and [                 ], respectively.  Economic conditions in any state or region may decline over time and from time to time.  Because of the concentration of the obligors in certain states, any adverse economic conditions in those states may have a greater effect on the performance of the certificates than if the concentration did not exist.  We are not aware of any adverse economic conditions that are peculiar to [                 ], [                 ] or [                 ] as of the date of this prospectus supplement. In addition, we do not believe that the laws of those states relating to motor vehicle or boat financing and the rights of lenders are more burdensome than those in other states.]
Newly originated loans may be more likely to default which may cause losses.	Defaults on automobile and boat loans tend to occur at higher rates during the early years of the loans. Substantially all of the automobile and boat loans will have been originated within [      ] months prior to the sale to the trust fund.  As a result, the trust fund may experience higher rates of default than if the automobile and boat loans had been outstanding for a longer period of time.
Balloon loans may have a higher rates of default which may cause losses.	A balloon loan has monthly payments that will not fully pay off the loan balance by the maturity date.  As a result the borrower usually will have to refinance the balloon loan in order to pay the amount due.  The borrower may not be able to refinance the balloon loan for any number of reasons, including the level of available interest rates, the age or condition of the vehicle, or the borrower’s payment or credit history.  The trust fund will not have any funds to refinance a balloon loan, and the Sponsor is not obligated to do so.
Class B certificates will absorb cash shortfalls and losses before the Class A certificates.	The Class B certificateholders will not receive any distribution of interest until the full amount of interest on the Class A certificates has been paid on each distribution date.  The Class B certificateholders will not receive any distributions of principal until the full amount of principal of the Class A certificates has been paid on that distribution date.  Holders of the certificates must rely for repayment upon payments on the receivables, and, if and to the extent available, amounts on deposit in the reserve account.  If funds in the reserve account are exhausted, the trust will depend solely on current distributions on the receivables to make payments on the certificates.  Delinquent payments on the receivables may result in a shortfall in the distributions on the Class B certificates on any distribution date due to the priority of payments on the Class A certificates.
Your yield to maturity may be reduced by prepayments.	The pre-tax yield to maturity is uncertain and will depend on a number of factors including the following:
The rate of return of principal is uncertain.	The amount of distributions of principal of the certificates and the time when you receive those distributions depends on the amount and the times at which borrowers make principal payments on the receivables.  Those principal payments may be regularly scheduled payments or unscheduled payments resulting from prepayments or defaults of the receivables.
An early termination will shorten the life of your investment which may reduce your yield to maturity.	If the receivables are sold upon exercise of the servicer’s optional termination, you will receive the principal amount of your certificates plus accrued interest through the related interest period. Because your certificates will no longer be outstanding, you will not receive the additional interest payments that you would have received had the certificates remained outstanding. If you bought your certificates at a premium, your yield to maturity will be lower than it would have been if the optional termination had not been exercised.
Class B certificateholders may have to pay taxes on amounts not actually received	For federal income tax purposes, amounts otherwise payable to the owners of the Class B certificates that are paid to the owners of the Class A certificates will be deemed to have been received by the owners of the Class B certificates and then paid by them to the owners of the Class A certificates pursuant to a guaranty.  Accordingly, the owners of the Class B certificates could be liable for taxes on amounts not actually received. See “Federal Income Tax Consequences” in this prospectus supplement and “Material Federal Income Tax Consequences -- Grantor Trusts” in the prospectus.
[Additional Applicable Risk Factors]	[____________________]

FORMATION OF THE ISSUING ENTITY

Pursuant to a pooling and servicing agreement (as amended and supplemented, the “Agreement”), to be dated as of [                 ] (the “Cutoff Date”), among Ace Securities Corp., as depositor (the “Depositor”), [        ], as sponsor (in this capacity, the “Sponsor”) and as servicer (in this capacity, the “Servicer”), [        ], as trustee (the “Trustee”), and [        ], as collateral agent (the “Collateral Agent”), the Depositor will establish [        ] Auto and Boat Grantor Trust [   ] (the “Issuing Entity”).   The Agreement constitutes the “governing instrument” under the laws of the State of Delaware.  Pursu ant to the Agreement, the Depositor will establish the Issuing Entity by selling and assigning a pool of fixed rate simple interest and actuarial motor vehicle and boat retail installment sales contracts and other motor vehicle and boat installment chattel paper (the “Receivables”) secured by new and used automobiles, recreational vehicles, including motor homes, campers, motorcycles, all-terrain vehicles and snowmobiles, vans trucks, buses and trailers (the “Financed Automobiles”); and 2) new and used boats, boat motors, jet skis and waverunners (the “Financed Boats,” and together with the Financed Automobiles, the “Financed Vehicles”); and the other Issuing Entity Property, as described below under “The Trust Property” to the Issuing Entity in exchange for the $[   ], [   ]% Class A certificates (the “Class A Certificates”) and the $[   ], [   ]% Class B certificates (the “Class B Certificates,” an d, together with the Class A Certificates, the “Certificates”).  The Depositor will sell the Certificates to [                 ] and [Deutsche Bank Securities Inc.], (the “Underwriters”) in exchange for cash. All references in this prospectus supplement to sales, assignments and transfers to the Issuing Entity refer to sales, assignments and transfers to the Trustee on behalf of the Issuing Entity for the benefit of the holders of the Certificates (the “Certificateholders”).

The Servicer will, directly or through subservicers, hold the Receivables and the certificates of title or ownership or other documents evidencing the notation of the Seller’s lien on the certificates of title or ownership relating to the Financed Vehicles as custodian for the Trustee. However, the Receivables will not be marked or stamped to indicate that they have been sold to the Issuing Entity, and the certificates of title for the Financed Vehicles will not be endorsed or otherwise amended to identify the Trustee as the new secured party. Under the foregoing circumstances and in certain jurisdictions, the Issuing Entity’s interest in the Receivables and the Financed Vehicles may be defeated.  See “Certain Legal Aspects of the Receivables” in the Prospectus.

The Issuing Entity will not acquire any contracts or assets other than the Issuing Entity Property, and it is not anticipated that the Issuing Entity will have any need for additional capital resources.  The Issuing Entity will have no operating history upon its establishment and will not engage in any business activity other than acquiring and holding the Trust Property, issuing the Certificates, distributing payments on the Certificates and engaging in other activities that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith.  The foregoing restrictions are contained in the Agreement.  [These restrictions cannot be amended without the consent of holders of Certificates evidencing at least 51% of the voting rights.]  For a description of other provisions relating to amending the Agreement, see “[[_______________]]” in the base prospectus.

The Issuing Entity’s fiscal year end is [______].

The Issuing Entity’s principal offices are in [      ], in care of [      ], as Trustee, at the address listed under “Description of the Certificates—The Trustee”

THE TRUST PROPERTY

Each Certificate represents a fractional undivided interest in the Trust.  The “Trust Property” will include the Receivables, which, except as provided below, were originated by motor vehicle and boat dealers (the “Dealers”) and purchased by the Seller pursuant to agreements with Dealers (“Dealer Agreements”).   Approximately [   ]% of the aggregate Principal Balance of the Receivables as of the Cutoff Date (the “Initial Pool Balance”) were directly originated by the Seller in connection with referrals from an insurance company.  On the date of the issuance of the Certificates (the “Closing Date”), the Depositor will buy the Receivables from the Seller and the Depositor will sell the Receivables to the Trust.  The Trust Property also includes:

•

all monies received under the Receivables on and after the Cut-off Date and, with respect to Receivables which are Actuarial Receivables, monies received thereunder prior to the Cut-off Date that are due on or after the Cut-off Date;

•

such amounts as from time to time may be held in the Collection Account, the Reserve Account, the Payahead Account, the Class A Distribution Account and the Class B Distribution Account, established and maintained by the Servicer pursuant to the Agreement as described below;

•

security interests in the Financed Vehicles;

•

the rights of the Sponsor to receive proceeds from claims under certain insurance policies;

•

the rights of the Trustee on behalf of the Certificateholders under the Agreement;

•

the rights of the Sponsor to refunds for the costs of extended service contracts and to refunds of unearned premiums with respect to credit life and credit accident and health insurance policies covering the Financed Vehicles or the retail purchasers of, or other persons owing payments on, the Financed Vehicles (the “Obligors”);

•

all right, title and interest of the Sponsor (other than with respect to any Dealer commission) with respect to the Receivables under the related Dealer Agreements;

•

rights with respect to any repossessed Financed Vehicles; and

•

all proceeds (within the meaning of the Uniform Commercial Code) of the foregoing.

The Reserve Account will be maintained in the name of the Collateral Agent for the benefit of the Certificateholders, but will not be part of the Trust Fund.

THE RECEIVABLES POOL

Pool Composition

The Receivables were selected from the Sponsor’s portfolio by several criteria, including, as of the Cut-off Date, the following:

•

each Receivable has a scheduled maturity of not later than the Final Scheduled Maturity Date;

•

each Receivable was originated by a Dealer and purchased by the Seller pursuant to a Dealer Agreement; provided, that approximately [   ]% of the Initial Pool Balance was comprised of Receivables originated directly by the Seller in connection with referrals from an insurance company;

•

each Receivable has an original term to maturity of not more than [      ] months and a remaining term to maturity of [      ] months or less as of the Cut-off Date;

•

approximately [      ]% of the Initial Pool Balance was secured by new Financed Vehicles, and approximately [      ]% of the Initial Pool Balance was secured by used Financed Vehicles;

•

each Receivable provides for level monthly payments which fully amortize the amount financed except, in the case of Simple Interest Receivables, for the last payment, which may be different from the level payment;

•

each Receivable is not more than [      ] days contractually past due as of the Cut-off Date and is not more than [      ] months paid ahead;

•

each Receivable has an outstanding principal balance between $[      ] and $[      ];

•

the Obligor with respect to each Receivable has a FICO score between [______] and [______];

•

and each Receivable has an APR of no less than [      ]%.

As of the Cut-off Date, no Obligor on any Receivable was noted in the related records of the Servicer as being the subject of any pending bankruptcy or insolvency proceeding.  The latest scheduled maturity of any Receivable is not later than [      ].  The Receivables were selected from the motor vehicle and boat retail installment sales contracts and other installment chattel paper secured by Financed Vehicles (“Motor Vehicle and Boat Loans”) in the portfolio of the Sponsor that met the above criteria.  The Depositor and the Sponsor believe that these selection procedures are not materially adverse to Certificateholders.

The Depositor considers an account past due if any portion of the payment due on a due date is not received by the succeeding due date for that account.

The composition, distribution by remaining term, distribution by APR, geographic distribution, distribution by remaining principal of the Receivables and distribution by FICO scores, in each case, as of the Cut-off Date are set forth in the tables below.  The percentages in the following tables may not add to 100% due to rounding.

Composition of the Receivables as of the Cut-off Date
	New Financed Vehicles	Used Financed Vehicles	Total
Aggregate Principal Balance	$[__________]	$[__________]	$[__________]
Number of Receivables	[__________]	[__________]	[__________]
Average Principal Balance	$[__________]	$[__________]	$[__________]
Average Original Balance	$[__________]	$[__________]	$[__________]
Weighted Average Contract Rate	[_______]%	[_______]%	[_______]%
Contract Rate (Range)	[___]% - [___]%	[___]% - [___]%	[___]% - [___]%
Weighted Average Original Term (months)	[_______]	[_______]	[_______]
Original Term (Range) (months)	[____] to [_____]	[____] to [_____]	[____] to [_____]
Weighted Average Remaining Term (months)	[_______]	[_______]	[_______]
Remaining Term (Range) (months)	[____] to [_____]	[____] to [_____]	[____] to [_____]
Weighted Average FICO score	[_______]	[_______]	[_______]
FICO score (Range)	[____] to [_____]	[____] to [_____]	[____] to [_____]

Distribution by Loan Type as of the Cutoff Date

				Percentage
	Number of	Aggregate		of Initial
Loan Type	Receivables	Principal Balance		Pool balance
Motor Vehicle Loan	[   ]	$ [   ]		[   ]%
Boat Loan	[   ]	[   ]		[   ]
Total	[   ]	$[   ]	100.00%

Distribution by Remaining Term of the Receivables as of the Cut-off Date
Remaining Term (Range)	Number of Receivables	Aggregate Principal Balance	Percentage of Initial Pool  Balance
Less than [_____] months	[____________]	$[__________]	[___________]%
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
Total		$	100.00%

Distribution by Annual Percentage Rate of the Receivables as of the Cut-off Date
Annual % Rate Range	Number of Receivables	Aggregate Principal Balance	Percentage of Initial Pool  Balance
[_____]% to below	[____________]	$	%
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[____]% and above	[____________]	[____________]	[____________]
Total		$	100.00%

Geographic Distribution of the Receivables as of the Cut-off Date
State1	Number of Receivables	Aggregate Principal Balance	Percentage of Initial Pool  Balance
[      ]	[____________]	$	%
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
Others2
Total		$	100.00%

____________________

1.

Based on state where the Obligors took initial title to the motor vehicle or boats or boats, which may differ from the state of origination of the Receivable and/or the billing addresses of the Obligors.

2.

Includes [    ] other states and [    ] none of which have a concentration of Receivables in excess of [    ]% of the Initial Pool Balance.

Distribution by Remaining Principal Balance of the Receivables as of the Cut-off  Date
Remaining Principal Balance (Range)	Number of Receivables	Aggregate Principal Balance	Percentage of Initial Pool  Balance
$ 2,500 to $ 4,999	[____________]	$	%
$ 5,000 to $ 7,499	[____________]	[____________]	[____________]
$ 7,500 to $ 9,999	[____________]	[____________]	[____________]
$10,000 to $12,499	[____________]	[____________]	[____________]
$12,500 to $14,999	[____________]	[____________]	[____________]
$15,000 to $17,499	[____________]	[____________]	[____________]
$17,500 to $19,999	[____________]	[____________]	[____________]
$20,000 to $22,499	[____________]	[____________]	[____________]
$22,500 to $24,999	[____________]	[____________]	[____________]
$25,000 to $27,499	[____________]	[____________]	[____________]
$27,500 to $29,999	[____________]	[____________]	[____________]
$30,000 to $32,499	[____________]	[____________]	[____________]
$32,500 to $34,999	[____________]	[____________]	[____________]
$35,000 to $37,499	[____________]	[____________]	[____________]
$37,500 to $39,999	[____________]	[____________]	[____________]
$40,000 to $41,499	[____________]	[____________]	[____________]
$42,500 to $44,999	[____________]	[____________]	[____________]
$45,000 to $47,499	[____________]	[____________]	[____________]
$47,500 to $49,999	[____________]	[____________]	[____________]
$50,000 to $52,499	[____________]	[____________]	[____________]
$52,500 to $54,999	[____________]	[____________]	[____________]
Total		$	100.00%

Distribution by FICO Score of the Receivables as of the Cut-off Date
Annual % Rate Range	Number of Receivables	Aggregate Principal Balance	Percentage of Initial Pool  Balance
[______] to [______]	[____________]	$	%
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] and above	[____________]	[____________]	[____________]
Total		$	100.00%

As of the Cut-off Date, approximately [     ]% of the aggregate principal balance of the Receivables, constituting [     ]% of the number of Receivables, were between 1 payment and [    ] payments paid-ahead.

As of the Cut-off Date, approximately [   ]% of the aggregate principal balance of the Receivables, constituting [     ]% of the number of Receivables, are Actuarial Receivables.  ”Actuarial Receivables” are receivables that provide for amortization of the amount financed over a series of fixed, level-payment monthly installments.  Each monthly installment, including the monthly installment representing the final payment on the Receivable, consists of an amount of interest equal to 1/12 of the Annual Percentage Rate (“APR”) of the amount financed multiplied by the unpaid principal balance of the amount financed, and an amount of principal equal to the remainder of the monthly payment.

As of the Cut-off Date, approximately [   ]% of the aggregate principal balance of the Receivables, constituting [   ]% of the number of Receivables, are Simple Interest Receivables.  ”Simple Interest Receivables” are receivables that provide for the amortization of the amount financed under the receivable over a series of fixed level monthly payments. However, unlike the monthly payment under an Actuarial Receivable, each monthly payment includes an installment of interest which is calculated on the basis of the outstanding principal balance of the receivable multiplied by the stated APR and further multiplied by the period elapsed (as a fraction of a calendar year) since the preceding payment of interest was made. As payments are received under a Simple Interest Receivable, the amount received is applied first to interest accrued to the date of payment and the balance is applied to reduce the unpaid principal balance. Accordingly, if an Obligor pays a fixed monthly installment before its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be less than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly greater. Conversely, if an Obligor pays a fixed monthly installment after its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be greater than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly less. In either case, the Obligor pays a fixed monthly installment until the final scheduled payment date, at which time the amount of the final installment is increased or decreased as necessary to repay the then outstanding principal balance.

If an Actuarial Receivable is prepaid in full, with minor variations based upon state law, under the terms of the motor vehicle or boat retail installment sale contract or loan agreement, as the case may be, a “refund” or “rebate” will be made to the borrower of the portion of the total amount of payments then due and payable under such contract or agreement allocable to “unearned” interest, calculated on the basis of a constant interest rate.  If a Simple Interest Receivable is prepaid, rather than receive a rebate, the borrower is required to pay interest only to the date of prepayment.  The amount of a rebate under an Actuarial Receivable generally will be less than the remaining scheduled payments of interest that would have been due under a Simple Interest Receivable for which all payments were made on schedule.

The Servicer may accede to an Obligor’s request to pay scheduled payments in advance, in which event the Obligor will not be required to make another regularly scheduled payment until the time a scheduled payment not paid in advance is due.  The amount of any payment (which are not amounts representing Payaheads) made in advance will be treated as a principal prepayment and will be distributed as part of the Principal Distribution Amount in the month following the Collection Period in which the prepayment was made.  See “Maturity and Prepayment Considerations” in the Prospectus.

Receivable Delinquencies and Losses

For information regarding delinquencies and losses on the Receivables, see the tables below.  A Receivable is considered to be delinquent when a payment due on any due date remains unpaid as of the close of business on the last business day immediately prior to the next monthly due date.  The determination as to whether a loan falls into this category is made as of the close of business on the last business day of each month.

30 -  59 Days (times):	Number of Receivables	% by Receivable Count	Principal Balance Outstanding as of the Cutoff Date	% of Aggregate Principal Balance Outstanding as of the Cutoff Date
0	[________]	[______]%	[_______._]	[__.__]
1	[________]	[______]%	[_______._]	[__.__]
2	[________]	[______]%	[_______._]	[__.__]
Total	[________]	100.00%	[_______._]	100.00

60 -  89 Days (times):	Number of Receivables	% by Receivable Count	Principal Balance Outstanding as of the Cutoff Date	% of Aggregate Principal Balance Outstanding as of the Cutoff Date
0	[________]	[______]	[_______._]	[__.__]
1	[________]	[______]	[_______._]	[__.__]
2	[________]	[______]	[_______._]	[__.__]
Total	[________]	100.00	[_______._]	100.00

[No Receivable has been delinquent more than 90 days since origination.]

STATIC POOL INFORMATION

Static pool information material to this offering may be found at [website address].

Information provided through the Internet address above will not be deemed to be a part of this prospectus or the registration statement for the certificates offered hereby if it relates to any prior certificates pool or vintage formed before January 1, 2006, or with respect to the mortgage pool (if applicable) any period before January 1, 2006.

THE ORIGINATORS

General

[____], [____] and  [____] are the originators of the receivables with respect to approximately [___]%, [___]% and [___]%, respectively, of the receivables by aggregate principal balance as of the Cut-off Date, along with various other originators, none of which originated more than 10% of the receivables by aggregate principal balance as of the Cut-off Date (each, an “Originator”).

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

THE SERVICER

[____________], a [describe form of organization of the servicer], (the “Servicer”) will initially service the Receivables pursuant to a the Agreement.  

The Servicer will perform the functions of a third-party servicer of automobile and boat loans as an agent for their beneficial owner.  [These servicer functions will include:

•

collecting and posting all payments;

•

responding to obligor inquiries regarding the automobile and boat loans;

•

investigating delinquencies;

•

reporting tax information to obligors;

•

paying vehicle disposition costs with respect to defaulted accounts;

•

monitoring the collateral;

•

accounting for collections;

•

furnishing monthly and annual statements to the Issuing Entity with respect to distributions; and

•

generating federal income tax information. ]

 [Regulation AB Item 1108 compliant description of the Servicer.]

Delinquency Experience (Dollars in Thousands)
	At December 31,
	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]
	Number of Loans	Dollars	Percent	Number of Loans	Dollars	Percent	Number of Loans	Dollars	Percent
Principal Amount Outstanding1
Delinquencies2
30-59 Days
60-89 Days
90-119 Days
over 120 days
Total Delinquencies as a  Percentage of the Total Amount Outstanding

________________________

1.

Principal Amount Outstanding is the aggregate remaining principal balance of all Receivables serviced, net of unearned interest.

2.

The period of delinquency is based on the number of days scheduled payments are contractually past due.  Includes repossessions on hand which have not been charged-off.  A receivable is 30 days contractually past due if a scheduled payment has not been received by the subsequent calendar month’s scheduled payment date.

WEIGHTED AVERAGE LIFE OF THE CERTIFICATES

Prepayments on automotive and boat receivables can be measured relative to a prepayment standard or model.  The model used in this Prospectus Supplement, the Absolute Prepayment Model (“ABS”), represents an assumed rate of prepayment each month relative to the original number of receivables in a pool of receivables.  ABS further assumes that all the receivables are the same size and amortize at the same rate and that each receivable in each month of its life will either be paid as scheduled or be prepaid in full.  For example, in a pool of receivables originally containing 10,000 receivables, a 1% ABS rate means that 100 receivables prepay each month. ABS does not purport to be an historical description of prepayment experience or a prediction of the anticipated rate of prepayment of any pool of receivables, including the Receivables.

All the Receivables are prepayable at any time.  For this purpose the term “prepayments” includes prepayments by Obligors in full or in part, certain partial prepayments related to liquidations due to default, including rebates of extended warranty contract costs and insurance premiums, as well as receipts of proceeds from physical damage, credit life, theft and disability insurance policies and certain other Receivables, purchased or repurchased pursuant to the terms of the Agreement.  The rate of prepayments on the Receivables may be influenced by a variety of economic, social and other factors, including changes in interest rates and the fact that an Obligor generally may not sell or transfer the Financed Vehicle securing a Receivable without the consent of the secured party, which generally results in the repayment of the remaining principal balance of the Receivable.  In addition, under some circumstances, the Selle r is obligated to repurchase and the Servicer is obligated to purchase, Receivables pursuant to the Agreement as a result of uncured breaches of representations and warranties in the case of the Seller and uncured breaches of covenants in the case of the Servicer.  In addition, the Servicer has the option to purchase the Receivables when the aggregate principal balance of the Receivables is 10% or less of the Initial Pool Balance, at a purchase price equal to the sum of the Class A Principal Balance and the Class B Principal Balance plus accrued and unpaid interest.  Accordingly, under some circumstances it is likely that the Certificates will be repaid before the Final Scheduled Distribution Date set forth in this prospectus supplement under “Summary of Terms -- Final Scheduled Distribution Date.” Reinvestment risk associated with early payment of the Certificates will be borne exclusively by the Certificateholders.

The table captioned “Percent of Initial Class A and Class B Principal Balance at Various ABS Percentages” (the “ABS Table”) has been prepared on the basis of the characteristics of the Receivables.   The ABS Table assumes that

•

the Receivables prepay in full at the specified constant percentage of ABS monthly, with no defaults, losses or repurchases,

•

each scheduled monthly payment on the Receivables is made on the last day of each month and each month has 30 days,

•

distributions on the Certificates are made on each Distribution Date (and each such date is assumed to be the [   ]th day of each applicable month),

•

the balance in the Reserve Account on each Distribution Date is equal to the Specified Reserve Account Balance, and

•

the Servicer does not exercise its option to purchase the Receivables.   

The ABS Table sets forth the percent of the Initial Class A Principal Balance and the percent of the Initial Class B Principal Balance that would be outstanding after each of the Distribution Dates shown and the corresponding weighted average lives at various constant ABS percentages.

The ABS Table also assumes that the Receivables have been aggregated into six hypothetical pools with all of the Receivables within each pool having the following characteristics and that the level scheduled monthly payment for each of the six pools, which is based on its aggregate principal balance, weighted average APR, weighted average original term to maturity and weighted average remaining term to maturity as of the cutoff date, will be such that each pool will fully amortize by the end of its remaining term to maturity.

Pool	Remaining Term to Maturity Range (in months)	Aggregate Principal Balance	Weighted Average Contract Rate	Weighted Average Original Term to Maturity (in Months)	Weighted Average Remaining Term to Maturity (in Months)
1		$	%
2		$	%
3		$	%
4		$	%

The actual characteristics and performance of the Receivables will differ from the assumptions used in constructing the ABS Tables.  The assumptions used are hypothetical and have been provided only to give a general sense of how the principal cash flows might behave under varying prepayment scenarios.  For example, it is very unlikely that the Receivables will prepay at a constant level of ABS until maturity or that all of the Receivables will prepay at the same level of ABS.  Moreover, the diverse terms of Receivables within each of the hypothetical pools could produce slower or faster principal distributions than indicated in the ABS Table at the various constant percentages of ABS specified, even if the original and remaining terms to maturity of the Receivables are as assumed.  Any difference between assumptions and the actual characteristics and performance of the Receivables, or actual prepayment experience, will affec t the percentages of initial balances outstanding over time and the weighted average lives of the Class A Certificates and the Class B Certificates.

Percent of Initial Class Principal Balance at Various ABS Percentages
	Class A Certificates Assumed ABS Percentage1
Distribution Dates	[   ]%	[   ]%	[   ]%	[   ]%
Closing Date	100	100	100	100
[                        ]
[                        ]
[                        ]
Weighted Average Life (years)2

_______________________

1.

An asterisk “*” means a percent of initial Certificate principal balance of more than zero and less than 0.5%.

2.

The weighted average life of a Certificate is determined by (i) multiplying the amount of each principal payment of such Certificate by the number of years from the date of the issuance of such Certificate to the Distribution Date on which such principal payment is made, (ii) adding the results and (iii) dividing the sum by the initial principal balance of such Certificate.

The ABS Tables have been prepared based on the assumptions described above (including the assumptions regarding the characteristics and performance of the Receivables which will differ from the actual characteristics and performance thereof) and should be read in conjunction therewith.

Percent of Initial Certificate Balance at Various ABS Percentages
	Class B Certificates Assumed ABS Percentage
Distribution Dates	[   ]%	[   ]%	[   ]%	[   ]%
Closing Date	100	100	100	100
[                        ]
[                        ]
[                        ]
[                        ]

The ABS Tables have been prepared based on the assumptions described above (including the assumptions regarding the characteristics and performance of the Receivables which will differ from the actual characteristics and performance thereof) and should be read in conjunction therewith.

USE OF PROCEEDS

The net proceeds from the sale of the Certificates will be applied by the Depositor first, to deposit approximately $[    ] into the Reserve Account and second, the balance to purchase the Receivables and the other Trust Property from the Sponsor.

DESCRIPTION OF THE CERTIFICATES

The Certificates will be issued pursuant to the Agreement, substantially in the form filed as an exhibit to the Registration Statement.  The following information summarizes all material provisions of the Certificates and the Agreement.  The following summary supplements the description of the general terms and provisions of the Certificates of any given Series and the related Agreement set forth in the Prospectus, to which description reference is made by this prospectus supplement.

Overview of the Certificates

The Class A Certificates will be issued in an initial aggregate principal amount of $[                 ] (the “Initial Class A Principal Balance”) and the Class B Certificates will be issued in an initial aggregate principal amount of $[                 ] (the “Initial Class B Principal Balance”).  The Certificates will evidence fractional undivided interests in the assets of the Issuing Entity to be created pursuant to the Agreement.  The Class A Certificates will evidence in the aggregate an undivided ownership interest of approximately [       ]% of the Issuing Entity (the “Class A Percentage”) and the Class B Certificates will evidence in the aggregate an undivided ownership interest of approximately [   & nbsp;     ]% of the Issuing Entity (the “Class B Percentage”).

The Certificates will constitute Fixed Rate Securities, as this term is defined under “Certain Information Regarding the Securities — Fixed Rate Securities” in the Prospectus.  Interest on the outstanding principal amount of each class of Certificates will accrue at the fixed rate per annum specified for that class on the cover page of this prospectus supplement (each rate, a “Pass-Through Rate”).  Interest on the outstanding principal amount of each class of Certificates will accrue at the related Pass-Through Rate from and including [                 ], in the case of the first Distribution Date, or from and including the most recent Distribution Date on which interest has been paid to but excluding the following Distribution Date (each representing an “Interest Period”).  Interest on the Certificates will be calcul ated on the basis of a 360 day year consisting of twelve 30 day months.  Distributions of principal and interest will be made on the [  ]th day of each month, or if the [____]th day is not a business day on the next succeeding Business Day (each, a “Distribution Date”), commencing [                 ].  Distributions on a Distribution Date will be made to Certificateholders of record on the Business Day prior to the applicable Distribution Date, or if definitive Certificates have been issued, the last day of the month prior to a Distribution Date (each date, a “Record Date”).  A “Business Day” is a day other than a Saturday, a Sunday or a day on which banking institutions or trust companies in New York, New York, [              ] or [              ] are authorized by law, regulation, executive order or governmental decree to be closed.

The Certificates will be available in book-entry form through the facilities of The Depository Trust Company in the United States and Clearstream, Luxembourg and the Euroclear System in Europe.  See “Certain Information Regarding the Securities—Book-Entry Registration” and “—Definitive Securities” in the Prospectus and Annex I to the Prospectus.

The Pooling and Servicing Agreement

Sale and Assignment of the Receivables

Information regarding the conveyance of the Receivables by the Sponsor to the Depositor and by the Depositor to the Trust on the Closing Date pursuant to the Agreement is set forth in the Prospectus under “Description of the Transfer and Servicing Agreements -- Sale and Assignment of Receivables.”

Accounts

The Servicer will establish one or more segregated accounts (the “Collection Account”), in the name of the Trustee on behalf of the Trust and the Certificateholders, into which all payments made on or with respect to the Receivables will be deposited.  The Servicer will also establish a segregated account (the “Class A Distribution Account”), in the name of the Trustee on behalf of the Trust and the Class A Certificateholders, and a segregated account (the “Class B Distribution Account”), in the name of the Trustee on behalf of the Trust and the Class B Certificateholders, from which all distributions with respect to the Class A Certificates and the Class B Certificates, respectively, will be made.  The Servicer will establish a segregated account (the “Reserve Account”), in the name of [        ], as collateral agent, on behalf of the Certificateholders.   The Servicer will establish an additional account (the “Payahead Account”), in the name of the Trustee on behalf of the Trust and the Certificateholders, into which early payments by or on behalf of Obligors on Actuarial Receivables will be deposited until the time the payment becomes due.  Until the time payments are transferred from the Payahead Account to the Collection Account, they will not constitute collected interest or collected principal and will not be available for distribution to the Certificateholders.  The Collection Account, the Class A Distribution Account, the Class B Distribution Account, the Payahead Account and the Reserve Account are sometimes referred to as the “Trust Accounts.”  The Reserve Account will be maintained for the benefit of the Certificateholders, but will not be an asset of the Trust.

Servicing Compensation

The Servicer will be entitled compensated as described under “—Fees and Expenses of the Trust Fund”, which will be paid in the order of priority described herein.  See “Description of the Transfer and Servicing Agreement—Servicing Compensation and Payment of Expenses” in the Prospectus.

Distributions on Certificates

Deposits to the Collection Account.  On or before the earlier of the [tenth] Business Day of the month in which a Distribution Date occurs and the [fourth] Business Day preceding that Distribution Date (the “Determination Date”), the Servicer will provide the Trustee with information with respect to the preceding Collection Period, including the aggregate amounts of the following:

•

Collections on the Receivables,

•

Advances to be remitted by the Servicer,

•

Liquidated Receivables, if any, and

•

Purchase Amounts of the Receivables to be repurchased by the Sponsor or purchased by the Servicer with respect to the Distribution Date.

On or before the Business Day preceding each Distribution Date, the Servicer will cause the Interest Collections and the Principal Collections for the Distribution Date to be deposited into the Collection Account.

“Collections” for any Distribution Date will equal the sum of Interest Collections and Principal Collections for the related Distribution Date.

“Interest Collections” for any Distribution Date will equal the sum of the following amounts with respect to any Distribution Date, computed, with respect to Simple Interest Receivables, in accordance with the simple interest method, and, with respect to Actuarial Receivables, in accordance with the actuarial method:

•

that portion of all collections on the Receivables allocable to interest in respect of the preceding Collection Period, including with respect to Actuarial Receivables, amounts withdrawn from the Payahead Account and allocable to interest and excluding amounts deposited into the Payahead Account and allocable to interest, in each case in respect of the related Collection Period;

•

all proceeds, other than any proceeds from any Dealer commission (“Liquidation Proceeds”) of the liquidation of Liquidated Receivables, net of expenses incurred by the Servicer in connection with the liquidation and any amounts required by law to be remitted to the Obligor on the Liquidated Receivables, to the extent attributable to interest due on the Liquidated Receivables, which became Liquidated Receivables during the Collection Period in accordance with the Servicer’s customary servicing procedures;

•

the Purchase Amount of each Receivable that was repurchased by the Sponsor or purchased by the Servicer during the preceding Collection Period to the extent attributable to accrued interest on that Receivable;

•

all monies collected, from whatever source, other than any proceeds from any Dealer commission, in respect to Liquidated Receivables during any Collection Period following the Collection Period in which the Receivable was written off, net of the sum of any amounts expended by the Servicer for the account of the Obligor and any amounts required by law to be remitted to the Obligor (“Recoveries”); and

•

all Advances with respect to interest for the related Distribution Date.

In calculating the Interest Collections, all payments and proceeds, including Liquidation Proceeds, of any Receivables repurchased by the Sponsor or purchased by the Servicer the Purchase Amount of which has been included in the Interest Collections on a prior Distribution Date will be excluded.

“Principal Collections” for any Distribution Date will equal the sum of the following amounts with respect to any Distribution Date, computed, with respect to Simple Interest Receivables, in accordance with the simple interest method, and with respect to Actuarial Receivables, in accordance with the actuarial method:

•

that portion of all collections on the Receivables allocable to principal in respect of the preceding Collection Period, without regard to any extensions or modifications effected after the Cutoff Date, other than with respect to any extensions or modifications in connection with Cram Down Losses during the related Collection Period, including with respect to Actuarial Receivables, amounts withdrawn from the Payahead Account and allocable to principal and excluding amounts deposited into the Payahead Account and allocable to principal, in each case in respect of the related Collection Period;

•

Liquidation Proceeds attributable to the principal amount of Receivables which became Liquidated Receivables during the preceding Collection Period in accordance with the Servicer’s customary servicing procedures with respect to the Liquidated Receivables;

•

all Advances made by the Servicer of principal due on the Actuarial Receivables in respect of the preceding Collection Period;

•

to the extent attributable to principal, the Purchase Amount of each Receivable repurchased by the Sponsor or purchased by the Servicer during the preceding Collection Period; and

•

partial prepayments on Receivables in respect of the preceding Collection Period relating to refunds of extended service contracts, or of physical damage, credit life, credit accident or health insurance premium, disability insurance policy premiums, but only if these costs or premiums were financed by the respective Obligor and only to the extent not included in the first bullet point above.

In calculating the Principal Collections, all payments and proceeds, including Liquidation Proceeds, of any Receivables repurchased by the Sponsor or purchased by the Servicer the Purchase Amount of which has been included in the Principal Collections on a prior Distribution Date will be excluded.

Withdrawals from the Payahead Account.  On or before the Business Day preceding each Distribution Date, the Servicer will or will cause the Trustee to (x) deposit into the Collection Account in immediately available funds, the portion of Payaheads constituting scheduled payments on Actuarial Receivables or that are to be applied to prepay Actuarial Receivables in full and (y) distribute to the Depositor, in immediately available funds, all investment earnings on funds in the Payahead Account with respect to the preceding Collection Period.  

Monthly Withdrawals from the Collection Account.  Except as set forth under “—Collections on Actuarial Receivables” below, on each Distribution Date, the Servicer shall instruct the Trustee to withdraw from the Collection Account and deposit in the Payahead Account in immediately available funds, the aggregate Payaheads collected during the preceding Collection Period.  On each Distribution Date, the Servicer shall calculate the amounts set forth below and shall instruct the Trustee to make the following deposits and distributions, after payment to the Servicer from the Collection Account of amounts in reimbursement of Advances previously made by the Servicer (as described below under “—Advances”), to the extent of Interest Collections (and, in the case of shortfalls occurring under clause (2) below in the Class A Interest Distribution, the Class B Percentage of Principal Collections to the extent o f such shortfalls):

(1)  

to the Servicer, the Servicing Fee and if the Servicer is an entity other than [        ], or [        ] or one of their affiliates, the Non-Affiliated Servicing Fee;

(2)

to the Class A Distribution Account, after the application of clause (1), the Class A Interest Distribution; and

(3)

to the Class B Distribution Account, after the application of clauses (1) and (2), the Class B Interest Distribution.

On each Distribution Date, the Servicer shall calculate the amounts set forth below and shall instruct the Trustee to make the following deposits and distributions, to the extent of Principal Collections and Interest Collections remaining after the application of clauses (1), (2) and (3) above:

(1)

to the Class A Distribution Account, the Class A Principal Distribution;

(2)

to the Class B Distribution Account, after the application of clause (4), the Class B Principal Distribution; and

(3)

to the Reserve Account, any amounts remaining after the application of clauses (1) through (5); these amounts to be distributed as described below under “Credit Enhancement—Reserve Account.”

To the extent necessary to satisfy the distributions described in clauses (1) through (5) above, the Servicer shall calculate the amounts set forth below and shall instruct the Trustee to withdraw from the Reserve Account and deposit in the Class A Distribution Account or the Class B Distribution Account as described below in the following order of priority on each Distribution Date:

(1)

an amount equal to the excess of the Class A Interest Distribution over the sum of Interest Collections (net of amounts paid to the Servicer pursuant to clause (1) of the preceding paragraph) and the Class B Percentage of Principal Collections will be deposited into the Class A Distribution Account;

(2)

an amount equal to the excess of the Class B Interest Distribution over the portion of Interest Collections (net of amounts paid to the Servicer pursuant to clause (1) of the preceding paragraph) remaining after the distribution of the Class A Interest Distribution will be deposited into the Class B Distribution Account;

(3)

an amount equal to the excess of the Class A Principal Distribution over the portion of Principal Collections and Interest Collections (net of amounts paid to the Servicer pursuant to clause (1) of the preceding paragraph) remaining after the distribution of the Class A Interest Distribution and the Class B Interest Distribution will be deposited into the Class A Distribution Account; and

(4)

an amount equal to the excess of the Class B Principal Distribution over the portion of Principal Collections and Interest Collections remaining (net of amounts paid to the Servicer pursuant to clause (1) of the preceding paragraph) after the distribution of the Class A Interest Distribution, the Class B Interest Distribution and the Class A Principal Distribution will be deposited into the Class B Distribution Account.

On each Distribution Date, all amounts on deposit in the Class A Distribution Account will be distributed to the Class A Certificateholders and all amounts on deposit in the Class B Distribution Account will be distributed to the Class B Certificateholders.

Fees and Expenses of the Trust Fund

In consideration of their duties on behalf of the Trust Fund, the Servicer, the Trustee and the Collateral Agent will receive from the assets of the Trust Fund certain fees as set forth in the following table:

Fee Payable to:	Frequency of Payment:	Amount of Fee:	How and When Fee Is Paid:
Servicer	[monthly]	[(a) A monthly fee paid to the Servicer out of interest collections received from the Receivables in an amount equal to the product of one-twelfth of [    ]% per annum (the “Servicing Fee Rate”) for so long as [               ] or an affiliate thereof is the Servicer, and [    ]% per annum (the “Non-Affiliated Servicing Fee Rate”) if [               ] or an affiliate thereof is no longer the Servicer  and the Pool Balance as of the first day of the Collection Period.] [(b) any late fees, prepayment charges and other administrative fees or similar charges allowed by applicable law with respect to the Receivables, and will be entitled to reimbursement from the Issuing Entity for various expenses.]	[Deducted by the Servicer from interest collections in respect of each Receivable serviced by the Servicer, before payment of any amounts to certificateholders.]
Trustee	[monthly]	[A monthly fee paid to the Trustee by the Servicer out of the Servicer’s fee.]	[Paid by the Servicer before payment of any amounts to certificateholders.]
Collateral Agent	[monthly]	[A monthly fee paid to the Collateral Agent by the Servicer out of the Servicer’s fee.]	[Paid by the Servicer before payment of any amounts to certificateholders.]
[Other Applicable Party]	[_____]	[_____]	[_____]

[[None of the fees set forth in table above may be changed without amendment of the Agreement as described under “The Agreement—Amendment”.]]

[[Expenses of the Servicer, the Trustee and the Collateral Agent will be reimbursed before payments are made on the certificates.]]

Example of Distributions

The following sets forth an example of collection of payments from Obligors on the Receivables, transfer of amounts among the Trust Accounts, and distributions on the certificates for the Distribution Date in [_______]:

On or before the earlier of the [tenth] business day of the month in which a Distribution Date occurs and the [fourth] business day preceding such Distribution Date	Determination Date	The Servicer will provide the Trustee with information with respect to the preceding Collection Period, including the aggregate amounts of Collections on the Receivables, Advances to be remitted by the Servicer, Liquidated Receivables, if any, and Purchase Amounts of the Receivables to be repurchased by the Sponsor or purchased by the Servicer with respect to the related Distribution Date.
On or before the business day preceding each Distribution Date	[Servicer Remittance Date]	The Servicer will or will cause the Trustee to (x) deposit into the Collection Account in immediately available funds, the portion of Payaheads constituting scheduled payments on Actuarial Receivables or that are to be applied to prepay Actuarial Receivables in full and (y) distribute to the Depositor, in immediately available funds, all investment earnings on funds in the Payahead Account with respect to the preceding Collection Period. The Servicer will cause the Interest Collections and Principal Collections for such Distribution Date to be deposited into the Collection Account.
The Business Day immediately prior to a Distribution Date or, if definitive certificates are issued, the last day of the month prior to a Distribution Date.	Record Date:	Distributions will be made to certificateholders of record for all applicable classes as of the Record Date.
The [__]th day of each month (or if the [__]h day is not a business day, the next business day),	Distribution Date:	The Servicer shall calculate the amounts set forth above under “—Distributions on the Certificates—Monthly Withdrawals from the Collection Account” and shall instruct the Trustee to make the deposits and distributions described therein.

Succeeding months follow the same pattern.

Related Definitions

For purposes hereof, the following terms have the following meanings:

 “Class A Interest Carryover Shortfall” means, with respect to any Distribution Date, the excess of Class A Monthly Interest for the preceding Distribution Date and any outstanding Class A Interest Carryover Shortfall on the preceding Distribution Date, over the amount in respect of interest that is actually deposited in the Class A Distribution Account on the preceding Distribution Date, plus 30 days of interest on that excess, to the extent permitted by law, at the Class A Pass-Through Rate.

“Class A Interest Distribution” means, with respect to any Distribution Date, the sum of Class A Monthly Interest for the Distribution Date and the Class A Interest Carryover Shortfall for the Distribution Date.

“Class A Monthly Interest” means, with respect to any Distribution Date, the product of (x) one-twelfth of the Class A Pass-Through Rate and (y) the Class A Principal Balance as of the immediately preceding Distribution Date, after giving effect to any payments made on that Distribution Date, or, in the case of the first Distribution Date, the Initial Class A Principal Balance.

“Class A Monthly Principal” means, with respect to any Distribution Date, the Class A Percentage of Principal Collections for the Distribution Date plus the sum of (1) the Class A Percentage of Realized Losses with respect to Receivables which became Liquidated Receivables during the related Collection Period and (2) the Class A Percentage of the aggregate amount of Cram Down Losses during the related Collection Period.

“Class A Pass-Through Rate” means, with respect to the Class A Certificates, [______]% per annum.

“Class A Principal Balance” equals the Initial Class A Principal Balance, as reduced by all amounts allocable to principal on the Class A Certificates previously distributed to Class A Certificateholders.

“Class A Principal Carryover Shortfall” means, with respect to any Distribution Date, the excess of Class A Monthly Principal for the preceding Distribution Date and any outstanding Class A Principal Carryover Shortfall on the preceding Distribution Date over the amount in respect of principal that is actually deposited in the Class A Distribution Account on the preceding Distribution Date.

“Class A Principal Distribution” means, with respect to any Distribution Date, the sum of Class A Monthly Principal for that Distribution Date and the Class A Principal Carryover Shortfall for that Distribution Date; provided, however, that the Class A Principal Distribution shall not exceed the Class A Principal Balance immediately prior to that Distribution Date.  In addition, on the Final Scheduled Distribution Date, the principal required to be deposited in the Class A Distribution Account will include the lesser of:

(a)

any principal due and remaining unpaid on each Receivable in the Trust as of the Final Scheduled Maturity Date; or

(b)

the portion of the amount required to be deposited under clause (a) above that is necessary, after giving effect to the other amounts to be deposited in the Class A Distribution Account on the applicable Distribution Date and allocable to principal, to reduce the Class A Principal Balance to zero.

“Class B Interest Carryover Shortfall” means, with respect to any Distribution Date, the excess of Class B Monthly Interest for the preceding Distribution Date and any outstanding Class B Interest Carryover Shortfall on the preceding Distribution Date, over the amount in respect of interest that is actually deposited in the Class B Distribution Account on the preceding Distribution Date, plus 30 days of interest on this excess, to the extent permitted by law, at the Class B Pass-Through Rate.

“Class B Interest Distribution” means, with respect to any Distribution Date, the sum of Class B Monthly Interest for that Distribution Date and the Class B Interest Carryover Shortfall for that Distribution Date.

“Class B Monthly Interest” means, with respect to any Distribution Date, the product of (x) one-twelfth of the Class B Pass-Through Rate and (y) the Class B Principal Balance as of the immediately preceding Distribution Date, after giving effect to any payments made on that Distribution Date, or, in the case of the first Distribution Date, the Initial Class B Principal Balance.

“Class B Monthly Principal” means, with respect to any Distribution Date, the Class B Percentage of Principal Collections for that Distribution Date plus the sum of (1) the Class B Percentage of Realized Losses with respect to Receivables which became Liquidated Receivables during the related Collection Period and (2) the Class B Percentage of the aggregate amount of Cram Down Losses during the related Collection Period.

“Class B Pass-Through Rate” means, with respect to the Class B Certificates, [______]% per annum.

“Class B Principal Balance” equals the Initial Class B Principal Balance, as reduced by all amounts allocable to principal on the Class B Certificates previously distributed to Class B Certificateholders.

“Class B Principal Carryover Shortfall” means, with respect to any Distribution Date, the excess of Class B Monthly Principal for the preceding Distribution Date and any outstanding Class B Principal Carryover Shortfall on the preceding Distribution Date over the amount in respect of principal that is actually deposited in the Class B Distribution Account on the preceding Distribution Date.

“Class B Principal Distribution” means, with respect to any Distribution Date, the sum of Class B Monthly Principal for that Distribution Date and the Class B Principal Carryover Shortfall for that Distribution Date; provided, however, that the Class B Principal Distribution shall not exceed the Class B Principal Balance immediately prior to that Distribution Date.  In addition, on the Final Scheduled Distribution Date, the principal required to be distributed to Class B Certificateholders will include the lesser of:

(a)

any principal due and remaining unpaid on each Receivable in the Trust as of the Final Scheduled Maturity Date; or

(b)

the portion of the amount required to be deposited under clause (a) above that is necessary, after giving effect to the other amounts to be deposited in the Class B Distribution Account on the Distribution Date and allocable to principal, to reduce the Class B Principal Balance to zero, and, in the case of clauses (a) and (b), remaining after any required distribution of the amount described in clause (a) to the Class A Distribution Account.

“Cram Down Loss” means, with respect to a Receivable if a court of appropriate jurisdiction in a bankruptcy or insolvency proceeding shall have issued an order reducing the amount owed on the Receivable or otherwise modifying or restructuring the scheduled payments to be made on the Receivable, an amount equal to:

(1)

the excess of the principal balance of the Receivable immediately prior to the court order over the principal balance of the Receivable as so reduced; and

(2)

if the issuing court shall have issued an order reducing the effective rate of interest on the Receivable, the net present value, using as the discount rate the higher of the APR on the Receivable or the rate of interest, if any, specified by the court in the order, of the scheduled payments as so modified or restructured.

A “Cram Down Loss” shall be deemed to have occurred on the date of issuance of the court order.

 “Liquidated Receivables” means, Receivables (x) which have been liquidated by the Servicer through the sale of the related Financed Vehicle, (y) as to which all or a portion representing 10% or more of a scheduled payment due is 120 or more days delinquent or (z) with respect to which proceeds have been received which, in the Servicer’s judgment, constitute the final amounts recoverable in respect of such Receivable.  A Receivable first becomes a Liquidated Receivable upon the earliest to occur of (x), (y) or (z) above.

The “Pool Balance” at any time will represent the aggregate principal balance of the Receivables at the end of the preceding Collection Period, after giving effect to all payments, other than Payaheads, received from Obligors and Purchase Amounts to be remitted by the Servicer and the Sponsor, as the case may be, all for the related Collection Period, all losses realized on Receivables that became Liquidated Receivables during the related Collection Period and all Cram Down Losses for the related Collection Period.

“Realized Losses” means, for any period, the excess of the principal balance of a Liquidated Receivable over Liquidation Proceeds to the extent allocable to principal.

Advances

With respect to any Distribution Date, the Servicer may, in its sole discretion, make a payment (an “Advance”) with respect to each Receivable, other than a Liquidated Receivable, equal to (A) with respect to Simple Interest Receivables, the excess, if any, of (x) the product of the principal balance of such Receivable as of the last day of the related Collection Period and one-twelfth of its APR, over (y) the interest actually received by the Servicer with respect to such Receivable from the Obligor or from the payment of the Repurchase Amount during or with respect to such Collection Period and (B) with respect to Actuarial Receivables, the scheduled payment of principal and interest due during the related Collection Period but not received.  The Servicer may elect not to make any Advance with respect to a Receivable to the extent that the Servicer, in its sole discretion, determines that such Advance is not recoverable from sub sequent payments on such Receivable or from funds in the Reserve Account.

With respect to Simple Interest Receivables, to the extent that the amount set forth in clause (y) above plus amounts withdrawn from the Reserve Account during or with respect to the related Collection Period and allocable to interest with respect to a Simple Interest Receivable is greater than the amount set forth in clause (x) above with respect to a Simple Interest Receivable, this amount shall be distributed to the Servicer on the related Distribution Date to reimburse the Servicer for previous unreimbursed Advances with respect to that Simple Interest Receivable.  Before a Simple Interest Receivable becomes a Liquidated Receivable, this reimbursement will only be from accrued interest due from the Obligor under that Receivable.  Collections on an Actuarial Receivable made during a Collection Period shall be applied first to repay any unreimbursed Advances on that Actuarial Receivable.

In addition, on the Business Day before each Distribution Date the Trustee shall withdraw from the Reserve Account an amount equal to the amount of any outstanding Advances on Liquidated Receivables to the extent not recovered from Liquidation Proceeds.

The Servicer will deposit all Advances with respect to any Distribution Date into the Collection Account on the Business Day before each Distribution Date.

Collections on Actuarial Receivables

To the extent that collections on an Actuarial Receivable during a Collection Period exceed the outstanding Advances on the Actuarial Receivable, the collections shall then first be applied to the scheduled payment on that Receivable.  If any collections remaining after the scheduled payment is made are insufficient to prepay the Actuarial Receivable in full, then, the remaining collections (the “Payaheads”) shall be transferred to and kept in the Payahead Account, until a later Collection Period where the collections may be transferred to the Collection Account and applied either to the scheduled payment or to prepay the Actuarial Receivable in full.  The scheduled payment with respect to an Actuarial Receivable is that portion of the payment required to be made by the related Obligor during each calendar month sufficient to amortize the principal balance of that Actuarial Receivable under the actuarial method over the term of the Actuarial Receivable and to provide interest at the APR of that Actuarial Receivable.  Notwithstanding the foregoing, so long as the Servicer is not required to remit collections to the Collection Account within two Business Days of receipt, the Servicer will not be required to deposit Payaheads to the Payahead Account but shall be required to deposit Payaheads to the Collection Account as described above.

Credit Enhancement

Subordination of the Class B Certificates.  The rights of the Class B Certificateholders to receive distributions with respect to the Receivables will be subordinated to the rights of the Class A Certificateholders to the extent described below.  This subordination is intended to enhance the likelihood of timely receipt by Class A Certificateholders of the full amount of interest and principal required to be paid to them, and to afford such Class A Certificateholders limited protection against losses in respect of the Receivables.

No distribution will be made to the Class B Certificateholders on any Distribution Date in respect of interest until the full amount of interest on the Class A Certificates payable on such Distribution Date has been distributed to the Class A Certificateholders.  No distribution will be made to the Class B Certificateholders on any Distribution Date in respect of principal until the full amount of interest on and principal of the Class A Certificates and interest on the Class B Certificates payable on such Distribution Date has been distributed to the Class A Certificateholders and the Class B Certificateholders, respectively.  Distributions of interest on the Class B Certificates, however, to the extent of collections on or in respect of the Receivables allocable to interest and certain available amounts on deposit in the Reserve Account, will not be subordinated to the payment of principal of the Class A Certificates.

Reserve Account.  In the event of delinquencies or losses on the Receivables, the protection afforded to the Class A Certificateholders will be effected both by the preferential right of the Class A Certificateholders to receive current distributions with respect to the Receivables, to the extent described above under “-- Subordination of the Class B Certificates,” prior to any distribution being made on a Distribution Date to the Class B Certificateholders, and to receive amounts on deposit in the Reserve Account.  Amounts on deposit in the Reserve Account will also be generally available to cover shortfalls in required distributions to the Class B Certificateholders, in respect of interest, after payment of interest on the Class A Certificates and, in respect of principal, after payment of interest on and principal of the Class A Certificates and interest on the Class B Certificates.  The Reserve Account will no t be a part of or otherwise includible in the Trust Fund and will be a segregated trust account held by the Collateral Agent for the benefit of the Certificateholders.

On the Closing Date, the Depositor will deposit $[                 ] ([                 ]% of the Initial Pool Balance) (the “Reserve Account Initial Deposit”) into the Reserve Account.  The Reserve Account Initial Deposit will be augmented on each Distribution Date by deposit in the Reserve Account of Collections remaining after distribution of the Servicing Fee and amounts to be paid to Class A Certificateholders and Class B Certificateholders as described above under “—Distributions on Certificates.”  To the extent that amounts on deposit in the Reserve Account after distributions on a Distribution Date exceed the Specified Reserve Account Balance, such excess will be released first, to the Servicer (if the Servicer is [         ]), in an amount equal to the Non-Affiliated Servicing Fee, together with any portion of the Non-Affiliated Servicing Fee that remains unpaid from prior Distribution Dates, and second, to the Depositor.  Upon any such release to the Depositor of amounts from the Reserve Account, neither the Class A Certificateholders nor the Class B Certificateholders will have any further rights in, or claims to, such amounts.

“Specified Reserve Account Balance” with respect to any Distribution Date will equal [                 ]% of the Pool Balance as of the last day of the related Collection Period, but in any event will not be less than the lesser of:

(1)

[                 ] ([                 ]% of the Initial Pool Balance), and

(2)

the Pool Balance;

provided, that if the Average Net Loss Ratio exceeds [                 ]% or the Average Delinquency Percentage exceeds [                 ]% on a Distribution Date, beginning with the [                 ] Distribution Date, the Specified Reserve Account Balance for the Distribution Date shall be calculated using a percentage of [                 ]%.

“Aggregate Net Losses” means, for any Distribution Date, the amount equal to (1) the aggregate Principal Balance of all Receivables that became Liquidated Receivables during the related Collection Period minus (2) the Liquidation Proceeds allocable to principal collected during the related Collection Period with respect to any Liquidated Receivables.

“Average Delinquency Percentage” means, for any Distribution Date, the average of the Delinquency Percentages for the Distribution Date and the preceding two Distribution Dates.

“Average Net Loss Ratio” means, for any Distribution Date, the average of the Net Loss Ratios for the Distribution Date and the preceding two Distribution Dates.

“Delinquency Percentage” means, for any Distribution Date, the sum of the outstanding Principal Balances of all Receivables which are 60 days or more delinquent, including Receivables relating to Financed Vehicles that have been repossessed, as of the close of business on the last day of the Collection Period immediately preceding the Distribution Date, determined in accordance with the Servicer’s normal practices, this sum expressed as a percentage of the Pool Balance as of the close of business on the last day of the related Collection Period.

“Liquidation Proceeds” means with respect to any Receivable,

(1)

insurance proceeds,

(2)

the monies collected during a Collection Period from whatever source on a Liquidated Receivable and

(3)

proceeds of a Financed Vehicle sold after repossession, in each case, net of any liquidation expenses and payments required by law to be remitted to the Obligor.

“Net Loss Ratio” means, for any Distribution Date, an amount expressed as a percentage, equal to the product of (A) twelve and (B) (1) the Aggregate Net Losses for the Distribution Date, divided by (2) the average of the Pool Balances on each of the first day of the related Collection Period and the last day of the related Collection Period.

The Specified Reserve Account Balance may be reduced to a lesser amount; provided, that the reduction may not adversely affect any rating of the Certificates by a Rating Agency.

In no circumstances will the Depositor be required to deposit any amounts in the Reserve Account other than the Reserve Account Initial Deposit to be made on the Closing Date.

Amounts held from time to time in the Reserve Account will continue to be held for the benefit of the Certificateholders and may be invested in Eligible Investments.  Any loss on an investment will be charged to the Reserve Account.  Any investment earnings, net of losses, will be paid to the Depositor.

The time necessary for the Reserve Account to reach and maintain the Specified Reserve Account Balance at any time after the date of issuance of the Certificates will be affected by the delinquency, credit loss and repossession and prepayment experience of the Receivables and, therefore, cannot be accurately predicted.

If on any Distribution Date the protection afforded the Class A Certificates by the Class B Certificates and by the Reserve Account is exhausted, the Class A Certificateholders will directly bear the risks associated with ownership of the Receivables.  If on any Distribution Date amounts on deposit in the Reserve Account have been depleted, the protection afforded the Class B Certificates by the Reserve Account will be exhausted and the Class B Certificateholders will directly bear the risks associated with ownership of the Receivables.

None of the Class B Certificateholders, the Trustee, the Servicer, the Sponsor or the Depositor will be required to refund any amounts properly distributed or paid to them, whether or not there are sufficient funds on any subsequent Distribution Date to make full distributions to the Class A Certificateholders.

Termination

The Servicer will be permitted, at its option, in the event that the Pool Balance as of the last day of a Collection Period has declined to 10% or less of the Initial Pool Balance, to purchase from the Issuing Entity, on any Distribution Date occurring in a subsequent Collection Period, all remaining Receivables in the Trust Fund at a purchase price equal to the sum of the Class A Principal Balance and the Class B Principal Balance plus accrued and unpaid interest at the applicable Pass-Through Rates.  The exercise of this right will effect an early retirement of the Certificates.  See “Description of the Transfer and Servicing Agreements -- Termination” in the Prospectus.

Duties of the Trustee

The Trustee will make no representations as to the validity or sufficiency of the Agreement, the Certificates, other than the execution and authentication of the Certificates, the Receivables or any related documents, and will not be accountable for the use or application by the Depositor or the Servicer of any funds paid to the Depositor or the Servicer in respect of the Certificates or the Receivables, or the investment of any monies by the Servicer before the monies are deposited into the Collection Account.  The Trustee will not independently verify the Receivables.  If no Event of Servicing Termination (as described in the Prospectus) has occurred and is continuing, the Trustee will be required to perform only those duties specifically required of it under the Agreement.  Generally, those duties are limited to the receipt of the various certificates, reports or other instruments required to be furnished to the Trustee under t he Agreement, in which case it will only be required to examine them to determine whether they conform to the requirements of the Agreement.  The Trustee will not be charged with knowledge of a failure by the Servicer to perform its duties under the Agreement which failure constitutes an Event of Servicing Termination unless a responsible officer of the Trustee obtains actual knowledge of the failure as specified in the Agreement.

The Trustee will be under no obligation to exercise any of the rights or powers vested in it by the Agreement or to make any investigation of matters arising under the Agreement or to institute, conduct or defend any litigation under the Agreement or in relation to the Agreement at the request, order or direction of any of the Certificateholders, unless the Certificateholders have offered the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities which may be incurred in or by an exercise of the Trustee’s rights or powers or an investigation.  No Class A Certificateholder or Class B Certificateholder will have any right under the Agreement to institute any proceeding with respect to the Agreement, unless the holder has given the Trustee written notice of default and unless, with respect to the Class A Certificates, the holders of Class A Certificates evidencing not less than a majority o f the aggregate outstanding principal balance of the Class A Certificates or, with respect to the Class B Certificates, the holders of Class B Certificates evidencing not less than a majority of the aggregate outstanding principal balance of the Class B Certificates, have made a written request to the Trustee to institute a proceeding in its own name as Trustee under the Agreement and have offered to the Trustee reasonable indemnity, and the Trustee for 30 days has neglected or refused to institute any proceedings.

The Trustee

[        ], a national banking association, will act as Trustee under the Agreement.  The Trustee, in its individual capacity or otherwise, and any of its affiliates, may hold Certificates in their own names or as pledgee.  In addition, for the purpose of meeting the legal requirements of some jurisdictions, the Servicer and the Trustee, acting jointly, or in some instances, the Trustee, acting alone, will have the power to appoint co-trustees or separate trustees of all or any part of the Trust.  In the event of an appointment, all rights, powers, duties and obligations conferred or imposed upon the Trustee by the Agreement will be conferred or imposed upon the Trustee and the co-trustee or separate trustee jointly, or, in any jurisdiction where the Trustee is incompetent or unqualified to perform certain acts, singly upon the co-trustee or separate trustee who shall exercise and perform these r ights, powers, duties and obligations solely at the direction of the Trustee.

The Trustee may resign at any time, in which event the Servicer will be obligated to appoint a successor trustee.  The Servicer may also remove the Trustee if the Trustee ceases to be eligible to serve, becomes legally unable to act, is adjudged insolvent or is placed in receivership or similar proceedings.  In these circumstances, the Servicer will be obligated to appoint a successor trustee.  However, any resignation or removal of the Trustee and appointment of a successor trustee will not become effective until acceptance of the appointment by the successor trustee.

The Agreement will provide that the Servicer will pay the Trustee’s fees.  The Agreement will also provide that the Trustee will be entitled to indemnification by the Depositor for, and will be held harmless against, any loss, liability or expense incurred by the Trustee not resulting from the Trustee’s own willful misfeasance, bad faith or negligence.  Indemnification will be unavailable to the Trustee to the extent that any loss, liability or expense results from a breach of any of the Trustee’s representations or warranties set forth in the Agreement, and for any tax, other than those for which the Depositor or the Servicer is required to indemnify the Trustee.

The Trustee’s Corporate Trust Office is located at [                 ].  The Depositor, the Servicer, the Seller and their respective affiliates may have other banking relationships with the Trustee and its affiliates in the ordinary course of their business.

In the Agreement, [        ] will agree to perform certain bond administration, distribution obligations and custodial functions on behalf of the Trustee and to act as successor servicer if [        ] is removed as servicer.  In performing these functions, [        ] will be entitled to all of the rights, powers and indemnities afforded to the Trustee under the Agreement.

The Collateral Agent

[        ], a national banking association, will act as the Collateral Agent under the Agreement.

[Regulation AB Item 1108 compliant description of Collateral Agent].

[THE INSURER]

[General]

[[_______________] (the “Insurer” or “[_______________]”) is a monoline financial guaranty insurance company incorporated under the laws of the State of New York.  The Insurer is currently licensed to do insurance business in, and is subject to the insurance regulation and supervision by, all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Singapore.]

[The Insurer is an indirect wholly owned subsidiary of [_______________], a [___________] (“[_______________]”).  Through its subsidiaries, [_______________] is a leading provider of insurance and reinsurance coverages and financial products and services to industrial, commercial and professional service firms, insurance companies and other enterprises on a worldwide basis.  The ordinary shares of [_______________] are publicly traded in the United States and listed on the New York Stock Exchange (NYSE: [_________]).  [_______________] is not obligated to pay the debts of or claims against the Insurer.]

[Reinsurance]

[The Insurer has entered into a facultative quota share reinsurance agreement with [____________] (“[_______________]”), an insurance company organized under the laws of [______________], and an affiliate of the Insurer.  Pursuant to this reinsurance agreement, the Insurer expects to cede up to 90% of its business to [_______________].  The Insurer may also cede reinsurance to third parties on a transaction-specific basis, which cessions may be any or a combination of quota share, first loss or excess of loss.  Such reinsurance is used by the Insurer as a risk management device and to comply with statutory and rating agency requirements and does not alter or limit the Insurer's obligations under any financial guaranty insurance policy.  With respect to any transaction insured by [_______________], the percentage of risk ceded to [_______________] may be less than 90% depending on certain factors including, without l imitation, whether [_______________] has obtained third party reinsurance covering the risk.  As a result, there can be no assurance as to the percentage reinsured by [_______________] of any given financial guaranty insurance policy issued by [_______________], including the Policy.]

[Based on the audited financials of [_______________], as of December 31, 2004, [_______________] had total assets, liabilities, redeemable preferred shares and shareholders’ equity of $[___________], $[___________], $[___________] and $[___________], respectively, determined in accordance with generally accepted accounting principles in the United States (“US GAAP”). [_______________]’s insurance financial strength is rated “Aaa” by Moody’s and “AAA” by S&P and Fitch Inc. In addition, [_______________] has obtained a financial enhancement rating of “AAA” from S&P.]  

[The obligations of [_______________] to the Insurer under the reinsurance agreement described above are unconditionally guaranteed by [___________] ("[_______________]"), a Bermuda exempted company and one of the world's leading excess commercial insurers.  [_______________] is a wholly owned indirect subsidiary of [_______________].  In addition to A.M. Best’s financial strength rating of “A+” and issuer credit rating of “aa-”, [_______________]’s insurance financial strength rating is “Aa2” (as of September 13, 2005, [_______________] is on review for downgrade) by Moody’s, “AA-” by Standard & Poor’s (on September 20, 2005, Standard & Poor’s placed [_______________] on CreditWatch with negative implications) and “AA-” (Outlook Stable) by Fitch.]  

[The rating agencies have taken certain actions with respect to [_______________] and various insurance operating subsidiaries of [_______________], as described below.  Moody’s placed the “A2” senior debt rating of [_______________] and the other insurance financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) on review for possible downgrade on September 13, 2005.  Standard & Poor’s placed the “A” senior debt rating of [_______________] and the other financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) on CreditWatch with negative implications on September 20, 2005.  Fitch downgraded the long term issuer rating of [_______________] and the insurer financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) from “A” to “A-” on October 26, 2005.  A.M. Best placed each of [___________]’s (which does not include [_______________] or [_______________]) and [_______________]’s respective financial strength ratings of “A+” and their issuer credit ratings of “aa-” under review with negative implications on September 15, 2005. ]

[The ratings of [_______________], [_______________] or any other member of the [_______________] group of companies are not recommendations to buy, sell or hold certificates, including the certificates and are subject to revision or withdrawal at any time by Moody’s, Standard & Poor’s or Fitch.]

[Notwithstanding the capital support provided to the Insurer described in this section, the certificateholders will have direct recourse against the Insurer only, and neither [_______________] nor [_______________] will be directly liable to the certificateholders.]

[Financial Strength and Financial Enhancement Ratings of [_______________]]

[The Insurer's insurance financial strength is rated “Aaa” by Moody’s and “AAA” by Standard & Poor’s and Fitch, Inc. (“Fitch”).  In addition, [_______________] has obtained a financial enhancement rating of “AAA” from Standard & Poor’s.  These ratings reflect Moody’s, Standard & Poor’s and Fitch's current assessment of the Insurer's creditworthiness and claims-paying ability as well as the reinsurance arrangement with [_______________] described under "Reinsurance" above.]

[The above ratings are not recommendations to buy, sell or hold certificates, including the certificates and are subject to revision or withdrawal at any time by Moody’s, Standard & Poor’s or Fitch.  Any downward revision or withdrawal of these ratings may have an adverse effect on the market price of the certificates.  The Insurer does not guaranty the market price of the certificates nor does it guaranty that the ratings on the certificates will not be revised or withdrawn.]

[Capitalization of the Insurer]

[Based on the audited financials of [_______________], as of December 31, 2004, [_______________] had total assets, liabilities, and shareholder’s equity of $[______________], $[______________], and $[______________], respectively, determined in accordance with U.S. GAAP.]

Based on the audited statutory financial statements for [_______________] as of December 31, 2004 filed with the State of New York Insurance Department, [_______________] has total admitted assets of $[______________], total liabilities of $[______________] and total capital and surplus of $[______________] determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities (“SAP”).  

[Incorporation by Reference of Financials

]

For further information concerning [_______________] and [_______________], see the financial statements of [_______________] and [_______________], and the certificates thereto, incorporated by reference in this prospectus supplement.  The financial statements of [_______________] and [_______________] are included as exhibits to the periodic reports filed with the Certificates and Exchange Commission (the “Commission”) by [_______________] and may be reviewed at the EDGAR website maintained by the Commission.  All financial statements of  [_______________] and [_______________] included in, or as exhibits to, documents filed by [_______________] pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act Act of 1934 on or prior to the date of this prospectus supplement, or after the date of this prospectus supplement but prior to termination of the offering of the certificates, shall be deemed incorpor ated by reference in this prospectus supplement.  Except for the financial statements of [_______________] and [_______________], no other information contained in [_______________]'s reports filed with the Commission is incorporated by reference. Copies of the statutory quarterly and annual statements filed with the State of New York Insurance Department by [_______________] are available upon request to the State of New York Insurance Department.]

[Regulation of the Insurer]

[The Insurer is regulated by the Superintendent of Insurance of the State of New York.  In addition, the Insurer is subject to regulation by the insurance laws and regulations of the other jurisdictions in which it is licensed.  As a financial guaranty insurance company licensed in the State of New York, the Insurer is subject to Article 69 of the New York Insurance Law, which, among other things, limits the business of each insurer to financial guaranty insurance and related lines, prescribes minimum standards of solvency, including minimum capital requirements, establishes contingency, loss and unearned premium reserve requirements, requires the maintenance of minimum surplus to policyholders and limits the aggregate amount of insurance which may be written and the maximum size of any single risk exposure which may be assumed.  The Insurer is also required to file detailed annual financial statements with the New York Insurance Department and similar supervisory agencies in each of the other jurisdictions in which it is licensed.]

[The extent of state insurance regulation and supervision varies by jurisdiction, but New York and most other jurisdictions have laws and regulations prescribing permitted investments and governing the payment of dividends, transactions with affiliates, mergers, consolidations, acquisitions or sales of assets and incurrence of liabilities for borrowings.]

 [THE FINANCIAL GUARANTY INSURANCE POLICIES ISSUED BY THE INSURER, INCLUDING THE INSURANCE POLICY, ARE NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.]

[The principal executive offices of the Insurer are located at [____________] and its telephone number at this address is [____________].]

[THE POLICY]

[[__________], in consideration of the payment of a premium and subject to the terms of the insurance policy, thereby unconditionally and irrevocably guarantees to any certificateholder that an amount equal to each full and complete Insured Amount will be received from [__________] by the Trustee or its successors, as Trustee for the certificateholders, on behalf of the certificateholders, for distribution by the Trustee to each certificateholder of that certificateholder’s proportionate share of the Insured Amount.]

[[__________]’s obligations under the insurance policy, with respect to a particular Insured Amount, will be discharged to the extent funds equal to the applicable Insured Amount are deposited in the account specified by the Trustee, whether or not those funds are properly applied by the Trustee. Insured Amounts will be paid only at the time set forth in the insurance policy, and no accelerated Insured Amounts will be paid regardless of any acceleration of the certificates, unless the acceleration is at the sole option of [__________]. ]

[Notwithstanding the foregoing paragraph, the insurance policy does not cover shortfalls, if any, attributable to the liability of the issuer or the Trustee for withholding taxes, if any (including interest and penalties in respect of any liability for withholding taxes).]

[[__________] will pay any Insured Amount that is an Avoided Payment on the business day following receipt on a business day by [__________] of the following:

•

a certified copy of the order requiring the return of an avoided payment, with respect to which order the appeal period has expired without an appeal having been filed;  

•

an assignment in a form attached to the insurance policy, irrevocably assigning to [__________] all rights and claims of the certificateholder relating to or arising under the certificates against the debtor which made the avoided payment or otherwise with respect to the avoided payment; and  

•

an appropriately completed and executed demand for payment in the form attached to the insurance policy;  

provided that if these documents are received after 10:00 a.m., New York time, on that business day, they will be deemed to be received on the following business day. Payments by [__________] will be disbursed to the receiver or the trustee in bankruptcy named in the final order of the court exercising jurisdiction on behalf of the certificateholder and not to any certificateholder directly unless the certificateholder has returned principal or interest paid on the certificates to the receiver or trustee in bankruptcy, in which case that payment will be disbursed to the Trustee for distribution to the certificateholder upon proof of such payment reasonably satisfactory to [__________].]

[[__________] will pay any other amount payable under the insurance policy no later than 2:00 p.m., New York time, on the later of the distribution date on which the related Scheduled Payment is due or the business day following receipt in New York, New York by [__________] of a notice from the Trustee specifying the Insured Amount which is due and owing on the applicable distribution date, provided that if the notice is received after 10:00 a.m., New York time, on that business day, it will be deemed to be received on the following business day.]

[Subject to the terms of the Agreement, [__________] will be subrogated to the rights of each certificateholder to receive payments under the certificates to the extent of any payment by [__________] under the insurance policy.]

[As used in the insurance policy, the following terms shall have the following meanings:

“Avoided Payment” means any amount previously distributed to a certificateholder on the certificates that is recoverable and sought to be recovered as a voidable payment in an insolvency proceeding, in accordance with a final nonappealable order of a court having competent jurisdiction.

“Insured Amount” means, that portion of Scheduled Payments that shall become due for payment but shall be unpaid by reason of nonpayment.

“Insured Payment” means (a) as of any distribution date, any Scheduled Payment and (b) any Avoided Payment.

“Scheduled Payment” for any distribution date, an amount equal to the excess, if any, of: (a) the sum, without duplication, of (i) the Certificateholders’ Interest Distributable Amount and (ii) the Certificateholders’ First Principal Distributable Amount (other than the amount specified in clause (2)(b) of the definition thereof) for the related distribution date over (b) the amount actually deposited into the certificate distribution account on the related distribution date.]

[Capitalized terms used in the insurance policy and not otherwise defined in the insurance policy shall have the meanings set forth in the Agreement as of the date of execution of the insurance policy, without giving effect to any subsequent amendment or modification to the Agreement unless such amendment or modification has been approved in writing by [__________].]

[The insurance policy is not cancelable for any reason. The premium on the insurance policy is not refundable for any reason including payment, or provision being made for payment, prior to the maturity of the certificates.]

[The insurance policy is being issued under and pursuant to, and will be construed under, the laws of the State of New York, without giving effect to the conflict of laws principles thereof.]

[The insurance provided by the insurance policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law.]

[OTHER CREDIT ENHANCEMENT PROVIDER]

[Regulation AB Item 1114 compliant description of any other credit enhancement provider.]

[DERIVATIVE INSTRUMENTS]

[The Interest Rate Swap Agreement and the Swap Provider]

[The Offered Certificates and Class B Certificates will have the benefit of an interest rate swap agreement.  On or before the Closing Date, the Trustee will enter into an interest rate swap agreement (the “Interest Rate Swap Agreement”) with [_______] (the “Swap Provider”).  A separate trust created under the pooling and servicing agreement (the "Supplemental Interest Trust") will hold the Interest Rate Swap Agreement documented by a 1992 ISDA Master Agreement (Multicurrency-Cross Border), together with a Schedule and Confirmation between The Trustee, on behalf of the Supplemental Interest Trust, and the Swap Provider. ]

[The significance percentage, as calculated in accordance with Item 1115 of Regulation AB is less than 10%.]

[If significance percentage, as calculated in accordance with Item 1115 of Regulation AB, is 10% or more, provide financial information required by Item 1115 of Regulation AB.]

[Pursuant to the Interest Rate Swap Agreement, on each Distribution Date, (i) the Securities Administrator (on behalf of the Supplemental Interest Trust and from funds of such trust) will be obligated to pay to the Swap Provider, a fixed amount equal to the product of (x) [__]%, (y) the Swap Notional Amount for that Distribution Date set forth in the Interest Rate Swap Agreement and (z) a fraction, the numerator of which is 30 (or, for the first Distribution Date, the number of days elapsed from the Closing Date to but excluding the first Distribution Date on a 30/360 basis), and the denominator of which is 360 (the “Securities Administrator Swap Payment”); and (ii) the Swap Provider will be obligated to pay to the Supplemental Interest Trust for the benefit of the holders of the Offered Certificates and the Class B Certificates (the “Swap Provider Payment”), a floating amount equal to the product of (x) one-mon th LIBOR (as determined pursuant to the Interest Rate Swap Agreement), (y) the Swap Notional Amount for that Distribution Date set forth in the Interest Rate Swap Agreement, and (z) a fraction, the numerator of which is the actual number of days elapsed from the previous Distribution Date to but excluding the current Distribution Date (or, for the first Distribution Date, the actual number of days elapsed from the Closing Date to but excluding the first Distribution Date), and the denominator of which is 360.  A net payment will be required to be made on each Distribution Date (each such net payment, a “Net Swap Payment”) (a) by the Securities Administrator to the Swap Provider, to the extent that the fixed amount exceeds the corresponding floating amount, or (b) by the Swap Provider to the Securities Administrator, to the extent that the floating amount exceeds the corresponding fixed amount. Payments received by the Supplemental Interest Trust pursuant to the Interest Rate Swap Agreement wil l be available for distributions of Interest Carry Forward Amounts, Net WAC Rate Carryforward Amounts, amounts necessary to maintain the Required Overcollateralization Amount and Allocated Realized Loss Amounts.]

[The “Swap Notional Amount” with respect to each Distribution Date commencing in [______, __], is set forth below (which will be substantially the same schedule as set forth in the Interest Rate Swap Agreement).  The Interest Rate Swap Agreement will terminate immediately following the Distribution Date in [______, __], unless terminated earlier upon the occurrence of a Swap Default, an Early Termination Event or an Additional Termination Event (each as defined below).]

Distribution Date	Swap Notional Amount
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]

[The respective obligations of the Swap Provider and the Supplemental Interest Trust to pay specified amounts due under the Interest Rate Swap Agreement will be subject to the following conditions precedent: (1) no Swap Default or event that with the giving of notice or lapse of time or both would become a Swap Default, in each case, in respect of the other party, shall have occurred and be continuing with respect to the Interest Rate Swap Agreement and (2) no “Early Termination Date” (as defined in the ISDA Master Agreement) has occurred or been effectively designated with respect to the Interest Rate Swap Agreement.]

[An Interest Rate Cap Agreement]

[The Class [__] certificates will have the benefit of the Interest Rate Cap Agreement. Pursuant to the Interest Rate Cap Agreement, with respect to any Distribution Date, commencing with the Distribution Date in [__], 20[ ], on or prior to the Distribution Date in [__], 20[ ], [_______], (the “Cap Provider”), will be obligated to pay to the trust administrator, an amount equal to the product of (a) the excess, if any, of (i) the then current one-month LIBOR rate (determined in accordance with the Interest Rate Cap Agreement) up to a maximum of [__]% (the “Maximum Cap Rate”) and (ii) a specified strike rate of [__]% (the “Cap Strike Rate”) and (b) the Interest Rate Cap Agreement Notional Amount set forth on the schedule attached as Annex B hereto for that Distribution Date, determined on a 30/360 Basis. (each such payment, the “Cap Agreement Payment”). The Interest Rate Cap Agreement will terminate after th e Distribution Date in [__], 20[ ].

The obligations of the Cap Provider are limited to those specifically set forth in the Interest Rate Cap Agreement. The Cap Provider conducts business in the over-the-counter derivatives market, engaging in a variety of derivatives products, including interest rate swaps, currency swaps, credit default swaps and interest rate options with institutional clients.

For the Class [__] certificates and each Distribution Date prior to and including the Distribution Date in [__], 20[ ],  any Cap Agreement Payment received by the trust administrator will be used to pay the related Cap Amount to such classes of certificates, as described below under “––The Reserve Funds.”  Amounts received on  the Interest Rate Cap Agreement will not be available to make distributions on any class of Certificates other than the Class [__] certificates.

The Interest Rate Cap Agreement will be governed by and construed in accordance with the law of the State of New York. The obligations of the Cap Provider are limited to those specifically set forth in the Interest Rate Cap Agreement. The Class [__] certificates do not represent an obligation of the Cap Provider. The holders of the Class [__] certificates are not parties to or beneficiaries under the Interest Rate Cap Agreement and will not have any right to proceed directly against the cap provider in respect of its obligations under the Interest Rate Cap Agreement.]

[A Yield Maintenance Agreement]

The Issuing Entity will enter into a Yield Maintenance Agreement for the benefit of the Class [__] Certificates.  Under the Yield Maintenance Agreement, the Counterparty will agree to pay to the Issuing Entity two Business Days prior to each Distribution Date beginning in [__], 20[ ] and to and including the Distribution Date in [__], 20[ ], an amount equal to the product of:

1.

the excess, if any, of LIBOR (as calculated under the related Yield Maintenance Agreement subject to the Rate Cap Ceiling) over the Cap Strike Rate for that Distribution Date;

2.

the related Scheduled Notional Amount for that Distribution Date; and

3.

a fraction, the numerator of which is the actual number of days elapsed from the previous Distribution Date to but excluding the current Distribution Date, and the denominator of which is 360.

The Scheduled Notional Amounts for each Yield Maintenance Agreement decline in accordance with the expected amortization of the Mortgage Loans.  The Yield Maintenance Agreements will terminate immediately following the Distribution Date in [__], 20[ ].

The Yield Maintenance Agreements will be governed by and construed in accordance with the law of the State of New York and will be documented under the ISDA Master Agreement, as supplemented by the schedule and the confirmation.  The obligations of the Counterparty are limited to those specifically set forth in the related Yield Maintenance Agreement.

Any amounts received by the Securities Administrator under a Yield Maintenance Agreement will be distributed as follows:

1.

to the Reserve Fund, in an amount equal to the Basis Risk Shortfall Carryover Amount for the Class [__] Certificates for such Distribution Date;

2.

to the Principal Remittance Amount, the Net Cumulative Realized Loss Amount on such Distribution Date;

3.

to the Class [__] Certificates, any applicable Unpaid Realized Loss Amounts, and

4.

to the Class [__] Certificates, any remaining amounts.

FEDERAL INCOME TAX CONSEQUENCES

Upon the issuance of the Certificates, McKee Nelson LLP, special tax counsel (“Federal Tax Counsel”), will deliver its opinion to the effect that, under then current law, assuming compliance with the Agreement, the Issuing Entity will be classified for federal income tax purposes as a grantor trust and not as an association taxable as a corporation.  Accordingly, each Certificateholder will be subject to federal income taxation as if it owned directly its interest in each asset owned by the Issuing Entity and paid directly its share of expenses paid by the Issuing Entity.  Certain individuals, estates, trusts and partnerships may be limited in their ability to fully deduct the expenses of the Issuing Entity.  See “Material Federal Income Tax Consequences” in the Prospectus for a discussion of those limits.

For federal income tax purposes, the Depositor will be deemed to have retained a fixed portion of the interest due on each Receivable (the “Spread”).  The Spread will be treated as “stripped coupons” within the meaning of Section 1286 of the Internal Revenue Code of 1986, as amended (the “Code”).  The Servicer may also be deemed to have retained a “stripped coupon” if and to the extent that the Servicing Fee is determined to be unreasonable.  In addition, because the Class B Pass-Through Rate exceeds the Class A Pass-Through Rate, a portion of the interest accrued on each Receivable will be treated as a “stripped coupon” purchased by the Class B Certificateholders.  Accordingly, each Class A Certificateholder will be treated as owning its pro rata percentage interest in the principal of, and interest payable on, each Receivable (minus the portion of the interest payable on suc h Receivable that is treated as Spread, as a stripped coupon retained by the Servicer or as a stripped coupon purchased by the Class B Certificateholders), and such interest in each Receivable will be treated as a “stripped bond” within the meaning of Section 1286 of the Code.  Similarly, each Class B Certificateholder will be treated as owning its pro rata percentage interest in the principal of each Receivable, plus a disproportionate share of the interest payable on each Receivable.

Class A Certificateholders

Because the Class A Certificates represent stripped bonds, they will be subject to the original issue discount (“OID”) rules of the Code.  Accordingly, the tax treatment of a Class A Certificateholder will depend upon whether the amount of OID on a Class A Certificate is less than a statutorily defined de minimis amount.  See “Material Federal Income Tax Consequences -- Grantor Trusts – Stripped Certificates” for a discussion regarding the calculation of OID, if any, on stripped bonds.

If the amount of OID is de minimis under the OID provisions of the Code, the Class A Certificates would not be treated as having OID.  Each Class A Certificateholder would be required to report on its federal income tax return its share of the gross income of the Issuing Entity, including interest and certain other charges accrued on the Receivables and any gain upon collection or disposition of the Receivables (but not including any portion of the Receivables treated as “stripped coupons” as described above that are treated as owned by other parties).  Such gross income attributable to interest on the Receivable would exceed the Class A Pass-Through Rate by an amount equal to the Class A Certificateholder’s share of the expenses of the Issuing Entity for the period during which it owns a Class A Certificate.  As indicated above, a Class A Certificateholder generally would be entitled to deduct its share of expenses of the Issuing Entity, subject to certain limitations that apply in the case of Certificateholders that are individuals, trusts, estates or partnerships.  Any amounts received by a Class A Certificateholder from the Reserve Account or from the subordination of the Class B Certificates will be treated for federal income tax purposes as having the same character as the payments they replace.  A Class A Certificateholder would report its share of the income of the Issuing Entity under its usual method of accounting.  Accordingly, interest would be includable in a Certificateholder’s gross income when it accrues on the Receivables, or, in the case of Certificateholders who are cash basis taxpayers, when received by the Servicer on behalf of Certificateholders.  The actual amount of discount on a Receivable would be includable in income as principal payments are received on the Receivables.

If OID relating to a Class A Certificate is not de minimis, a Class A Certificateholder will be required to include in income, in addition to the amounts described above, any OID as it accrues, regardless of when cash payments are received, using a method reflecting a constant yield on the Receivables.

Although the Trustee intends to account for OID, if any, reportable by holders of Class A Certificates by reference to the price paid for a Class A Certificate by an initial purchaser, the amount of OID will differ for subsequent purchasers.  Such subsequent purchasers should consult their tax advisers regarding the proper calculation of OID on the interest in the Receivables represented by a Class A Certificate.

Class B Certificateholders

In General.  Except as described below, it is believed that the Class B Certificateholders will be subject to tax in the same manner as Class A Certificateholders.  However, no federal income tax authorities address the precise method of taxation of an instrument such as the Class B Certificates and Federal Tax Counsel cannot opine on this issue.  In the absence of applicable authorities, the Trustee intends to report income to Class B Certificateholders in the manner described below.

Each Class B Certificateholder will be treated as owning (x) the Class B Percentage of each Receivable plus (y) a disproportionate portion of the interest on each Receivable (not including the Spread).  Income will be reported to a Class B Certificateholder based on the assumption that all amounts payable to the Class B Certificateholders are taxable under the coupon stripping provisions of the Code and treated as a single obligation.  In applying those provisions, the Trustee will take the position that a Class B Certificateholder’s entire share of the interest on a Receivable will qualify as “qualified stated interest.” Thus, except to the extent modified by the effects of subordination of the Class B Certificates, as described below, income will be reported to Class B Certificateholders in the manner described above for holders of the Class A Certificates.

Effect Of Subordination

If the Certificateholders of one Class of Certificates receive distributions of less than their share of the Issuing Entity’s receipts of principal or interest (the “Shortfall Amount”) because of the subordination of the Certificates, it is believed that such Certificateholders would probably be treated for federal income tax purposes as if they had:

(1)  received as distributions their full share of such receipts,

(2)  paid over to the Certificateholders of the other Class of Certificates an amount equal to such Shortfall Amount, and

(3)  retained the right to reimbursement of such amounts to the extent of future collections otherwise available for deposit in the Reserve Account.

However, Federal Tax Counsel cannot opine to such treatment.

Under this treatment,

(a)  Class B Certificateholders would be required to accrue as current income any interest, OID income, or (to the extent paid on the Receivables) accrued market discount of the Issuing Entity that was a component of the Shortfall Amount, even though such amount was in fact paid to the Class A Certificateholders,

(b) a loss would only be allowed to the Class B Certificateholders when their right to receive reimbursement of such Shortfall Amount became worthless (i.e., when it became clear that that amount would not be available from any source to reimburse such loss), and

(c)  reimbursement of such Shortfall Amount prior to such a claim of worthlessness would not be taxable income to Class B Certificateholders because such amount was previously included in income.

Those results should not significantly affect the inclusion of income for Class B Certificateholders on the accrual method of accounting, but could accelerate inclusion of income to Class B Certificateholders on the cash method of accounting by, in effect, placing them on the accrual method.  Moreover, the character and timing of loss deductions are unclear and all Class B Certificateholders are encouraged to consult their tax advisors regarding such character and timing.

All Certificateholders should see “Material Federal Income Tax Consequences” in the Prospectus for a more detailed discussion of the material federal income tax consequences of the purchase, ownership and disposition of the Certificates.

STATE AND LOCAL TAX CONSEQUENCES

The discussion under “Federal Income Tax Consequences” above does not address the tax consequences of purchase, ownership or disposition of the Certificates under any state or local tax law.  We recommend that investors consult their own tax advisors regarding state and local tax consequences.

ERISA CONSIDERATIONS

A fiduciary of a pension, profit-sharing, retirement or other employee benefit plan subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), should consider the fiduciary standards under ERISA in the context of the plan’s particular circumstances before authorizing an investment of a portion of such plan’s assets in the Certificates.  Accordingly, pursuant to Section 404 of ERISA, such fiduciary should consider among other factors:

(1)  whether the investment is for the exclusive benefit of plan participants and their beneficiaries;

(2)  whether the investment satisfies the applicable diversification requirements;

(3)  whether the investment is in accordance with the documents and instruments governing the plan; and

(4)  whether the investment is prudent, considering the nature of the investment.  Fiduciaries of plans also should consider ERISA’s prohibition on improper delegation of control over, or responsibility for, plan assets.

In addition, benefit plans subject to ERISA, as well as individual retirement accounts or certain types of Keogh plans not subject to ERISA but subject to Section 4975 of the Code and any entity whose source of funds for the purchase of Certificates includes plan assets by reason of a plan or account investing in such entity (each, a “Plan”), are prohibited from engaging in a broad range of transactions involving Plan assets and persons having certain specified relationships to a Plan (“Parties in Interest” and “Disqualified Persons”).  Such transactions are treated as “prohibited transactions” under Sections 406 and 407 of ERISA and excise taxes are imposed upon such persons by Section 4975 of the Code.

An investment in Certificates by a Plan might result in the assets of the Issuing Entity being deemed to constitute Plan assets, which in turn might mean that certain aspects of such investment, including the operation of the Issuing Entity, might be prohibited transactions under ERISA and the Code.  Neither ERISA nor the Code defines the term “plan assets.”  Under Section 2510.3-101 of the United States Department of Labor (“DOL”) regulations (the “Regulation”), a Plan’s assets may include an interest in the underlying assets of an entity (such as a trust) for certain purposes, including the prohibited transaction provisions of ERISA and the Code, if the Plan acquires an “equity interest” in such entity, unless certain exceptions apply.  The Depositor believes that the Certificates will give Certificateholders an equity interest in the Issuing Entity for purposes of the Regulation and can give no assurance that the Certificates will qualify for any of the exceptions under the Regulation.

As a result, the assets of the Issuing Entity may be considered the assets of any Plan which acquires a Certificate.

The DOL has granted to Deutsche Bank Securities Inc. an individual exemption, Prohibited Transaction Exemption 94-84, and to Deutsche Morgan Grenfell/C.J. Lawrence Inc., similar approval (FAN 97-03E), which were both amended and restated pursuant to Prohibited Transaction Exemption 2002-41 (“PTE 2002-41”) (collectively, the “Exemption”) which is applicable to Certificates which meet its requirements whenever Deutsche Bank Securities Inc. or its affiliate is the sole underwriter, manager or co-manager of an underwriting syndicate or is the selling or placement agent.  The Exemption generally exempts from the application of the prohibited transaction provisions of Section 406 of ERISA and the excise taxes imposed on such prohibited transactions pursuant to Section 4975(a) and (b) of the Code and Section 502(i) of ERISA certain transactions relating to the initial purchase, holding and subsequent resale by Plans of certific ates in pass-through trusts that consist of certain receivables, loans and other obligations that meet the conditions and requirements set forth in the Exemption.  The receivables covered by the Exemption include motor vehicle or boat installment obligations such as the Receivables.  The Depositor believes that the Exemption will apply to the acquisition, holding and resale of the Certificates by a Plan and that all conditions of the Exemption other than those within the control of the investors have been or will be met.

All Certificateholders should refer to “ERISA Considerations” in the Prospectus for a detailed discussion of the general and specific conditions of the Exemption.

If the general conditions of the Exemption are satisfied, the Exemption may provide relief from the restrictions imposed by Sections 406(a) and 407(a) of ERISA as well as the excise taxes imposed by Section 4975(a) and (b) of the Code by reason of Section 4975(c)(1)(A) through (D) of the Code, in connection with the direct or indirect sale, exchange, transfer or holding of the Certificates by a Plan.  However, no exemption is provided from the restrictions of Sections 406(a)(1)(E), 406(a)(2) and 407 of ERISA for the acquisition or holding of a Certificate on behalf of an “Excluded Plan” by any person who has discretionary authority or renders investment advice with respect to the assets of such Excluded Plan.  For purposes of the Certificates an Excluded Plan is a Plan sponsored by any member of the Restricted Group.

If certain specific conditions of the Exemption are also satisfied, the Exemption may provide relief from the restrictions imposed by Sections 406(b)(l) and (b)(2) and 407(a) of ERISA and the taxes imposed by Section 4975(a) and (b) of the Code by reason of Section 4975(c)(1)(E) of the Code in connection with the direct or indirect sale, exchange, transfer or holding of Certificates in the initial issuance of Certificates between the Depositor or the Underwriters and a Plan other than an Excluded Plan when the person who has discretionary authority or renders investment advice with respect to the investment of Plan assets in the Certificates is (a) an Obligor with respect to 5% or less of the fair market value of the Receivables or (b) an affiliate of such person.

The Exemption also may provide relief from the restriction imposed by Sections 406(a) and 407(a) of ERISA and the taxes imposed by Section 4975(c)(1)(A) through (D) of the Code if such restrictions are deemed to otherwise apply merely because a person is deemed to be a party in interest or a disqualified person with respect to an investing Plan by virtue of providing services to a Plan (or by virtue of having certain specified relationships to such a person) solely as a result of such Plan’s ownership of Certificates.

Before purchasing a Certificate, a fiduciary of a Plan should itself confirm (a) that the Certificates constitute “certificates” for purposes of the Exemption and (b) that the specific conditions set forth in Section II of the Exemption and the other requirements set forth in the Exemption will be satisfied.

Any Plan fiduciary considering whether to purchase a Certificate on behalf of a Plan are encouraged to consult with its counsel regarding the applicability of the fiduciary responsibility and prohibited transaction provisions of ERISA and the Code to such investment.

UNDERWRITING

Subject to the terms and conditions set forth in the Underwriting agreement relating to the Certificates (the “Underwriting Agreement”), the Depositor has agreed to sell to [                 ] and [Deutsche Bank Securities Inc.] (together, the “Underwriters”), and each of the Underwriters has severally agreed to purchase, the principal amount of Class A Certificates and Class B Certificates set forth opposite its name below, subject to the satisfaction of certain conditions precedent.

Underwriter	Principal Amount of Class A Certificates	Principal Amount of Class B Certificates
[           ]	$[                 ]	$[                 ]
[Deutsche Bank Securities Inc.]	$[                 ]	$[                 ]
Total	$[                 ]	$[                 ]

The Depositor has been advised by the Underwriters that the Underwriters propose to offer the Certificates to the public initially at the public offering prices set forth on the cover page of this Prospectus, and to certain dealers at these prices less a concession of [                 ]% per Class A Certificate and [                 ]% per Class B Certificate; that the Underwriters and these dealers may allow a discount of [                 ]% per Class A Certificate and [                 ]% per Class B Certificate on the sale to certain other dealers; and that after the initial public offering of the Certificates, the public offe ring prices and the concessions and discounts to dealers may be changed by the Underwriters.

Until the distribution of the Certificates is completed, rules of the Securities and Exchange Commission may limit the ability of the Underwriters and certain selling group members to bid for and purchase the Certificates.  As an exception to these rules, the Underwriters are permitted to engage in certain transactions that stabilize the prices of the Certificates.  These transactions consist of bids or purchases for the purpose of pegging, fixing or maintaining the price of such Certificates.

In general, purchases of a security for the purpose of stabilization or to reduce a short position could cause the price of the security to be higher than it might be in the absence of purchases for these purposes.

Neither the Depositor nor either Underwriter makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the prices of the Certificates.  In addition, neither the Depositor nor either Underwriter makes any representation that either Underwriter will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

[Deutsche Bank Securities Inc.] is an affiliate of the Depositor and the Seller.

This Prospectus Supplement may be used by [Deutsche Bank Securities Inc.], an affiliate of the Depositor, in connection with offers and sales relating to market-making transactions in the Certificates in which [Deutsche Bank Securities Inc.] acts as principal. [Deutsche Bank Securities Inc.] may also act as agent in such transactions.  Sales will be made at prices related to the prevailing prices at the time of sale.

The Depositor has agreed to indemnify the Underwriters against particular liabilities, including civil liabilities under the Securities Act, or contribute to payments which the Underwriters may be required to make in respect of these liabilities.  In the opinion of the Commission, this indemnification is against public policy as expressed in the Securities Act and, may, therefore, be unenforceable.

The Trustee or the Collateral Agent, as applicable, may, from time to time, invest the funds in the Trust Accounts in Eligible Investments acquired from either of the Underwriters.

RATINGS

It is a condition to the issuance of the Certificates that the Certificates receive at least the following ratings from [             ] (“[             ]”) and [             ] (“[             ]”):

Certificates	[             ]	[             ]
Class A Certificates	[___]	[___]
Class B Certificates	[___]	[___]

The ratings of the Class A Certificates will be based primarily on the Receivables, the Reserve Account, and the terms of the Certificates, including the subordination provided by the Class B Certificates.  The ratings of the Class B Certificates will be based primarily on the Receivables and the Reserve Account.  The ratings of the Certificates should be evaluated independently from similar ratings on other types of securities.  The ratings do not address the possibility that Certificateholders may suffer a lower than anticipated yield.

There can be no assurance that any rating will remain in effect for any given period of time or that a rating will not be lowered or withdrawn by the assigning Rating Agency if, in its judgment, circumstances so warrant.  In the event that the rating initially assigned to any of the Certificates is subsequently lowered or withdrawn for any reason, no person or entity will be obligated to provide any additional credit enhancement with respect to these certificates.  There can be no assurance whether any other rating agency will rate any of the Certificates, or if one does, what rating would be assigned by any other rating agency.  A security rating is not a recommendation to buy, sell or hold securities.

The rating agencies have stated that it is their standard policy to monitor ratings on publicly offered certificates for which a rating has been provided, as to each rating agency rating each class of certificates in accordance with the rating agencies’ particular surveillance policies, unless the issuer requests a rating without surveillance.  A rating agency will monitor the rating it issues on an ongoing basis and may update the rating after conducting its regular review of the issuer’s creditworthiness or after conducting a review of the status of the rating upon becoming aware of any information that might reasonably be expected to result in a change of rating.  The depositor has not requested that any rating agency not monitor their ratings of the certificates, and the depositor has not requested that any rating agency use any monitoring procedures other than their standard monitoring procedures.

LEGAL PROCEEDINGS

[There are no material legal proceedings pending against the Sponsor, the Depositor, the Trustee, the Issuing Entity, the Collateral Agent, [any affiliated Servicer, any 20% concentration unaffiliated Servicer, any 20% concentration Originator], or with respect to which the property of any of the foregoing transaction parties is subject, that are material to the certificateholders.  No legal proceedings against any of the foregoing transaction parties is known to be contemplated by governmental authorities, that are material to the certificateholders.]

AFFILIATIONS, RELATIONSHIPS AND RELATED TRANSACTIONS

[There are no affiliations between the Sponsor, the Depositor or the Issuing Entity and any of [any affiliated Servicer, any 20% concentration unaffiliated Servicer], the Trustee, the Collateral Agent, [any 10% concentration Originator] or [any credit enhancement provider or derivatives counterparty].  There are no affiliations among [any affiliated Servicer, any 20% concentration unaffiliated Servicer], the Trustee, the Collateral Agent, [any 10% concentration Originator] or [any credit enhancement provider or derivatives counterparty].  There are currently no business relationships, agreements, arrangements, transactions or understandings between (a) the Sponsor, the Depositor or the Issuing Entity and (b) any of the parties referred to in the preceding sentence, or any of their respective affiliates, that were entered into outside the normal course of business or that contain terms other than would be obtained in an arm’s lengt h transaction with an unrelated third party and that are material to the investor's understanding of the certificates, or that relate to the certificates or the pooled assets.  No such business relationship, agreement, arrangement, transaction or understanding has existed during the past two years.]

LEGAL MATTERS

Certain legal matters with respect to the Certificates will be passed upon for the Sponsor by [        ].  Certain legal matters with respect to the Certificates will be passed upon for the Underwriter by McKee Nelson LLP, New York, New York.  McKee Nelson LLP also will pass upon the material federal income tax consequences related to the Certificates.

PROSPECTUS

ACE SECURITIES CORP.

Depositor

Asset Backed Certificates

Asset Backed Notes

(Issuable in Series)

Boat Receivables and Receivables Securities Trusts

____________________

The Issuing Entities:

Each issuing entity will be established to hold assets generally consisting of one or more of the following:

1.  One or more pools of

·

installment loan agreements or retail installment sale contracts secured by new and used boats, boat motors, jet skis and/or waverunners, and security interests therein,

·

private securities evidencing ownership interests in or secured by loans similar to the types of loans described above;

2.  Government Securities;

3.  All monies due under the above assets, which may be net of amounts payable to the servicer; and

4.  Funds or accounts established for the related issuing entity, or one or more forms of enhancement.

The prospectus supplement for your particular issuing entity specifies the assets in the issuing entity.

The Securities:

ACE Securities Corp. will sell the securities pursuant to a prospectus supplement.  The securities will be grouped into one or more series, each having its own distinct designation.  Each series will be issued in one or more classes and will evidence beneficial ownership of, or be secured by, the assets in the issuing entity that the series relates to.  A prospectus supplement for a series will specify all of the terms of the series and of each of the classes in the series.  The securities represent obligations of the issuing entity only and do not represent an interest in or obligation of the depositor, the sponsor, the servicer or any of their affiliates.

Consider carefully the risk factors beginning on page 6 of this prospectus:

Neither the SEC nor any state securities commission has approved or disapproved the offered securities or determined if this prospectus is accurate or complete. Making any contrary representation is a criminal offense.

<R>The date of this prospectus is February 22, 2007.</R>

IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT

We provide information to you about the securities in two separate documents that progressively provide varying levels of detail:

·

This prospectus, which provides general information, some of which may not apply to a particular series of securities including your series, and

·

The accompanying prospectus supplement, which will describe the specific terms of the offered securities.

Whenever we use words like “intends,” “anticipates” or “expects” or similar words in this prospectus, we are making a forward-looking statement, or a projection of what we think will happen in the future.  Forward-looking statements are inherently subject to a variety of circumstances, many of which are beyond our control and could cause actual results to differ materially from what we anticipate.  Any forward-looking statements in this prospectus speak only as of the date of this prospectus.  We do not assume any responsibility to update or review any forward-looking statement contained in this prospectus to reflect any change in our expectation about the subject of that forward-looking statement or to reflect any change in events, conditions or circumstances on which we have based any forward-looking statement.

TABLE OF CONTENTS

Risk Factors

6

The Issuing Entities

10

The Trustee

12

The Sponsor

12

The Depositor

12

The Receivables Pools

13

Delinquencies, Repossessions and Net Losses

15

New and Used Financed Boats

15

Static Pool Data

15

The Collateral Certificates

16

Enhancement Relating to Collateral Certificates

17

Additional Information

17

The Government Securities

18

Treasury Bonds

19

Treasury Strips

19

GSE Bonds

20

Private Label Custody Receipt Securities

25

Weighted Average Life of the Securities

28

Pool Factors and Trading Information

29

The Seller and the Servicer

29

Use of Proceeds

29

Description of the Notes

30

Distribution of Principal and Interest

30

Revolving Period

31

Provisions of the Indenture

31

The Indenture Trustee

37

Description of the Certificates

37

Distributions of Principal and Interest

38

Certain Information Regarding the Securities

39

Book-Entry Registration

39

Definitive Securities

41

Statements to Securityholders

42

List of Securityholders

43

Description of the Transfer and Servicing Agreements

43

Sale and Assignment of Primary Assets

44

Trust Accounts

45

Pre-Funding

47

Servicing Procedures

49

Collections

49

Advances

50

Net Deposits

50

Servicing Compensation and Payment Of Expenses

51

Distributions

51

Credit and Cash Flow Enhancement

52

Evidence as to Compliance

53

Statements to trustees and the Trust

54

Certain Matters Regarding the Servicer

54

Servicer Defaults

54

Rights Upon Servicer Default

55

Waiver of Past Defaults

56

Amendment

56

Payment in Full of the notes

57

Termination

57

Certain Legal Aspects of the Receivables

57

Security Interests in Financed Boats

57

Repossession

61

Notice of Sale; Redemption Rights

62

Deficiency Judgments and Excess Proceeds

62

Consumer Protection Laws

62

Other Limitations

63

Material Federal Income Tax Consequences

64

Trusts That Issue Notes

64

Grantor Trusts

81

Penalty Avoidance

88

ERISA Considerations

88

General

88

ERISA Considerations Relating to Certificates

89

ERISA Considerations Relating to Notes

94

Plan of Distribution

95

Legal Matters

96

Prospectus Supplement

97

Reports to Securityholders

97

Available Information

97

Incorporation of Certain Documents by Reference

98

Rating

99

INDEX OF TERMS

100

Initial Settlement

106

Secondary Market Trading

107

Certain U.S. Federal Income Tax Documentation Requirements

109

Risk Factors

The following information, which you should carefully consider, identifies certain significant sources of risk associated with an investment in the certificates and the notes.  You should also carefully consider the information set forth under “Risk Factors” in the prospectus supplement.

Limited Liquidity May Result in Delays in your Ability to Sell securities or Lower Returns	There will be no market for the securities of any series prior to their issuance, and there can be no assurance that a secondary market will develop.  If a secondary market does develop, there can be no assurance that it will provide holders with liquidity of investment or that the market will continue for the life of the securities of the related series.  Deutsche Bank Securities Inc. presently expects to make a secondary market in the securities, but has no obligation to do so.  Absent a secondary market for the securities you may experience a delay if you choose to sell your securities or the price you receive may be less than you would receive for a comparable liquid security.
Limited Assets for Payments - No Recourse to depositor, Seller or Servicer	The depositor does not have, nor is it expected to have, any significant assets.  The securities of a series will be payable solely from the assets of the issuing entity’s trust fund for that series. Except for any related insurance policies or credit support, there will be no recourse to the depositor or any other person for any default on the notes or any failure to receive distributions on the certificates with respect to any series.  Consequently, holders of securities of each series must rely solely upon payments with respect to the assets constituting the issuing entity’s trust fund for a series of securities, including, if applicable, any amounts available pursuant to any enhancement for that series, for the payment of principal of and interest on the securities of that series. The only obligations, if any, of the depositor with respect to the securities of any series will be with respect to its breach of specific representations and warranties.  The depositor does not have, and is not expected in the future to have, any significant assets with which to meet any obligation to repurchase assets with respect to which there has been a breach of any representation or warranty.  If, for example, the depositor were required to repurchase a receivable, its only sources of funds to make the repurchase would be from funds obtained from the enforcement of a corresponding obligation, if any, on the part of the originator of the receivable, or the seller, as the case may be, or from a reserve fund established to provide funds for repurchases.  If the depositor does not have sufficient assets and no other party is obligated to repurchase defective assets, you may experience a loss.
Limits on Enhancement May Result in Losses to You	Although we intend the enhancement for the securities to reduce the risk of delinquent payments or losses to holders of a series of securities entitled to the benefit of the enhancement, the amount of the enhancement will be limited, as set forth in the related prospectus supplement.  In addition, the amount available will decline and could be depleted prior to the payment in full of the related series of securities, and losses on the primary assets could result in losses to holders of those securities.
Timing and Rate of Prepayments May Result in Lower Yield	The yield to maturity experienced by a holder of securities may be affected by the rate and timing of payments of principal of the receivables or of the underlying receivables relating to the private securities.  The rate and timing of principal payments of the securities of a series will be affected by a number of factors, including the following: • the extent of prepayments, which may be influenced by a variety of factors, • the manner of allocating principal payments among the classes of securities of a series as specified in the related prospectus supplement, and • the exercise of any right of optional termination. Prepayments may also result from repurchases of receivables or underlying receivables, as applicable, due to material breaches of the seller’s or the depositor’s representations or warranties. Interest payable on the securities of a series on a distribution date will include all interest accrued during the period specified in the related prospectus supplement.  In the event interest accrues during the calendar month prior to a distribution date, the effective yield to holders will be reduced from the yield that would otherwise be obtainable if interest payable on the security were to accrue through the day immediately preceding each distribution date, and the effective yield at par to holders will be less than the indicated coupon rate.
Risks of Subordinated Securities	To the extent specified in the applicable prospectus supplement, distributions of interest on and principal of one or more classes of securities of a series may be subordinated in priority of payment to interest and principal due on one or more other classes of securities of the related series.  Any subordinated securities will be affected to a greater degree by any losses on the receivables or of the underlying receivables relating to the private securities.
Potential Lack of Security	The depositor will assign security interests in the financed vehicles securing the receivables to the related issuing entity. Due to administrative burden and expense, however, we will not cause the certificates of title to the financed vehicles to be amended to reflect the assignment to the issuing entity unless otherwise specified in the prospectus supplement. In the absence of amendment, an issuing entity may not have a perfected security interest in the financed vehicles securing the receivables in some states. If an issuing entity does not have a perfected security interest in a financed vehicle, its ability to realize in the event of a default on that financed vehicle may be adversely affected.   To the extent that the issuing entity’s security interest in a financed boat is perfected, the issuing entity will have a prior claim over subsequent purchasers of such financed boat and holders of subsequently perfected security interests in such financed boat.  Under the laws of many states, certain possessory liens for repairs on a boat and storage, as well as certain rights in favor of federal and state governmental authorities arising from the use of a boat in connection with illegal activities, may take priority even over a perfected security interest.  Under the Ship Mortgage Statutes, certain preferred maritime liens will have priority over security interests in financed boats perfected under federal law.  Certain federal tax liens may have priority over the lien of a secured party. In addition, through fraud or negligence, the issuing entity could lose its security interest or the priority of its secu rity interest in a financed boat.  If a security interest in a financed boat is initially perfected (by titling or UCC filing) under applicable state law and the financed boat subsequently is federally documented, the issuing entity could lose the priority of its security interest in such financed boat to a purchaser thereof or to the holder of a subsequently perfected Preferred Mortgage covering such financed boat.  See “Certain Legal Aspects of the Receivables--Security Interests in the Financed Vehicles.”  ACE Securities Corp. shall not have an obligation to repurchase a contract as to which any of the aforementioned occurrences result in the issuing entity’s losing the priority of its security interest or its security interest in such financed boat after the date such security interest was conveyed to the issuing entity.
Risk of Commingling	We will require the servicer to deposit all payments on the receivables collected during each collection period into the related collection account within two business days of receipt of the payments.  However, if a servicer satisfies particular requirements for less frequent remittances we will not require the servicer to deposit the amounts into the collection account until the business day preceding each distribution date. Pending deposit into the collection account, collections may be invested by the servicer at its own risk and for its own benefit and will not be segregated from funds of the servicer. If the servicer were unable to remit the funds, the applicable securityholders might incur a loss. To the extent set forth in the related prospectus supplement, the servicer may, in order to satisfy the requirements described above, obtain a letter of credit or other security for the benefit of the related issuing entity to secure timely remittances of collections on the receivables.
Removal of a Servicer After a Servicer Default	The related prospectus supplement may provide that with respect to a series of securities issued by an owner trust, upon the occurrence of a servicer default, the related indenture trustee or noteholders may remove the servicer without the consent of the related trustee or any certificateholders. The trustee or the certificateholders with respect to a series may not have the ability to remove the servicer if a servicer default occurs. In addition, the noteholders with respect to a series have the ability, with specified exceptions, to waive defaults by the servicer, including defaults that could materially adversely affect the certificateholders of the series.
Book-Entry Registration--Beneficial Owners Not Recognized by Trust	Issuance of the securities in book-entry form may reduce the liquidity of these securities in the secondary trading market since investors may be unwilling to purchase securities for which they cannot obtain physical certificates.  Since transactions in the securities can be effected only through The Depository Trust depositor and any other entities set forth in the related prospectus supplement, your ability to pledge a security to persons or entities that do not participate in The Depository Trust depositor or any other entities or otherwise to take actions in respect of the related securities may be limited due to lack of a physical certificate representing the securities. You may experience some delay in the receipt of distributions of interest and principal on the securities since the distributions will be forwarded by the trustee to The Depository Trust depositor and The Depository Trust depositor will credit the distributions to the accounts of its participants which will subsequently credit them to your account either directly or indirectly through indirect participants.
You may be unable to reinvest distributions in comparable investments.	Asset backed securities, like the securities, usually produce more returns of principal to investors when market interest rates fall below the interest rates on the receivables and produce less returns of principal when market interest rates are above the interest rates on the receivables. As a result, you are likely to receive more money to reinvest at a time when other investments generally are producing a lower yield than that on the securities, and are likely to receive less money to reinvest when other investments generally are producing a higher yield than that on the securities.  You will bear the risk that the timing and amount of distributions on your securities will prevent you from attaining your desired yield.
Withdrawal or downgrading of initial ratings will reduce the prices for securities.	A security rating is not a recommendation to buy, sell or hold securities.  Similar ratings on different types of securities do not necessarily mean the same thing.  You are encouraged to analyze the significance of each rating independently from any other rating.  Any rating agency may change its rating of the securities after those securities are issued if that rating agency believes that circumstances have changed.  Any subsequent change in rating will likely reduce the price that a subsequent purchaser will be willing to pay for the securities.
The securities are not suitable investments for all investors.	The securities are not a suitable investment for any investor that requires a regular or predictable schedule of payments or payment on any specific date.  The securities are complex investments that should be considered only by investors who, either alone or with their financial, tax and legal advisors, have the expertise to analyze the prepayment, reinvestment, default and market risk, the tax consequences of an investment, and the interaction of these factors.

The Issuing Entities

With respect to each series of securities, ACE Securities Corp. as depositor (the “depositor”) will establish a separate issuing entity that is a trust (each, referred to as an “issuing entity” or a “Trust”) pursuant to a trust agreement (a “Trust Agreement”) between the depositor and the related trustee or pooling and servicing agreement (a “Pooling and Servicing Agreement”) among the depositor, the servicer and the trustee for the related Trust, as applicable, for the transactions described in this prospectus and in the related prospectus supplement. The property of each issuing entity will include Primary Assets and all payments due under the Primary Assets on and after the applicable cutoff date in the case of Precomputed Receivables and all payments received under the Precomputed Receivables on and after the applicable cutoff date or closing date, as specifi ed in the related prospectus supplement, in the case of Simple Interest Receivables, Collateral Certificates, Government Securities and Private Label Custody Receipt Securities. On the applicable closing date, after the issuance of the notes and/or certificates of a given series, the depositor will transfer or sell Primary Assets to the issuing entity in the outstanding principal amount specified in the related prospectus supplement. The property of each issuing entity may also include:

·

amounts as from time to time may be held in separate trust accounts established and maintained pursuant to the related Trust Agreement, sale and servicing agreement (a “Sale and Servicing Agreement”) among the depositor, the servicer and the related issuing entity or Pooling and Servicing Agreement, as applicable, and the proceeds of these accounts, as described in this prospectus and in the related prospectus supplement;

·

security interests in boats, boat motors, jet skis and/or waverunners and trailers related thereto financed by the Receivables (the “Financed Boats “) and any other interest of a seller in the Financed Boats;

·

the rights to proceeds from claims on physical damage, credit life and disability insurance policies covering Financed Boats or the obligors, as the case may be;

·

any property that has secured a Receivable and that has been acquired by the applicable issuing entity; and

·

any and all proceeds of the Primary Assets or the foregoing.

To the extent specified in the related prospectus supplement, a Reserve Account or other form of credit enhancement may be a part of the property of a given issuing entity or may be held by the trustee for the benefit of holders of the related securities.

The servicer specified in the related prospectus supplement, as servicer under the Pooling and Servicing Agreement or Sale and Servicing Agreement, as applicable, will service the Receivables held by each issuing entity and will receive fees for these services. See “Description of the Transfer and Servicing Agreements—Servicing Compensation and Payment of Expenses” in this prospectus and “Description of the Transfer and Sale and Servicing Agreement—Servicing Compensation” in the related prospectus supplement. To facilitate the servicing of Receivables and unless otherwise specified in the related prospectus supplement, each seller and each trustee will authorize the servicer to retain physical possession of the Receivables held by each issuing entity and other documents relating to possession of the Receivables as custodian for each issuing entity. Due to the administrative burden a nd expense, the certificates of title to the Financed Boats will not be amended to reflect the sale and assignment of the security interest in the Financed Boats to an issuing entity. In the absence of an amendment, an issuing entity may not have a perfected security interest in some of the Financed Boats in some states. See “Certain Legal Aspects of the Receivables” and “Description of the Transfer and Servicing Agreements—Sale and Assignment of Primary Assets”. In the case of Primary Assets consisting of Collateral Certificates, Government Securities and/or Private Label Custody Receipt Securities, the trustee specified in the related prospectus supplement will manage the Collateral Certificates, Government Securities and/or Private Label Custody Receipt Securities.

If the protection provided to (1) holders of notes issued by an owner trust by the subordination of the related certificates and by the Reserve Account, if any, or any other available form of credit enhancement for the series or (2) certificateholders by any Reserve Account or other form of credit enhancement is insufficient, the noteholders or certificateholders, as the case may be, will have to look to payments by or on behalf of obligors on Receivables or on the Collateral Certificates, the Government Securities, and the Private Label Custody Receipt Securities, as applicable, and the proceeds from the repossession and sale of Financed Boats that secure defaulted Receivables for distributions of principal and interest on the securities. In this event, some factors, such as the applicable issuing entities not having perfected security interests in all of the Financed Boats, may limit the ability of an issuing entity to realize on the collateral securing the related Primary Assets, or may limit the amount realized to less than the amount due under Receivables. Securityholders may be subject to delays in payment on, or may incur losses on their investment in, the securities as a result of defaults or delinquencies by obligors and depreciation in the value of the related Financed Boats. See “Description of the Transfer and Servicing Agreements—Credit and Cash Flow Enhancement” and “Certain Legal Aspects of the Receivables”.

The principal offices of each issuing entity and the related trustee will be specified in the applicable prospectus supplement.

The Trustee

The trustee for each Trust will be specified in the related prospectus supplement. The trustee’s liability in connection with the issuance and sale of the related securities is limited solely to the express obligations of the trustee set forth in the related Trust Agreement and Sale and Servicing Agreement or the related Pooling and Servicing Agreement, as applicable. A trustee may resign at any time, in which event the servicer will be obligated to appoint a successor trustee. The servicer may also remove the related trustee if the trustee ceases to be eligible to continue as trustee under the related Trust Agreement or Pooling and Servicing Agreement, as applicable, and will be obligated to appoint a successor trustee. Any resignation or removal of a trustee and appointment of a successor trustee will not become effective until the acceptance of the appointment by the successor trustee.

The Sponsor

The sponsor will be DB Structured Products, Inc., a Delaware corporation, referred to herein as the Sponsor, for each series of securities unless otherwise indicated in the related prospectus supplement.  The Sponsor maintains its principal office at 60 Wall Street, New York, New York  10005.  Its telephone number is (212) 250-2500.

With respect to any series of securities, if so specified in the related prospectus supplement, the Sponsor will also act as servicer or master servicer for the mortgage pool.  If so, the Sponsor will service the Designated Mortgage Assets in accordance with the description of the applicable servicing procedures contained in this prospectus under “Description of the Securities.”

The Depositor

ACE Securities Corp., the depositor, is a special purpose corporation incorporated in the State of Delaware on June 3, 1998.  The principal executive offices of the depositor are located at 6525 Morrison Boulevard, Suite 318, Charlotte, North Carolina 28211.  Its telephone number is (704) 365-0569.  The depositor does not have, nor is it expected in the future to have, any significant assets.

The limited purposes of the depositor are, in general, to acquire, own and sell mortgage loans and financial assets; to issue, acquire, own, hold and sell securities and notes secured by or representing ownership interests in mortgage loans and other financial assets, collections on the mortgage loans and related assets; and to engage in any acts that are incidental to, or necessary, suitable or convenient to accomplish, these purposes.

All of the shares of capital stock of the depositor are held by Altamont Holdings Corp., a Delaware corporation.

The Receivables Pools

The installment loan agreements or retail installment sale contracts secured by new and used boats, boat motors, jet skis and waverunners and trailers related thereto (the “Receivables”) in a Receivables Pool have been or will be originated or acquired by a seller in the ordinary course of business, in accordance with its credit and underwriting standards as described in the related prospectus supplement.

The Receivables to be sold to each issuing entity will be selected from a seller’s portfolio for inclusion in a Receivables Pool based on rating agency criteria, compliance with representations and warranties, and conformity to criteria relating to the characterization of the Certificates and Notes for tax, ERISA, Form S-3 eligibility and any other criteria specified in the related prospectus supplement.  Each Receivable

·

is secured by a new or used boat, boat motor, jet ski or waverunner,

·

was originated or acquired, either from a boat, boat motor, jet ski or waverunner dealer or a financial institution, by the seller,

·

provides for level monthly payments, except for the last payment, which may be different from the level payments, that, unless otherwise provided in the related prospectus supplement, amortize the amount financed over the original term to maturity of the related Receivable,

·

is a Precomputed Receivable or a Simple Interest Receivable and

·

satisfies the other criteria, if any, set forth in the related prospectus supplement. No selection procedures believed by the seller to be adverse to Securityholders were or will be used in selecting the Receivables.

“Precomputed Receivables” consist of either (1) monthly actuarial receivables (“Actuarial Receivables”) or (2) receivables that provide for allocation of payments according to the “sum of periodic balances” or “sum of monthly payments” method, similar to the “Rule of 78s” (“Rule of 78S Receivables”). An Actuarial Receivable provides for amortization of the loan over a series of fixed level monthly installment payments. Each monthly installment, including the monthly installment representing the final payment on the Receivable, consists of (x) an amount of interest equal to 1/12 of the stated contract interest rate under the related Receivable multiplied by the unpaid principal balance of the loan, plus (y) an amount allocable to principal equal to the remainder of the monthly payment. A Rule of 78s Receivable provides for the payment by the obligor of a specified total amount of payments, payable in equal monthly installments on each due date, which total represents the principal amount financed plus add-on interest in an amount calculated at the stated contract interest rate under the related Receivable for the term of the receivable. The rate at which the amount of add-on interest is earned and, correspondingly, the amount of each fixed monthly payment allocated to reduction of the outstanding principal amount are calculated in accordance with the Rule of 78s.

“Simple Interest Receivables” are receivables that provide for the amortization of the amount financed under them over a series of fixed level monthly payments. However, unlike the monthly payment under an Actuarial Receivable, each monthly payment consists of an installment of interest that is calculated on the basis of the outstanding principal balance of the receivable multiplied by the stated contract interest rate under the related Receivable and further multiplied by the period elapsed, as a fraction of a calendar year, since the preceding payment of interest was made. As payments are received under a Simple Interest Receivable, the amount received generally is applied first to interest accrued to the date of payment and the balance is applied to reduce the unpaid principal balance.  Accordingly, if an obligor pays a fixed monthly installment before its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be less than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly greater. Conversely, if an obligor pays a fixed monthly installment after its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be greater than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly less. In either case, the obligor is obligated to pay a fixed monthly installment until the final scheduled payment date, at which time the amount of the final installment may be increased or decreased as necessary to repay the then outstanding principal balance.

In the event of the prepayment in full, voluntarily or by acceleration, of a Rule of 78s Receivable, under the terms of the contract a “refund” or “rebate” will be made to the obligor of the portion of the total amount of payments then due and payable allocable to “unearned” add-on interest, calculated in accordance with a method equivalent to the Rule of 78s. If an Actuarial Receivable is prepaid in full, with minor variations based upon state law, the Actuarial Receivable requires that the rebate be calculated on the basis of a constant interest rate. If a Simple Interest Receivable is prepaid, rather than receive a rebate, the obligor is required to pay interest only to the date of prepayment. The amount of a rebate under a Rule of 78s Receivable generally will be less than the amount of a rebate on an Actuarial Receivable and generally will be less than the remaining scheduled p ayments of interest that would have been due under a Simple Interest Receivable for which all payments were made on schedule.

To the extent provided in the related prospectus supplement, each issuing entity will account for the Rule of 78s Receivables as if the Receivables were Actuarial Receivables. Amounts received upon prepayment in full of a Rule of 78s Receivable in excess of the then outstanding principal balance of the Receivable and accrued interest on the Receivable, calculated pursuant to the actuarial method, will not be paid to noteholders or passed through to certificateholders of the applicable series, but will be paid to the servicer as additional servicing compensation.

Information with respect to each Receivables Pool will be set forth in the related prospectus supplement, including, to the extent appropriate, the composition and distribution by annual percentage rate and by states of origination of the Receivables, the portion of each Receivables Pool consisting of Precomputed Receivables and of Simple Interest Receivables, and the portion of each Receivables Pool secured by new boats and by used boats.

Delinquencies, Repossessions and Net Losses

Information concerning the experience of a seller pertaining to delinquencies, repossessions and net losses with respect to Receivables will be set forth in each prospectus supplement. There can be no assurance that the delinquency, repossession and net loss experience on any Receivables Pool will be comparable to prior experience or to the information.

New and Used Financed Boats

The extension of credit to an obligor on a Receivable is based on an assessment of an applicant’s ability to repay the amounts due on the Receivable and the adequacy of the related Financed Boat.  An assessment generally does not distinguish between new or used boats.  Rather, the amount advanced under a boat loan generally will not exceed 100% of the value of the collateral unless otherwise specified in the related prospectus supplement.  For new boats, the value equals the dealer invoice for the boat that serves as collateral, plus sales tax, license fee, title fee, the cost of service and warranty contracts, and any premium for credit life and disability insurance obtained in connection with the loan.  For used boats, the value equals the wholesale price reported in the most recent edition of any industry guide as specified in the related prospectus supplement, plus sales tax, license fee, title fee, the cost of service and warranty contracts, and any premium for credit life and disability insurance obtained in connection with the loan.  The maximum age of any used boat acceptable as collateral generally is ten model years.  Additional information with respect to delinquencies, repossessions and net losses with respect to Receivables secured by new or used Financed Boats will be set forth in each prospectus supplement.

Static Pool Data

If specified in the related prospectus supplement, static pool data with respect to the delinquency, cumulative loss and prepayment data for each issuing entity will be made available through a website.  The prospectus supplement related to each series for which the static pool data is provided through a website will contain the website address to obtain this information.  Except as stated below, the static pool data provided through any website will be deemed part of this prospectus and the registration statement of which this prospectus is a part from the date of the related prospectus supplement.  

Notwithstanding the foregoing, the following information shall not be deemed part of the prospectus or the registration statement of which this prospectus is a part:

·

with respect to information regarding prior securitized pools of the depositor that do not include the currently offered pool, information regarding prior securitized pools that were established before January 1, 2006; and

·

with respect to information regarding the pool described in the related prospectus supplement, information about the pool for periods before January 1, 2006.

Copies of the static pool data presented on a website and deemed part of this prospectus may be obtained upon written request by the securityholders of the related series at the address specified in the related prospectus supplement.  Copies of information related to the period prior to January 1, 2006 may also be obtained upon written request.

The Collateral Certificates

The primary assets (“Primary Assets”) for a series will include Receivables or Collateral Certificates, which include certificates evidencing an undivided interest in, or notes or loans secured by, Receivables. These Collateral Certificates will have previously been offered and distributed to the public pursuant to an effective registration statement or are being registered under the Securities Act in connection with the offering of a series of securities, which offering, distribution and registration may have been undertaken, or may be undertaken, by the depositor and/or one or more affiliates of the depositor, in each case, subject to exceptions which, if applicable, will be described in the related prospectus supplement. Collateral Certificates will have been issued pursuant to a pooling and servicing agreement, a sale and servicing agreement, a trust agreement, an indenture or similar agreement (an “Underlying Trust Agreement”).  The servicer (the “Underlying Servicer”) of the underlying installment loans or sale contracts will have entered into the Underlying Trust Agreement with a trustee (the “Underlying Trustee”).

The issuer of the Collateral Certificates (the “Underlying Issuer”) will be

·

a financial institution, corporation or other entity engaged generally in the business of purchasing or originating installment loan agreements and boat retail installment sale contracts secured by boats, boat motors, jet skis and/or waverunners and the related trailors,

·

a limited purpose corporation organized for the purpose of, among other things, establishing trusts, acquiring and selling receivables to the trusts and selling beneficial interests in these trusts, or

·

one of the trusts.

If so specified in the related prospectus supplement, the Underlying Issuer may be the depositor and/or one or more affiliates of the depositor.  The obligations of the Underlying Issuer will generally be limited to specific representations and warranties with respect to the assets conveyed by it to the related issuing entity. The related prospectus supplement will, subject to exceptions which, if applicable, will be described in the related prospectus supplement, provide that the Underlying Issuer will not have guaranteed any of the assets conveyed to the related issuing entity or any of the Collateral Certificates issued under the Underlying Trust Agreement.

Distributions of principal and interest will be made on the Collateral Certificates on the dates specified in the related prospectus supplement. The Collateral Certificates may be entitled to receive nominal or no principal distribution or nominal or no interest distributions. Principal and interest distributions will be made on the Collateral Certificates by the Underlying Trustee or the Underlying Servicer. The Underlying Issuer or the Underlying Servicer may have the right to repurchase assets underlying the Collateral Certificates after a specific date or under other circumstances specified in the related prospectus supplement.

Enhancement Relating to Collateral Certificates

Enhancement only in the form of reserve funds, subordination of other securities issued in connection with the Collateral Certificates, guarantees, letters of credit, cash collateral accounts, insurance policies may be provided with respect to the Receivables underlying the Collateral Certificates or with respect to the Collateral Certificates themselves. The type, characteristics and amount of enhancement will be a function of particular characteristics of the Receivables and other factors and will have been established for the Collateral Certificates on the basis of requirements of rating agencies.

Additional Information

The related prospectus supplement for a series for which the Primary Assets include Collateral Certificates will specify, to the extent relevant and to the extent the information is reasonably available to the depositor and the depositor reasonably believes the information to be reliable:

·

the aggregate approximate principal amount and type of the Collateral Certificates to be included in the Primary Assets;

·

the characteristics of the receivables which comprise the underlying assets for the Collateral Certificates;

·

the expected and final maturity of the Collateral Certificates;

·

the interest rate of the Collateral Certificates;

·

the Underlying Issuer, the Underlying Servicer, if other than the Underlying Issuer, and the Underlying Trustee for the Collateral Certificates;

·

characteristics of the enhancement, if any, such as reserve funds, insurance funds, insurance policies, letters of credit or guarantees relating to the receivables underlying the Collateral Certificates or to the Collateral Certificates themselves;

·

the terms on which the underlying receivables for the Collateral Certificates may, or are required to, be purchased prior to their stated maturity or the stated maturity of the Collateral Certificates; and

·

the terms on which receivables may be substituted for those originally underlying the Collateral Certificates.

The Government Securities

Primary Assets for a series may include, but will not consist entirely of, any combination of

·

receipts or other instruments created under the Department of the Treasury’s Separate Trading of Registered Interest and Principal of securities, or STRIPS, program (“Treasury Strips”), which interest and/or principal strips evidence ownership of specific interest and/or principal payments to be made on particular United States Treasury Bonds (“Treasury Bonds”),

·

Treasury Bonds and

·

other debt securities (“GSEs Bonds”) of United States government sponsored enterprises (“GSEs”; and together with Treasury Strips and Treasury Bonds, collectively, “Government Securities”).

The Government Securities, if any, included in an issuing entity are intended to assure investors that funds are available to make specified payments of principal and/or interest due on the related securities. Accordingly, the Government Securities, if any, included in an issuing entity are intended both to (1) support the ratings assigned to these securities, and (2) perform a function similar to that described in this prospectus under “Description of the Transfer and Servicing Agreements—Credit and Cash Flow Enhancement”. A description of the respective general features of Treasury Bonds, Treasury Strips and GSE Bonds is set forth below.

The prospectus supplement for each series of securities the issuing entity with respect to which contains Government Securities will contain information as to:

(1)

the title and series of each Government Security, the aggregate principal amount, denomination and form of each Government Security;

(2)

the limit, if any, upon the aggregate principal amount of the Government Security;

(3)

the dates on which, or the range of dates within which, the principal of, and premium, if any, on, the Government Security will be payable;

(4)

the rate or rates, or the method of determination of the rate or rates, at which the Government Security will bear interest, if any, the date or dates from which the interest will accrue, and the dates on which the interest will be payable;

(5)

whether the Government Security was issued at a price lower than the principal amount of that Government Security;

(6)

material events of default or restrictive covenants provided for with respect to the Government Security;

(7)

the rating of the Government Security, if any;

(8)

the issuer of each Government Security;

(9)

the material risks, if any, posed by any Government Securities and issuers of the Government Securities (which risks, if appropriate, will be described in the “Risk Factors” section of the related prospectus supplement); and

(10)

any other material terms of the Government Security.

With respect to a Trust which includes a pool of Government Securities, the related prospectus supplement will, to the extent applicable, describe the composition of the Government Securities’ pool, particular material events of default or restrictive covenants common to the Government Securities, and, on an aggregate, percentage or weighted average basis, as applicable, the characteristics of the pool with respect to the terms set forth in (3), (4) and (5) of the preceding sentence and any other material terms regarding the pool. The Government Securities included in an issuing entity will be senior, unsecured, nonredeemable obligations of the issuer of the Government Securities, will be denominated in United States dollars and, if rated, will be rated at least investment grade by at least one nationally recognized rating agency. In addition, the inclusion of Government Securities in an issuing entity with respect to a seri es of securities is conditioned upon their characteristics being in form and substance satisfactory to the Rating Agency rating the related series of securities.

Treasury Bonds

Treasury Bonds are issued by and are the obligations of the United States of America. Accordingly, the payment of principal and interest on each Treasury Bond will be guaranteed by the full faith and credit of the United States of America. Interest is typically payable on the Bonds semiannually. Treasury Bonds are issued in registered form in denominations of $1,000, $5,000, $10,000, $100,000 and $1,000,000 and in book-entry form in integral multiples of these amounts.

Treasury Strips

In general, Treasury Strips are created by separating, or stripping, the principal and interest components of Treasury Bonds that have an original maturity of 10 or more years from the date of issue. A particular Treasury Strip evidences ownership of the principal payment or one of the periodic interest payments, generally semiannual, due on the Treasury Bond to which the Treasury Strip relates.

In 1985 the Department of the Treasury announced that all new issues of Treasury Bonds with maturities of 10 years or more would be transferable in their component pieces on the Federal Reserve wire system. In so doing, the Treasury created a generic, book-entry Treasury Strip named STRIPS (Separate Trading of Registered Interest and Principal of Securities) which, unlike private label Treasury Strips, can be issued without the need for a custodial arrangement. The STRIPS program has eclipsed the private sector programs (which are described below under “—Private Label Custody Receipt Securities”), and investment banks no longer sponsor new issues of custodial receipts.

Treasury Strips may be either “serial” or “callable”. A serial Treasury Strip evidences ownership of one of the periodic interest payments to be made on a Treasury Bond. No payments are made on the Treasury Strip, nor is it redeemable, prior to its maturity, at which time the holder becomes entitled to receive a single payment of the face amount of the Treasury Strip. Callable Treasury Strips relate to payments scheduled to be made after the related Treasury Bonds have become subject to redemption. These Treasury Strips evidence ownership of both principal of the related Treasury Bonds and each of the related interest payments commencing, typically, on the first interest payment date following the first optional redemption date. If the underlying Treasury Bonds are actually redeemed, holders of callable Treasury Strips generally receive a payment equal to the principal portion of the total fa ce amount of the Treasury Strips plus the interest payment represented by the Treasury Strips maturing on the redemption date. No callable Treasury Strips will be included in a Trust. The face amount of any Treasury Strip is the aggregate of all payments scheduled to be received on the Treasury Strip. Treasury Strips are available in registered form and generally may be transferred and exchanged by the holders of the Treasury Strips in accordance with procedures applicable to the particular issue of the Treasury Strips.

A holder of a private label Treasury Strip, as opposed to a STRIP, cannot enforce payment on that Treasury Strip against the Treasury. Instead, the holder must look to the custodian for payment. The custodian, and the holder of a Treasury Strip that obtains ownership of the underlying Treasury Bond, can enforce payment of the underlying Treasury Bond against the Treasury. If any private label Treasury Strips are included in a Trust with respect to any series of securities, the prospectus supplement for the series will include the identity and a brief description of each custodian that issued the Treasury Strips. If the depositor knows that the depositor of the Treasury Bonds underlying the Treasury Strips is the depositor or any of its affiliates, the depositor will disclose that fact in the related prospectus supplement.

GSE Bonds

As specified in the applicable prospectus supplement, the obligations of one or more of the following GSEs may be included in a Trust: Federal National Mortgage Association (“Fannie Mae”), Federal Home Loan Mortgage Association (“Freddie Mac”), REFCO, Tennessee Valley Authority (“TVA”), Federal Home Loan Banks (“FHLB”), to the extent the obligations represent the joint and several obligations of the twelve Federal Home Loan Banks, and Federal Farm Credit Banks (“FFCB”). GSE debt securities are exempt from registration under the securities Act pursuant to Section 3(a)(2) of the securities Act, or are deemed by statute to be so exempt, and are not required to be registered under the Exchange Act. The securities of any GSE, including a GSE Guaranteed Bond, will be included in a Trust only to the extent that (1) its obligations are supported by the full faith and cre dit of the United States government or (2) the organization makes publicly available its annual report which shall include financial statements or similar financial information with respect to the organization (a “GSE Issuer”). Unless otherwise specified in the related prospectus supplement, the GSE Bonds will not be guaranteed by the United States and do not constitute a debt or obligation of the United States or of any agency or instrumentality of the United States other than the related GSE.

Unless otherwise specified in the related prospectus supplement, none of the GSE Bonds will have been issued pursuant to an indenture, and no trustee is provided for with respect to any GSE Bonds. There will generally be a fiscal agent (“Fiscal Agent”) for an issuer of GSE Bonds whose actions will be governed by a fiscal agency agreement. A Fiscal Agent is not a trustee for the holders of the GSE Bonds and does not have the same responsibilities or duties to act for the holders as would a trustee.

GSE Bonds may be subject to particular contractual and statutory restrictions which may provide some protection to securityholders against the occurrence or effects of specified events. Unless otherwise specified in the related prospectus supplement, each GSE is limited to activities as will promote its statutory purposes as set forth in the publicly available information with respect to the issuer. A GSE’s promotion of its statutory purposes, as well as its statutory, structural and regulatory relationships with the federal government, may cause or require the GSE to conduct its business in a manner that differs from what an enterprise which is not a GSE might employ.

The Federal National Mortgage Association

Fannie Mae is a federally chartered and stockholder owned corporation organized and existing under the Federal National Mortgage Association Charter Act. It is the largest investor in home mortgage loans in the United States. Fannie Mae originally was established in 1938 as a corporation wholly owned by the United States government to provide supplemental liquidity to the mortgage market and was transformed into a stockholder owned and privately managed corporation by legislation enacted in 1968 and 1970. Fannie Mae provides funds to the mortgage market by purchasing mortgage loans from lenders, thus replenishing their funds for additional lending. Fannie Mae acquires funds to purchase loans from many capital market investors that ordinarily may not invest in mortgage loans, therefore expanding the total amount of funds available for housing. Operating nationwide, Fannie Mae helps to redistribute mortgage funds from capital-surplus to capital-short areas. Fannie Mae also issues mortgage-backed securities (“MBS”). Fannie Mae receives guaranty fees for its guaranty of timely payment of principal of and interest on MBS. Fannie Mae issues MBS primarily in exchange for pools of mortgage loans from lenders. The issuance of MBS enables Fannie Mae to further its statutory purpose of increasing the liquidity of residential mortgage loans.

Fannie Mae prepares an Information Statement annually which describes Fannie Mae, its business and operations and contains Fannie Mae’s audited financial statements. From time to time Fannie Mae prepares supplements to its Information Statement which include specific unaudited financial data and other information concerning the business and operations of Fannie Mae.

The Federal Home Loan Mortgage Corporation

Freddie Mac is a publicly held government-sponsored enterprise created on July 24, 1970 pursuant to the Federal Home Loan Mortgage Corporation Act, Title III of the Emergency Home Finance Act of 1970, as amended (the “FHLMC Act”). Freddie Mac’s statutory mission is to provide stability in the secondary market for home mortgages, to respond appropriately to the private capital market and to provide ongoing assistance to the secondary market for home mortgages, including mortgages secured by housing for low- and moderate-income families involving a reasonable economic return to Freddie Mac, by increasing the liquidity of mortgage investments and improving the distribution of investment capital available for home mortgage financing. The principal activity of Freddie Mac consists of the purchase of conventional residential mortgages and participation interests in those mortgages from mortgage lending institutions and the sale of guaranteed mortgage securities backed by the mortgages so purchased. Freddie Mac generally matches and finances its purchases of mortgages with sales of guaranteed securities. Mortgages retained by Freddie Mac are financed with short- and long-term debt, cash temporarily held pending disbursement to security holders, and equity capital.

The Resolution Funding Corporation

REFCO is a mixed-ownership government corporation established by Title V of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”). The sole purpose of REFCO is to provide financing for the Resolution Trust Corporation (the “RTC”). REFCO is to be dissolved, as soon as practicable, after the maturity and full payment of all obligations issued by it. REFCO is subject to the general oversight and direction of the Oversight Board, which is comprised of the Secretary of the Treasury, the Chairman of the Board of Governors of the Federal Reserve System, the Secretary of Housing and Urban Development and two independent members to be appointed by the President with the advice and consent of the Senate. The day-to-day operations of REFCO are under the management of a three-member Directorate comprised of the Director of the Office of Finance of the FHLB and two members se lected by the Oversight Board from among the presidents of the twelve FHLB.

The RTC was established by FIRREA to manage and resolve cases involving failed savings and loan institutions pursuant to policies established by the Oversight Board. The RTC was granted authority to issue nonvoting capital certificates to REFCO in exchange for the funds transferred from REFCO to the RTC. Pursuant to FIRREA, the net proceeds of these obligations are used to purchase nonvoting capital certificates issued by the RTC or to retire previously issued REFCO obligations.

The Federal Home Loan Banks

The Federal Home Loan Banks constitute a system of twelve federally chartered corporations (collectively, the “FHLB”), each wholly owned by its member institutions. The mission of the FHLB is to enhance the availability of residential mortgage credit by providing a readily available, low-cost source of funds to their member institutions. A primary source of funds for the FHLB is the proceeds from the sale to the public of debt instruments issued as consolidated obligations, which are the joint and several obligations of all the FHLB. The FHLB are supervised and regulated by the Federal Housing Finance Board, which is an independent federal agency in the executive branch of the United States government, but obligations of the FHLB are not obligations of the United States government.

Tennessee Valley Authority

TVA is a wholly owned corporate agency and instrumentality of the United States of America established pursuant to the Tennessee Valley Authority Act of 1933, as amended (the “TVA Act”). TVA’s objective is to develop the resources of the Tennessee Valley region in order to strengthen the regional and national economy and the national defense. The programs of TVA consist of power and nonpower programs. For the fiscal year ending September 30, 1995, TVA received $139 million in congressional appropriations from the federal government for the nonpower programs. The power program is required to be self-supporting from revenues it produces. The TVA Act authorizes TVA to issue evidences of indebtedness that may be serviced only from proceeds of its power program. TVA bonds are not obligations of or guaranteed by the United States government.

Federal Farm Credit Banks

The Farm Credit System is a nationwide system of lending institutions and affiliated service and other entities (the “System”). Through its Banks (“FCBs”) and related associations, the System provides credit and related services to farmers, ranchers, producers and harvesters of aquatic products, rural homeowners, some farm-related businesses, agricultural and aquatic cooperatives and rural utilities. System institutions are federally chartered under the Farm Credit Act of 1971, as amended (the “Farm Credit Act”), and are subject to regulation by a Federal agency, the Farm Credit Administration (the “FCA”). The FCBs and associations are not commonly owned or controlled. They are cooperatively owned, directly or indirectly, by their respective borrowers. Unlike commercial banks and other financial institutions that lend to the agricultural sector in addition to other sectors of the economy, under the Farm Credit Act the System institutions are restricted solely to making loans to qualified borrowers in the agricultural sector, to some related businesses and to rural homeowners. Moreover, the System is required to make credit and other services available in all areas of the nation. In order to fulfill its broad statutory mandate, the System maintains lending units in all 50 states and the Commonwealth of Puerto Rico.

The System obtains funds for its lending operations primarily from the sale of debt securities issued under Section 4.2(d) of the Farm Credit Act (“Systemwide Debt Securities”). The FCBs are jointly and severally liable on all Systemwide Debt Securities. Systemwide Debt Securities are issued by the FCBs through the Federal Farm Credit Banks Funding Corporation, as agent for the FCBs (the “Funding Corporation”).

Private Label Custody Receipt Securities

If so specified in the applicable prospectus supplement, the issuing entity for a series may include, but will not consist entirely of, any combination of (1) receipts or other instruments, other than Treasury Strips, evidencing ownership of specific interest and/or principal payments to be made on particular Treasury Bonds held by a custodian (“Private Label Custody Strips”) and (2) receipts or other instruments evidencing ownership of specific interest and/or principal payments to be made on specific Resolution Funding Corporation (“REFCO”) bonds (“REFCO Strips”; and together with Private Label Custody Strips, “Private Label Custody Receipt Securities”). The Private Label Custody Receipt Securities, if any, included in an issuing entity are intended to assure investors that funds are available to make specified payments of principal and/or interest due on the related sec urities. Accordingly, the Private Label Custody Receipt Securities, if any, included in an issuing entity are intended both to (1) support the ratings assigned to the securities, and (2) perform a function similar to that described in this prospectus under “Description of the Transfer and Servicing Agreements—Credit and Cash Flow Enhancement”. A description of the respective general features of Private Label Custody Strips and REFCO Strips is set forth below.

The prospectus supplement for each series of securities the issuing entity with respect to which contains Private Label Custody Receipt Securities will contain information as to:

(1)

the title and series of each Private Label Custody Receipt Security, the aggregate principal amount, denomination and form of each Private Label Custody Receipt Security;

(2)

the limit, if any, upon the aggregate principal amount of each Private Label Custody Receipt Security;

(3)

the dates on which, or the range of dates within which, the principal of, and premium, if any, on, each Private Label Custody Receipt Security will be payable;

(4)

the rate or rates, or the method of determination of the rate or rates, at which each Private Label Custody Receipt Security will bear interest, if any, the date or dates from which the interest will accrue, and the dates on which the interest will be payable;

(5)

whether each Private Label Custody Receipt Security was issued at a price lower than the principal amount of that Private Label Custody Receipt Security;

(6)

material events of default or restrictive covenants provided for with respect to each Private Label Custody Receipt Security;

(7)

the rating of each Private Label Custody Receipt Security, if any;

(8)

the issuer of each Private Label Custody Receipt Security;

(9)

the material risks, if any, posed by each Private Label Custody Receipt Security and the issuer of each Private Label Custody Receipt Security, which risks, if appropriate, will be described in the “Risk Factors” section of the related prospectus supplement; and

(10)

any other material terms of each Private Label Custody Receipt Security.

With respect to an issuing entity which includes a pool of Private Label Custody Receipt Securities, the related prospectus supplement will, to the extent applicable, describe the composition of the Private Label Custody Receipt Securities’ pool, particular material events of default or restrictive covenants common to the Private Label Custody Receipt Securities, and, on an aggregate, percentage or weighted average basis, as applicable, the characteristics of the pool with respect to the terms set forth in (3), (4) and (5) of the preceding sentence and any other material terms regarding the pool.

The Private Label Custody Receipt Securities included in an issuing entity will be senior, unsecured, nonredeemable obligations of the issuers of the Private Label Custody Receipt Securities, will be denominated in United States dollars and, if rated, will be rated at least investment grade by at least one nationally recognized rating agency. In addition, the inclusion of Private Label Custody Receipt Securities in an issuing entity with respect to a series of securities is conditioned upon their characteristics being in form and substance satisfactory to the Rating Agency rating the related series of securities. Each issuing entity will be provided with an opinion of counsel to the issuing entity to the effect that the Private Label Custody Receipt Securities included in the issuing entity are exempt from the registration requirements of the securities Act. A copy of the opinion will be filed with the SEC in a Current Report on Form 8-K or in a post-effective amendment to the Registration Statement.

Private Label Custody Strips

The first “stripping” of Treasury Bonds occurred in the 1970s when government securities dealers physically separated coupons from definitive certificates and offered them to investors as tax-deferred investments. Investors were able to purchase the “strip” at a deep discount and pay no federal income tax until resale or maturity. This tax treatment was limited in 1982 by the Tax Equity and Fiscal Responsibility Act (“TEFRA”) which required holders of strips to accrue a portion of the discount toward par annually and report this accrual, even though unrealized, as taxable income. TEFRA also required that all new Treasury issues be made available only in book-entry form.

The shift to “book-entry only” Treasury Bonds created a shortage of the physical certificates needed for stripping. In response, various dealers created custodial receipt programs in which Treasury Bonds in book-entry form were deposited with custodians who would then issue certificates evidencing rights in principal and interest payments. Some of the better known programs first came to market in 1982 and 1983. Although available eventually in denominations as small as $1,000, these custodial receipts lacked the liquidity of the physical strips. While physical strips had multiple market-makers, custodial receipts were proprietary and, as such, the sole market-maker would usually be an affiliate of the program’s sponsor. As a result, the market that developed for the receipts was segmented.

In early 1984, a group of dealers sought to enhance the liquidity of custodial receipts by developing a generic, multiple market-maker security known as a TR (Treasury Receipt). A large secondary market quickly developed in these generic Treasury Strips.

Treasury Receipts, physical strips and the proprietary receipts trade at varying discounts from STRIPS which reflect, among other things, lower levels of liquidity and the structuring difference discussed above.

A holder of a Private Label Custody Strip, as opposed to a STRIP, cannot enforce payment on a Treasury Strip against the Treasury, instead, the holder must look to the custodian for payment. The custodian, and the holder of a Private Label Custody Strip that obtains ownership of the underlying Treasury Bond, can enforce payment of the underlying Treasury Bond against the Treasury. If any Private Label Custody Strips are included in an issuing entity with respect to any series of securities, the prospectus supplement for the series will include the identity and a brief description of each custodian that issued the Private Label Custody Strips. If the depositor knows that the depositor of the Treasury Bonds underlying the Private Label Custody Strips is the depositor or any of its affiliates, the depositor will disclose this fact in the related prospectus supplement.

REFCO Strips

A REFCO Bond may be divided into its separate components, consisting of: (1) each future semiannual interest distribution (an “Interest Component”); and (2) the principal payment (the “Principal Component”) (each component individually referred to in this prospectus as a “REFCO Strip”). REFCO Strips are not created by REFCO. Instead, third parties such as investment banking firms create them. Each REFCO Strip has an identifying designation and CUSIP number. REFCO Strips generally trade in the market for Treasury Strips at yields of a few basis points over Treasury Strips of similar maturities. REFCO Strips are viewed generally by the market as liquid investments.

For a REFCO Bond to be separated into its components, the par amount of the REFCO Bond must be in an amount which, based on the stated interest rate of the REFCO Bond, will produce a semiannual interest payment of $1,000 or an integral multiple of $1,000. REFCO Bonds may be separated into their components at any time from the issue date until maturity. Once created, REFCO Strips are maintained and transferred in integral multiples of $1,000.

A holder of a REFCO Strip cannot enforce payment on the REFCO Strip against REFCO. Instead, the holder must look to the custodian for payment. The custodian, and the holder of a REFCO Strip that obtains ownership of the underlying REFCO Bond, can enforce payment of the underlying REFCO Bond against REFCO. The identity and a brief description of each custodian that has issued any REFCO Strip included in a Trust will be set forth in the related prospectus supplement. If the depositor knows that the depositor of the REFCO Bonds underlying the REFCO Strips included in the Trust is the depositor or any of its affiliates, the depositor will disclose this fact in the related prospectus supplement.

Weighted Average Life of the Securities

The weighted average life of the notes, if any, and the certificates of any series generally will be influenced by the rate at which the principal balances of the related Primary Assets are paid, which payment may be in the form of scheduled amortization or prepayments. With respect to securities backed by Receivables and to receivables underlying Collateral Certificates, the term “prepayments” includes prepayments in full, partial prepayments, including those related to rebates of extended warranty contract costs and insurance premiums, liquidations due to defaults, as well as receipts of proceeds from physical damage, credit life and disability insurance policies, or the Repurchase Amount of Receivables and/or Collateral Certificates repurchased by the depositor or a seller or purchased by a servicer for administrative reasons. With respect to securities backed by Government Securities and/or Private Label Custody Receipt Securities, as applicable, the term “prepayments” means the Repurchase Amount of Government Securities and/or Private Label Custody Receipt Securities repurchased by the depositor or purchased by a servicer for administrative reasons. Substantially all of the Receivables and receivables underlying Collateral Certificates are prepayable at any time without penalty to the obligor. The rate of prepayment of boat receivables is influenced by a variety of economic, social and other factors, including the fact that an obligor generally may not sell or transfer the Financed Boat securing a receivable without the consent of the related seller. The rate of prepayment on receivables may also be influenced by the structure of the loan. In addition, under some circumstances, the related seller will be obligated to repurchase Receivables from a given issuing entity pursuant to the related Receivables Purchase Agreement as a result of breaches of representations and warranties, and the ser vicer will be obligated to purchase Receivables from the issuing entity pursuant to the Sale and Servicing Agreement or Pooling and Servicing Agreement as a result of breaches of specific covenants. See “Description of the Transfer and Servicing Agreements—Sale and Assignment of Primary Assets” and “Servicing Procedures”. See also “Certain Matters Regarding the Servicer—Termination” regarding the servicer’s option to purchase Primary Assets from a given Trust.

In light of the above considerations, there can be no assurance as to the amount of principal payments to be made on the notes and/or certificates of a series on each Distribution Date since the amount will depend, in part, on the amount of principal collected on the related Primary Assets during the applicable Collection Period. Any reinvestment risks resulting from a faster or slower incidence of payment of Primary Assets will be borne entirely by the noteholders and certificateholders. The related prospectus supplement may set forth some additional information with respect to the maturity and prepayment considerations applicable to particular Primary Assets and the related series of securities.

Pool Factors and Trading Information

The “Note Pool Factor” for each class of notes will be a seven-digit decimal which the servicer or trustee will compute prior to each distribution with respect to the class of notes indicating the remaining outstanding principal balance of that class of notes, as of the applicable Distribution Date, after giving effect to payments to be made on the applicable Distribution Date, as a fraction of the initial outstanding principal balance of the class of notes. The “Certificate Pool Factor” for each class of certificates will be a seven-digit decimal which the servicer or trustee will compute prior to each distribution with respect to the class of certificates indicating the remaining certificate balance of the class of certificates, as of the applicable Distribution Date, after giving effect to distributions to be made on the applicable Distribution Date, as a fraction of the initial certificat e balance of the class of certificates. Each Note Pool Factor and each Certificate Pool Factor will be 1.0000000 as of the related closing date, and after will decline to reflect reductions in the outstanding principal balance of the applicable class of notes or the reduction of the certificate balance of the applicable class of certificates. A noteholder’s portion of the aggregate outstanding principal balance of the related class of notes will be the product of (1) the original denomination of the noteholder’s note and (2) the applicable Note Pool Factor at the time of determination. A certificateholder’s portion of the aggregate outstanding certificate balance for the related class of certificates will be the product of (a) the original denomination of the certificateholder’s certificate and (b) the applicable Certificate Pool Factor at the time of determination.

As provided in the related prospectus supplement, the noteholders, if any, and the certificateholders will receive reports on or about each Distribution Date concerning payments received on the Receivables, the Pool Balance and each Note Pool Factor or Certificate Pool Factor, as applicable. In addition, Securityholders of record during any calendar year will be furnished information for tax reporting purposes not later than the latest date permitted by law. See “Certain Information Regarding the Securities— Statements to Securityholders”.

The Seller and the Servicer

Information with respect to the seller and the servicer will be set forth in the related prospectus supplement.

Use of Proceeds

If so provided in the related prospectus supplement, the net proceeds from the sale of the securities of a series will be applied by the applicable issuing entity to the purchase of the Primary Assets from the depositor or the seller, as applicable and any other use specified in the prospectus supplement. The depositor will use the portion of the net proceeds paid to it to purchase the Primary Assets and any other use specified in the prospectus supplement.

Description of the Notes

Each issuing entity that is an owner trust will issue one or more classes of notes pursuant to an indenture (an “Indenture”) between the related owner trust and the indenture trustee, a form of which has been filed as an exhibit to the Registration Statement of which this prospectus forms a part. The following summary describes the material provisions of each Indenture which are anticipated to be common to any notes included in a series of securities. The following summary does not purport to be a complete description of all terms of the related notes or Indenture and therefore is subject to, and is qualified in its entirely by reference to, the provisions of the related notes and Indenture.

If so specified in the related prospectus supplement, each class of notes will initially be represented by one or more certificates registered in the name of the nominee of DTC (together with any successor depositor selected by the Trust, the “Depository”). The notes will be available for purchase in minimum denominations of $1,000 or any other minimum denomination as shall be specified in the related prospectus supplement and integral multiples of $1,000 or any other minimum denomination so specified in the related prospectus supplement in book-entry form or any other form as shall be specified in the related prospectus supplement. If the notes are available in book-entry form only, the depositor has been informed by DTC that DTC’s nominee will be Cede unless another nominee is specified in the related prospectus supplement. Accordingly, the nominee is expected to be the holder of record of the n otes of each class. If the notes are available in book-entry form only, unless and until Definitive notes are issued under the limited circumstances described in this prospectus or in the related prospectus supplement, no noteholder will be entitled to receive a physical certificate representing a note. If the notes are available in book-entry form only, all references in this prospectus and in the related prospectus supplement to actions by noteholders refer to action taken by DTC upon instructions from it participating organizations, and all references in this prospectus and in the related prospectus supplement to distributions, notices, reports and statements to noteholders refer to distributions, notices, reports and statements to DTC or its nominee, as registered holder of the notes, for distribution to noteholders in accordance with DTC’s procedures with respect to distributions. See “Certain Information Regarding the Securities—Book-Entry Registration” and “—Definitive Se curities”.

Distribution of Principal and Interest

The timing and priority of payment, seniority, allocations of losses, interest rate and amount of or method of determining payments of principal and interest on each class of notes of a series will be described in the related prospectus supplement. The right of holders of any class of notes to receive payments of principal and interest may be senior or subordinate to the rights of holders of one or more other class or classes of notes of the series, as described in the related prospectus supplement. The related prospectus supplement may provide that payments of interest on the notes will be made prior to payments of principal on the notes. If so provided in the related prospectus supplement, a series of notes may include one or more classes of strip notes entitled to (1) principal payments with disproportionate, nominal or no interest payments or (2) interest payments with disproportionate, nominal or no princip al payments. Each class of notes may have a different interest rate, which may be a fixed, variable or adjustable interest rate, and which may be zero for some classes of strip notes, or any combination of the foregoing. The related prospectus supplement will specify the interest rate for each class of notes of a series or the method for determining the interest rate. One or more classes of notes of a series may be redeemable in whole or in part under the circumstances specified in the related prospectus supplement, including as a result of the exercise by the servicer of its option to purchase the related Receivable Pool. See “Certain Matters Regarding the Servicer—Termination”.

To the extent specified in any prospectus supplement, one or more classes of notes of a given series may have fixed principal payment schedules, as set forth in the prospectus supplement. Holders of any notes will be entitled to receive payments of principal on any given Distribution Date in the applicable amount set forth on the schedule with respect to the notes, in the manner and to the extent set forth in the related prospectus supplement.

The related prospectus supplement may also provide that payment of interest to noteholders of all classes within a series will have the same priority. Under some circumstances, the amount available for payments could be less than the amount of interest payable on the notes on a Distribution Date, in which case each class of notes will receive its ratable share, based upon the aggregate amount of interest due to the class of notes, of the aggregate amount available to be distributed on the date as interest on the notes of the series. See “Description of the Transfer and Servicing Agreements—Distributions” and “—Credit and Cash Flow Enhancement”.

In the case of a series of securities issued by an issuing entity that includes two or more classes of notes, the sequential order and priority of payment in respect of principal and interest, and any schedule or formula or other provisions applicable to the determination of the sequential order and priority of payment in respect of principal and interest, of each class will be set forth in the related prospectus supplement. Payments in respect of principal of and interest on any class of notes will be made on a pro rata basis among all the noteholders of the class or by any other method as is specified in the prospectus supplement.

If specified in the related prospectus supplement, the issuing entity may issue securities from time to time and use the proceeds of this issuance to make principal payments with respect to a series.

Revolving Period

The applicable prospectus supplement may provide that all or a portion of the principal collections may be applied by the issuing entity to the acquisition of subsequent Receivables or Collateral Certificates during a specified period rather than used to distribute payments of principal to holders of securities during that period.  These securities would then possess an interest only period, also commonly referred to as a “revolving period”, which will be followed by an “amortization period”, during which principal will be paid.  Any interest only or revolving period may terminate prior to the end of the specified period and result in the earlier than expected principal repayment of the securities.

Provisions of the Indenture

Events of Default; Rights upon Event of Default. “Events of Default” in respect of a series of notes under the related Indenture will consist of:

(1)

a default for five days or more in the payment of any interest on any note;

(2)

a default in the payment of the principal of, or any installment of the principal of, any note when the same becomes due and payable;

(3)

a default in the observance or performance of any material covenant or agreement of the related Trust made in the related Indenture and the continuation of any default for a period of 30 days, or for a longer period, not in excess of 90 days, as may be reasonably necessary to remedy the default; provided that the default is capable of remedy within 90 days or less and servicer on behalf of the related trustee delivers an Officer’s Certificate to the related indenture trustee to the effect that the trustee has commenced, or will promptly commence and diligently pursue, all reasonable efforts to remedy the default, after notice of the default is given to the related issuing entity by the applicable indenture trustee or to the Trust and the related indenture trustee by the holders of 25% of the aggregate outstanding principal amount of the notes;

(4)

any representation or warranty made by the issuing entity in the related Indenture or in any certificate delivered pursuant to the related Indenture or in connection with the related Indenture having been incorrect in a material respect as of the time made, if the breach is not cured with 30 days, or for a longer period, not in excess of 90 days, as may be reasonably necessary to remedy the default; provided that the default is capable of remedy within 90 days or less and servicer on behalf of the related trustee delivers an Officer’s Certificate to the related indenture trustee to the effect that the trustee has commenced, or will promptly commence and diligently pursue, all reasonable efforts to remedy the default, after notice of the breach is given to the issuing entity by the applicable indenture trustee or to the Trust and the indenture trustee by the holder of 25% of the aggregate outstanding princi pal amount of the notes;

(5)

particular events of bankruptcy, insolvency, receivership or liquidation with respect to the Trust or a substantial part of the property of the issuing entity; and

(6)

any other events as may be specified in the prospectus supplement.

The amount of principal required to be paid to noteholders of each series under the related Indenture on any Distribution Date generally will be limited to amounts available to be deposited in the applicable Note Distribution Account. Therefore, the failure to pay principal on a class of notes generally will not result in the occurrence of an Event of Default until the applicable final scheduled Distribution Date for the class of notes.

If an Event of Default should occur and be continuing with respect to the notes of any series, the related indenture trustee or holders of a majority in principal amount of the notes may declare the principal of the notes to be immediately due and payable. This declaration may, under some circumstances, be rescinded by the holders of a majority in principal amount of the notes then outstanding.

If the notes of any series are declared due and payable following an Event of Default, the related indenture trustee may institute proceedings to collect amounts due on the notes, foreclose on the property of the issuing entity, exercise remedies as a secured party, sell the related Primary Assets or elect to have the applicable issuing entity maintain possession of the Primary Assets and continue to apply collections on these Primary Assets as if there had been no declaration of acceleration. Subject to particular limitations that, if applicable, will be specified in the related prospectus supplement, the indenture trustee will be prohibited from selling the Primary Assets following an Event of Default, other than a default in the payment of any principal of, or a default for five days or more in the payment of any interest on, any note of the series, unless

·

the holders of all outstanding notes consent to the sale,

·

the proceeds of the sale are sufficient to pay in full the principal of and the accrued interest on the outstanding notes at the date of sale or

·

the indenture trustee determines that the proceeds of the Primary Assets would not be sufficient on an ongoing basis to make all payments on the notes as these payments would have become due if these obligations had not been declared due and payable, and the indenture trustee obtains the consent of the holders of 66 2/3% of the aggregate outstanding principal amount of the notes.

Subject to the provisions of the applicable Indenture relating to the duties of the related indenture trustee, if an Event of Default occurs and is continuing with respect to a series of notes, the indenture trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the holders of the notes if it reasonably believes it will not be adequately indemnified against the costs, expenses and liabilities that might be incurred by it in complying with the request. Subject to the provisions for indemnification and particular limitations contained in the related Indenture, the holders of a majority of the aggregate outstanding principal amount of the notes of a series will have the right to direct the time, method and place of conducting any proceeding or exercising any remedy available to the related indenture trustee. In addition, the holders of n otes representing a majority of the aggregate outstanding principal amount of the notes may, in some cases, waive any default with respect to the notes, except a default in the payment of principal of or interest on any note or a default in respect of a covenant or provision of the Indenture that cannot be modified or amended without the waiver or consent of the holders of all the outstanding notes of the series.

Except to the extent provided in the related prospectus supplement, no holder of a note will have the right to institute any proceeding with respect to the related Indenture, unless:

·

the holder previously has given to the applicable indenture trustee written notice of a continuing Event of Default;

·

the holders of not less than 25% of the outstanding principal amount of the notes have made written request to the indenture trustee to institute a proceeding in its own name as indenture trustee;

·

the holder or holders have offered the indenture trustee reasonable indemnity;

·

the indenture trustee has for 60 days failed to institute a proceeding; and

·

no direction inconsistent with a written request has been given to the indenture trustee during the 60-day period by the holders of a majority of the outstanding principal amount of the notes of the series.

With respect to any issuing entity that issues notes, none of the related indenture trustee in its individual capacity, the related trustee in its individual capacity, any holder of a certificate representing an ownership interest in the issuing entity, or any of their respective beneficiaries, agents, officers, directors, employees, affiliates, successors or assigns will, in the absence of an express agreement to the contrary, be personally liable for the payment of the principal of or interest on the related notes or for the agreements of the Trust contained in the applicable Indenture.

No issuing entity may engage in any activity other than as described in this prospectus or in the related prospectus supplement. No issuing entity will incur, assume or guarantee any indebtedness other than indebtedness incurred pursuant to the related notes and the related Indenture, pursuant to any Advances made to it by the servicer or otherwise in accordance with the Related Documents.

Certain Covenants. Each Indenture will provide that the related issuing entity may not consolidate with or merge into any other entity, unless

·

the entity formed by or surviving the consolidation or merger is organized under the laws of the United States, any state or the District of Columbia;

·

the entity expressly assumes the issuing entity’s obligation to make due and punctual payments upon the notes of the related series and to perform or observe every agreement and covenant of the issuing entity under the Indenture;

·

no Event of Default shall have occurred and be continuing immediately after the merger or consolidation;

·

the issuing entity has been advised by each Rating Agency that the merger or consolidation will not result in the qualification, reduction or withdrawal of its then-current rating of any class of the notes or certificates of the series;

·

the issuing entity has received an opinion of counsel to the effect that the consolidation or merger would have no material adverse tax consequence to the Trust or to any related noteholder or certificateholder;

·

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

·

the issuing entity has delivered to the related indenture trustee an Officer’s Certificate and an opinion of counsel that the merger complies with the requirements and conditions precedent of the Indenture.

No issuing entity that issues notes will:

·

except as expressly permitted by the applicable Indenture, the applicable Transfer and Servicing Agreements or other documents with respect to the Trust (the “Related Documents”), sell, transfer, exchange or otherwise dispose of any of the assets of the issuing entity;

·

claim any credit on or make any deduction from the principal and interest payment in respect to the related notes, other than amounts withheld under the Code or applicable state tax laws, or assert any claim against any present or former holder of the notes because of the payment of taxes levied or assessed upon the issuing entity;

·

dissolve or liquidate in whole or in part;

·

permit the validity or effectiveness of the related Indenture to be impaired or permit any person to be released from any covenants or obligations with respect to the related notes under the Indenture except as may be expressly permitted by the related Indenture;

·

permit any lien, charge, excise, claim, security interest, mortgage or other encumbrance to be created on or extent to or otherwise arise upon or burden the assets of the issuing entity or any part of the issuing entity, or any interest in the issuing entity or the proceeds of the issuing entity; or

·

permit the lien of the related Indenture not to constitute a valid first priority security interest, other than with respect to a tax, mechanics’ or similar lien, in the asset of the issuing entity.

Each indenture trustee and the related noteholders, by accepting the related notes, will covenant that they will not at any time institute against the applicable Trust any bankruptcy, reorganization or other proceeding under any federal or state bankruptcy or similar law.

Modification of Indenture. Each owner trustee and the related indenture trustee may, with the consent of the holders of a majority of the aggregate outstanding principal amount of the notes of the related series, execute a supplemental indenture to add provisions to, change in any manner or eliminate any provisions of, the related Indenture, or modify (except as provided below) in any manner the rights of the related noteholders. Except as otherwise provided in the related Indenture, without the consent of the holder of each outstanding note affected by the related supplemental indenture, no supplemental indenture will:

·

change the due date of any installment of principal of or interest on any note or reduce the principal amount of any note, the interest rate specified on any note or the redemption price with respect to any note, change the provisions of the related Indenture relating to the application of collections on, or the proceeds of the sale of, the property of the related issuing entity to payment of principal or interest on the notes of the series, or change any place of payment where or the coin or currency in which any note or any interest on any note is payable;

·

impair the right to institute suit for the enforcement of specific provisions of the related Indenture;

·

reduce the percentage of the aggregate amount of the outstanding notes of the series, the consent of the holders of which is required for any supplemental indenture or for any waiver of compliance with specific provisions of the related Indenture or of particular defaults under the related Indenture and their consequences as provided for in the related Indenture;

·

modify or alter the provisions of the related Indenture regarding the voting of notes held by the applicable owner trust, any other obligor on the notes, the seller or an affiliate of any of them;

·

reduce the percentage of the aggregate outstanding amount of the notes, the consent of the holders of which is required to direct the related indenture trustee to sell or liquidate the Primary Assets if the proceeds of the sale would be insufficient to pay the principal amount and accrued and unpaid interest on the outstanding notes of the series;

·

decrease the percentage of the aggregate principal amount of the notes required to amend the sections of the related Indenture that specify the percentage of the aggregate principal amount of the notes of the series necessary to amend the related Indenture or other related agreements; or

·

permit the creation of any lien ranking prior to or on a parity with the lien of the related Indenture with respect to any of the collateral for the notes or, except as otherwise permitted or contemplated in the Indenture, terminate the lien of the related Indenture on any of the collateral or deprive the holder of any note of the security afforded by the lien of the related Indenture.

An issuing entity that is an owner trust and the related indenture trustee may also enter into supplemental indentures, without obtaining the consent of the noteholders of the related series,

(1)

to cure any ambiguity;

(2)

to correct or supplement any provisions in the Indenture; or

(3)

for the purpose of, among other things, adding any provisions to or changing in any manner or eliminating any of the provisions of the related Indenture;

provided that the action referred to in clause (3) above will not materially and adversely affect the interest of any noteholder.

Annual Compliance Statement. Each owner trust will be required to file annually with the related indenture trustee a written statement as to the fulfillment of its obligations under the Indenture.

Indenture Trustee’s Annual Report. If required by the Trust Indenture Act, the indenture trustee for each issuing entity that is an owner trust will mail each year to all related noteholders a brief report relating to its eligibility and qualification to continue as indenture trustee under the related Indenture, any amounts advanced by it under the Indenture, the amount, interest rate and maturity date of particular indebtedness, if any, owing by the owner trust to the applicable indenture trust in its individual capacity, the property and funds physically held by the indenture trustee as indenture trustee and any action taken by it that materially affects the related notes that has not been previously reported.

Satisfaction and Discharge of Indenture. Each Indenture will be discharged with respect to the collateral securing the related notes upon the delivery to the related indenture trustee for cancellation of all of the notes or, with limitations, upon deposit with the indenture trustee of funds sufficient for the payment in full of all the notes.

The Indenture Trustee

The indenture trustee for a series of notes will be specified in the related prospectus supplement. The indenture trustee for any series may resign at any time, in which event the related issuing entity will be obligated to appoint a successor indenture trustee for the series. Additionally, the holders of a majority of the outstanding amount of the notes of a series may remove the related indenture trustee and appoint a successor indenture trustee. An issuing entity may also remove the related indenture trustee if the indenture trustee ceases to be eligible to continue in that capacity under the related Indenture, if particular insolvency events occur with respect to the indenture trustee or if the indenture trustee otherwise becomes incapable of acting as indenture trustee. In these circumstances, the issuing entity will be obligated to appoint a successor indenture trustee for the applicable series of notes. N o resignation or removal of the indenture trustee and appointment of a successor indenture trustee for a series of notes will become effective until the acceptance of the appointment by the successor indenture trustee for the series and payment of all fees and expenses owed to the outgoing indenture trustee.

Description of the Certificates

Each issuing entity may issue one or more classes of certificates pursuant to a Trust Agreement or Pooling and Servicing Agreement, as applicable. A form of each of the Trust Agreement and the Pooling and Servicing Agreement has been filed as an exhibit to the Registration Statement of which this prospectus forms a part. The following summary describes the material provisions of the Trust Agreement and the Pooling and Servicing Agreement, in each case, which are anticipated to be common to any certificates included in a series of securities. The following summary does not purport to be a complete description of all terms of the related certificates, Trust Agreement or Pooling and Servicing Agreement and therefore is subject to, and is qualified in its entirety by reference to, the provisions of the related certificates and Trust Agreement or Pooling and Servicing Agreement, as applicable.

If so specified in the related prospectus supplement and except for the certificates, if any, of a series purchased by the depositor, a seller or any of their respective affiliates, each class of certificates will initially be represented by one or more certificates registered in the name of the Depository. The certificates will be available for purchase in minimum denominations of $10,000 or any other minimum denomination as shall be specified in the related prospectus supplement and integral multiples of $1,000 in excess of $10,000 or any other minimum denomination so specified in the related prospectus supplement in book-entry form only, or any other form as shall be specified in the related prospectus supplement. If the certificates are available in book-entry form only, the depositor has been informed by DTC that DTC’s nominee will be Cede. Accordingly, the nominee is expected to be the holder of recor d of the certificates of any series. If the certificates are available in book-entry form only, unless and until Definitive certificates are issued under the limited circumstances described in this prospectus or in the related prospectus supplement, no certificateholder, other than the depositor, a seller or any of their respective affiliates, will be entitled to receive a physical certificate representing a certificate. If the certificates are available in book-entry form only, all references in this prospectus and in the related prospectus supplement to actions by certificateholders refer to actions taken by DTC upon instructions from the Participants, and all references in this prospectus and in the related prospectus supplement to distributions, notices, reports and statements to certificateholders refer to distributions, notices, reports and statements to DTC or its nominee, as the case may be, as the registered holder of the certificates, for distribution to certificateholders in accordance with DTC
46;s procedures with respect to distributions. See “Certain Information Regarding the Securities—Book-Entry Registration” and “—Definitive Securities”. Any certificate of a series owned by the depositor, a seller or any of their respective affiliates will be entitled to equal and proportionate benefits under the applicable Trust Agreement or Pooling and Servicing Agreement, as applicable, except that, unless otherwise provided in the related Trust Agreement, the certificates will be deemed not to be outstanding for the purpose of determining whether the requisite percentage of certificateholders has given any request, demand, authorization, direction, notice, or consent or taken any other action under the Related Documents.

Distributions of Principal and Interest

The timing and priority of distributions, seniority, allocations of losses, certificate pass-through rate and amount of or method of determining distributions with respect to principal and interest on each class of certificates of a series will be described in the related prospectus supplement. Distributions of interest on these certificates will be made on the dates specified in the related prospectus supplement (the “Distribution Date”) and will be made prior to distributions with respect to principal of the certificates. To the extent provided in the related prospectus supplement, a series of certificates may include one or more classes of strip certificates entitled to (1) principal distributions with disproportionate, nominal or no interest distributions or (2) interest distributions with disproportionate, nominal or no principal distributions. Each class of certificates may have a different certi ficate pass-through rate, which may be a fixed, variable or adjustable certificate pass-through rate, and which may be zero for some classes of strip certificates, or any combination of the foregoing. The related prospectus supplement will specify the certificate pass-through rate for each class of certificates of a series or the method for determining the certificate pass-through rate.

In the case of a series of securities that includes two or more classes of certificates, the timing, sequential order, priority of payment or amount of distributions in respect of interest and principal, and any schedule or formula or other provisions applicable to the determination of the timing, sequential order, priority of payment or amount of distributions in respect of interest and principal, of each class will be as set forth in the related prospectus supplement. In the case of certificates issued by an owner trust, distributions in respect of these certificates will be subordinated to payments in respect of the notes of the related series and to the extent described in the related prospectus supplement. Distributions in respect of interest on and principal of any class of certificates will be made on a pro rata basis among all holders of certificates of the class.

Certain Information Regarding the Securities

Book-Entry Registration

If so specified in the related prospectus supplement, DTC will act as securities depositor for each class of securities offered by this prospectus. Each class of securities initially will be represented by one or more certificates registered in the name of Cede, the nominee of DTC. As the nominee of DTC, it is anticipated that the only “noteholder” and/or “certificateholder” with respect to a series of securities will be Cede. Beneficial owners of the securities (“Security Owners”) will not be recognized as “noteholders” by the related indenture trustee, as the term is used in each Indenture, or as “certificateholders” by the related trustee, as the term is used in each Trust Agreement or Pooling and Servicing Agreement, as applicable, and Security Owners will be permitted to exercise the rights of noteholders or certificateholders only indirectly through DTC and its participating members (“Participants”).

DTC is a limited purpose trust depositor organized under the laws of the State of New York, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the Uniform Commercial Code (the “UCC”) in effect in the State of New York, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for the Participants and to facilitate the clearance and settlement of securities transactions between Participants through electronic book-entries, thus eliminating the need for physical movement of certificates. Participants include securities brokers and dealers, banks, trust companies and clearing corporations. Indirect access to the DTC system also is available to banks, brokers, dealers and trust companies that cle ar through or maintain a custodial relationship with a Participant, either directly or indirectly (the “Indirect Participants”).

Security Owners that are not Participants or Indirect Participants but desire to purchase, sell or otherwise transfer ownership of, or an interest in, the securities may do so only through Participants and Indirect Participants. In addition, all Security Owners will receive all distributions of principal and interest from the related indenture trustee or the related trustee, as applicable, through Participants or Indirect Participants. Under a book-entry format, Security Owners may experience some delay in their receipt of payments, since these payments will be forwarded by the applicable trustee or indenture trustee to DTC’s nominee. DTC will then forward the payments to the Participants, which will then forward them to Indirect Participants or Security Owners.

Under the rules, regulations and procedures creating and affecting DTC and its operations (the “Rules”), DTC is required to make book-entry transfers among Participants on whose behalf it acts with respect to the securities and to receive and transmit distributions of principal of and interest on the securities. Participants and Indirect Participants with which Security Owners have accounts with respect to the securities similarly are required to make book-entry transfers and to receive and transmit the payments on behalf of their respective Security Owners. Accordingly, although Security Owners will not possess physical certificates representing the securities, the Rules provide a mechanism by which Participants and Indirect Participants will receive payments and transfer or exchange interests, directly or indirectly, on behalf of Security Owners.

Because DTC can act only on behalf of Participants, who in turn may act on behalf of Indirect Participants, the ability of a Security Owner to pledge securities to persons or entities that do not participate in the DTC system, or otherwise take actions with respect to the securities, may be limited due to the lack of a physical certificate representing the securities.

DTC has advised the depositor that it will take any action permitted to be taken by a Security Owner under the Indenture, Trust Agreement or Pooling and Servicing Agreement, as applicable, only at the direction of one or more Participants to whose account with DTC the securities are credited. DTC may take conflicting actions with respect to other undivided interests to the extent that these actions are taken on behalf of Participants whose holdings include the undivided interests.

Clearstream Banking, société anonyme, 67 Bd Grande-Duchesse Charlotte, L-2967 Luxembourg (“Clearstream, Luxembourg”), was incorporated in 1970 as “Cedel S.A.”, a depositor with limited liability under Luxembourg law (a société anonyme).  Cedel S.A. subsequently changed its name to Cedelbank.  On January 10, 2000, Cedelbank’s parent depositor, Cedel International, société anonyme (“CI”) merged its clearing, settlement and custody business with that of Deutsche Börse Clearing AG (“DBC”).  The merger involved the transfer by CI of substantially all of its assets and liabilities (including its shares in CB) to a new Luxembourg depositor, New Cedel International, société anonyme (“New CI”), which is 50% owned by CI and 50% owned by DBC’s parent depositor Deutsche Börse AG.  The shareholder s of these two entities are banks, securities dealers and financial institutions.  Cedel International currently has 92 shareholders, including U.S. financial institutions or their subsidiaries.  No single entity may own more than 5 percent of Cedel International’s stock.

Further to the merger, the Board of Directors of New Cedel International decided to rename the companies in the group in order to give them a cohesive brand name.  The new brand name that was chosen is “Clearstream”.  With effect from January 14, 2000 New CI has been renamed “Clearstream International, société anonyme”.  On January 18, 2000, Cedelbank was renamed “Clearstream Banking, société anonyme”, and Cedel Global Services was renamed “Clearstream Services, société anonyme”.

On January 17, 2000 DBC was renamed “Clearstream Banking AG”.  This means that there are now two entities in the corporate group headed by Clearstream International which share the name “Clearstream Banking”, the entity previously named “Cedelbank” and the entity previously named “Deutsche Borse Clearing AG”.

Clearstream, Luxembourg holds securities for its customers (“Clearstream, Luxembourg Participants”) and facilitates the clearance and settlement of securities transactions between Clearstream, Luxembourg customers through electronic book-entry changes in accounts of Clearstream, Luxembourg customers, thereby eliminating the need for physical movement of certificates.  Transactions may be settled by Clearstream, Luxembourg in any of 36 currencies, including United States Dollars.  Clearstream, Luxembourg provides to its customers, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing.  Clearstream, Luxembourg also deals with domestic securities markets in over 30 countries through established depository and custodial relationships.  Clearstream, Luxembourg is registered as a ban k in Luxembourg, and as such is subject to regulation by the Commission de Surveillance du Secteur Financier, “CSSF”, which supervises Luxembourg banks.  Clearstream, Luxembourg’s customers are world-wide financial institutions including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations.  Clearstream, Luxembourg’s U.S. customers are limited to securities brokers and dealers, and banks.  Currently, Clearstream, Luxembourg has approximately 2,000 customers located in over 80 countries, including all major European countries, Canada, and the United States.  Indirect access to Clearstream, Luxembourg is available to other institutions that clear through or maintain a custodial relationship with an account holder of Clearstream, Luxembourg.  Clearstream, Luxembourg has established an electronic bridge with Morgan Guaranty Trust depositor of New York as the Operator of the Euroclear System (MGT/EOC) in Brussels to facilitate settlement of trades between Clearstream, Luxembourg and MGT/EOC.

Except as required by law, none of Deutsche Bank Securities Inc., the depositor, the related seller, the related servicer, or related indenture trustee, if any, or the related trustee will have any liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of securities of any series held by DTC’s nominee, or for maintaining, supervising or reviewing any records relating to the beneficial ownership interests.

Definitive Securities

If so stated in the related prospectus supplement, the notes and/or certificates of a given series will be issued in fully registered, certificated form (“Definitive notes” and “Definitive certificates”, respectively, and, collectively, “Definitive Securities”) to noteholders or certificateholders or their respective nominees, rather than to DTC or its nominee, only if

·

the related trustee of a grantor trust or the related indenture trustee in the case of an owner trust, as applicable, determines that DTC is no longer willing or able to discharge properly its responsibilities as Depository with respect to the related securities and the indenture trustee or trustee, as applicable, is unable to locate a qualified successor,

·

the indenture trustee or trustee, as applicable, elects, at its option, to terminate the book-entry system through DTC or

·

after the occurrence of an Event of Default or Servicer Default, Security Owners representing at least a majority of the outstanding principal amount of the notes or certificates, as applicable, of the series, advise the related trustee through DTC that the continuation of a book-entry system through DTC, or a successor to DTC, is no longer in the best interests of the related Security Owners.

Upon the occurrence of any of the events described in the immediately preceding paragraph, the related trustee or indenture trustee, as applicable, will be required to notify the related Security Owners, through Participants, of the availability of Definitive Securities. Upon surrender by DTC of the certificates representing all securities of any affected class and the receipt of instructions for re-registration, the trustee will issue Definitive Securities to the related Security Owners. Distributions on the related Definitive Securities will subsequently be made by the related trustee or indenture trustee, as applicable, directly to the holders in whose name the related Definitive Securities are registered at the close of business on the applicable record date, in accordance with the procedures set forth in this prospectus and in the related Indenture or the related Trust Agreement or Pooling and Servicing Agr eement, as applicable. Distributions will be made by check mailed to the address of the holders as they appear on the register specified in the related Indenture, Trust Agreement or Pooling and Servicing Agreement, as applicable; however, the final payment on any securities, whether Definitive Securities or securities registered in the name of a Depository or its nominee, will be made only upon presentation and surrender of the securities at the office or agency as specified in the notice of final distribution to Securityholders.

Definitive Securities will be transferable and exchangeable at the offices of the related trustee or indenture trustee, or any security registrar appointed by the related trustee or the indenture trustee, as applicable. No service charge will be imposed for any registration of transfer or exchange, but the trustee or indenture trustee may require payment of a sum sufficient to cover any tax or other governmental charge imposed in connection with a registration of transfer or exchange.

Statements to Securityholders

With respect to each series of securities, on or prior to each Distribution Date, the related servicer will prepare and forward to the related indenture trustee or trustee to be included with the distribution to each Securityholder of record a statement setting forth for the related Collection Period the following information, and any other information specified in the related prospectus supplement:

(1)

the amount of the distribution allocable to principal of each class of securities of the series;

(2)

the amount of the distribution allocable to interest on each class of securities of the series;

(3)

if applicable, the amount of the Servicing Fee paid to the related servicer with respect to the related Collection Period;

(4)

the outstanding principal balance and Note Pool Factor for each class of notes, if any, and the certificate balance and Certificate Pool Factor for each class of certificates of the series as of the related record date;

(5)

the balance of any Reserve Account or other form of credit enhancement, after giving effect to any additions to the balance of the Reserve Account or withdrawals from the Reserve Account or reductions to the Reserve Account to be made on the following Distribution Date; and

(6)

the aggregate amount of realized losses, if any, in respect of Receivables and any other loss, delinquency or other ratios set forth in the related prospectus supplement for the related Collection Period.

Items (1), (2) and (4) above with respect to the notes or certificates of a series will be expressed as a dollar amount per $1,000 of initial principal balance of the notes or the initial certificate balance of the certificates, as applicable.

In addition, within the prescribed period of time for tax reporting purposes after the end of each calendar year during the term of each issuing entity, the related trustee or indenture trustee, as applicable, will mail to each person who at any time during the related calendar year shall have been a registered Securityholder a statement containing information for the purposes of the Securityholder’s preparation of federal income tax returns. See “Material Federal Income Tax Consequences”.

List of Securityholders

Three or more holders of the notes of any series or one or more holders of the notes evidencing not less than 25% of the aggregate outstanding principal balance of the notes of the series may, by written request to the related indenture trustee, obtain access to the list of all noteholders maintained by the indenture trustee for the purpose of communicating with other noteholders with respect to their rights under the related Indenture or under the notes. The indenture trustee may elect not to afford the requesting noteholders access to the list of noteholders if it agrees to mail the desired communication or proxy, on behalf of and at the expense of the requesting noteholders, to all noteholders of the series.

Three or more holders of the certificates of any series or one or more holders of the certificates evidencing not less than 25% of the certificate balance of the certificates may, by written request to the related trustee, obtain access to the list of all certificateholders maintained by the trustee for the purpose of communicating with other certificateholders with respect to their rights under the related Trust Agreement or Pooling and Servicing Agreement, as applicable, or under the certificates.

Description of the Transfer and Servicing Agreements

The following summary describes the material provisions, in each case, to the extent anticipated to be common to any series of securities, of:

·

each Receivables Purchase Agreement pursuant to which the seller will transfer Receivables to the depositor,

·

each Trust Agreement or Pooling and Servicing Agreement pursuant to which an issuing entity will be created, Collateral Certificates, Government Securities and/or Private Label Custody Receipt Securities, as applicable, may be sold or transferred to the issuing entity, certificates will be issued, and the servicer will service Receivables and the trustee will manage Government Securities, if any and Private Label Custody Receipt Securities, if any, in the case of an issuing entity that is a grantor trust,

·

each Sale and Servicing Agreement pursuant to which the depositor will transfer Receivables to an issuing entity and the servicer will service Receivables, in the case of an owner trust, or

·

in the case of securities backed by Collateral Certificates, each Trust Agreement pursuant to which an issuing entity will be created, Collateral Certificates will be sold or transferred to the issuing entity, Government Securities and Private Label Custody Receipt Securities may be sold or transferred to the issuing entity and a trustee will manage Collateral Certificates, Government Securities, if any, and Private Label Custody Receipt Securities, if any (collectively, the “Transfer and Servicing Agreements”).

Forms of the Transfer and Servicing Agreements have been filed as exhibits to the Registration Statement of which this prospectus forms a part. The following summary does not purport to be a complete description of all of the terms of the Transfer and Servicing Agreements and therefore is subject to, and is qualified in its entirety by reference to, the provisions of the related Transfer and Servicing Agreement.

Sale and Assignment of Primary Assets

In the case of Primary Assets consisting of Receivables, on or prior to the related closing date, a seller will transfer and assign to the depositor, pursuant to a Receivables Purchase Agreement, without recourse, all of its right, title and interest in and to Receivables in the outstanding principal amount specified in the related prospectus supplement, including its security interests in the related Financed Boats. Each Receivable will be identified in a schedule appearing as an exhibit to the related Receivables Purchase Agreement (the “Schedule of Receivables”).

In each Receivables Purchase Agreement the seller will represent and warrant to the depositor, among other things, that

·

the information set forth in the Schedule of Receivables is correct in all material respects as of the applicable cutoff date;

·

the obligor on each Receivable is contractually required to maintain physical damage insurance covering the related Financed Boat in accordance with the seller’s normal requirements;

·

on the closing date, the Receivables are free and clear of all security interests, liens, charges and encumbrances, and no offsets, defenses or counterclaims have been asserted or threatened;

·

at the closing date, each of the Receivables is secured by a perfected, first-priority security interest in the related Financed Boat in favor of the seller;

·

each Receivable, at the time it was originated, complied and, on the closing date complies, in all material respects with applicable federal and state laws, including, without limitation, consumer credit, truth-in-lending, equal credit opportunity and disclosure laws; and

·

any other representations and warranties that may be set forth in the related prospectus supplement.

To the extent specified in the related prospectus supplement, as of the last day of the second Collection Period, or, if the seller so elects, the last day of the first Collection Period, following the discovery by or notice to the seller of any breach of a representation and warranty of the seller that materially and adversely affects the interests of the related issuing entity in any Receivable, the seller will be obligated to repurchase the Receivable, unless the seller cures the breach in a timely fashion. The purchase price for any of these Receivables will be equal to the unpaid principal balance owed by the obligor on the Receivable, plus accrued and unpaid interest on the unpaid principal balance at the applicable APR to the last day of the month of repurchase (the “Repurchase Amount”). This repurchase obligation will constitute the sole remedy available to the Securityholders, the related trus tee and any related indenture trustee for any uncured breach.

On the related closing date, the depositor will transfer and assign to the related Trust, pursuant to a Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, without recourse, all of its right, title and interest in and to Primary Assets in the outstanding principal amount specified in the related prospectus supplement. Concurrently with the transfer and assignment of Primary Assets to the related issuing entity, the related trustee or indenture trustee, as applicable, will execute, authenticate and deliver the related securities.

Pursuant to the terms of the Sale and Servicing Agreement or the Pooling and Servicing Agreement, as applicable, the depositor will assign to the related issuing entity the representations and warranties made by the related seller under the related Receivables Purchase Agreement for the benefit of the related Securityholders and will make limited representations and warranties with respect to the other Primary Assets included in the issuing entity. To the extent that the related seller does not repurchase a Primary Asset in the event of a breach of its representations and warranties with respect to the Primary Asset, the depositor will not be required to repurchase the Primary Asset unless the breach also constitutes a breach of one of the depositor’s representations and warranties under the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, with respect to that Primary Asset, if any, and the breach materially and adversely affects the interests of the Securityholders in any Primary Asset. Neither the seller nor the depositor will have any other obligation with respect to the Primary Assets or the securities.

Trust Accounts

With respect to each owner trust, the servicer will establish and maintain with the related indenture trustee, or the trustee will establish and maintain, (a) one or more accounts, on behalf of the related Securityholders, into which all payments made on or in respect of the related Primary Assets will be deposited (the “Collection Account”) and (b) an account, in the name of the indenture trustee on behalf of the noteholders, into which amounts released from the Collection Account and any Reserve Account or other form of credit enhancement for payment to the noteholders will be deposited and from which all distributions to the noteholders will be made (the “Note Distribution Account”). With respect to each issuing entity that is an owner trust or grantor trust, the servicer or the related trustee will establish and maintain an account, in the name of the trustee on behalf of the certificateh olders, into which amounts released from the Collection Account and any Reserve Account or other form of credit enhancement for distribution to the certificateholders will be deposited and from which all distributions to the certificateholders will be made (the “Certificate Distribution Account”). With respect to any issuing entity that is a grantor trust, the servicer or the related trustee will also establish and maintain the Collection Account and any other Trust Account in the name of the related trustee on behalf of the related certificateholders.

If so provided in the related prospectus supplement, the servicer will establish for each series of securities an additional account (the “Payahead Account”), in the name of the related indenture trustee, in the case of an issuing entity that is an owner trust, or trustee, in the case of an issuing entity that is a grantor trust, into which, to the extent required in the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, early payments made by or on behalf of obligors on Precomputed Receivables will be deposited until the time these payments become due. Until the time payments are transferred from the Payahead Account to the Collection Account, they will not constitute collected interest or collected principal and will not be available for distribution to noteholders or certificateholders. Any other accounts to be established with respect to an issuing entity will b e described in the related prospectus supplement.

For each series of securities, funds in the Collection Account, Note Distribution Account, Certificate Distribution Account and any Reserve Account or other accounts identified in the related prospectus supplement (collectively, the “Trust Accounts”) will be invested as provided in the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, in Eligible Investments. “Eligible Investments” will generally be limited to investments acceptable to the Rating Agencies as being consistent with the rating of the related securities. Eligible Investments will generally be limited to obligations or securities that mature on or before the date of the next scheduled distribution to Securityholders of the series. However, to the extent permitted by the Rating Agencies, funds in any Reserve Account may be invested in securities that will not mature prior to the date of the nex t scheduled distribution with respect to the notes or certificates and will not be sold prior to maturity to meet any shortfalls. Thus, the amount of available funds on deposit in a Reserve Account at any time may be less than the balance of that Reserve Account. If the amount required to be withdrawn from a Reserve Account to cover shortfalls in collections on the related Receivables (as provided in the related prospectus supplement) exceeds the amount of available funds on deposit in the Reserve Account, a temporary shortfall in the amounts distributed to the related noteholders or certificateholders could result, which could, in turn, increase the average life of the related notes or certificates. Unless otherwise and to the extent provided in the related prospectus supplement, investment earnings on funds deposited in the Trust Accounts, net of losses and investment expenses (collectively, “Investment Earnings”), will be deposited in the applicable Collection Account on each Distribution Date a nd will be treated as collections of interest on the related Receivables.

The Trust Accounts will be maintained as Eligible Deposit Accounts. “Eligible Deposit Account” means either (a) a segregated account with an Eligible Institution or (b) a segregated trust account with the corporate trust department of a depositor institution organized under the laws of the United States of America or any one of the states of the United States of America 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 the account, so long as any of the securities of the depositor institution have a credit rating from each Rating Agency in one of its generic rating categories that signifies investment grade. “Eligible Institution” means, with respect to a Trust, (a) the corporate trust department of the related indenture trustee or trustee, as applicable, or (b) a depositor institution organized un der the laws of the United States of America or any one of the states of the United States of America or the District of Columbia, or any domestic branch of a foreign bank, (1) that has either (A) a long-term unsecured debt rating acceptable to the Rating Agencies or (B) a short-term unsecured debt rating or certificate of deposit rating acceptable to the Rating Agencies and (2) whose deposits are insured by the FDIC.

Pre-Funding

If so specified in the related prospectus supplement, a portion of the issuance proceeds of the securities of a particular series (this amount, the “Pre-Funded Amount”) will be deposited in an account (the “Pre-Funding Account”) to be established with the trustee, which will be used to acquire additional Receivables from time to time during the time period specified in the related prospectus supplement (the “Pre-Funding Period”). Prior to the investment of the Pre-Funded Amount in additional Receivables, the Pre-Funded Amount may be invested in one or more Eligible Investments. Except as otherwise provided in the applicable Agreement, an “Eligible Investment” is any of the following, in each case as determined at the time of the investment or contractual commitment to invest in the relevant Eligible Investment, to the extent these investments would not require registration of the Trust Fund as an investment depositor pursuant to the Investment depositor Act of 1940:

(a)

negotiable instruments or securities represented by instruments in bearer or registered or book-entry form which evidence

(1)

obligations which have the benefit of the full faith and credit of the United States of America, including depositor receipts issued by a bank as custodian with respect to any instrument or security held by the custodian for the benefit of the holder of the depositor receipt,

(2)

demand deposits or time deposits in, or bankers’ acceptances issued by, any depositary institution or trust depositor incorporated under the laws of the United States of America or any state of the United States of America and subject to supervision and examination by Federal or state banking or depositary institution authorities; provided that at the time of the trustee’s investment or contractual commitment to invest in the relevant Eligible Investment, the certificates of deposit or short-term deposits, if any, or long-term unsecured debt obligations, other than the obligations whose rating is based on collateral or on the credit of a Person other than the institution or trust depositor, of the depositary institution or trust depositor has a credit rating in the highest rating category from each Rating Agency,

(3)

certificates of deposit having a rating in the highest rating category from each Rating Agency or

(4)

investments in money market funds which are, or which are composed of instruments or other investments which are, rated in the highest rating category from each Rating Agency;

(b)

demand deposits in the name of the trustee in any depositary institution or trust depositor referred to in clause (a)(2) above;

(c)

commercial paper, having original or remaining maturities of no more than 270 days, having a credit rating in the highest rating category from each Rating Agency;

(d)

Eurodollar time deposits that are obligations of institutions whose time deposits carry a credit rating in the highest rating category from each Rating Agency;

(e)

repurchase agreements involving any Eligible Investment described in any of clauses (a)(1), (a)(3) or (d) above, so long as the other party to the repurchase agreement has its long-term unsecured debt obligations rated in the highest rating category from each Rating Agency; and

(f)

any other investment with respect to which each Rating Agency rating the securities indicates will not result in the reduction or withdrawal of its then existing rating of the securities. Except as otherwise provided in the applicable Agreement, any Eligible Investment must mature no later than the Business Day prior to the next Distribution Date.

During any Pre-Funding Period, the seller or any other party specified in the related prospectus supplement will be obligated, subject only to the availability of additional Receivables, to transfer to the related issuing entity additional Receivables from time to time during the related Pre-Funding Period. Additional Receivables will be required to satisfy specific eligibility criteria more fully set forth in the related prospectus supplement, which eligibility criteria will be consistent with the eligibility criteria of the Receivables included in the issuing entity as of the closing date subject to exceptions as are expressly stated in the related prospectus supplement.

Although the specific parameters of the Pre-Funding Account with respect to any issuance of securities will be specified in the related prospectus supplement, it is anticipated that:

·

the Pre-Funding Period will not exceed 90 days from the related closing date;

·

that the additional loans to be acquired during the Pre-Funding Period will be subject to the same representations and warranties as the Receivables included in the related issuing entity on the closing date, although additional criteria may also be required to be satisfied, as described in the related prospectus supplement; and

·

the Pre-Funded Amount will not exceed 25% of the principal amount of the securities issued pursuant to a particular offering.

Servicing Procedures

To assure uniform quality in servicing the Receivables and to reduce administrative costs, the depositor and each issuing entity will designate the servicer as custodian to maintain possession, as the issuing entity’s agent, of the related Receivables and any other documents relating to the Receivables. The seller’s and the servicer’s accounting records and computer systems will be marked to reflect the sale and assignment of the related Receivables to each issuing entity, and UCC financing statements reflecting the sale and assignment will be filed.

The servicer will make reasonable efforts to collect all payments due with respect to the Receivables and will, consistent with the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, follow the collection procedures as it follows with respect to comparable Receivables it services for itself and others. The prospectus supplement will specify that the servicer may, in its discretion, arrange with the obligor on a Receivable to extend or modify the payment schedule, but no arrangement will, if inconsistent with its normal procedures, for purposes of any Sale and Servicing Agreement or Pooling and Servicing Agreement, reduce the contract rate of, the amount of the scheduled payments under, or extend the final payment date of, any Receivable beyond the “Final Scheduled Maturity Date” (as the term is defined with respect to any Receivables Pool in the related prospectus s upplement). Some arrangements may result in the servicer purchasing the Receivables for the Repurchase Amount, while others may result in the servicer making Advances. The servicer may sell the related Financed Boat securing any Receivable at a public or private sale, or take any other action permitted by applicable law. See “Certain Legal Aspects of the Receivables”.

Collections

With respect to each issuing entity, the servicer or the trustee will deposit all payments on the related Primary Assets, from whatever source, and all proceeds of the related Primary Assets, collected during the period specified in the related prospectus supplement (a “Collection Period”) into the related Collection Account not later than two business days after receipt of payments and proceeds of the related Primary Assets or any other period as specified in the related prospectus supplement. However, notwithstanding the foregoing, these amounts may be remitted to the Collection Account by the servicer on a monthly basis on or prior to the applicable Distribution Date if no Servicer Default exists and each other condition to making deposits less frequently than daily as may be specified by the Rating Agencies or set forth in the related prospectus supplement is satisfied. Pending deposit into the Col lection Account, the collections may be invested by the servicer at its own risk and for its own benefit and will not be segregated from its own funds. If the servicer were unable to remit the funds to the Collection Account on any Distribution Date, Securityholders might incur a loss. To the extent set forth in the related prospectus supplement, the servicer may, in order to satisfy the requirements described above, obtain a letter of credit or other security for the benefit of the related Trust to secure timely remittances of collections on the related Primary Assets and payment of the aggregate Repurchase Amount with respect to Receivables repurchased by the servicer.

Collections on a Precomputed Receivable during any Collection Period will be applied first to the repayment of any outstanding Precomputed Advances made by the servicer with respect to the Receivable, as described below, and then to the scheduled monthly payment due on the Receivable. Any portion of the collections remaining after the scheduled monthly payment has been made (these excess amounts, the “Payaheads”) will, unless the remaining amount is sufficient to prepay the Precomputed Receivable in full, and subject to limitations which, if applicable, will be specified in the related prospectus supplement, be transferred to and kept in the Payahead Account until a later Distribution Date on which the Payaheads may be applied either to the scheduled monthly payment due during the related Collection Period or to prepay the Receivable in full.

Advances

If specified in the related prospectus supplement, to the extent the collections of interest and principal on a Precomputed Receivable for a Collection Period fall short of the related scheduled payment, the servicer generally will advance the shortfall (a “Precomputed Advance”). The servicer will be obligated to make a Precomputed Advance on a Precomputed Receivable only to the extent that the servicer, in its sole discretion, expects to recoup the Advance from subsequent collections or recoveries on the Receivable or other Precomputed Receivables in the related Receivables Pool. The servicer will deposit the Precomputed Advance in the applicable Collection Account on or before the business day preceding the applicable Distribution Date. The servicer will recoup its Precomputed Advance from subsequent payments by or on behalf of the related obligor or from insurance or liquidation proceeds with respec t to the related Receivable and will release its right to reimbursement in conjunction with its purchase of the Receivable as servicer or, upon determining that reimbursement from the preceding sources is unlikely, will recoup its Precomputed Advance from any collections made on other Precomputed Receivables in the related Receivables Pool.

If specified in the related prospectus supplement, on or before the business day prior to each Distribution Date, the servicer will deposit into the related Collection Account an amount equal to the amount of interest that would have been due on the related Simple Interest Receivables at their respective annual percentage rates for the related Collection Period, assuming that the Simple Interest Receivables are paid on their respective due dates, minus the amount of interest actually received on the Simple Interest Receivables during the applicable Collection Period (a “Simple Interest Advance”, and together with Precomputed Advances, “Advances”). If the calculation results in a negative number, an amount equal to the amount shall be paid to the servicer in reimbursement of outstanding Simple Interest Advances. In addition, if specified in the related prospectus supplement, if a Simple Intere st Receivable becomes a Liquidated Receivable (as the term is defined in the related prospectus supplement), the amount of accrued and unpaid interest on the Simple Interest Receivable that became a Liquidated Receivable, but not including interest for the then current collection Period, will be withdrawn from the Collection Account and paid to the servicer in reimbursement of outstanding Simple Interest Advances. No advances of principal will be made with respect to Simple Interest Receivables.

Net Deposits

For administrative convenience, unless the servicer or the trustee is required to remit collections to the Collection Account on a daily basis as described under “Collections” above, the servicer or the trustee will be permitted to make deposits of collections, aggregate Advances and Repurchase Amounts for any issuing entity for or in respect of each Collection Period net of distributions to be made to the servicer with respect to the Collection Period. The servicer also may cause a single, net transfer to be made from the Collection Account to the Payahead Account, or vice versa.

Servicing Compensation and Payment Of Expenses

To the extent provided in the related prospectus supplement, with respect to each issuing entity the related servicer will be entitled to receive, out of interest collected on or in respect of the related Primary Assets serviced by the servicer, a fee for each Collection Period (the “Servicing Fee”) in an amount equal to the percentage per annum specified in the related prospectus supplement (the “Servicing Fee Rate”) of the Pool Balance related to the Primary Assets as of the first day of the related Collection Period. Unless otherwise provided in the related prospectus supplement, the Servicing Fee, together with any portion of the Servicing Fee that remains unpaid from prior Distribution Dates, will be paid solely to the extent of the Interest Distribution Amount; however, the Servicing Fee will be paid prior to the distribution of any portion of the Interest Distribution Amount to the hol ders of the notes or certificates of any series.

To the extent provided in the related prospectus supplement, the servicer will also collect and retain any late fees, prepayment charges and other administrative fees or similar charges allowed by applicable law with respect to Receivables and will be entitled to reimbursement from each Trust for some liabilities. Payments by or on behalf of obligors will be allocated to scheduled payments under the related Receivable and late fees and other charges in accordance with the servicer’s normal practices and procedures.

If applicable, the Servicing Fee will compensate the servicer for performing the functions of a third party servicer of boat receivables as an agent for the related issuing entity, including collecting and posting all payments, responding to inquiries of obligors on the Receivables, investigating delinquencies, sending payment statements and reporting the collateral. The Servicing Fee will also compensate the servicer for administering the Receivables, including making Advances, accounting for collection, furnishing monthly and annual statements to the related indenture trustee and/or trustee, and generating federal income tax information for the issuing entity and for the related noteholders and/or certificateholders as well as the issuing entity’s compliance with the reporting provisions under the Exchange Act. The Servicing Fee may also reimburse the servicer for particular taxes, the fees of the related indenture trustee and/or trustee, accounting fees, outside auditor fees, date processing cost and other costs incurred in connection with administering the Primary Assets.

Distributions

With respect to each series of securities, beginning on the Distribution Date specified in the related prospectus supplement, distributions of principal and interest, or, where applicable, principal only or interest only, on each class of securities entitled to these distributions will be made by the related trustee or indenture trustee, as applicable, to the certificateholders and noteholders of the series. The timing, calculation, allocation, order, source and priorities of, and requirements for, all payments to the holders of each class of notes and/or distributions to holders of each class of certificates will be set forth in the related prospectus supplement.

With respect to each issuing entity, on each Distribution Date collections on or in respect of the related Primary Assets will be transferred from the Collection Account to the Note Distribution Account or Certificate Distribution Account, as applicable, for distribution to the noteholders and certificateholders to the extent provided in the related prospectus supplement. Credit enhancement, such as a Reserve Account, will be available to cover shortfalls in the amount available for distribution on the date to the extent specified in the related prospectus supplement. As and to the extent described in the related prospectus supplement, distributions in respect of principal of a class of securities of a series may be subordinate to distributions in respect of interests on the class, and distributions in respect of one or more classes of certificates of the series may be subordinate to payments in respect of the n otes, if any, of the series or other classes of certificates. Distributions of principal on the securities of a series may be based on the amount of principal collected or due, or the amount of realized losses incurred, in a Collection Period.

Credit and Cash Flow Enhancement

The amounts and types of any credit and cash flow enhancement arrangements and the provider of the credit and cash flow enhancement arrangements, if applicable, with respect to each class of securities of a series will be set forth in the related prospectus supplement. To the extent provided in the related prospectus supplement, credit or cash flow enhancement may only be in the form of subordination of one or more classes of securities, Reserve Accounts, spread accounts, letters of credit, surety bonds, insurance policies, over-collateralization, credit or liquidity facilities, guaranteed investment contracts, interest rate swap agreements, interest rate cap or floor agreements, currency swap agreements or similar agreements provided to reduce the effects of interest rate or currency exchange rate fluctuations on the Assets or on one or more classes of Notes or Certificates, as applicable, or other interest rate protection agree ments, repurchase obligations, cash deposits, or any combination of the foregoing. If specified in the applicable prospectus supplement, credit or cash flow enhancement for a class of securities may cover one or more other classes of securities of the same series, and credit enhancement for a series of securities may cover one or more other series of securities.

The existence of a Reserve Account or other form of credit enhancement for the benefit of any class or series of securities is intended to enhance the likelihood of receipt by the Securityholders of the class or series of the full amount of principal and interest due on the applicable class or series and to decrease the likelihood that the Securityholders will experience losses. The credit enhancement for a class or series of securities will not, as a general rule, provide protection against all types of loss and will not guarantee repayment of all principal and interest on a class or series of securities. If losses occur which exceed the amount covered by credit enhancement or which are not covered by the credit enhancement, Securityholders will bear their allocable share of these losses, as described in the prospectus supplement. In addition, if a form of credit enhancement covers more than one series of secur ities, Securityholders of any series will be subject to the risk that credit enhancement may be exhausted by the claims of Securityholders of other series.

Reserve Account. If so provided in the related prospectus supplement, pursuant to the related Transfer and Servicing Agreement, the depositor or the seller will establish for a series or class or classes of securities an account (the “Reserve Account”), which will be maintained with the related indenture trustee or trustee, as applicable. A Reserve Account will be funded by an initial deposit by the depositor or the seller, as applicable, on the closing date in the amount set forth in the related prospectus supplement. As further described in the related prospectus supplement, the amount on deposit in the Reserve Account may be increased or reinstated on each Distribution Date, to the extent described in the related prospectus supplement, by the deposit there of amounts from collections on the Primary Assets. The related prospectus supplement will describe the circumstances under which and the m anner in which distributions may be made out of the Reserve Account, either to holders of the securities covered by the Reserve Account or to the depositor, the seller or to any other entity.

Financial Guaranty Insurance Policy or Surety Bond.  Credit enhancement may be provided in the form of a financial guaranty insurance policy or a surety bond issued by an insurer named in the policy or surety bond, if specified in the prospectus supplement.

Letter of Credit.  Alternative credit support for a series of Notes, as applicable, may be provided by the issuance of a letter of credit by the bank or financial institution specified in the prospectus supplement.  The coverage, amount and frequency of any reduction in coverage provided by a letter of credit issued for a series of Notes, as applicable, will be set forth in the prospectus supplement relating to that series.

Subordinate Securities.  One or more classes of Notes, as applicable, of a series may be Subordinate Notes, as applicable, if specified in the prospectus supplement.  The rights of the holders of Subordinate Notes, as applicable, to receive distributions of principal and interest from the Collection Account on any Distribution Date will be subordinated to those rights of the holders of Senior Notes, as applicable.  The subordination of a class may apply only in the event of (or may be limited to) particular types of losses or shortfalls.  The prospectus supplement will set forth information concerning the amount of subordination of a class or classes of Subordinate Notes, as applicable, in a series, the circumstances in which that subordination will be applicable and the manner, if any, in which the amount of subordination will be effected.

Overcollateralization. If specified in the prospectus supplement, subordination provisions of an issuing entity may be used to accelerate to a limited extent the amortization of one or more classes of Notes, as applicable, relative to the amortization of the related Assets.  The accelerated amortization is achieved by the application of excess interest to the payment of principal of one or more classes of Notes, as applicable.  This acceleration feature creates, for the Assets or groups of Assets, overcollateralization, which is the excess of the total principal balance of the related Assets, or a group of related Assets, over the principal balance of the related class or classes of Notes or Certificates, as applicable.  This acceleration may continue for the life of the related Security, or may be limited.  In the case of limited acceleration, once the required level of overcollateralization is reached, and subject to the provisions specified in the prospectus supplement, the limited acceleration feature may cease, unless necessary to maintain the required level of overcollateralization.

Limited Guarantee.  If specified in the prospectus supplement for a series of Notes or Certificates, as applicable, credit enhancement may be provided in the form of a limited guarantee issued by a guarantor named in the prospectus supplement.  Any guarantee specified in the prospectus supplement, if any, will be exempt from registration under the Securities Act.

Evidence as to Compliance

Each Pooling and Servicing Agreement and Sale and Servicing Agreement will provide that on or before a specified date in each year, beginning with the first year after the year in which the cut-off date occurs, each party responsible for the servicing function will provide to the depositor and the indenture trustee and/or trustee a report on an assessment of compliance with the minimum servicing criteria established in Item 1122(a) of Regulation AB (the “AB Servicing Criteria”).  The AB Servicing Criteria include specific criteria relating to the following areas: general servicing considerations, cash collection and administration, investor remittances and reporting, and pool asset administration.  Such report will indicate that the AB Servicing Criteria were used to test compliance on a platform level basis and will set out any material instances of noncompliance.

Each Pooling and Servicing Agreement and Sale and Servicing Agreement will also provide that the each party responsible for the servicing function will deliver along with its report on assessment of compliance, an attestation report from a firm of independent public accountants on the assessment of compliance with the AB Servicing Criteria.

Each Pooling and Servicing Agreement and Sale and Servicing Agreement will also provide for delivery to the indenture trustee and/or trustee, on or before a specified date in each year, of a separate annual statement of compliance from each entity responsible for the servicing function to the effect that, to the best knowledge of the signing officer, the servicer has fulfilled in all material respects its obligations under the Pooling and Servicing Agreement or Sale and Servicing Agreement throughout the preceding year or, if there has been a material failure in the fulfillment of any obligation, the statement shall specify such failure and the nature and status thereof.  This statement may be provided as a single form making the required statements as to more than one Pooling and Servicing Agreement or Sale and Servicing Agreement.

Copies of the annual reports of assessment of compliance, attestation reports, and statements of compliance may be obtained by securityholders without charge upon written request to the indenture trustee or trustee.  These items will be filed with the issuing entity’s annual report on Form 10-K, to the extent required under Regulation AB.

Statements to trustees and the Trust

Prior to each Distribution Date with respect to each series of securities, the servicer will provide to the applicable indenture trustee, if any, and the applicable trustee as of the close of business on the last day of the preceding Collection Period a statement setting forth substantially the same information as is required to be provided in the periodic reports provided to Securityholders of the series as described under “Certain Information Regarding the Securities—Statements to Securityholders”.

Certain Matters Regarding the Servicer

Each Sale and Servicing Agreement and Pooling and Servicing Agreement will provide that the servicer may not resign from its obligations and duties as servicer under the applicable Agreement, except upon determination that the servicer’s performance of his duties is no longer permissible under applicable law or if resignation is required by regulatory authorities. No resignation will become effective until the related indenture trustee or trustee, as applicable, or a successor servicer has assumed the servicing obligations and duties under the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable.

Each Sale and Servicing Agreement and Pooling and Servicing Agreement will further provide that neither the servicer nor any of its directors, officers, employees and agents will be under any liability to the related issuing entity or Securityholders for taking any action or for refraining from taking any action pursuant to the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, or for errors in judgment; provided, that neither the servicer nor any person will be protected against any liability that would otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence in the performance of the servicer’s duties or by reason of reckless disregard of its obligations and duties under the applicable Agreement. In addition, each Sale and Servicing Agreement and Pooling and Servicing Agreement will provide that the servicer is under no obligation to appear in, prosecute or defend any legal action that is not incidental to its servicing responsibilities under the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, and that, in its opinion, may cause it to incur any expense or liability.

Under the circumstances specified in each Sale and Servicing Agreement and Pooling and Servicing Agreement, any entity into which the servicer may be merged or consolidated, or any entity resulting from any merger or consolidation to which the servicer is a party, or any entity succeeding to all or substantially all of the business of the servicer, or any corporation which assumes the obligations of the servicer, will be the successor to the servicer under the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable.

Servicer Defaults

A “Servicer Default” under each Sale and Servicing Agreement and Pooling and Servicing Agreement will consist of:

(1)

any failure by the servicer to deliver to the related trustee or indenture trustee, as applicable, for deposit in any of the Trust Accounts any required payment or to direct the related trustee or indenture trustee, as applicable, to make any required distributions from the Trust Accounts, which failure continues unremedied for five business days after discovery by an officer of the servicer or written notice of failure is given (a) to the servicer by the related trustee or indenture trustee, as applicable, or (b) to the servicer and to the related trustee or indenture trustee, as applicable, by holders of notes, if any, evidencing not less that 25% of the aggregate outstanding principal amount of the notes or, in the event a series of securities includes no notes or if the notes have been paid in full, by holders of certificates evidencing not less that 25% of the certificate balance;

(2)

any failure by the servicer duly to observe or perform in any material respect any covenant or agreement in the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, which failure materially and adversely affects the rights of the related Securityholders and which continues unremedied for 60 days after written notice of failure is given to the servicer in the same manner described in clause (1) above;

(3)

specific events of bankruptcy, insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings and particular actions by the servicer indicating its insolvency, reorganization pursuant to bankruptcy proceedings or inability to pay its obligations; and

(4)

any other events as may be set forth in the related prospectus supplement.

Rights Upon Servicer Default

Generally, in the case of an issuing entity that is an owner trust, as long as a Servicer Default under the related Sale and Servicing Agreement remains unremedied, the related indenture trustee or holders of notes of the related series evidencing not less than 50% of the aggregate principal amount of the notes then outstanding may terminate all the rights and obligations of the servicer under the related Sale and Servicing Agreement, and upon this termination the indenture trustee or a successor servicer appointed by the indenture trustee will succeed to all the responsibilities, duties and liabilities of the servicer under the related Sale and Servicing Agreement and will be entitled to similar compensation arrangements. Generally, in the case of an issuing entity that is a grantor trust, as long as a Servicer Default under the related Pooling and Servicing Agreement remains unremedied, the related trustee or holders of certificates of the related series evidencing not less than 25% of the certificate balance may terminate all the rights and obligations of the servicer under the related Pooling and Servicing Agreement, and upon this termination the trustee or a successor servicer appointed by the trustee will succeed to all the responsibilities, duties and liabilities of the servicer under the related Pooling and Servicing Agreement and will be entitled to similar compensation arrangements. If, however, a bankruptcy trustee or similar official has been appointed for the servicer, and no Servicer Default other than the appointment has occurred, the trustee or official may have the power to prevent any indenture trustee or the related noteholders or the trustee or the related certificateholders from effecting a transfer of servicing. If the related indenture trustee, if any, or the related trustee is unwilling or unable to act as successor to the servicer, the indenture trustee or trustee, as applicable, may appoin t, or may petition a court of competent jurisdiction to appoint, a successor with a net worth of at least $100,000,000 and whose regular business includes the servicing of boat receivables. The indenture trustee, if any, or the trustee may arrange for compensation to be paid to the successor servicer, which in no event may be greater than the compensation payable to the servicer under the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable.

Waiver of Past Defaults

To the extent provided in the related prospectus supplement, (1) in the case of an issuing entity that is a owner trust, holders of the related notes evidencing not less than a majority of the aggregate outstanding principal amount of the notes, or of certificates evidencing not less than a majority of the outstanding certificate balance, in the case of any default that does not adversely affect the indenture trustee or noteholders, and (2) in the case of each issuing entity that is a grantor trust, holders of certificates evidencing not less than a majority of the certificate balance, may, on behalf of all the noteholders and certificateholders, waive any default by the servicer in the performance of its obligations under the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, and its consequences, except a default in making any required deposits to or payments from any Trust Account or in respect of a covenant or provision in the Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, that cannot be modified or amended without the consent of each Securityholder, in which event the related waiver will require the approval of holders of all of the securities of the series. No waiver will impair the Securityholders’ right with respect to any subsequent Servicer Default.

Amendment

Unless otherwise provided in the related prospectus supplement, each of the Transfer and Servicing Agreements may be amended by the parties to the Transfer and Servicing Agreements without the consent of the related noteholders or certificateholders:

(1)

to cure any ambiguity,

(2)

to correct or supplement any provisions in the related Transfer and Servicing Agreement, or

(3)

for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, the related Transfer and Servicing Agreement;

provided, that any action in this clause (3) will not, in the opinion of counsel satisfactory to the related trustee or indenture trustee, as applicable, adversely affect in any material respect the interests of the depositor or any noteholder.

The Transfer and Servicing Agreements may also be amended from time to time by the parties to the Transfer and Servicing Agreements with the consent of the holders of notes evidencing at least a majority of the aggregate principal amount of the then outstanding notes, if any, and with the consent of the holders of certificates evidencing at least a majority of the aggregate principal amount of the then outstanding certificates, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the related Transfer and Servicing Agreement or of modifying in any manner the rights of the noteholders or certificateholders, as applicable; provided that no amendment may (1) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on or in respect of the related Primary Assets or distributions that are required to be made fo r the benefit of the noteholders or certificateholders or (2) reduce the aforesaid percentage of the notes or certificates of the series the holders of which are required to consent to any amendment, without the consent of the holders of all of the outstanding notes or certificates, as the case may be, of the series.

Payment in Full of the notes

Upon the payment in full of all outstanding notes of a given series and the satisfaction and discharge of the related Indenture, the related trustee will succeed to all the rights of the indenture trustee, and the certificateholders of the series generally will succeed to the rights of the noteholders of the series under the related Sale and Servicing Agreement.

Termination

The obligations of the related servicer, the related trustee and the related indenture trustee, if any, with respect to an issuing entity pursuant to the related Transfer and Servicing Agreement will terminate upon the latest to occur of

·

the maturity or other liquidation of the last Primary Asset and the disposition of any amounts received upon liquidation of any remaining Primary Asset,

·

the payment to noteholders, if any, and certificateholders of all amounts required to be paid to them pursuant to the Transfer and Servicing Agreements and

·

the occurrence of either event described below.

In order to avoid excessive administrative expenses, the related servicer will be permitted, at its option, to purchase from an issuing entity all remaining Primary Assets as of the end of any Collection Period, if the then outstanding Pool Balance is 10%, or, if any seller is a bank, 5%, or less of the Pool Balance as of the related cutoff date, at a purchase price equal to the price specified in the related prospectus supplement.

If and to the extent provided in the related prospectus supplement, the indenture trustee or trustee, as applicable, will, within ten days following a Distribution Date as of which the Pool Balance is equal to or less than the percentage of the original Pool Balance specified in the related prospectus supplement, solicit bids for the purchase of the Primary Assets remaining in the Trust, in the manner and subject to the terms and conditions set forth in the related prospectus supplement. If the indenture trustee or trustee receives satisfactory bids as described in the related prospectus supplement, then the Primary Assets remaining in the Trust will be sold to the highest bidder.

Certain Legal Aspects of the Receivables

Security Interests in Financed Boats

Security interests in boats may be perfected in one of three ways: in certificate of title states, a security interest is perfected by obtaining the certificate of title to the financed boat or notation of the secured party’s lien on the boat’s certificate of title; in other states, a security interest may be perfected by filing a UCC-1 financing statement, however, a purchase money lien in consumer goods is perfected without any filing requirement and if a boat is required to be documented under Federal law, a preferred mortgage may be obtained under the Ship Mortgage Act by filing the mortgage with the Coast Guard, which is the exclusive method for perfecting security interests in documented boats.

The contracts will represent marine retail installment sale contracts purchased  from Dealers or direct loans to Obligors secured by the Financed Boats.  When originated, each contract will have granted a security interest in the Financed Boat financed thereby.  Each such security interest will be required to be perfected under applicable state law and, in the case of certain Financed Boats described below, under applicable federal law.  Generally, security interests in boats may be perfected in one of three ways:  (i) in “title” states, by notation of the secured party’s lien on the certificate of title issued by an applicable state boat or wildlife department or other appropriate state agency; (ii) in non-title states, by filing a UCC-1 financing statement; and (iii) in respect of a boat eligible for documentation under federal law, by filing all documents necessary to c reate a first preferred ship mortgage (a  ”Preferred  Mortgage”) under the Ship Mortgage Act of 1920 (1988 Recodification) ss. 30101 et seq. (the “Ship Mortgage  Statutes”).  Vessels that meet the federal five net ton standard (determined in a manner  prescribed by 46 CFR Part 69  (Measurement of Vessels)) qualify  for  documentation  under  federal  law  (“U.S. Documentable Boats”).  However, federal documentation of vessels used exclusively for  recreational purposes is discretionary.

In the event that the originator of a contract failed to perfect the security interest in a Financed  Boat (for example, by complying with the UCC rather than the applicable certificate of title statute, or by failing to comply with applicable state title law, or the Ship Mortgage Statutes or applicable United States Coast Guard (the “Coast  Guard”) regulations), such originator would not have a perfected first priority security interest in such Financed Boat.  In this event, if third party liens equal or exceed the value of the Financed Boat, the only recourse of the Issuing Entity would be against the Obligor on an unsecured basis, or, if applicable, against a Dealer or financial intermediary pursuant to its repurchase obligation or against the Seller.

Under the Ship Mortgage Statutes, in the absence of an assignment of record of a Preferred Mortgage, the assignment of the related contract by itself will not convey the perfected preferred mortgage lien on the Financed Boat subject to such Preferred Mortgage and neither the Seller (if not the secured party of record) nor the Issuing Entity will have a perfected security interest in such Financed Boat.  However, to the extent specified in the related Prospectus Supplement, pursuant to the Sale and Servicing Agreement, the Seller will agree to cause filings of the assignments to the Issuing Entity of certain specified Preferred Mortgages (each a “Designated Preferred Mortgage”) showing the chain of ownership of each such Preferred Mortgage from the originator of each such contract to the Issuing Entity, within the time period specified in the related Prospectus Supplement.  However, due to adm inistrative burden and expense, assignments may not be made of all Preferred Mortgages relating to the contracts.  Under the Ship Mortgage Statutes, in the absence of an assignment of a Preferred Mortgage, or in the event an assignment of a Preferred Mortgage is not effective, the Issuing Entity will not have a perfected security interest in the related Financed Boat as against third parties without knowledge of the transfer.  In such case, if third party liens equal or exceed the value of such Financed Boat, the only recourse of the Issuing Entity would be against the related Obligor on an unsecured basis.

Under the laws of many states, certain possessory liens for repairs performed on a Financed Boat and storage, as well as certain rights in favor of federal and state governmental authorities arising from the use of a boat in connection with illegal activities, may take priority over a security interest perfected under state  law.  Certain U.S. federal tax liens may also have  priority over the security interest of a secured  party.  Under the Ship Mortgage Statutes, a Preferred Mortgage supersedes a perfected state law security interest, a state or federally created lien or forfeiture rights (so long as the secured party is innocent of wrongdoing) other than preferred maritime liens such as those arising under federal statutory or common-law for captain’s or crew’s wages, tort claims (so-called “general average” claims) and salvage claims.  Maritime liens arising under federal law or state laws for repair, storage or supplies which are subordinate to a preferred ship mortgage lien typically have priority over state security interests under federal law or under applicable law of the state where the contract was originated or under  applicable law of the state to which the related  Financed  Boats may have been  relocated.  Preferred federal maritime liens are, of course, also prior to all state created security interests or liens.  The Seller will represent in the Sale and Servicing Agreement that, as of the Initial Cut-off Date or Subsequent Cut-off Date, as the case may be, it has no knowledge of any such liens with respect to any Financed Boat related to a contract.  However, such liens could arise at any time during the term of a contract.  No notice will be given to the owner trustee or the indenture trustee in the event such a lien arises.

Generally all of the Receivables name the seller as obligee or assignee and as the secured party. The seller will take all actions necessary under the laws of the state in which the Financed Boat is located to perfect the seller’s security interest in the Financed Boat, including, where applicable, having a notation of its lien recorded on the boat’s certificate of title or file a UCC-1 Financing Statement. If the seller, because of clerical error or otherwise, has failed to take action with respect to Financed Boat, it will not have a perfected security interest and its security interest may be subordinate to the interest of, among others, subsequent purchasers of the Financed Boat that give value without notice of the seller’s security interest and to whom a certificate of ownership is issued in the purchaser’s name, holders of perfected security interests in the Financed Boat and the trust ee in bankruptcy of the obligor. The seller’s security interest may also be subordinate to third parties in the event of fraud or forgery by the obligor or administrative error by state recording officials or in the circumstances noted below.

Pursuant to each Sale and Servicing Agreement and Pooling and Servicing Agreement, the seller will assign its interests in the Financed Boats securing the related Receivables to the related Trust. However, because of administrative burden and expense, neither the seller nor the related trustee will amend any certificate of title to identify the Issuing Entity as the new secured party on the certificates of title relating to the Financed Boats. Unless otherwise specified in the related prospectus supplement, the servicer will hold certificates of title relating to the Financed Boats in its possession as custodian for the Issuing Entity pursuant to the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable. See “Description of the Transfer and Servicing Agreements—Sale and Assignment of Primary Assets”.

In most states, assignments such as those under the related Trust Agreement or Pooling and Servicing Agreement, as applicable, are effective conveyances of a security interest in the related Financed Boat without amendment of any lien noted on the boat’s certificate of title, and the assignee succeeds by assignment to the assignor’s rights as secured party. Although re-registration of the boat is not necessary in these states to convey a perfected security interest in the Financed Boats to an Issuing Entity, because the related Issuing Entity will not be listed as legal owner on the certificates of title to the Financed Boats, an Issuing Entity’s security interest could be defeated through fraud or negligence. However, in the absence of fraud or forgery by the boat owner or the servicer or administrative error by state of local agencies, the notation of the seller’s lien on a certificate of t itle will be sufficient to protect an Issuing Entity against the rights of subsequent purchasers of a Financed Boat or subsequent creditors who take a security interest in a Financed Boat. If there are any Financed Boats as to which the seller fails to obtain a first-priority perfected security interest, the Issuing Entity’s security interest would be subordinate to, among others, subsequent purchasers of Financed Boats and holders of perfected security interests in Financed Boats.  A failure, however, would constitute a breach of the seller’s representations and warranties under the related Receivables Purchase Agreement and the seller will be required to repurchase the Receivable from the Trust unless the breach is cured in a timely manner. See “Description of the Transfer and Servicing Agreements—Sale and Assignment of Primary Assets” and “Risk Factors—Potential Lack of Security”.

Under the laws of most states in which a perfected security interest is governed by a certificate of title statute, a perfected security interest in a boat continues for four months after the boat is moved to a new state from the one in which it is initially registered and after until the owner re-registers the boat in the new state. A majority of these states require surrender of a certificate of title to re-register a boat. Accordingly, a secured party must surrender possession if it holds the certificate of title of the boat or, in the case of boats registered in states providing for the notation of a lien on the certificate of title but not possession by the secured party, the secured party would receive notice of surrender from the state of re-registration if the security interest is noted on the certificate of title. Thus, the secured party would have the opportunity to reperfect its security interest in t he boat in the state of relocation. However, these procedural safeguards will not protect the secured party if, through fraud, forgery or administrative error, an obligor somehow procures a new certificate of title that does not list the secured party’s lien. Additionally, in states that do not require a certificate of title for registration of a boat, re-registration could defeat perfection. In the ordinary course of servicing the Receivables, the servicer will take steps to effect re-perfection upon receipt of notice of re-registration or information from the obligor as to relocation. Similarly, when an obligor sells a Financed Boat and the purchaser of that Financed Boat attempts to re-register the boat, the seller must surrender possession of the certificate of title or will receive notice as a result of having its lien noted on the certificate of title and accordingly will have an opportunity to require satisfaction of the related Receivable before its lien is released. Under each Sale and Servicin g Agreement and Pooling and Servicing Agreement, the servicer will be obligated to take appropriate steps, at its own expense, to maintain perfection of security interests in the related Financed Boat is obligated to purchase the related Receivable if it fails to do so.

In states which the perfection of a security interest is governed by the filing of a UCC-1 financing statement, or the obligor moves from a title state to a non-title state, the servicer will file a UCC-1 financing statement in the new state of the obligor as soon as possible after receiving notice of the obligor’s change of residence. UCC-1 financing statements expire after five years. When the term of a loan exceeds five years, the filing must be continued in order to maintain the servicer’s perfected security interest. The servicer takes steps to effect continuation. In the event that an obligor moves to a state other than the state in which the UCC-1 financing statement is filed or in some states to a different county in the state, under the laws of most states the perfection of the security interest in the boat would continue for four months after relocation, unless the perfection in the original jurisdiction would have expired earlier. A new financing statement must be filed in the state of relocation or, if the state is a title state, a notation on the certificate of title must be made in order to continue the security interest. The servicer generally takes steps to effect re-perfection upon notification of an address change. Generally, in both title states and in non-title states, the servicer will not re-perfect a state law security interest which has expired or where the obligor has moved if the Receivable has a small balance, a short remaining term and the obligor has a good payment record.

Under the laws of most states, liens for repairs performed on a boat and liens for unpaid taxes take priority over even a perfected, first-priority security interest in the boat. The Code also grants priority to particular federal tax liens over the lien of a secured party. The laws of some states and federal law permit the confiscation of boats by governmental authorities under some circumstances if used in unlawful activities, which may result in the loss of a secured party’s perfected security interest in a confiscated boat. In each Receivables Purchase Agreement, the seller will represent and warrant that, as of the date any Receivable is sold to the Trust, the security interest in the related Financed Boat is or will be prior to all other present liens, other than tax liens and other liens that arise by operation of law, upon and security interests in the Financed Boat. However, liens for repairs or ta xes could arise, or the confiscation of a Financed Boat could occur, at any time during the term of a Receivable. No notice will be given to the related trustee, the related indenture trustee, if any, or related Securityholders in the event a lien arises or confiscation occurs. Any lien or confiscation arising or occurring after the closing date will not give rise to a repurchase obligation of the seller under the related Receivables Purchase Agreement.

Repossession

In the event of default by an obligor, the holder of the related retail installment sale contract has all the remedies of a secured party under the UCC, except where specifically limited by other state laws. The UCC remedies of a secured party include the right to repossession by self-help means, unless these means would constitute a breach of the peace. Self-help repossession is the method employed by the servicer in most cases and is accomplished simply by taking possession of the related boat. In cases where the obligor objects or raises a defense to repossession, or if otherwise required by applicable state law, a court order must be obtained from the appropriate state court, and the boat must then be recovered in accordance with that order. In some jurisdictions, the secured party is required to notify an obligor debtor of the default and the intent to repossess the collateral and to give the obligor a peri od of time within which to cure the default prior to repossession. Generally, the right to cure may only be exercised on a limited number of occasions during the term of the related contract.

Notice of Sale; Redemption Rights

The UCC and other state laws require the secured party to provide the obligor with reasonable notice of the date, time and place of any public sale and/or the date after which any private sale of the collateral may be held. The obligor has the right to redeem the collateral prior to actual sale by paying the secured party the unpaid principal balance of the obligation, accrued interest on the unpaid principal balance of the obligation, plus reasonable expenses for repossessing, holding and preparing the collateral for disposition and arranging for its sale, plus, in some jurisdictions, reasonable attorneys’ fees or, in some states, by payment of delinquent installments or the unpaid principal balance of the related obligation.

Deficiency Judgments and Excess Proceeds

The proceeds of the resale of any Financed Boat generally will be applied first to the expenses of resale and repossession and then to the satisfaction of the related indebtedness. While some states impose prohibitions or limitations on deficiency judgments if the net proceeds from any resale do not cover the full amount of the indebtedness, a deficiency judgment can be sought in other states that do not prohibit or limit deficiency judgments. However, the deficiency judgment would be a personal judgment against the obligor for the shortfall, and a defaulting obligor can be expected to have very little capital or sources of income available following repossession; in many cases, therefore, it may not be useful to seek a deficiency judgment or, if one is obtained, it may be settled at a significant discount or be uncollectible. In addition to the notice requirement, the UCC requires that every aspect of the sale or other disposition, including the method, manner, time, place and terms, be “commercially reasonable”. Generally, courts have held that when a sale is not “commercially reasonable”, the secured party loses its right to a deficiency judgment. In addition, the UCC permits the debtor or other interested party to recover for any loss caused by noncompliance with the provisions of the UCC. Also, prior to a sale, the UCC permits the debtor or other interested person to restrain the secured party from disposing of the collateral if it is established that the secured party is not proceeding in accordance with the “default” provisions under the UCC.

Occasionally, after the resale of a boat and payment of all related expenses and indebtedness, there is a surplus of funds. In that case, the UCC requires the creditor to remit the surplus to any holder of a subordinate lien with respect to the related boat or, if no subordinate lienholder exists, to the former owner of the boat.

Consumer Protection Laws

Numerous federal and state consumer protection laws and related regulations impose substantial requirements upon creditors and servicers involved in consumer finance. These laws include the Truth-in-Lending Act, the Equal Credit Opportunity Act, the Federal Trade Commission Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board’s Regulations B and Z, the Soldiers’ and Sailors’ Relief Act, state adaptations of the National Consumer Act and of the Uniform Consumer Credit Code, and state boat retail installment sales acts, retail installment sales acts and other similar laws. Also, the laws of some states impose finance charge ceilings and other restrictions on consumer transactions and require contract disclosures in addition to those required under other restrictions on consumer transactions and require contract disclosures in addition to those required under federal law. These requirements impose specific statutory liabilities upon creditors who fail to comply with their provisions. In some cases, this liability could affect the ability of an assignee, such as an issuing entity, to enforce consumer finance contracts such as Receivables.

The so-called “Holder-in-Due-Course” rule of the Federal Trade Commission (the “FTC Rule”), the provisions of which are generally duplicated by the Uniform Consumer Credit Code, other statutes or the common law, has the effect of subjecting a seller in a consumer credit transaction, and some related creditors and their assignees, to all claims and defenses that the obligor in the transaction could assert against the seller of the goods. Liability under the FTC Rule is limited to the amounts paid by the obligor under the contract, and the holder of the contract may also be unable to collect any balance remaining due under the contract from the obligor. Most of the Receivables will be subject to the requirements of the FTC Rule. Accordingly, each issuing entity, as holder of the related Receivables, will be subject to any claims or defenses that the purchasers of the related Financed Boats may assert against the sellers of those Financed Boats. If an obligor were successful in asserting any claims or defenses, the claim or defense would constitute a breach of the seller’s warranties under the related Receivables Purchase Agreement and would create an obligation of the seller to repurchase the Receivable unless the breach is cured in a timely manner. See “Description of the Transfer and Servicing Agreements—Sale and Assignment of Primary Assets”.

Courts have applied general equitable principles to secured parties pursuing repossession and litigation involving deficiency balances. These equitable principles may have the effect of relieving an obligor from some or all of the legal consequences of a default.

In several cases, consumers have asserted that the self-help remedies of secured parties under the UCC and related laws violate the due process protections of the Fourteenth Amendment to the Constitution of the United States. Courts have generally either upheld the notice provisions of the UCC and related laws as reasonable or have found that the creditors’ repossession and resale do not involve sufficient state action to afford constitutional protection to borrowers.

Under each Receivables Purchase Agreement the seller will represent and warrant that each Receivable complies in all material respects with all applicable federal and state laws. Accordingly, if an obligor has a claim against an issuing entity for a violation of any law and that claim materially and adversely affects the interests of the issuing entity in a Receivable, the violation would constitute a breach of the seller’s representation and warranty and would create an obligation of the seller to repurchase the Receivable unless the breach is cured. See “Description of the Transfer and Servicing Agreements—Sale and Assignment of Primary Assets”.

Other Limitations

In addition to the laws limiting or prohibiting deficiency judgments, numerous other statutory provisions, including federal bankruptcy laws and related state laws, may interfere with or affect the ability of a creditor to realize upon collateral or enforce a deficiency judgment. For example, in a Chapter 13 proceeding under the federal bankruptcy law, a court may prevent a creditor from repossessing a boat and, as part of the rehabilitation plan, may reduce the amount of the secured indebtedness to the market value of the boat at the time of bankruptcy, as determined by the court, leaving the party providing financing as a general unsecured creditor for the remainder of the indebtedness. A bankruptcy court may also reduce the monthly payments due under the related contract or change the rate of interest and time of repayment of the indebtedness.

Material Federal Income Tax Consequences

The following is a general discussion of the anticipated material United States federal income tax consequences of the purchase, ownership and disposition of securities.  The summary does not purport to deal with federal income tax consequences applicable to all categories of holders, some of which may be subject to special rules.  For example, it does not discuss the tax treatment of beneficial owners of notes (“Note Owners”) or certificates (“Certificate Owners”) that are insurance companies, regulated investment companies or dealers in securities.  Moreover, there are no cases or Internal Revenue Service (“IRS”) rulings on similar transactions involving both debt and equity interests issued by a trust with terms similar to those of the notes and the certificates.  As a result, the IRS might disagree with all or part of the discussion below.  Prospective i nvestors are urged to consult their own tax advisors in determining the federal, state, local, foreign and any other tax consequences to them of the purchase, ownership and disposition of the notes and the certificates.

The following summary is based upon current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), the Treasury regulations promulgated under the Code and judicial or ruling authority, all of which are subject to change, which change may be retroactive.  Each Trust will be provided with an opinion of tax counsel specified in the related prospectus supplement (“Federal Tax Counsel”) regarding some related federal income tax matters discussed below.  An opinion of Federal Tax Counsel, however, is not binding on the IRS or the courts.  No ruling on any of the issues discussed below will be sought from the IRS.  The opinion of Federal Tax Counsel specifically addresses only those issues specifically identified below as being covered by that opinion; however, the opinion also states that the additional discussion set forth below accurately sets forth the advi ce of Federal Tax Counsel with respect to material federal income tax issues.  For purposes of the following summary, references to the Trust, the notes, the certificates and related terms, parties and documents shall be deemed to refer, unless otherwise specified in this prospectus, to each Trust and the notes, certificates and related terms, parties and documents applicable to the issuing entity.

Trusts That Issue Notes

Tax Characterization of the Trusts.

In the case of an issuing entity that issues one or more classes of notes, Federal Tax Counsel will deliver its opinion that the an issuing entity will not be an association, or publicly traded partnership, taxable as a corporation for federal income tax purposes.  The opinion of Federal Tax Counsel will be based on the assumption that the terms of the Trust Agreement and related documents will be complied with, and on counsel’s conclusions that the nature of the income of the issuing entity, or restrictions, if any, on transfers of the certificates, will exempt the issuing entity from the rule that some publicly traded partnerships are taxable as corporations.

If an issuing entity were taxable as a corporation for federal income tax purposes, the issuing entity would be subject to corporate income tax on its taxable income.  The issuing entity’s taxable income would include all of its income on the related Primary Assets, which might be reduced by its interest expense on the notes.  Any corporate income tax could materially reduce cash available to make payments on the notes and distributions on the certificates, and Certificate Owners, and possibly Note Owners, could be liable for any resulting corporate income tax that is unpaid by the issuing entity.

Tax Consequences to Note Owners.

Treatment of the Notes as Indebtedness.  The issuing entity will agree, and the Note Owners will agree by their purchase of notes, to treat the notes as debt for federal tax purposes.  Federal Tax Counsel will, subject to exceptions which, if applicable, will be specified in the related prospectus supplement, advise the owner trust that the notes will be classified as debt for federal income tax purposes, or classified in any other manner as shall be provided in the related prospectus supplement.  If, contrary to the opinion of Federal Tax Counsel, the IRS successfully asserted that one or more of the classes of notes did not represent debt for federal income tax purposes, the notes would be treated as equity interests in the issuing entity.  If so treated, the issuing entity might be treated as a publicly traded partnership that would be taxable as a corporation unless it met particul ar qualifying income tests, and the resulting taxable corporation would not be able to reduce its taxable income by deductions for interest expense on notes recharacterized as equity.  Treatment of the notes as equity interests in a partnership could have adverse tax consequences to some holders, even if the issuing entity were not treated as a publicly traded partnership taxable as a corporation.  For example, income allocable to foreign holders on such recharacterized notes might be subject to United States tax and United States tax return filing and withholding requirements, income allocable to tax-exempt holders on a recharacterized note would constitute “unrelated business taxable income” if some, but not all, of the notes were recharacterized as equity in a partnership, individual holders might be subject to limitations on their ability to deduct their share of issuing entity expenses, and income from the issuing entity’s assets would be taxable to Note Owners without regard to whether cash distributions are made to such Note Owners and without regard to the Note Owners’ method of tax accounting.  The discussion below assumes that the notes will be characterized as debt for federal income tax purposes.

Interest Income on the Notes-General.  Except as discussed below, interest on a note generally is includable in a Note Owner’s income as ordinary interest income when actually or constructively received, if the Note Owner uses the cash method of accounting for federal income tax purposes, or when accrued, if the Note Owner uses an accrual method of accounting for federal income tax purposes.

Original Issue Discount.  Notes of certain series may be issued with “original issue discount” within the meaning of Section 1273(a) of the Code.  Holders of notes issued with original issue discount generally must include original issue discount in gross income for federal income tax purposes as it accrues, in advance of receipt of the cash attributable to such income, under a method that takes account of the compounding of interest.  The Code requires that information with respect to the original issue discount accruing on any note be reported periodically to the IRS and to certain categories of Note Owners.

Each issuing entity will report original issue discount, if any, to the Note Owners based on the Treasury regulations relating to original issue discount (the “OID Regulations”).  The OID Regulations concerning contingent payment debt instruments do not apply to prepayable debt instruments, such as the notes, and other provisions of the OID Regulations either do not apply as to prepayable securities such as the notes or do not address the unique issues prepayable securities present.

The OID Regulations provide that, in the case of debt instruments such as the notes, (i) the amount and rate of accrual of original issue discount will be calculated based on a reasonable assumed prepayment rate (the “Prepayment Assumption”), and (ii) adjustments will be made in the amount and rate of accrual of such discount to reflect differences between the actual prepayment rate and the Prepayment Assumption.  The method for determining the appropriate assumed prepayment rate will eventually be set forth in Treasury regulations, but those regulations have not yet been issued.  The applicable legislative history indicates, however, that such regulations will provide that the assumed prepayment rate for securities such as the notes will be the rate used in pricing the initial offering of those securities.  If the notes of a series are issued with original issue discount, the Prospectus Supplement for that series of notes will specify the Prepayment Assumption.  However, no representation is made that the notes of that series will, in fact, prepay at a rate based on the Prepayment Assumption or at any other rate.

In general, a note will be considered to be issued with original issue discount if its stated redemption price at maturity exceeds its issue price.  Except as discussed below under”—Payment Lag Notes; Initial Period Considerations,” and”—Qualified Stated Interest,” and in the case of certain Variable Rate Notes (as defined below) and accrual notes, the stated redemption price at maturity of a note is its principal amount.  The issue price of a note is the initial offering price to the public (excluding bond houses and brokers) at which a substantial amount of the class of notes is sold.  Notwithstanding the general definition of original issue discount, such discount will be considered to be zero for any note on which such discount is less than 0.25% of its stated redemption price at maturity multiplied by its weighted average life.  For purposes of this rule, we will compute the weighted average life of a note as the sum, for all distributions included in the stated redemption price at maturity of the note (that is, all payments except payments of qualified stated interest), of the amounts determined by multiplying (i) the number of complete years (rounding down for partial years) from the applicable closing date to the date on which each such distribution is expected to be made, determined under the Prepayment Assumption, by (ii) a fraction, the numerator of which is the amount of such distribution and the denominator of which is the note’s stated redemption price at maturity.  The OID Regulations provide that holders will include any de minimis original issue discount ratably as payments of stated principal are made on the notes.

The Note Owner of a note issued with original issue discount must include in gross income the sum of the “daily portions” of such original issue discount for each day during its taxable year on which it held such note.  In the case of an original Note Owner, the daily portions of original issue discount are determined first by calculating the portion of the original issue discount that accrued during each period (an “accrual period”) that begins on the day following a Distribution Date (or in the case of the first such period, begins on the applicable closing date) and ends on the next succeeding Distribution Date.  The original issue discount accruing during each accrual period is then allocated ratably to each day during such period to determine the daily portion of original issue discount for that day.

The portion of the original issue discount that accrues in any accrual period will equal the excess, if any, of (i) the sum of (A) the present value, as of the end of the accrual period, of all of the distributions to be made on the note, if any, in future periods (taking into account events that have occurred during the accrual period such as prepayments or actual losses) and (B) the distributions made on the note during the accrual period that are included in such note’s stated redemption price at maturity, over (ii) the adjusted issue price of such note at the beginning of the accrual period.  The present value of the remaining distributions referred to in the preceding sentence will be calculated (i) assuming that the notes will be prepaid in future periods at a rate computed in accordance with the Prepayment Assumption and (ii) using a discount rate equal to the original yield to maturity of the n otes.  For these purposes, the original yield to maturity of the notes will be calculated based on their issue price and assuming that the notes will be prepaid in accordance with the Prepayment Assumption.  The adjusted issue price of a note at the beginning of any accrual period will equal the issue price of such note, increased by the portion of the original issue discount that has accrued during prior accrual periods, and reduced by the amount of any distributions made on such note in prior accrual periods that were included in such note’s stated redemption price at maturity.

The daily portions of original issue discount may increase or decrease depending on the extent to which the actual rate of prepayments diverges from the Prepayment Assumption.  If original issue discount accruing during any accrual period computed as described above is negative, a Note Owner may only be entitled to offset such amount against positive original issue discount accruing on such note in future accrual periods.

A subsequent Note Owner that purchases a note issued with original issue discount at a cost that is less than its remaining stated redemption price at maturity will also generally be required to include in gross income, for each day on which it holds such note, the daily portions of original issue discount with respect to the note, calculated as described above.  However, if (i) the excess of the remaining stated redemption price at maturity over such cost is less than (ii) the aggregate amount of such daily portions for all days after the date of purchase until final retirement of such note, then such daily portions will be reduced proportionately in determining the income of such Note Owner.

Qualified Stated Interest.  Interest payable on a note which qualifies as “qualified stated interest” for purposes of the OID Regulations will not be includable in the stated redemption price at maturity of the note.  Conversely, if the interest on a note does not constitute “qualified stated interest,” such interest will be includable in the stated redemption price at maturity of the note and the note, consequently, will have original issue discount.  Interest payments will not qualify as qualified stated interest unless the interest payments are “unconditionally payable.” The OID Regulations state that interest is unconditionally payable if reasonable legal remedies exist to compel timely payment, or the debt instrument otherwise provides terms and conditions that make the likelihood of late payment (other than a late payment that occurs within a reasonable g race period) or nonpayment of interest a remote contingency, as defined in the OID Regulations.   Any terms or conditions that do not reflect arm’s length dealing or that the Note Owner does not intend to enforce are not considered.  Subordinate classes of notes may lack the right to enforce payment until they are the Senior Class.  However, absent guidance to the contrary and unless disclosed in the related prospectus supplement, the Trustee will, for information reporting purposes, treat all stated interest on all classes of notes as qualified stated interest.

Premium.  A purchaser of a note that purchases such note at a cost greater than its remaining stated redemption price at maturity will be considered to have purchased such note at a premium, and may, under Section 171 of the Code, elect to amortize such premium under a constant yield method over the life of the note.  The Prepayment Assumption is probably taken into account in determining the life of the note for this purpose.  Except as provided in regulations, amortizable premium will be treated as an offset to interest income on the note.

Payment Lag Notes; Initial Period Considerations.  Certain notes may provide for distributions of interest based on a period that is the same length as the interval between Distribution Dates but ends prior to each Distribution Date.  Any interest that accrues prior to the applicable closing date may be treated under the OID Regulations either (i) as part of the issue price and the stated redemption price at maturity of the notes or (ii) as not included in the issue price or the stated redemption price.  The OID Regulations provide a special application of the de minimis rule for debt instruments with long first accrual periods where the interest payable for the first period is at a rate which is effectively less than that which applies in all other periods.  In such cases, for the sole purpose of determining whether original issue discount is de minimis, the OID Regulations provide th at the stated redemption price is equal to the instrument’s issue price plus the greater of the amount of foregone interest or the excess (if any) of the instrument’s stated principal amount over its issue price.

Variable Rate Notes.  Under the OID Regulations, notes paying interest at a variable rate (each, a “Variable Rate Note”) are subject to special rules.  A Variable Rate Note will qualify as a “variable rate debt instrument” if (i) its issue price does not exceed the total noncontingent principal payments due under the Variable Rate Note by more than a specified de minimis amount; (ii) it provides for stated interest, paid or compounded at least annually, at a current value of (a) one or more qualified floating rates, (b) a single fixed rate and one or more qualified floating rates, (c) a single objective rate or (d) a single fixed rate and a single objective rate that is a qualified inverse floating rate; and (iii) it does not provide for any principal payments that are contingent, as defined in the OID Regulations, except as provided in (i), above.  The OID Regulations r elating to contingent payment debt instruments do not apply to prepayable debt instruments, such as the notes.  In general, the regulations addressing the treatment of contingent payment obligations require accruing income as a yield comparable to what the issuer would pay on non-contingent debt and then making appropriate adjustments as the contingencies become fixed.  In addition, losses on sale are ordinary to the extent of prior accruals and all gains on sale are ordinary.  As similar approach may ultimately be applied to prepayable obligations such as the notes.

A “qualified floating rate” is any variable rate where variations in the value of such rate can reasonably be expected to measure contemporaneous variations in the cost of newly borrowed funds in the currency in which the Variable Rate Note is denominated.  A multiple of a qualified floating rate will generally not itself constitute a qualified floating rate for purposes of the OID Regulations.  However, a variable rate equal to (i) the product of a qualified floating rate and a fixed multiple that is greater than 0.65 but not more than 1.35 or (ii) the product of a qualified floating rate and a fixed multiple that is greater than 0.65 but not more than 1.35, increased or decreased by a fixed rate will constitute a qualified floating rate for purposes of the OID Regulations.  In addition, under the OID Regulations, two or more qualified floating rates that can reasonably be expected to h ave approximately the same values throughout the term of the Variable Rate Note will be treated as a single qualified floating rate (a “Presumed Single Qualified Floating Rate”).  Two or more qualified floating rates with values within 25 basis points of each other as determined on the Variable Rate Note’s issue date will be conclusively presumed to be a Presumed Single Qualified Floating Rate.  Notwithstanding the foregoing, a variable rate that would otherwise constitute a qualified floating rate, but which is subject to one or more restrictions such as a cap or floor, will not be a qualified floating rate for purposes of the OID Regulations unless the restriction is fixed throughout the term of the Variable Rate Note or the restriction is not reasonably expected as of the issue date to significantly affect the yield of the Variable Rate Note.

An “objective rate” is a rate that is not itself a qualified floating rate but which is determined using a single fixed formula and which is based upon objective financial or economic information.  The OID Regulations also provide that other variable rates may be treated as objective rates if so designated by the IRS in the future.  Despite the foregoing, a variable rate of interest on a Variable Rate Note will not constitute an objective rate if it is reasonably expected that the average value of such rate during the first half of the Variable Rate Note’s term will be either significantly less than or significantly greater than the average value of the rate during the final half of the Variable Rate Note’s term.  Further, an objective rate does not include a rate that is based on information that is within the control of the issuer (or a party related to the issuer) or that is unique to the circumstances of the issuer (or a party related to the issuer).  An objective rate will qualify as a “qualified inverse floating rate” if such rate is equal to a fixed rate minus a qualified floating rate and variations in the rate can reasonably be expected to inversely reflect contemporaneous variations in the qualified floating rate.  The OID Regulations also provide that if a Variable Rate Note provides for stated interest at a fixed rate for an initial period of less than one year followed by a variable rate that is either a qualified floating rate or an objective rate and if the variable rate on the Variable Rate Note’s issue date is intended to approximate the fixed rate, then the fixed rate and the variable rate together will constitute either a single qualified floating rate or objective rate, as the case may be (a “Presumed Single Variable Rate”).  If the value of the variable rate and the initial fixed rate are within 25 basis points of each o ther as determined on the Variable Rate Note’s issue date, the variable rate will be conclusively presumed to approximate the fixed rate.

For Variable Rate Notes that qualify as “variable rate debt instruments” under the OID Regulations and provide for interest at either a single qualified floating rate, a single objective rate, a Presumed Single Qualified Floating Rate or a Presumed Single Variable Rate throughout the term (a “Single Variable Rate Note”), original issue discount is computed as described above in”—Interest Income on the Notes—Original Issue Discount” based on the following: (i) stated interest on the Single Variable Rate Note which is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually will constitute qualified stated interest; (ii) by assuming that the variable rate on the Single Variable Rate Note is a fixed rate equal to: (a) in the case of a Single Variable Rate Note with a qualified floating rate or a qualified inverse floating rate, the value, as of the issue date, of the qualified floating rate or the qualified inverse floating rate or (b) in the case of a Single Variable Rate Note with an objective rate (other than a qualified inverse floating rate), a fixed rate which reflects the reasonably expected yield for such Single Variable Rate Note; and (iii) the qualified stated interest allocable to an accrual period is increased (or decreased) if the interest actually paid during an accrual period exceeds (or is less than) the interest assumed to be paid under the assumed fixed rate described in (ii), above.

In general, any Variable Rate Note other than a Single Variable Rate Note (a “Multiple Variable Rate Note”) that qualifies as a “variable rate debt instrument” will be converted into an “equivalent” fixed rate debt instrument for purposes of determining the amount and accrual of original issue discount and qualified stated interest on the Multiple Variable Rate Note.  The OID Regulations generally require that such a Multiple Variable Rate Note be converted into an “equivalent” fixed rate debt instrument by substituting any qualified floating rate or qualified inverse floating rate provided for under the terms of the Multiple Variable Rate Note with a fixed rate equal to the value of the qualified floating rate or qualified inverse floating rate, as the case may be, as of the Multiple Variable Rate Note’s issue date.  Any objective rate (other than a qualifi ed inverse floating rate) provided for under the terms of the Multiple Variable Rate Note is converted into a fixed rate that reflects the yield that is reasonably expected for the Multiple Variable Rate Note.  (A Multiple Variable Rate Note may not bear more than one objective rate.) In the case of a Multiple Variable Rate Note that qualifies as a “variable rate debt instrument” and provides for stated interest at a fixed rate in addition to either one or more qualified floating rates or a qualified inverse floating rate, the fixed rate is initially converted into a qualified floating rate (or a qualified inverse floating rate, if the Multiple Variable Rate Note provides for a qualified inverse floating rate).  Under such circumstances, the qualified floating rate or qualified inverse floating rate that replaces the fixed rate must be such that the fair market value of the Multiple Variable Rate Note as of the Multiple Variable Rate Note’s issue date is approximately the same as the fair market value of an otherwise identical debt instrument that provides for either the qualified floating rate or qualified inverse floating rate rather than the fixed rate.  Subsequent to converting the fixed rate into either a qualified floating rate or a qualified inverse floating rate, the Multiple Variable Rate Note is then converted into an “equivalent” fixed rate debt instrument in the manner described above.

Once the Multiple Variable Rate Note is converted into an “equivalent” fixed rate debt instrument pursuant to the foregoing rules, the amounts of original issue discount and qualified stated interest, if any, are determined for the “equivalent” fixed rate debt instrument by applying the original issue discount rules to the “equivalent” fixed rate debt instrument in the manner described above in”—Interest Income on the Notes—Original Issue Discount.” A holder of the Multiple Variable Rate Note will account for such original issue discount and qualified stated interest as if the holder held the “equivalent” fixed rate debt instrument.  In each accrual period, appropriate adjustments will be made to the amount of qualified stated interest or original issue discount assumed to have been accrued or paid with respect to the “equivalent” fixed r ate debt instrument in the event that such amounts differ from the actual amount of interest accrued or paid on the Multiple Variable Rate Note during the accrual period.

If a Variable Rate Note does not qualify as a “variable rate debt instrument” under the OID Regulations, then the Variable Rate Note would be treated as a contingent payment debt obligation.  The manner in which a Variable Rate Note would be taxed if such note were treated as a contingent payment debt obligation is not governed by the OID Regulations relating to contingent payment debt obligations which do not apply to prepayable debt instruments, such as the notes, and Treasury regulations do not otherwise address this point and it is unclear how such instruments should be treated.

Market Discount.  A Note Owner that acquires a note at a market discount (that is, a discount that exceeds any unaccrued original issue discount) will recognize gain upon receipt of a principal distribution, regardless of whether the distribution is scheduled or is a prepayment.  In particular, the Note Owner will be required to allocate that principal distribution first to the portion of the market discount on such note that has accrued but has not previously been includable in income, and will recognize ordinary income to that extent.  In general terms, unless Treasury regulations when issued provide otherwise, market discount on a note may be treated, at the election of the holder of the note, as accruing either (i) under a constant yield method, taking into account the Prepayment Assumption, or (ii) in proportion to accruals of original issue discount (or, if there is no original issue discount, in proportion to stated interest on the note).

In addition, a Note Owner may be required to defer deductions for a portion of the Note Owner’s interest expense on any debt incurred or continued to purchase or carry a note purchased with market discount.  The deferred portion of any interest deduction would not exceed the portion of the market discount on the note that accrues during the taxable year in which such interest would otherwise be deductible and, in general, would be deductible when such market discount is included in income upon receipt of a principal distribution on, or upon the sale of, the note.  The Code requires that information necessary to compute accruals of market discount be reported periodically to the IRS and to certain categories of Note Owners.

Notwithstanding the above rules, market discount on a note will be considered to be zero if such discount is less than 0.25% of the remaining stated redemption price at maturity of such note multiplied by its weighted average remaining life.  Weighted average remaining life presumably is calculated in a manner similar to weighted average life (described above under”—Interest Income on the Notes—Original Issue Discount”), taking into account distributions (including prepayments) prior to the date of acquisition of such note by the subsequent purchaser.  If market discount on a note is treated as zero under this rule, the actual amount of such discount must be allocated to the remaining principal distributions on such note in proportion to the amounts of such principal distributions, and when each such distribution is made, gain equal to the discount, if any, allocated to the distribu tion will be recognized.

Election to Treat All Interest Under the Constant Yield Rules.  The OID Regulations allow a holder of a Note to elect to include in gross income all interest that accrues on such debt instrument using the constant yield method.  For purposes of this election, interest includes stated interest, original issue discount, and market discount, as adjusted to account for any premium.  If an election were to be made with respect to a Note with market discount, the Note Owner would be deemed to have made an election to include in income currently market discount with respect to all other debt instruments having market discount that the grantor trust certificateholder acquires during the year of the election or afterward.  See”—Market Discount” above.  Similarly, a Note Owner that makes this election for a Note that is acquired at a premium will be deemed to have made an ele ction to amortize bond premium with respect to all debt instruments having amortizable bond premium that the grantor trust Note Owner owns at the beginning of the first taxable year to which the election applies or acquires afterward.  See “—Premium” above.  The election to accrue interest, discount and premium on a constant yield method with respect to a Note is irrevocable.  Note Owners should consult their own tax advisors regarding the availability or advisability of such an election.

Sales of Notes.  If a note is sold, the seller will recognize gain or loss equal to the difference between the amount realized on the sale and its adjusted basis in the note.  A holder’s adjusted basis in a note generally equals the cost of the note to the holder, increased by income reported by the holder with respect to the note and reduced (but not below zero) by distributions on the note (other than qualified stated interest) received by the holder and by amortized premium.  Subject to the discussion of the rules applicable to contingent payment debt obligations above, any such gain or loss generally will be capital gain or loss provided the note is held as a capital asset, except for gain recognized on the sale of a note by a seller who purchased the note at a market discount would be taxable as ordinary income in an amount not exceeding the portion of such discount that accrued d uring the period the note was held by such seller, reduced by any market discount includable in income under the rules described above under”—Interest Income on the Notes—Market Discount.”  Further, the notes will be “evidences of indebtedness” within the meaning of Section 582(c)(1) of the Code, so that gain or loss recognized from a sale of a note by a bank or other financial institution to which such section applies would be ordinary income or loss.

Allocations of Realized Losses.  The manner losses are claimed on the notes as a result of defaults by the underlying obligors is complex and differs depending on the characterization of the person considered the issuer of the notes for federal tax purposes.  Whether the notes are governed by the loss rules for bad debts under Code Section 166 or for worthless securities under Code Section 165 depends on whether the notes are considered issued by a corporation.  If there is a single corporate holder of the Certificates constituting all of the equity interests in the issuing Trust Fund, then the issuing Trust will be a disregarded entity and the notes will be considered issued by a corporation subject to the loss rules of Code Section 165 (which affects both timing and character of loss for corporate taxpayers, and character and possibly timing for other taxpayers).  If the notes are co nsidered issued by a grantor trust, then the notes may be treated as issued in proportion to the nature of the Certificateholders (e.g, if some Certificateholders are natural persons or partnerships and some are corporations, losses on the notes would be governed in part by Code Section 166 and in part by Code Section 165).  If the notes are considered issued by a partnership then they would be governed by the rules under Code Section 166.  Investors should consult their tax advisors as to the character and timing of any loss that can be claimed with respect to a note.

Short-Term Notes.  In the case of a note with a maturity of one year or less from its issue date (a “Short-Term Note”), no interest is treated as qualified stated interest, and therefore all interest is included in original issue discount.  Note Owners that report income for federal income tax purposes on an accrual method and some other Note Owners, including banks and certain dealers in securities, (collectively, “Short-Term Accruers”) are required to include original issue discount in income on Short-Term Notes on a straight-line basis, unless an election is made to accrue the original issue discount according to a constant yield method based on daily compounding.

Any other Note Owner of a Short-Term Note is not required to accrue original issue discount for federal income tax purposes, unless it elects to do so.  In the case of a Note Owner that is not required, and does not elect, to include original issue discount in income currently, any gain realized on the sale, exchange or retirement of a Short-Term Note is ordinary income to the extent of the original issue discount accrued on a straight-line basis, or, if elected, according to a constant yield method based on daily compounding, through the date of sale, exchange or retirement.  In addition, Note Owners that are not required, and do not elect, to include original issue discount in income currently are required to defer deductions for any interest paid on indebtedness incurred or continued to purchase or carry a Short-Term Note in an amount not exceeding the deferred interest income with respect to the Sh ort-Term Note, which includes both the accrued original issue discount and accrued interest that are payable but that have not been included in gross income, until the deferred interest income is realized.  A Note Owner may elect to apply the foregoing rules, except for the rule characterizing gain on sale, exchange or retirement as ordinary, with respect to “acquisition discount” rather than original issue discount.  Acquisition discount is the excess of the stated redemption price at maturity of the Short-Term Note over the Note Owner’s basis in the Short-Term Note.  This election applies to all obligations acquired by the taxpayer on or after the first day of the first taxable year to which the election applies, unless revoked with the consent of the IRS.  A Note Owner’s tax basis in a Short-Term Note is increased by the amount included in the Note Owner’s income with respect to the note.

Foreign Investors in Notes.  Except as discussed below, a Note Owner that is not a “United States person” (as defined below) generally will not be subject to United States income or withholding tax in respect of a distribution on a note provided that (i) the holder complies to the extent necessary with certain certification requirements, which generally relate to the identity of the beneficial owner and the status of the beneficial owner as a person that is not a United States person (as defined below), (ii) the holder is not a “10-percent shareholder” within the meaning of Section 871(h)(3)(B) of the Code, which could be interpreted to include a person that directly or indirectly owns 10% or more of the certificates in the issuing entity, (iii) the holder is not a “controlled foreign corporation” (as defined in the Code) related to the issuing entity or related to a 10 percent holder of certificates in the issuing entity, and (iv) the holder is not engaged in a United States trade or business, or otherwise subject to federal income tax as a result of any direct or indirect connection to the United States other than through its ownership of a note.  For these purposes, the term “United States person” means (i) a citizen or resident of the United States, (ii) a corporation or partnership (or other entity properly treated as a corporation or partnership for federal income tax purposes) created or organized in or under the laws of the United States or any State thereof or the District of Columbia, (iii) an estate whose income is includable in gross income for United States federal income taxation regardless of its source, and (iv) a trust for which one or more United States persons have the authority to control all substantial decisions and for which a court of the United States can exercise primary supervision over the trust’s administration and certain el igible trusts that have elected to be treated as United States persons.  A “Foreign Person” is any person that is not a United States person.  Each Note Owner should consult its tax advisors regarding the tax documentation and certifications that must be provided to secure the exemption from United States withholding taxes.

Any capital gain realized on the sale, redemption, retirement or other taxable disposition of a note by a Foreign Person generally will be exempt from United States federal income and withholding tax, provided that (i) such gain is not effectively connected with the conduct of a trade or business in the United States by the Foreign Person and (ii) in the case of an individual Foreign Person, the Foreign Person is not present in the United States for 183 days or more in the taxable year.

If the interest, gain or income on a note held by a Foreign Person is effectively connected with the conduct of a trade or business in the United States by the Foreign Person (although exempt from the withholding tax previously discussed if the holder provides an appropriate statement establishing that such income is so effectively connected), the holder generally will be subject to United States federal income tax on the interest, gain or income at regular federal income tax rates.  In addition, if the Foreign Person is a foreign corporation, it may be subject to a branch profits tax equal to 30% of its “effectively connected earnings and profits,” within the meaning of the Code, for the taxable year, as adjusted for certain items, unless it qualifies for a lower rate under an applicable tax treaty (as modified by the branch profits tax rules).

Backup Withholding on Notes.  Distributions made on the notes and proceeds from the sale of notes to or through certain brokers may be subject to a “backup” withholding tax on “reportable payments” (including interest accruals, original issue discount, and, under certain circumstances, distributions in reduction of principal amount) if the holder of the notes fails to comply with certain identification procedures, unless the Note Owner is an exempt recipient under applicable provisions of the Code and, if necessary, demonstrates such status.  Any amounts so withheld from distributions on the notes would be refunded by the IRS or allowable as a credit against the Note Owner’s federal income tax.

Reportable Transactions. Pursuant to recently enacted legislation, a penalty in the amount of $10,000 in the case of a natural person and $50,000 in any other case is imposed on any taxpayer that fails to timely file an information return with the IRS with respect to a “reportable transaction” (as defined in Section 6011 of the Code). The rules defining “reportable transactions” are complex, and include transactions that result in certain losses that exceed threshold amounts. Prospective investors are advised to consult their own tax advisers regarding any possible disclosure obligations in light of their particular circumstances.

Tax Consequences to Certificate Owners of Owner Trust

Treatment of the Issuing Entity as a Partnership.  The correct characterization of a Trust that has issued debt and is not otherwise taxed as a corporation is uncertain.  If the Trust has only a single class of equity and the trustee does not have the authority to accept any additional assets after the initial acquisition of receivables (except within a certain prescribed pre-funding period not exceeding three months) and has very limited powers of investment (for example does not hold any reserve fund that could ultimately flow to the Certificateholders if not needed to pay the noteholders) the Trust could qualify as a grantor trust with interest expense.  As a consequence, each Certificateholder would be treated as owning a pro rata share of the Trust assets, earning income thereon and incurring the expenses of the Trust (including the interest expense on the notes).  See  7;Grantor Trusts.”  If a Trust that issues notes intends to take the position that Certificateholders hold interests in a grantor trust it will be disclosed in the related prospectus supplement.  In addition, it is possible that a Trust that issued notes could qualify as a partnership eligible to make an election under Section 761 to not be taxed under the main partnership provisions of the Code (although certain ancillary provisions, including the rules relating to audits of partnerships, would continue to apply).  Such an election would cause Certificateholders to be treated as essentially the same as holding an interest in a grantor trust.  However, the IRS has recently taken a narrow interpretation of the type of entities that qualify for this election, which may not include a Trust.  If a Trust that is treated as a partnership intends to report in accordance with having made an election under Section 761 to be excluded from the main partnership provisions of the Code the co nsequences of such reporting will be disclosed in the related prospectus supplement along with a description of the consequences of making such an election.  If there is only one Certificateholder in a Trust that represents all of the equity of the Trust for federal income tax purposes, the separate existence of the Trust is disregarded, and the Certificateholder is treated as the owner of all of the assets of the Trust and as the issuer of the notes of the Trust for federal income tax purposes.  For all other Trust that issue notes.  The Trust will agree, and the related Certificate Owners will agree by their purchase of certificates, if there is more than one Certificate Owner, to treat the Trust as a partnership for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, with the assets of the partnership being the assets held by the Trust, the partners of the partnership being the Certificate Owners, including, to the extent relevan t, the seller in its capacity as recipient of distributions from any reserve fund, and the notes being debt of the partnership, and if there is one Certificate Owner, to treat the Certificate Owner as the owner of the assets of the Trust and to treat the Trust as a disregarded entity.  However, the proper characterization of the arrangement involving the Trust, the certificates, the notes, the seller, the depositor and the servicer is not certain because there is no authority on transactions closely comparable to that contemplated in this prospectus.

A variety of alternative characterizations are possible.  For example, because the certificates have certain features characteristic of debt, the certificates might be considered debt of the Trust.  Generally, provided such certificates are issued at or close to face value, any such characterization would not result in materially adverse tax consequences to holders of Certificates as compared to the consequences from treatment of the certificates as equity in a partnership, described below.  The following discussion assumes that the certificates represent equity interests in a partnership.

Partnership Taxation.  As a partnership, the Trust will not be subject to federal income tax.  Rather, each Certificate Owner will be required to take into account separately the Certificate Owner’s allocable share of income, gains, losses, deductions and credits of the Trust, whether or not there is a corresponding cash distribution.  The Trust will generally be required to use an accrual method of accounting and a tax year based on the tax year of its certificateholders.  Thus, cash basis holders will in effect be required to report income from the certificates on the accrual basis and Certificate Owners may become liable for taxes on Trust income even if they have not received cash from the Trust to pay the taxes.  The Trust’s income will consist primarily of interest and finance charges earned on the related Primary Assets, including appropriate adjustments for marke t discount, original issue discount and bond premium, and any gain upon collection or disposition of the Primary Assets.

The Trust’s deductions will consist primarily of interest accruing with respect to the notes, servicing and other fees, and losses or deductions upon collection or disposition of Primary Assets.

The federal income tax treatment of any Collateral Certificates held by the Trust will depend on the terms of the Collateral Certificates and their characterization (for example, as indebtedness) for federal income tax purposes.

The tax items of a partnership are allocable to the partners in accordance with the Code, Treasury regulations and the partnership agreement (i.e., the Trust Agreement and related documents).  To the extent that there is more than one class of equity (or potentially more than one class of equity) the related prospectus supplement will describe the manner in which income from the assets of the Trust Fund will be allocated.

Assuming notes are also issued, all or substantially all of the taxable income allocated to a Certificate Owner that is a pension, profit sharing or employee benefit plan or other tax-exempt entity, including an individual retirement account, will constitute “unrelated business taxable income” generally taxable to the holder under the Code.

An individual taxpayer’s share of expenses of the Trust, including fees to the servicer, but not interest expense, would be miscellaneous itemized deductions and thus deductible only to the extent such expenses plus all other miscellaneous itemized deductions exceeds two percent of the individual’s adjusted gross income.  An individual taxpayer will be allowed no deduction for his share of expenses of the Trust, other than interest, in determining his liability for alternative minimum tax.  In addition, Section 68 of the Code, provides that the amount of itemized deductions otherwise allowable for the taxable year for an individual whose adjusted gross income exceeds a prescribed threshold amount (which is adjusted annually for inflation) will be reduced by the lesser of (1) 3% of the excess of adjusted gross income over the specified threshold amount or (2) 80% of the amount of itemized dedu ctions otherwise allowable for the applicable taxable year.  The reduction under Code Section 68 is itself reduced by one-third for taxable years beginning in 2006 and 2007, two-thirds for taxable years beginning in 2008 and 2009, and fully reduced for taxable years beginning in 2010 with no reduction thereafter.  Accordingly, deductions might be disallowed to the individual in whole or in part and might result in the Certificate Owner being taxed on an amount of income that exceeds the amount of cash actually distributed to the holder over the life of the Trust.  In the case of a partnership that has 100 or more partners and elects to be treated as an “electing large partnership,” 70% of that partnership’s miscellaneous itemized deductions will be disallowed, although the remaining deductions will generally be allowed at the partnership level and will not be subject to the 2% floor that would otherwise be applicable to individual partners.

The Trust intends to make all tax calculations relating to income and allocations to Certificate Owners on an aggregate basis to the extent relevant.  If the IRS were to require that the calculations be made separately for each Primary Asset, the calculations may result in some timing and character differences under some circumstances.

Discount and Premium.  The purchase price paid by the Trust for the related Primary Assets may be greater or less than the remaining principal balance of the Primary Assets at the time of purchase.  If so, the Primary Assets will have been acquired at a premium or market discount, as the case may be.  See “Tax Consequences to Note Owners—Premium” and”— Market Discount” above.  If the Primary Assets are debt instruments, the yield on which may be affected by prepayments, the trust will be required to use a prepayment assumption for purposes of calculating accruals of original issue discount and market discount and amortization of premium.  As indicated above, the Trust will make this calculation on an aggregate basis, but it is possible that the IRS might require that it be recomputed on a Primary Asset-by-Primary Asset basis.  Further, to the ext ent a Primary Asset is a Treasury Strip, Private Label Custody Strip, REFCO Strip or other instrument evidencing ownership of specific interest and/or principal of a particular bond, it will be subject to the rules relating to original issue discount (in lieu of the rules relating to market discount).  See “ Tax Consequences to Note Owners—Original Issue Discount” above.

If the Trust acquires the Primary Assets at a market discount or premium, the Trust will elect to include any market discount in income currently as it accrues over the life of the Primary Assets or to offset any premium against interest income on the Primary Assets.  As indicated above, a portion of the market discount income or premium deduction may be allocated to Certificate Owners.

Section 708 Termination.  Under Section 708 of the Code, the Trust will be deemed to terminate for federal income tax purposes if 50% or more of the capital and profits interests in the Trust are sold or exchanged within a 12-month period.  If a termination occurs under Section 708 of the Code, the Trust will be considered to contribute its assets to a new Trust, which would be treated as a new partnership, in exchange for certificates in the new Trust.  The original Trust will then be deemed to distribute the certificates in the new Trust to each of the owners of certificates in the original Trust in liquidation of the original Trust.  The Trust will not comply with particular technical requirements that might apply when a constructive termination occurs.  As a result, the Trust may be subject to some tax penalties and may incur additional expenses if it is required to comply wit h those requirements.  Furthermore, the Trust might not be able to comply with these requirements due to lack of data.

Disposition of Certificates.  Generally, capital gain or loss will be recognized on a sale of certificates in an amount equal to the difference between the amount realized and the seller’s tax basis in the certificates sold.  Any gain or loss would be long-term capital gain or loss if the Certificate Owner’s holding period exceeded one year.  A Certificate Owner’s tax basis in a Certificate will generally equal its cost, increased by its share of Trust income allocable to the Certificate Owner and decreased by any distributions received or losses allocated with respect to the certificate.  In addition, both the tax basis in the certificates and the amount realized on a sale of a certificate would include the Certificate Owner’s share, determined under Treasury Regulations, of the notes and other liabilities of the Trust.  A Certificate Owner acquiring certifica tes at different prices will generally be required to maintain a single aggregate adjusted tax basis in the certificates and, upon a sale or other disposition of some of the certificates, allocate a portion of the aggregate tax basis to the certificates sold, rather than maintaining a separate tax basis in each certificate for purposes of computing gain or loss on a sale of that certificate.  A portion holding rule is applied, however, if a Certificateholder has held some of its interest in the Partnership Trust Fund for one year or less and some of its interest for more than one year and a “by lot” identification is not permitted.

If a Certificate Owner is required to recognize an aggregate amount of income (not including income attributable to disallowed itemized deductions described above) over the life of the certificates that exceeds the aggregate cash distributions with respect to the certificates, the excess will generally give rise to a capital loss upon the retirement of the certificates.

Allocations Between Transferors and Transferees.  In general, the Trust’s taxable income and losses will be determined monthly and the tax items for a particular calendar month will be apportioned among the Certificate Owners in proportion to the principal amount of certificates owned by them as of the close of the last day of the applicable month.  As a result, a Certificate Owner purchasing certificates may be allocated tax items, which will affect the purchaser’s tax liability and tax basis, attributable to periods before the actual transaction.

The use of a monthly convention may not be permitted by existing Treasury regulations.  If a monthly convention is not allowed, or only applies to transfers of less than all of the partner’s interest, taxable income or losses of the Trust might be reallocated among the Certificate Owners.  The Trust’s method of allocation between transferors and transferees may be revised to conform to a method permitted by future laws, regulations or other IRS guidance.

Section 731 Distributions.  In the case of any distribution to a Certificate Owner, no gain will be recognized to that Certificate Owner to the extent that the amount of any money distributed for that Certificate does not exceed the adjusted basis of that Certificate Owner’s interest in the Certificate.  To the extent that the amount of money distributed exceeds that Certificate Owner’s adjusted basis, gain will be currently recognized.  In the case of any distribution to a Certificate Owner, no loss will be recognized except upon a distribution in liquidation of a Certificate Owner’s interest.  Any gain or loss recognized by a Certificate Owner generally will be capital gain or loss.

Section 754 Election.  In the event that a Certificate Owner sells its certificates at a profit (or loss), the purchasing Certificate Owner will have a higher (or lower) basis in the certificates than the selling Certificate Owner had.  The tax basis of the Trust’s assets will not be adjusted to reflect that higher (or lower) basis unless there is a “substantial basis reduction” within the meaning of Section 734 of the Code or unless the Trust were to file an election under Section 754 of the Code.  Because the trust will most likely qualify as a “securitization partnership” within the meaning of Section 743(f) of the Code, there will not be a substantial basis reduction with respect to the sale of the certificates.  With respect to the election under Section 754 of the Code, in order to avoid the administrative complexities that would be involved in keeping ac curate accounting records, as well as potentially onerous information reporting requirements, the Trust current does not intend to make an election under Section 754 of the Code.  As a result, Certificate Owners might be allocated a greater or lesser amount of Trust income than would be appropriate based on their own purchase price for certificates.

Administrative Matters.  The trustee is required to keep or cause to be kept complete and accurate books of the Trust.  For each trust which is not a fixed pool of assets or that has multiple classes of equity ownership, the trustee will file a partnership information return (IRS Form 1065) with the IRS for each taxable year of the Trust and will report each Certificate Owner’s allocable share of items of Trust income and expense to Certificate Owners and the IRS on Schedule K-1.  The Trust will provide the Schedule K-1 information to nominees that fail to provide the Trust with the information statement described below and the nominees will be required to forward this information to the beneficial owners of the certificates.  Generally, holders must timely file tax returns that are consistent with the information return filed by the Trust or be subject to penalties unless the hol der notifies the IRS of all the inconsistencies.

Under Section 6031 of the Code, any person that holds certificates as a nominee at any time during a calendar year is required to furnish the Trust with a statement containing specific information on the nominee, the beneficial owners and the certificates so held.  The information includes (1) the name, address and taxpayer identification number of the nominee and (2) as to each beneficial owner:  (a) the name, address and identification number of such person, (b) whether such person is a United States person, a tax-exempt entity or a foreign government, an international organization, or any wholly owned agency or instrumentality of either of the foregoing, and (c) particular information on certificates that were held, bought or sold on behalf of the person throughout the year.

In addition, brokers and financial institutions that hold certificates through a nominee are required to furnish directly to the Trust information as to themselves and their ownership of certificates.  A clearing agency registered under Section 17A of the Exchange Act is not required to furnish any information statement to the Trust.  The information referred to above for any calendar year must be furnished to the Trust on or before the following January 31.  Nominees, brokers and financial institutions that fail to provide the Trust with the information described above may be subject to penalties.

The depositor ordinarily will be designated as the tax matters partner for each Trust in the related Trust Agreement and, as the tax matters partner, will be responsible for representing the Certificate Owners in some specific disputes with the IRS.  The Code provides for administrative examination of a partnership as if the partnership were a separate and distinct taxpayer.  Generally, the statute of limitations for partnership items does not expire before the later of three years after the date on which the partnership information return is filed or the last day for filing the return for the applicable year, determined without regard to extensions.  Any adverse determination following an audit of the return of the Trust by the appropriate taxing authorities could result in an adjustment of the returns of the Certificate Owners, and, under some circumstances, a Certificate Owner may be precluded from separately litigating a proposed adjustment to the items of the Trust.  An adjustment could also result in an audit of a Certificate Owner’s returns and adjustments of items not related to the income and losses of the Trust.

A special audit system exists for qualifying large partnerships that have elected to apply a simplified flow-through reporting system under Sections 771 through 777 of the Code.  Unless otherwise specified in the applicable Prospectus Supplement, a Trust will not elect to apply the simplified flow-through reporting system.

Taxation of Tax Exempt Owners.  Certificate Owners that are tax-exempt will be subject to the tax on unrelated business taxable income (also known as UBTI), if the trust has issued other securities that are debt, or treated as debt, for federal income tax purposes.

Taxation of Certain Foreign Certificate Owners.  As used below, the term “Non-United States Owner” means a Certificate Owner that is not a United States person, as defined under “Tax Consequences to Note Owners—Foreign Investors in Notes,” above.

It is not clear whether the Trust would be considered to be engaged in a trade or business in the United States for purposes of federal withholding taxes with respect to Non-United States Owners because there is no clear authority dealing with that issue under facts substantially similar to those described in this Prospectus.  Although it is not expected that the Trust would be engaged in a trade or business in the United States for these purposes, the Trust will withhold as if it were so engaged in order to protect the Trust from possible adverse consequences of a failure to withhold.  The Trust expects to withhold on the portion of its taxable income that is allocable to Non-United States Owners pursuant to Section 1446 of the Code, as if the income were effectively connected to a U.S. trade or business, at a rate equal to the highest income tax rate applicable to corporations for Non-United States O wners that are taxable as corporations and at a rate equal to the highest income tax rate applicable to individuals for all other Non-United States Owners.

Subsequent adoption of Treasury regulations or the issuance of other administrative pronouncements may require the Trust to change its withholding procedures.

Each Non-United States Owner might be required to file a U.S. individual or corporate income tax return on its share of the Trust’s income including, in the case of a corporation, a return in respect of the branch profits tax.  Assuming the Trust is not engaged in a U.S. trade or business, a Non-United States Owner would be entitled to a refund with respect to all or a portion of taxes withheld by the Trust if, in particular, the Owner’s allocable share of interest from the Trust constituted “portfolio interest” under the Code.

The interest, however, may not constitute “portfolio interest” if, among other reasons, the underlying obligation is not in registered form or if the interest is determined without regard to the income of the Trust, in the later case, the interest being properly characterized as a guaranteed payment under Section 707(c) of the Code.  If this were the case, Non-United States Owners would be subject to a United States federal income and withholding tax at a rate of 30 percent on the Trust’s gross income, without any deductions or other allowances for costs and expenses incurred in producing the income, unless reduced or eliminated pursuant to an applicable treaty.  In this case, a Non-United States Owner would only be entitled to a refund for that portion of the taxes, if any, in excess of the taxes that should have been withheld with respect to the interest.

Backup Withholding.  Distributions made on the certificates and proceeds from the sale of the certificates will be subject to a “backup” withholding tax if, in general, the Certificate Owner fails to comply with particular identification procedures, unless the holder is an exempt recipient under applicable provisions of the Code and, if necessary, demonstrates such status.  Any amounts so withheld would be refunded by the IRS or allowable as a credit against the Certificate Owner’s federal income tax.

Reportable Transactions. Pursuant to recently enacted legislation, a penalty in the amount of $10,000 in the case of a natural person and $50,000 in any other case is imposed on any taxpayer that fails to timely file an information return with the IRS with respect to a “reportable transaction” (as defined in Section 6011 of the Code). The rules defining “reportable transactions” are complex, and include transactions that result in certain losses that exceed threshold amounts. Prospective investors are advised to consult their own tax advisers regarding any possible disclosure obligations in light of their particular circumstances.

Grantor Trusts

Characterization.  In the case of a grantor trust, Federal Tax Counsel will deliver its opinion that the Trust will not be classified as an association taxable as a corporation and that the Trust will be classified as a grantor trust under subpart E, Part I of subchapter J of chapter 1 of subtitle A of the Code.  In this case, beneficial owners of certificates (referred to in this Prospectus as “grantor trust certificateholders”) will be treated for federal income tax purposes as owners of a portion of the Trust’s assets as described below.  The certificates issued by a Trust that is treated as a grantor trust are referred to in this Prospectus as “grantor trust certificates”.

Taxation of Grantor Trust Certificateholders.  Subject to the discussion below under “Stripped Certificates” and “Subordinated Certificates,” each grantor trust certificateholder will be treated as the owner of a pro rata undivided interest in the Primary Assets and other assets of the Trust.  Accordingly, and subject to the discussion below of the recharacterization of the Servicing Fee, each grantor trust certificateholder must include in income its pro rata share of the interest and other income from the Primary Assets, including any interest, original issue discount, market discount, prepayment fees, assumption fees, and late payment charges with respect to the assets, and, subject to limitations discussed below, may deduct its pro rata share of the fees and other deductible expenses paid by the Trust, at the same time and to the same extent as these items would be includ ed or deducted by the grantor trust certificateholder if the grantor trust certificateholder held directly a pro rata interest in the assets of the Trust and received and paid directly the amounts received and paid by the Trust.  Any amounts received by a grantor trust certificateholder in lieu of amounts due with respect to any Primary Asset because of a default or delinquency in payment will be treated for federal income tax purposes as having the same character as the payments they replace.

Each grantor trust certificateholder will be entitled to deduct its pro rata share of servicing fees, prepayment fees, assumption fees, any loss recognized upon an assumption and late payment charges retained by the servicer, provided that these amounts are reasonable compensation for services rendered to the Trust.  Grantor trust certificateholders that are individuals, estates or trusts will be entitled to deduct their share of expenses only to the extent these expenses plus all other miscellaneous itemized deductions exceed two percent of the grantor trust certificateholder’s adjusted gross income, and will be allowed no deduction for these expenses in determining their liabilities for alternative minimum tax.  In addition, Section 68 of the Code provides that the amount of itemized deductions otherwise allowable for the taxable year for an individual whose adjusted gross income exceeds a presc ribed threshold amount will be reduced by the lesser of (1) 3% of the excess of adjusted gross income over the specified threshold amount (adjusted annually for inflation) or (2) 80% of the amount of itemized deductions otherwise allowable for the applicable taxable year.  The reduction under Code Section 68 is itself reduced by one-third for taxable years beginning in 2006 and 2007, two-thirds for taxable years beginning in 2008 and 2009, and fully reduced for taxable years beginning in 2010 with no reduction thereafter.  In the case of a partnership that has 100 or more partners and elects to be treated as an “electing large partnership,” 70% of the partnership’s miscellaneous itemized deductions will be disallowed, although the remaining deductions will generally be allowed at the partnership level and will not be subject to the 2% floor that would otherwise be applicable to individual partners.

The servicing compensation to be received by the servicer may be questioned by the IRS as exceeding a reasonable fee for the services being performed in exchange for the servicing compensation, and a portion of the servicing compensation could be recharacterized as an ownership interest retained by the servicer or other party in a portion of the interest payments to be made with respect to the Trust’s assets.  In this event, a certificate might be treated as a Stripped Certificate subject to the stripped bond rules of Section 1286 of the Code and the original issue discount provisions rather than to the market discount and premium rules.  See the discussion below under “—Stripped Certificates”.  Except as discussed below under “Stripped Certificates” or “—Subordinated Certificates,” this discussion assumes that the servicing fees paid to the servicer do not exceed reasonable servicing compensation.

A purchaser of a grantor trust certificate will be treated as purchasing an interest in each Primary Asset in the Trust at a price determined by allocating the purchase price paid for the certificate among all Primary Assets in proportion to their fair market values at the time of the purchase of the certificate.  To the extent that the portion of the purchase price of a grantor trust certificate allocated to a Primary Asset is less than or greater than the portion of the stated redemption price at maturity of the Primary Asset, the interest in the Primary Asset will have been acquired at a discount or premium.  See “—Market Discount” and “—Premium,” below.

The treatment of any discount on a Primary Asset will depend on whether the discount represents original issue discount or market discount.  Except as indicated otherwise in the applicable Prospectus Supplement, it is not expected that any Primary Asset (other than a Primary Asset that is a Treasury Strip, Private Label Custody Strip, REFCO Strip or other instrument evidencing ownership of specific interest and/or principal of a particular bond) will have original issue discount (except as discussed below under “Stripped Certificates” or “Subordinated Certificates”).  For the rules governing original issue discount, see “Trusts That Issue Notes—Tax Consequences to Note Owners—Original Issue Discount” above.  However, in the case of Primary Assets that constitute short-term Government Securities the rules set out above dealing with short-term obligations (see “Trusts That Issue Notes—Tax Consequences to Note Owners— Short-Term Notes” above) are applied with reference to acquisition discount rather than original issue discount, if the obligations constitute “short-term Government obligations” within the meaning of Section 1271(a)(3)(B) of the Code.  Further, if 20 percent or more of the grantor trust certificateholders are Short-Term Accruers, all holders of grantor trust certificates may be required to accrue acquisition discount or original issue discount, as the case may be, with respect to short-term obligations held by the Trust in the same manner as a Short-Term Accruer would accrue such discount.  See “Trusts That Issue Notes—Tax Consequences to Note Owners— Short-Term Notes” above.

The information provided to grantor trust certificateholders will not include information necessary to compute the amount of discount or premium, if any, at which an interest in each Primary Asset is acquired.

Market Discount.  A grantor trust certificateholder that acquires an undivided interest in Primary Assets may be subject to the market discount rules of Sections 1276 through 1278 to the extent an undivided interest in a Primary Asset is considered to have been purchased at a “market discount”.  For a discussion of the market discount rules under the Code, see “Trusts That Issue Notes—Tax Consequences to Note Owners—Market Discount” above.  As discussed above, to the extent a Primary Asset is a Treasury Strip, Private Label Custody Strip, REFCO Strip or other instrument evidencing ownership of specific interest and/or principal of a particular bond, it will be subject to the rules relating to original issue discount (in lieu of the rules relating to market discount).  See “ Tax Consequences to Note Owners—Original Issue Discount” above.

Premium.  To the extent a grantor trust certificateholder is considered to have purchased an undivided interest in a Primary Asset for an amount that is greater than the stated redemption price at maturity of the interest, the grantor trust certificateholder will be considered to have purchased the interest in the Primary Asset with “amortizable bond premium” equal in amount to the excess.  For a discussion of the rules applicable to amortizable bond premium, see “Trusts That Issue Notes—Tax Consequences to Note Owners—Premium” above.

Stripped Certificates.  Some classes of certificates may be subject to the stripped bond rules of Section 1286 of the Code and for purposes of this discussion will be referred to as “Stripped Certificates.” In general, a Stripped Certificate will be subject to the stripped bond rules where there has been a separation of ownership of the right to receive some or all of the principal payments on a Primary Asset from ownership of the right to receive some or all of the related interest payments.  In general, where a separation has occurred, under the stripped bond rules of Section 1286 of the Code, the holder of a right to receive a principal or interest payment on the bond is required to accrue into income, on a constant yield basis under rules governing original issue discount (see “Trusts That Issue Notes—Tax Consequences to Note Owners—Original Issue Discount”), th e difference between the holder’s initial purchase price for the right to receive and the principal or interest payment to be received with respect to that right.

Certificates will constitute Stripped Certificates and will be subject to these rules under various circumstances, including the following:

·

if any servicing compensation is deemed to exceed a reasonable amount (see “Taxation of Grantor Trust Certificateholders,” above);

·

if the depositor or any other party retains a retained yield with respect to the Primary Assets held by the Trust;

·

if two or more classes of certificates are issued representing the right to non-pro rata percentages of the interest or principal payments on the Trust’s assets; or

·

if certificates are issued which represent the right to interest-only payments or principal-only payments.

The tax treatment of the Stripped Certificates with respect to the application of the original issue discount provisions of the Code is currently unclear.  However, the trustee intends to treat each Stripped Certificate as a single debt instrument issued on the day it is purchased for purposes of calculating any original issue discount.  Original issue discount with respect to a Stripped Certificate must be included in ordinary gross income for federal income tax purposes as it accrues in accordance with the constant yield method that takes into account the compounding of interest and this accrual of income may be in advance of the receipt of any cash attributable to that income.  See “Trusts That Issue Notes—Tax Consequences to Note Owners—Original Issue Discount” above.  For purposes of applying the original issue discount provisions of the Code, the issue price of a Str ipped Certificate will be the purchase price paid by each holder of the Stripped Certificate and the stated redemption price at maturity may include the aggregate amount of all payments to be made with respect to the Stripped Certificate whether or not denominated as interest.  The amount of original issue discount with respect to a Stripped Certificate may be treated as zero under the original issue discount de minimis rules described above.

The precise tax treatment of Stripped Coupon Certificates is substantially uncertain.  The Code could read literally to require that OID computations be made for each payment from each receivable.  However, based on IRS guidance, it appears that all payments from a receivable underlying a Stripped Coupon Certificate should be treated as a single installment obligation subject to the OID rules of the Code, in which case, all payments from the receivable would be included in the receivable’s stated redemption price at maturity for purposes of calculating income on the Stripped Coupon Certificate under the OID rules of the Code.

Based on current authority it is unclear under what circumstances, if any, the prepayment of receivables will give rise to a loss to the holder of a Stripped Bond Certificate purchased at a premium or a Stripped Coupon Certificate.  The Code provides that a prepayment assumption must be used to accrue income on any pool of debt instruments the yield on which can be affected by prepayments.  There is no guidance as to whether a Stripped Coupon Certificate or Stripped Bond Certificate would represent an interest in a pool of debt instruments for purposes of this Code provision.  In addition, the manner in which to take prepayments into account is uncertain.  It is possible that no loss may be available as a result of any particular prepayment, except perhaps to the extent that even if no further prepayments were received a Certificateholder would be unable to recover its basis.  In additio n, amounts received in redemption for debt instruments issued by natural persons purchased or issued after June 8, 1997 are treated as received in exchange therefor (that is treated the same as obligations issued by corporations).  This change could affect the character of any loss.

Holders of Stripped Bond Certificates and Stripped Coupon Certificates are encouraged to consult with their own tax advisors regarding the proper treatment of these certificates for federal income tax purposes.

Subordinated Certificates.  In the event the Trust issues two classes of grantor trust certificates that are identical except that one class is a subordinate class, with a relatively high certificate pass-through rate, and the other is a senior class, with a relatively low certificate pass-through rate (referred to in this Prospectus as the “Subordinate Certificates” and “Senior Certificates”, respectively), the grantor trust certificateholders in the aggregate will be deemed to have acquired the following assets: (1) the principal portion of each Primary Asset plus a portion of the interest due on each Primary Asset (the “Trust Stripped Bond”), and (2) a portion of the interest due on each Primary Asset equal to the difference between the certificate pass-through rate on the Subordinate Certificates and the certificate pass-through rate on the Senior Certificates, if an y, which difference is then multiplied by the Subordinate Class Percentage (the “Trust Stripped Coupon”).  The “Subordinate Class Percentage” equals the initial aggregate principal amount of the Subordinate Certificates divided by the sum of the initial aggregate principal amount of the Subordinate Certificates and the Senior Certificates.  The “Senior Class Percentage” equals the initial aggregate principal amount of the Senior Certificates divided by the sum of the initial aggregate principal amount of the Subordinate Certificates and the Senior Certificates.

The Senior Certificateholders in the aggregate will own the Senior Class Percentage of the Trust Stripped Bond and accordingly each Senior Certificateholder will be treated as owning its pro rata share of such asset.  The Senior Certificateholders will not own any portion of the Trust Stripped Coupon.  The Subordinate Certificateholders in the aggregate own both the Subordinate Class Percentage of the Trust Stripped Bond plus 100% of the Trust Stripped Coupon, if any, and accordingly each Subordinate Certificateholder will be treated as owning its pro rata share in both assets.  The Trust Stripped Bond will be treated as a “stripped bond” and the Trust Stripped Coupon will be treated as “stripped coupons” within the meaning of Section 1286 of the Code.

Although not entirely clear, the interest income on the Subordinate Certificates and the portion of the Servicing Fee allocable to such certificates that does not constitute excess servicing will be treated by the Trust as qualified stated interest, assuming the interest with respect to the Primary Assets would otherwise qualify as qualified stated interest.  Accordingly, except to the extent modified below, the income of the Subordinate Certificates will be reported in the same manner as described generally above for holders of Senior Certificates.

If the Subordinate Certificateholders receive distribution of less than their share of the Trust’s receipts of principal or interest (the “Shortfall Amount”) because of the subordination of the Subordinate Certificates, holders of Subordinate Certificates would probably be treated for federal income tax purposes as if they had

received as distributions their full share of receipts;

paid over to the Senior Certificateholders an amount equal to the Shortfall Amount; and

retained the right to reimbursement of the relevant amounts to the extent these amounts are otherwise available as a result of collections on the Primary Assets or amounts available from a reserve account or other form of credit enhancement, if any.

Under this analysis,

Subordinate Certificateholders would be required to accrue as current income any interest income, original issue discount, or (to the extent paid on assets of the Trust) accrued market discount of the Trust that was a component of the Shortfall Amount, even though that amount was in fact paid to the Senior Certificateholders;

a loss would only be allowed to the Subordinate Certificateholders when their right to receive reimbursement of the Shortfall Amount became worthless (i.e., when it becomes clear that amount will not be available from any source to reimburse the loss); and

reimbursement of the Shortfall Amount prior to a claim of worthlessness would not be taxable income to Subordinate Certificateholders because the amount was previously included in income.

Those results should not significantly affect the inclusion of income for Subordinate Certificateholders on the accrual method of accounting, but could accelerate inclusion of income to Subordinate Certificateholders on the cash method of accounting by, in effect, placing them on the accrual method.  Moreover, the character and timing of loss deductions are unclear.  Subordinate Certificateholders are strongly urged to consult their own tax advisors regarding the appropriate timing, amount and character of any losses sustained with respect to the Subordinate Certificates including any loss resulting from the failure to recover previously accrued interest or discount income.

Election to Treat All Interest as Original Issue Discount.  The Treasury Regulations relating to original issue discount permit a grantor trust certificateholder to elect to accrue all interest, discount, including de minimis market or original issue discount, reduced by any premium, in income as interest, based on a constant yield method.  If an election were to be made with respect to an interest in a Primary Asset with market discount, the Certificate Owner would be deemed to have made an election to include in income currently market discount with respect to all other debt instruments having market discount that the grantor trust certificateholder acquires during the year of the election or afterward.  See”—Market Discount” above.  Similarly, a grantor trust certificateholder that makes this election for an interest in a Primary Asset that is acquired at a premium wi ll be deemed to have made an election to amortize bond premium with respect to all debt instruments having amortizable bond premium that the grantor trust certificateholder owns at the beginning of the first taxable year to which the election applies or acquires afterward.  See “—Premium” above.  The election to accrue interest, discount and premium on a constant yield method with respect to a grantor trust certificate is irrevocable.

Sale or Exchange of a Grantor Trust Certificate.  Sale or exchange of a grantor trust certificate prior to its maturity will result in gain or loss equal to the difference, if any, between the amount realized, exclusive of amounts attributable to accrued and unpaid interest, which will be treated as ordinary income, allocable to the Primary Asset and the owner’s adjusted basis in the grantor trust certificate.  The adjusted basis generally will equal the seller’s cost for the grantor trust certificate, increased by the original issue discount and any market discount included in the seller’s gross income with respect to the grantor trust certificate, and reduced, but not below zero, by any premium amortized by the seller and by principal payments on the grantor trust certificate previously received by the seller.  The gain or loss will, except as discussed below, be capital ga in or loss to an owner for which the Primary Assets represented by a grantor trust certificate are “capital assets” within the meaning of Section 1221.  A capital gain or loss will be long-term or short-term depending on whether or not the grantor trust certificate has been owned for the long-term capital gain holding period, currently more than one year.

Notwithstanding the foregoing, any gain realized on the sale or exchange of a grantor trust certificate will be ordinary income to the extent of the seller’s interest in accrued market discount on Primary Assets not previously taken into income.  See “—Market Discount,” above.  Further, grantor trust certificates will represent “evidences of indebtedness” within the meaning of Section 582(c)(1) to the extent these assets of the grantor trust would be so treated.  Accordingly, gain or loss recognized from the sale of a grantor trust certificate by a bank or thrift institution to which such section applied will be treated as ordinary gain or loss to the extent selling the assets of the grantor trust directly would be so treated.

Foreign Investors in Grantor Trust Certificates.  A holder of grantor trust certificate who is not a “United States person” (as defined above at “Trusts That Issue Notes—Tax Consequences to Note Owners—Foreign Investors in Notes”) and is not subject to federal income tax as a result of any direct or indirect connection to the United States other than its ownership of a grantor trust certificate generally will not be subject to United States income or withholding tax in respect of payments of interest or original issue discount on its grantor trust certificate to the extent attributable to debt obligations held by the Trust that were originated after July 18, 1984, provided that the grantor trust certificateholder complies to the extent necessary with certain certification requirements which generally relate to the identity of the beneficial owner and the status of the be neficial owner as a person that is not a United States person.  Interest or original issue discount on a grantor trust certificate attributable to debt obligations held by the Trust that were originated prior to July 19, 1984 will be subject to a 30% withholding tax (unless such tax is reduced or eliminated by an applicable tax treaty).  All holders of grantor trust certificates should consult their tax advisors regarding the tax documentation and certifications that must be provided to secure any applicable exemptions from United States withholding taxes.

Any capital gain realized on the sale or other taxable disposition of a grantor trust certificate by a Foreign Person (as defined above at “Trusts That Issue Notes—Tax Consequences to Note Owners—Foreign Investors in Notes”) generally will be exempt from United States federal income and withholding tax, provided that (i) such gain is not effectively connected with the conduct of a trade or business in the United States by the Foreign Person and (ii) in the case of an individual Foreign Person, the Foreign Person is not present in the United States for 183 days or more in the taxable year.

If the interest, gain or income with respect to a grantor trust certificate held by a Foreign Person is effectively connected with the conduct of a trade or business in the United States by the Foreign Person (although exempt from the withholding tax previously discussed if the holder provides an appropriate statement establishing that such income is so effectively connected), the holder generally will be subject to United States federal income tax on the interest, gain or income at regular federal income tax rates.  In addition, if the Foreign Person is a foreign corporation, it may be subject to a branch profits tax equal to 30% of its “effectively connected earnings and profits,” within the meaning of the Code, for the taxable year, as adjusted for certain items, unless it qualifies for a lower rate under an applicable tax treaty (as modified by the branch profits tax rules).

Backup Withholding.  Distributions made on the grantor trust certificates and proceeds from the sale of the grantor trust certificates will be subject to a “backup” withholding tax if, in general, the grantor trust certificateholder fails to comply with particular identification procedures, unless the holder is an exempt recipient under applicable provisions of the Code and, if necessary, demonstrates such status.  Any amounts so withheld would be refunded by the IRS or allowable as a credit against the grantor trust certificateholder’s federal income tax.

Reportable Transactions. Pursuant to recently enacted legislation, a penalty in the amount of $10,000 in the case of a natural person and $50,000 in any other case is imposed on any taxpayer that fails to timely file an information return with the IRS with respect to a “reportable transaction” (as defined in Section 6011 of the Code). The rules defining “reportable transactions” are complex, and include transactions that result in certain losses that exceed threshold amounts. Prospective investors are advised to consult their own tax advisers regarding any possible disclosure obligations in light of their particular circumstances.

Penalty Avoidance

The summary of tax considerations contained herein was written to support the promotion and marketing of the securities, and was not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding United States federal income tax penalties that may be imposed. Each taxpayer is encouraged to seek advice based on the taxpayer's particular circumstances from an independent tax advisor.

State and Local Tax Considerations

The discussion above does not address the tax consequences of purchase, ownership or disposition of certificates or notes under any state or local tax laws.  We recommend that investors consult their own tax advisors regarding state and local tax consequences.  In particular, individuals should consider the deductibility of the expenses (including interest expense) of the partnership.

* * *

THE TAX DISCUSSIONS SET FORTH ABOVE ARE INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A NOTE OWNER’S OR CERTIFICATE OWNER’S PARTICULAR TAX SITUATION.  PROSPECTIVE PURCHASERS OF NOTES OR CERTIFICATES SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF NOTES AND CERTIFICATES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL AND FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.

ERISA Considerations

General

A fiduciary of a pension, profit-sharing, retirement or other employee benefit plan subject to Title I of ERISA should consider the fiduciary standards under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) in the context of the plan’s particular circumstances before authorizing an investment of a portion of such plan’s assets in the Securities.  Accordingly, pursuant to Section 404 of ERISA, such fiduciary should consider among other factors (i) whether the investment is for the exclusive benefit of plan participants and their beneficiaries; (ii) whether the investment satisfies the applicable diversification requirements; (iii) whether the investment is in accordance with the documents and instruments governing the plan; and (iv) whether the investment is prudent, considering the nature of the investment.  Fiduciaries of plans also should consider ERISA
46;s prohibition on improper delegation of control over, or responsibility for, plan assets.

In addition, employee benefit plans or other retirement arrangements subject to ERISA, as well as individual retirement accounts, certain types of Keogh plans not subject to ERISA but subject to Section 4975 of the Code, or any entity (including insurance depositor separate or general accounts) whose underlying assets include plan assets by reason of such plans, arrangements or accounts investing in the entity (each, a “Plan”) are prohibited from engaging in a broad range of transactions involving Plan assets and persons having certain specified relationships to a Plan (“parties in interest” and “disqualified persons”).  Such transactions are treated as “prohibited transactions” under Sections 406 of ERISA and excise taxes and/or other penalties are imposed upon such persons under ERISA and/or Section 4975 of the Code unless an exemption applies.  The depositor, underwriter of the Securities, the servicer, the trustee, the indenture trustee and certain of their affiliates might be considered “parties in interest” or “disqualified persons” with respect to a Plan.  If so, the acquisition, holding or disposition of Securities by or on behalf of such Plan could be considered to give rise to a “prohibited transaction” within the meaning of ERISA and the Code unless a statutory, regulatory or administrative exception or exemption is available.

ERISA Considerations Relating to Certificates

Plan Assets.  In 29 C.F.R §2510.3-101 (the “Plan Asset Regulations”), the U.S. Department of Labor (“DOL”) has defined what constitutes “plan assets” for purposes of ERISA and Section 4975 of the Code.  The Plan Asset Regulations provide that if a Plan makes an investment in an “equity interest” in an entity, an undivided portion of the assets of the entity will be considered the assets of such Plan unless certain exceptions set forth in such Regulations apply.  The Certificates will be deemed an equity interest for purposes of the Plan Asset Regulations, and the depositor can give no assurance that the Certificates will qualify for any of the exceptions under the Plan Asset Regulations.  As a result, (i) a Plan may be deemed to have acquired an interest in the assets of the Trust and not merely an interest in the Certificates, (ii) the fidu ciary investment standards of ERISA could apply to such assets and (iii) transactions occurring in the course of managing, operating and servicing the Trust and its assets might constitute prohibited transactions, unless a statutory, regulatory or administrative exemption applies.

Underwriter Exemption

General Discussion.  The DOL has granted to Deutsche Bank Securities Inc. an individual exemption, Prohibited Transaction Exemption 94-84, and to Deutsche Morgan Grenfell/C.J. Lawrence Inc., similar approval (FAN 97-03E), which were both amended and restated pursuant to Prohibited Transaction Exemption 2002-41 (“PTE 2002-41”) (collectively, the “Exemption”) which is applicable to Certificates which meet its requirements whenever Deutsche Bank Securities Inc. or its affiliate is the sole underwriter, manager or co-manager of an underwriting syndicate or is the selling or placement agent.  The Exemption generally exempts certain transactions from the application of certain of the prohibited transaction provisions of ERISA and the Code provided that the conditions set forth in the Exemption are satisfied.  These transactions include the servicing, managing and operation of investment trusts holding fixed (generally non-revolving pools) of enumerated categories of assets which include (i) the Receivables and (ii) securities previously issued under the Exemption and the purchase, sale and holding of Certificates which represent beneficial ownership interests in the assets of such trusts.

General Conditions of Exemption.  The Exemption sets forth general conditions which must be satisfied for a transaction involving the purchase, sale and holding of the Certificates to be eligible for exemptive relief thereunder.  First, the acquisition of Certificates by Plans must be on terms that are at least as favorable to the Plan as they would be in an arm’s-length transaction with an unrelated party.  Second, the receivables held by the issuing entity must be secured.  Third, unless the Certificates are issued in “designated transactions” (as described below) and are backed by fully-secured Receivables, they may not be subordinated.  Fourth, the Certificates at the time of acquisition by the Plan must be rated in one of the three (or in the case of designated transactions, four) highest generic rating categories by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., Moody’s Investors Services, Inc. or Fitch, Inc. (each, a “Rating Agency”).  Fifth, the trustee and the indenture trustee generally cannot be affiliates of any member of the “Restricted Group” other than the underwriter.  The “Restricted Group” consists of any (i) underwriter as defined in the Exemption, (ii) the depositor, (iii) the servicer, (iv) the counterparty of any “interest swap” (as described below) held as an asset of the issuing entity and (v) any obligor with respect to Receivables constituting more than 5% of the aggregate unamortized principal balance of the Receivables held in the issuing entity as of the date of initial issuance of the Certificates.  Sixth, the sum of all payments made to, and retained by, such underwriters must represent not more than reasonable compensation for underwriting the Certificates; the sum of all payments made to, and retained by, the depositor pursuant to th e assignment of the Receivables to the related issuing entity must represent not more than the fair market value of such Receivables; and the sum of all payments made to, and retained by, the servicer must represent not more than reasonable compensation for such person’s services under the Agreement and reimbursement of such person’s reasonable expenses in connection therewith.  Seventh, (i) the investment pool must consist only of assets of the type enumerated in the Exemption and which have been included in other investment pools; (ii) Certificates evidencing interests in such other investment pools must have been rated in one of the three (or in the case of designated transactions, four) highest generic rating categories by one of the Rating Agencies for at least one year prior to a Plan’s acquisition of Certificates; and (iii) Certificates evidencing interests in such other investment pools must have been purchased by investors other than Plans for at least one year prior to a Plan
46;s acquisition of Certificates.  Finally, the investing Plan must be an accredited investor as defined in Rule 501(a)(1) of Regulation D of the Commission under the Securities Act of 1933, as amended.  The depositor assumes that only Plans which are accredited investors under the federal securities laws will be permitted to purchase the Certificates.

Types of Trusts.  The types of issuing entities permitted under the Exemption include owner-trusts, as well as grantor trusts.  Owner-trusts are subject to certain restrictions in their governing documents to ensure that their assets may not be reached by the creditors of the depositor in the event of bankruptcy or other insolvency and must provide certain legal opinions.

Designated Transactions.  In the case where the Certificates are backed by Trust assets such as the Receivables which are secured boat receivables, credit instruments or obligations that bear interest or are purchased a discount as described and defined in the Exemption as designated transactions (“Designated Transactions”), the Exemption permits the Certificates issued by the Trust in such transactions to be rated in one of the highest four generic rating categories by a Rating Agency and/or to be subordinated.  The Receivables are the type of assets which qualify for Designated Transaction treatment unless otherwise specified in the Prospectus Supplement.

Coverage of Certificates Not Exemption Eligible.  In the event that Certificates do not meet the requirements of the Exemption solely because they are Subordinate Certificates or fail to meet a minimum rating requirement under the Exemption, certain Plans may be eligible to purchase Certificates pursuant to Section III of Prohibited Transaction Class Exemption 95-60 (“PTCE 95-60”) which permits insurance depositor general accounts as defined in PTCE 95-60 to purchase such Certificates if they otherwise meet all of the other requirements of the Exemption.

Permitted Assets.  The Exemption permits an interest-rate swap to be an asset of an issuing entity which issues Certificates acquired by Plans in an initial offering or in the secondary market.  An interest-rate swap (or if purchased by or on behalf of the issuing entity) an interest-rate cap contract (collectively, a “Swap” or “Swap Agreement”) is a permitted issuing entity asset if it:  (a) is an “eligible Swap;” (b) is with an “eligible counterparty;” (c) is purchased by a “qualified plan investor;” (d) meets certain additional specific conditions which depend on whether the Swap is a “ratings dependent Swap” or a “non-ratings dependent Swap” and (e) permits the issuing entity to make termination payments to the Swap (other than currently scheduled payments) solely from excess spread or amounts otherwise payable to the servicer or depositor.

An “eligible Swap” is one which:  (a) is denominated in U.S. dollars; (b) pursuant to which the issuing entity pays or receives, on or immediately prior to the respective payment or distribution date for the class of Certificates to which the Swap relates, a fixed rate of interest or a floating rate of interest based on a publicly available index (e.g., LIBOR or the U.S. Federal Reserve’s Cost of Funds Index (COFI)), with the issuing entity receiving such payments on at least a quarterly basis and obligated to make separate payments no more frequently than the counterparty, with all simultaneous payments being netted (“Allowable Interest Rate”); (c) has a notional amount that does not exceed either:  (i) the principal balance of the class of Certificates to which the Swap relates, or (ii) the portion of the principal balance of such class represented by obligations ( 7;Allowable Notional Amount”); (d) is not leveraged (i.e., payments are based on the applicable notional amount, the day count fractions, the fixed or floating rates permitted above, and the difference between the products thereof, calculated on a one-to-one ratio and not on a multiplier of such difference) (“Leveraged”); (e) has a final termination date that is either the earlier of the date on which the issuer terminates or the related class of Certificates are fully repaid and (f) does not incorporate any provision which could cause a unilateral alteration in the requirements described in (a) to (d) above.

An “eligible counterparty” means a bank or other financial institution which has a rating at the date of issuance of the Certificates, which is in one of the three highest long-term credit rating categories or one of the two highest short-term credit rating categories, utilized by at least one of the Rating Agencies rating the Certificates; provided that, if a counterparty is relying on its short-term rating to establish eligibility hereunder, such counterparty must either have a long-term rating in one of the three highest long-term rating categories or not have a long-term rating from the applicable Rating Agency.

A “qualified plan investor” is a Plan or Plans where the decision to buy such class of Certificates is made on behalf of the Plan by an independent fiduciary qualified to understand the Swap transaction and the effect the Swap would have on the rating of the Certificates and such fiduciary is either (a) a “qualified professional asset manager” (“QPAM”) under Prohibited Transaction Class Exemption 84-14 (“PTCE 84-14”) (see below), (b) an “in-house asset manager” under Prohibited Transaction Class Exemption 96-23 (“PTCE 96-23”) (see below) or (c) has total assets (both Plan and non-Plan) under management of at least $100 million at the time the Certificates are acquired by the Plan.

In “ratings dependent Swaps” (where the rating of a class of Certificates is dependent on the terms and conditions of the Swap), the Swap Agreement must provide that if the credit rating of the counterparty is withdrawn or reduced by any Rating Agency below a level specified by the Rating Agency, the servicer must, within the period specified under the Pooling and Servicing Agreement:  (a) obtain a replacement Swap Agreement with an eligible counterparty which is acceptable to the Rating Agency and the terms of which are substantially the same as the current Swap Agreement (at which time the earlier Swap Agreement must terminate); or (b) cause the Swap counterparty to establish any collateralization or other arrangement satisfactory to the Rating Agency such that the then current rating by the Rating Agency of the particular class of Certificates will not be withdrawn or reduced (and the terms of the Swap Agreement must specifically obligate the counterparty to perform these duties for any class of Certificates with a term of more than one year).  In the event that the servicer fails to meet these obligations, Plan certificateholders must be notified in the immediately following periodic report which is provided to certificateholders but in no event later than the end of the second month beginning after the date of such failure.  Sixty days after the receipt of such report, the exemptive relief provided under the Exemption will prospectively cease to be applicable to any class of Certificates held by a Plan which involves such ratings dependent Swap.

“Non-ratings dependent Swaps” (those where the rating of the Certificates does not depend on the terms and conditions of the Swap) are subject to the following conditions. If the credit rating of the counterparty is withdrawn or reduced below the lowest level permitted above, the servicer will, within a specified period after such rating withdrawal or reduction: (a) obtain a replacement Swap Agreement with an eligible counterparty, the terms of which are substantially the same as the current Swap Agreement (at which time the earlier Swap Agreement must terminate); (b) cause the counterparty to post collateral with the issuing entity in an amount equal to all payments owed by the counterparty if the Swap transaction were terminated; or (c) terminate the Swap Agreement in accordance with its terms.

An “eligible yield supplement agreement” is any yield supplement agreement or similar arrangement (or if purchased by or on behalf of the issuing entity) an interest rate cap contract to supplement the interest rates otherwise payable on obligations held by the Trust (“EYS Agreement”).  If the EYS Agreement has a notional principal amount and/or is written on an International Swaps and Derivatives Association, Inc. (ISDA) form, the EYS Agreement may only be held as an asset of the issuing entity if it meets the following conditions:  (a) it is denominated in U.S. dollars; (b) it pays an Allowable Interest Rate; (c) it is not Leveraged; (d) it does not allow any of these three preceding requirements to be unilaterally altered without the consent of the trustee; (e) it is entered into between the issuing entity and an eligible counterparty and (f) it has an Allowable Notional Amount.< /P>

Pre-Funding Accounts.  The Exemption extends exemptive relief to Certificates issued in transactions using pre-funding accounts whereby a portion of the Receivables backing the Certificates are transferred to the issuing entity within a specified period following the Closing Date (“DOL Pre-Funding Period”) (see below) instead of requiring that all such Receivables be either identified or transferred on or before the Closing Date, provided that the following conditions are met.  First, the ratio of the amount allocated to the Pre-Funding Account to the total principal amount of the Certificates being offered (“Pre-Funding Limit”) must not exceed twenty-five percent (25%).  Second, all Receivables transferred after the Closing Date (referred to here as “Additional Receivables”) must meet the same terms and conditions for eligibility as the original Receivables us ed to create the issuing entity, which terms and conditions have been approved by the Rating Agency.  Third, the transfer of such Additional Receivables to the issuing entity during the DOL Pre-Funding Period must not result in the Certificates receiving a lower credit rating from the Rating Agency upon termination of the DOL Pre-Funding Period than the rating that was obtained at the time of the initial issuance of the Certificates by the issuing entity.  Fourth, solely as a result of the use of pre-funding, the weighted average annual percentage interest rate (the “average interest rate”) for all of the Receivables in the issuing entity at the end of the DOL Pre-Funding Period must not be more than 100 basis points lower than the average interest rate for the Receivables which were transferred to the issuing entity on the Closing Date.  Fifth, either: (i) the characteristics of the Additional Receivables must be monitored by an insurer or other credit support provider which is inde pendent of the depositor; or (ii) an independent accountant retained by the depositor must provide the depositor with a letter (with copies provided to the Rating Agency, the underwriter and the trustee) stating whether or not the characteristics of the Additional Receivables conform to the characteristics described in the Prospectus, Prospectus Supplement, Private Placement Memorandum (“Offering Documents”) and/or the Agreement.  In preparing such letter, the independent accountant must use the same type of procedures as were applicable to the Receivables which were transferred as of the Closing Date.  Sixth, the DOL Pre-Funding Period must end no later than three months or 90 days after the Closing Date or earlier, in certain circumstances, if the amount on deposit in the Pre-Funding Account is reduced below the minimum level specified in the Agreement or an event of default occurs under the Agreement.  Seventh, amounts transferred to any Pre-Funding Account and/or Capitalized Inte rest Account used in connection with the pre-funding may be invested only in investments which are permitted by the Rating Agency and (i) are direct obligations of, or obligations fully guaranteed as to timely payment of principal and interest by, the United States or any agency or instrumentality thereof (provided that such obligations are backed by the full faith and credit of the United States); or (ii) have been rated (or the obligor has been rated) in one of the three highest generic rating categories by the Rating Agency (“Acceptable Investments”).  Eighth, certain disclosure requirements must be met.

Limitations on Scope of the Exemption.  If the general conditions of the Exemption are satisfied, the Exemption may provide an exemption from the restrictions imposed by ERISA and the Code in connection with the initial acquisition, transfer or holding, and the acquisition or disposition in the secondary market, of the Certificates by Plans.  However, no exemption is provided from the restrictions of ERISA for the acquisition or holding of a Certificates on behalf of an “Excluded Plan” by any person who is a fiduciary with respect to the assets of such Excluded Plan.  For those purposes, an Excluded Plan is a Plan sponsored by any member of the Restricted Group.  Exemptive relief may also be provided for the acquisition, holding and disposition of Certificates by Plans if the fiduciary or its affiliate is the obligor with respect to 5% or less of the fair market value of the Receivables in the issuing entity provided that:  (i) the Plan is not an Excluded Plan, (ii) each Plan’s investment in each class of Certificates does not exceed 25% of the outstanding Certificates in the class, (iii) after the Plan’s acquisition of the Certificates, no more than 25% of the assets over which the fiduciary has investment authority are invested in Certificates of the issuing entity containing assets which are sold or serviced by the same entity and (iv) in the case of initial issuance (but not secondary market transactions), at least 50% of each class of Certificates and at least 50% of the aggregate interests in the issuing entity are acquired by persons independent of the Restricted Group.

ERISA Considerations Relating to Notes

Under the Plan Asset Regulations, the assets of the issuing entity would be treated as “plan assets” of a Plan for the purposes of ERISA and the Code only if the Plan acquires an “equity interest” in the issuing entity and none of the exceptions contained in the Plan Asset Regulations is applicable.  An equity interest is defined under the Plan Asset Regulations as an interest other than an instrument which is treated as indebtedness under applicable local law and which has no substantial equity features.  Assuming that the notes are treated as indebtedness without substantial equity features for purposes of the Plan Asset Regulations, then such notes will be eligible for purchase by Plans.  However, without regard to whether the notes are treated as an “equity interest” for such purposes, the acquisition or holding of notes by or on behalf of a Plan could be consider ed to give rise to a prohibited transaction if the issuing entity or any of its affiliates is or becomes a party in interest or disqualified person with respect to such Plan, or in the event that a note is purchased in the secondary market and such purchase constitutes a sale or exchange between a Plan and a party in interest or disqualified person with respect to such Plan. There can be no assurance that the issuing entity or any of its affiliates will not be or become a party in interest or a disqualified person with respect to a Plan that acquires notes.

The Exemption permits issuing entities that are grantor trusts, owner-trusts, or FASITs to issue notes, as well as Certificates, provided a legal opinion is received to the effect that the noteholders have a perfected security interest in the issuing entity’s assets.  The exemptive relief provided under the Exemption for any prohibited transactions which could be caused as a result of the operation, management or servicing of the issuing entity and its assets would not be necessary with respect to notes with no substantial equity features which are issued as obligations of the issuing entity.  However, effective for the acquisition, holding or transfer of notes between a Plan and a party in interest, the Exemption would provide prohibited transaction exemptive relief, provided that the same conditions of the Exemption described above relating to Certificates are met with respect to the notes. &nbs p;The same limitations of such exemptive relief relating to acquisitions of Certificates by fiduciaries with respect to Excluded Plans would also be applicable to the notes as described herein in “Limitations on Scope of the Exemption.”

In the event that the Exemption is not applicable to the notes, one or more other prohibited transactions exemptions may be available to Plans purchasing or transferring the notes depending in part upon the type of Plan fiduciary making the decision to acquire the notes and the circumstances under which such decision is made.  These exemptions include, but are not limited to, Prohibited Transaction Class Exemption 90-1 (regarding investments by insurance depositor pooled separate accounts), Prohibited Transaction Class Exemption 91-38 (regarding investments by bank collective investments funds), PTCE 84-14 (regarding transactions effected by “qualified professional asset managers”), PTCE 95-60 (regarding investments by insurance depositor general accounts) and PTCE 96-23 (regarding transactions effected by “in-house asset managers”) (collectively, the “Investor-Based Exemptions” ;).  However, even if the conditions specified in these Investor-Based Exemptions are met, the scope of the relief provided under such Exemptions might or might not cover all acts which might be construed as prohibited transactions.

EACH PROSPECTUS SUPPLEMENT WILL CONTAIN INFORMATION CONCERNING CONSIDERATIONS RELATING TO ERISA AND THE CODE THAT ARE APPLICABLE TO THE RELATED SECURITIES.  BEFORE PURCHASING SECURITIES IN RELIANCE ON THE EXEMPTION, THE INVESTOR-BASED EXEMPTIONS OR ANY OTHER EXEMPTION, A FIDUCIARY OF A PLAN SHOULD ITSELF CONFIRM THAT REQUIREMENTS SET FORTH IN SUCH EXEMPTION WOULD BE SATISFIED.

ANY PLAN INVESTOR WHO PROPOSES TO USE “PLAN ASSETS” OF ANY PLAN TO PURCHASE SECURITIES OF ANY SERIES OR CLASS SHOULD CONSULT WITH ITS COUNSEL WITH RESPECT TO THE POTENTIAL CONSEQUENCES UNDER ERISA AND SECTION 4975 OF THE CODE OF THE ACQUISITION AND OWNERSHIP OF SUCH SECURITIES.

Governmental plans and church plans as defined in ERISA are not subject to ERISA or Code Section 4975, although they may elect to be qualified under Section 401(a) of the Code and exempt from taxation under Section 501(a) of the Code and would then be subject to the prohibited transaction rules set forth in Section 503 of the Code.  In addition, governmental plans may be subject to federal, state and local laws which are to a material extent similar to the provisions of ERISA or a Code Section 4975 (“Similar Law”).  A fiduciary of a governmental plan should make its own determination as to the propriety of an investment in Securities under applicable fiduciary or other investment standards and the need for the availability of any exemptive relief under any Similar Law.

Plan of Distribution

On the terms and conditions set forth in an underwriting agreement with respect to the notes, if any, of a given series and an underwriting agreement with respect to the certificates of the series (collectively, the “Underwriting Agreements”), the depositor will agree to cause the related issuing entity to sell to the underwriters named in the Underwriting Agreement and in the related prospectus supplement, and each of these underwriters will severally agree to purchase, the principal amount of each class of notes and certificates, as the case may be, of the related series set forth in the related Underwriting Agreement and in the related prospectus supplement.

In the Underwriting Agreements with respect to any given series of securities, the several underwriters will agree, subject to the terms and conditions set forth in the related Underwriting Agreement, to purchase all of the notes and certificates, as the case may be, described in the related Underwriting Agreement that are offered by this prospectus and by the related prospectus supplement if any of the notes and certificates, as the case may be, are purchased.

Each prospectus supplement will either (1) set forth the price at which each class of notes and certificates, as the case may be, being offered by the related prospectus supplement will be offered to the public and any concessions that may be offered to particular dealers participating in the offering of the notes and certificates, as the case may be, or (2) specify that the related notes and certificates, as the case may be, are to be resold by the underwriters in negotiated transactions at varying prices to be determined at the time of sale. After the initial public offering of any notes and certificates, as the case may be, public offering prices and concessions may be changed.

Pursuant to the Receivables Purchase Agreement between the seller, or its affiliate, and the depositor, the seller will indemnify the depositor and the related underwriters against specific civil liabilities, including liabilities under the securities Act, or contribute to payments the depositor and the several underwriters may be required to make in respect of the Receivables Purchase Agreement.

Each issuing entity may, from time to time, invest the funds in its Trust Accounts in Eligible Investments acquired from the underwriters.

Pursuant to each of the Underwriting Agreements with respect to a given series of securities, the closing of the sale of any class of securities will be conditioned on the closing of the sale of all other classes under the related Underwriting Agreement.

The place and time of delivery for the notes and certificates, as the case may be, in respect of which this prospectus is delivered will be set forth in the related prospectus supplement.

If and to the extent required by applicable law or regulation, this prospectus and the prospectus supplement will also be used by the Underwriter after the completion of the offering in connection with offers and sales related to market-making transactions in the offered securities in which the Underwriter acts as principal. The Underwriter may also act as agent in these transactions. Sales will be made at negotiated prices determined at the time of sale.

Legal Matters

Some legal matters relating to the securities of any series will be passed upon by the law firms specified in the related prospectus supplement. Some related federal income tax and other matters will be passed upon for the Trust and the seller, by the law firms specified in the related prospectus supplement.

Prospectus Supplement

The prospectus supplement relating to a series of securities to be offered under this prospectus will, among other things, set forth with respect to each class of securities:

·

the interest rate and authorized denominations, as applicable, of each class of securities;

·

specific information concerning the Primary Assets and the related seller and servicer, as applicable;

·

the terms of any Credit or Cash Flow Enhancement applicable to any class or classes of securities;

·

information concerning any other assets in the related issuing entity;

·

the expected date or dates on which the principal amount, if any, of each class of securities will be paid to holders of the securities;

·

the extent to which any class within a series is subordinated to any other class of the same series; and

·

additional information with respect to the plan of distribution of the securities.

Reports to Securityholders

With respect to each series of securities, the servicer of the related Primary Assets will prepare for distribution to the related Securityholders monthly and annual reports concerning the securities and the related Trust. See “Certain Information Regarding the Securities--Statements to Securityholders.”

Available Information

The depositor has filed with the Securities and Exchange Commission (the “Commission”) a Registration Statement on Form S-3 (together with all amendments and exhibits to the Registration Statement, the “Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the securities being offered by this prospectus.  This prospectus, which forms a part of the Registration Statement, omits some of the information contained in the Registration Statement pursuant to the rules and regulations of the Commission.  The Registration Statement and the exhibits to the Registration Statement can be inspected and copied at the public reference facilities maintained by the Commission at 100 F Street NE, Washington, D.C. 20549, and at Regional Offices in the following locations:

·

Chicago Regional Office, 175 West Jackson Boulevard, Suite 900, Chicago, Illinois 60604; and

·

New York Regional Office, 3 World Financial Center, Room 4300, New York, New York 10281.

Copies of these materials can also be obtained from the Public Reference Section of the Commission, 100 F Street NE, Washington, D.C. 20549, at prescribed rates.

The Commission also maintains a site on the world wide web at “http://www.sec.gov” at which users can view and download copies of reports, proxy and information statements and other information filed electronically through the Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) system.  The depositor has filed the Registration Statement, including all exhibits to the Registration Statement, through the EDGAR system and therefore these materials should be available by logging onto the Commission’s web site.  The Commission maintains computer terminals providing access to the EDGAR system at each of the offices referred to above.

As to each issuing entity that is no longer required to file reports under the Exchange Act, periodic distribution reports will be posted on the depositor’s website referenced above as soon as practicable.  Annual reports of assessment of compliance with the AB Servicing Criteria, attestation reports, and statements of compliance will be provided to registered holders of the related securities upon request free of charge.  See “Description of the Transfer and Servicing Agreements — Evidence as to Compliance”.

Incorporation of Certain Documents by Reference

All documents subsequently filed by or on behalf of the issuing entity referred to in the prospectus supplement with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of this prospectus and prior to the termination of any offering of the Notes or Certificates, as applicable, issued by that issuing entity will be deemed to be incorporated by reference in this prospectus and to be a part of this prospectus from the date of the filing of those documents. Any statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus will be deemed to be modified or superseded for all purposes of this prospectus to the extent that a statement contained in this prospectus (or in the prospectus supplement) or in any other subsequently filed document that also is or is deemed to be incorporated by reference modifies or replaces that statemen t. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.  All documents subsequently filed by the depositor pursuant to Sections 13(a) or 15(d) of the Exchange Act in respect of any offering prior to the termination of the offering of the offered securities shall also be deemed incorporated by reference into this prospectus and the related prospectus supplement.  

The trustee and/or indenture trustee on behalf of any issuing entity will provide without charge to each person to whom this prospectus is delivered, upon request, a copy of any or all of the documents referred to above that have been or may be incorporated by reference in this prospectus (not including exhibits to the information that is incorporated by reference unless the exhibits are specifically incorporated by reference into the information that this prospectus incorporates).  Requests for information should be directed to the corporate trust office of the trustee and/or indenture trustee specified in the prospectus supplement.

Rating

As a condition to the issuance of any class of offered notes or offered certificates, as applicable, they must not be rated lower than investment grade; that is, they must be rated in one of the four highest rating categories, by a rating agency.

A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating organization.  Each security rating should be evaluated independently of any other security rating.

INDEX OF TERMS

Page

Actuarial Receivables

9

Advances

39

Cede

4

Certificate Distribution Account

35

Certificate Owners

50

Certificate Pool Factor

21

Code

50

Collection Account

35

Collection Period

38

Definitive certificates

32

Definitive notes

32

Definitive Securities

32

Depository

22

Distribution Date

29

DTC

4

Eligible Deposit Account

36

Eligible Institution

36

Eligible Investment

37

Eligible Investments

36

Events of Default

24

Exchange Act

78

Fannie Mae

14

Farm Credit Act

17

FCA

18

FCBs

17

Federal Tax Counsel

50

FFCB

14

FFEL

16

FHLB

14

FHLMC Act

15

Final Scheduled Maturity Date

38

Financed Boats

7

FIRREA

16

Fiscal Agent

14

Freddie Mac

14

FTC Rule

49

Funding Corporation

18

Government Securities

12

grantor trust certificateholders

64

grantor trust certificates

64

GSE Issuer

14

GSEs

12

GSEs Bonds

12

Indenture

22

Indirect Participants

30

Interest Component

20

Investment Earnings

36

IRS

50

MBS

15

Multiple Variable Rate Note

55

Non-United States Owner

63

Note Distribution Account

35

Note Owners

50

Note Pool Factor

21

Participants

30

Payahead Account

35

Payaheads

39

Pooling and Servicing Agreement

7

Precomputed Advance

39

Precomputed Receivables

9

Pre-Funded Amount

36

Pre-Funding Account

36

Pre-Funding Period

36

Prepayment Assumption

51

Presumed Single Qualified Floating Rate

54

Presumed Single Variable Rate

54

Primary Assets

10

Principal Component

20

Private Label Custody Receipt Securities

18

Private Label Custody Strips

18

Receivables

8

REFCO

18

REFCO Strip

20

Registration Statement

78

Related Documents

26

Repurchase Amount

35

Reserve Account

41

RTC

16

Rule of 78S Receivables

9

Rules

30

Sale and Servicing Agreement

7

Sallie Mae

14

Schedule of Receivables

34

Securities Act

78

Security Owners

30

Senior Certificates

67

Senior Class Percentage

67

Servicer Default

43

Servicing Fee

40

Servicing Fee Rate

40

Shortfall Amount

67

Short-Term Note

57

Simple Interest Advance

39

Simple Interest Receivables

9

Single Variable Rate Note

54

Stripped Certificates

66

Subordinate Certificates

67

Subordinate Class Percentage

67

System

17

Systemwide Debt Securities

18

TEFRA

19

Transfer and Servicing Agreements

34

Treasury Bonds

12

Treasury Strips

12

Trust

7

Trust Accounts

36

Trust Agreement

7

Trust Stripped Bond

67

Trust Stripped Coupon

67

TVA

14

TVA Act

17

UCC

30

Underlying Issuer

11

Underlying Servicer

11

Underlying Trust Agreement

11

Underlying Trustee

11

Underwriting Agreements

76

United States person

57

Variable Rate Note

53

1997 Act

69

Actuarial Receivables

7

Advances

39

Cede

1

Certificate Distribution Account

3

Certificate Owners

50

Certificate Pool Factor

20

Code

50

Collection Account

35

Collection Period

38

Definitive certificates

31

Definitive notes

31

Definitive Securities

31

Depository

21

Distribution Date

28

DTC

1

Eligible Deposit Account

36

Eligible Institution

36

Eligible Investment

36

Eligible Investments

35

Events of Default

23

Exchange Act

79

Fannie Mae

12

Farm Credit Act

16

FCA

16

FCBs

16

Federal Tax Counsel

50

FFCB

13

FFEL

14

FHLB

13

FHLMC Act

14

Final Scheduled Maturity Date

38

Financed Boats

5

FIRREA

15

Fiscal Agent

13

Freddie Mac

12

FTC Rule

49

Funding Corporation

17

Government Securities

10

grantor trust certificateholders

64

grantor trust certificates

64

GSE Issuer

13

GSEs

10

GSEs Bonds

10

Indenture

21

Indirect Participants

29

Interest Component

19

Investment Earnings

36

IRS

50

MBS

13

Multiple Variable Rate Note

55

Non-United States Owner

63

Note Distribution Account

35

Note Owners

50

Note Pool Factor

20

Participants

29

Payahead Account

35

Payaheads

39

Pooling and Servicing Agreement

5

Precomputed Advance

39

Precomputed Receivables

7

Pre-Funded Amount

36

Pre-Funding Account

36

Pre-Funding Period

36

Prepayment Assumption

52

Presumed Single Qualified Floating Rate

54

Presumed Single Variable Rate

55

Primary Assets

9

Principal Component

19

Private Label Custody Receipt Securities

17

Private Label Custody Strips

17

Receivables

6

REFCO

17

REFCO Strip

19

Registration Statement

79

Related Documents

25

Repurchase Amount

34

Reserve Account

41

RTC

5

Rule of 78S Receivables

7

Rules

29

Sale and Servicing Agreement

5

Sallie Mae

12

Schedule of Receivables

34

Securities Act

79

Security Owners

29

Senior Certificates

67

Senior Class Percentage

67

Servicer Default

43

Servicing Fee

40

Servicing Fee Rate

40

Shortfall Amount

68

Short-Term Note

57

Simple Interest Advance

39

Simple Interest Receivables

7

Single Variable Rate Note

55

Stripped Certificates

66

Subordinate Certificates

67

Subordinate Class Percentage

67

System

16

Systemwide Debt Securities

16

TEFRA

18

Transfer and Servicing Agreements

33

Treasury Bonds

10

Treasury Strips

10

Trust

5

Trust Accounts

35

Trust Agreement

5

Trust Stripped Bond

67

Trust Stripped Coupon

67

TVA

13

TVA Act

16

UCC

29

Underlying Issuer

9

Underlying Servicer

9

Underlying Trust Agreement

9

Underlying Trustee

9

Underwriting Agreements

77

United States person

58

Variable Rate Note

54

Annex I

Global Clearance, Settlement and Tax Documentation Procedures

Except in some limited circumstances, the globally offered securities (the “Global securities”) will be available only in book-entry form. Unless otherwise specified in the related prospectus supplement, investors in the Global securities may hold Global securities through any of The Depository Trust depositor (“DTC”), Clearstream, Luxembourg or Euroclear.  Unless otherwise specified in the related prospectus supplement, Global securities will be tradable as home market instruments in both the European and U.S. domestic markets.  Unless otherwise specified in the related prospectus supplement, Initial settlement and all secondary trades will settle in same-day funds.

Secondary market trading between investors holding Global securities through Clearstream, Luxembourg and Euroclear will be conducted in the ordinary way in accordance with their normal rules and operating procedures and in accordance with conventional eurobond practice (i.e., seven calendar day settlement).

Secondary market trading between investors holding Global securities through DTC will be conducted according to the rules and procedures applicable to U.S. corporate debt obligations.

Secondary cross-market trading between Clearstream, Luxembourg or Euroclear and DTC Participants holding securities will be effected on a delivery-against-payment basis through the respective Depositaries of Clearstream, Luxembourg and Euroclear, in this capacity, and as DTC Participants.

Non-U.S. holders of Global securities will be subject to U.S. withholding taxes unless the holders meet particular requirements and deliver appropriate U.S. tax documents to the securities clearing organizations or their participants.

Initial Settlement

All Global securities will be held in book-entry form by The Depository Trust depositor (“DTC”) in the name of Cede & Co. (“Cede”) as nominee of DTC. Securityholders’ interests in the Global securities will be represented through financial institutions acting on their behalf as direct and indirect Participants in DTC.  As a result, Clearstream, Luxembourg and Euroclear will hold positions on behalf of their participants through their respective Depositaries, which in turn will hold these positions in accounts as DTC Participants.

Securityholders electing to hold their Global securities through DTC will follow the settlement practices applicable to U.S. corporate debt obligations. Securityholder securities custody accounts will be credited with their holdings against payment in same-day funds on the settlement date.

Securityholders electing to hold their Global securities through Clearstream, Luxembourg or Euroclear accounts will follow the settlement procedures applicable to conventional eurobonds, except that there will be no temporary global security and no “lock-up” or restricted period.  Global securities will be credited to the securities custody accounts on the settlement date against payment in same-day funds.

Secondary Market Trading

Since the purchaser determines the place of delivery, it is important to establish at the time of the trade where both the purchaser’s and seller’s accounts are located to ensure that settlement can be made on the desired value date.

Trading between DTC Participants. Secondary market trading between DTC Participants will be settled using the procedures applicable to U.S. corporate debt obligations in same-day funds.

Trading between Clearstream, Luxembourg and/or Euroclear Participants. Secondary market trading between Clearstream, Luxembourg Participants or Euroclear Participants will be settled using the procedures applicable to conventional eurobonds in same-day funds.

Trading between DTC seller and Clearstream, Luxembourg or Euroclear purchaser.  When Global securities are to be transferred from the account of a DTC Participant to the account of a Clearstream, Luxembourg Clearstream, Luxembourg Participant or a Euroclear Participant, the purchaser will send instructions to Clearstream, Luxembourg or Euroclear through a Clearstream, Luxembourg Participant or Euroclear Participant at least one business day prior to settlement. Clearstream, Luxembourg or Euroclear will instruct the respective Depositary, as the case may be, to receive the Global securities against payment. Payment will include interest accrued on the Global securities from and including the last coupon payment date to and excluding the settlement date.  Payment will then be made by the respective Depositary to the DTC Participant’s account against delivery of the Global securities.  Af ter settlement has been completed, the Global securities will be credited to the respective clearing system and by the clearing system, in accordance with its usual procedures, to the Clearstream, Luxembourg Participant’s or Euroclear Participant’s account.  The Global securities credit will appear the next day (European time) and the cash debit will be back-valued to, and the interest on the Global securities will accrue from, the value date, which would be the preceding day when settlement occurred in New York. If settlement is not completed on the intended value date (i.e., the trade fails), the Clearstream, Luxembourg or Euroclear cash debit will be valued instead as of the actual settlement date.

Clearstream, Luxembourg Participants and Euroclear Participants will need to make available to the respective clearing systems the funds necessary to process same-day funds settlement.  The most direct means of doing so is to pre-position funds for settlement, either from cash on hand or existing lines of credit, as they would for any settlement occurring within Clearstream, Luxembourg or Euroclear. Under this approach, they may take on credit exposure to Clearstream, Luxembourg or Euroclear until the Global securities are credited to their accounts one day later.

As an alternative, if Clearstream, Luxembourg or Euroclear has extended a line of credit to them, Clearstream, Luxembourg Participants or Euroclear Participants can elect not to pre-position funds and allow that credit line to be drawn upon the finance settlement. Under this procedure, Clearstream, Luxembourg Participants or Euroclear Participants purchasing Global securities would incur overdraft charges for one day, assuming they cleared the overdraft when the Global securities were credited to their accounts.  However, interest on the Global securities would accrue from the value date.  Therefore, in many cases the investment income on the Global securities earned during that one-day period may substantially reduce or offset the amount of the overdraft charges, although this result will depend on each Clearstream, Luxembourg Participant’s or Euroclear Participant’s particular cost of funds .

Since the settlement is taking place during New York business hours, DTC Participants can employ their usual procedures for sending Global securities to the respective Depositary for the benefit of Clearstream, Luxembourg Participants or Euroclear Participants.  The sale proceeds will be available to the DTC seller on the settlement date.  Thus, to the DTC Participant a cross-market transaction will settle no differently than a trade between two DTC Participants.

Trading between Clearstream, Luxembourg or Euroclear seller and DTC purchaser.  Due to time zone differences in their favor, Clearstream, Luxembourg Participants and Euroclear Participants may employ their customary procedures for transactions in which Global securities are to be transferred by the respective clearing system, through the respective Depositary, to a DTC Participant.  The seller will send instructions to Clearstream, Luxembourg or Euroclear through a Clearstream, Luxembourg Participant or Euroclear Participant at least one business day prior to settlement.  In these cases, Clearstream, Luxembourg or Euroclear will instruct the respective Depositary, as appropriate, to deliver the bonds to the DTC Participant’s account against payment. Payment will include interest accrued on the Global securities from and including the last coupon payment date to and excluding the settle ment date. The payment will then be reflected in the account of the Clearstream, Luxembourg Participant or Euroclear Participant the following day, and receipt of the cash proceeds in the Clearstream, Luxembourg Participant’s or Euroclear Participant’s account would be back-valued to the value date, which would be the preceding day, when settlement occurred in New York. Should the Clearstream, Luxembourg Participant or Euroclear Participant have a line of credit with its respective clearing system and elect to be in debit in anticipation of receipt of the sale proceeds in its account, the back-valuation will extinguish any overdraft charges incurred over that one-day period.  If settlement is not completed on the intended value date (i.e., the trade fails), receipt of the cash proceeds in the Clearstream, Luxembourg Participant’s or Euroclear Participant’s account would instead be valued as of the actual settlement date.  Finally, day traders that use Clearstream, Luxembourg or Euroclear and that purchase Global securities from DTC Participants for delivery to Clearstream, Luxembourg Participants or Euroclear Participants should note that these trades would automatically fail on the sale side unless affirmative action were taken.  At least three techniques should be readily available to eliminate this potential problem:

(a)

borrowing through Clearstream, Luxembourg or Euroclear for one day, until the purchase side of the day trade is reflected in their Clearstream, Luxembourg or Euroclear accounts, in accordance with the clearing system’s customary procedures;

(b)

borrowing the Global securities in the U.S. from a DTC Participant no later than one day prior to settlement, which would give the Global securities sufficient time to be reflected in their Clearstream, Luxembourg or Euroclear account in order to settle the sale side of the trade; or

(c)

staggering the value dates for the buy and sell sides of the trade so that the value date for the purchase from the DTC Participant is at least one day prior to the value date for the sale to the Clearstream, Luxembourg Participant or Euroclear Participant.

Certain U.S. Federal Income Tax Documentation Requirements

A beneficial owner of Global securities holding securities through Clearstream, Luxembourg or Euroclear, or through DTC will be subject to the 30% U.S. withholding tax that generally applies to payments of interest, including original issue discount, on registered debt issued by U.S. Persons or to backup withholding, at a rate of up to 31% unless (1) each clearing system, bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business in the chain of intermediaries between the beneficial owner and the U.S. entity required to withhold tax complies with applicable certification requirements and (2) the beneficial owner takes one of the following steps to obtain an exemption or reduced tax rate:

Exemption for non-U.S. Persons (Form W-8BEN). Beneficial owners of securities that are non-U.S. Persons can obtain a complete exemption from the withholding tax by filing a signed Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. If the information shown on Form W-8 BEN changes, a new Form W-8 BEN  must be filed within 30 days of the change.

Exemption for non-U.S. Persons with effectively connected income (Form W-8ECI). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S. branch, for which the interest income is effectively connected with its conduct of a trade or business in the United States, can obtain an exemption from the withholding tax by filing Form W-8ECI (Certificate of Foreign Person’s Claim for Exemption from Withholding on Income Effectively Connected with the Conduct of a Trade or Business in the United States).

Exemption or reduced rate for non-U.S. Persons resident in treaty countries (Form W-8BEN). Non-U.S. Persons that are beneficial owners of securities residing in a country that has a tax treaty with the United States can obtain an exemption or reduced tax rate, depending on the treaty terms, by filing Form W-8BEN (including Part II thereof). If the treaty provides only for a reduced rate, the beneficial owner may still be entitled to complete exemption from withholding under the first exemption discussed above.

Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain complete exemption from the withholding tax by filing Form W-9 (Request for Taxpayer Identification Number and Certification).

U.S. Federal Income Tax Reporting Procedure. The beneficial owner of a Global Security files by submitting the appropriate form to the person through whom it holds, the clearing agency, in the case of persons holding directly on the books of the clearing agency. Form W-8BEN and Form W-8ECI are generally effective for three calendar years from the close of the calendar year in which it is collected.

The term “U.S. Person” means (1) a citizen or resident of the United States, (2) a corporation or partnership (or other entity properly classified as a corporation or partnership for U.S. Federal income tax purposes) organized in or under the laws of the United States or any state or the District of Columbia,  (3) an estate the income of which is includible in gross income for United States tax purposes, regardless of its source, or (4)  a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have authority to control all substantial decisions of the trust.  Notwithstanding the preceding sentence, to the extent provided in regulations, trusts in existence on August 20, 1996 and treated as United States persons prior to that date that elect to continue to be so treated also will be consi dered U.S. Persons. Treasury regulations provide certain presumptions regarding the entity classification and foreign or U.S. status of a holder that a payor generally must apply in the absence of appropriate documentation from the holder, and provide detailed documentation and procedures for holders claiming withholding tax exemptions through intermediaries.  Prospective investors are urged to consult their tax advisors regarding the effect of these regulations on their ability to claim and the means for claiming exemptions from or reduced rates of U.S. withholding taxes.

This summary does not deal with all aspects of U.S. Federal income tax withholding that may be relevant to foreign holders of the Global securities. Investors are advised to consult their own tax advisers for specific tax advice concerning their holding and disposing of the Global securities.

The information in this prospectus supplement is not complete and may be changed.  We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective.  This prospectus supplement is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED [_________]

PROSPECTUS SUPPLEMENT (to prospectus dated [            ])

$[               ] (Approximate)

ACE SECURITIES CORP., [______] Auto Owner Trust [______], Series  [       ]

Asset Backed Notes

[______] Auto OwnerTrust [______]

Issuing Entity

[DB Structured Products, Inc.]

Sponsor

ACE Securities Corp.

Depositor

 [               ]

Servicer

Notes Offered • $[      ], [     ]% Class A-1 Asset Backed Notes • $[      ], [     ]% Class A-2 Asset Backed Notes Assets • Retail automobile receivables Credit Enhancement Class A-1 Notes • Subordination of Class A-2 Notes • Reserve account • [Financial guaranty insurance policy issued by [         ]] Class A-2 Notes • [Financial guaranty insurance policy issued by [         ]] [Describe other credit enhancement provided by [_____]] Expected Ratings • [      ] or equivalent for the Class A -1 Notes • [      ] or equivalent for the Class A -2 Notes Consider carefully the risk factors beginning on page S-[  ] of this prospectus supplement and on page [  ] of the prospectus. For a list of capitalized terms used in this prospectus supplement and the prospectus, see the index of defined terms beginning on page S-[  ] of this prospectus supplement and on page [  ] of the prospectus. The notes will represent interests in the Issuing Entity only and will not represent interests in or obligations of the sponsor, the depositor or any of their affiliates. Distributions on the notes will be made on the [__]th day of each month, or, if such day is not a business day, on the next succeeding business day, beginning in [__]. This prospectus supplement may be used to offer and sell the notes only if accompanied by the prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these notes or determined if this prospectus supplement or the attached prospectus is accurate or complete.  Making any contrary representation is a criminal offense.

[Deutsche Bank Securities Inc.] is purchasing the class A-1 notes from the Issuing Entity at approximately [   ]% of the principal amount of the class A-1 notes plus accrued interest from [     ], [      ] and the class A-2 notes at approximately [____]% of the principal amount of the class A-2 notes plus accrued interest from [                ].  [Deutsche Bank Securities Inc.] is offering the class A-1 notes and class A-2 notes from time to time in negotiated transactions or at varying prices which will be determined at the time of sale.  The aggregate proceeds to the Issuing Entity, before deducting expenses payable by or on behalf of the Issuing Entity estimated at $[     ], will be $[     ].

 [Deutsche Bank Securities]

The date of this prospectus supplement is [         ].

Important Notice About Information Presented in this
Prospectus Supplement and the Accompanying Prospectus:

We provide information to you about the notes offered by this prospectus supplement in two separate documents that progressively provide more detail: (1) the accompanying prospectus, which provides general information, some of which may not apply to your notes, and (2) this prospectus supplement, which describes the specific terms of your notes.

If the information regarding the notes is more specific in this prospectus supplement than in the prospectus, then you should rely on the information in this prospectus supplement.

You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus.  We have not authorized anyone to provide you with different information.

We are not offering the notes in any state where the offer is not permitted.  We do not claim that the information in this prospectus supplement and prospectus is accurate as of any date other than the dates stated on their respective covers.

Dealers will deliver a prospectus supplement and prospectus when acting as underwriters of the notes and with respect to their unsold allotments or subscriptions.  In addition, all dealers selling the notes will be required to deliver a prospectus supplement and prospectus for ninety days following the date of this prospectus supplement.

We include cross-references in this prospectus supplement and the accompanying prospectus to captions in these materials where you can find further related discussions.  The following table of contents and the table of contents included in the accompanying prospectus provide the pages on which these captions are located.

TABLE OF CONTENTS

Prospectus Supplement

Caption

Page

Summary of Terms

1

Risk Factors

1

Formation of the Issuing Entity

3

The Trust Property

6

The Receivables Pool

7

Static Pool Information

14

The Originators

14

The Servicer

14

The Backup Servicer

15

Maturity and prepayment considerations

16

Yield Considerations

18

Use of Proceeds

19

Description of the Notes

19

Description of the Transaction Documents

36

[Other Credit Enhancement Provider]

48

[Derivative Instruments]

48

Federal Income Tax Consequences

49

Certain State Tax Consequences

51

ERISA Considerations

51

Underwriting

53

Ratings

53

Legal Proceedings

53

Affiliations, Relationships and Related Transactions

54

[Experts

54

Legal Matters

54

SUMMARY OF TERMS

This summary highlights selected information from this prospectus supplement and does not contain all of the information that you need to consider in making your investment decision.  To understand all of the terms of the offering of the notes, it is necessary that you read carefully this entire prospectus supplement and accompanying prospectus.

While this summary contains an overview of certain calculations, cash flow priorities, and other information to aid your understanding, you should read carefully the full description of these calculations, cash flow priorities and other information in this prospectus supplement and the accompanying prospectus before making any investment decision.

Issuing Entity	[      ] Auto Owner Trust [      ]-[      ], a Delaware business trust.
Depositor	Ace Securities Corp.  See “The Depositor” in the Prospectus.
Servicer	[      ].
Sponsor	[      ].  See “The Sponsor” in the Prospectus.
Originators	[_________________________], with respect to approximately [__]% of the receivables by aggregate principal balance as of the Cut-off Date. The remainder of the receivables were originated by various originators, none of which have originated more than 10% of the receivables.  See “The Originators” in this prospectus supplement.
Owner Trustee	[      ].
Indenture Trustee	[      ].
Backup Servicer	[      ].
[The Insurer	[________] is a [          ] financial guaranty insurance company. [          ] will issue a policy, which will guarantee the payment of timely interest and principal due on the class A-1 notes and class A-2 notes but only as set forth in the section of this prospectus supplement titled “The Policy.”]
[Any credit enhancement provider referenced in Items 1114(b) and 1115 of Regulation AB]	[      ].
Closing Date	On or about [      ].
[Initial] Cut-off Date	The [close] [opening] of business on [      ].

Description of the Notes

The issuing entity will issue three classes of asset backed notes.  The class A-1 notes will be designated as the “Class A-1 Notes” and the class A-2 notes will be designated as the “Class A-2 Notes”.  The Class A-1 Notes together with the Class A-2 Notes will be designated as the “Class A Notes”. The class B notes will be designated as the “Class B Notes.” Only the Class A Notes are offered to you pursuant to this prospectus supplement.  Any information in this prospectus supplement relating to the Class B Notes is presented solely to provide you with a better understanding of the Class A Notes.

Each of the Class A-1 Notes and Class A-2 Notes will have the initial principal amount and the interest rate set forth in the following table. The dates on which the final payment of principal and interest on each of the Class A-1 Notes and Class A-2 Notes is scheduled to be made are also set forth in the following table.

Class	Initial Note Principal Balance	Interest Rate	Final Scheduled Payment Date
A-1	$ [          ]	[       ]%	[          ]
A-2	$ [          ]	[       ]%	[          ]

The Class A Notes will initially be issued in book-entry form only. The Class A Notes will be issued in minimum denominations of $1,000 and multiples of $1,000 in excess of $1,000.

The Class A-[  ] Notes will not receive any payment of principal on a payment date until the full amount of the Class A-[  ] Notes principal has been paid in full.  On each payment date, the Class B Notes will not receive any payment of interest or principal until all amounts due the Class A Notes on the payment date have been paid in full.

Payment Dates

The payment date will be the [  ]th day of each month, or, if that day is not a business day, on the next succeeding business day. The first payment date will be [          ].

The record date for all payment dates is the [   ]th day of each month, or, if that day is not a business day, on the prior business day.

Interest

In the case of the first payment date, interest will accrue from [          ] through and excluding the first payment date of [          ]. For any subsequent payment interest will accrue on the Class A Notes during the month preceding each payment date. Interest on the notes will be calculated on a “30/360” basis.

Principal

Prior to achieving a required level of

overcollateralization, the amount of principal

available to be distributed to the Class A Notes is generally equal to (1) the amount of collections on the auto loan pool allocable to principal during the prior calendar month plus any losses recognized on the auto loan pool during the prior calendar month and (2) a specified amount of excess interest received on the auto loan pool during the prior calendar month, after paying specific expenses of the issuing entity, interest on the Class A Notes and funding the reserve account to the required level, necessary to achieve the required level of overcollateralization.

Once the required level of overcollateralization has been reached, the amount of principal available to be distributed to the Class A Notes will be equal to (1) the amount of collections on the auto loan pool allocable to principal during the prior calendar month plus any losses recognized on the auto loan pool during the prior calendar month less (2) the excess of (a) the amount of overcollateralization on the payment date less (b) the required level of overcollateralization on the payment date.  Additionally, once the required level of overcollateralization has been reached, excess interest will no longer be used to create any further overcollateralization.

Principal distributable to the Class A Notes will be distributed first to the Class A-1 Notes until its principal balance is reduced to zero and then will be distributed to the Class A-2 Notes until its principal balance has been reduced to zero.

In addition, the outstanding principal amount of the Class A Notes, to the extent not previously paid, will be payable on the final scheduled payment date of the related class of notes.

The Trust Fund’s Assets

The trust fund’s assets will include:

●

[non-prime] motor vehicle retail installment sale contracts secured by new and used automobiles and light-duty trucks;

●

monies due on, or received under the receivables, after [          ];

●

an assignment of the security interests in the vehicles securing the auto loan pool;

●

the related files;

●

all rights to proceeds from claims on physical damage, credit life and disability insurance policies covering the vehicles or the obligors;

●

all rights to liquidation proceeds with respect to the auto loan pool;

●

an assignment of the rights of the depositor under a receivables purchase agreement with [          ];

●

an assignment of the rights of [          ] against dealers under agreements between [          ] and these dealers;

●

specific bank accounts;

●

all proceeds of the foregoing; and

●

particular rights under the principal transaction documents for this offering.

The Auto Loan Pool

The auto loans consist of [non-prime] motor vehicle retail installment sale contracts originated by dealers and then acquired by [          ] pursuant to its contract acquisition program. [The motor vehicle retail installment sale contracts consist primarily of contracts with individuals with less than perfect credit due to various factors. These factors include the manner in which the individuals have handled previous credit, the limited extent of their prior credit history and/or their limited financial resources.]

The depositor expects that the receivables will have the following characteristics as of [   ].  As of the closing date, no more than 5% of the receivables will have characteristics that differ from those described in this prospectus supplement as of [   ].

Number of contracts

[   ]

Principal Amount

$[   ]

Annual Percentage Rates

[   ]% to [    ]%

Weighted Average Annual
Percentage Rate

[   ]%

Original term

[   ] months to [   ] months

Weighted Average
original term

[   ] months

Remaining term

[   ] months to [__] months

Weighted Average
remaining term

[   ]%

New

[   ]

Used

[   ]

States

      [______]

[   ]%

      [______]

[   ]%

Balloon Loans

[   ]

[For approximately [      ]% of the principal amount of the receivables, the amount of the receivable was more than the value of the financed vehicle at the time the loan was made.]

[Pre-Funding Feature

Approximately $[          ] of the proceeds of the notes will be held by [          ]in an account which is formed solely to hold this money, and used to purchase additional auto loans with the prior written consent of [          ] in each case. The Issuing Entity will purchase from the Depositor additional [non-prime] auto loans from time to time on or before [          ], [          ], from funds on deposit in this account. The obligation of the Depositor to sell additional auto loans to the issuing entity is conditioned on these loans having been sold to the Depositor from [          ].

The auto loans acquired by the issuing entity during the period between the day of the closing and [          ], will also be originated or acquired by [          ]. The characteristics of the subsequently-acquired auto loans are not expected to differ to any great extent from the auto loans acquired by the issuing entity on the day of the closing.]

Removal and Substitution of a Receivable

[Regulation AB Item 1103(a)(6) compliant description of removal or substitution of receivables in connection with material document defects or breaches of representations and warranties].

[Trigger Events]

[Regulation AB Item 1103(a)(3)(vii) compliant description of any events in the transaction agreements that can trigger liquidation or amortization of the receivables or other performance triggers that would alter the transaction structure or the flow of funds].

 [Other Credit Enhancement]

[Regulation AB Item 1103(a)(3)(ix) compliant description of any other credit enhancement].

[Additional Series or Classes Backed by Receivables]

[Regulation AB Item 1103(a)(4) compliant description of any outstanding series or classes of notes that are backed by the receivables or otherwise have claims on the receivables.  Regulation AB compliant description of any circumstances in which additional series or classes of notes may be issued that are backed by the receivables, with specification if noteholder approval is necessary for such issuances and if noteholders will receive notice of such issuances].

[Revolving Periods]

[Regulation AB Item 1103(a)(5) compliant description of any revolving periods].

Fees and Expenses

Prior to the distribution of any interest to the noteholders, the servicer will be entitled to receive a servicing fee for each collection period in an amount equal to the product of one-twelfth of [    ]% per annum for so long as [               ] or an affiliate thereof is the servicer, and [    ]% per annum if [               ] or an affiliate thereof is no longer the servicer and the aggregate principal balance of the receivables as of the first day of the collection period.  See “Description of the Transfer and Servicing Agreement--Servicing Compensation and Payment of Expenses” in the Prospectus.

[Regulation AB Item 1103(a)(7) compliant description of any other fees and expenses].

Optional Termination

When the principal amount of the receivables is 10% or less than it was on the cut-off date, the servicer may buy the receivables.  If the servicer does not do so, the indenture trustee will try to sell the receivables to another buyer.  In either case, you must receive the principal amount of your notes and all accrued but unpaid interest or the receivables will not be sold.

Final Scheduled Maturity Dates

The final scheduled maturity date of the notes is [__________].  The actual date on which the aggregate outstanding principal amount of the notes is paid may be earlier than the final scheduled maturity date based on a variety of factors.

Expected Final Distribution Dates

The expected final distribution date of each class of notes is [

], based on the assumption that the servicer has exercised its option to purchase all the receivables as described in “Optional Termination” above.  Due to losses and prepayments on the receivables, the final distribution dates on each class of notes may be substantially earlier or later than such date.

[The Insurance Policy

On the day of the closing, [          ] will issue a financial guaranty insurance policy for the benefit of the Class A noteholders. Pursuant to this policy, [_________] will unconditionally and irrevocably guarantee the payments of interest and principal for each payment date with respect to the Class A Notes required to be made during the term of the policy, subject to the further provisions of the policy as described in this prospectus supplement. The Class B Notes do not have the benefit of the policy.]

Optional Redemption

The notes, if still outstanding, may be redeemed in whole, but not in part, on any payment date on which [          ] exercises its “clean-up call” option to purchase the auto loan pool. This can only occur after the pool balance declines to 10% or less of the original pool balance. [          ]’s exercise of the “clean-up call” is also subject to the satisfaction of particular conditions[, including obtaining the prior written consent, in some circumstances, of [          ]]. The redemption price is equal to the unpaid principal amount of the notes plus accrued and unpaid interest on the notes.

Mandatory Redemption

[If Pre-Funding Account Is Not Depleted

Each of the Class A-1 Notes and Class A-2 Notes will be redeemed in part on a pro rata basis if any portion of the $[          ] deposited in a segregated pre-funding account with [          ] remains on deposit in that account on [          ], or prior to this date if the amount remaining in the account is less than $[_________], provided, however if the amount remaining in the pre-funding account is less than $[_________], only the Class A-1 Notes will be redeemed.]

Upon Event Of Default

The notes may be accelerated and subject to immediate payment at par upon the occurrence of an event of default under the indenture. [So long as [          ] is not in default, the power to declare an event of default will be held by [          ]].  In the case of an event of default, the notes will automatically be accelerated and subject to immediate payment at par. [The policy issued by [          ] does not guarantee payment of any amounts that become due on an accelerated basis, unless [          ] elects, in its sole discretion, to pay the amounts in whole or in part.]

Tax Consequences

McKee Nelson LLP, special federal tax counsel, will deliver an opinion of counsel that, for federal income tax purposes, the Class A Notes will be treated as indebtedness and the issuing entity will not be an association, or publicly traded partnership, taxable as a corporation. Each noteholder, by accepting a Class A Note, will agree to treat the notes as indebtedness.

The tax code is complex, and we recommend that you and your tax advisors review the information under the caption “Federal Income Tax Consequences” in this prospectus supplement and under the caption “Material Federal Income Tax Consequences” in the prospectus.

ERISA Considerations

Subject to particular considerations discussed in this prospectus supplement under “ERISA Considerations,” the Class A Notes are eligible for purchase by employee benefit plans.  See “ERISA Considerations” in this prospectus supplement and the prospectus.

Ratings

It is a condition to the issuance of the Class A Notes that the Class A Notes receive at least the following ratings from [______________] and [_________________]:

Notes	[____]	[____]
Class A-1 Notes	[__]	[__]
Class A-2 Notes	[__]	[__]

RISK FACTORS

The following information, which you should carefully consider, identifies certain significant sources of risk associated with an investment in the securities.  You should also carefully consider the information set forth under “Risk Factors” in the prospectus.

The information relating to the auto loans may not reflect actual experience.	There can be no assurance that the net loss experience calculated and presented in this prospectus supplement by [       ] with respect to its portfolio of serviced contracts will reflect actual experience with respect to the auto loans included in the issuing entity. In addition, there can be no assurance that the future delinquency or loan loss experience of the servicer with respect to the auto loans will be better or worse than that set forth in this prospectus supplement with respect to [       ]’s servicing portfolio.
The [       ] finance program and the nature of obligors may increase the risk of delinquencies and losses.	[       ]generally originated by automobile dealers for sale and assignment to [       ]. [       ] purchases retail automobile installment sale contracts which may not meet the credit standards of traditional primary lenders. As a result, the underwriting standards applied by [       ] are not as stringent as those of the finance companies of motor vehicle manufacturers or other financial institutions. The [       ] finance program focuses on the non-prime market, including borrowers with sub-standard credit profiles who may not be able to receive financing from more traditional sources. The borrowers may have had credit problems in the past, including prior delinquencies, repossessions, bankruptcy filings or charge-offs by other credit companies. Accordingly, borrowers ma y have greater difficulty or be less likely to make their scheduled payments. The number of delinquencies and losses on the auto loans is expected to be higher than would be the case with lower risk borrowers. Due to the credit quality of these borrowers, the auto loans have been originated with higher annual percentage interest rates than more traditional lenders charge lower risk borrowers. Any increase in losses on the auto loans will result in accelerated prepayments on the Class A Notes. Any reinvestment risks associated with prepayment will be borne by the noteholders. Additionally, if [       ], as the security insurer, defaults under the policy, you will bear the risk of loss on the auto loans. You are urged to consider the credit quality of the auto loans when analyzing an investment in the notes.
A change in servicer may adversely affect collections on the auto loans.	[       ] believes that its credit loss and delinquency experience reflect in part its trained staff and collection procedures. If a servicer termination event occurs under the sale and servicing agreement and [       ] is removed as servicer, or if [       ] resigns or is terminated as servicer, the backup servicer has agreed to assume the obligations of successor servicer. Typically, a change in servicers results in a temporary disruption of servicing. There can be no assurance, however, that collections with respect to the auto loans will not be adversely affected by any change in servicer.
The rate at which the Class A Notes will amortize cannot be predicted.	Interest on the auto loans will be payable to the holders of the Class A Notes on each payment date. This amount will equal one-twelfth of the interest rate on the note balance of the class as of the close of business on the last day of the month immediately preceding the payment date. The auto loans have different APRs. All of the auto loans are prepayable at any time. The rate of prepayments on the auto loans may be influenced by a variety of economic, social and other factors. These factors include the fact that a consumer obligor generally may not sell or transfer the related financed vehicle securing an auto loan without the consent of [       ] unless the loan is repaid by the Obligor at the time of the sale or transfer. The rate of prepayment on the auto loans may also may be influenced by the structure of the loan, the nature of the consumer obligors and the related financed vehicles and servicing decisions. In addition, under some circumstances, [       ] is obligated to purchase auto loans as a result of breaches of particular representations and warranties, pursuant to the sale and servicing agreement and the receivables purchase agreement. Under some circumstances, the servicer is obligated to purchase auto loans pursuant to the sale and servicing agreement as a result of specified uncured breaches of covenants by it. The servicer may also purchase all the auto loans if the pool balance has declined to less than 10% of the original pool balance, subject to specified limitations in the sale and servicing agreement. [       ] is not aware of publicly available industry statistics that set forth principal prepayment experience for motor vehicle retail installment contracts similar to the auto loans. None of the issuing entity, the Depositor or [       ] make any representation as to the actual prepayment rates on the auto loans. [       ], however, believes that the actual rate of prepayments will result in the Class A Notes being repaid prior to their respective final scheduled payment date. The amounts paid to noteholders will include prepayments on the auto loans. The noteholders will bear all reinvestment risk resulting from the timing of payments on the notes.
Effect of litigation on [       ]’s financial condition.	Due to the consumer-oriented nature of [       ]’s industry and the application of particular laws and regulations, industry participants are regularly named as defendants in litigation alleging violations of federal and state laws and regulations and consumer law torts, including fraud. Many of these actions involve alleged violations of consumer protection laws. A significant judgment against [       ] or others within the industry could have a material adverse effect on [       ]. It could affect [       ]’s financial condition, results of operations and/or its ability to perform its obligations under the receivables purchase agreement, the sale and servicing agreement and the trust agreement.
Events of default under the indenture may result in an acceleration.	Upon the occurrence of an event of default under the indenture, so long as _[       ] shall not have defaulted and the default is not continuing, [       ] as indenture trustee, will continue to submit claims under the insurance policy as necessary in accordance with the terms of the insurance policy to enable the issuing entity to continue to make payments due with respect to the Class A Notes on each payment date. However, following the occurrence of an event of default, [       ] may, at its option, elect to cause the liquidation of the assets of the issuing entity, in whole or in part, and pay all or any portion of the outstanding amount of the Class A Notes, plus accrued interest on the Class A Notes.
[If the Issuing Entity does not use all of the money in the pre-funding account a mandatory redemption of a portion of the Class A Notes could result.	If the issuing entity has not used all of the money deposited in the pre-funding account to purchase additional auto loans by [       ], [       ], then the holders of each of the Class A-1 Notes and the Class A-2 Notes will receive a pro rata prepayment of principal in an amount equal to the unused amount or if the amount remaining in the pre-funding account is less than $[____________], only the Class A-1 Notes will be redeemed. Any reinvestment risk from the mandatory redemption of a portion of the Class A Notes from the unused amount will be borne by the holders of the Class A Notes.]
The concentration of the receivables in specific geographic areas may increase the risk of loss.	Economic conditions in the states where obligors reside may affect the delinquency, loan loss and repossession experience of the trust fund with respect to the receivables.  As of the cut-off date, the billing addresses of the obligors with respect to approximately [      ]%, [      ]%, and [      ]% of the principal amount of the receivables were located in [      ],  [      ]  and [      ], respectively.  Economic conditions in any state or region may decline over time and from time to time.  Because of the concentration of the obligors in certain states, any adverse economic conditions in those states may have a greater effect on the performance of the notes than if the concentration did not exist.
[Additional Applicable Risk Factors]	[____________________]

FORMATION OF THE ISSUING ENTITY

The Issuing Entity

[      ] Auto Owner Trust [    ]-[    ] is a [business] trust to be formed by the Depositor under the laws of the State of Delaware pursuant to a trust agreement between the Depositor and the Owner Trustee, dated as of [________] (the “Trust Agreement”) for the transactions described in the Prospectus.  [The Trust Agreement constitutes the “governing instrument” under the laws of the State of Delaware.]   On or about [       ] (the “Closing Date”), the Issuing Entity will issue Class A-1 [       ]% Asset Backed Notes (the “Class A-1 Notes”), Class A-2 [       ]% Asset Backed Notes (the “Class A-2 Notes”, and together with the Class A-1 Notes, the “Class A Notes”) and Class B [       ]% Asset Backed N otes (the “Class B Notes” and, together with the Class A Notes, the “Notes.”) The Class A-1 Notes will have an aggregate original principal amount of $[       ], the Class A-2 Notes will have an aggregate original principal amount of $[       ] and the Class B Notes will have an aggregate original principal amount of $[       ]. Only the Class A Notes are offered to you pursuant to this prospectus supplement. Any information in this prospectus supplement relating to the Class B Notes is presented solely to provide you with a better understanding of the Class A Notes. On the Closing Date, the Issuing Entity will also issue an Asset Backed Certificate (the “Certificate”) which represents the equity ownership in the issuing entity and is subordinate in right of payment to the Notes. The Certificate is not being offered by this prospectus supplement.

 After its formation, the Issuing Entity will not engage in any activity other than:

·

acquiring, holding and managing motor vehicle retail installment sales contracts secured by new and used automobiles, recreational vehicles, including motor homes, campers, motorcycles, all-terrain-vehicles and snowmobiles, vans trucks, buses and trailers financed by  these motor vehicle retail installment sales contracts (the “Receivables”) and the other assets of the Issuing Entity and proceeds therefrom,

·

issuing the Notes and the Certificate,

·

making payments on the Notes and

·

engaging in other activities that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith.

The foregoing restrictions are contained in the Trust Agreement.  [These restrictions cannot be amended without the consent of holders of Notes evidencing at least 51% of the voting rights].  For a description of other provisions relating to amending the Trust Agreement, see “[[_______________]]” in the base prospectus.

The assets of the Issuing Entity will consist of the Receivables and certain related assets.

The Issuing Entity’s fiscal year end is [______].

The proceeds from the initial sale of the Notes will be used by the Issuing Entity to purchase the Initial Receivables from the Depositor pursuant to the Sale and Servicing Agreement [and to fund deposits in the Pre-Funding Account and the Capitalized Interest Account].  The Servicer will service the Receivables pursuant to the Sale and Servicing Agreement and will be compensated for acting as Servicer. See “Description of the Transaction Documents—Servicing Compensation” in this prospectus supplement.

The Issuing Entity’s principal offices are located in Wilmington, Delaware, in care of [       ], as Owner Trustee, at the address listed below under “—The Owner Trustee.”

Capitalization of the Issuing Entity

The following table illustrates the capitalization of the Issuing Entity as of the [Initial] Cut-off Date, as if the issuance and sale of the Notes had taken place on such date:

Class A-1 Notes	$[      ]
Class A-2 Notes	$[      ]
Class B Notes	$[      ]
Total	$[      ]

The Owner Trustee

[       ], the Owner Trustee (the “Owner Trustee”) under the Trust Agreement dated as of [       ], as amended as of [       ] among the Sponsor, the Depositor and the Owner Trustee (the “Trust Agreement”) is a [       ] and its principal offices are located at [       ]. The Owner Trustee will perform limited administrative functions under the Trust Agreement. The Owner Trustee’s liability in connection with the issuance and sale of the Notes is limited solely to the express obligations of the Owner Trustee set forth in the Trust Agreement and the Sale and Servicing Agreement.

[Provide Reg AB Item 1109(b) compliant description of the extent of the Owner Trustee’s prior experience serving as a trustee for asset-backed securities transactions involving asset pools of retail automobile receivables.]

[Provide Reg AB Item 1109(c) compliant description of the Owner Trustee’s duties and responsibilities regarding the asset-backed securities under the governing documents and under applicable law, and of any actions required by the Owner Trustee, including whether notices are required to investors, rating agencies or other third parties, upon an event of default, potential event of default (and how defined) or other breach of a transaction covenant and any required percentage of a class or classes of asset-backed securities that is needed to require the Owner Trustee to take action.]

[Provide Reg AB Item 1109(d) compliant description of any limitations on the Owner Trustee’s liability under the transaction agreements regarding the asset-backed securities transaction.]

[Provide Reg AB Item 1109(e) compliant description of any indemnification provisions that entitle the Owner Trustee to be indemnified from the cash flow that otherwise would be used to pay the asset-backed securities.]

[Provide Reg AB Item 1109(f) compliant description of any contractual provisions or understandings regarding the Owner Trustee’s removal, replacement or resignation, as well as how the expenses associated with changing from one owner trustee to another owner trustee will be paid.]

The Indenture Trustee

 [          ], a [national banking association], will be the Indenture Trustee under the Indenture dated as of [________] among the Issuing Entity and the Indenture Trustee (the “Indenture”)..  The Depositor maintains normal commercial banking relations with the Indenture Trustee.

[Provide Reg AB Item 1109(b) compliant description of the extent of the Indenture Trustee’s prior experience serving as a trustee for asset-backed securities transactions involving asset pools of retail automobile receivables.]

[Provide Reg AB Item 1109(c) compliant description of the Indenture Trustee’s duties and responsibilities regarding the asset-backed securities under the governing documents and under applicable law, and of any actions required by the Indenture Trustee, including whether notices are required to investors, rating agencies or other third parties, upon an event of default, potential event of default (and how defined) or other breach of a transaction covenant and any required percentage of a class or classes of asset-backed securities that is needed to require the Indenture Trustee to take action.]

[Provide Reg AB Item 1109(d) compliant description of any limitations on the Indenture Trustee’s liability under the transaction agreements regarding the asset-backed securities transaction.]

[Provide Reg AB Item 1109(e) compliant description of any indemnification provisions that entitle the Indenture Trustee to be indemnified from the cash flow that otherwise would be used to pay the asset-backed securities.]

[Provide Reg AB Item 1109(f) compliant description of any contractual provisions or understandings regarding the Indenture Trustee’s removal, replacement or resignation, as well as how the expenses associated with changing from one Indenture trustee to another Indenture trustee will be paid.]

THE TRUST PROPERTY

The Notes will be collateralized by the Trust Property. Each Note represents a limited obligation of the Issuing Entity secured by the Trust Property.  On the Closing Date, the Depositor will buy the Receivables from the Sponsor and the Depositor will sell the Receivables to the Issuing Entity.  The Servicer will, directly or through subservicers, service the Receivables.  The Trust Property also includes:

·

[non-prime] motor vehicle retail installment sale contracts (the “[Initial] Receivables”) secured by new and used automobiles and light-duty trucks (the “[Initial] Financed Vehicles”);

·

monies due or received under the Initial Receivables [(a)] with respect to the [Initial] Receivables, after [       ] (the “[Initial] Cutoff Date”), [or (b) with respect to the Subsequent Receivables after the related cutoff date (each a “Subsequent Cutoff Date”);]

·

amounts as from time to time may be held in one or more separate trust accounts established and maintained by the Indenture Trustee, including the Collection Account, [the Pre-Funding Account and the Capitalized Interest Account], and the proceeds of these accounts, as described below (see “Description of the Transaction Documents—Accounts”);

·

security interests in the Financed Vehicles granted by the obligors (the “Obligors”) pursuant to the Receivables and any accessions;

·

the interest of the Sponsor in any proceeds from claims on any credit life, credit disability, and physical damage insurance policies or other insurance policies covering the Financed Vehicles or Obligors;

·

specific rights under the Sale and Servicing Agreement and the Receivables Purchase Agreement;

·

amounts payable to the Sponsor under all Dealer Recourse obligations;

·

all items contained in the related receivable files and any and all other documents that the Sponsor keeps on file in accordance with its customary procedures relating to the Receivables;

·

property, including the right to receive future Liquidation Proceeds, that secures any of the Receivables and that has been acquired pursuant to the liquidation of any Receivable; and

·

any and all payments on and proceeds of the foregoing.

[Additional [non-prime] motor vehicle retail installment sale contracts (the “Subsequent Receivables”) secured by new and used automobiles and light-duty trucks (the “Subsequent Financed Vehicles”) and related property are intended to be purchased by the Issuing Entity from the Sponsor from time to time on or before [       ], from funds on deposit in the Pre-Funding Account. The Subsequent Receivables will be purchased by the Depositor from the Sponsor pursuant to one or more subsequent purchase agreements (each, a “Subsequent Purchase Agreement”) between the Depositor and the Sponsor, and from the Depositor by the Issuing Entity pursuant to one or more subsequent transfer agreements. The purchase by the Issuing Entity of the Initial Receivables and the Subsequent Receivables are in this prospectus supplement referred to as the “Receivables,” and the Initial Financed Vehicl es and the Subsequent Financed Vehicles are in this prospectus supplement referred to as the “Financed Vehicles.”]

Pursuant to the dealer agreement between the Dealer and the Sponsor, a Dealer generally is obligated to pay the Sponsor for the unpaid balance of those Receivables which do not meet limited representations made by the Dealers (these obligations referred to in this prospectus supplement as “Dealer Recourse”). These representations and warranties relate primarily to the origination of the contracts and the perfection of the security interests in the related Financed Vehicles, and do not typically relate to the creditworthiness of the related Obligors or the collectability of the relevant contracts. Although the Dealer Agreements with respect to the Receivables will not be assigned to the Issuing Entity or Indenture Trustee, the Receivables Purchase Agreement and the Sale and Servicing Agreement will require the Sponsor to cause the amount of any recovery in respect to any Receivable pursuant to any Dealer Recourse to be deposited in the Collection Account in satisfaction of the Sponsor’s obligations under the Sale and Servicing Agreement. The sales by the Dealers of installment sale contracts to the Sponsor do not generally provide for recourse against the Dealers for unpaid amounts in the event of a default by an Obligor under the installment sales contract, other than in connection with the breach of the foregoing representations and warranties. There can be no assurance that the Sponsor will pursue all claims under the Dealer Agreements nor that the Sponsor will prevail if any claim is made.

The Receivables were generally originated by Dealers in accordance with the Sponsor’s requirements under agreements with Dealers for assignment to the Sponsor and were so assigned. All the [Initial] Receivables will be sold and assigned by the Sponsor to the Depositor pursuant to the Receivables Purchase Agreement and by the Depositor to the Issuing Entity pursuant to the Sale and Servicing Agreement on or prior to the Closing Date. [The Subsequent Receivables will be sold and assigned on one or more future dates occurring no later than [       ] (each, a “Subsequent Transfer Date”).] The Indenture Trustee, as custodian, will hold the original installment sales contract or promissory note as well as copies of documents and instruments relating to each Receivable (the “Receivables File”).

Pursuant to the Indenture, the Issuing Entity will grant a security interest in the Trust Property in favor of the Indenture Trustee on behalf of the Noteholders and for the benefit of the [       ] (the “Insurer”) in support of the obligations owing to it under the Insurance and Indemnity Agreement, dated as of [       ], between the Sponsor, the Issuing Entity, the Certificateholder and the Insurer. Any proceeds of the security interest in the Trust Property would be distributed according to the Indenture as described under “The Notes—Priority of Distribution Amounts.” The Insurer would be entitled to the distributions only after payment of amounts owing to, among others, Noteholders.

THE RECEIVABLES POOL

Pursuant to the Receivables Purchase Agreement, the Sponsor will sell and assign to the Depositor all of its right, title and interest in and to the Receivables and the other Trust Property, and the Depositor, pursuant to the Sale and Servicing Agreement, will sell and assign to the Issuing Entity all of its right, title and interest in and to the Receivables and any other Trust Property. The Issuing Entity will then pledge all of its right, title and interest in and to the Receivables to the Indenture Trustee for the benefit of the Noteholders and the Insurer pursuant to the Indenture. The Receivables consist of non-prime motor vehicle retail installment sales contracts. The Receivables were purchased by the Sponsor in the ordinary course of its business pursuant to its finance programs and underwriting standards. As detailed in this prospectus supplement, credit guidelines may be less stringent than those applied in the origination of other au tomobile loans by other lenders. See “The Originators.”

No selection procedures adverse to the Noteholders [or the Insurer] were utilized in selecting the [Initial] Receivables sold and assigned to the Depositor and then sold and assigned to the Issuing entity. The Receivables existing as of the [Initial] Cutoff Date were selected from the Sponsor’s portfolio according to several criteria. Among the criteria, each Receivable:

(1)

arises from the delivery and acceptance of a Financed Vehicle and which delivery and acceptance has been fully performed by the Obligor and the Dealer party to the transaction,

(2)

arises from the normal course of the Dealer’s business,

(3)

is not in default,

(4)

the Obligor of which is a natural person residing in any state or the District of Columbia,

(5)

the Obligor of which is not a government or a governmental subdivision or agency,

(6)

met the Sponsor’s underwriting criteria at the time of purchase,

(7)

is denominated and payable in Dollars in the United States,

(8)

is in full force and effect and constitutes the legal, valid and binding obligation of the Obligor in accordance with its terms,

(9)

is not subject to any dispute, litigation, counterclaim or defense, or any offset or right of offset at the time of purchase by the Sponsor, any exercisable right of rescission,

(10)

is not more than [       ] days past due,

(11)

has an original term to scheduled maturity of not less than [       ] or more than [____] months,

(12)

has a remaining term to scheduled maturity of not less than [       ] months or greater than [____] months,

(13)

provides for equal monthly payments which will cause the Receivable to fully amortize [       ] during its term,

(14)

has a remaining principal balance of not less than $[       ] or more than $[       ],

(15)

has an APR of not less than [       ]% and

(16)

the model year of the related Financed Vehicle is not earlier than [       ].

As of the Cut-off Date, no Obligor on any Receivable was noted in the related records of the Servicer as being the subject of any pending bankruptcy or insolvency proceeding.  The latest scheduled maturity of any Receivable is not later than [      ].  No selection procedures believed by the Depositor to be adverse to the Noteholders were used in selecting the Receivables.

The Depositor considers an account past due if any portion of the payment due on a due date is not received by the succeeding due date for that account.

Payments on the Receivables

All of the Receivables provide for the payment by the related Obligor of a specific total amount of payments, payable in substantially equal monthly installments on each scheduled payment date, which total represents the amount financed plus interest charges on the amount financed for the term of the Receivable. Each Receivable provides for repayment of the Amount Financed by an Obligor according to:

·

the Rule of 78’s (a “Rule of 78’s Receivables”),

·

the actuarial method (an “Actuarial Receivable” and together with Rule of 78’s Receivables, the “Precomputed Receivables”) or

·

the simple interest method (a “Simple Interest Receivable”).

Under a Rule of 78’s Receivable, the rate at which the amount of finance charges is earned and, correspondingly, the amount of each scheduled monthly payment allocated to reduction of the outstanding principal balance of the related Receivable are calculated in accordance with the “Rule of 78’s”. Under the Rule of 78’s, the portion of a payment allocable to interest earned during that month is determined by multiplying the total amount of interest payable over the term of the Receivable by a fraction, the denominator of which is equal to the sum of a series of numbers beginning with one and ending with the number of scheduled monthly payments due under the related Receivable, and the numerator of which is the number of payments remaining under the Receivable before giving effect to the payment to which the fraction is being applied. The difference between the amount of the scheduled monthly payment mad e by the Obligor and the amount of earned interest calculated for the month is applied to principal reduction.

An Actuarial Receivable provides for amortization of the loan over a series of fixed level monthly installments. Each scheduled monthly payment is deemed to consist of an amount of interest equal to one-twelfth of the stated APR of the Receivable multiplied by the outstanding principal balance of the Receivable and an amount of principal equal to the remainder of the scheduled monthly payment.

All payments received by the Servicer on or in respect of Precomputed Receivables, including the final scheduled payment, will be allocated pursuant to the Sale and Servicing Agreement on an actuarial basis. No adjustment will be made in the event of early or late payments, although in the latter case, the Obligor may be subject to a late charge.

“Simple Interest Receivables” provide for the amortization of the amount financed under the Receivable over a series of fixed level monthly payments. However, unlike the monthly payment under Rule of 78s Receivables, each monthly payment consists of an installment of interest which is calculated on the basis of the outstanding principal balance of the receivable multiplied by the stated APR and further multiplied by the period elapsed, as a fraction of a calendar year, since the preceding payment of interest was made. As payments are received under a Simple Interest Receivable, the amount received is applied first to interest accrued to the date immediately preceding the date of payment and the balance is applied to reduce the unpaid principal balance. Accordingly, if an Obligor pays a fixed monthly installment before its scheduled due date, the portion of the payment allocable to interest for the period since the pre ceding payment was made will be less than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly greater. Conversely, if an Obligor pays a fixed monthly installment after its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be greater than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly less. In either case, the Obligor pays a fixed monthly installment until the final scheduled payment date, at which time the amount of the final installment is increased or decreased as necessary to repay the then outstanding principal balance.

In the event of a prepayment in full, voluntarily or by acceleration, of a Precomputed Receivable, a “rebate” in the loan accounting records of the Servicer may be made to the Obligor of that portion of the total amount of payments under the relevant Receivable allocable to “unearned” finance charges. In the event of the prepayment in full, voluntarily or by acceleration, of a Simple Interest Receivable, a “rebate” will not be made to the Obligor, but the Obligor will be required to pay interest only to the date immediately preceding the date of prepayment. The amount of a rebate under a Precomputed Receivable generally will be less than or equal to the remaining scheduled payments of interest that would have been due under a Simple Interest Receivable for which all remaining payments were made on schedule.

The amount of a rebate under a Rule of 78’s Receivable calculated in accordance with the Rule of 78’s generally will be less than the amount of a rebate on an Actuarial Receivable calculated in accordance with the actuarial method. Distributions to Noteholders will not be affected by Rule of 78’s rebates under the Rule of 78’s Receivables because pursuant to the Sale and Servicing Agreements distributions will be determined using the actuarial method. Amounts received upon prepayment in full of a Rule of 78’s Receivable in excess of the then outstanding principal balance of the Receivable and accrued interest on the then outstanding principal balance of the Receivable, calculated pursuant to the actuarial method, will not be passed through to Noteholders.

Purchase or Replacement Obligations

Pursuant to the Receivables Purchase Agreement and the Sale and Servicing Agreement, the Sponsor will be obligated to repurchase or replace, subject to limits on replacement set forth in the Sale and Servicing Agreement, any Receivable sold and assigned to the Issuing Entity as to which a breach has occurred as to particular representations or warranties made by the Sponsor with respect to the Receivable, if the breach has not been cured by the last day of the first full calendar month following the discovery by or notice to the Sponsor of the breach, if the breach will materially and adversely affect the interests of the Noteholders, the Insurer or the Issuing Entity in the relevant Receivable. The Indenture Trustee will also have rights to enforce the obligations of the Sponsor under the Receivables Purchase Agreement. See “Description of the Transaction Documents—Sale and Assignment of Receivables” and “T rust Property” in this prospectus supplement.

The Sale and Servicing Agreement also provides that if the Servicer breaches certain of its servicing obligations under the Sale and Servicing Agreement, including but not limited to its obligation to maintain perfection of the first priority security interest of the Sponsor created by each Receivable in the related Financed Vehicle, or other covenants with regard to the Servicer, in each case only in a manner that materially and adversely affects the interests of the Noteholders, the Insurer or the Issuing Entity in any Receivable, the Servicer will purchase or replace the relevant Receivable from the Issuing Entity, unless the breach has been cured by the last day of the first full calendar month following the discovery by or notice to the Servicer of the breach.

Composition of the Pool of Initial Receivables

The tables below set forth information regarding the composition and characteristics of the pool of Receivables as of the [Initial] Cutoff Date. It is expected that the composition and characteristics of the Receivables on the Closing Date will be similar to the information set forth below. However, some Receivables may be excluded on the Closing Date as of a result of particular administrative considerations. The Sponsor does not believe that the characteristics of the Receivables included in the Issuing Entity on the Closing Date in the aggregate will differ materially from the information set forth in this prospectus supplement.

Composition of the Receivables as of the [Initial] Cut-off Date
	New Financed Vehicles	Used Financed Vehicles	Total
Aggregate Principal Balance	$[__________]	$[__________]	$[__________]
Number of Receivables	[__________]	[__________]	[__________]
Average Principal Balance	$[__________]	$[__________]	$[__________]
Average Original Balance	$[__________]	$[__________]	$[__________]
Weighted Average Contract Rate	[_______]%	[_______]%	[_______]%
Contract Rate (Range)	[___]% - [___]%	[___]% - [___]%	[___]% - [___]%
Weighted Average Original Term (months)	[_______]	[_______]	[_______]
Original Term (Range) (months)	[____] to [_____]	[____] to [_____]	[____] to [_____]
Weighted Average Remaining Term (months)	[_______]	[_______]	[_______]
Remaining Term (Range) (months)	[____] to [_____]	[____] to [_____]	[____] to [_____]
Weighted Average FICO score	[_______]	[_______]	[_______]
FICO score (Range)	[____] to [_____]	[____] to [_____]	[____] to [_____]

Distribution by Remaining Term of the Receivables as of the [Initial] Cut-off Date
Remaining Term (Range)	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
Less than [_____] months	[____________]	$[__________]	[___________]%
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
Total		$	100.00%

Distribution by Annual Percentage Rate of the Receivables as of the [Initial] Cut-off Date
Annual % Rate Range	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
[_____]% to below	[____________]	$	%
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[____]% and above	[____________]	[____________]	[____________]
Total		$	100.00%

Geographic Distribution of the Receivables as of the [Initial] Cut-off Date
State1	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
[      ]	[____________]	$	%
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
Others2
Total		$	100.00%

____________________

1.

Based on billing addresses of the Obligors as of the Cut-off Date, which may differ from the state of origination of the Receivable.

2.

Includes [    ] other states and [    ] none of which have a concentration of Receivables in excess of [    ]% of the aggregate principal balance.

Distribution by Remaining Principal Balance of the Receivables as of the [Initial] Cut-off  Date
Remaining Principal Balance (Range)	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
$ 2,500 to $ 4,999	[____________]	$	%
$ 5,000 to $ 7,499	[____________]	[____________]	[____________]
$ 7,500 to $ 9,999	[____________]	[____________]	[____________]
$10,000 to $12,499	[____________]	[____________]	[____________]
$12,500 to $14,999	[____________]	[____________]	[____________]
$15,000 to $17,499	[____________]	[____________]	[____________]
$17,500 to $19,999	[____________]	[____________]	[____________]
$20,000 to $22,499	[____________]	[____________]	[____________]
$22,500 to $24,999	[____________]	[____________]	[____________]
$25,000 to $27,499	[____________]	[____________]	[____________]
$27,500 to $29,999	[____________]	[____________]	[____________]
$30,000 to $32,499	[____________]	[____________]	[____________]
$32,500 to $34,999	[____________]	[____________]	[____________]
$35,000 to $37,499	[____________]	[____________]	[____________]
$37,500 to $39,999	[____________]	[____________]	[____________]
$40,000 to $41,499	[____________]	[____________]	[____________]
$42,500 to $44,999	[____________]	[____________]	[____________]
$45,000 to $47,499	[____________]	[____________]	[____________]
$47,500 to $49,999	[____________]	[____________]	[____________]
$50,000 to $52,499	[____________]	[____________]	[____________]
$52,500 to $54,999	[____________]	[____________]	[____________]
Total		$	100.00%

Distribution by FICO Score of the Receivables as of the [Initial] Cut-off Date
Annual % Rate Range	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
[______] to [______]	[____________]	$	%
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] and above	[____________]	[____________]	[____________]
Total		$	100.00%

Receivable Delinquencies and Losses

For information regarding delinquencies and losses on the Receivables, see the tables below.  A Receivable is considered to be delinquent when a payment due on any due date remains unpaid as of the close of business on the last business day immediately prior to the next monthly due date.  The determination as to whether a loan falls into this category is made as of the close of business on the last business day of each month.

30 -  59 Days (times):	Number of Receivables	% by Receivable Count	Principal Balance Outstanding as of the Cutoff Date	% of Aggregate Principal Balance Outstanding as of the Cutoff Date
0	[________]	[______]%	[_______._]	[__.__]
1	[________]	[______]%	[_______._]	[__.__]
2	[________]	[______]%	[_______._]	[__.__]
Total	[________]	100.00%	[_______._]	100.00

60 -  89 Days (times):	Number of Receivables	% by Receivable Count	Principal Balance Outstanding as of the Cutoff Date	% of Aggregate Principal Balance Outstanding as of the Cutoff Date
0	[________]	[______]	[_______._]	[__.__]
1	[________]	[______]	[_______._]	[__.__]
2	[________]	[______]	[_______._]	[__.__]
Total	[________]	100.00	[_______._]	100.00

[No Receivable has been delinquent more than 90 days since origination.]

STATIC POOL INFORMATION

Static pool information material to this offering may be found at [website address].

Information provided through the Internet address above will not be deemed to be a part of this prospectus or the registration statement for the notes offered hereby if it relates to any prior notes pool or vintage formed before January 1, 2006, or with respect to the mortgage pool (if applicable) any period before January 1, 2006.

THE ORIGINATORS

General

[____], [____] and  [____] are the originators of the receivables with respect to approximately [___]%, [___]% and [___]%, respectively, of the receivables by aggregate principal balance as of the Cut-off Date, along with various other originators, none of which originated more than 10% of the receivables by aggregate principal balance as of the Cut-off Date (each, an “Originator”).

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

THE SERVICER

[____________], a [describe form of organization of the servicer], (the “Servicer”) will initially service the Receivables pursuant to a sale and servicing agreement, to be dated as of [      ] (the “Sale and Servicing Agreement”), among the Sponsor, the Depositor, the Issuing Entity and the Servicer.  

The Servicer will perform the functions of a third-party servicer of automobile loans as an agent for their beneficial owner.  [These servicer functions will include:

·

collecting and posting all payments;

·

responding to obligor inquiries regarding the automobile loans;

·

investigating delinquencies;

·

reporting tax information to obligors;

·

paying vehicle disposition costs with respect to defaulted accounts;

·

monitoring the collateral;

·

accounting for collections;

·

furnishing monthly and annual statements to the Issuing Entity with respect to distributions; and

·

generating federal income tax information. ]

 [Regulation AB Item 1108 compliant description of the Servicer.]

Delinquency Experience (Dollars in Thousands)
	At December 31,
	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]
	Number of Loans	Dollars	Percent	Number of Loans	Dollars	Percent	Number of Loans	Dollars	Percent
Principal Amount Outstanding1
Delinquencies2
30-59 Days
60-89 Days
90-119 Days
over 120 days
Total Delinquencies as a  Percentage of the Total Amount Outstanding

________________________

1.

Principal Amount Outstanding is the aggregate remaining principal balance of all Receivables serviced, net of unearned interest.

2.

The period of delinquency is based on the number of days scheduled payments are contractually past due.  Includes repossessions on hand which have not been charged-off.  A receivable is 30 days contractually past due if a scheduled payment has not been received by the subsequent calendar month’s scheduled payment date.

THE BACKUP SERVICER

If a Servicer Termination Event occurs and remains unremedied and the Sponsor is terminated as Servicer or resigns as Servicer, in each case in accordance with the Sale and Servicing Agreement, [       ], a [       ], will serve as Backup Servicer.

The Backup Servicer will receive a fee on each Payment Date equal to one-twelfth the product of [       ] basis points and the then outstanding Note Balance as compensation for, among other things, (1) standing by to act as successor Servicer and (2) confirming particular calculations made by the Servicer on the monthly statement to Noteholders, including but not limited to (a) interest and principal payments due to the Noteholders and (b) some of the Receivables performance ratios. In addition, following the resignation or removal of the Servicer, the Backup Servicer will be reimbursed for particular costs and expenses associated with the transition of the Backup Servicer to Servicer (the “Servicer Transition Expenses”).

 [Regulation AB Item 1108 compliant description of the Backup Servicer.]

MATURITY AND PREPAYMENT CONSIDERATIONS

All the Receivables are prepayable at any time. The rate of prepayments on the Receivables may be influenced by a variety of economic, social and other factors, including the fact that an Obligor generally may not sell or transfer the Financed Vehicle securing a Receivable without the consent of the Sponsor unless the loan is repaid by the Obligor at the time of the sale or transfer.  For this purpose the term “prepayments” includes prepayments in full, or in part, including, without limitation, some partial prepayments related to refunds of extended service contract costs and unearned insurance premiums, liquidations due to default, as well as receipts of proceeds from physical damage, credit life and credit accident and health insurance policies and other Receivables repurchased for administrative reasons.  The rate of prepayment on the Receivables may also be influenced by the structure of the loan, the n ature of the Obligors and the Financed Vehicles and servicing decisions as discussed above. In addition, under some circumstances, the Sponsor is obligated to repurchase or replace Receivables as a result of breaches of representations and warranties pursuant to the Sale and Servicing Agreement and the Receivables Purchase Agreement, and under some circumstances, the Servicer is obligated to purchase Receivables pursuant to the Sale and Servicing Agreement as a result of breaches of specific covenants. Subject to particular conditions, the Servicer has the option to purchase the Receivables when the aggregate principal balance of the Receivables is 10% or less of the Original Pool Balance.

If prepayments are received on the Receivables, the actual weighted average life of the Receivables may be shorter than the scheduled weighted average life, i.e., the weighted average life assuming that payments will be made as scheduled and that no prepayments will be made. “Weighted Average Life” means the average amount of time during which each dollar of principal on a Receivable is outstanding.

Any reinvestment risks resulting from a faster or slower incidence of prepayment of Receivables will be borne by the Noteholders. See also “The Notes—Optional Purchase of Receivables” regarding the Servicer’s right to purchase the Receivables and the other Trust Property on any Determination Date as of which the Aggregate Principal Balance has declined to less than 10% of the Original Pool Balance.

[Prepayments on automotive receivables can be measured relative to a prepayment standard or model.  The model used in this Prospectus, the Absolute Prepayment Model (“ABS”), represents an assumed rate of prepayment each month relative to the original number of receivables in a pool of receivables.   ABS further assumes that all the receivables are the same size and amortize at the same rate and that each receivable in each month of its life will either be paid as scheduled or be prepaid in full.   For example, in a pool of receivables originally containing 10,000 receivables, a 1% ABS rate means that 100 receivables prepay each month.   ABS does not purport to be an historical description of prepayment experience or a prediction of the anticipated rate of prepayment of any pool of receivables, including the Receivables.

The table captioned “Percent of Initial Note Principal Balance at Various ABS Percentages” (the “ABS Table”) has been prepared on the basis of the characteristics of the Receivables.   The ABS Table assumes that

·

the Issuing Entity includes two pools of Receivables with the characteristics set forth in the following table;

·

the Receivables prepay in full at the specified constant percentage of ABS monthly, with no defaults, losses or repurchases;

·

each scheduled monthly payment on the Receivables is made on the last day of each month and each month has 30 days;

·

the initial principal amount of each of the Class A-1 Notes and Class A-2 Notes are as set forth on the cover page of this prospectus supplement;

·

interest accrues during each Interest Period at the following assuming coupon rates; Class A-1 Notes, [______]% and Class A-2 Notes, [______]%;

·

payments on the Notes are made on each Distribution Date (and each such date is assumed to be the [   ] day of each applicable month);

·

the Class A Notes are purchased on [       ];

·

the scheduled monthly payment for each Receivable has been calculated on the basis of the assumed characteristics in the following table so that each Receivable will amortize in amounts sufficient to repay the Principal Balance of the Receivable by its indicated remaining term to maturity;

·

the first due date for each Receivable is the last day of the month of the assumed cutoff date for each Receivable as set forth in the following table;

·

[the entire Pre-Funded Amount is used to purchase Subsequent Receivables;]

·

the Servicer does exercise its option to purchase the Receivables; and

·

the difference between the gross APR and the net APR is equal to the Servicer Fee, and the net APR is further reduced by the fees due to the Indenture Trustee, the Backup Servicer [and the Insurer].

Pool	Aggregate Principal Balance	Gross APR (%)	Assumed Cutoff Date	Original Term to Maturity (in Months)	Remaining Term to Scheduled Maturity (in Months)
1	$[______]	[       ]	[       ]	[       ]	[       ]
2	$[______]	[       ]	[       ]	[       ]	[       ]
Total	$[______]

The ABS Table sets forth the percent of the initial principal amount of the Notes that would be outstanding after each of the Distribution Dates shown and the corresponding weighted average lives thereof at various constant ABS percentages.

The actual characteristics and performance of the Receivables will differ from the assumptions used in constructing the ABS Table.   The assumptions used are hypothetical and have been provided only to give a general sense of how the principal cash flows might behave under varying prepayment scenarios.   For example, it is very unlikely that the Receivables will prepay at a constant level of ABS until maturity or that all of the Receivables will prepay at the same level of ABS or that the coupon rates on the Notes will remain constant.   Moreover, the diverse terms of Receivables could produce slower or faster principal distributions than indicated in the ABS Table at the various constant percentages of ABS specified, even if the original and remaining terms to maturity of the Receivables are as assumed.  Any difference between such assumptions and the actual characteristics and performance of the Receivables, including actual prepayment experience or losses, will affect the percentages of initial balances outstanding over time and the weighted average lives of the Notes.]

Percent of Initial Note Principal Balance at Various ABS Percentages(1)
	Class A-1 Notes Assumed ABS Percentage
Payment Dates	[   ]%	[   ]%	[   ]%	[   ]%
Closing Date	100	100	100	100
[                        ]
[                        ]
[                        ]
Weighted Average Life (years) (2)

_______________________

(1)The percentages in this table have been rounded to nearest whole number.

(2)The weighted average life of a note is determined by (1) multiplying the amount of each principal payment on a note by the number of years from the date of the Issuance of the note to the related Payment Date, (b) adding the results and (c) dividing the sum by the related initial principal amount of the note.

Percent of Initial Note Principal Balance at Various ABS Percentages(1)
	Class A-2 Notes Assumed ABS Percentage
Payment Dates	[   ]%	[   ]%	[   ]%	[   ]%
Closing Date	100	100	100	100
[                        ]
[                        ]
[                        ]
Weighted Average Life (years) (2)

_______________________

(1)The percentages in this table have been rounded to nearest whole number.

(2)The weighted average life of a note is determined by (a) multiplying the amount of each principal payment on a note by the number of years from the date of the Issuance of the note to the related Payment Date, (b) adding the results and (c) dividing the sum by the related initial principal amount of the note.

YIELD CONSIDERATIONS

Other than on the first Payment Date, on each Payment Date, interest on the Receivables will be passed through to the Noteholders in an amount equal to one-twelfth of the Interest Rate multiplied by the Note Balance of the applicable Class on the last day of the immediately preceding Collection Period. In the event of prepayments on Receivables, Noteholders will nonetheless be entitled to receive interest for the full month on the Notes. See also “The Receivables—Payments on the Receivables” in this prospectus supplement.

USE OF PROCEEDS

The Issuing Entity will use the net proceeds from the sale of the Notes to purchase Receivables from the Depositor [and to make the initial deposit into the Capitalized Interest Account and the Pre-Funding Account]. The Depositor will use the net proceeds paid to the Depositor by the Issuing Entity to purchase Receivables from the Sponsor, which in turn will use the proceeds to pay related expenses and repay specific warehouse loans and any additional proceeds will be added to the Sponsor’s general funds and used for its general corporate purposes.

DESCRIPTION OF THE NOTES

The Notes will be issued pursuant to the terms of the Indenture, substantially in the form filed as an exhibit to the Registration Statement.  The following information summarizes all material provisions of the Notes and the Indenture.  The following summary supplements the description of the general terms and provisions of the Notes of any given Series and the related Indenture set forth in the Prospectus, to which description reference is hereby made.

The Notes

The Class A Notes initially will be represented by notes registered in the name of Cede & Co., as the nominee of The Depository Trust Company (“DTC”), and will only be available in the form of book-entries on the records of DTC and participating members of DTC in denominations of $1,000. All references to “Holders” or “Noteholders” and to authorized denominations, when used with respect to the Notes, shall reflect the rights of Note Owners, and limitations of Note Owners, as they may be indirectly exercised through DTC and its participating members, except as otherwise specified in this prospectus supplement. See “Certain Information Regarding the Securities—Book-Entry Regulation” in the prospectus supplement and Annex I to the prospectus.

In general, the Class A-1 Noteholders will be entitled to receive, on each Payment Date, the Class A-1 Principal Payment Amount and the Class A-1 Interest Payment Amount and the Class A-2 Noteholders will be entitled to receive, on each Payment Date, the Class A-2 Principal Payment Amount and the Class A-2 Interest Payment Amount, subject to the priority of payments as described in “—Priority of Distribution Amounts.” Payments on the Notes will be made from the Note Distribution Account.

In general, the Class A-1 Noteholders will be entitled to receive, on each Payment Date, the Class A-1 Principal Payment Amount and the Class A-1 Interest Payment Amount and the Class A-2 Noteholders will be entitled to receive, on each Payment Date, the Class A-2 Principal Payment Amount and the Class A-2 Interest Payment Amount, subject to the priority of payments as described in “—Priority of Distribution Amounts.” Payments on the Notes will be made from the Note Distribution Account.

[Mandatory Redemption

The Class A Notes will be redeemed in part on the Mandatory Redemption Date in the event that any portion of the Pre-Funded Amount remains on deposit in the Pre-Funding Account at the end of the Funding Period. The aggregate principal amount of the Class A Notes to be redeemed will be an amount equal to the remaining Pre-Funded Amount on that date (the “Class A Mandatory Redemption Amount”). The Class A Mandatory Redemption Amount will be distributed pro rata to each of the Class A-1 Notes and the Class A-2 Notes, based on the current principal balance of each Class, provided, however, that if the amount remaining in the Pre-Funding Account is less than $[_____________], only the Class A-1 Notes will be redeemed.]

Optional Purchase of Receivables

As an administrative convenience, the Servicer may purchase all the Receivables and other Trust Property on any Payment Date if, as of the last day of the related Collection Period, the Aggregate Principal Balance has declined to less than 10% of [the sum of (1)] the Aggregate Principal Balance as of the [Initial] Cutoff Date [plus (2) the aggregate principal balances of the Subsequent Receivables added to the Issuing Entity as of their respective Cutoff Dates] (the “Original Pool Balance”). To exercise this option, the Servicer must pay the aggregate Purchase Amounts for the Receivables [and obtain the prior written consent of the Insurer, or if the redemption would result in a claim under the Policy or if the redemption would result in any amount owing to the Insurer remaining unpaid.] Upon exercising the option, the Servicer will succeed to all interests in and to the Trust Property. The purchase price paid by the Servicer will be d eposited into the Collection Account and distributed pursuant to “—Priority of Distribution Amounts” below. See “Certain Matters Regarding the Servicer—Termination” in the accompanying prospectus.

This purchase will cause a redemption of the Notes; provided, however, that the Servicer will provide the Indenture Trustee, the Backup Servicer, [the Insurer] and the Rating Agencies at least 10 days’ prior written notice of any redemption. The Indenture Trustee will give notice to each Noteholder at least five days prior to any redemption. The redemption price for each Note will be no less than the outstanding principal balance of the relevant Note on the date of redemption plus accrued and unpaid interest on the outstanding principal balance (the “Redemption Price”). The Servicer will deposit the Redemption Price into the Collection Account, and the Indenture Trustee will distribute the amounts so deposited in accordance with the “Priority of Distribution Amounts” below.

Distributions from the Issuing Entity

No later than 12:00 p.m. New York City time on each Determination Date, the Servicer will inform the Indenture Trustee of the amount of aggregate collections on the Receivables and the aggregate Purchase Amount of Receivables to be purchased by the Servicer with respect to the related Collection Period. The Servicer will determine prior to the Determination Date, the Class A-1 Interest Payment Amount, the Class A-1 Principal Payment Amount, the Class A-2 Interest Payment Amount, the Class A-2 Principal Payment Amount, the Payment Amount, the amounts, if any, required to be deposited in the Class A Reserve Account, the Class A Overcollateralization Amount and the Class A Target Overcollateralization Amount.

For purposes of this prospectus supplement, the following terms shall have the following meanings:

“Aggregate Principal Balance” means, with respect to the Closing Date, the Cutoff Date Principal Balance, and with respect to any Determination Date, the sum of the Principal Balances, computed as of the last day of the related Collection Period end date, for all Receivables, other than Liquidated Receivables and Purchased Receivables.

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

“Available Funds” means, with respect to any Determination Date, the sum of

(1)

the “Collected Funds” received by the Servicer during the related Collection Period,

(2)

all Purchase Amounts deposited in the Collection Account for the related Collection Period,

(3)

all income received from investments of funds in the Collection Account during the related Collection Period,

[(4)

the Monthly Capitalized Interest Amount with respect to the Payment Date,]

[(5)

the Insurer Optional Deposit, if any, and]

[(6)

any remaining Pre-Funded Amount applied to the mandatory redemption of Notes.]

“Certificateholder” means the holder of a Certificate

“Class” means a class of Notes.

“Class A Interest Carryover Shortfall” means, as of the close of business on any Payment Date, the sum of (1) the Class A-1 Interest Carryover Shortfall and (2) the Class A-2 Interest Carryover Shortfall.

“Class A Interest Payment Amount” means, with respect to any Payment Date, the sum of (1) the Class A-1 Interest Payment Amount and (2) the Class A-2 Interest Payment Amount.

[“Class A Mandatory Redemption Amount” means the amount, if any, remaining of the Pre-Funded Amount on the Mandatory Redemption Date.]

“Class A Overcollateralization Amount” means, with respect to any Payment Date, an amount equal to the excess, if any, of:

[(1)

the sum of,

(a)]

 the remaining Aggregate Principal Balance as of the last day of the related Collection Period [and

(b)

 all amounts, if any, in the Pre-Funding Account,] over

(2)

 the remaining Class A Note Balance, after giving effect to the amounts payable on the Payment Date pursuant to clauses (1) through (5) under “—Priority of Distribution Amounts” on the Payment Date.

“Class A Principal Payment Amount” means, with respect to any Payment Date, the sum of the Class A-1 Principal Payment Amount and the Class A-2 Principal Payment Amount.

“Class A Target Overcollateralization Amount” means, with respect to any Payment Date, an amount equal to the product of (1) [       ]%[, or any lesser percentage as the Insurer may decide in its sole discretion,] and (2) [the sum of (a)] the remaining Aggregate Principal Balance[, and (b) amounts, if any, in the Pre-Funded Account, each] determined as of the last day of the related Collection Period.

“Class A-1 Final Scheduled Payment Date” means [       ] or, if this day is not a Business Day, the next succeeding Business Day.

 “Class A-1 Interest Carryover Shortfall” means, as of the close of business on any Payment Date, the excess of (a) the Class A-1 Interest Payment Amount for the Payment Date and any outstanding Class A-1 Interest Carryover Shortfall from the immediately preceding Payment Date plus interest on this outstanding Class A-1 Interest Carryover Shortfall, to the extent permitted by law, at the Class A-1 Interest Rate from the preceding Payment Date through the current Payment Date, calculated on the basis of a 360-day year consisting of twelve 30-day months, over (b) the amount of interest that the Holders of the Class A-1 Notes actually received on the current Payment Date.

“Class A-1 Interest Payment Amount” means, with respect to any Payment Date, 30 days’ interest, calculated on the basis of a 360-day year consisting of twelve 30-day months or, in the case of the first Payment Date, the number of days (on a “30/360” basis) from and including [       ], to but excluding [       ], at the Class A-1 Interest Rate on the Class A-1 Note Balance as of the close of business on the last day of the related Collection Period.

[“Class A-1 Mandatory Redemption Amount” means, (1) with respect to the Mandatory Redemption Date on which the Class A Mandatory Redemption Amount is less than $100,000, the Class A Mandatory Redemption Amount, and (2) with respect to any Payment Date on which the Class A Mandatory Redemption Amount is greater than $[__________], the product of (A) the Class A Mandatory Redemption Amount and (B) a fraction, the numerator of which is the Class A-1 Note Balance as of the class of business on the date prior to the related Payment Date and the denominator of which is the Class A Note Balance as of the class of business on the date prior to the related Payment Date.]

“Class A-1 Principal Carryover Shortfall” means, as of the close of business on any Payment Date, the excess of (a) the Class A-1 Principal Payment Amount and any outstanding Class A-1 Principal Carryover Shortfall from the immediately preceding Payment Date, over (b) the amount of principal that the Holders of the Class A-1 Notes actually received on the current Payment Date.

“Class A-1 Principal Payment Amount” means:

(a)

with respect to any Payment Date other than the Class A-1 Final Scheduled Payment Date: the lesser of,

(1)

the Class A-1 Note Balance immediately prior to the Payment Date and

[(2)

the sum of

(A)]

the Principal Payment Amount [and

(B)

the Class A-1 Mandatory Redemption Amount] and

(b)

with respect to the Class A-1 Final Scheduled Payment Date, the then outstanding Class A-1 Note Balance.

“Class A-2 Final Scheduled Payment Date” means [       ], or, if this day is not a Business Day, the next succeeding Business Day.

“Class A-2 Interest Payment Amount” means, with respect to any Payment Date, 30 days’ interest, calculated on the basis of a 360-day year consisting of twelve 30-day months or, in the case of the first Payment Date, the number of days (on a “30/360” basis) from and including [       ], to but excluding [       ], at the Class A-2 Interest Rate on the Class A-2 Note Balance as of the close of business on the last day of the related Collection Period.

 “Class A-2 Interest Carryover Shortfall” means, as of the close of business on any Payment Date, the excess of (a) the Class A-2 Interest Payment Amount for the Payment Date and any outstanding Class A-2 Interest Carryover Shortfall from the immediately preceding Payment Date plus interest on the outstanding Class A-2 Interest Carryover Shortfall, to the extent permitted by law, at the Class A-2 Interest Rate from the preceding Payment Date through the current Payment Date, calculated on the basis of a 360-day year consisting of twelve 30-day months, over (b) the amount of interest that the Holders of the Class A-2 Notes actually received on the current Payment Date.

[“Class A-2 Mandatory Redemption Amount” means, with respect to the Mandatory Redemption Payment Date, the positive difference, if any, between the Class A Mandatory Redemption Amount and the Class A-1 Mandatory Redemption Amount.]

“Class A-2 Principal Carryover Shortfall” means, as of the close of business on any Payment Date, the excess of (a) the Class A-2 Principal Payment Amount and any outstanding Class A-2 Principal Carryover Shortfall from the immediately preceding Payment Date, over (b) the amount of principal that the Holders of the Class A-2 Notes actually received on the current Payment Date.

“Class A-2 Principal Payment Amount” means:

(a)

with respect to any Payment Date other than the Class A-2 Final Scheduled Payment Date: the lesser of,

(1)

the Class A-2 Note Balance immediately prior to the Payment Date, and

[(2)

the difference between

(A)]

[the sum of] the Principal Payment Amount [and the Class A-2 Mandatory Redemption Amount] and

(B)

the Class A-1 Principal Payment Amount and

(b)

with respect to the Class A-2 Final Scheduled Payment Date, the then outstanding Class A-2 Note Balance.

“Class B Interest Carryover Shortfall” means, as of the close of business on any Payment Date, the excess of (a) the Class B Interest Payment Amount for the Payment Date and any outstanding Class B Interest Carryover Shortfall from the immediately preceding Payment Date plus interest on the outstanding Class B Interest Carryover Shortfall, to the extent permitted by law, at the Class B Interest Rate from the preceding Payment Date through the current Payment Date, calculated on the basis of a 360-day year consisting of twelve 30-day months, over (b) the amount of interest that the Holders of the Class B Notes actually received on the current Payment Date.

“Class B Interest Payment Amount” means, with respect to any Payment Date, 30 days’ interest, calculated on the basis of a 360-day year consisting of twelve 30-day months or, in the case of the first Payment Date, the number of days (on a “30/360” basis) from and including [       ] to but excluding [       ], at the Class B Interest Rate on the Class B Note Balance as of the close of business on the last day of the related Collection Period.

“Class B Note Balance” means an amount equal to $[       ] on the Closing Date and after, an amount equal to the initial Class B Note Balance reduced by all amounts distributed to the Class B Noteholders that are allocable to principal.

“Class B Principal Payment Amount” means:

(a)

with respect to any Payment Date other than the Class B Final Scheduled Payment Date: the lesser of,

(x)

the Class B Note Balance immediately prior to the Payment Date, and

(y)

amounts remaining from the sum of,

(A)

Available Funds and

(B)

amounts available from the Class A Reserve Account in accordance with the terms of the Sale and Servicing Agreement, after application of priorities First through Ninth under “—Priority of Distribution Amounts,” and

(b)

with respect to the Class B Final Scheduled Payment Date, the then outstanding Class B Note Balance.

“Collected Funds” means with respect to any Determination Date, the amount of funds in the Collection Account representing collections on the Receivables received by the Servicer during the related Collection Period, including all Liquidation Proceeds collected during the related Collection Period, but excluding any Purchase Amounts, and all amounts paid by Dealers under Dealer Agreements or Dealer Assignments with respect to the Receivables during the related Collection Period.

“Collection Period” means with respect to any Payment Date or Determination Date, the calendar month preceding the month in which the Payment Date or Determination Date occurs.

“Contract Scheduled Payment” means, for any Collection Period for any Receivable, the amount indicated in the Receivable as required to be paid by the Obligor in the relevant Collection Period, without giving effect to deferments of payments granted to Obligors by the Servicer pursuant to the Sale and Servicing Agreement or any rescheduling of payments in an insolvency or similar proceeding.

“Controlling Party” means [the Insurer, so long as an Insurer Default shall not have occurred and be continuing, otherwise,] the Indenture Trustee for the benefit of the Noteholders; provided, however, that the Owner Trustee for the benefit of the Certificateholder will be the Controlling Party after all unpaid principal and interest on the Notes shall have been paid in full and all amounts due to the Insurer have been paid and the Policy has expired in accordance with its terms.

“Corporate Trust Office” means the office of the Indenture Trustee at which its corporate trust business shall be principally administered, which office as of the date of this prospectus supplement is located at [       ].

“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 a Receivable or otherwise modifying or restructuring the Contract Scheduled Payments to be made on a Receivable, an amount equal to (1) the excess of the Principal Balance of the Receivable immediately prior to the order over the Principal Balance of the Receivable as so reduced and/or (2) if the court shall have issued an order reducing the effective rate of interest on the Receivable, the net present value, using as the discount rate the higher of the APR on the Receivable or the rate of interest, if any, specified by the court in the order, of the Contract Scheduled Payments as so modified or restructured. A Cram Down Loss shall be deemed to have occurred on the date of issuance of the order.

“Cutoff Date” means [with respect to the Initial Receivables, the Initial Cutoff Date, and with respect to the Subsequent Receivables, the Subsequent Cutoff Date.]

“Dealer Agreement” means an agreement generally between the Sponsor and a Dealer relating to the sale of retail installment contracts to the Sponsor and all documents and instruments relating to that agreement.

“Dealer Assignment” means with respect to a Receivable, the executed assignment conveying a Receivable to the Sponsor.

“Defaulted Receivable” means any Receivable with respect to which any of the following shall have occurred:

·

for which the related Financed Vehicle has been repossessed by the Servicer;

·

for which all or more than 10% of any payment is 120 days or more past due; or

·

a Contract with respect to which the Servicer has determined in good faith that all amounts expected to be recovered have been received.

“Deficiency Claim Amount” means with respect to any Determination Date, the positive difference, if any, of (1) the sum of the related Scheduled Payments plus the amounts described in clauses (1), (2) and (3) under the heading “The Notes—Priority of Distribution Amounts” minus (2) the amount of Available Funds with respect to the Determination Date, which amount will be withdrawn from the Class A Reserve Account to the extent funds are on deposit tin this prospectus supplement in accordance with the terms of the Class A Reserve Account Agreement and deposited into the Collection Account on the related Payment Date.

“Determination Date” means with respect to a Collection Period, the [___]th Business Day preceding the Payment Date in the next calendar month; provided, however that the first Determination Date will be the Closing Date.

“Draw Date” means, with respect to any Payment Date the third business Day (as defined in the Policy) immediately preceeding the Payment Date.

“Excess Overcollateralization Amount” means, with respect to any Payment Date, the excess, if any, of

(1)

the Class A Overcollateralization Amount calculated for this purpose only without deduction for any Excess Overcollateralization Amount (i.e., assuming that the entire amount described in clause (x) of the definition of “Principal Payment Amount” is distributed as principal on the Class A Notes) over

(2)

the Class A Target Overcollateralization Amount on the Payment Date.

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

[“Insurer Optional Deposit” means, with respect to any Payment Date, an amount delivered by the Insurer, at its sole option, other than amounts in respect of a Policy Claim Amount, for deposit into the Collection Account for any of the following purposes:

(1)

to provide funds in respect of the payment of fees or expenses of any provider of services to the Issuing Entity with respect to the Payment Date; or

(2)

to include this amount as part of the Additional Funds Available for the Payment Date to the extent that without this amount a draw would be required to be made on the Policy.]

“Liquidated Receivable” means any Receivable with respect to which any of the following shall have occurred with respect to any Collection Period:

·

the sale of the Financed Vehicle;

·

for which all or more than 10% of any Contract Scheduled Payment is 120 days or more past due, except in the case of repossessed Financed Vehicles,

·

the Servicer has determined in good faith that all amounts it expects to be recovered have been received, or

·

90 days have elapsed since the Servicer repossessed the Financed Vehicle.

“Liquidation Proceeds” means with respect to a Liquidated Receivable,

·

proceeds from the disposition of Financed Vehicles securing the Liquidated Receivables,

·

any insurance proceeds or rebates, or

·

other monies received from the Obligor or otherwise, less amounts required to be refunded to the Obligor.

“Managed Receivable” means any retail installment contract, including any related promissory note, for a Financed Vehicle, and all rights and obligations under the retail installment contract, generally originated by and currently serviced by the Sponsor for Obligors.

“Note Balance” means the sum of the Class A Note Balance and Class B Note Balance.

“Note Majority” means as of any date of determination, Holders of Class A-1 Notes and Class A-2 Notes and Class B Notes representing more than 50% of the Note Balance.

“OC Stabilization Date” means the first Payment Date on which the Class A Overcollateralization Amount equals the Class A Target Overcollateralization Amount.

“Payment Amount” means with respect to a Payment Date, the sum of (1) the Available Funds as of the last day of a Collection Period, plus (2) the Deficiency Claim Amount, if any, with respect to the Payment Date.

“Person” means any legal person, including any individual, corporation, limited liability company, partnership, joint venture, estate, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision of these or any other entity.

[“Policy Claim Amount” means, for any Payment Date, the excess, if any, of

(1)

the sum of the Class A Interest Payment Amount and the Class A Principal Payment Amount for the Payment Date over

(2)

the sum of

(a)

the amounts actually deposited into the Class A Note Distribution Account on the related Payment Date and

(b)

the Additional Funds Available to pay the Class A Interest Payment Amount or the Class A Principal Payment Amount if any, for the Payment Date.]

“Principal Balance” of a Receivable:

·

as of the Cutoff Date, means the Amount Financed minus

(1)

in the case of a Precomputed Receivable, that portion of all payments, including all Contract Scheduled Payments and any prepayments in full or partial prepayments, actually received on or prior to that date and allocable to principal in accordance with the actuarial method and

(2)

in the case of a Simple Interest Receivable, that portion of all payments, including all Contract Scheduled Payments and any prepayments in full or partial prepayments, actually received on or prior to that date and allocable to principal in accordance with the simple interest method, and

·

as of any date after the Cutoff Date, means the Principal Balance as of the Cutoff Date minus

(1)

in the case of a Precomputed Receivable, that portion of all payments, including all Contract Scheduled Payments and any prepayments in full or partial prepayments, actually received on or prior to that date, but after the Cutoff Date, and allocable to principal in accordance with the actuarial method,

(2)

in the case of a Simple Interest Receivable, that portion of all payments, including all Contract Scheduled Payments and any prepayments in full or partial prepayments, actually received on or prior to that date, but after the Cutoff Date, and allocable to principal in accordance with the simple interest method and

(3)

any Cram Down Loss in respect of the Receivable. The Principal Balance of a Liquidated Receivable for purposes other than the definition of Principal Payment Amount shall be equal to $0.

“Principal Payment Amount” means the amount equal to the excess, if any, of (x) the sum of the following amounts, without duplication:

·

the principal portion of all Contract Scheduled Payments received during the Collection Period on Precomputed Receivables, calculated in accordance with the actuarial method, and all payments of principal received on Simple Interest Receivables, calculated in accordance with the simple interest method, during the Collection Period;

·

the principal portion of all prepayments received during the related Collection Period;

·

the portion of the Purchase Amount allocable to principal of each Receivable that became a Purchased Receivable as of the last day of the related Collection Period and, at the option of the Insurer, the Principal Balance of each Receivable that was required to be but was not so purchased or repurchased;

·

the Principal Balance of each Receivable that first became a Liquidated Receivable during the related Collection Period; and

·

the aggregate amount of Cram Down Losses with respect to the Receivables that have occurred during the related Collection Period, over

(y) the Excess Overcollateralization Amount, if any, for the Payment Date.

“Purchase Amount” means, with respect to a Receivable, the Principal Balance plus interest on the Principal Balance at the respective APR from the last day through which interest has been paid to the last day of the immediately preceding Collection Period if purchased prior to the Determination Date immediately following the end of the Collection Period, and otherwise through the last day of the month of repurchase.

“Purchased Receivable” means a Receivable that was purchased as of the close of business on the last day of a Collection Period by the Sponsor or the Servicer as the result of the violation of particular representations or warranties of the Sponsor under the Sale and Servicing Agreement or a breach by the Servicer of some of the Servicer’s obligations.

“Rating Agency Condition” means with respect to any action, that the Rating Agency has been given prior notice of and that the Rating Agency has notified the Sponsor, the Sponsor, the Servicer and the Indenture Trustee in writing that the action will not result in a reduction or withdrawal of the then current rating of the Notes.

“Sale and Servicing Agreement” means the Sale and Servicing Agreement between the Sponsor, in its individual capacity and as Servicer, the Depositor, the Issuing Entity, as purchaser, and [       ], as Indenture Trustee and Backup Servicer.

“Servicer’s Certificate” means with respect to each Collection Period, a certificate, completed by and executed on behalf of the Servicer, in accordance with the applicable Sale and Servicing Agreement provisions.

“Servicer Receivables Files” means the following documents or instruments in the Servicer’s possession with respect to each Receivable: (1) documents evidencing or relating to any Insurance Policy; and (2) any and all other documents, in original or electronic form, that the Servicer keeps on file in accordance with its customary procedures relating to the individual Receivable, Obligor or Financed Vehicle.

“State” means any state of the United States or the District of Columbia.

“Transaction Documents” means the Sale and Servicing Agreement, the Indenture, the Trust Agreement, the Notes, the Receivables Purchase Agreement, the Underwriting Agreement and the other agreements executed in connection with the closing of the transactions described in this prospectus supplement.

“Trust Agreement” means the Trust Agreement between the Depositor, the Certificateholder, the Sponsor, and [       ], as Owner Trustee.

Calculation of Payment Amounts.  The Class A-1 Noteholders will be entitled to receive, to the extent funds are available, the Class A-1 Principal Payment Amount and the Class A-1 Interest Payment Amount with respect to each Payment Date. The Class A-2 Noteholders will be entitled to receive to the extent funds are available, the Class A-2 Principal Payment Amount and the Class A-2 Interest Payment Amount with respect to each Payment Date, subject to the priority of payments as described in “—Priority of Distribution Amounts”. The “Class A-1 Note Balance” will initially represent $[       ], and afterward, an amount equal to the initial Class A-1 Note Balance reduced by all amounts distributed to the Noteholders that are allocable to principal. The “Class A-2 Note Balance” will initially represent $[       ], and afterward, an amount equal to the initial Class A-2 Note Balance reduced by all amounts distributed to the Class A-2 Noteholders that are allocable to principal.

Priority of Distribution Amounts

On each Payment Date, the Indenture Trustee will, based on the information contained in the Servicer’s Certificate delivered on the related Determination Date, distribute the following amounts in the following order of priority:

(1)

first, from the Available Funds, to the Servicer, the Servicer Fee (as defined in this prospectus supplement) for the related Collection Period, and any Servicer Expenses for the related or any prior Collection Period and other amounts mistakenly deposited in the Collection Account belonging to the Servicer, if any, or otherwise required to be distributed to the Servicer in accordance with the Sale and Servicing Agreement;

(2)

second, from the remaining Available Funds, to the Lockbox Bank, the Indenture Trustee, the Owner Trustee and the Backup Servicer, any accrued and unpaid fees and in the case of the Backup Servicer, Servicer Transition Expenses, if any, up to an amount specified in the Sale and Servicing Agreement, in each case, to the extent the Person (as defined in this prospectus supplement) has not previously received this amount from the Servicer;

(3)

third, from the remaining Available Funds, pro rata in respect of the amounts due, (a) to the Class A-1 Noteholders, the Class A-1 Interest Payment Amount for the Payment Date and the Class A-1 Interest Carryover Shortfall, if any, and (b) to the Class A-2 Noteholders, the Class A-2 Interest Payment Amount for the Payment Date and the Class A-2 Interest Carryover Shortfall, if any;

(4)

fourth, from the remaining Available Funds, to the Class A-1 Noteholders, the Class A-1 Principal Payment Amount for the Payment Date, and the Class A-1 Principal Carryover Shortfall, if any;

(5)

fifth, from the remaining Available Funds, to the Class A-2 Noteholders, the Class A-2 Principal Payment Amount for the Payment Date, and the Class A-2 Principal Carryover Shortfall, if any;

[(6)

sixth, from the remaining Available Funds, to the Insurer to the extent of any amounts owing the Insurer under the Insurance Agreement;]

(7)

seventh, from the remaining Available Funds, to the Class A Reserve Account to the extent necessary to increase the amount on deposit tin this prospectus supplement to its then required level;

(8)

eighth, on or prior to the OC Stabilization Date, from the remaining Available Funds, and together with amounts, if any, available in accordance with the terms of the Class A Reserve Account Agreement, sequentially, to the Class A-1 Noteholders and to the Class A-2 Noteholders, as principal, until the Class A Target Overcollateralization Amount is achieved;

(9)

ninth, from the remaining Available Funds, to the Class B Noteholders, the Class B Interest Payment Amount for the Payment Date and the Class B Interest Carryover Shortfall, if any;

(10)

tenth, from the remaining Available Funds, and together with amounts, if any, available from the Class A Reserve Account in accordance with the terms of the Sale and Servicing Agreement, to the Class B Noteholders, the Class B Principal Payment Amount; and

(11)

eleventh, from the remaining Available Funds, to the Class A Reserve Account, or as otherwise specified in the Trust Documents, any remaining funds.

Payment Date Calculations and Payments

In the event that any Servicer’s Certificate delivered by the Servicer indicates that the Available Funds with respect to a Payment Date are insufficient to fund in full the related Scheduled Payments plus the amounts described in clauses (1), (2) [and (6)] above in “—Priority of Distribution Amounts”, the Indenture Trustee shall request the Deficiency Claim Amount from the Class A Reserve Account, at the time required by and pursuant to, the Class A Reserve Account Agreement. Any funds received by the Indenture Trustee pursuant to this request will be deposited in the Collection Account and paid on the related Payment Date to the persons entitled to the funds, in the amounts described in clauses (1) through [(6)] of “—Priority of Distributions” in accordance with the priority of payment. [Further, in the event that any Servicer’s Certificate delivered by the Servicer indicates that the sum of (1) the Avai lable Funds with respect to a Payment Date, plus (2) any related Deficiency Claim Amount funds deposited in the Collection Account or otherwise received by the Indenture Trustee is insufficient to fund in full the related Scheduled Payments, the Indenture Trustee shall furnish to the Insurer no later than 12:00 noon New York City time on the related Draw Date a completed notice of claim in the amount of the Policy Claim Amount.  Amounts paid by the Insurer pursuant to any notice of claim shall be deposited by the Insurer into the Note Distribution Account for payment to Noteholders on the Payment Date.]

Statements to Noteholders

On each Payment Date, the Indenture Trustee must provide to each Class A Noteholder[, the Insurer] and the Rating Agencies a statement prepared by the Servicer based on the information in the related Servicer’s Certificate, which statement sets forth the information required under the Sale and Servicing Agreement. Each statement will include the following information with respect to the Payment Date or the immediately preceding Collection Period, as applicable:

(1)

the amount of the payment allocable to interest with respect to the Class A-1 Notes, the Class A-2 Notes and the Class B Notes, as applicable;

(2)

the amount of the payment allocable to principal on or with respect to the Class A-1 Notes, the Class A-2 Notes and the Class B Notes;

(3)

the amount of the payment pursuant to a claim on the Policy;

(4)

the amount of fees paid by the Issuing Entity with respect to the related Collection Period, including any Servicer Fee and Servicer Expenses;

(5)

the Class A-1 Note Balance, the Class A-2 Note Balance and the Class B Note Balance;

(6)

the Class A-1 Interest Carryover Shortfall, the Class A-2 Interest Carryover Shortfall and the Class B Interest Carryover Shortfall, if any, and the Class A-1 Principal Carryover Shortfall, the Class A-2 Principal Carryover Shortfall and the Class B Principal Carryover Shortfall, if any;

(7)

the Class A-1 Note Factor, the Class A-2 Note Factor and the Class B Note Factor;

[(8)

for each date during the Pre-Funding Period, the remaining Pre-Funded Amount, the amount in the Pre-Funding Account and the amount remaining the Capitalized Interest Account;]

(9)

the number of Receivables and the aggregate Principal Balance due of the Receivables, for which the related Obligors are delinquent in making Contract Scheduled Payments (A) between 31 and 60 days, (B) between 61 and 90 Days, (C) between 91 and 120 days and (D) more than 120 days;

(10)

the number of Receivables which became Liquidated Receivables, and the aggregate principal amount of the Receivables which became Liquidated Receivables net of Recoveries;

(11)

the number of Receivables which became Defaulted Receivables, and the aggregate principal amount of these Receivables;

(12)

the number and the aggregate Purchase Amount of Receivables that became Purchased Receivables during the related Collection Period and the number and aggregate Purchase Amount of Receivables that were required to be repurchased during the related Collection Period but were not so repurchased;

(13)

the Principal Balance, APR and model year of each Receivable that was replaced and the Principal Balance, APR and model year of the corresponding Replacement Receivable;

(14)

the number and the aggregate Principal Balance of Receivables with respect to which, to the knowledge of the Servicer, Obligors became the subject of bankruptcy proceedings during the Collection Period, or during a prior Collection Period, if the Servicer first became aware of the proceeding during the current Collection Period;

(15)

the amount of any Deficiency Claim Amounts deposited in the Collection Account from the Class A Reserve Account;

(16)

the Class A Overcollateralization Amount and the Class A Target Overcollateralization Amount; and

(17)

the beginning balance, amount of claims paid, amount of deposits made, and ending balance of the applicable collateral self-insurance fund, if any.

Each amount set forth pursuant to subclauses (1), (2) and (5) will be expressed as a dollar amount per $1,000 of the initial principal amount of a Note.

Unless and until Definitive Notes are issued, the reports will be sent on behalf of the Trust to Cede & Co., as registered holder of the Class A Notes and the nominee of DTC. See “Reports to Securityholders” and “Description of the Notes” in the prospectus. Within the required period of time after the end of each calendar year, the Indenture Trustee will furnish to each person who at any time during the calendar year was a Noteholder, a statement as to the aggregate amounts of interest and principal paid to that Noteholder and any other information as the Servicer deems necessary to enable the Noteholder to prepare its tax returns. See “Certain Federal Income Tax Consequences.”

Credit Support

The Class A Overcollaterization Amount and the Class A Reserve Account (a funded cash reserve account (the “Class A Reserve Account”)), result in credit support for the Class A Notes. This credit support is required to be increased to, and subsequently maintained at, a level established by the Insurer. This level changes over time. [The Insurer may permit the required level of credit support provided by the Class A Reserve Account and the Class A Overcollateralization Amount to be reduced, or “step down”, over time without the consent of Noteholders.]

Overcollaterization.

Overcollaterization for the Class A Notes is created as a result of the application of “excess interest” and “excess principal” to the payment of principal on the Class A Notes. The “excess interest” is interest which is collected on the Receivables in excess of the amount of interest that is paid on the Class A Notes, used to pay specific fees, or, under some circumstances, deposited to the Class A Reserve Account. This application of excess interest results in the outstanding principal balance of the Class A Notes amortizing more quickly than the Pool Balance. The “excess principal” is the principal allocated to the Class A Notes which is in excess of the principal the Class A Notes would receive if the principal collected on the Receivables were distributed pro rata to the Class A Notes and Class B Notes based on their relative outstanding principal balances. This application of the “excess princip al” results in the outstanding principal balance on the Class A Notes amortizing more quickly than the Aggregate Principal Balance on a percentage basis.

[If the Insurer permits the required level of overcollaterization to step down, principal collections which would otherwise be paid through to the Class A Noteholders as part of the Class A Principal Payment Amount may be instead released to the Class B Noteholders or the Certificateholder.]

Subordination.

As of the Closing Date, the principal balance of the Class B Notes equals [____]% of the Note Balance. The transaction is structured so that until the OC Stabilization Date, the Class B Note Balance will grow as a percentage of the Note Balance. The Class B Notes are subordinated in right of payment to the payment of the Class A Notes. No payments of principal will be made to the Class B Notes until the OC Stabilization Date. Payment of interest on the Class B Notes is subordinated to payment of interest and principal on the Class A Notes, the funding of the Class A Reserve Account and, until the OC Stabilization Date, the payment of excess interest as additional principal to the Class A Notes. If there are losses on the Receivables, those losses will be borne entirely by the Certificateholder and by the Class B Notes before there are any losses on the Class A Notes.

Class A Reserve Account.

The Class A Reserve Account will be funded with an initial cash deposit on the Closing Date. On each subsequent Payment Date, the Indenture Trustee will be required to deposit additional amounts into the Class A Reserve Account from payments on the Receivables as described under “The Notes—Priority of Distribution Amounts” above to the extent that the balance on deposit tin this prospectus supplement is below the then required level. Amounts, if any, on deposit in the Class A Reserve Account on a Payment Date will be available to the extent provided in the Class A Reserve Account Agreement to fund any Deficiency Claim Amount with respect to the Payment Date. Amounts on deposit in the Class A Reserve Account on any Payment Date on or prior to the OC Stabilization Date, after giving effect to all distributions made on the Payment Date, in excess of the specified Class A Reserve Account Requirements for the Payment Date shall be dist ributed to Class A Noteholders as a prepayment of principal on the Class A Notes. On any Payment Date after the OC Stabilization Date, the excess funds may be released to the Class B Noteholders or the Certificateholder without the consent of the Class A Noteholders.

In addition, the Certificateholder, [the Insurer] and the Collateral Agent under the Class A Reserve Account Agreement may amend the Class A Reserve Account Agreement, [and any provisions in the Insurance Agreement relating to the Class A Reserve Account], in any respect, including, without limitation, reducing or eliminating the funding requirements of the Class A Reserve Account or permitting these funds to be used for the benefit of persons other than Class A Noteholders, without the consent of, or notice to, the Trustee, the Owner Trustee or the Noteholders. The Collateral Agent shall not withhold or delay its consent with respect to any amendment that does not adversely affect the Collateral Agent in its individual capacity. [Notwithstanding any reduction in or elimination of the funding requirements of the Class A Reserve Account or the depletion of the Class A Reserve Account, the Insurer will be obligated on each Payment Date to fund the full amount of each Scheduled Payment required to be paid by the Payment Date, and which would not be in the absence of a payment under the Policy. If the Insurer breaches its obligations, any losses on the Receivables will be borne first by the Class B Noteholders and then by the Noteholders.]

The Indenture

The Indenture Trustee. [       ] is the Indenture Trustee under the Indenture. For the purpose of meeting the legal requirements of some jurisdictions, the Indenture Trustee may appoint co-trustees or separate trustees of all or any part of the trust estate and confer upon this party any powers, duties, obligations, rights and trusts as the Indenture Trustee deems necessary, or desirable. In the event of an appointment, all rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee by the Indenture will be conferred or imposed upon the Indenture Trustee and the separate trustee or co-trustee jointly, or, in any jurisdiction in which the Indenture Trustee shall be incompetent or unqualified to perform particular acts, singly upon the separate trustee or co-trustee who will exercise and perform these rights, powers, duties, and obligations solely at the direction of the Indent ure Trustee.

The Indenture Trustee may resign at any time after 60 days’ written notice to the Issuing Entity, [the Insurer] and Noteholders in which event the Controlling Party will be obligated to appoint a successor trustee. The Controlling Party may remove the Indenture Trustee if, among other reasons, the Indenture Trustee ceases to be eligible to continue as the Indenture Trustee under the Indenture, becomes legally unable to act or becomes insolvent. In these circumstances, the Controlling Party will be obligated to appoint a successor trustee. Any resignation or removal of the Indenture Trustee and appointment of a successor trustee will not become effective until acceptance of the appointment of a successor trustee.

The Sale and Servicing Agreement will provide that the Indenture Trustee will be entitled to indemnification by the Servicer for, and will be held harmless against, any loss, liability, fee, disbursement or expense incurred by the Indenture Trustee not resulting from the Indenture Trustee’s own willful misfeasance, bad faith or negligence and other than by reason of a breach of any of the Indenture Trustee’s representations or warranties set forth in the Sale and Servicing Agreement. The Sale and Servicing Agreement will further provide that the Servicer will indemnify the Indenture Trustee for some of the taxes that may be asserted in connection with the transaction.

The Indenture Trustee makes no representations as to the validity or sufficiency of the Sale and Servicing Agreement, the Notes, other than the authentication of the Notes, or any Receivables or the Related Documents and is not accountable for the use or application by the Sponsor or the Servicer of any funds paid to the Sponsor or the Servicer in respect of the Notes or the Receivables, or the investment of any monies received by the Servicer before the monies are deposited in the Collection Account. The Indenture Trustee has not independently verified the Receivables. The Indenture Trustee is required to perform only those duties specifically required of it under the Sale and Servicing Agreement and the Indenture. The Indenture Trustee shall determine whether the certificates, reports or other instruments required to be furnished to the Indenture Trustee under the Sale and Servicing Agreement and the Indenture conform to the requirements of th e Sale and Servicing Agreement and the Indenture, respectively.

Modification of Indenture Without Noteholder Consent.  The Issuing Entity and Indenture Trustee may, [with the prior written consent of the Insurer, prior to the occurrence and continuance of an Insurer Default, but without consent of the Noteholders,] enter into one or more supplemental indentures for any of the following purposes:

·

to correct or amplify the description of the property subject to the lien of the Indenture or add additional property to it;

·

to evidence the succession of another Person to the Issuing Entity and the assumption by the successor of the covenants of the Issuing Entity;

·

to add additional covenants for the benefit of the Noteholders or to surrender any right or power conferred on the Issuing Entity;

·

to convey, transfer, assign, mortgage or pledge any additional property to or with the Indenture Trustee;

·

to cure any ambiguity, or to correct or supplement any provision in the Indenture or in any supplemental indenture that may be inconsistent with any other provision of the Indenture or any supplemental indenture;

·

to add to or change any of the provisions of the Indenture as shall be necessary and permitted to facilitate the administration by more than one trustee; and

·

to add any provisions to, change in any manner or eliminate any of the provisions of the Indenture or modify in any manner the rights of Noteholders under the Indenture; provided that any action must not, as evidenced by an opinion of counsel, adversely affect in any material respect the interests of any Noteholder.

Modification of Indenture With Noteholder Consent.  With the prior written consent of [the Insurer, prior to the occurrence and continuance of an Insurer Default,] and the Note Majority, the Issuing Entity and the Indenture Trustee may execute one or more supplemental indentures to add, change or eliminate any other provisions of the Indenture, modify in any manner the rights of the Noteholders or provide for the acceptance of the appointment of a successor Indenture Trustee. Without the prior written consent of [the Insurer, prior to the occurrence and continuance of an Insurer Default,] and the Holder of each outstanding related Note affected, however, no supplemental indenture will:

·

change the due date of any installment of principal of or interest on any Note or reduce the principal amount of any Note, the interest rate on the Note or the redemption price with respect to the Note, change the provisions of the Indenture relating to the application of collections on, or the proceeds of the sale of, the collateral to the payment of principal of or interest on the Notes, change any place of payment where or the coin or currency in which any Note or any interest on the Note is payable;

·

impair the right to institute suit for the enforcement of particular provisions of the Indenture regarding payment;

·

reduce the percentage of the aggregate amount of the outstanding Notes the consent of the Holders of which is required for any supplemental indenture or the consent of the Holders of which is required for any waiver of compliance with particular provisions of the Indenture or of some of the defaults under the Indenture and their consequences as provided for in the Indenture;

·

modify or alter the provisions of the Indenture regarding particular aspects of what constitutes an “Outstanding” Note;

·

reduce the percentage of the aggregate outstanding amount of the Notes the consent of the Holders of which is required to direct the Indenture Trustee to sell or liquidate the Receivables if the proceeds of the sale would be insufficient to pay the principal amount and accrued but unpaid interest on the outstanding Notes;

·

modify the provision of the Indenture requiring consent of Noteholders except to increase the percentage of the aggregate principal amount of the Notes required to amend the sections of the Indenture or to provide additional provisions requiring the consent of each Noteholder prior to modification or waiver;

·

modify any of the provisions of the Indenture affecting the calculation of the amount of any payment of interest or principal due on any Note on any Payment Date;

·

permit the creation of any lien ranking prior to or on a parity with the lien of the Indenture with respect to any of the collateral for the Notes or, except as otherwise permitted or contemplated in the Indenture, terminate the lien of the Indenture on any collateral or deprive the Holder of any Note of the security afforded by the lien of the Indenture; or

·

become effective if the Rating Agency Condition has not been satisfied with respect to it.

Note Factors; Statement to Noteholders; Servicer Reports to the Indenture Trustee.

The “Class A-1 Note Factor” will be a seven-digit decimal number that the Servicer will compute each month indicating the Class A-1 Note Balance as of the close of business on the last day of the related Collection Period in that month as a fraction of the respective original outstanding principal balance of the Class A-1 Notes. The Class A-1 Note Factor will be 1.0000000 as of the Cutoff Date; and afterward, the Class A-1 Note Factor will decline to reflect reductions in the Class A-1 Note Balance as a result of scheduled payments collected, partial prepayments, prepayments and liquidations of the Receivables. The amount of a Class A-1 Noteholder’s pro rata share of the Class A-1 Note Balance can be determined on any date by multiplying the original denomination of the Holder’s Note by the Class A-1 Note Factor as of the close of business on the most recent Payment Date.

The “Class A-2 Note Factor” will be a seven-digit decimal number that the Servicer will compute each month indicating the Class A-2 Note Balance as of the close of business on the last day of the related Collection Period in that month as a fraction of the respective original outstanding principal balance of the Class A-2 Notes. The Class A-2 Note Factor will be 1.0000000 as of the Cutoff Date; and afterward, the Class A-2 Note Factor will decline to reflect reductions in the Class A-2 Note Balance as a result of scheduled payments collected, partial prepayments, prepayments and liquidations of the Receivables. The amount of a Class A-2 Noteholder’s pro rata share of the Class A-2 Note Balance can be determined on any date by multiplying the original denomination of the Holder’s Note by the Class A-2 Note Factor as of the close of business on the most recent Payment Date.

Under the Sale and Servicing Agreement, the Servicer will perform some monitoring and reporting functions for the Issuing Entity, including the preparation and delivery of the Servicer’s certificate on each Determination Date to the Indenture Trustee, the Backup Servicer,[ the Insurer,] and the Rating Agencies setting forth specified information with respect to the preceding Collection Period.

Within the prescribed period of time for tax reporting purposes after the end of each calendar year during the term of the Sale and Servicing Agreement, the Indenture Trustee will be required to mail to each person who at any time during the relevant calendar year will have been a Noteholder, a statement containing information related to the Noteholder’s preparation of federal income tax returns.

Fees and Expenses of the Trust Fund

In consideration of their duties on behalf of the Trust Fund, the Servicer, the Backup Servicer, the Owner Trustee and the Indenture Trustee will receive from the assets of the Trust Fund certain fees as set forth in the following table:

Fee Payable to:	Frequency of Payment:	Amount of Fee:	How and When Fee Is Paid:
Servicer	[monthly]	[(a) A monthly fee paid to the Servicer out of interest collections received from the Receivables in an amount equal to the product of one-twelfth of [    ]% per annum (the “Servicing Fee Rate”) and the Pool Balance as of the first day of the Collection Period.] [(b) any late fees, prepayment charges and other administrative fees or similar charges allowed by applicable law with respect to the Receivables, and will be entitled to reimbursement from the Issuing Entity for various expenses.]	[Deducted by the Servicer from interest collections in respect of each Receivable serviced by the Servicer, before payment of any amounts to noteholders.]
Owner Trustee	[monthly]	[A monthly fee paid to the Owner Trustee by the Servicer out of the Servicer’s fee.]	[Paid by the Servicer before payment of any amounts to noteholders.]
Indenture Trustee	[monthly]	[A monthly fee paid to the Indenture Trustee by the Servicer out of the Servicer’s fee.]	[Paid by the Servicer before payment of any amounts to noteholders.]
Backup Servicer	[monthly]	[(a) A monthly fee paid to the Backup Servicer out of interest collections received from the Receivables in an amount equal to the product of one-twelfth of [    ]% per annum (the “Servicing Fee Rate”) and the Pool Balance as of the first day of the Collection Period.] [(b) any late fees, prepayment charges and other administrative fees or similar charges allowed by applicable law with respect to the Receivables, and will be entitled to reimbursement from the Issuing Entity for various expenses.]	[Deducted by the Backup Servicer from interest collections in respect of each Receivable serviced by the Backup Servicer, before payment of any amounts to noteholders.]
[Other Applicable Party]	[_____]	[_____]	[_____]

 [[None of the fees set forth in table above may be changed without amendment of the related Transaction Agreement]].

[[Expenses of the Servicer, the Backup Servicer, the Owner Trustee and the Indenture Trustee will be reimbursed before payments are made on the notes.]]

Example of Distributions

The following sets forth an example of collection of payments from Obligors on the Receivables, transfer of amounts among the Trust Accounts, and distributions on the notes for the Distribution Date in [_______]:

[On or before the earlier of the [eighth] business day of the month in which a Distribution Date occurs and the [fourth] business day preceding such Distribution Date]	Determination Date	[The Servicer will calculate the Total Distribution Amount, the Interest Distribution Amount, the Available Principal, the Principal Distribution Amount, the Total Servicing Fee, the Noteholders’ Interest Distributable Amount, the Noteholders’ Principal Distributable Amount, the Advances, if any, to be made by the Servicer of interest and principal due on the Actuarial Receivables, the amount, if any, to be withdrawn from the Payahead Account and deposited in the Collection Account, the amount, if any, to be withdrawn from the Reserve Account and deposited in the Collection Account and the amount, if any, to be withdrawn from the Reserve Account and paid to the Depositor, in each case, with respect to such Distribution Date.]
[On or before each Distribution Date]	[Servicer Remittance Date]	[The Servicer will cause the Indenture Trustee to withdraw from the Payahead Account and deposit into the Collection Account in immediately available funds, the portion of Payaheads constituting scheduled payments on Actuarial Receivables or that are to be applied to prepay Actuarial Receivable in full and distribute to the Depositor, in immediately available funds, all investment earnings on funds in the Payahead Account with respect to the preceding Collection Period.] [The Servicer will deposit any advances for such Distribution Date into the Collection Account.] [The Servicer shall cause the Indenture Trustee to withdraw from the Reserve Account and deposit in the Collection Account the Reserve Account Transfer Amount.]
[On or before the business day preceding each Distribution Date]	[Servicer Remittance Date]	the Servicer will cause the Interest Distribution Amount and the Available Principal for such Distribution Date to be deposited into the Collection Account.
Last day of the month prior to the related Distribution Date	Record Date:	[Distributions will be made to noteholders of record for all applicable classes as of the Record Date].
The [__]th day of each month (or if the [__]h day is not a business day, the next business day),	Distribution Date:	[The Servicer will cause the Indenture Trustee to withdraw the Total Distribution Amount for deposit into the Note Distribution Account and the Indenture Trustee will make distributions to Noteholders from amounts on deposit in the Note Distribution Account.]

Succeeding months follow the same pattern.

DESCRIPTION OF THE TRANSACTION DOCUMENTS

The following summary describes some of the terms of the Transaction Documents. Forms of the Transaction Documents have been filed as exhibits to the Registration Statement. This summary does not purport to be complete and is subject to, and qualified in its entirety by reference to, all the provisions in the Transaction Documents. The following summary supplements the description of the general terms and provisions of the Transfer and Servicing Agreements (as this term is used in the prospectus) set forth in the prospectus, to which description reference is made by this prospectus supplement.

Sale and Assignment of Receivables

Certain information regarding the conveyance of the Receivables by the Sponsor to the Depositor and by the Depositor to the Issuing Entity on the Closing Date pursuant to the Sale and Servicing Agreement is set forth in the Prospectus under “Description of the Transfer and Servicing Agreements--Sale and Assignment of Receivables.”  See also “The Receivables” in this prospectus supplement and “The Receivables Pools” in the prospectus for additional information regarding the Receivables and some of the obligations of the Sponsor and the Servicer with respect to the Receivables.

At the time of issuance of the Notes, the Sponsor will sell and assign to the Depositor, the Sponsor’s entire interest in the Receivables, including its security interests in the Financed Vehicles, and the Depositor will sell and assign to the Issuing Entity the Depositor’s entire interest in the Receivables, including the security interests in the Financed Vehicles. On or before the Closing Date, the Issuing Entity will pledge the Receivables to the Indenture Trustee for the benefit of the Noteholders and the Insurer pursuant to the Indenture. Each Receivable will be identified in a schedule to the Sale and Servicing Agreement. The Indenture Trustee will, concurrently with the pledge, authenticate and deliver the Notes, which have been executed on behalf of the Issuing Entity.

[Any conveyance of Subsequent Receivables is subject to the satisfaction, on or before the related Subsequent Transfer Date, of the following conditions, among others:

(1)

each Subsequent Receivable satisfies the eligibility criteria specified in the Sale and Servicing Agreement;

[(2)

the Insurer, so long as no Insurer Default shall have occurred and be continuing, shall in its absolute and sole discretion have approved the transfer of the Subsequent Receivables to the Issuing Entity;]

(3)

the Sponsor will not have selected the Subsequent Receivable in a manner that it believes is adverse to the interests of the Noteholders or the Insurer;

(4)

as of each applicable Subsequent Cutoff Date, the Receivables in the Issuing Entity together with the Subsequent Receivables to be conveyed by the Sponsor as of the Subsequent Cutoff Date, meet the following criteria, computed based on the characteristics of the Initial Receivables on the Initial Cutoff Date and any Subsequent Receivables on the related Subsequent Cutoff Date:

(a)

the weighted average APR of the Receivables will not be less than one percent less than the weighted average APR of the Initial Receivables on the Initial Cutoff Date;

(b)

the remaining term of the Receivables will not be greater than [___] months nor less than [       ] months;

(c)

not more than [       ]% of the Principal Balances of the Receivables will be attributable to Loans for the purchase of used Financed Vehicles;

(d)

the APR is not less than [       ]% nor more than [       ]%; and

(e)

no vehicle is older than a [       ] model year, and the Issuing Entity, the Indenture Trustee, the Owner Trustee

[(f)

and the Insurer shall have received written confirmation from a firm of certified independent public accountants as to the satisfaction of the criteria in clauses (a) through (e) above;]

(5)

the Sponsor shall have executed and delivered to the Issuing Entity, with a copy to the Indenture Trustee, a Subsequent Transfer Agreement conveying the Subsequent Receivable to the Issuing Entity, including a schedule identifying the Subsequent Receivables;

(6)

the Sponsor shall have delivered certain opinions of counsel to the Indenture Trustee, [the Insurer,] the Owner Trustee and the Rating Agencies with respect to the validity of the conveyance of the Subsequent Receivables; and

(7)

the Rating Agencies shall have each notified the Sponsor, the Owner Trustee, the Indenture Trustee [and the Insurer] in writing that, following the addition of all of the Subsequent Receivables, each of the Class A-1 Notes and the Class A-2 Notes will be rated [       ] by [       ] and [       ] by [       ].]

Pursuant to the Receivables Purchase Agreement and the Sale and Servicing Agreement, the Sponsor will represent and warrant that, among other things:

·

as of [each] [the] Cutoff Date, the information provided in the schedule to the Sale and Servicing Agreement with respect to the Receivables is correct in all material respects;

·

at the date of issuance of the Notes[ and any Subsequent Transfer Date], the Receivables are free and clear of all liens or claims and no right of setoff, counterclaim or rescission has been asserted or, to the best of its knowledge, threatened with respect to the Receivables;

·

at the date of issuance of the Notes [and any Subsequent Transfer Date], each of the Receivables is secured by, or will be when all necessary steps have been taken to result in, a first priority perfected security interest in the Financed Vehicle in favor of the Sponsor and this security interest has been validly assigned to the Sponsor, the Issuing Entity and the Indenture Trustee; and

·

each Receivable, at the time it was originated, complied, and at the date of issuance of the Notes [and any Subsequent Transfer Date], complies in all material respects with applicable federal, state and local laws, including consumer credit, truth in lending, equal credit opportunity and disclosure laws.

Pursuant to the Receivables Purchase Agreement and the Sale and Servicing Agreement, the Sponsor will be obligated to repurchase or replace subject to limits on replacement set forth in the Sale and Servicing Agreement a Receivable from the Issuing Entity, if the interests of the Noteholders,[ the Insurer] or the Issuing Entity in the Receivable are materially adversely affected by a breach of any representation or warranty made by the Sponsor, with respect to the Receivable, if the breach has not been cured following discovery by or notice to the Sponsor of the breach. Pursuant to the Sale and Servicing Agreement, the Servicer will be obligated to purchase or replace a Receivable from the Issuing Entity if the interests of the Noteholders, [the Insurer] or the Issuing Entity in the Receivables are materially adversely affected by a breach of some of its servicing obligations under the Sale and Servicing Agreement, including its obligation to ma intain perfection of the first priority security interest created by each Receivable in the related Financed Vehicle or other covenants with respect to the Servicer, if the breach has not been cured following the discovery or notice to the Servicer of the breach. Each Receivable will be purchased from the Issuing Entity or replaced by the Sponsor or the Servicer, as the case may be, at a price equal to the Purchase Amount. The purchase or replacement obligations will constitute the sole remedy available to the Noteholders or the Indenture Trustee for any uncured breaches.

Pursuant to the Sale and Servicing Agreement, the Servicer will service and administer the Receivables. The documents evidencing the Receivables will be delivered to the Indenture Trustee on the Closing Date. In addition, the Sponsor’s accounting records and computer systems will be marked to reflect the sale and assignment, and UCC financing statements reflecting the sale and assignment will be filed. See “Certain Legal Aspects of the Receivables—Security Interests in Financed Vehicles” in the accompanying prospectus.

Accounts

Each Obligor has been instructed to make payments with respect to the Receivables after the applicable Cutoff Date to a Lockbox which has been established and will be maintained by [                  ] (the “Lockbox Bank”). Upon receipt of payments in the Lockbox, the Lockbox Bank will deposit funds into an account maintained by the Lockbox Bank at a depository institution (the “Lockbox Account”) acceptable to the [Indenture Trustee][Insurer]. The Indenture Trustee will establish the Collection Account (the “Collection Account”) in the name of the Indenture Trustee for the benefit of the Noteholders [and the Insurer]. All payments made on or with respect to the Receivables previously deposited in the Lockbox Account will be transferred to the Collection Account within two Business Days of the receipt of available funds tin this pros pectus supplement. Upon receipt, but in no event later than two Business Days after the receipt of amounts in respect of Receivables, each of the Servicer and the Sponsor will remit all amounts received by it in respect of the Receivables in the form of checks with payment coupons directly to the Lockbox. Other payments received by each of the Servicer and the Sponsor will be deposited into a local servicing account for processing, and then transferred to the Collection Account within two Business Days of the receipt of available funds tin this prospectus supplement. The Collection Account will be maintained with the Indenture Trustee as long as the Indenture Trustee’s deposits have a rating acceptable to the Insurer and the Rating Agencies. If the deposits of the Indenture Trustee no longer have an acceptable rating, the Indenture Trustee shall cause the accounts to be moved to a bank or trust company having acceptable ratings.

The Indenture Trustee will also establish and maintain an account, in its name, on behalf of Noteholders and the Insurer, in which amounts released from the Collection Account for distribution to Noteholders will be deposited and from which all distributions to Noteholders will be made (the “Note Distribution Account”).

[On the Closing Date, a cash amount equal to approximately $[       ] (the “Initial Pre-Funded Amount”) will be deposited in an account (the “Pre-Funding Account”) which will be established with the Indenture Trustee. The “Funding Period” is the period from the Closing Date until the earliest of the date on which:

(1)

the amount on deposit in the Pre-Funding Account is less than $100,000,

(2)

a Servicer Termination Event occurs under the Sale and Servicing Agreement or an Insurance Agreement Event of Default occurs, or

(3)

the Payment Date in [       ].

The Initial Pre-Funded Amount, as reduced from time to time during the Funding Period by the amount used to purchase Subsequent Receivables in accordance with the Sale and Servicing Agreement, is referred to in this prospectus supplement as the “Pre-Funded Amount.” The Sponsor expects that the Pre-Funded Amount will be reduced to less than $[___________] on or before the Payment Date in [       ]. Any Pre-Funded Amount remaining at the end of the Funding Period will be payable to the Noteholders as described in this prospectus supplement. The “Mandatory Redemption Date” is the earlier of (1) the Payment Date in [       ] and (2) if the last day of the Funding Period occurs on or prior to the Determination Date in [       ], then the [       ] Payment Date.

On the Closing Date, a cash amount shall be deposited in an account (the “Capitalized Interest Account”) which will be established with the Indenture Trustee. The amount, if any, deposited in the Capitalized Interest Account will be applied on the Payment Dates occurring in [       ], [       ] and [       ], and to fund an amount (the “Monthly Capitalized Interest Amount”) equal to the amount of interest accrued for each Payment Date at the excess of (1) the weighted average interest rate on the Class A Notes over (2) [       ]%, on the portion of the Class A Notes having a principal balance in excess of the Aggregate Principal Balances of the Receivables. Any amounts remaining in the Capitalized Interest Account on the Mandatory Redemption Date and not used for these purposes are required to be paid to the Class A Noteholders on the relevant date. See “Description of the Transaction Documents—Accounts.”]

All of these Accounts shall be Eligible Deposit Accounts (as defined in the prospectus) acceptable to the Insurer, so long as no Insurer Default has occurred and is continuing.

Consistent with the Sale and Servicing Agreement and its normal collection practices and procedures, the Servicer may, in its discretion, arrange with the Obligor on a Receivable to extend or modify the payment schedule, subject to particular limitations. No extension or modification in accordance with the Sale and Servicing Agreement will result in a repurchase obligation for the Servicer.

Servicing Procedures

The Servicer will make all reasonable efforts to collect all payments due with respect to the Receivables and will continue these collection procedures as it follows with respect to all comparable motor vehicle receivables that it services for itself or others, in a manner consistent with the Sale and Servicing Agreement. If the Servicer determines that eventual payment in full of a Receivable is unlikely, the Servicer will follow its normal collection practices and procedures, including the repossession and disposition of the Financed Vehicle securing the Receivable at a public or private auction, or the taking of any other action permitted by applicable law.

The Servicer will not be required under the Sale and Servicing Agreement to make any advances of principal or interest due on any Receivable.

Collections

The Servicer or the Sponsor, as the case may be, will remit or cause to be remitted the aggregate Purchase Amount of any Receivables required to be purchased by it from the Issuing Entity to the Collection Account. Under the Sale and Servicing Agreement, the amounts of any recoveries in respect of any Receivables repurchased by Dealers pursuant to any Dealer Recourse constitute collections on the Receivables.

For purposes of the Sale and Servicing Agreement, collections on a Receivable, other than a Receivable purchased by the Servicer or the Sponsor, which are not late fees or other administrative fees and expenses collected during a Collection Period are required to be applied first to the Contract Scheduled Payment. To the extent that the collections on a Receivable during a Collection Period exceed the Contract Scheduled Payment on the Receivable, the collections are required to be applied to prepay the Receivable in full. If the collections are insufficient to prepay the Receivable in full, any partial prepayment of principal during a Collection Period will be immediately applied to reduce the principal balance of the Receivable during that Collection Period.

Servicing Compensation

The Servicer is entitled under the Sale and Servicing Agreement to receive on each Payment Date a fee (the “Servicer Fee”) equal to the sum of (a) the product of one-twelfth and [       ]% (the “Servicing Fee Rate”) and the Principal Balance outstanding at the beginning of the calendar month immediately preceding the month in which the Payment Date occurs and (b) any late fees. If the Backup Servicer, or any other entity becomes the successor Servicer, it will receive compensation at the Servicing Fee Rate. The Servicer will also be reimbursed for particular expenses related to the repossession of Financed Vehicles (the “Servicer Expenses”). The Servicer Fee and Servicer Expenses will be paid out of collections from the Receivables pursuant to the distribution described under “The Notes—Priority of Distribution Amounts”.

The Servicer Fee and the Servicer Expenses will compensate the Servicer for performing the functions of a third-party servicer of the Receivables as an agent for the Issuing Entity, including collecting and posting all payments, responding to inquiries of Obligors on the Receivables, investigating delinquencies, reporting any required tax information to Obligors, paying costs of collections and monitoring the collateral. In addition, the Servicer Fee will (a) compensate the Servicer for administering the Receivables, including accounting for collections, furnishing monthly and annual statements with respect to payments and generating federal income tax information, if any, and (b) reimburse the Servicer for some of the taxes, independent accountants’ fees and other costs incurred in connection with administering the Receivables.

Backup Servicing and Backup Servicing Compensation

Pursuant to the Sale and Servicing Agreement, [       ] will perform particular duties as the Backup Servicer. In addition, following the resignation or removal of the Servicer, the Backup Servicer has agreed to serve as the successor Servicer under the Sale and Servicing Agreement. The Backup Servicer will be required to carry out its duties in accordance with the customary and usual procedures of institutions which perform similar functions. On each Payment Date, the Backup Servicer will be entitled to receive a fee for acting as Backup Servicer (the “Backup Servicer Fee”) equal to one-twelfth the product of [       ] basis points and the outstanding Note Balance. In addition, following the resignation or removal of the Servicer, the Backup Servicer will be reimbursed for particular costs and expenses associated with the transition of the Backup Servicer to Servicer (the
47;Servicer Transition Expenses”).

The Sale and Servicing Agreement will provide that the Backup Servicer may not resign from its obligations and duties as Backup Servicer under the Sale and Servicing Agreement, except upon determination that, by reason of a change in legal requirements, the Backup Servicer’s performance of these duties would be in violation of particular legal requirements and the Controlling Party does not elect to waive the obligations of the Backup Servicer to perform the duties that render it legally unable to act or to delegate those duties to another Person. No resignation will become effective until a successor backup servicer has assumed the Backup Servicer’s servicing obligations and duties under the Sale and Servicing Agreement. Notwithstanding the foregoing, the Backup Servicer may resign for any reason, provided an entity acceptable to the Controlling Party has assumed the Backup Servicer’s obligations and duties under the Sale and Ser vicing Agreement prior to the effectiveness of any resignation and the Rating Agency Condition is also satisfied with respect to the resignation and assumption of the Backup Servicer’s obligations.

Certain Matters Regarding the Servicer

The Sale and Servicing Agreement will provide that the Servicer may not resign from its obligations and duties as Servicer under the Sale and Servicing Agreement, except (1) upon determination that, by reason of a change in legal requirements, the Servicer’s performance of these duties would be in violation of particular legal requirements and (2) [the Insurer, or, if an Insurer Default has occurred and is continuing,] a Note Majority, does not elect to waive the obligations of the Servicer to perform the duties that render it legally unable to act or to delegate those duties to another Person. No resignation will become effective until the Backup Servicer or a successor servicer has assumed the Servicer’s servicing obligations and duties under the Sale and Servicing Agreement.

The Sale and Servicing Agreement will further provide that neither the Servicer nor any of its stockholders, directors, officers, employees or agents, will be liable to the Issuing Entity or the Indenture Trustee for taking any action or for refraining from taking any action pursuant to the Sale and Servicing Agreement; provided, however, that neither the Servicer nor any Person will be protected against any liability that would otherwise be imposed by reason of the Servicer’s material breach of the Sale and Servicing Agreement, willful misfeasance, bad faith or negligence, other than errors in judgment, in the performance of its duties.

Subject to the provisions of the Sale and Servicing Agreement, any entity into which the Servicer may be merged or consolidated, resulting from any merger, conversion or consolidation to which the Servicer is a party, which acquires all or substantially all of the assets of the Servicer, or succeeding to the business of the Servicer, which in any case assumes the obligations of the Servicer, will be the successor of the Servicer, under the Sale and Servicing Agreement. [The Servicer may at any time perform specific duties as Servicer through other subcontractors with the prior written consent of the Insurer.]

Servicer Termination Events; Rights Upon Servicer Termination Event

A “Servicer Termination Event” under the Sale and Servicing Agreement will include:

·

the Servicer’s failure to make deposits into the Collection Account or to deliver to the Indenture Trustee any proceeds or payments payable to the Noteholders or the Insurer required to be so deposited or delivered in accordance with the Sale and Servicing Agreement, which failure continues unremedied for a period of two Business Days, one Business Day with respect to payment of Purchase Amounts, after the earlier of (x) discovery of the failure by the Servicer and (y) notice of the failure is given by the Indenture Trustee to the Servicer;

·

the Servicer’s failure or failures to satisfy any other covenant or agreement set forth in the Sale and Servicing Agreement, which failure or failures, individually or in the aggregate, materially and adversely affect the rights of Noteholders or the Insurer and remains uncured for a period of 60 days after the earlier of the date on which [(a)] it obtains actual knowledge of the failure [or (b) it receives written notice of the failure from (1) the Insurer or the Indenture Trustee or (2) if an Insurer Default has occurred and is continuing, the Note Majority];

·

particular events of insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings with respect to the Servicer indicating its insolvency;

·

[Insurer Events of Default]

·

any representation or warranty shall prove to be incorrect in any material respect and this incorrectness shall have a material adverse effect on the interest of the Issuing Entity, the Noteholders [or the Insurer] in the Receivables, which has not been cured within 30 days.

As long as a Servicer Termination Event under the Sale and Servicing Agreement remains unremedied, [(x) provided that no Insurer Default shall have occurred and be continuing, the Insurer in its sole and absolute discretion, or (y) if an Insurer Default shall have occurred and be continuing,] then the Note Majority may terminate all of the rights and obligations of the Servicer under the Sale and Servicing Agreement. Upon termination, all authority, power, obligations and responsibilities of the Servicer under the Sale and Servicing Agreement, other than obligations and responsibilities arising prior to the termination, will automatically pass to the Backup Servicer, or other successor servicer [appointed by the Insurer, provided that no Insurer Default shall have occurred and be continuing.]

Waiver of Past Defaults

As set forth under “Certain Matters Regarding Servicer—Waiver of Past Defaults” in the prospectus, the Insurer may, so long as no Insurer Default shall have occurred and be continuing, on behalf of the Noteholders, waive any default by the Servicer in the performance of its obligations under the Sale and Servicing Agreement and its consequences. No waiver will impair the Noteholders’ rights with respect to subsequent defaults.

Amendment

The Sale and Servicing Agreement may be amended by the Issuing Entity, the Sponsor, the Servicer, the Depositor, the Indenture Trustee and the Backup Servicer, [with the prior written consent of the Insurer, so long as no Insurer Default has occurred and is continuing,] but without the consent of any of the Certificateholders or the Noteholders, to cure any ambiguity, to correct or supplement any provision in this prospectus supplement or for the purpose of adding any provision to or changing in any manner or eliminating any provision of this prospectus supplement or modifying in any manner the rights of the Noteholders; provided, however, that the action must not, as evidenced by an opinion of counsel, adversely affect in any material respect the interests of the Noteholders. The Sponsor, the Issuing Entity, the Servicer, the Depositor, the Backup Servicer and the Indenture Trustee may also amend the Sale and Servicing Agreement with the prior written consent of [the Insurer, so long as no Insurer Default has occurred and is continuing, and] a Note Majority to add, change or eliminate any provisions of the Sale and Servicing Agreement or to modify the rights of the Noteholders; provided, however, that the action will not:

·

increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on Receivables or distributions that are required to be made for the benefit of the Noteholders or Certificateholders;

·

reduce the aforesaid percentage of the Noteholders or Certificateholders which is required to consent to any amendment, without, in either case, the consent of the Holders of all Notes and Certificates outstanding; [provided, further, that if an Insurer Default has occurred and is continuing, the action shall not materially adversely affect the interest of the Insurer;] or

·

result in a downgrade or withdrawal of the then current rating of the Notes by the Rating Agencies without the consent of each Noteholder.

The above should in no way be construed to require the consent of the Noteholders or Certificateholders to a reduction in the Target Overcollateralization Amount or the required level of the Class A Reserve Account.

List of Noteholders; Voting of Notes

Upon written request by three or more Noteholders or any one or more Noteholders with an aggregate principal balance evidencing not less than 25% of the Note Balance and upon compliance by these Noteholders with other provisions of the Sale and Servicing Agreement, the Indenture Trustee will afford the Noteholders, within five Business Days after receipt of the request, access during business hours to the current list of Noteholders for purposes of communicating with other Noteholders with respect to their rights under the Sale and Servicing Agreement and the Notes.

If the Sponsor or the Servicer or any of their affiliates owns any Notes, the Note will not have voting rights under the Sale and Servicing Agreement or the other Related Documents.

The Sale and Servicing Agreement will not provide for the holding of any annual or other meetings of Noteholders.

Termination

The respective obligations of the Issuing Entity, the Sponsor, the Servicer, the Depositor, the Backup Servicer and the Indenture Trustee pursuant to the Sale and Servicing Agreement will terminate upon the latest of:

·

the maturity or other liquidation of the last Receivable and the payment to Noteholders and the Insurer of amounts required to be paid under the Notes, the Indenture [and the Insurance Agreement];

·

[the expiration of the Policy in accordance with its terms; or]

·

the payment to Noteholders of all amounts required to be paid to them pursuant to the Indenture and the expiration of any related preference period.

In order to avoid excessive administrative expense, the Servicer has the option to purchase from the Issuing Entity, as of the last day of any month as of which the Aggregate Principal Balance with respect to the Receivables is less than or equal to 10% of the Original Pool Balance, all remaining Receivables at a price equal to the aggregate of the Purchase Amounts of the Receivables as of that last day, plus the appraised value of any other property held by the Issuing Entity, [with the prior written consent of the Insurer, if the redemption would result in a claim under the Policy or if the redemption would result in any amount owing to the Insurer remaining unpaid.] The Indenture Trustee will give written notice of termination to each Noteholder of record. The final distribution to any Noteholder will be made only upon surrender and cancellation of that Holder’s Note at the office or agency of the Indenture Trustee specified in the notic e of termination; provided, however, that if on the Payment Date upon which final payment of the Notes is to be made, there are five or fewer Noteholders of record, the final payment to that Noteholder will be made by check or wire transfer as described above and each Noteholder shall present and surrender its Note at the office or agency designated in the notice of final distribution referred to above within 30 days after the Payment Date.

 [THE INSURER]

[General]

[[_______________] (the “Insurer” or “[_______________]”) is a monoline financial guaranty insurance company incorporated under the laws of the State of New York.  The Insurer is currently licensed to do insurance business in, and is subject to the insurance regulation and supervision by, all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Singapore.]

[The Insurer is an indirect wholly owned subsidiary of [_______________], a [___________] (“[_______________]”).  Through its subsidiaries, [_______________] is a leading provider of insurance and reinsurance coverages and financial products and services to industrial, commercial and professional service firms, insurance companies and other enterprises on a worldwide basis.  The ordinary shares of [_______________] are publicly traded in the United States and listed on the New York Stock Exchange (NYSE: [_________]).  [_______________] is not obligated to pay the debts of or claims against the Insurer.]

[Reinsurance]

[The Insurer has entered into a facultative quota share reinsurance agreement with [____________] (“[_______________]”), an insurance company organized under the laws of [______________], and an affiliate of the Insurer.  Pursuant to this reinsurance agreement, the Insurer expects to cede up to 90% of its business to [_______________].  The Insurer may also cede reinsurance to third parties on a transaction-specific basis, which cessions may be any or a combination of quota share, first loss or excess of loss.  Such reinsurance is used by the Insurer as a risk management device and to comply with statutory and rating agency requirements and does not alter or limit the Insurer's obligations under any financial guaranty insurance policy.  With respect to any transaction insured by [_______________], the percentage of risk ceded to [_______________] may be less than 90% depending on certain factors including, without l imitation, whether [_______________] has obtained third party reinsurance covering the risk.  As a result, there can be no assurance as to the percentage reinsured by [_______________] of any given financial guaranty insurance policy issued by [_______________], including the Policy.]

[Based on the audited financials of [_______________], as of December 31, 2004, [_______________] had total assets, liabilities, redeemable preferred shares and shareholders’ equity of $[___________], $[___________], $[___________] and $[___________], respectively, determined in accordance with generally accepted accounting principles in the United States (“US GAAP”). [_______________]’s insurance financial strength is rated “Aaa” by Moody’s and “AAA” by S&P and Fitch Inc. In addition, [_______________] has obtained a financial enhancement rating of “AAA” from S&P.]  

[The obligations of [_______________] to the Insurer under the reinsurance agreement described above are unconditionally guaranteed by [___________] ("[_______________]"), a Bermuda exempted company and one of the world's leading excess commercial insurers.  [_______________] is a wholly owned indirect subsidiary of [_______________].  In addition to A.M. Best’s financial strength rating of “A+” and issuer credit rating of “aa-”, [_______________]’s insurance financial strength rating is “Aa2” (as of September 13, 2005, [_______________] is on review for downgrade) by Moody’s, “AA-” by Standard & Poor’s (on September 20, 2005, Standard & Poor’s placed [_______________] on CreditWatch with negative implications) and “AA-” (Outlook Stable) by Fitch.]  

[The rating agencies have taken certain actions with respect to [_______________] and various insurance operating subsidiaries of [_______________], as described below.  Moody’s placed the “A2” senior debt rating of [_______________] and the other insurance financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) on review for possible downgrade on September 13, 2005.  Standard & Poor’s placed the “A” senior debt rating of [_______________] and the other financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) on CreditWatch with negative implications on September 20, 2005.  Fitch downgraded the long term issuer rating of [_______________] and the insurer financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) from “A” to “A-” on October 26, 2005.  A.M. Best placed each of [___________]’s (which does not include [_______________] or [_______________]) and [_______________]’s respective financial strength ratings of “A+” and their issuer credit ratings of “aa-” under review with negative implications on September 15, 2005. ]

[The ratings of [_______________], [_______________] or any other member of the [_______________] group of companies are not recommendations to buy, sell or hold notes, including the notes and are subject to revision or withdrawal at any time by Moody’s, Standard & Poor’s or Fitch.]

[Notwithstanding the capital support provided to the Insurer described in this section, the noteholders will have direct recourse against the Insurer only, and neither [_______________] nor [_______________] will be directly liable to the noteholders.]

[Financial Strength and Financial Enhancement Ratings of [_______________]]

[The Insurer's insurance financial strength is rated “Aaa” by Moody’s and “AAA” by Standard & Poor’s and Fitch, Inc. (“Fitch”).  In addition, [_______________] has obtained a financial enhancement rating of “AAA” from Standard & Poor’s.  These ratings reflect Moody’s, Standard & Poor’s and Fitch's current assessment of the Insurer's creditworthiness and claims-paying ability as well as the reinsurance arrangement with [_______________] described under "Reinsurance" above.]

[The above ratings are not recommendations to buy, sell or hold notes, including the notes and are subject to revision or withdrawal at any time by Moody’s, Standard & Poor’s or Fitch.  Any downward revision or withdrawal of these ratings may have an adverse effect on the market price of the notes.  The Insurer does not guaranty the market price of the notes nor does it guaranty that the ratings on the notes will not be revised or withdrawn.]

[Capitalization of the Insurer]

[Based on the audited financials of [_______________], as of December 31, 2004, [_______________] had total assets, liabilities, and shareholder’s equity of $[______________], $[______________], and $[______________], respectively, determined in accordance with U.S. GAAP.]

Based on the audited statutory financial statements for [_______________] as of December 31, 2004 filed with the State of New York Insurance Department, [_______________] has total admitted assets of $[______________], total liabilities of $[______________] and total capital and surplus of $[______________] determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities (“SAP”).  

[Incorporation by Reference of Financials

]

For further information concerning [_______________] and [_______________], see the financial statements of [_______________] and [_______________], and the notes thereto, incorporated by reference in this prospectus supplement.  The financial statements of [_______________] and [_______________] are included as exhibits to the periodic reports filed with the Securities and Exchange Commission (the “Commission”) by [_______________] and may be reviewed at the EDGAR website maintained by the Commission.  All financial statements of  [_______________] and [_______________] included in, or as exhibits to, documents filed by [_______________] pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 on or prior to the date of this prospectus supplement, or after the date of this prospectus supplement but prior to termination of the offering of the notes, shall be deemed incorporated by reference in this prospectus supplement.  Except for the financial statements of [_______________] and [_______________], no other information contained in [_______________]'s reports filed with the Commission is incorporated by reference. Copies of the statutory quarterly and annual statements filed with the State of New York Insurance Department by [_______________] are available upon request to the State of New York Insurance Department.]

[Regulation of the Insurer]

[The Insurer is regulated by the Superintendent of Insurance of the State of New York.  In addition, the Insurer is subject to regulation by the insurance laws and regulations of the other jurisdictions in which it is licensed.  As a financial guaranty insurance company licensed in the State of New York, the Insurer is subject to Article 69 of the New York Insurance Law, which, among other things, limits the business of each insurer to financial guaranty insurance and related lines, prescribes minimum standards of solvency, including minimum capital requirements, establishes contingency, loss and unearned premium reserve requirements, requires the maintenance of minimum surplus to policyholders and limits the aggregate amount of insurance which may be written and the maximum size of any single risk exposure which may be assumed.  The Insurer is also required to file detailed annual financial statements with the New York Insurance Department and similar supervisory agencies in each of the other jurisdictions in which it is licensed.]

[The extent of state insurance regulation and supervision varies by jurisdiction, but New York and most other jurisdictions have laws and regulations prescribing permitted investments and governing the payment of dividends, transactions with affiliates, mergers, consolidations, acquisitions or sales of assets and incurrence of liabilities for borrowings.]

 [THE FINANCIAL GUARANTY INSURANCE POLICIES ISSUED BY THE INSURER, INCLUDING THE INSURANCE POLICY, ARE NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.]

[The principal executive offices of the Insurer are located at [____________] and its telephone number at this address is [____________].]

[THE POLICY

The following summary of the terms of the Policy does not purport to be complete and is qualified in its entirety by reference to the Policy.

Simultaneously with the issuance of the Class A Notes, the Insurer will deliver the Policy to the Indenture Trustee for the benefit of each Class A Noteholder. Under the Policy, the Insurer will unconditionally and irrevocably guarantee to the Indenture Trustee, on each Payment Date, for the benefit of each Class A Noteholder the full and complete payment of (1) Scheduled Payments on the Class A Notes and (2) the amount of any Scheduled Payment which subsequently is avoided in whole or in part as a preference payment under applicable law. In the event the Indenture Trustee fails to make a claim under the Policy, Class A Noteholders do not have the right to make a claim directly under the Policy, but may sue to compel the Indenture Trustee to do so.

“Scheduled Payments” means payments which are scheduled to be made on the Class A Notes during the term of the Policy in accordance with the original terms of the Class A Notes when issued and without regard to any subsequent amendment or modification of the Class A Notes, the Sale and Servicing Agreement or the Indenture that has not been consented to by the Insurer, which “Scheduled Payments”, are

(1)

the Class A Interest Payment Amount, with respect to a Payment Date and

(2)

the Class A Principal Payment Amount with respect to a Payment Date. Scheduled Payments do not include payments which become due on an accelerated basis as a result of

·

a default by the Issuing Entity,

·

an election by the Issuing Entity to pay principal on an accelerated basis,

·

the occurrence of an Event of Default under the Indenture or

·

any other cause,

unless the Insurer elects, in its sole discretion, to pay in whole or in part the principal due upon acceleration, together with any accrued interest to the date of acceleration.

In the event the Insurer does not so elect, the Policy will continue to guarantee Scheduled Payments due on the Class A Notes in accordance with their original terms. Scheduled Payments shall not include

(1)

any portion of a Class A Interest Payment Amount due to the Class A Noteholders because the appropriate notice and certificate for payment in proper form was not timely Received by the Insurer,

(2)

any portion of a Class A Interest Payment Amount due to Class A Noteholders representing interest on any Class A Interest Carryover Shortfall or

(3)

any Class A Mandatory Redemption Amounts,

unless the Insurer elects, in its sole discretion, to pay the amount in whole or in part. Scheduled Payments shall not include, any amounts due in respect of the Class A Notes attributable to any increase in interest rate, penalty or other sum payable by the Issuing Entity by reason of any default or event of default in respect of the Class A Notes or by reason of any deterioration of the creditworthiness of the Issuing Entity nor shall coverage be provided under the Policy in respect of any taxes, withholding or other charge imposed with respect to any Noteholder by any governmental authority due in connection with the payment of any Scheduled Payment to a Class A Noteholder.

Payment of claims on the Policy made in respect of Scheduled Payments will be made by the Insurer following Receipt by the Insurer of the appropriate notice for payment on the later to occur of (1) 12:00 noon, New York City time, on the third Business Day following Receipt of notice for payment, and (2) 12:00 noon, New York City time, on the date on which the payment was due on the Class A Notes.

If payment of any amount avoided as a preference under applicable bankruptcy, insolvency, receivership or similar law is required to be made under the Policy, the Insurer shall cause the payment to be made on the later of

(a)

the date when due to be paid pursuant to the Order referred to below or

(b)

the first to occur of

(1)

the fourth Business Day following Receipt by the Insurer from the Indenture Trustee of

(A)

a certified copy of the order (the “Order”) of the court or other governmental body that exercised jurisdiction to the effect that the Class A Noteholder is required to return Scheduled Payments made with respect to the Class A Notes during the term of the Policy because the payments were avoidable as preference payments under applicable bankruptcy law,

(B)

a certificate of the Class A Noteholder that the Order has been entered and is not subject to any stay and

(C)

an assignment duly executed and delivered by the Class A Noteholder, in a form as is reasonably required by the Insurer and provided to the Class A Noteholder by the Insurer, irrevocably assigning to the Insurer all rights and claims of the Class A Noteholder relating to or arising under the Class A Notes against the Issuing Entity or otherwise with respect to the preference payment, or

(2)

the date of Receipt by the Insurer from the Indenture Trustee of the items referred to in clauses (A), (B) and (C) above if, at least four Business Days prior to the date of Receipt, the Insurer shall have Received written notice from the Indenture Trustee that these items were to be delivered on that date and the date was specified in the notice.

This payment shall be disbursed to the receiver, conservator, debtor-in-possession or trustee in bankruptcy named in the Order and not to the Indenture Trustee or any Class A Noteholder directly, unless a Class A Noteholder has previously paid the amount to the receiver, conservator, debtor-in-possession or trustee in bankruptcy named in the Order, in which case the payment shall be disbursed to the Indenture Trustee for distribution to the Class A Noteholder upon proof of the payment reasonably satisfactory to the Insurer. In connection with the foregoing, the Insurer shall have the rights provided pursuant to the Sale and Servicing Agreement including, without limitation, the right to direct all matters relating to any preference claim and subrogation to the rights of the Indenture Trustee and each Class A Noteholder in the conduct of any proceeding with respect to a preference claim.

Other Provisions of the Policy

The terms “Receipt” and “Received” with respect to the Policy shall mean actual delivery to the Insurer and to its fiscal agent, if any, prior to 12:00 noon, New York City time, on a Business Day; delivery either on a day that is not a Business Day or after 12:00 noon, New York City time, shall be deemed to be Received on the next succeeding Business Day. If any notice or certificate given under the Policy by the Indenture Trustee is not in proper form or is not properly completed, executed or delivered, it shall be denied not to have been Received, and the Insurer or its fiscal agent shall promptly so advise the Indenture Trustee, and the Indenture Trustee may submit an amended notice.

Under the Policy, “Business Day” means any day other than a Saturday, Sunday, legal holiday or other day on which commercial banking institutions in Wilmington, Delaware, the City of New York or any other location of any successor Servicer, successor Owner Trustee or successor Indenture Trustee are authorized or obligated by law, executive order or governmental decree to be closed.

The Insurer’s obligations under the Policy in respect of Scheduled Payments shall be discharged to the extent funds are transferred to the Indenture Trustee as provided in the Policy whether or not the funds are properly applied by the Indenture Trustee.

The Insurer shall be subrogated to the rights of each Class A Noteholder to receive payments of principal and interest to the extent of any payment by the Insurer under the Policy.

Claims under the Policy constitute direct, unsecured and unsubordinated obligations of the Insurer ranking not less than pari passu with other unsecured and unsubordinated indebtedness of the Insurer for borrowed money. Claims against the Insurer under the Policy and each other financial guaranty insurance policy issued by the Policy constitute pari passu claims against the general assets of the Insurer. The terms of the Policy cannot be modified or altered by any other agreement or instrument, or by the merger, consolidation or dissolution of the Issuing Entity. The Policy may not be canceled or revoked prior to distribution in full of all Scheduled Payments with respect to the Notes. The Policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law. The Policy is governed by the laws of the State of New York.

It is a condition to issuance that the Class A Notes be rated [       ] by [       ] and [       ] by [       ]. The ratings by the Rating Agencies of the Class A Notes will be based on the issuance of the Policy. A rating is not a recommendation to purchase, hold or sell Class A Notes. In the event that the rating initially assigned to any of the Class A Notes is subsequently lowered or withdrawn for any reason, including by reason of a downgrading of the claims-paying ability of the Insurer, no person or entity will be obligated to provide any additional credit enhancement with respect to the Class A Notes. Any reduction or withdrawal of a rating may have an adverse effect on the liquidity and market price of the Notes. See “Ratings” in this prospectus supplement.]

[OTHER CREDIT ENHANCEMENT PROVIDER]

[Regulation AB Item 1114 compliant description of any other credit enhancement provider.]

[DERIVATIVE INSTRUMENTS]

[The Interest Rate Swap Agreement and the Swap Provider]

[The Offered Certificates and Class B Certificates will have the benefit of an interest rate swap agreement.  On or before the Closing Date, the Trustee will enter into an interest rate swap agreement (the “Interest Rate Swap Agreement”) with [_______] (the “Swap Provider”).  A separate trust created under the pooling and servicing agreement (the "Supplemental Interest Trust") will hold the Interest Rate Swap Agreement documented by a 1992 ISDA Master Agreement (Multicurrency-Cross Border), together with a Schedule and Confirmation between The Trustee, on behalf of the Supplemental Interest Trust, and the Swap Provider. ]

[The significance percentage, as calculated in accordance with Item 1115 of Regulation AB is less than 10%.]

[If significance percentage, as calculated in accordance with Item 1115 of Regulation AB, is 10% or more, provide financial information required by Item 1115 of Regulation AB.]

[Pursuant to the Interest Rate Swap Agreement, on each Distribution Date, (i) the Securities Administrator (on behalf of the Supplemental Interest Trust and from funds of such trust) will be obligated to pay to the Swap Provider, a fixed amount equal to the product of (x) [__]%, (y) the Swap Notional Amount for that Distribution Date set forth in the Interest Rate Swap Agreement and (z) a fraction, the numerator of which is 30 (or, for the first Distribution Date, the number of days elapsed from the Closing Date to but excluding the first Distribution Date on a 30/360 basis), and the denominator of which is 360 (the “Securities Administrator Swap Payment”); and (ii) the Swap Provider will be obligated to pay to the Supplemental Interest Trust for the benefit of the holders of the Offered Certificates and the Class B Certificates (the “Swap Provider Payment”), a floating amount equal to the product of (x) one-mon th LIBOR (as determined pursuant to the Interest Rate Swap Agreement), (y) the Swap Notional Amount for that Distribution Date set forth in the Interest Rate Swap Agreement, and (z) a fraction, the numerator of which is the actual number of days elapsed from the previous Distribution Date to but excluding the current Distribution Date (or, for the first Distribution Date, the actual number of days elapsed from the Closing Date to but excluding the first Distribution Date), and the denominator of which is 360.  A net payment will be required to be made on each Distribution Date (each such net payment, a “Net Swap Payment”) (a) by the Securities Administrator to the Swap Provider, to the extent that the fixed amount exceeds the corresponding floating amount, or (b) by the Swap Provider to the Securities Administrator, to the extent that the floating amount exceeds the corresponding fixed amount. Payments received by the Supplemental Interest Trust pursuant to the Interest Rate Swap Agreement wil l be available for distributions of Interest Carry Forward Amounts, Net WAC Rate Carryforward Amounts, amounts necessary to maintain the Required Overcollateralization Amount and Allocated Realized Loss Amounts.]

[The “Swap Notional Amount” with respect to each Distribution Date commencing in [______, __], is set forth below (which will be substantially the same schedule as set forth in the Interest Rate Swap Agreement).  The Interest Rate Swap Agreement will terminate immediately following the Distribution Date in [______, __], unless terminated earlier upon the occurrence of a Swap Default, an Early Termination Event or an Additional Termination Event (each as defined below).]

Distribution Date	Swap Notional Amount
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]

[The respective obligations of the Swap Provider and the Supplemental Interest Trust to pay specified amounts due under the Interest Rate Swap Agreement will be subject to the following conditions precedent: (1) no Swap Default or event that with the giving of notice or lapse of time or both would become a Swap Default, in each case, in respect of the other party, shall have occurred and be continuing with respect to the Interest Rate Swap Agreement and (2) no “Early Termination Date” (as defined in the ISDA Master Agreement) has occurred or been effectively designated with respect to the Interest Rate Swap Agreement.]

[An Interest Rate Cap Agreement]

[The Class [__] certificates will have the benefit of the Interest Rate Cap Agreement. Pursuant to the Interest Rate Cap Agreement, with respect to any Distribution Date, commencing with the Distribution Date in [__], 20[ ], on or prior to the Distribution Date in [__], 20[ ], [_______], (the “Cap Provider”), will be obligated to pay to the trust administrator, an amount equal to the product of (a) the excess, if any, of (i) the then current one-month LIBOR rate (determined in accordance with the Interest Rate Cap Agreement) up to a maximum of [__]% (the “Maximum Cap Rate”) and (ii) a specified strike rate of [__]% (the “Cap Strike Rate”) and (b) the Interest Rate Cap Agreement Notional Amount set forth on the schedule attached as Annex B hereto for that Distribution Date, determined on a 30/360 Basis. (each such payment, the “Cap Agreement Payment”). The Interest Rate Cap Agreement will terminate after th e Distribution Date in [__], 20[ ].

The obligations of the Cap Provider are limited to those specifically set forth in the Interest Rate Cap Agreement. The Cap Provider conducts business in the over-the-counter derivatives market, engaging in a variety of derivatives products, including interest rate swaps, currency swaps, credit default swaps and interest rate options with institutional clients.

For the Class [__] certificates and each Distribution Date prior to and including the Distribution Date in [__], 20[ ],  any Cap Agreement Payment received by the trust administrator will be used to pay the related Cap Amount to such classes of certificates, as described below under “––The Reserve Funds.”  Amounts received on  the Interest Rate Cap Agreement will not be available to make distributions on any class of Certificates other than the Class [__] certificates.

The Interest Rate Cap Agreement will be governed by and construed in accordance with the law of the State of New York. The obligations of the Cap Provider are limited to those specifically set forth in the Interest Rate Cap Agreement. The Class [__] certificates do not represent an obligation of the Cap Provider. The holders of the Class [__] certificates are not parties to or beneficiaries under the Interest Rate Cap Agreement and will not have any right to proceed directly against the cap provider in respect of its obligations under the Interest Rate Cap Agreement.]

[A Yield Maintenance Agreement]

The Issuing Entity will enter into a Yield Maintenance Agreement for the benefit of the Class [__] Certificates.  Under the Yield Maintenance Agreement, the Counterparty will agree to pay to the Issuing Entity two Business Days prior to each Distribution Date beginning in [__], 20[ ] and to and including the Distribution Date in [__], 20[ ], an amount equal to the product of:

1.

the excess, if any, of LIBOR (as calculated under the related Yield Maintenance Agreement subject to the Rate Cap Ceiling) over the Cap Strike Rate for that Distribution Date;

2.

the related Scheduled Notional Amount for that Distribution Date; and

3.

a fraction, the numerator of which is the actual number of days elapsed from the previous Distribution Date to but excluding the current Distribution Date, and the denominator of which is 360.

The Scheduled Notional Amounts for each Yield Maintenance Agreement decline in accordance with the expected amortization of the Mortgage Loans.  The Yield Maintenance Agreements will terminate immediately following the Distribution Date in [__], 20[ ].

The Yield Maintenance Agreements will be governed by and construed in accordance with the law of the State of New York and will be documented under the ISDA Master Agreement, as supplemented by the schedule and the confirmation.  The obligations of the Counterparty are limited to those specifically set forth in the related Yield Maintenance Agreement.

Any amounts received by the Securities Administrator under a Yield Maintenance Agreement will be distributed as follows:

1.

to the Reserve Fund, in an amount equal to the Basis Risk Shortfall Carryover Amount for the Class [__] Certificates for such Distribution Date;

2.

to the Principal Remittance Amount, the Net Cumulative Realized Loss Amount on such Distribution Date;

3.

to the Class [__] Certificates, any applicable Unpaid Realized Loss Amounts, and

4.

to the Class [__] Certificates, any remaining amounts.

FEDERAL INCOME TAX CONSEQUENCES

The following is a general summary of some of the related Federal income tax consequences of the purchase, ownership and disposition of the Class A Notes. This discussion does not address every aspect of the Federal income tax laws that may be relevant to holders of Class A Notes in light of their personal investment circumstances or to particular types of Class A Noteholders subject to special treatment under the Federal income tax laws, including, without limitation, banks and thrifts, insurance companies, dealers in securities, foreign investors, regulated investment companies, individuals, trusts and estates and pass-through entities, the equity holders of which are any of the foregoing. This discussion is directed to prospective purchasers who purchase Class A Notes in the initial distribution of the Class A Notes and who hold the Class A Notes as “capital assets” within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). Prospective purchasers are urged to consult their own tax advisors in determining the Federal, state, local, foreign and any other tax consequences to them of the purchase, ownership and disposition of the Class A Notes.

The following summary is based upon current provisions of the Code, the Treasury regulations promulgated under the Code, judicial authority, and ruling authority, all of which are subject to change, which change may be retroactive. The Issuing Entity will be provided with an opinion of Federal Tax Counsel regarding some of the related Federal income tax matters discussed below. An opinion of Federal Tax Counsel, however, is not binding on the Internal Revenue Service (the “IRS”) or the courts. Moreover, there are no cases or IRS rulings on similar transactions with terms similar to those of the Class A Notes. As a result, the IRS may disagree with all or a part of the discussion below. No ruling on any of the issues discussed below will be sought from the IRS.

Tax Characterization of the Issuing Entity

McKee Nelson LLP will deliver its opinion that the Issuing Entity will not be classified as an association, or publicly traded partnership taxable as a corporation for Federal income tax purposes. This opinion will be based on the assumption of compliance by all parties with the terms of the Trust Agreement and related documents.

If the Issuing Entity were taxable as a corporation for Federal income tax purposes, the Issuing Entity would be subject to corporate income tax on its taxable income. The Issuing Entity’s taxable income would include all its income on the Receivables, possibly reduced by its interest expense on the Class A Notes. Any corporate income tax could materially reduce cash available to make payments on the Class A Notes and distributions on the Certificates, and Certificateholders, could be liable for any tax that is not paid by the Issuing Entity.

Tax Consequences to Holders of the Class A Notes

Treatment of the Class A Notes as Indebtedness.  The Issuing Entity will agree, and the Class A Noteholders will agree by their purchase of Class A Notes, to treat the Class A Notes as debt for Federal, state and local income and franchise tax purposes. Federal Tax Counsel will advise the Issuing Entity that in its opinion the Class A Notes will be classified as debt for Federal income tax purposes.

The prepayment assumption that is used in determining the accrual of original issue discount, market discount or premium with respect to the Notes is [100% Prepayment Assumption], as defined below.  However, no representation is made that the loans will prepay in accordance with this assumption or in accordance with any other assumption.  The [100% Prepayment Assumption] assumes a [constant prepayment rate of ___%].

Alternatively, if, contrary to the opinion of Federal Tax Counsel, the Class A Notes were not properly classified as debt and Issuing Entity were treated as a publicly traded partnership taxable as a corporation, it would be subject to Federal income tax, and any similar state or local taxes, at corporate tax rates on its taxable income generated by ownership of the Receivables.  This tax could result in reduced distributions to Class A Noteholders. Distributions to Class A Noteholders generally would not be deductible in computing the taxable income of the publicly traded partnership. In addition, all or a portion of any distributions would, to the extent of the current and accumulated earnings and profits of the corporation, be treated as dividend income to the Class A Noteholders, and in the case of Class A Noteholders that are foreign persons would be subject to withholding tax.

Interest Income and OID on the Class A Notes.

It is not anticipated that the Class A Notes will be issued with original issue discount (“OID”) within the meaning of Section 1273 of the Code. The stated interest on the Class A Notes will be taxable to a Class A Noteholder as ordinary interest income when received or accrued in accordance with the Class A Noteholder’s method of tax accounting. If the Class A Notes were treated as being issued with OID, the excess of the “stated redemption price at maturity” of the Class A Notes over their issue price would constitute OID. Under the OID Regulations, a holder of a Class A Note issued with a de minimis amount of OID must include this OID in income, on a pro rata basis, as principal payments are made on the Class A Note. A subsequent purchaser who buys a Class A Note for more or less than its principal amount will generally be subject, respectively, to the premium amortization or market discount rules of the Code.

Sale or Other Disposition.

If a Class A Noteholder sells a Class A Note, the holder will recognize gain or loss in an amount equal to the difference between the amount realized on the sale and the holder’s adjusted tax basis in the Class A Note. The adjusted tax basis of a Class A Note to a particular Class A Noteholder will equal the holder’s cost for the Class A Note, increased by any market discount, and gain previously included by the Class A Noteholder in income with respect to the Class A Note and decreased by the amount of premium, if any, previously amortized and by the amount of principal payments previously received by the Class A Noteholder with respect to the related Class A Note. Any gain or loss will be capital gain or loss, except for gain representing accrued interest, including OID, and accrued market discount not previously included in income. Capital losses generally may be used by a corporate taxpayer only to offset capital gains, and by an i ndividual taxpayer only to the extent of capital gains plus $3,000 of other income.

Foreign Holders.

Except as discussed below, a Class A Noteholder that is not a “United States person” (as defined below) generally will not be subject to United States income or withholding tax in respect of a distribution on a Class A Note provided that (i) the holder complies to the extent necessary with certain certification requirements, which generally relate to the identity of the beneficial owner and the status of the beneficial owner as a person that is not a United States person (as defined below), (ii) the holder is not a “10-percent shareholder” within the meaning of Section 871(h)(3)(B) of the Code, which could be interpreted to include a person that directly or indirectly owns 10% or more of the certificates in the Issuing Entity or the equity in the Sponsor or the Depositor, (iii) the holder is not a “controlled foreign corporation” (as defined in the Code) related to the Issuing Entity or related to a 10 percent holde r of certificates in the Issuing Entity or equity in the Sponsor or the Depositor, and (iv) the holder is not engaged in a United States trade or business, or otherwise subject to Federal income tax as a result of any direct or indirect connection to the United States other than through its ownership of a Class A Note.  For these purposes, the term “United States person” means (i) a citizen or resident of the United States, (ii) a corporation or partnership (or other entity properly treated as a corporation or partnership for Federal income tax purposes) created or organized in or under the laws of the United States or any State thereof or the District of Columbia, (iii) an estate whose income is includable in gross income for United States Federal income taxation regardless of its source, and (iv) a trust for which one or more United States persons have the authority to control all substantial decisions and for which a court of the United States can exercise primary supervision over the trust ’s administration and certain eligible trusts that elect to be treated as United States persons.  A “Foreign Person” is any person that is not a United States person.  Each Class A Noteholder should consult its tax advisors regarding the tax documentation and certifications that must be provided to secure the exemption from United States withholding taxes.

Any capital gain realized on the sale, redemption, retirement or other taxable disposition of a Class A Note by a Foreign Person generally will be exempt from United States Federal income and withholding tax, provided that (i) such gain is not effectively connected with the conduct of a trade or business in the United States by the Foreign Person and (ii) in the case of an individual Foreign Person, the Foreign Person is not present in the United States for 183 days or more in the taxable year.

If the interest, gain or income on a Class A Note held by a Foreign Person is effectively connected with the conduct of a trade or business in the United States by the Foreign Person (although exempt from the withholding tax previously discussed if the holder provides an appropriate statement establishing that such income is so effectively connected), the holder generally will be subject to United States Federal income tax on the interest, gain or income at regular Federal income tax rates.  In addition, if the Foreign Person is a foreign corporation, it may be subject to a branch profits tax equal to 30% of its effectively connected earnings and profits,” within the meaning of the Code, for the taxable year, as adjusted for certain items, unless it qualifies for a lower rate under an applicable tax treaty (as modified by the branch profits tax rules).

If the IRS were to contend successfully that the Class A Notes are interests in a partnership, not taxable as a corporation, a Class A Noteholder that is a foreign person might be required to file a United States. Federal income tax return and pay tax on its share of partnership income at regular United States tax rates, including the branch profits tax, and could be subject to withholding tax on its share of partnership income. If the Class A Notes were recharacterized as interests in a “publicly traded partnership” taxable as a corporation, distributions on the Class A Notes treated as dividends would generally be subject to withholding tax on the gross amount of the dividends at the rate of 30% unless the rate were reduced by an applicable treaty. If the Class A Notes are recharacterized as equity interests in a partnership, or, contrary to the opinion of Federal Tax Counsel, in a publicly traded partnership taxable as a corporation , any taxes required to be so withheld will be treated for all purposes of the Class A Notes as having been paid to the related Class A Noteholder.

Backup Withholding. Distributions made on the Class A Notes and proceeds from the sale of Class A Notes to or through certain brokers may be subject to a “backup” withholding tax on “reportable payments” (including interest accruals, original issue discount, and, under certain circumstances, distributions in reduction of principal amount) if the holder of the Class A Notes fails to comply with certain identification procedures, unless the Class A Noteholder is an exempt recipient under applicable provisions of the Code and, if necessary, demonstrates such status.  Any amounts so withheld from distributions on the Class A Notes would be refunded by the IRS or allowable as a credit against the Class A Noteholder’s Federal income tax.

CERTAIN STATE TAX CONSEQUENCES

In addition to the federal income tax consequences described in “Material Federal Income Tax Consequences” above, potential purchasers should consider the state income tax consequences of the acquisition, ownership and disposition of the Class A Notes. State income tax law may vary substantially from state to state, and this discussion does not purport to describe any aspect of the income tax laws of any state. Therefore, potential purchasers should consult their own tax advisors with respect to the various tax consequences of an investment in the Class A Notes.

ERISA CONSIDERATIONS

General

Section 406 of ERISA prohibits, and Section 4975 of the Code imposes adverse tax consequences on, certain transactions between any benefit plan which is subject to Title I of ERISA and/or Section 4975 of the Code or is an entity which is deemed to hold the assets of the foregoing (the “Plan”) and persons that are “parties in interest” under ERISA or “disqualified persons” under the Code with respect to such Plan.  A violation of these “prohibited transaction” rules may result in excise taxes and other penalties and liabilities under ERISA and the Code for such persons.

Certain transactions involving the assets of an issuing entity might be deemed to constitute prohibited transactions under Section 406 ERISA and Section 4975 of the Code with respect to a Plan that purchased notes issued by that issuing entity if assets of the issuing entity were deemed to be assets of the Plan.  Under the regulation issued by the United States Department of Labor set forth at 29 C.F.R. Section 2510.3-101 governing the definition of “plan assets” for purposes of the fiduciary responsibility and prohibited transaction provisions of ERISA and Section 4975 of the Code (the “Plan Asset Regulations”), the assets of an issuing entity would be treated as plan assets of the Plan for the purposes of ERISA and the Code only if the Plan acquired an “equity interest” in the issuing entity and none of the exceptions contained in the Plan Asset Regulations was applicable.  An equity interest is defined under the Plan Asset Regulations as an interest other than an instrument which is treated as indebtedness under applicable local law and which has no substantial equity features.

Purchases of the Notes

Although there is little guidance on the subject, the notes should be treated as indebtedness without substantial equity features for purposes of the Plan Asset Regulations.  This determination is based in part upon (i) tax counsel’s opinion that notes transferred on the closing date to parties unrelated to the holder of the Residual Certificates will be classified as debt for U. S. federal income tax purposes and that retained notes, if later sold to a party unrelated to the holder of the Residual Certificates for cash, will be classified as debt instruments for U.S. federal income tax purposes as of the date of such sale, based on certain assumptions (including that the rating of the notes as of the closing date has not declined below investment grade) and (ii) the traditional debt features of the notes, including the reasonable expectation of purchasers of the notes that they will be repaid when due, as well as the absence of conversion rights, warrants an d other typical equity features.  Based upon the foregoing and other considerations, subject to the considerations described below, the notes may be purchased by a Plan.

Without regard to whether the notes are considered an “equity interest” in the issuing entity under the Plan Asset Regulations, the acquisition or holding of notes by or on behalf of a Plan could be considered to give rise to a prohibited transaction if the underwriters, the issuing entity, the owner trustee or the indenture trustee, or any of their respective affiliates is or becomes a party in interest or a disqualified person with respect to such Plan.  In that case, PTE 84-14 (relating to transactions effected by a “qualified professional asset manager”); PTE 90-1 (relating to transactions involving insurance company pooled separate accounts); PTE 91-38 (relating to transactions involving bank collective investment funds); PTE 95-60 (relating to transactions involving insurance company general accounts); PTE 96-23 (relating to transactions effected by an “in-house asset manager”); and any other applicable exemption granted by the U.S. Department of Labor (the “Investor Based Exemptions) could be applicable, depending on the type of Plan involved and the circumstances of the plan fiduciary’s decision to acquire a note.  Even if the conditions specified in one or more of the Investor-Based Exemptions are met, the scope of the relief provided by these exemptions might or might not cover all acts that might be construed as prohibited transactions.  There can be no assurance that any of the Investor-Based Exemptions, or any other exemption, will be available with respect to any particular transaction involving the notes.

Certain employee benefit plans, including governmental plans (as defined in Section 3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and foreign plans are not subject to the ERISA requirements but may be subject to federal, state, local or foreign laws that are substantially similar to ERISA or the Code (“Similar Law”), such plans, together with Plans are referred to herein as “Benefit Plans.”

The notes should not be purchased with the assets of a Plan if the depositor, the servicer, the master servicer, the indenture trustee, the owner trustee, the underwriters or any of their affiliates is a fiduciary or gives investment advice with respect to such Plan or is an employer maintaining or contributing to such Plan, unless such purchase and holding of the notes would be covered by an applicable prohibited transaction exemption.

Each purchaser and transferee of a note will be deemed to represent and warrant to the issuing entity that either (i) it is not a Benefit Plan or (ii) it is a Benefit Plan and its acquisition and holding of such notes will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code which is not covered under an Investor-Based Exemption or some other applicable exemption, and will not cause a non-exempt violation of any substantially Similar Law.

Prospective Benefit Plan investors in notes should consult with their legal advisors concerning the impact of ERISA and the Code, the availability of other exemptions from the prohibited transaction rules that may apply to them, and the potential consequences in their specific circumstances, prior to making an investment in the notes.  Each Benefit Plan fiduciary should also determine whether under the general fiduciary standards of investment prudence and diversification, an investment in the notes is appropriate for the Benefit Plan, taking into account the overall investment policy of the Plan and the composition of the Benefit Plan’s investment portfolio.

UNDERWRITING

Subject to the terms and conditions set forth in an underwriting agreement dated [                  ] (the “Underwriting Agreement”), the Depositor has agreed to cause the Issuing Entity to sell to [Deutsche Bank Securities Inc.] (the “Underwriter”), and the Underwriter has agreed to purchase, all of the Class A Notes.

Under the terms and conditions of the Underwriting Agreement, the Underwriter is committed to take and pay for all the Class A Notes offered by this prospectus supplement, if any are taken.

The Sponsor has been advised by the Underwriter that the Underwriter proposes to offer the Class A Notes from time to time for sale in negotiated transactions or otherwise, at prices determined at the time of sale. The Underwriter may effect these transactions by selling Class A Notes to or through dealers and these dealers may receive compensation in the form of underwriting discounts, concessions or commissions from the Underwriter and any purchasers of Class A Notes for whom they may act as agents. The Underwriter and any dealers that participate with the Underwriter in the distribution of the Class A Notes may be deemed to be underwriters, and any discounts or commissions received by them and any profit on the resale of Class A Notes by them may be deemed to be underwriting discounts or commissions under the Securities Act of 1933, as amended (the “Securities Act”).

The Class A Notes are a new issue of securities with no established trading market. The Issuing Entity has been advised by the Underwriter that it intends to make a market in the Class A Notes, but the Underwriter is not obligated to make a market and may discontinue market making at any time without notice. No assurance can be given as to the liquidity of the trading market for the Class A Notes.

An affiliate of the underwriter provides a warehouse facility to the Sponsor.

The Sponsor has agreed to indemnify the Underwriter against particular types of liabilities, including liabilities under the Securities Act.

RATINGS

It is a condition to issuance that each of the Class A-1 Notes and the Class A-2 Notes be rated [       ] by [       ] and [       ] by [       ]. The ratings by the Rating Agencies of the Class A Notes will be based on the issuance of the Policy. A rating is not a recommendation to purchase, hold or sell Class A Notes. In the event that the rating initially assigned to any of the Class A Notes is subsequently lowered or withdrawn for any reason, including by reason of a downgrading of the claims-paying ability of the Insurer, no person or entity will be obligated to provide any additional credit enhancement with respect to the Class A Notes. Any reduction or withdrawal of a rating may have an adverse effect on the liquidity and market price of the Class A Notes.

The rating agencies have stated that it is their standard policy to monitor ratings on publicly offered notes for which a rating has been provided, as to each rating agency rating each class of notes in accordance with the rating agencies’ particular surveillance policies, unless the issuer requests a rating without surveillance.  A rating agency will monitor the rating it issues on an ongoing basis and may update the rating after conducting its regular review of the issuer’s creditworthiness or after conducting a review of the status of the rating upon becoming aware of any information that might reasonably be expected to result in a change of rating.  The depositor has not requested that any rating agency not monitor their ratings of the notes, and the depositor has not requested that any rating agency use any monitoring procedures other than their standard monitoring procedures.

LEGAL PROCEEDINGS

[There are no material legal proceedings pending against the Sponsor, the Depositor, the Owner Trustee, the Indenture Trustee, the Issuing Entity, [any affiliated Servicer, any 20% concentration unaffiliated Servicer, any 20% concentration Originator], or with respect to which the property of any of the foregoing transaction parties is subject, that are material to the noteholders.  No legal proceedings against any of the foregoing transaction parties is known to be contemplated by governmental authorities, that are material to the noteholders.]

AFFILIATIONS, RELATIONSHIPS AND RELATED TRANSACTIONS

[There are no affiliations between the Sponsor, the Depositor or the Issuing Entity and any of [any affiliated Servicer, any 20% concentration unaffiliated Servicer], the Owner Trustee, the Indenture Trustee, [any 10% concentration Originator] or [any credit enhancement provider or derivatives counterparty].  There are no affiliations among [any affiliated Servicer, any 20% concentration unaffiliated Servicer], the Owner Trustee, the Indenture Trustee, [any 10% concentration Originator] or [any credit enhancement provider or derivatives counterparty].  There are currently no business relationships, agreements, arrangements, transactions or understandings between (a) the Sponsor, the Depositor or the Issuing Entity and (b) any of the parties referred to in the preceding sentence, or any of their respective affiliates, that were entered into outside the normal course of business or that contain terms other than would be obtained in an ar m’s length transaction with an unrelated third party and that are material to the investor's understanding of the notes, or that relate to the notes or the pooled assets.  No such business relationship, agreement, arrangement, transaction or understanding has existed during the past two years.]

[EXPERTS

The consolidated balance sheets of Financial Security and Subsidiaries as of December 31, [       ] and [       ] and the related consolidated statements of income, changes in shareholder’s equity and cash flows for each of the three years in the period ended December 31, [       ], incorporated by reference in this prospectus supplement, have been incorporated in this prospectus supplement in reliance on the report of [       ], independent accountants, given on the authority of that firm as experts in accounting and auditing.]

LEGAL MATTERS

Some legal matters relating to the Class A Notes and some related federal income tax and other matters will be passed upon for the Sponsor by [       ].  Some legal matters relating to the Class A Notes will be passed upon for the Underwriter and the Depositor by McKee Nelson LLP, New York, New York.

The information in this prospectus supplement is not complete and may be changed.  We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective.  This prospectus supplement is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED [_________]

PROSPECTUS SUPPLEMENT (to prospectus dated [            ])

$[               ] (Approximate)

ACE SECURITIES CORP., [______] Auto Trust [______], Series  [       ]

Asset Backed Notes

[______] Auto Trust [______]

Issuing Entity

[DB Structured Products, Inc.]

Sponsor

ACE Securities Corp.

Depositor

[               ]

Servicer

Securities Offered • $[      ], [     ]% Class [_____] asset backed notes • $[      ], [     ]% Class [_____] asset backed notes • $[      ], [     ]% asset backed certificates Assets • Retail automobile receivables Credit Enhancement • Subordination of the certificates • Reserve account • [Describe any other credit enhancement provided by [_____]] Expected Ratings • [      ] or equivalent for the notes • [      ] or equivalent for the certificates Consider carefully the risk factors beginning on page S-[  ] of this prospectus supplement and on page [  ] of the prospectus. For a list of capitalized terms used in this prospectus supplement and the prospectus, see the index of defined terms beginning on page S-[  ] of this prospectus supplement and on page [  ] of the prospectus. The notes will represent interests in the Issuing Entity only and will not represent interests in or obligations of the sponsor, the depositor or any of their affiliates. Distributions on the notes will be made on the [__]th day of each month, or, if such day is not a business day, on the next succeeding business day, beginning in [__]. This prospectus supplement may be used to offer and sell the notes only if accompanied by the prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this prospectus supplement or the attached prospectus is accurate or complete.  Making any contrary representation is a criminal offense.

Subject to the satisfaction of certain conditions, the underwriter named below is offering the notes and certificates at the price to public shown.  The securities will be delivered in book entry form only on or about [        ].

	Price to Public	Underwriting Discounts & Commissions	Proceeds to the Depositor(1)
Per Note	[    ]%	[    ]%	[    ]%
Per Certificate	[    ]%	[    ]%	[    ]%
Total	$[     ]	$[     ]	$[     ]

___________________________

1  Before deducting expenses, estimated to be $ [      ].

[Deutsche Bank Securities]

The date of this prospectus supplement is [         ].

Important Notice About Information Presented in this
Prospectus Supplement and the Accompanying Prospectus:

We provide information to you about the securities offered by this prospectus supplement in two separate documents that progressively provide more detail: (1) the accompanying prospectus, which provides general information, some of which may not apply to your securities, and (2) this prospectus supplement, which describes the specific terms of your securities.

If the information regarding the securities is more specific in this prospectus supplement than in the prospectus, then you should rely on the information in this prospectus supplement.

You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus.  We have not authorized anyone to provide you with different information.

We are not offering the securities in any state where the offer is not permitted.  We do not claim that the information in this prospectus supplement and prospectus is accurate as of any date other than the dates stated on their respective covers.

Dealers will deliver a prospectus supplement and prospectus when acting as underwriters of the securities and with respect to their unsold allotments or subscriptions.  In addition, all dealers selling the securities will be required to deliver a prospectus supplement and prospectus for ninety days following the date of this prospectus supplement.

We include cross-references in this prospectus supplement and the accompanying prospectus to captions in these materials where you can find further related discussions.  The following table of contents and the table of contents included in the accompanying prospectus provide the pages on which these captions are located.

TABLE OF CONTENTS

Prospectus Supplement

Caption

Page

Summary of Terms

1

Risk Factors

1

Formation of the Trust

3

The Trust Property

4

The Receivables Pool

5

STATIC POOL INFORMATION

10

THE ORIGINATORS

11

The Servicer

11

[Weighted Average Life of the Securities]

12

Use of Proceeds

15

Description of the Notes

15

Description of the Certificates

16

Description of the Transfer and Servicing Agreements

17

Federal Income Tax Consequences

27

State and Local Tax Consequences

31

ERISA Considerations

36

Underwriting

38

RATINGS

39

LEGAL PROCEEDINGS

39

AFFILIATIONS, RELATIONSHIPS AND RELATED TRANSACTIONS

39

Legal Matters

40

SUMMARY OF TERMS

This summary highlights selected information from this prospectus supplement and does not contain all of the information that you need to consider in making your investment decision.  To understand all of the terms of the offering of the securities, it is necessary that you read carefully this entire prospectus supplement and accompanying prospectus.

While this summary contains an overview of certain calculations, cash flow priorities, and other information to aid your understanding, you should read carefully the full description of these calculations, cash flow priorities and other information in this prospectus supplement and the accompanying prospectus before making any investment decision.

Issuing Entity	[      ] Auto Trust [      ]-[      ], a limited purpose Delaware business trust.
Depositor	Ace Securities Corp.  See “The Depositor” in the Prospectus.
Servicer	[      ].
Sponsor	[      ].  See “The Sponsor” in the Prospectus.
Originators	[_________________________], with respect to approximately [__]% of the receivables by aggregate principal balance as of the Cut-off Date. The remainder of the receivables were originated by various originators, none of which have originated more than 10% of the receivables.  See “The Originators” in this prospectus supplement.
Owner Trustee	[      ].
Indenture Trustee	[      ].
[Any credit enhancement provider referenced in Items 1114(b) and 1115 of Regulation AB]	[      ].
Closing Date	On or about [      ].
Cut-off Date	The [close] [opening] of business on [      ].
Distribution Dates	[      ] of each month or the next business day if the [      ] day is not a business day, beginning in [      ].
Record Dates	Last day of the month prior to a distribution date.
Minimum Denominations	$[25,000].
Form	Book-entry.
Interest Accrual Method	30/360.
Final Scheduled Distribution Date	[      ] for the notes and [      ] for the certificates.

The Receivables

The receivables are amounts owed by individuals under retail installment sale contracts to purchase or refinance new or used automobiles, recreational vehicles, including motor homes, campers, motorcycles, all-terrain-vehicles and snowmobiles, vans trucks, buses and trailers.

The depositor expects that the receivables will have the following characteristics as of [   ].  As of the closing date, no more than 5% of the receivables will have characteristics that differ from those described in this prospectus supplement as of [   ].

Number of contracts

[   ]

Principal Amount

$[   ]

Annual Percentage Rates

[   ]% to [    ]%

Weighted Average Annual Percentage Rate

[   ]%

Original term

[   ] months to [   ] months

Weighted Average original term

[   ] months

Remaining term

[   ] months to [__] months

Weighted Average remaining term

[   ]%

New

[   ]

Used

[   ]

States

[   ]

[   ]

[   ]

Balloon Loans

[   ]

[For approximately [      ]% of the principal amount of the receivables, the amount of the receivable was more than the value of the financed vehicle at the time the loan was made.]

Removal and Substitution of a Receivable

[Regulation AB Item 1103(a)(6) compliant description of removal or substitution of receivables in connection with material document defects or breaches of representations and warranties].

Interest Distributions

On each distribution date, if the trust fund has sufficient cash, it will pay you the interest accrued on your securities during the related interest period.  Interest periods begin on the prior distribution date and run through the day before the current distribution date. The first interest period, however, begins on the closing date and runs through the day before the first distribution date.  We will assume that each year has 360 days.

Principal Distributions

The trust fund will pay all principal collections to the noteholders until the notes are paid in full.  The trust fund will not pay any principal collections to the certificateholders until the notes are paid in full.

Reserve Account

There will be a reserve account to help cover cash flow shortfalls.  Initially, the account will be $[      ]. On each distribution date amounts remaining after distribution of the total servicing fee and amounts to be paid to the noteholders and certificateholders will be deposited in the reserve account until the amount equals a specified amount.

[Trigger Events]

[Regulation AB Item 1103(a)(3)(vii) compliant description of any events in the transaction agreements that can trigger liquidation or amortization of the receivables or other performance triggers that would alter the transaction structure or the flow of funds].

 [Other Credit Enhancement]

[Regulation AB Item 1103(a)(3)(ix) compliant description of any other credit enhancement].

[Additional Series or Classes Backed by Receivables]

[Regulation AB Item 1103(a)(4) compliant description of any outstanding series or classes of securities that are backed by the receivables or otherwise have claims on the receivables.  Regulation AB compliant description of any circumstances in which additional series or classes of securities may be issued that are backed by the receivables, with specification if security holder approval is necessary for such issuances and if security holders will receive notice of such issuances].

[Revolving Periods]

[Regulation AB Item 1103(a)(5) compliant description of any revolving periods].

[Prefunding Periods]

[Regulation AB Item 1103(a)(5) compliant description of any prefunding periods].

Fees and Expenses

Prior to the distribution of any interest to the noteholders or the certificateholders, the servicer will be entitled to receive a servicing fee for each collection period in an amount equal to the product of one-twelfth of [    ]% per annum for so long as [               ] or an affiliate thereof is the servicer, and [    ]% per annum if [               ] or an affiliate thereof is no longer the servicer and the aggregate principal balance of the receivables as of the first day of the collection period.  See “Description of the Transfer and Servicing Agreement--Servicing Compensation and Payment of Expenses” in the Prospectus.

[Regulation AB Item 1103(a)(7) compliant description of any other fees and expenses].

Optional Termination

When the principal amount of the receivables is 10% or less than it was on the cut-off date, the servicer may buy the receivables.  If the servicer does not do so, the Indenture trustee will try to sell the receivables to another buyer.  In either case, you must receive the principal amount of your securities and all accrued but unpaid interest or the receivables will not be sold.

Final Scheduled Maturity Dates

The final scheduled maturity date of the securities is [__________].  The actual date on which the aggregate outstanding principal amount of the securities is paid may be earlier than the final scheduled maturity date based on a variety of factors.

Expected Final Distribution Dates

The expected final distribution date of each class of securities is [                  ], based on the assumption that the servicer has exercised its option to purchase all the receivables as described in “Optional Termination” above.  Due to losses and prepayments on the receivables, the final distribution dates on each class of securities may be substantially earlier or later than such date.

Tax Consequences

McKee Nelson LLP, special federal tax counsel to the trust fund, is of the opinion that, for federal income tax purposes the notes will constitute indebtedness and the certificates will constitute interests in a trust fund that will not be treated as an association taxable as a corporation or publicly traded partnership taxable as a corporation. The trust and holders of the certificates will agree by their purchase of certificates, if there is more than one holder of the certificates, to treat the trust as a partnership for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, with the assets of the partnership being the assets held by the trust, the holders of the certificates as partners of the partnership and the notes as debt of the partnership, and if there is one holder of certificates, to treat that holder as the owner of the assets of the trust and to treat the trust as a disregarded entity.

The tax code is complex, and we recommend that you and your tax advisors review the information under the caption “Federal Income Tax Consequences” in this prospectus supplement and under the caption “Material Federal Income Tax Consequences” in the prospectus.

ERISA Considerations

The notes may be purchased by ERISA and other retirement plans if one or more administrative exemptions apply. The certificates may not be purchased by ERISA or other retirement plans.  See “ERISA Considerations” in this prospectus supplement and the prospectus.

Ratings

It is a condition to the issuance of the securities that the securities receive at least the following ratings from [______________] and [_________________]:

Securities	[____]	[____]
Class [__] Notes	[__]	[__]
Class [__] Notes	[__]	[__]
Certificates	[__]	[__]
Class [__]	[__]	[__]

RISK FACTORS

The following information, which you should carefully consider, identifies certain significant sources of risk associated with an investment in the securities.  You should also carefully consider the information set forth under “Risk Factors” in the prospectus.

Certain features of the receivables pool may result in losses.	There are a number of features of the receivables in the pool that create additional risk of loss, including the following:
Certain obligors have little equity in their financed vehicles which may result in more severe losses.	For approximately [      ]% of the principal amount of the receivables, the original principal amount of the loan exceeded the cost of the related vehicle.  Although each such obligor was required to make a downpayment from the obligor’s own funds, those obligors have no equity in their vehicles.  While those borrowers had excellent credit histories at the time, the lack of any equity in the vehicle may make it more likely that those obligors will default if their personal financial conditions change.  In addition, if such an obligor defaults and the vehicle is repossessed, the trust fund is likely to suffer a loss.
The concentration of the receivables in specific geographic areas may increase the risk of loss.	Economic conditions in the states where obligors reside may affect the delinquency, loan loss and repossession experience of the trust fund with respect to the receivables.  As of the cut-off date, the billing addresses of the obligors with respect to approximately [      ]%, [      ]%, and [      ]% of the principal amount of the receivables were located in [      ],  [      ]  and [      ], respectively.  Economic conditions in any state or region may decline over time and from time to time.  Because of the concentration of the obligors in certain states, any adverse economic conditions in those states may have a greater effect on the performance of the securities than if the concentration did not exist.
Newly originated loans may be more likely to default which may cause losses.	Defaults on automobile loans tend to occur at higher rates during the early years of the automobile loans.  Substantially all of the automobile loans will have been originated within [      ] months prior to the sale to the trust fund.  As a result, the trust fund may experience higher rates of default than if the automobile loans had been outstanding for a longer period of time.
Balloon loans may have a higher rates of default which may cause losses.	A balloon loan has monthly payments that will not fully pay off the loan balance by the maturity date.  As a result the borrower usually will have to refinance the balloon loan in order to pay the amount due.  The borrower may not be able to refinance the balloon loan for any number of reasons, including the level of available interest rates, the age or condition of the vehicle, or the borrower’s payment or credit history.  The trust fund will not have any funds to refinance a balloon loan, and the Sponsor is not obligated to do so.
Certificates will absorb cash shortfalls and losses before the notes.	The certificateholders will not receive any distribution of interest until the full amount of interest on the notes has been paid on each distribution date.  The certificateholders will not receive any distributions of principal until the notes have been repaid in full.  Holders of the certificates must rely for repayment upon payments on the receivables, and, if and to the extent available, amounts on deposit in the reserve account.  If funds in the reserve account are exhausted, the trust fund will depend solely on current distributions on the receivables to make payments on the securities.  Delinquent payments on the receivables may result in a shortfall in the distributions on the certificates on any distribution date due to the priority of payments on the notes.  Although on each distribution date distributions of interest on the certificates ranks senior to payments of principal of the notes, after an event of default or an acceleration of the notes, the principal amount of the notes must be paid in full prior to the distribution of any amounts on the certificates.
Your yield to maturity may be reduced by prepayments.	The pre-tax yield to maturity is uncertain and will depend on a number of factors including the following:
The rate of return of principal is uncertain.	The amount of distributions of principal of the securities and the time when you receive those distributions depends on the amount and the times at which borrowers make principal payments on the receivables.  Those principal payments may be regularly scheduled payments or unscheduled payments resulting from prepayments or defaults of the receivables.
An early termination will shorten the life of your investment which may reduce your yield to maturity.	If the receivables are sold upon exercise of the servicer’s optional termination or the auction call, you will receive the principal amount of your securities plus accrued interest through the related interest period.  Because your securities will no longer be outstanding, you will not receive the additional interest payments that you would have received had the securities remained outstanding.  If you bought your securities at par or at a premium, your yield to maturity will be lower than it would have been if the optional termination or auction call had not been exercised.
[Additional Applicable Risk Factors]	[____________________]

FORMATION OF THE ISSUING ENTITY

The Issuing Entity

[      ] Auto Trust [    ]-[    ] is a business trust to be formed by the Depositor under the laws of the State of Delaware pursuant to a trust agreement between the Depositor and the Owner Trustee, dated as of [________] (the “Trust Agreement”) for the transactions described in the Prospectus.  The Trust Agreement constitutes the “governing instrument” under the laws of the State of Delaware.  After its formation, the Issuing Entity will not engage in any activity other than:

•

acquiring, holding and managing the Receivables and the other assets of the Issuing Entity and proceeds therefrom,

•

issuing the Certificates and the Notes,

•

making payments on the Certificates and the Notes and

•

engaging in other activities that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith.

The foregoing restrictions are contained in the Trust Agreement.  [These restrictions cannot be amended without the consent of holders of Certificates evidencing at least 51% of the voting rights.]  For a description of other provisions relating to amending the Trust Agreement, see “[[_______________]]” in the base prospectus.

The assets of the Issuing Entity will consist of the Receivables and certain related assets.

The Issuing Entity’s fiscal year end is [______].

The Issuing Entity will initially be capitalized with equity of $[      ], excluding amounts deposited in the Reserve Account, representing the initial principal balance of the Certificates.  The Notes and Certificates will be transferred by the Issuing Entity to the Depositor in exchange for the Receivables.  The Certificates and the Notes will be sold to the Underwriter for cash.  The Servicer will initially service the Receivables pursuant to a sale and servicing agreement, to be dated as of [      ] (the “Sale and Servicing Agreement”), among the Sponsor, the Depositor, the Issuing Entity and the Servicer, and will be compensated for acting as the Servicer.  See “Description of the Transfer and Servicing Agreements--Servicing Compensation” in this prospectus supplement and “--Servicing Compensation and Payment of Expenses” in the Prospectus. & nbsp;To facilitate servicing and to minimize administrative burden and expense, the Servicer will be appointed custodian for the Receivables by the Issuing Entity, but will not stamp the Receivables to reflect the sale and assignment of the Receivables to the Issuing Entity, nor amend the certificates of title of the Financed Vehicles.

If the protection provided to the investment of the Securityholders in the Issuing Entity by the Reserve Account is insufficient, the Issuing Entity will look to the Obligors on the Receivables, and the proceeds from the repossession and sale of Financed Vehicles which secure defaulted Receivables.  In such event, there may not be sufficient funds to make distributions with respect to the Securities.

The Issuing Entity’s principal offices are in [      ], in care of [      ], as Owner Trustee, at the address listed below under “--The Owner Trustee.”

Capitalization of the Issuing Entity

The following table illustrates the capitalization of the Issuing Entity as of the Cut-off Date, as if the issuance and sale of the Notes and the Certificates had taken place on such date:

Notes	$[      ]
Certificates	$[      ]
Total	$[      ]

The Owner Trustee

[      ], a [national banking association] is the Owner Trustee under the Trust Agreement. [      ] is a [      ] and its principal offices are located at [      ], [      ].  The Owner Trustee will perform limited administrative functions under the Trust Agreement, including making distributions from the Certificate Distribution Account. The Owner Trustee’s liability in connection with the issuance and sale of the Certificates and the Notes is limited solely to the express obligations of the Owner Trustee set forth in the Trust Agreement.

[Provide Reg AB Item 1109(b) compliant description of the extent of the Owner Trustee’s prior experience serving as a trustee for asset-backed securities transactions involving asset pools of retail automobile receivables.]

[Provide Reg AB Item 1109(c) compliant description of the Owner Trustee’s duties and responsibilities regarding the asset-backed securities under the governing documents and under applicable law, and of any actions required by the Owner Trustee, including whether notices are required to investors, rating agencies or other third parties, upon an event of default, potential event of default (and how defined) or other breach of a transaction covenant and any required percentage of a class or classes of asset-backed securities that is needed to require the Owner Trustee to take action.]

[Provide Reg AB Item 1109(d) compliant description of any limitations on the Owner Trustee’s liability under the transaction agreements regarding the asset-backed securities transaction.]

[Provide Reg AB Item 1109(e) compliant description of any indemnification provisions that entitle the Owner Trustee to be indemnified from the cash flow that otherwise would be used to pay the asset-backed securities.]

[Provide Reg AB Item 1109(f) compliant description of any contractual provisions or understandings regarding the Owner Trustee’s removal, replacement or resignation, as well as how the expenses associated with changing from one owner trustee to another owner trustee will be paid.]

THE TRUST PROPERTY

The Notes will be collateralized by the Trust Property (other than the Certificate Distribution Account). Each Certificate represents a fractional undivided interest in the Trust. The “Trust Property” will include the Receivables, which were originated indirectly by Dealers and purchased indirectly by the Sponsor pursuant to agreements with Dealers (“Dealer Agreements”).  On the Closing Date, the Depositor will buy the Receivables from the Sponsor and the Depositor will sell the Receivables to the Trust.  The Servicer will, directly or through subservicers, service the Receivables.  The Trust Property also includes:

•

all monies received under the Receivables on and after the Cut-off Date and, with respect to Receivables which are Actuarial Receivables, monies received thereunder prior to the Cut-off Date that are due on or after the Cut-off Date;

•

such amounts as from time to time may be held in the Collection Account, the Reserve Account, the Payahead Account, the Note Distribution Account and the Certificate Distribution Account, established and maintained by the Servicer pursuant to the Sale and Servicing Agreement as described below;

•

security interests in the Financed Vehicles;

•

the rights of the Sponsor to receive proceeds from claims under certain insurance policies;

•

the rights of the Trust under the Sale and Servicing Agreement;

•

the rights of the Sponsor to refunds for the costs of extended service contracts and to refunds of unearned premiums with respect to credit life and credit accident and health insurance policies covering the Financed Vehicles or the retail purchasers of, or other persons owing payments on, the Financed Vehicles (the “Obligors”);

•

all right, title and interest of the Sponsor (other than with respect to any Dealer commission) with respect to the Receivables under the related Dealer Agreements;

•

rights with respect to any repossessed Financed Vehicles; and

•

all proceeds (within the meaning of the UCC) of the foregoing.

The Reserve Account will be maintained in the name of the Indenture Trustee for the benefit of the Noteholders and the Certificateholders.

THE RECEIVABLES POOL

Pool Composition

[The receivables pool consists of amounts owed by individuals under retail installment sale contracts to purchase or refinance new or used automobiles, recreational vehicles, including motor homes, campers, motorcycles, all-terrain-vehicles and snowmobiles, vans trucks, buses and trailers (the “Receivables”).]

 The Receivables were selected from the Sponsor’s portfolio by several criteria, including, as of the Cut-off Date, the following:

•

each Receivable has a scheduled maturity of not later than the Final Scheduled Maturity Date;

•

each Receivable was originated in the United States of America;

•

each Receivable has an original term to maturity of not more than [      ] months and a remaining term to maturity of [      ] months or less as of the Cut-off Date;

•

approximately [      ]% of the Initial Pool Balance was secured by new Financed Vehicles, and approximately [      ]% of the Initial Pool Balance was secured by used Financed Vehicles;

•

each Receivable provides for level monthly payments which fully amortize the amount financed except, in the case of Simple Interest Receivables, for the last payment, which may be different from the level payment;

•

each Receivable is not more than [      ] days contractually past due as of the Cut-off Date and is not more than [      ] months paid ahead;

•

each Receivable has an outstanding principal balance between $[      ] and $[      ];

•

the Obligor with respect to each Receivable has a FICO score between [______] and [______];

•

and each Receivable has an APR of no less than [      ]%.

As of the Cut-off Date, no Obligor on any Receivable was noted in the related records of the Servicer as being the subject of any pending bankruptcy or insolvency proceeding.  The latest scheduled maturity of any Receivable is not later than [      ].  No selection procedures believed by the Depositor to be adverse to Certificateholders or the Noteholders were used in selecting the Receivables.

The Depositor considers an account past due if any portion of the payment due on a due date is not received by the succeeding due date for that account.

The composition, distribution by remaining term, distribution by APR, geographic distribution and distribution by remaining principal of the Receivables, in each case, as of the Cut-off Date are set forth in the tables below.  The percentages in the following tables may not add to 100% due to rounding.

Composition of the Receivables as of the Cut-off Date
	New Financed Vehicles	Used Financed Vehicles	Total
Aggregate Principal Balance	$[__________]	$[__________]	$[__________]
Number of Receivables	[__________]	[__________]	[__________]
Average Principal Balance	$[__________]	$[__________]	$[__________]
Average Original Balance	$[__________]	$[__________]	$[__________]
Weighted Average Contract Rate	[_______]%	[_______]%	[_______]%
Contract Rate (Range)	[___]% - [___]%	[___]% - [___]%	[___]% - [___]%
Weighted Average Original Term (months)	[_______]	[_______]	[_______]
Original Term (Range) (months)	[____] to [_____]	[____] to [_____]	[____] to [_____]
Weighted Average Remaining Term (months)	[_______]	[_______]	[_______]
Remaining Term (Range) (months)	[____] to [_____]	[____] to [_____]	[____] to [_____]
Weighted Average FICO score	[_______]	[_______]	[_______]
FICO score (Range)	[____] to [_____]	[____] to [_____]	[____] to [_____]

Distribution by Remaining Term of the Receivables as of the Cut-off Date
Remaining Term (Range)	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
Less than [_____] months	[____________]	$[__________]	[___________]%
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
Total		$	100.00%

Distribution by Annual Percentage Rate of the Receivables as of the Cut-off Date
Annual % Rate Range	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
[_____]% to below	[____________]	$	%
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[____]% and above	[____________]	[____________]	[____________]
Total		$	100.00%

Geographic Distribution of the Receivables as of the Cut-off Date
State1	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
[      ]	[____________]	$	%
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
Others2
Total		$	100.00%

____________________

1.

Based on billing addresses of the Obligors as of the Cut-off Date, which may differ from the state of origination of the Receivable.

2.

Includes [    ] other states and [    ] none of which have a concentration of Receivables in excess of [    ]% of the aggregate principal balance.

Distribution by Remaining Principal Balance of the Receivables as of the Cut-off  Date
Remaining Principal Balance (Range)	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
$ 2,500 to $ 4,999	[____________]	$	%
$ 5,000 to $ 7,499	[____________]	[____________]	[____________]
$ 7,500 to $ 9,999	[____________]	[____________]	[____________]
$10,000 to $12,499	[____________]	[____________]	[____________]
$12,500 to $14,999	[____________]	[____________]	[____________]
$15,000 to $17,499	[____________]	[____________]	[____________]
$17,500 to $19,999	[____________]	[____________]	[____________]
$20,000 to $22,499	[____________]	[____________]	[____________]
$22,500 to $24,999	[____________]	[____________]	[____________]
$25,000 to $27,499	[____________]	[____________]	[____________]
$27,500 to $29,999	[____________]	[____________]	[____________]
$30,000 to $32,499	[____________]	[____________]	[____________]
$32,500 to $34,999	[____________]	[____________]	[____________]
$35,000 to $37,499	[____________]	[____________]	[____________]
$37,500 to $39,999	[____________]	[____________]	[____________]
$40,000 to $41,499	[____________]	[____________]	[____________]
$42,500 to $44,999	[____________]	[____________]	[____________]
$45,000 to $47,499	[____________]	[____________]	[____________]
$47,500 to $49,999	[____________]	[____________]	[____________]
$50,000 to $52,499	[____________]	[____________]	[____________]
$52,500 to $54,999	[____________]	[____________]	[____________]
Total		$	100.00%

Distribution by FICO Score of the Receivables as of the Cut-off Date
Annual % Rate Range	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
[______] to [______]	[____________]	$	%
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] and above	[____________]	[____________]	[____________]
Total		$	100.00%

As of the Cut-off Date, approximately [     ]% of the aggregate principal balance of the Receivables, constituting [     ]% of the number of Receivables, were between 1 payment and [    ] payments paid-ahead.

As of the Cut-off Date, approximately [   ]% of the aggregate principal balance of the Receivables, constituting [     ]% of the number of Receivables, are Actuarial Receivables.  ”Actuarial Receivables” are receivables that provide for amortization of the amount financed over a series of fixed, level-payment monthly installments.  Each monthly installment, including the monthly installment representing the final payment on the Receivable, consists of an amount of interest equal to 1/12 of the Annual Percentage Rate (“APR”) of the amount financed multiplied by the unpaid principal balance of the amount financed, and an amount of principal equal to the remainder of the monthly payment.

As of the Cut-off Date, approximately [   ]% of the aggregate principal balance of the Receivables, constituting [   ]% of the number of Receivables, are Simple Interest Receivables.  ”Simple Interest Receivables” are receivables that provide for the amortization of the amount financed under the receivable over a series of fixed level monthly payments. However, unlike the monthly payment under an Actuarial Receivable, each monthly payment includes an installment of interest which is calculated on the basis of the outstanding principal balance of the receivable multiplied by the stated APR and further multiplied by the period elapsed (as a fraction of a calendar year) since the preceding payment of interest was made. As payments are received under a Simple Interest Receivable, the amount received is applied first to interest accrued to the date of payment and the balance is applied to reduce the unpaid principal balance. Accordingly, if an Obligor pays a fixed monthly installment before its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be less than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly greater. Conversely, if an Obligor pays a fixed monthly installment after its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be greater than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly less. In either case, the Obligor pays a fixed monthly installment until the final scheduled payment date, at which time the amount of the final installment is increased or decreased as necessary to repay the then outstanding principal balance.

If an Actuarial Receivable is prepaid in full, with minor variations based upon state law, under the terms of the motor vehicle retail installment sale contract or loan agreement, as the case may be, a “refund” or “rebate” will be made to the borrower of the portion of the total amount of payments then due and payable under such contract or agreement allocable to “unearned” interest, calculated on the basis of a constant interest rate.  If a Simple Interest Receivable is prepaid, rather than receive a rebate, the borrower is required to pay interest only to the date of prepayment.  The amount of a rebate under an Actuarial Receivable generally will be less than the remaining scheduled payments of interest that would have been due under a Simple Interest Receivable for which all payments were made on schedule.

The Servicer may accede to an Obligor’s request to pay scheduled payments in advance, in which event the Obligor will not be required to make another regularly scheduled payment until the time a scheduled payment not paid in advance is due.  The amount of any payment (which are not amounts representing Payaheads) made in advance will be treated as a principal prepayment and will be distributed as part of the Principal Distribution Amount in the month following the Collection Period in which the prepayment was made.  See “Maturity and Prepayment Considerations” in the Prospectus.

Receivable Delinquencies and Losses

For information regarding delinquencies and losses on the Receivables, see the tables below.  A Receivable is considered to be delinquent when a payment due on any due date remains unpaid as of the close of business on the last business day immediately prior to the next monthly due date.  The determination as to whether a loan falls into this category is made as of the close of business on the last business day of each month.

30 -  59 Days (times):	Number of Receivables	% by Receivable Count	Principal Balance Outstanding as of the Cutoff Date	% of Aggregate Principal Balance Outstanding as of the Cutoff Date
0	[________]	[______]%	[_______._]	[__.__]
1	[________]	[______]%	[_______._]	[__.__]
2	[________]	[______]%	[_______._]	[__.__]
Total	[________]	100.00%	[_______._]	100.00

60 -  89 Days (times):	Number of Receivables	% by Receivable Count	Principal Balance Outstanding as of the Cutoff Date	% of Aggregate Principal Balance Outstanding as of the Cutoff Date
0	[________]	[______]	[_______._]	[__.__]
1	[________]	[______]	[_______._]	[__.__]
2	[________]	[______]	[_______._]	[__.__]
Total	[________]	100.00	[_______._]	100.00

[No Receivable has been delinquent more than 90 days since origination.]

STATIC POOL INFORMATION

Static pool information material to this offering may be found at [website address].

Information provided through the Internet address above will not be deemed to be a part of this prospectus or the registration statement for the securities offered hereby if it relates to any prior securities pool or vintage formed before January 1, 2006, or with respect to the mortgage pool (if applicable) any period before January 1, 2006.

THE ORIGINATORS

General

[____], [____] and  [____] are the originators of the receivables with respect to approximately [___]%, [___]% and [___]%, respectively, of the receivables by aggregate principal balance as of the Cut-off Date, along with various other originators, none of which originated more than 10% of the receivables by aggregate principal balance as of the Cut-off Date (each, an “Originator”).

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

THE SERVICER

[____________], a [describe form of organization of the servicer], (the “Servicer”) will initially service the Receivables pursuant to a sale and servicing agreement, to be dated as of [      ] (the “Sale and Servicing Agreement”), among the Sponsor, the Depositor, the Issuing Entity and the Servicer.  

The Servicer will perform the functions of a third-party servicer of automobile loans as an agent for their beneficial owner.  [These servicer functions will include:

•

collecting and posting all payments;

•

responding to obligor inquiries regarding the automobile loans;

•

investigating delinquencies;

•

reporting tax information to obligors;

•

paying vehicle disposition costs with respect to defaulted accounts;

•

monitoring the collateral;

•

accounting for collections;

•

furnishing monthly and annual statements to the Issuing Entity with respect to distributions; and

•

generating federal income tax information. ]

 [Regulation AB Item 1108 compliant description of the Servicer.]

Delinquency Experience (Dollars in Thousands)
	At December 31,
	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]
	Number of Loans	Dollars	Percent	Number of Loans	Dollars	Percent	Number of Loans	Dollars	Percent
Principal Amount Outstanding1
Delinquencies2
30-59 Days
60-89 Days
90-119 Days
over 120 days
Total Delinquencies as a  Percentage of the Total Amount Outstanding

________________________

1.

Principal Amount Outstanding is the aggregate remaining principal balance of all Receivables serviced, net of unearned interest.

2.

The period of delinquency is based on the number of days scheduled payments are contractually past due.  Includes repossessions on hand which have not been charged-off.  A receivable is 30 days contractually past due if a scheduled payment has not been received by the subsequent calendar month’s scheduled payment date.

[WEIGHTED AVERAGE LIFE OF THE SECURITIES]

[Prepayments on automotive receivables can be measured relative to a prepayment standard or model.  The model used in this Prospectus, the Absolute Prepayment Model (“ABS”), represents an assumed rate of prepayment each month relative to the original number of receivables in a pool of receivables.   ABS further assumes that all the receivables are the same size and amortize at the same rate and that each receivable in each month of its life will either be paid as scheduled or be prepaid in full.   For example, in a pool of receivables originally containing 10,000 receivables, a 1% ABS rate means that 100 receivables prepay each month.   ABS does not purport to be an historical description of prepayment experience or a prediction of the anticipated rate of prepayment of any pool of receivables, including the Receivables.

As the rate of payment of principal of the Notes and in respect of the Certificate Balance will depend on the rate of payment (including prepayments) of the principal balance of the Receivables, final payment of  the Notes could occur significantly earlier than the Final Scheduled Maturity Date for the Notes.  The final distribution in respect of the Certificates also could occur prior to the Final Scheduled Distribution Date for the Certificates.  Reinvestment risk associated with early payment of the Notes and the Certificates will be borne exclusively by the Noteholders and the Certificateholders, respectively.

The table captioned “Percent of Initial Note Principal Balance or Initial Certificate Balance at Various ABS Percentages” (the “ABS Table”) has been prepared on the basis of the characteristics of the Receivables.   The ABS Table assumes that

•

the Receivables prepay in full at the specified constant percentage of ABS monthly, with no defaults, losses or repurchases,

•

each scheduled monthly payment on the Receivables is made on the last day of each month and each month has 30 days,

•

payments on the Notes and distributions on the Certificates are made on each Distribution Date (and each such date is assumed to be the [   ] day of each applicable month),

•

the balance in the Reserve Account on each Distribution Date is equal to the Specified Reserve Account Balance, and

•

the Servicer does not exercise its option to purchase the Receivables.   The first two pools have an assumed cut-off date of [   ] and the remaining pools have an assumed cut-off date of [   ].

The ABS Table sets forth the percent of the initial principal amount of the Notes and the percent of the initial Certificate Balance that would be outstanding after each of the Distribution Dates shown and the corresponding weighted average lives thereof at various constant ABS percentages.

The ABS Table also assumes that the Receivables have been aggregated into four hypothetical pools with all of the Receivables within each such pool having the following characteristics and that the level scheduled monthly payment for each of the four pools (which is based on its aggregate principal balance, APR, original term to maturity as of the Cut-off Date) will be such that each pool will fully amortize by the end of its remaining term to maturity.

Pool	Remaining Term to Maturity Range (in months)	Aggregate Principal Balance	Weighted Average Contract Rate	Weighted Average Original Term to Maturity (in Months)	Weighted Average Remaining Term to Maturity (in Months)
1		$	%
2		$	%
3		$	%
4		$	%

The actual characteristics and performance of the Receivables will differ from the assumptions used in constructing the ABS Table.   The assumptions used are hypothetical and have been provided only to give a general sense of how the principal cash flows might behave under varying prepayment scenarios.   For example, it is very unlikely that the Receivables will prepay at a constant level of ABS until maturity or that all of the Receivables will prepay at the same level of ABS.   Moreover, the diverse terms of Receivables within each of the four hypothetical pools could produce slower or faster principal distributions than indicated in the ABS Table at the various constant percentages of ABS specified, even if the original and remaining terms to maturity of the Receivables are as assumed.  Any difference between such assumptions and the actual characteristics and performance of the Receivables, or actual prepay ment experience, will affect the percentages of initial balances outstanding over time and the weighted average lives of the Notes and the Certificates.]

Percent of Initial Note Principal Balance at Various ABS Percentages
	Notes Assumed ABS Percentage1
Distribution Dates	[   ]%	[   ]%	[   ]%	[   ]%
Closing Date	100	100	100	100
[                        ]
[                        ]
[                        ]
Weighted Average Life (years)2

_______________________

1.

An asterisk “*” means a percent of initial Note principal balance of more than zero and less than 0.5%.

2.

The weighted average life of a Note is determined by (i) multiplying the amount of each principal payment of such Note by the number of years from the date of the issuance of such Note to the Distribution Date on which such principal payment is made, (ii) adding the results and (iii) dividing the sum by the initial principal balance of such Note.

The ABS Tables have been prepared based on the assumptions described above (including the assumptions regarding the characteristics and performance of the Receivables which will differ from the actual characteristics and performance thereof) and should be read in conjunction therewith.

Percent of Initial Certificate Balance at Various ABS Percentages
	Certificates Assumed ABS Percentage
Distribution Dates	[   ]%	[   ]%	[   ]%	[   ]%
Closing Date	100	100	100	100
[                        ]
[                        ]
[                        ]
[                        ]

The ABS Tables have been prepared based on the assumptions described above (including the assumptions regarding the characteristics and performance of the Receivables which will differ from the actual characteristics and performance thereof) and should be read in conjunction therewith.

USE OF PROCEEDS

The net proceeds from the sale of the Securities will be applied by the Depositor first, to deposit approximately $[    ] into the Reserve Account and second, the balance to purchase the Receivables and the other Trust Property from the Sponsor.

DESCRIPTION OF THE NOTES

The Notes will be issued pursuant to the terms of the Indenture, substantially in the form filed as an exhibit to the Registration Statement.  The following information summarizes all material provisions of the Notes and the Indenture.  The following summary supplements the description of the general terms and provisions of the Notes of any given Series and the related Indenture set forth in the Prospectus, to which description reference is hereby made.

The Notes

Payments of Interest.  The Notes will constitute [Fixed Rate] Securities, as such term is defined under “Certain Information Regarding the Securities--Fixed Rate Securities” in the Prospectus.  Interest on the outstanding principal amount of the Notes will accrue at the Interest Rate and will be payable to the Noteholders monthly on each Distribution Date, commencing [    ].  Interest will accrue from and including the Closing Date (in the case of the first Distribution Date), or from and including the most recent Distribution Date on which interest has been paid to but excluding the following Distribution Date (each representing an “Interest Period”).  Interest on the Notes will be calculated on the basis of a 360 day year consisting of twelve 30 day months.  Interest payments on the Notes will generally be derived from the Total Distribution Amount remaining after the payment o f the Servicing Fee for the related Collection Period and all accrued and unpaid Servicing Fees for prior Collection Periods (the “Total Servicing Fee”).  See “Description of the Transfer and Servicing Agreements--Distributions” and “--Credit Enhancement--Reserve Account” in this prospectus supplement.  Interest payments to the Noteholders will have the same priority.  Under certain circumstances, the amount available for interest payments could be less than the amount of interest payable on the Notes on any Distribution Date.  Interest accrued as of any Distribution Date but not paid on such Distribution Date will be due on the next Distribution Date, together with interest on such amount at the Interest Rate.

Payments of Principal.   Principal payments will be made to the Noteholders on each Distribution Date in an amount equal to the Noteholders’ Percentage of the Principal Distribution Amount in respect of such Collection Period, subject to certain limitations.  Principal payments on the Notes will be generally derived from the Total Distribution Amount remaining after the payment of the Total Servicing Fee, the Noteholders’ Interest Distributable Amount and the Certificateholders’ Interest Distributable Amount; provided, however, that following the occurrence and during the continuation of certain Events of Default or an acceleration of the Notes, the Noteholders will be entitled to be paid in full before the distributions may be made on the Certificates.  See “Description of the Transfer and Servicing Agreements--Distributions” and “--Credit Enhancement--Reserve Account” in this prospe ctus supplement.

The principal balance of the Notes, to the extent not previously paid, will be due on the Note Final Scheduled Distribution Date.  The actual date on which the aggregate outstanding principal amount of the Notes is paid may be earlier than the Note Final Scheduled Distribution Date based on a variety of factors.

Optional Redemption.   The Notes will be redeemed in whole, but not in part, on any Distribution Date on which the Servicer exercises its option to purchase the Receivables.   The Servicer may purchase the Receivables when the Pool Balance has declined to 5% or less of the Initial Pool Balance.  The redemption price will be equal to the unpaid principal amount of the Notes and the Certificates plus accrued and unpaid interest thereon.  See “Description of the Transfer and Servicing Agreements--Termination” in the Prospectus.

Auction Sale.  In the event of an Auction Sale, the Notes will be redeemed in an amount equal to the unpaid principal amount of the then outstanding Notes plus accrued and unpaid interest thereon at the Interest Rate.  See “Description of the Transfer and Servicing Agreements--Termination” in the Prospectus.

The Indenture Trustee.

[          ], a [national banking association], will be the Indenture Trustee under the Indenture.  The Depositor maintains normal commercial banking relations with the Indenture Trustee.

[Provide Reg AB Item 1109(b) compliant description of the extent of the Indenture Trustee’s prior experience serving as a trustee for asset-backed securities transactions involving asset pools of retail automobile receivables.]

[Provide Reg AB Item 1109(c) compliant description of the Indenture Trustee’s duties and responsibilities regarding the asset-backed securities under the governing documents and under applicable law, and of any actions required by the Indenture Trustee, including whether notices are required to investors, rating agencies or other third parties, upon an event of default, potential event of default (and how defined) or other breach of a transaction covenant and any required percentage of a class or classes of asset-backed securities that is needed to require the Indenture Trustee to take action.]

[Provide Reg AB Item 1109(d) compliant description of any limitations on the Indenture Trustee’s liability under the transaction agreements regarding the asset-backed securities transaction.]

[Provide Reg AB Item 1109(e) compliant description of any indemnification provisions that entitle the Indenture Trustee to be indemnified from the cash flow that otherwise would be used to pay the asset-backed securities.]

[Provide Reg AB Item 1109(f) compliant description of any contractual provisions or understandings regarding the Indenture Trustee’s removal, replacement or resignation, as well as how the expenses associated with changing from one Indenture trustee to another Indenture trustee will be paid.]

DESCRIPTION OF THE CERTIFICATES

The Certificates will be issued pursuant to the terms of the Trust Agreement, substantially in the form filed as an exhibit to the Registration Statement.  The following information summarizes all material provisions of the Certificates and the Trust Agreement.  The following summary supplements the description of the general terms and provisions of the Certificates of any given Series and the related Trust Agreement set forth in the Prospectus, to which description reference is hereby made.

The Certificates

Distributions of Interest.  Certificateholders will be entitled to distributions of interest in an amount equal to accrued interest on the Certificate Balance at the Pass-Through Rate.  Such amounts will be distributable monthly on each Distribution Date commencing [          ].  [The Certificates will constitute Fixed Rate Securities, as such term is defined under “Certain Information Regarding the Securities--Fixed Rate Securities”] in the Prospectus.  That interest entitlement will accrue from and including the Closing Date (in the case of the first such Distribution Date) or from the most recent Distribution Date on which interest distributions have been made to but excluding such Distribution Date and will be calculated on the basis of a 360-day year of twelve 30-day months. Interest distributions with respect to the Certificates will be funded from the portio n of the Total Distribution Amount remaining after the distribution of the Total Servicing Fee and the Noteholders’ Interest Distributable Amount.  On any Distribution Date, the Certificateholders’ Interest Distributable Amount will equal 30 days’ interest at the Pass-Through Rate on the Certificate Balance (or, in the case of the first Distribution Date, interest accrued from and including the Closing Date to but excluding the first Distribution Date) plus any amounts due but not paid on previous Distribution Dates with interest thereon at the Pass-Through Rate.  See “Description of the Transfer and Servicing Agreements--Distributions” and “--Credit Enhancement--Reserve Account” herein.

Distributions of Principal Payments.   Certificateholders will be entitled to distributions of principal on each Distribution Date commencing on the Distribution Date on which the Notes have been paid in full, in an amount equal to the Certificateholders’ Percentage of the Principal Distribution Amount in respect of the related Collection Period, subject to certain limitations.  Distributions with respect to principal payments will generally be funded from the portion of the Total Distribution Amount remaining after the distribution of the Total Servicing Fee, the Noteholders’ Distributable Amount, if any, and the Certificateholders’ Interest Distributable Amount.  See “Description of the Transfer and Servicing Agreement--Distributions” and “--Credit Enhancement--Reserve Account” in this prospectus supplement.

On and after any Distribution Date on which the Notes have been paid in full, funds in the Reserve Account will be applied to reduce the Certificate Balance to zero if, after giving effect to all distributions to the Servicer, the Noteholders and the Certificateholders on such Distribution Date, the amount on deposit in the Reserve Account is equal to or greater than the Certificate Balance.

Subordination of Certificates.   The rights of Certificateholders to receive distributions of interest are subordinated to the rights of Noteholders to receive payments of interest.  In addition, the Certificateholders have no right to receive distributions of principal until the principal amount of the Notes has been paid in full.   Consequently, funds on deposit in the Collection Account (including amounts deposited therein from the Reserve Account) will be applied to the payment of interest on the Notes before distributions of interest on the Certificates and will be applied to the payment of principal on the Notes before distributions of principal on the Certificates.   In addition, following the occurrence of certain Events of Default or an acceleration of the Notes, the Noteholders will be entitled to be paid in full before the Certificateholders are entitled to any distributions.

Optional Prepayment.  If the Servicer exercises its option to purchase the Receivables when the Pool Balance declines to 5% or less of the Initial Pool Balance, Certificateholders will receive an amount in respect of the Certificates equal to the Certificate Balance together with accrued and unpaid interest thereon, which distribution will effect early retirement of the Certificates.   See “Description of the Transfer and Servicing Agreements--Termination” in the Prospectus.

Auction Sale.  In the event of an Auction Sale, the Certificates will be prepaid at a price equal to the Certificate Balance plus accrued and unpaid interest thereon at the Pass-Through Rate.  See “Description of the Transfer and Servicing Agreements--Termination” in the Prospectus.

DESCRIPTION OF THE TRANSFER AND SERVICING AGREEMENTS

The following information summarizes all material provisions of the Sale and Servicing Agreement, substantially in the form filed as an exhibit to the Registration Statement, pursuant to which the Trust is purchasing and the Servicer is undertaking to service the Receivables and the Trust Agreement pursuant to which the Trust will be created and the Certificates will be issued (collectively the “Transfer and Servicing Agreements”).  The following summary supplements the description of the general terms and provisions of the Transfer and Servicing Agreements set forth in the Prospectus, to which description reference is hereby made.

Sale and Assignment of Receivables

Certain information regarding the conveyance of the Receivables by the Sponsor to the Depositor and by the Depositor to the Trust on the Closing Date pursuant to the Sale and Servicing Agreement is set forth in the Prospectus under “Description of the Transfer and Servicing Agreements--Sale and Assignment of Receivables.”

Accounts

[The assets of the Trust will not include a Pre-Funding Account.]  All other Accounts referred to under “Description of the Transfer and Servicing Agreements--Accounts” in the Prospectus, as well as a Reserve Account, will be established by the Servicer and maintained  with the Indenture Trustee in the name of the Indenture Trustee on behalf of the Noteholders and the Certificateholders.

Distributions

Deposits to the Collection Account.  On or before the earlier of the [eighth] business day of the month in which a Distribution Date occurs and the [fourth] business day preceding such Distribution Date (the “Determination Date”), the Servicer will calculate the Total Distribution Amount, the Interest Distribution Amount, the Available Principal, the Principal Distribution Amount, the Total Servicing Fee, the Noteholders’ Interest Distributable Amount, the Noteholders’ Principal Distributable Amount, the Certificateholders’ Interest Distributable Amount, the Certificateholders’ Principal Distributable Amount, the Advances, if any, to be made by the Servicer of interest and principal due on the Actuarial Receivables, the amount, if any, to be withdrawn from the Payahead Account and deposited in the Collection Account, the amount, if any, to be withdrawn from the Reserve Account and deposited in the Collec tion Account and the amount, if any, to be withdrawn from the Reserve Account and paid to the Depositor, in each case, with respect to such Distribution Date.

On or before each Distribution Date, the Servicer will cause the Indenture Trustee to withdraw from the Payahead Account and

•

deposit into the Collection Account in immediately available funds, the portion of Payaheads constituting scheduled payments on Actuarial Receivables or that are to be applied to prepay Actuarial Receivable in full and

•

distribute to the Depositor, in immediately available funds, all investment earnings on funds in the Payahead Account with respect to the preceding Collection Period.  On or before each Distribution Date the Servicer will deposit any advances for such Distribution Date into the Collection Account.

On or before the business day preceding each Distribution Date, the Servicer will cause the Interest Distribution Amount and the Available Principal for such Distribution Date to be deposited into the Collection Account.  On or before each Distribution Date, the Servicer shall cause the Indenture Trustee to withdraw from the Reserve Account and deposit in the Collection Account an amount (the “Reserve Account Transfer Amount”) equal to the lesser of

•

the amount of cash or other immediately available funds in the Reserve Account on such Distribution Date (before giving effect to any withdrawals therefrom relating to such Distribution Date) or

•

the amount, if any, by which

•

the sum of the Total Servicing Fee, the Noteholders’ Interest Distributable Amount, the Certificateholders’ Interest Distributable Amount, the Noteholders’ Principal Distributable Amount and the Certificateholders’ Principal Distributable Amount for such Distribution Date exceeds

•

the sum of the Interest Distribution Amount and the Available Principal for such Distribution Date.

The “Interest Distribution Amount” for a Distribution Date will be the sum of the following amounts with respect to any Distribution Date, computed, with respect to Simple Interest Receivables, in accordance with the simple interest method, and with respect to Actuarial Receivables, in accordance with the actuarial method:

•

that portion of all collections on the Receivables allocable to interest in respect of the preceding Collection Period (including, with respect to Actuarial Receivables, amounts withdrawn from the Payahead Account and allocable to interest and excluding amounts deposited into the Payahead Account and allocable to interest, in each case, in respect of the preceding Collection Period);

•

all proceeds (other than any proceeds from any Dealer commission) (“Liquidation Proceeds”) of the liquidation of Liquidated Receivables, net of expenses incurred by the Servicer in connection with such liquidation and any amounts required by law to be remitted to the Obligor on such Liquidated Receivables, to the extent attributable to interest due thereon, which became Liquidated Receivables during such Collection Period in accordance with the Servicer’s customary servicing procedures;

•

all advances made by the Servicer of interest due on the Actuarial Receivables in respect of the preceding Collection Period;

•

the Purchase Amount of each Receivable that was repurchased by the Sponsor or purchased by the Servicer during the preceding Collection Period to the extent attributable to accrued interest thereon;

•

all monies collected, from whatever source (other than any proceeds from any Dealer commission), in respect to Liquidated Receivables during any Collection Period following the Collection Period in which such Receivable was written off, net of the sum of any amounts expended by the Servicer for the account of the Obligor and any amounts required by law to be remitted to the Obligor (“Recoveries”); and

•

investment earnings for such Distribution Date;

In calculating the Interest Distribution Amount, the following shall be excluded:  all payments and proceeds (including Liquidation Proceeds) of any Receivables

•

repurchased by the Sponsor or purchased by the Servicer, the Purchase Amount of which has been included in the Interest Distribution Amount on a prior Distribution Date and

•

received on Actuarial Receivables and distributed to the Servicer, with respect to such Distribution Date, as reimbursement for any unreimbursed advances in accordance with the Sale and Servicing Agreement.

The “Available Principal” for a Distribution Date will be the sum of the following amounts with respect to any Distribution Date, computed, with respect to Simple Interest Receivables, in accordance with the simple interest method, and, with respect to Actuarial Receivables, in accordance with the actuarial method:

•

that portion of all collections on the Receivables allocable to principal in respect of the preceding Collection Period (including, with respect to Actuarial Receivables, amounts withdrawn from the Payahead Account and allocable to principal and excluding amounts deposited into the Payahead Account and allocable to principal, in each case, in respect of the preceding Collection Period);

•

Liquidation Proceeds attributable to the principal amount of Receivables which became Liquidated Receivables during the preceding Collection Period in accordance with the Servicer’s customary servicing procedures with respect to such Liquidated Receivables;

•

all advances made by the Servicer of principal due on the Actuarial Receivables in respect of the preceding Collection Period;

•

to the extent attributable to principal, the Purchase Amount of each Receivable repurchased by the Sponsor or purchased by the Servicer during the preceding Collection Period; and

•

partial prepayments on Receivables in respect of the preceding Collection Period relating to refunds of extended service contracts, or of physical damage, credit life, credit accident or health insurance premium, disability insurance policy premiums, but only if such costs or premiums were financed by the respective Obligor and only to the extent not included in the first bullet point above.

In calculating the Available Principal, the following shall be excluded:  all payments and proceeds (including Liquidation Proceeds) of any Receivables

•

repurchased by the Sponsor or purchased by the Servicer the Purchase Amount of which has been included in the Available Principal on a prior Distribution Date, and

•

received on Actuarial Receivables and distributed to the Servicer, with respect to such Distribution Date, as reimbursement for any unreimbursed advances in accordance with the Sale and Servicing Agreement.

The “Principal Distribution Amount” for a Distribution Date will be the sum of the following amounts with respect to the preceding Collection Period:

(1)

(a) with respect to Simple Interest Receivables, that portion of all collections on the Receivable allocable to principal in respect of the preceding Collection Period and (b) with respect to Actuarial Receivables the sum of

(2)

the amount of all scheduled payments allocable to principal due during the preceding Collection Period and

(3)

the portion of all prepayments in full allocable to principal received during the preceding Collection Period,

in the case of both (a) and (b) without regard to any extensions or modifications thereof effected after the Cut-off Date, other than with respect to any extensions or modifications in connection with Cram Down Losses during such Collection Period;

(1)

the principal balance of each Receivable that was repurchased by the Sponsor or purchased by the Servicer in each case during the preceding Collection Period (except to the extent included in (1) above);

(2)

the principal balance of each Liquidated Receivable which became such during the preceding Collection Period (except to the extent included in (1) above);

(3)

partial prepayments on Receivables in respect of the preceding Collection Period relating to refunds of extended service contracts, or of physical damage, credit life, credit accident or health insurance premium, disability insurance policy premiums, but only if such costs or premiums were financed by the respective Obligor and only to the extent not included in clause (1) above; and

(4)

the aggregate amount of Cram Down Losses during such Collection Period.

Monthly Withdrawals from Collection Account.  On each Distribution Date, the Servicer shall instruct the Indenture Trustee to withdraw from the Collection Account and deposit in the Payahead Account in immediately available funds, the aggregate Payaheads collected during the preceding Collection Period.  On each Distribution Date, the Servicer shall instruct the Indenture Trustee to make the following withdrawals, based upon the calculations set forth in “Deposits to the Collection Account” above, deposits and distributions, in the amounts and in the order of priority specified below, to the extent of the sum of the Interest Distribution Amount and the Available Principal in respect of such Distribution Date and the Reserve Account Transfer Amount in respect of such Distribution Date (the “Total Distribution Amount”):

(1)

from the Collection Account to the Servicer, from the Total Distribution Amount, the Total Servicing Fee;

(2)

from the Collection Account to the Note Distribution Account, from the Total Distribution Amount remaining after the application of clause (1), the Noteholders’ Interest Distributable Amount;

(3)

from the Collection Account to the Certificate Distribution Account, from the Total Distribution Amount remaining after the application of clauses (1) and (2), the Certificateholders’ Interest Distributable Amount;

(4)

from the Collection Account to the Note Distribution Account, from the Total Distribution Amount remaining after the application of clauses (1) through (3), the Noteholders’ Principal Distributable Amount;

(5)

from the Collection Account to the Certificate Distribution Account, from the Total Distribution Amount remaining after the application of clauses (1) through (4), the Certificateholders’ Principal Distributable Amount; and

(6)

from the Collection Account to the Reserve Account, any amounts remaining after the application of clauses (1) through (5).

Notwithstanding the foregoing, following the occurrence and during the continuation of certain Events of Default or an acceleration of the Notes, the Total Distribution Amount remaining after the application of clauses (1) and (2) above will be deposited in the Note Distribution Account to the extent necessary to reduce the principal balance of the Notes to zero.

On each Distribution Date, all amounts on deposit in the Note Distribution Account will be paid in the following order of priority:

(1)

first, to the Noteholders, accrued and unpaid interest on the outstanding principal balance of the Notes at the Interest Rate; and

(2)

second, to the Noteholders in reduction of principal until the principal balance of the Notes has been reduced to zero;

On each Distribution Date, all amounts on deposit in the Certificate Distribution Account will be distributed to the Certificateholders in the following order of priority:

(1)

first, to the Certificateholders, accrued and unpaid interest on the Certificate Balance at the Pass-Through Rate; and

(2)

second, to the Certificateholders in reduction of principal until the principal balance of the Certificates has been reduced to zero.

Fees and Expenses of the Trust Fund

In consideration of their duties on behalf of the Trust Fund, the Servicer, the Owner Trustee and the Indenture Trustee will receive from the assets of the Trust Fund certain fees as set forth in the following table:

Fee Payable to:	Frequency of Payment:	Amount of Fee:	How and When Fee Is Paid:
Servicer	[monthly]	[(a) A monthly fee paid to the Servicer out of interest collections received from the Receivables in an amount equal to the product of one-twelfth of [    ]% per annum for so long as [               ] or an affiliate thereof is the Servicer, and [    ]% per annum if [               ] or an affiliate thereof is no longer the Servicer (the “Servicing Fee Rate”) and the Pool Balance as of the first day of the Collection Period.] [(b) any late fees, prepayment charges and other administrative fees or similar charges allowed by applicable law with respect to the Receivables, and will be entitled to reimbursement from the Issuing Entity for various expenses.]	[Deducted by the Servicer from interest collections in respect of each Receivable serviced by the Servicer, before payment of any amounts to securityholders.]
Owner Trustee	[monthly]	[A monthly fee paid to the Owner Trustee by the Servicer out of the Servicer’s fee.]	[Paid by the Servicer before payment of any amounts to securityholders.]
Indenture Trustee	[monthly]	[A monthly fee paid to the Indenture Trustee by the Servicer out of the Servicer’s fee.]	[Paid by the Servicer before payment of any amounts to securityholders.]
[Other Applicable Party]	[_____]	[_____]	[_____]

The Servicing Fee, together with any portion of the Servicing Fee that remains unpaid from prior Distribution Dates (the “Total Servicing Fee”), will be paid from the Total Distribution Amount.  The Total Servicing Fee will be paid prior to the distribution of any portion of the Interest Distribution Amount to the Noteholders or the Certificateholders.  See “Description of the Transfer and Servicing Agreement--Servicing Compensation and Payment of Expenses” in the Prospectus.

[[None of the fees set forth in table above may be changed without amendment of the Pooling Agreement as described under “The Pooling and Servicing Agreement—Amendment”.]]

[[Expenses of the Servicer, the Owner Trustee and the Indenture Trust will be reimbursed before payments are made on the securities.]]

Example of Distributions

The following sets forth an example of collection of payments from Obligors on the Receivables, transfer of amounts among the Trust Accounts, and distributions on the securities for the Distribution Date in [_______]:

[On or before the earlier of the [eighth] business day of the month in which a Distribution Date occurs and the [fourth] business day preceding such Distribution Date]	Determination Date	[The Servicer will calculate the Total Distribution Amount, the Interest Distribution Amount, the Available Principal, the Principal Distribution Amount, the Total Servicing Fee, the Noteholders’ Interest Distributable Amount, the Noteholders’ Principal Distributable Amount, the Certificateholders’ Interest Distributable Amount, the Certificateholders’ Principal Distributable Amount, the Advances, if any, to be made by the Servicer of interest and principal due on the Actuarial Receivables, the amount, if any, to be withdrawn from the Payahead Account and deposited in the Collection Account, the amount, if any, to be withdrawn from the Reserve Account and deposited in the Collection Account and the amount, if any, to be withdrawn from the Reserve Account and paid to the Depositor, in each case, with respect to such Distribution Date.]
[On or before each Distribution Date]	[Servicer Remittance Date]	[The Servicer will cause the Indenture Trustee to withdraw from the Payahead Account and deposit into the Collection Account in immediately available funds, the portion of Payaheads constituting scheduled payments on Actuarial Receivables or that are to be applied to prepay Actuarial Receivable in full and distribute to the Depositor, in immediately available funds, all investment earnings on funds in the Payahead Account with respect to the preceding Collection Period.] [The Servicer will deposit any advances for such Distribution Date into the Collection Account.] [The Servicer shall cause the Indenture Trustee to withdraw from the Reserve Account and deposit in the Collection Account the Reserve Account Transfer Amount.]
[On or before the business day preceding each Distribution Date]	[Servicer Remittance Date]	the Servicer will cause the Interest Distribution Amount and the Available Principal for such Distribution Date to be deposited into the Collection Account.
Last day of the month prior to the related Distribution Date	Record Date:	[Distributions will be made to securityholders of record for all applicable classes as of the Record Date].
The [__]th day of each month (or if the [__]h day is not a business day, the next business day),	Distribution Date:	[The Servicer will cause the Indenture Trustee to withdraw the Total Distribution Amount for deposit into the Note Distribution Account and Certificate Distribution Account, as applicable, and the Indenture Trustee will make distributions to Noteholders and Certificateholders from amounts on deposit in the Note Distribution Account and Certificate Distribution Account, respectively.]

Succeeding months follow the same pattern.

Related Definitions

For purposes hereof, the following terms have the following meanings:

“Collection Period” means, with respect to a Distribution Date, (x) in the case of the initial Distribution Date, the period from and including the Cut-off Date through and including [    ] and (y) thereafter, the calendar month preceding the related Distribution Date.

“Cram Down Loss” means, with respect to a Receivable if a court of appropriate jurisdiction in a bankruptcy or 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 the principal balance of such Receivable immediately prior to such order over the principal balance of such Receivable as so reduced and/or

•

if such court shall have issued an order reducing the effective rate of interest on such Receivable, the net present value (using as the discount rate the higher of the APR on such Receivable or the rate of interest, if any, specified by the court in such order) of the scheduled payments as so modified or restructured.

A “Cram Down Loss” shall be deemed to have occurred on the date of issuance of such order.

The “Pool Balance” at any time will represent the aggregate principal balance of the Receivables at the end of the preceding Collection Period, after giving effect to all payments (other than Payaheads) received from Obligors, Purchase Amounts and advances to be remitted by the Depositor, the Servicer and the Sponsor, as the case may be, all for such Collection Period, all losses realized on Receivables that became Liquidated Receivables during such Collection Period and all Cram Down Losses for such Collection Period.

“Realized Losses” means the excess of the principal balance of a Liquidated Receivable over Liquidation Proceeds to the extent allocable to principal.

“Liquidated Receivables” means, Receivables (1) which have been liquidated by the Servicer through the sale of the related Financed Vehicle, (2) as to which all or a portion representing 10% or more of a scheduled payment due is [150] or more days delinquent or (3) with respect to which proceeds have been received which, in the Servicer’s judgment, constitute the final amounts recoverable in respect of such Receivable.

“Noteholders’ Distributable Amount” means, with respect to any Distribution Date, the sum of the Noteholders’ Principal Distributable Amount and the Noteholders’ Interest Distributable Amount.

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

“Noteholders’ Monthly Interest Distributable Amount” means, with respect to any Distribution Date, the product of (x) one-twelfth of the Interest Rate (or, in the case of the first Distribution Date, the Interest Rate multiplied by a fraction, the numerator of which is the number of days elapsed from and including the Closing Date to but excluding such Distribution Date and the denominator of which is 360) and (y) the outstanding principal balance of the Notes on the immediately preceding Distribution Date, after giving effect to all distributions of principal to the Noteholders on such Distribution Date (or, in the case of the first Distribution Date, on the Closing Date).

“Noteholders’ Interest Carryover Shortfall” means, with respect to any Distribution Date, the excess of the Noteholders’ Monthly Interest Distributable Amount for the preceding Distribution Date and any outstanding Noteholders’ Interest Carryover Shortfall on such preceding Distribution Date over the amount in respect of interest that is actually deposited in the Note Distribution Account on such preceding Distribution Date, plus interest on the amount of interest due but not paid to Noteholders on the preceding Distribution Date, to the extent permitted by law, at the Interest Rate borne by the Notes from such preceding Distribution Date through the current Distribution Date.

“Noteholders’ Principal Distributable Amount” means, with respect to any Distribution Date, the sum of the Noteholders’ Monthly Principal Distributable Amount for such Distribution Date and the Noteholders’ Principal Carryover Shortfall as of the close of the preceding Distribution Date; provided, however, that the Noteholders’ Principal Distributable Amount shall not exceed the outstanding principal balance of the Notes.  In addition, on the Note Final Scheduled Distribution Date, the principal required to be deposited in the Note Distribution Account will include the amount necessary (after giving effect to the other amounts to be deposited in the Note Distribution Account on such Distribution Date and allocable to principal) to reduce the outstanding principal balance of the Notes to zero.

“Noteholders” Monthly Principal Distributable Amount” means, with respect to any Distribution Date, the Noteholders’ Percentage of the Principal Distribution Amount.

“Noteholders’ Percentage” means (a) for each Distribution Date until the principal balance of the Notes is reduced to zero, 100%, and (b) zero for each Distribution Date thereafter.

“Noteholders’ Principal Carryover Shortfall” means, as of the close of any Distribution Date, the excess of the Noteholders’ Monthly Principal Distributable Amount and any outstanding Noteholders’ Principal Carryover Shortfall from the preceding Distribution Date over the amount in respect of principal that is actually deposited in the Note Distribution Account.

“Certificateholders’ Distributable Amount” means, with respect to any Distribution Date, the sum of the Certificateholders’ Principal Distributable Amount and the Certificateholders’ Interest Distributable Amount.

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

“Certificateholders’ Monthly Interest Distributable Amount” means, with respect to any Distribution Date, the product of (x) one-twelfth of the Pass-Through Rate (or, in the case of the first Distribution Date, the Pass-Through Rate multiplied by a fraction, the numerator of which is the number of days elapsed from and including the Closing Date to but excluding such Distribution Date) and the denominator of which is 360) and (y) the Certificate Balance on the immediately preceding Distribution Date, after giving effect to all payments of principal to the Certificateholders on or prior to such Distribution Date (or, in the case of the first Distribution Date, on the Closing Date).

“Certificateholders’ Interest Carryover Shortfall” means, with respect to any Distribution Date, the excess of the Certificateholders’ Monthly Interest Distributable Amount for the preceding Distribution Date and any outstanding Certificateholders’ Interest Carryover Shortfall on such preceding Distribution Date, over the amount in respect of interest at the Pass-Through Rate that is actually deposited in the Certificate Distribution Account on such preceding Distribution Date, plus interest on such excess, to the extent permitted by law, at the Pass-Through Rate from and including such preceding Distribution Date to but excluding the current Distribution Date.

“Certificateholders’ Principal Distributable Amount” means, with respect to any Distribution Date, the sum of the Certificateholders’ Monthly Principal Distributable Amount for such Distribution Date and the Certificateholders’ Principal Carryover Shortfall as of the close of the preceding Distribution Date; provided, however, that the Certificateholders’ Principal Distributable Amount shall not exceed the Certificate Balance.  In addition, on the Certificate Final Scheduled Distribution Date, the principal required to be distributed to Certificateholders will include the lesser of:

•

any payments of principal due and remaining unpaid on each Receivable in the Trust as of the Final Scheduled Maturity Date or

•

the portion of the amount that is necessary (after giving effect to the other amounts to be deposited in the Certificate Distribution Account on such Distribution Date and allocable to principal) to reduce the Certificate Balance to zero, in either case after giving effect to any required distribution of the Noteholders’ Principal Distributable Amount to the Note Distribution Account.  

In addition, on any Distribution Date on which, after giving effect to all distributions to the Servicer, the Noteholders and the Certificateholders on such Distribution Date, the outstanding principal balance of the Notes is zero and the amount on deposit in the Reserve Account is equal to or greater than the Certificate Balance, the Certificateholders’ Principal Distributable Amount shall include an amount equal to such Certificate Balance.

“Certificateholders’ Monthly Principal Distributable Amount” means, with respect to any Distribution Date, the Certificateholders’ Percentage of the Principal Distribution Amount or, with respect to any Distribution Date on or after the Distribution Date on which the outstanding principal balance of the Notes is reduced to zero, 100% of the Principal Distribution Amount (less any amount required on the first such Distribution Date to reduce the outstanding principal balance of the Notes to zero, which shall be deposited into the Note Distribution Account).

“Certificateholders’ Percentage” means 100% minus the Noteholders’ Percentage.

“Certificateholders’ Principal Carryover Shortfall” means, as of the close of any Distribution Date, the excess of the Certificateholders’ Monthly Principal Distributable Amount and any outstanding Certificateholders’ Principal Carryover Shortfall from the preceding Distribution Date, over the amount in respect of principal that is actually deposited in the Certificate Distribution Account on such Distribution Date.

“Certificate Balance” equals, initially, $[          ] and, thereafter, equals the initial Certificate Balance, reduced by all amounts allocable to principal previously distributed to Certificateholders.

“Pass-Through Rate” means, with respect to the Certificates, [    ]% per annum.

Credit Enhancement

Reserve Account.  Pursuant to the Sale and Servicing Agreement, the Reserve Account will be created and maintained with the Indenture Trustee.  On the Closing Date, the Depositor will deposit $[    ] ([    ]% of aggregate initial principal balance of the Notes plus the initial Certificate Balance) (the “Reserve Account Initial Deposit”) in the Reserve Account.  The Reserve Account Initial Deposit will be augmented on each Distribution Date by the deposit in the Reserve Account of amounts remaining after distribution of the Total Servicing Fee and amounts to be paid to the Noteholders and Certificateholders.  If the amount on deposit in the Reserve Account on any Distribution Date (after giving effect to all deposits or withdrawals therefrom on such Distribution Date) is greater than the Specified Reserve Account Balance for such Distribution Date, the Servicer will instruct the I ndenture Trustee to distribute the amount of the excess to the Depositor.  Upon any distribution to the Depositor of amounts from the Reserve Account, neither the Noteholders nor the Certificateholders will have any rights in, or claims to, such amounts.  In certain circumstances, funds in the Reserve Account will be used to reduce the Certificate Balance to zero.

“Specified Reserve Account Balance” with respect to any Distribution Date generally means the greater of

•

[    ]% of the sum of the aggregate outstanding principal amount of the Notes and the outstanding Certificate Balance on such Distribution Date (after giving effect to all payments on the Notes and distributions with respect to the Certificates to be made on such Distribution Date) or

•

[    ]% of the aggregate initial principal balance of the Notes plus the initial Certificate Balance.  In no circumstances will the Depositor be required to deposit any amounts in the Reserve Account other than the Reserve Account Initial Deposit to be made on the Closing Date.

Subordination of the Certificates.  The rights of the Certificateholders to receive distributions will be subordinated to the rights of the Noteholders following the occurrence of certain Events of Default or an acceleration of the Notes.  The subordination of the Certificates is intended to enhance the likelihood of receipt by Noteholders of amounts due them and to decrease the likelihood that the Noteholders will experience losses.  In addition, the Reserve Account is intended to enhance the likelihood of receipt by Noteholders and Certificateholders of amounts due them and to decrease the likelihood that the Noteholders and Certificateholders will experience losses.  However, in certain circumstances, the Reserve Account could be depleted.  If the amount required to be withdrawn from the Reserve Account to cover shortfalls in collections on the Receivables exceeds the amount on deposit in the Reserve Account a temporary shortfall in the amounts distributed to the Noteholders or the Certificateholders could result.  In addition, depletion of the Reserve Account ultimately could result in losses to Noteholders and Certificateholders.

[THE INSURER]

[General]

[[_______________] (the “Insurer” or “[_______________]”) is a monoline financial guaranty insurance company incorporated under the laws of the State of New York.  The Insurer is currently licensed to do insurance business in, and is subject to the insurance regulation and supervision by, all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Singapore.]

[The Insurer is an indirect wholly owned subsidiary of [_______________], a [___________] (“[_______________]”).  Through its subsidiaries, [_______________] is a leading provider of insurance and reinsurance coverages and financial products and services to industrial, commercial and professional service firms, insurance companies and other enterprises on a worldwide basis.  The ordinary shares of [_______________] are publicly traded in the United States and listed on the New York Stock Exchange (NYSE: [_________]).  [_______________] is not obligated to pay the debts of or claims against the Insurer.]

[Reinsurance]

[The Insurer has entered into a facultative quota share reinsurance agreement with [____________] (“[_______________]”), an insurance company organized under the laws of [______________], and an affiliate of the Insurer.  Pursuant to this reinsurance agreement, the Insurer expects to cede up to 90% of its business to [_______________].  The Insurer may also cede reinsurance to third parties on a transaction-specific basis, which cessions may be any or a combination of quota share, first loss or excess of loss.  Such reinsurance is used by the Insurer as a risk management device and to comply with statutory and rating agency requirements and does not alter or limit the Insurer's obligations under any financial guaranty insurance policy.  With respect to any transaction insured by [_______________], the percentage of risk ceded to [_______________] may be less than 90% depending on certain factors including, without l imitation, whether [_______________] has obtained third party reinsurance covering the risk.  As a result, there can be no assurance as to the percentage reinsured by [_______________] of any given financial guaranty insurance policy issued by [_______________], including the Policy.]

[Based on the audited financials of [_______________], as of December 31, 2004, [_______________] had total assets, liabilities, redeemable preferred shares and shareholders’ equity of $[___________], $[___________], $[___________] and $[___________], respectively, determined in accordance with generally accepted accounting principles in the United States (“US GAAP”). [_______________]’s insurance financial strength is rated “Aaa” by Moody’s and “AAA” by S&P and Fitch Inc. In addition, [_______________] has obtained a financial enhancement rating of “AAA” from S&P.]  

[The obligations of [_______________] to the Insurer under the reinsurance agreement described above are unconditionally guaranteed by [___________] ("[_______________]"), a Bermuda exempted company and one of the world's leading excess commercial insurers.  [_______________] is a wholly owned indirect subsidiary of [_______________].  In addition to A.M. Best’s financial strength rating of “A+” and issuer credit rating of “aa-”, [_______________]’s insurance financial strength rating is “Aa2” (as of September 13, 2005, [_______________] is on review for downgrade) by Moody’s, “AA-” by Standard & Poor’s (on September 20, 2005, Standard & Poor’s placed [_______________] on CreditWatch with negative implications) and “AA-” (Outlook Stable) by Fitch.]  

[The rating agencies have taken certain actions with respect to [_______________] and various insurance operating subsidiaries of [_______________], as described below.  Moody’s placed the “A2” senior debt rating of [_______________] and the other insurance financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) on review for possible downgrade on September 13, 2005.  Standard & Poor’s placed the “A” senior debt rating of [_______________] and the other financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) on CreditWatch with negative implications on September 20, 2005.  Fitch downgraded the long term issuer rating of [_______________] and the insurer financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) from “A” to “A-” on October 26, 2005.  A.M. Best placed each of [___________]’s (which does not include [_______________] or [_______________]) and [_______________]’s respective financial strength ratings of “A+” and their issuer credit ratings of “aa-” under review with negative implications on September 15, 2005. ]

[The ratings of [_______________], [_______________] or any other member of the [_______________] group of companies are not recommendations to buy, sell or hold securities, including the notes and are subject to revision or withdrawal at any time by Moody’s, Standard & Poor’s or Fitch.]

[Notwithstanding the capital support provided to the Insurer described in this section, the noteholders will have direct recourse against the Insurer only, and neither [_______________] nor [_______________] will be directly liable to the noteholders.]

[Financial Strength and Financial Enhancement Ratings of [_______________]]

[The Insurer's insurance financial strength is rated “Aaa” by Moody’s and “AAA” by Standard & Poor’s and Fitch, Inc. (“Fitch”).  In addition, [_______________] has obtained a financial enhancement rating of “AAA” from Standard & Poor’s.  These ratings reflect Moody’s, Standard & Poor’s and Fitch's current assessment of the Insurer's creditworthiness and claims-paying ability as well as the reinsurance arrangement with [_______________] described under "Reinsurance" above.]

[The above ratings are not recommendations to buy, sell or hold securities, including the notes and are subject to revision or withdrawal at any time by Moody’s, Standard & Poor’s or Fitch.  Any downward revision or withdrawal of these ratings may have an adverse effect on the market price of the notes.  The Insurer does not guaranty the market price of the notes nor does it guaranty that the ratings on the notes will not be revised or withdrawn.]

[Capitalization of the Insurer]

[Based on the audited financials of [_______________], as of December 31, 2004, [_______________] had total assets, liabilities, and shareholder’s equity of $[______________], $[______________], and $[______________], respectively, determined in accordance with U.S. GAAP.]

Based on the audited statutory financial statements for [_______________] as of December 31, 2004 filed with the State of New York Insurance Department, [_______________] has total admitted assets of $[______________], total liabilities of $[______________] and total capital and surplus of $[______________] determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities (“SAP”).  

[Incorporation by Reference of Financials

]

For further information concerning [_______________] and [_______________], see the financial statements of [_______________] and [_______________], and the notes thereto, incorporated by reference in this prospectus supplement.  The financial statements of [_______________] and [_______________] are included as exhibits to the periodic reports filed with the Securities and Exchange Commission (the “Commission”) by [_______________] and may be reviewed at the EDGAR website maintained by the Commission.  All financial statements of  [_______________] and [_______________] included in, or as exhibits to, documents filed by [_______________] pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 on or prior to the date of this prospectus supplement, or after the date of this prospectus supplement but prior to termination of the offering of the notes, shall be deemed incorporated by reference in this prospectus supplement.  Except for the financial statements of [_______________] and [_______________], no other information contained in [_______________]'s reports filed with the Commission is incorporated by reference. Copies of the statutory quarterly and annual statements filed with the State of New York Insurance Department by [_______________] are available upon request to the State of New York Insurance Department.]

[Regulation of the Insurer]

[The Insurer is regulated by the Superintendent of Insurance of the State of New York.  In addition, the Insurer is subject to regulation by the insurance laws and regulations of the other jurisdictions in which it is licensed.  As a financial guaranty insurance company licensed in the State of New York, the Insurer is subject to Article 69 of the New York Insurance Law, which, among other things, limits the business of each insurer to financial guaranty insurance and related lines, prescribes minimum standards of solvency, including minimum capital requirements, establishes contingency, loss and unearned premium reserve requirements, requires the maintenance of minimum surplus to policyholders and limits the aggregate amount of insurance which may be written and the maximum size of any single risk exposure which may be assumed.  The Insurer is also required to file detailed annual financial statements with the New York Insurance Department and similar supervisory agencies in each of the other jurisdictions in which it is licensed.]

[The extent of state insurance regulation and supervision varies by jurisdiction, but New York and most other jurisdictions have laws and regulations prescribing permitted investments and governing the payment of dividends, transactions with affiliates, mergers, consolidations, acquisitions or sales of assets and incurrence of liabilities for borrowings.]

[THE FINANCIAL GUARANTY INSURANCE POLICIES ISSUED BY THE INSURER, INCLUDING THE INSURANCE POLICY, ARE NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.]

[The principal executive offices of the Insurer are located at [____________] and its telephone number at this address is [____________].]

[THE POLICY]

[[__________], in consideration of the payment of a premium and subject to the terms of the insurance policy, thereby unconditionally and irrevocably guarantees to any securityholder that an amount equal to each full and complete Insured Amount will be received from [__________] by the Indenture Trustee or its successors, as Indenture Trustee for the securityholders, on behalf of the securityholders, for distribution by the Indenture Trustee to each securityholder of that securityholder’s proportionate share of the Insured Amount.]

[[__________]’s obligations under the insurance policy, with respect to a particular Insured Amount, will be discharged to the extent funds equal to the applicable Insured Amount are deposited in the account specified by the Indenture Trustee, whether or not those funds are properly applied by the Indenture Trustee. Insured Amounts will be paid only at the time set forth in the insurance policy, and no accelerated Insured Amounts will be paid regardless of any acceleration of the notes, unless the acceleration is at the sole option of [__________]. ]

[Notwithstanding the foregoing paragraph, the insurance policy does not cover shortfalls, if any, attributable to the liability of the issuer or the Indenture Trustee for withholding taxes, if any (including interest and penalties in respect of any liability for withholding taxes).]

[[__________] will pay any Insured Amount that is an Avoided Payment on the business day following receipt on a business day by [__________] of the following:

•

a certified copy of the order requiring the return of an avoided payment, with respect to which order the appeal period has expired without an appeal having been filed;  

•

an assignment in a form attached to the insurance policy, irrevocably assigning to [__________] all rights and claims of the securityholder relating to or arising under the notes against the debtor which made the avoided payment or otherwise with respect to the avoided payment; and  

•

an appropriately completed and executed demand for payment in the form attached to the insurance policy;  

provided that if these documents are received after 10:00 a.m., New York time, on that business day, they will be deemed to be received on the following business day. Payments by [__________] will be disbursed to the receiver or the trustee in bankruptcy named in the final order of the court exercising jurisdiction on behalf of the securityholder and not to any securityholder directly unless the securityholder has returned principal or interest paid on the notes to the receiver or trustee in bankruptcy, in which case that payment will be disbursed to the Indenture Trustee for distribution to the securityholder upon proof of such payment reasonably satisfactory to [__________].]

[[__________] will pay any other amount payable under the insurance policy no later than 2:00 p.m., New York time, on the later of the distribution date on which the related Scheduled Payment is due or the business day following receipt in New York, New York by [__________] of a notice from the Indenture Trustee specifying the Insured Amount which is due and owing on the applicable distribution date, provided that if the notice is received after 10:00 a.m., New York time, on that business day, it will be deemed to be received on the following business day.]

[Subject to the terms of the Indenture and the Sale and Servicing Agreement, [__________] will be subrogated to the rights of each securityholder to receive payments under the notes to the extent of any payment by [__________] under the insurance policy.]

[As used in the insurance policy, the following terms shall have the following meanings:

“Avoided Payment” means any amount previously distributed to a securityholder on the notes that is recoverable and sought to be recovered as a voidable payment in an insolvency proceeding, in accordance with a final nonappealable order of a court having competent jurisdiction.

“Insured Amount” means, that portion of Scheduled Payments that shall become due for payment but shall be unpaid by reason of nonpayment.

“Insured Payment” means (a) as of any distribution date, any Scheduled Payment and (b) any Avoided Payment.

“Scheduled Payment” for any distribution date, an amount equal to the excess, if any, of: (a) the sum, without duplication, of (i) the Noteholders’ Interest Distributable Amount and (ii) the Noteholders’ First Principal Distributable Amount (other than the amount specified in clause (2)(b) of the definition thereof) for the related distribution date over (b) the amount actually deposited into the note distribution account on the related distribution date.]

[Capitalized terms used in the insurance policy and not otherwise defined in the insurance policy shall have the meanings set forth in the Indenture and the Sale and Servicing Agreement as of the date of execution of the insurance policy, without giving effect to any subsequent amendment or modification to the Indenture or the Sale and Servicing Agreement unless such amendment or modification has been approved in writing by [__________].]

[The insurance policy is not cancelable for any reason. The premium on the insurance policy is not refundable for any reason including payment, or provision being made for payment, prior to the maturity of the notes.]

[The insurance policy is being issued under and pursuant to, and will be construed under, the laws of the State of New York, without giving effect to the conflict of laws principles thereof.]

[The insurance provided by the insurance policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law.]

[OTHER CREDIT ENHANCEMENT PROVIDER]

[Regulation AB Item 1114 compliant description of any other credit enhancement provider.]

[DERIVATIVE INSTRUMENTS]

[The Interest Rate Swap Agreement and the Swap Provider]

[The Offered Certificates and Class B Certificates will have the benefit of an interest rate swap agreement.  On or before the Closing Date, the Trustee will enter into an interest rate swap agreement (the “Interest Rate Swap Agreement”) with [_______] (the “Swap Provider”).  A separate trust created under the pooling and servicing agreement (the "Supplemental Interest Trust") will hold the Interest Rate Swap Agreement documented by a 1992 ISDA Master Agreement (Multicurrency-Cross Border), together with a Schedule and Confirmation between The Trustee, on behalf of the Supplemental Interest Trust, and the Swap Provider. ]

[The significance percentage, as calculated in accordance with Item 1115 of Regulation AB is less than 10%.]

[If significance percentage, as calculated in accordance with Item 1115 of Regulation AB, is 10% or more, provide financial information required by Item 1115 of Regulation AB.]

[Pursuant to the Interest Rate Swap Agreement, on each Distribution Date, (i) the Securities Administrator (on behalf of the Supplemental Interest Trust and from funds of such trust) will be obligated to pay to the Swap Provider, a fixed amount equal to the product of (x) [__]%, (y) the Swap Notional Amount for that Distribution Date set forth in the Interest Rate Swap Agreement and (z) a fraction, the numerator of which is 30 (or, for the first Distribution Date, the number of days elapsed from the Closing Date to but excluding the first Distribution Date on a 30/360 basis), and the denominator of which is 360 (the “Securities Administrator Swap Payment”); and (ii) the Swap Provider will be obligated to pay to the Supplemental Interest Trust for the benefit of the holders of the Offered Certificates and the Class B Certificates (the “Swap Provider Payment”), a floating amount equal to the product of (x) one-mon th LIBOR (as determined pursuant to the Interest Rate Swap Agreement), (y) the Swap Notional Amount for that Distribution Date set forth in the Interest Rate Swap Agreement, and (z) a fraction, the numerator of which is the actual number of days elapsed from the previous Distribution Date to but excluding the current Distribution Date (or, for the first Distribution Date, the actual number of days elapsed from the Closing Date to but excluding the first Distribution Date), and the denominator of which is 360.  A net payment will be required to be made on each Distribution Date (each such net payment, a “Net Swap Payment”) (a) by the Securities Administrator to the Swap Provider, to the extent that the fixed amount exceeds the corresponding floating amount, or (b) by the Swap Provider to the Securities Administrator, to the extent that the floating amount exceeds the corresponding fixed amount. Payments received by the Supplemental Interest Trust pursuant to the Interest Rate Swap Agreement wil l be available for distributions of Interest Carry Forward Amounts, Net WAC Rate Carryforward Amounts, amounts necessary to maintain the Required Overcollateralization Amount and Allocated Realized Loss Amounts.]

[The “Swap Notional Amount” with respect to each Distribution Date commencing in [______, __], is set forth below (which will be substantially the same schedule as set forth in the Interest Rate Swap Agreement).  The Interest Rate Swap Agreement will terminate immediately following the Distribution Date in [______, __], unless terminated earlier upon the occurrence of a Swap Default, an Early Termination Event or an Additional Termination Event (each as defined below).]

Distribution Date	Swap Notional Amount
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]

[The respective obligations of the Swap Provider and the Supplemental Interest Trust to pay specified amounts due under the Interest Rate Swap Agreement will be subject to the following conditions precedent: (1) no Swap Default or event that with the giving of notice or lapse of time or both would become a Swap Default, in each case, in respect of the other party, shall have occurred and be continuing with respect to the Interest Rate Swap Agreement and (2) no “Early Termination Date” (as defined in the ISDA Master Agreement) has occurred or been effectively designated with respect to the Interest Rate Swap Agreement.]

[An Interest Rate Cap Agreement]

[The Class [__] certificates will have the benefit of the Interest Rate Cap Agreement. Pursuant to the Interest Rate Cap Agreement, with respect to any Distribution Date, commencing with the Distribution Date in [__], 20[ ], on or prior to the Distribution Date in [__], 20[ ], [_______], (the “Cap Provider”), will be obligated to pay to the trust administrator, an amount equal to the product of (a) the excess, if any, of (i) the then current one-month LIBOR rate (determined in accordance with the Interest Rate Cap Agreement) up to a maximum of [__]% (the “Maximum Cap Rate”) and (ii) a specified strike rate of [__]% (the “Cap Strike Rate”) and (b) the Interest Rate Cap Agreement Notional Amount set forth on the schedule attached as Annex B hereto for that Distribution Date, determined on a 30/360 Basis. (each such payment, the “Cap Agreement Payment”). The Interest Rate Cap Agreement will terminate after th e Distribution Date in [__], 20[ ].

The obligations of the Cap Provider are limited to those specifically set forth in the Interest Rate Cap Agreement. The Cap Provider conducts business in the over-the-counter derivatives market, engaging in a variety of derivatives products, including interest rate swaps, currency swaps, credit default swaps and interest rate options with institutional clients.

For the Class [__] certificates and each Distribution Date prior to and including the Distribution Date in [__], 20[ ],  any Cap Agreement Payment received by the trust administrator will be used to pay the related Cap Amount to such classes of certificates, as described below under “––The Reserve Funds.”  Amounts received on  the Interest Rate Cap Agreement will not be available to make distributions on any class of Certificates other than the Class [__] certificates.

The Interest Rate Cap Agreement will be governed by and construed in accordance with the law of the State of New York. The obligations of the Cap Provider are limited to those specifically set forth in the Interest Rate Cap Agreement. The Class [__] certificates do not represent an obligation of the Cap Provider. The holders of the Class [__] certificates are not parties to or beneficiaries under the Interest Rate Cap Agreement and will not have any right to proceed directly against the cap provider in respect of its obligations under the Interest Rate Cap Agreement.]

[A Yield Maintenance Agreement]

The Issuing Entity will enter into a Yield Maintenance Agreement for the benefit of the Class [__] Certificates.  Under the Yield Maintenance Agreement, the Counterparty will agree to pay to the Issuing Entity two Business Days prior to each Distribution Date beginning in [__], 20[ ] and to and including the Distribution Date in [__], 20[ ], an amount equal to the product of:

1.

the excess, if any, of LIBOR (as calculated under the related Yield Maintenance Agreement subject to the Rate Cap Ceiling) over the Cap Strike Rate for that Distribution Date;

2.

the related Scheduled Notional Amount for that Distribution Date; and

3.

a fraction, the numerator of which is the actual number of days elapsed from the previous Distribution Date to but excluding the current Distribution Date, and the denominator of which is 360.

The Scheduled Notional Amounts for each Yield Maintenance Agreement decline in accordance with the expected amortization of the Mortgage Loans.  The Yield Maintenance Agreements will terminate immediately following the Distribution Date in [__], 20[ ].

The Yield Maintenance Agreements will be governed by and construed in accordance with the law of the State of New York and will be documented under the ISDA Master Agreement, as supplemented by the schedule and the confirmation.  The obligations of the Counterparty are limited to those specifically set forth in the related Yield Maintenance Agreement.

Any amounts received by the Securities Administrator under a Yield Maintenance Agreement will be distributed as follows:

1.

to the Reserve Fund, in an amount equal to the Basis Risk Shortfall Carryover Amount for the Class [__] Certificates for such Distribution Date;

2.

to the Principal Remittance Amount, the Net Cumulative Realized Loss Amount on such Distribution Date;

3.

to the Class [__] Certificates, any applicable Unpaid Realized Loss Amounts, and

4.

to the Class [__] Certificates, any remaining amounts.

FEDERAL INCOME TAX CONSEQUENCES

The following is a general summary of some of the related Federal income tax consequences of the purchase, ownership and disposition of the Class A Notes. This discussion does not address every aspect of the Federal income tax laws that may be relevant to holders of Class A Notes in light of their personal investment circumstances or to particular types of Class A Noteholders subject to special treatment under the Federal income tax laws, including, without limitation, banks and thrifts, insurance companies, dealers in securities, foreign investors, regulated investment companies, individuals, trusts and estates and pass-through entities, the equity holders of which are any of the foregoing. This discussion is directed to prospective purchasers who purchase Class A Notes in the initial distribution of the Class A Notes and who hold the Class A Notes as “capital assets” within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). Prospective purchasers are urged to consult their own tax advisors in determining the Federal, state, local, foreign and any other tax consequences to them of the purchase, ownership and disposition of the Class A Notes.

The following summary is based upon current provisions of the Code, the Treasury regulations promulgated under the Code, judicial authority, and ruling authority, all of which are subject to change, which change may be retroactive. The Issuing Entity will be provided with an opinion of Federal Tax Counsel regarding some of the related Federal income tax matters discussed below. An opinion of Federal Tax Counsel, however, is not binding on the Internal Revenue Service (the “IRS”) or the courts. Moreover, there are no cases or IRS rulings on similar transactions with terms similar to those of the Class A Notes. As a result, the IRS may disagree with all or a part of the discussion below. No ruling on any of the issues discussed below will be sought from the IRS.

Tax Characterization of the Issuing Entity

McKee Nelson LLP will deliver its opinion that the Issuing Entity will not be classified as an association, or publicly traded partnership taxable as a corporation for Federal income tax purposes. This opinion will be based on the assumption of compliance by all parties with the terms of the Trust Agreement and related documents.

If the Issuing Entity were taxable as a corporation for Federal income tax purposes, the Issuing Entity would be subject to corporate income tax on its taxable income. The Issuing Entity’s taxable income would include all its income on the Receivables, possibly reduced by its interest expense on the Class A Notes. Any corporate income tax could materially reduce cash available to make payments on the Class A Notes and distributions on the Certificates, and Certificateholders, could be liable for any tax that is not paid by the Issuing Entity.

Tax Consequences to Holders of the Class A Notes

Treatment of the Class A Notes as Indebtedness.  The Issuing Entity will agree, and the Class A Noteholders will agree by their purchase of Class A Notes, to treat the Class A Notes as debt for Federal, state and local income and franchise tax purposes. Federal Tax Counsel will advise the Issuing Entity that in its opinion the Class A Notes will be classified as debt for Federal income tax purposes.

The prepayment assumption that is used in determining the accrual of original issue discount, market discount or premium with respect to the Notes is [100% Prepayment Assumption], as defined below.  However, no representation is made that the loans will prepay in accordance with this assumption or in accordance with any other assumption.  The [100% Prepayment Assumption] assumes a [constant prepayment rate of ___%].

Alternatively, if, contrary to the opinion of Federal Tax Counsel, the Class A Notes were not properly classified as debt and Issuing Entity were treated as a publicly traded partnership taxable as a corporation, it would be subject to Federal income tax, and any similar state or local taxes, at corporate tax rates on its taxable income generated by ownership of the Receivables.  This tax could result in reduced distributions to Class A Noteholders. Distributions to Class A Noteholders generally would not be deductible in computing the taxable income of the publicly traded partnership. In addition, all or a portion of any distributions would, to the extent of the current and accumulated earnings and profits of the corporation, be treated as dividend income to the Class A Noteholders, and in the case of Class A Noteholders that are foreign persons would be subject to withholding tax.

Interest Income and OID on the Class A Notes.

It is not anticipated that the Class A Notes will be issued with original issue discount (“OID”) within the meaning of Section 1273 of the Code. The stated interest on the Class A Notes will be taxable to a Class A Noteholder as ordinary interest income when received or accrued in accordance with the Class A Noteholder’s method of tax accounting. If the Class A Notes were treated as being issued with OID, the excess of the “stated redemption price at maturity” of the Class A Notes over their issue price would constitute OID. Under the OID Regulations, a holder of a Class A Note issued with a de minimis amount of OID must include this OID in income, on a pro rata basis, as principal payments are made on the Class A Note. A subsequent purchaser who buys a Class A Note for more or less than its principal amount will generally be subject, respectively, to the premium amortization or market discount rules of the Code.

Sale or Other Disposition.

If a Class A Noteholder sells a Class A Note, the holder will recognize gain or loss in an amount equal to the difference between the amount realized on the sale and the holder’s adjusted tax basis in the Class A Note. The adjusted tax basis of a Class A Note to a particular Class A Noteholder will equal the holder’s cost for the Class A Note, increased by any market discount, and gain previously included by the Class A Noteholder in income with respect to the Class A Note and decreased by the amount of premium, if any, previously amortized and by the amount of principal payments previously received by the Class A Noteholder with respect to the related Class A Note. Any gain or loss will be capital gain or loss, except for gain representing accrued interest, including OID, and accrued market discount not previously included in income. Capital losses generally may be used by a corporate taxpayer only to offset capital gains, and by an i ndividual taxpayer only to the extent of capital gains plus $3,000 of other income.

Foreign Holders.

Except as discussed below, a Class A Noteholder that is not a “United States person” (as defined below) generally will not be subject to United States income or withholding tax in respect of a distribution on a Class A Note provided that (i) the holder complies to the extent necessary with certain certification requirements, which generally relate to the identity of the beneficial owner and the status of the beneficial owner as a person that is not a United States person (as defined below), (ii) the holder is not a “10-percent shareholder” within the meaning of Section 871(h)(3)(B) of the Code, which could be interpreted to include a person that directly or indirectly owns 10% or more of the certificates in the Issuing Entity or the equity in the Sponsor or the Depositor, (iii) the holder is not a “controlled foreign corporation” (as defined in the Code) related to the Issuing Entity or related to a 10 percent holde r of certificates in the Issuing Entity or equity in the Sponsor or the Depositor, and (iv) the holder is not engaged in a United States trade or business, or otherwise subject to Federal income tax as a result of any direct or indirect connection to the United States other than through its ownership of a Class A Note.  For these purposes, the term “United States person” means (i) a citizen or resident of the United States, (ii) a corporation or partnership (or other entity properly treated as a corporation or partnership for Federal income tax purposes) created or organized in or under the laws of the United States or any State thereof or the District of Columbia, (iii) an estate whose income is includable in gross income for United States Federal income taxation regardless of its source, and (iv) a trust for which one or more United States persons have the authority to control all substantial decisions and for which a court of the United States can exercise primary supervision over the trust ’s administration and certain eligible trusts that elect to be treated as United States persons.  A “Foreign Person” is any person that is not a United States person.  Each Class A Noteholder should consult its tax advisors regarding the tax documentation and certifications that must be provided to secure the exemption from United States withholding taxes.

Any capital gain realized on the sale, redemption, retirement or other taxable disposition of a Class A Note by a Foreign Person generally will be exempt from United States Federal income and withholding tax, provided that (i) such gain is not effectively connected with the conduct of a trade or business in the United States by the Foreign Person and (ii) in the case of an individual Foreign Person, the Foreign Person is not present in the United States for 183 days or more in the taxable year.

If the interest, gain or income on a Class A Note held by a Foreign Person is effectively connected with the conduct of a trade or business in the United States by the Foreign Person (although exempt from the withholding tax previously discussed if the holder provides an appropriate statement establishing that such income is so effectively connected), the holder generally will be subject to United States Federal income tax on the interest, gain or income at regular Federal income tax rates.  In addition, if the Foreign Person is a foreign corporation, it may be subject to a branch profits tax equal to 30% of its effectively connected earnings and profits,” within the meaning of the Code, for the taxable year, as adjusted for certain items, unless it qualifies for a lower rate under an applicable tax treaty (as modified by the branch profits tax rules).

If the IRS were to contend successfully that the Class A Notes are interests in a partnership, not taxable as a corporation, a Class A Noteholder that is a foreign person might be required to file a United States. Federal income tax return and pay tax on its share of partnership income at regular United States tax rates, including the branch profits tax, and could be subject to withholding tax on its share of partnership income. If the Class A Notes were recharacterized as interests in a “publicly traded partnership” taxable as a corporation, distributions on the Class A Notes treated as dividends would generally be subject to withholding tax on the gross amount of the dividends at the rate of 30% unless the rate were reduced by an applicable treaty. If the Class A Notes are recharacterized as equity interests in a partnership, or, contrary to the opinion of Federal Tax Counsel, in a publicly traded partnership taxable as a corporation , any taxes required to be so withheld will be treated for all purposes of the Class A Notes as having been paid to the related Class A Noteholder.

Backup Withholding. Distributions made on the Class A Notes and proceeds from the sale of Class A Notes to or through certain brokers may be subject to a “backup” withholding tax on “reportable payments” (including interest accruals, original issue discount, and, under certain circumstances, distributions in reduction of principal amount) if the holder of the Class A Notes fails to comply with certain identification procedures, unless the Class A Noteholder is an exempt recipient under applicable provisions of the Code and, if necessary, demonstrates such status.  Any amounts so withheld from distributions on the Class A Notes would be refunded by the IRS or allowable as a credit against the Class A Noteholder’s Federal income tax.

STATE AND LOCAL TAX CONSEQUENCES

The discussion above does not address the tax consequences of purchase, ownership or disposition of the Securities under any state or local tax law.  We recommend that investors consult their own tax advisors regarding state and local tax consequences.

ERISA CONSIDERATIONS

The Notes

General

Section 406 of ERISA prohibits, and Section 4975 of the Code imposes adverse tax consequences on, certain transactions between any benefit plan which is subject to Title I of ERISA and/or Section 4975 of the Code or is an entity which is deemed to hold the assets of the foregoing (the “Plan”) and persons that are “parties in interest” under ERISA or “disqualified persons” under the Code with respect to such Plan.  A violation of these “prohibited transaction” rules may result in excise taxes and other penalties and liabilities under ERISA and the Code for such persons.

Certain transactions involving the assets of an issuing entity might be deemed to constitute prohibited transactions under Section 406 ERISA and Section 4975 of the Code with respect to a Plan that purchased notes issued by that issuing entity if assets of the issuing entity were deemed to be assets of the Plan.  Under the regulation issued by the United States Department of Labor set forth at 29 C.F.R. Section 2510.3-101 governing the definition of “plan assets” for purposes of the fiduciary responsibility and prohibited transaction provisions of ERISA and Section 4975 of the Code (the “Plan Asset Regulations”), the assets of an issuing entity would be treated as plan assets of the Plan for the purposes of ERISA and the Code only if the Plan acquired an “equity interest” in the issuing entity and none of the exceptions contained in the Plan Asset Regulations was applicable.  An equity interest is defined under the Plan Asset Regulations as an interest other than an instrument which is treated as indebtedness under applicable local law and which has no substantial equity features.

Purchases of the Notes

Although there is little guidance on the subject, the notes should be treated as indebtedness without substantial equity features for purposes of the Plan Asset Regulations.  This determination is based in part upon (i) tax counsel’s opinion that notes transferred on the closing date to parties unrelated to the holder of the Residual Certificates will be classified as debt for U. S. federal income tax purposes and that retained notes, if later sold to a party unrelated to the holder of the Residual Certificates for cash, will be classified as debt instruments for U.S. federal income tax purposes as of the date of such sale, based on certain assumptions (including that the rating of the notes as of the closing date has not declined below investment grade) and (ii) the traditional debt features of the notes, including the reasonable expectation of purchasers of the notes that they will be repaid when due, as well as the absence of conversion rights, warrants an d other typical equity features.  Based upon the foregoing and other considerations, subject to the considerations described below, the notes may be purchased by a Plan.

Without regard to whether the notes are considered an “equity interest” in the issuing entity under the Plan Asset Regulations, the acquisition or holding of notes by or on behalf of a Plan could be considered to give rise to a prohibited transaction if the underwriters, the issuing entity, the owner trustee or the indenture trustee, or any of their respective affiliates is or becomes a party in interest or a disqualified person with respect to such Plan.  In that case, PTE 84-14 (relating to transactions effected by a “qualified professional asset manager”); PTE 90-1 (relating to transactions involving insurance company pooled separate accounts); PTE 91-38 (relating to transactions involving bank collective investment funds); PTE 95-60 (relating to transactions involving insurance company general accounts); PTE 96-23 (relating to transactions effected by an “in-house asset manager”); and any other applicable exemption granted by the U.S. Department of Labor (the “Investor Based Exemptions) could be applicable, depending on the type of Plan involved and the circumstances of the plan fiduciary’s decision to acquire a note.  Even if the conditions specified in one or more of the Investor-Based Exemptions are met, the scope of the relief provided by these exemptions might or might not cover all acts that might be construed as prohibited transactions.  There can be no assurance that any of the Investor-Based Exemptions, or any other exemption, will be available with respect to any particular transaction involving the notes.

Certain employee benefit plans, including governmental plans (as defined in Section 3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and foreign plans are not subject to the ERISA requirements but may be subject to federal, state, local or foreign laws that are substantially similar to ERISA or the Code (“Similar Law”), such plans, together with Plans are referred to herein as “Benefit Plans.”

The notes should not be purchased with the assets of a Plan if the depositor, the servicer, the master servicer, the indenture trustee, the owner trustee, the underwriters or any of their affiliates is a fiduciary or gives investment advice with respect to such Plan or is an employer maintaining or contributing to such Plan, unless such purchase and holding of the notes would be covered by an applicable prohibited transaction exemption.

Each purchaser and transferee of a note will be deemed to represent and warrant to the issuing entity that either (i) it is not a Benefit Plan or (ii) it is a Benefit Plan and its acquisition and holding of such notes will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code which is not covered under an Investor-Based Exemption or some other applicable exemption, and will not cause a non-exempt violation of any substantially Similar Law.

Prospective Benefit Plan investors in notes should consult with their legal advisors concerning the impact of ERISA and the Code, the availability of other exemptions from the prohibited transaction rules that may apply to them, and the potential consequences in their specific circumstances, prior to making an investment in the notes.  Each Benefit Plan fiduciary should also determine whether under the general fiduciary standards of investment prudence and diversification, an investment in the notes is appropriate for the Benefit Plan, taking into account the overall investment policy of the Plan and the composition of the Benefit Plan’s investment portfolio.

The Certificates

The Certificates may not be acquired (directly or indirectly) by or on behalf of any Benefit Plan or any entity (including an insurance company general account) whose underlying assets include plan assets of the Benefit Plan by reason of a plan’s investment in the entity.  By acceptance of a Certificate, each Certificateholder will be deemed to have represented and warranted that it is not a Benefit Plan.

UNDERWRITING

Subject to the terms and conditions set forth in the Underwriting agreement relating to the Notes and the Certificates (the “Underwriting Agreement”), the Depositor has agreed to sell to Deutsche Bank Securities Inc. (the “Underwriter”), and the Underwriter has agreed to purchase, the Notes and the Certificates, subject to the satisfaction of certain conditions precedent.

The Depositor has been advised by the Underwriter that the Underwriter proposes to offer the Notes to the public initially at the public offering prices set forth on the cover page of this prospectus supplement, and to certain dealers at such prices less a concession of [   ]% per Note, that the Underwriter and such dealers may allow a discount of [   ]% per Note on the sale to certain other dealers; and that after the initial public offering of the Notes, the public offering prices and the concessions and discounts to dealers may be changed by the Underwriter.

The Depositor has been advised by the Underwriter that the Underwriter proposes to offer the Certificates to the public initially at the public offering price set forth on the cover page of this prospectus supplement, and to certain dealers at such price less a concession of [   ]% per Certificate; that the Underwriter and such dealers may allow a discount of [   ]% per Certificate on the sale to certain other dealers; and that after the initial public offering of the Certificates, the public offering price and the concession and discount to dealers may be changed by the Underwriter.

Until the distribution of the Securities is completed, rules of the Securities and Exchange Commission may limit the ability of the Underwriter and certain selling group members to bid for and purchase the Securities.  As an exception to these rules, the Underwriter is permitted to engage in certain transactions that stabilize the prices of the Securities.  Such transactions consist of bids or purchases for the purpose of pegging, fixing or maintaining the price of such Securities.

In general, purchases of a security for the purpose of stabilization or to reduce a short position could cause the price of the security to be higher than it might be in the absence of such purchases.

Neither the Depositor nor the Underwriter makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the prices of the Securities.  In addition, neither the Depositor nor the Underwriter makes any representation that the Underwriter will engage in such transactions or that such transactions, once commenced, will not be discontinued without notice.

The Depositor has agreed to indemnify the Underwriter against certain liabilities, including civil liabilities under the Securities Act, or contribute to payments which the Underwriter may be required to make in respect thereof.  In the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act and, may, therefore, be unenforceable.

The Trust may, from time to time, invest the funds in the Trust Accounts and the Certificate Distribution Account in Eligible Investments acquired from the Underwriter.

The closing of the sale of the Notes is conditioned on the closing of the sale of the Certificates, and the closing of the sale of the Certificates is conditioned on the closing of the sale of the Notes.

RATINGS

It is a condition to the issuance of the securities that the securities receive at least the following ratings from [             ] (“[             ]”) and [             ] (“[             ]”):

Securities	[             ]	[             ]
Class [__] Notes	[___]	[___]
Class [__] Notes	[___]	[___]
Certificates	[___]	[___]

The rating agencies have stated that it is their standard policy to monitor ratings on publicly offered securities for which a rating has been provided, as to each rating agency rating each class of securities in accordance with the rating agencies’ particular surveillance policies, unless the issuer requests a rating without surveillance.  A rating agency will monitor the rating it issues on an ongoing basis and may update the rating after conducting its regular review of the issuer’s creditworthiness or after conducting a review of the status of the rating upon becoming aware of any information that might reasonably be expected to result in a change of rating.  The depositor has not requested that any rating agency not monitor their ratings of the securities, and the depositor has not requested that any rating agency use any monitoring procedures other than their standard monitoring procedures.

LEGAL PROCEEDINGS

[There are no material legal proceedings pending against the Sponsor, the Depositor, the Owner Trustee, the Indenture Trustee, the Issuing Entity, [any affiliated Servicer, any 20% concentration unaffiliated Servicer, any 20% concentration Originator], or with respect to which the property of any of the foregoing transaction parties is subject, that are material to the securityholders.  No legal proceedings against any of the foregoing transaction parties is known to be contemplated by governmental authorities, that are material to the securityholders.]

AFFILIATIONS, RELATIONSHIPS AND RELATED TRANSACTIONS

[There are no affiliations between the Sponsor, the Depositor or the Issuing Entity and any of [any affiliated Servicer, any 20% concentration unaffiliated Servicer], the Owner Trustee, the Indenture Trustee, [any 10% concentration Originator] or [any credit enhancement provider or derivatives counterparty].  There are no affiliations among [any affiliated Servicer, any 20% concentration unaffiliated Servicer], the Owner Trustee, the Indenture Trustee, [any 10% concentration Originator] or [any credit enhancement provider or derivatives counterparty].  There are currently no business relationships, agreements, arrangements, transactions or understandings between (a) the Sponsor, the Depositor or the Issuing Entity and (b) any of the parties referred to in the preceding sentence, or any of their respective affiliates, that were entered into outside the normal course of business or that contain terms other than would be obtained in an ar m’s length transaction with an unrelated third party and that are material to the investor's understanding of the securities, or that relate to the securities or the pooled assets.  No such business relationship, agreement, arrangement, transaction or understanding has existed during the past two years.]

LEGAL MATTERS

Certain legal matters with respect to the Notes and the Certificates will be passed upon for the Depositor by [        ].  Certain legal matters with respect to the Notes and the Certificates will be passed upon for the Underwriter by McKee Nelson LLP, New York, New York.  McKee Nelson LLP also will pass upon the material federal income tax consequences related to the Notes and the Certificates.  Certain legal matters under the laws of the State of Delaware will  be passed upon for the Depositor by [        ], [        ].

The information in this prospectus supplement is not complete and may be changed.  We may not sell these certificates until the registration statement filed with the Certificates and Exchange Commission is effective.  This prospectus supplement is not an offer to sell these certificates and it is not soliciting an offer to buy these certificates in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED [_________]

PROSPECTUS SUPPLEMENT (to prospectus dated [            ])

$[               ] (Approximate)

ACE SECURITIES CORP., [______] Auto Grantor Trust [______], Series  [       ]

Asset Backed Certificates

[______] Auto Grantor Trust [______]

Issuing Entity

[DB Structured Products, Inc.]

Sponsor

Ace Securities Corp.

Depositor

[               ]

Servicer

Certificates Offered • $[      ], [     ]% Class A certificates • $[      ], [     ]% Class B certificates Assets • Retail automobile receivables Credit Enhancement Class A Certificates • Subordination of Class B certificates • Reserve account Class B Certificates • Reserve account
[Describe other credit enhancement provided by [_____]] Expected Ratings • [      ] or equivalent for the Class A Certificates • [      ] or equivalent for the Class B Certificates Consider carefully the risk factors beginning on page S-[  ] of this prospectus supplement and on page [  ] of the prospectus. For a list of capitalized terms used in this prospectus supplement and the prospectus, see the index of defined terms beginning on page S-[  ] of this prospectus supplement and on page [  ] of the prospectus. The certificates will represent interests in the Issuing Entity only and will not represent interests in or obligations of the sponsor, the depositor or any of their affiliates. Distributions on the certificates will be made on the [__]th day of each month, or, if such day is not a business day, on the next succeeding business day, beginning in [__]. This prospectus supplement may be used to offer and sell the certificates only if accompanied by the prospectus.

Neither the Certificates and Exchange Commission nor any state certificates commission has approved or disapproved these certificates or determined if this prospectus supplement or the attached prospectus is accurate or complete.  Making any contrary representation is a criminal offense.

Subject to the satisfaction of certain conditions, the underwriter named below is offering the certificates at the price to public shown.  The certificates will be delivered in book entry form only on or about [________].

	Price to Public	Underwriting Discounts & Commissions	Proceeds to the Depositor(1)(2)
Per Class A Certificate	[    ]%	[    ]%	[    ]%
Per Class B Certificate	[    ]%	[    ]%	[    ]%
Total	$[     ]	$[     ]	$[     ]

___________________________

1.  Plus accrued interest from [______].

2.  Before deducting expenses, estimated to be $ [      ].

[Deutsche Bank Certificates]

The date of this prospectus supplement is [         ].

Important Notice About Information Presented in this
Prospectus Supplement and the Accompanying Prospectus:

We provide information to you about the certificates offered by this prospectus supplement in two separate documents that progressively provide more detail: (1) the accompanying prospectus, which provides general information, some of which may not apply to your certificates, and (2) this prospectus supplement, which describes the specific terms of your certificates.

If the information regarding the certificates is more specific in this prospectus supplement than in the prospectus, then you should rely on the information in this prospectus supplement.

You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus.  We have not authorized anyone to provide you with different information.

We are not offering the certificates in any state where the offer is not permitted.  We do not claim that the information in this prospectus supplement and prospectus is accurate as of any date other than the dates stated on their respective covers.

Dealers will deliver a prospectus supplement and prospectus when acting as underwriters of the certificates and with respect to their unsold allotments or subscriptions.  In addition, all dealers selling the certificates will be required to deliver a prospectus supplement and prospectus for ninety days following the date of this prospectus supplement.

We include cross-references in this prospectus supplement and the accompanying prospectus to captions in these materials where you can find further related discussions.  The following table of contents and the table of contents included in the accompanying prospectus provide the pages on which these captions are located.

TABLE OF CONTENTS

Prospectus Supplement

Caption

Page

Summary of Terms

1

Risk Factors

1

FORMATION OF THE ISSUING ENTITY

4

The Trust Property

4

The Receivables Pool

5

STATIC POOL INFORMATION

10

THE ORIGINATORS

11

The Servicer

11

Weighted Average Life of the Certificates

12

Use of Proceeds

15

Description of the certificates

15

[The Insurer]

27

[The Policy]

29

[other credit enhancement provider]

31

[derivative instruments]

31

Federal Income Tax Consequences

31

State and Local Tax Consequences

36

ERISA Considerations

36

Underwriting

38

RATINGS

39

LEGAL PROCEEDINGS

39

AFFILIATIONS, RELATIONSHIPS AND RELATED TRANSACTIONS

39

Legal Matters

40

SUMMARY OF TERMS

This summary highlights selected information from this prospectus supplement and does not contain all of the information that you need to consider in making your investment decision.  To understand all of the terms of the offering of the certificates, it is necessary that you read carefully this entire prospectus supplement and accompanying prospectus.

While this summary contains an overview of certain calculations, cash flow priorities, and other information to aid your understanding, you should read carefully the full description of these calculations, cash flow priorities and other information in this prospectus supplement and the accompanying prospectus before making any investment decision.

Issuing Entity	[      ] Auto Grantor Trust [      ]-[      ].
Depositor	Ace Securities Corp.  See “The Depositor” in the Prospectus.
Servicer	[      ].
Sponsor	[      ].  See “The Sponsor” in the Prospectus.
Originators	[_________________________], with respect to approximately [__]% of the receivables by aggregate principal balance as of the Cut-off Date. The remainder of the receivables were originated by various originators, none of which have originated more than 10% of the receivables.  See “The Originators” in this prospectus supplement.
Trustee	[      ].
Collateral Agent	[      ].
[Any credit enhancement provider referenced in Items 1114(b) and 1115 of Regulation AB]	[      ].
Closing Date	On or about [      ].
Cut-off Date	The [close] [opening] of business on [      ].
Distribution Dates	[      ] of each month or the next business day if the [      ] day is not a business day, beginning in [      ].
Record Dates	The business day immediately prior to a distribution date or, if definitive certificates are issued, the last day of the month prior to a distribution date.
Minimum Denominations	$[25,000, except for one Class B Certificate].
Form	Book-entry.
Interest Accrual Method	30/360.
Final Scheduled Distribution Date	[      ].

The Receivables

The receivables are amounts owed by individuals under fixed rate simple interest or actuarial retail installment sale contracts to purchase or refinance new or used automobiles, including passenger cars, minivans, sport utility vehicles and light trucks, substantially all of which were purchased from motor vehicle dealers.

The depositor expects that the receivables will have the following characteristics as of [   ].  As of the closing date, no more than 5% of the receivables will have characteristics that differ from those described in this prospectus supplement as of [   ].

Number of receivables

[   ]

Principal amount

$[   ]

Annual percentage rates

[   ]% to [    ]%

Weighted average annual percentage rate

[   ]%

Original term

[   ] months to [   ] months

Weighted average original term

[   ] months

Remaining term

[   ] months to [__] months

Weighted average remaining term

[   ]%

New by principal

[   ]%

Used by principal

[   ]%

Simple interest by principal

[   ]%

Actuarial by principal

[   ]%

States

[___] by principal

[   ]%

[___] by principal

[   ]%

Balloon Loans by principal

[   ]%

[For approximately [      ]% of the principal amount of the receivables, the amount of the receivable was more than the value of the financed vehicle at the time the loan was made.]

Removal and Substitution of a Receivable

[Regulation AB Item 1103(a)(6) compliant description of removal or substitution of receivables in connection with material document defects or breaches of representations and warranties].

Interest Distributions

On each distribution date, if the trust fund has sufficient cash, it will pay you the interest accrued on your certificates during the related interest period. The trust will not pay interest on the Class B certificates on any distribution date until the Class A certificateholders have received their full payment of interest on that distribution date. Interest periods begin on the prior distribution date and run through the day before the current distribution date.  The first interest period begins on [                 ] and runs through the day before the first distribution date. We will assume that each year has 360 days consisting of twelve 30 day months.

Principal Distributions

The Class A certificates and Class B certificates will be entitled to a pro rata share of the principal collections.  However, the trust will make principal distributions to the Class A certificates before making principal distributions to the Class B certificates on each distribution date.

Reserve Account

There will be a reserve account to help cover cash flow shortfalls.  Initially, the account will be $[      ]. On each distribution date the trustee will deposit amounts remaining after distribution of the servicing fee and amounts to be paid to the certificateholders in the reserve account until the amount equals a specified amount.

[Trigger Events]

[Regulation AB Item 1103(a)(3)(vii) compliant description of any events in the transaction agreements that can trigger liquidation or amortization of the receivables or other performance triggers that would alter the transaction structure or the flow of funds].

[Other Credit Enhancement]

[Regulation AB Item 1103(a)(3)(ix) compliant description of any other credit enhancement].

[Additional Series or Classes Backed by Receivables]

[Regulation AB Item 1103(a)(4) compliant description of any outstanding series or classes of certificates that are backed by the receivables or otherwise have claims on the receivables.  Regulation AB compliant description of any circumstances in which additional series or classes of certificates may be issued that are backed by the receivables, with specification if certificateholder approval is necessary for such issuances and if certificateholders will receive notice of such issuances].

[Revolving Periods]

[Regulation AB Item 1103(a)(5) compliant description of any revolving periods].

[Prefunding Periods]

[Regulation AB Item 1103(a)(5) compliant description of any prefunding periods].

Fees and Expenses

Prior to the distribution of any interest to the certificateholders, the servicer will be entitled to receive a servicing fee for each collection period in an amount equal to the product of one-twelfth of [    ]% per annum for so long as [               ] or an affiliate thereof is the servicer, and [    ]% per annum if [               ] or an affiliate thereof is no longer the servicer and the aggregate principal balance of the receivables as of the first day of the collection period.  See “Description of the Transfer and Servicing Agreement--Servicing Compensation and Payment of Expenses” in the Prospectus.

[Regulation AB Item 1103(a)(7) compliant description of any trustee fees and any other fees and expenses].

Optional Termination

When the principal amount of the receivables is 10% or less than it was on the cut-off date, the servicer may buy the receivables.  You must receive the principal amount of your certificates and all accrued but unpaid interest or the receivables will not be sold.

Final Scheduled Maturity Dates

The final scheduled maturity date of the certificates is [__________].  The actual date on which the aggregate outstanding principal amount of the certificates is paid may be earlier than the final scheduled maturity date based on a variety of factors.

Expected Final Distribution Dates

The expected final distribution date of each class of certificates is [

], based on the assumption that the servicer has exercised its option to purchase all the receivables as described in “Optional Termination” above.  Due to losses and prepayments on the receivables, the final distribution dates on each class of certificates may be substantially earlier or later than such date.

Tax Consequences

McKee Nelson LLP, special federal tax counsel to the trust, is of the opinion that the trust will be classified, for federal income tax purposes, as a grantor trust and not as an association taxable as a corporation.  Certificateholders must report their respective allocable shares of income earned on trust assets excluding certain amounts retained by the depositor as described in this prospectus supplement and, subject to the limitations applicable to individuals, estates, trusts and partnerships, may deduct their respective allocable shares of reasonable servicing and other fees.  However, the tax code is complex, and we recommend that you and your tax advisors review the information under the caption “Federal Income Tax Consequences” in this prospectus supplement and “Material Federal Income Tax Consequences -- Grantor Trusts” in the prospectus.

ERISA Considerations

The certificates may be purchased by ERISA and other retirement plans if one or more administrative exemptions apply.  See “ERISA Considerations” in this prospectus supplement and the prospectus.

Ratings

It is a condition to the issuance of the certificates that the certificates receive at least the following ratings from [______________] and [_________________]:

Certificates	[____]	[____]
Class A Certificates	[__]	[__]
Class B Certificates	[__]	[__]

RISK FACTORS

The following information, which you should carefully consider, identifies certain significant sources of risk associated with an investment in the certificates.  You should also carefully consider the information set forth under “Risk Factors” in the prospectus.

Certain features of the receivables pool may result in losses.	There are a number of features of the receivables in the pool that create additional risk of loss, including the following:
Certain obligors have little equity in their financed vehicles which may result in more severe losses.	For approximately [      ]% of the principal amount of the receivables, the original principal amount of the loan exceeded the cost of the related vehicle.  Although each such obligor was required to make a downpayment from the obligor’s own funds, those obligors have no equity in their vehicles.  While those borrowers had excellent credit histories at the time, the lack of any equity in the vehicle may make it more likely that those obligors will default if their personal financial conditions change.  In addition, if such an obligor defaults and the vehicle is repossessed, the trust fund is likely to suffer a loss.
[The concentration of the receivables in specific geographic areas may increase the risk of loss.	Economic conditions in the states where obligors reside may affect the delinquency, loan loss and repossession experience of the trust fund with respect to the receivables.  As of the cutoff date, with respect to approximately [  ]%, [  ]% and [  ]% of the principal amount of the receivables, obligors took initial title to the motor vehicles relating to the receivables in [                 ], [                 ] and [                 ], respectively.  Economic conditions in any state or region may decline over time and from time to time.  Because of the concentration of the obligors in certain states, any adverse economic conditions in those states may have a greater effect on the performance of the certificates than if the concentration did not exist.  We are not aware of any adverse economic conditions that are peculiar to [                 ], [                 ] or [                 ] as of the date of this prospectus supplement. In addition, we do not believe that the laws of those states relating to motor vehicle financing and the rights of lenders are more burdensome than those in other states.]
Newly originated loans may be more likely to default which may cause losses.	Defaults on automobile loans tend to occur at higher rates during the early years of the automobile loans. Substantially all of the automobile loans will have been originated within [      ] months prior to the sale to the trust fund.  As a result, the trust fund may experience higher rates of default than if the automobile loans had been outstanding for a longer period of time.
Balloon loans may have a higher rates of default which may cause losses.	A balloon loan has monthly payments that will not fully pay off the loan balance by the maturity date.  As a result the borrower usually will have to refinance the balloon loan in order to pay the amount due.  The borrower may not be able to refinance the balloon loan for any number of reasons, including the level of available interest rates, the age or condition of the vehicle, or the borrower’s payment or credit history.  The trust fund will not have any funds to refinance a balloon loan, and the Sponsor is not obligated to do so.
Class B certificates will absorb cash shortfalls and losses before the Class A certificates.	The Class B certificateholders will not receive any distribution of interest until the full amount of interest on the Class A certificates has been paid on each distribution date.  The Class B certificateholders will not receive any distributions of principal until the full amount of principal of the Class A certificates has been paid on that distribution date.  Holders of the certificates must rely for repayment upon payments on the receivables, and, if and to the extent available, amounts on deposit in the reserve account.  If funds in the reserve account are exhausted, the trust will depend solely on current distributions on the receivables to make payments on the certificates.  Delinquent payments on the receivables may result in a shortfall in the distributions on the Class B certificates on any distribution date due to the priority of payments on the Class A certificates.
Your yield to maturity may be reduced by prepayments.	The pre-tax yield to maturity is uncertain and will depend on a number of factors including the following:
The rate of return of principal is uncertain.	The amount of distributions of principal of the certificates and the time when you receive those distributions depends on the amount and the times at which borrowers make principal payments on the receivables.  Those principal payments may be regularly scheduled payments or unscheduled payments resulting from prepayments or defaults of the receivables.
An early termination will shorten the life of your investment which may reduce your yield to maturity.	If the receivables are sold upon exercise of the servicer’s optional termination, you will receive the principal amount of your certificates plus accrued interest through the related interest period. Because your certificates will no longer be outstanding, you will not receive the additional interest payments that you would have received had the certificates remained outstanding. If you bought your certificates at a premium, your yield to maturity will be lower than it would have been if the optional termination had not been exercised.
Class B certificateholders may have to pay taxes on amounts not actually received	For federal income tax purposes, amounts otherwise payable to the owners of the Class B certificates that are paid to the owners of the Class A certificates will be deemed to have been received by the owners of the Class B certificates and then paid by them to the owners of the Class A certificates pursuant to a guaranty.  Accordingly, the owners of the Class B certificates could be liable for taxes on amounts not actually received. See “Federal Income Tax Consequences” in this prospectus supplement and “Material Federal Income Tax Consequences -- Grantor Trusts” in the prospectus.
[Additional Applicable Risk Factors]	[____________________]

FORMATION OF THE ISSUING ENTITY

Pursuant to a pooling and servicing agreement (as amended and supplemented, the “Agreement”), to be dated as of [                 ] (the “Cutoff Date”), among Ace Securities Corp., as depositor (the “Depositor”), [        ], as sponsor (in this capacity, the “Sponsor”) and as servicer (in this capacity, the “Servicer”), [        ], as trustee (the “Trustee”), and [        ], as collateral agent (the “Collateral Agent”), the Depositor will establish [        ] Auto Grantor Trust [   ] (the “Issuing Entity”).   The Agreement constitutes the “governing instrument” under the laws of the State of Delaware.  Pursuant to th e Agreement, the Depositor will establish the Issuing Entity by selling and assigning a pool of fixed rate simple interest and actuarial motor vehicle retail installment sales contracts and other motor vehicle installment chattel paper (the “Receivables”) secured by new and used automobiles, recreational vehicles, including motor homes, campers, motorcycles, all-terrain vehicles and snowmobiles, vans trucks, buses and trailers (the “Financed Vehicles”) and the other Issuing Entity Property, as described below under “The Trust Property” to the Issuing Entity in exchange for the $[   ], [   ]% Class A certificates (the “Class A Certificates”) and the $[   ], [   ]% Class B certificates (the “Class B Certificates,” and, together with the Class A Certificates, the “Certificates”).  The Depositor will sell the Certificates to [                ;  ] and [Deutsche Bank Securities Inc.], (the “Underwriters”) in exchange for cash. All references in this prospectus supplement to sales, assignments and transfers to the Issuing Entity refer to sales, assignments and transfers to the Trustee on behalf of the Issuing Entity for the benefit of the holders of the Certificates (the “Certificateholders”).

The Servicer will, directly or through subservicers, hold the Receivables and the certificates of title or ownership or other documents evidencing the notation of the Seller’s lien on the certificates of title or ownership relating to the Financed Vehicles as custodian for the Trustee. However, the Receivables will not be marked or stamped to indicate that they have been sold to the Issuing Entity, and the certificates of title for the Financed Vehicles will not be endorsed or otherwise amended to identify the Trustee as the new secured party. Under the foregoing circumstances and in certain jurisdictions, the Issuing Entity’s interest in the Receivables and the Financed Vehicles may be defeated.  See  ”Risk Factors – The trust’s security interest in the financed vehicles will not be noted on the certificates of title which may cause losses” and “Certain Legal Aspects of the Receivables” in the P rospectus.

The Issuing Entity will not acquire any contracts or assets other than the Issuing Entity Property, and it is not anticipated that the Issuing Entity will have any need for additional capital resources.  The Issuing Entity will have no operating history upon its establishment and will not engage in any business activity other than acquiring and holding the Trust Property, issuing the Certificates, distributing payments on the Certificates and engaging in other activities that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith.  The foregoing restrictions are contained in the Agreement.  [These restrictions cannot be amended without the consent of holders of Certificates evidencing at least 51% of the voting rights.]  For a description of other provisions relating to amending the Agreement, see “[[_______________]]” in the base prospectus.

The Issuing Entity’s fiscal year end is [______].

The Issuing Entity’s principal offices are in [      ], in care of [      ], as Trustee, at the address listed under “Description of the Certificates—The Trustee”

THE TRUST PROPERTY

Each Certificate represents a fractional undivided interest in the Trust.  The “Trust Property” will include the Receivables, which, except as provided below, were originated by motor vehicle dealers (the “Dealers”) and purchased by the Seller pursuant to agreements with Dealers (“Dealer Agreements”).   Approximately [   ]% of the aggregate Principal Balance of the Receivables as of the Cutoff Date (the “Initial Pool Balance”) were directly originated by the Seller in connection with referrals from an insurance company.  On the date of the issuance of the Certificates (the “Closing Date”), the Depositor will buy the Receivables from the Seller and the Depositor will sell the Receivables to the Trust.  The Trust Property also includes:

•

all monies received under the Receivables on and after the Cut-off Date and, with respect to Receivables which are Actuarial Receivables, monies received thereunder prior to the Cut-off Date that are due on or after the Cut-off Date;

•

such amounts as from time to time may be held in the Collection Account, the Reserve Account, the Payahead Account, the Class A Distribution Account and the Class B Distribution Account, established and maintained by the Servicer pursuant to the Agreement as described below;

•

security interests in the Financed Vehicles;

•

the rights of the Sponsor to receive proceeds from claims under certain insurance policies;

•

the rights of the Trustee on behalf of the Certificateholders under the Agreement;

•

the rights of the Sponsor to refunds for the costs of extended service contracts and to refunds of unearned premiums with respect to credit life and credit accident and health insurance policies covering the Financed Vehicles or the retail purchasers of, or other persons owing payments on, the Financed Vehicles (the “Obligors”);

•

all right, title and interest of the Sponsor (other than with respect to any Dealer commission) with respect to the Receivables under the related Dealer Agreements;

•

rights with respect to any repossessed Financed Vehicles; and

•

all proceeds (within the meaning of the Uniform Commercial Code) of the foregoing.

The Reserve Account will be maintained in the name of the Collateral Agent for the benefit of the Certificateholders, but will not be part of the Trust Fund.

THE RECEIVABLES POOL

Pool Composition

The Receivables were selected from the Sponsor’s portfolio by several criteria, including, as of the Cut-off Date, the following:

•

each Receivable has a scheduled maturity of not later than the Final Scheduled Maturity Date;

•

each Receivable was originated by a Dealer and purchased by the Seller pursuant to a Dealer Agreement; provided, that approximately [   ]% of the Initial Pool Balance was comprised of Receivables originated directly by the Seller in connection with referrals from an insurance company;

•

each Receivable has an original term to maturity of not more than [      ] months and a remaining term to maturity of [      ] months or less as of the Cut-off Date;

•

approximately [      ]% of the Initial Pool Balance was secured by new Financed Vehicles, and approximately [      ]% of the Initial Pool Balance was secured by used Financed Vehicles;

•

each Receivable provides for level monthly payments which fully amortize the amount financed except, in the case of Simple Interest Receivables, for the last payment, which may be different from the level payment;

•

each Receivable is not more than [      ] days contractually past due as of the Cut-off Date and is not more than [      ] months paid ahead;

•

each Receivable has an outstanding principal balance between $[      ] and $[      ];

•

the Obligor with respect to each Receivable has a FICO score between [______] and [______];

•

and each Receivable has an APR of no less than [      ]%.

As of the Cut-off Date, no Obligor on any Receivable was noted in the related records of the Servicer as being the subject of any pending bankruptcy or insolvency proceeding.  The latest scheduled maturity of any Receivable is not later than [      ].  The Receivables were selected from the motor vehicle retail installment sales contracts and other installment chattel paper secured by Financed Vehicles (“Motor Vehicle Loans”) in the portfolio of the Sponsor that met the above criteria.  The Depositor and the Sponsor believe that these selection procedures are not materially adverse to Certificateholders.

The Depositor considers an account past due if any portion of the payment due on a due date is not received by the succeeding due date for that account.

The composition, distribution by remaining term, distribution by APR, geographic distribution, distribution by remaining principal of the Receivables and distribution by FICO scores, in each case, as of the Cut-off Date are set forth in the tables below.  The percentages in the following tables may not add to 100% due to rounding.

Composition of the Receivables as of the Cut-off Date
	New Financed Vehicles	Used Financed Vehicles	Total
Aggregate Principal Balance	$[__________]	$[__________]	$[__________]
Number of Receivables	[__________]	[__________]	[__________]
Average Principal Balance	$[__________]	$[__________]	$[__________]
Average Original Balance	$[__________]	$[__________]	$[__________]
Weighted Average Contract Rate	[_______]%	[_______]%	[_______]%
Contract Rate (Range)	[___]% - [___]%	[___]% - [___]%	[___]% - [___]%
Weighted Average Original Term (months)	[_______]	[_______]	[_______]
Original Term (Range) (months)	[____] to [_____]	[____] to [_____]	[____] to [_____]
Weighted Average Remaining Term (months)	[_______]	[_______]	[_______]
Remaining Term (Range) (months)	[____] to [_____]	[____] to [_____]	[____] to [_____]
Weighted Average FICO score	[_______]	[_______]	[_______]
FICO score (Range)	[____] to [_____]	[____] to [_____]	[____] to [_____]

Distribution by Remaining Term of the Receivables as of the Cut-off Date
Remaining Term (Range)	Number of Receivables	Aggregate Principal Balance	Percentage of Initial Pool  Balance
Less than [_____] months	[____________]	$[__________]	[___________]%
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
Total		$	100.00%

Distribution by Annual Percentage Rate of the Receivables as of the Cut-off Date
Annual % Rate Range	Number of Receivables	Aggregate Principal Balance	Percentage of Initial Pool  Balance
[_____]% to below	[____________]	$	%
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[____]% and above	[____________]	[____________]	[____________]
Total		$	100.00%

Geographic Distribution of the Receivables as of the Cut-off Date
State1	Number of Receivables	Aggregate Principal Balance	Percentage of Initial Pool  Balance
[      ]	[____________]	$	%
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
Others2
Total		$	100.00%

____________________

1.

Based on state where the Obligors took initial title to the motor vehicles, which may differ from the state of origination of the Receivable and/or the billing addresses of the Obligors.

2.

Includes [    ] other states and [    ] none of which have a concentration of Receivables in excess of [    ]% of the Initial Pool Balance.

Distribution by Remaining Principal Balance of the Receivables as of the Cut-off  Date
Remaining Principal Balance (Range)	Number of Receivables	Aggregate Principal Balance	Percentage of Initial Pool  Balance
$ 2,500 to $ 4,999	[____________]	$	%
$ 5,000 to $ 7,499	[____________]	[____________]	[____________]
$ 7,500 to $ 9,999	[____________]	[____________]	[____________]
$10,000 to $12,499	[____________]	[____________]	[____________]
$12,500 to $14,999	[____________]	[____________]	[____________]
$15,000 to $17,499	[____________]	[____________]	[____________]
$17,500 to $19,999	[____________]	[____________]	[____________]
$20,000 to $22,499	[____________]	[____________]	[____________]
$22,500 to $24,999	[____________]	[____________]	[____________]
$25,000 to $27,499	[____________]	[____________]	[____________]
$27,500 to $29,999	[____________]	[____________]	[____________]
$30,000 to $32,499	[____________]	[____________]	[____________]
$32,500 to $34,999	[____________]	[____________]	[____________]
$35,000 to $37,499	[____________]	[____________]	[____________]
$37,500 to $39,999	[____________]	[____________]	[____________]
$40,000 to $41,499	[____________]	[____________]	[____________]
$42,500 to $44,999	[____________]	[____________]	[____________]
$45,000 to $47,499	[____________]	[____________]	[____________]
$47,500 to $49,999	[____________]	[____________]	[____________]
$50,000 to $52,499	[____________]	[____________]	[____________]
$52,500 to $54,999	[____________]	[____________]	[____________]
Total		$	100.00%

Distribution by FICO Score of the Receivables as of the Cut-off Date
Annual % Rate Range	Number of Receivables	Aggregate Principal Balance	Percentage of Initial Pool  Balance
[______] to [______]	[____________]	$	%
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] and above	[____________]	[____________]	[____________]
		$	100.00%
Total		$	100.00%

As of the Cut-off Date, approximately [     ]% of the aggregate principal balance of the Receivables, constituting [     ]% of the number of Receivables, were between 1 payment and [    ] payments paid-ahead.

As of the Cut-off Date, approximately [   ]% of the aggregate principal balance of the Receivables, constituting [     ]% of the number of Receivables, are Actuarial Receivables.  ”Actuarial Receivables” are receivables that provide for amortization of the amount financed over a series of fixed, level-payment monthly installments.  Each monthly installment, including the monthly installment representing the final payment on the Receivable, consists of an amount of interest equal to 1/12 of the Annual Percentage Rate (“APR”) of the amount financed multiplied by the unpaid principal balance of the amount financed, and an amount of principal equal to the remainder of the monthly payment.

As of the Cut-off Date, approximately [   ]% of the aggregate principal balance of the Receivables, constituting [   ]% of the number of Receivables, are Simple Interest Receivables.  ”Simple Interest Receivables” are receivables that provide for the amortization of the amount financed under the receivable over a series of fixed level monthly payments. However, unlike the monthly payment under an Actuarial Receivable, each monthly payment includes an installment of interest which is calculated on the basis of the outstanding principal balance of the receivable multiplied by the stated APR and further multiplied by the period elapsed (as a fraction of a calendar year) since the preceding payment of interest was made. As payments are received under a Simple Interest Receivable, the amount received is applied first to interest accrued to the date of payment and the balance is applied to reduce the unpaid principal balance. Accordingly, if an Obligor pays a fixed monthly installment before its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be less than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly greater. Conversely, if an Obligor pays a fixed monthly installment after its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be greater than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly less. In either case, the Obligor pays a fixed monthly installment until the final scheduled payment date, at which time the amount of the final installment is increased or decreased as necessary to repay the then outstanding principal balance.

If an Actuarial Receivable is prepaid in full, with minor variations based upon state law, under the terms of the motor vehicle retail installment sale contract or loan agreement, as the case may be, a “refund” or “rebate” will be made to the borrower of the portion of the total amount of payments then due and payable under such contract or agreement allocable to “unearned” interest, calculated on the basis of a constant interest rate.  If a Simple Interest Receivable is prepaid, rather than receive a rebate, the borrower is required to pay interest only to the date of prepayment.  The amount of a rebate under an Actuarial Receivable generally will be less than the remaining scheduled payments of interest that would have been due under a Simple Interest Receivable for which all payments were made on schedule.

The Servicer may accede to an Obligor’s request to pay scheduled payments in advance, in which event the Obligor will not be required to make another regularly scheduled payment until the time a scheduled payment not paid in advance is due.  The amount of any payment (which are not amounts representing Payaheads) made in advance will be treated as a principal prepayment and will be distributed as part of the Principal Distribution Amount in the month following the Collection Period in which the prepayment was made.  See “Maturity and Prepayment Considerations” in the Prospectus.

Receivable Delinquencies and Losses

For information regarding delinquencies and losses on the Receivables, see the tables below.  A Receivable is considered to be delinquent when a payment due on any due date remains unpaid as of the close of business on the last business day immediately prior to the next monthly due date.  The determination as to whether a loan falls into this category is made as of the close of business on the last business day of each month.

30 -  59 Days (times):	Number of Receivables	% by Receivable Count	Principal Balance Outstanding as of the Cutoff Date	% of Aggregate Principal Balance Outstanding as of the Cutoff Date
0	[________]	[______]%	[_______._]	[__.__]
1	[________]	[______]%	[_______._]	[__.__]
2	[________]	[______]%	[_______._]	[__.__]
Total	[________]	100.00%	[_______._]	100.00

60 -  89 Days (times):	Number of Receivables	% by Receivable Count	Principal Balance Outstanding as of the Cutoff Date	% of Aggregate Principal Balance Outstanding as of the Cutoff Date
0	[________]	[______]	[_______._]	[__.__]
1	[________]	[______]	[_______._]	[__.__]
2	[________]	[______]	[_______._]	[__.__]
Total	[________]	100.00	[_______._]	100.00

[No Receivable has been delinquent more than 90 days since origination.]

STATIC POOL INFORMATION

Static pool information material to this offering may be found at [website address].

Information provided through the Internet address above will not be deemed to be a part of this prospectus or the registration statement for the certificates offered hereby if it relates to any prior certificates pool or vintage formed before January 1, 2006, or with respect to the mortgage pool (if applicable) any period before January 1, 2006.

THE ORIGINATORS

General

[____], [____] and  [____] are the originators of the receivables with respect to approximately [___]%, [___]% and [___]%, respectively, of the receivables by aggregate principal balance as of the Cut-off Date, along with various other originators, none of which originated more than 10% of the receivables by aggregate principal balance as of the Cut-off Date (each, an “Originator”).

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

THE SERVICER

[____________], a [describe form of organization of the servicer], (the “Servicer”) will initially service the Receivables pursuant to a the Agreement.  

The Servicer will perform the functions of a third-party servicer of automobile loans as an agent for their beneficial owner.  [These servicer functions will include:

•

collecting and posting all payments;

•

responding to obligor inquiries regarding the automobile loans;

•

investigating delinquencies;

•

reporting tax information to obligors;

•

paying vehicle disposition costs with respect to defaulted accounts;

•

monitoring the collateral;

•

accounting for collections;

•

furnishing monthly and annual statements to the Issuing Entity with respect to distributions; and

•

generating federal income tax information. ]

[Regulation AB Item 1108 compliant description of the Servicer.]

Delinquency Experience (Dollars in Thousands)
	At December 31,
	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]
	Number of Loans	Dollars	Percent	Number of Loans	Dollars	Percent	Number of Loans	Dollars	Percent
Principal Amount Outstanding1
Delinquencies2
30-59 Days
60-89 Days
90-119 Days
over 120 days
Total Delinquencies as a  Percentage of the Total Amount Outstanding

________________________

1.

Principal Amount Outstanding is the aggregate remaining principal balance of all Receivables serviced, net of unearned interest.

2.

The period of delinquency is based on the number of days scheduled payments are contractually past due.  Includes repossessions on hand which have not been charged-off.  A receivable is 30 days contractually past due if a scheduled payment has not been received by the subsequent calendar month’s scheduled payment date.

WEIGHTED AVERAGE LIFE OF THE CERTIFICATES

Prepayments on automotive receivables can be measured relative to a prepayment standard or model.  The model used in this Prospectus Supplement, the Absolute Prepayment Model (“ABS”), represents an assumed rate of prepayment each month relative to the original number of receivables in a pool of receivables.  ABS further assumes that all the receivables are the same size and amortize at the same rate and that each receivable in each month of its life will either be paid as scheduled or be prepaid in full.  For example, in a pool of receivables originally containing 10,000 receivables, a 1% ABS rate means that 100 receivables prepay each month. ABS does not purport to be an historical description of prepayment experience or a prediction of the anticipated rate of prepayment of any pool of receivables, including the Receivables.

All the Receivables are prepayable at any time.  For this purpose the term “prepayments” includes prepayments by Obligors in full or in part, certain partial prepayments related to liquidations due to default, including rebates of extended warranty contract costs and insurance premiums, as well as receipts of proceeds from physical damage, credit life, theft and disability insurance policies and certain other Receivables, purchased or repurchased pursuant to the terms of the Agreement.  The rate of prepayments on the Receivables may be influenced by a variety of economic, social and other factors, including changes in interest rates and the fact that an Obligor generally may not sell or transfer the Financed Vehicle securing a Receivable without the consent of the secured party, which generally results in the repayment of the remaining principal balance of the Receivable.  In addition, under some circumstances, the Selle r is obligated to repurchase and the Servicer is obligated to purchase, Receivables pursuant to the Agreement as a result of uncured breaches of representations and warranties in the case of the Seller and uncured breaches of covenants in the case of the Servicer.  In addition, the Servicer has the option to purchase the Receivables when the aggregate principal balance of the Receivables is 10% or less of the Initial Pool Balance, at a purchase price equal to the sum of the Class A Principal Balance and the Class B Principal Balance plus accrued and unpaid interest.  Accordingly, under some circumstances it is likely that the Certificates will be repaid before the Final Scheduled Distribution Date set forth in this prospectus supplement under “Summary of Terms -- Final Scheduled Distribution Date.” Reinvestment risk associated with early payment of the Certificates will be borne exclusively by the Certificateholders.

The table captioned “Percent of Initial Class A and Class B Principal Balance at Various ABS Percentages” (the “ABS Table”) has been prepared on the basis of the characteristics of the Receivables.   The ABS Table assumes that

•

the Receivables prepay in full at the specified constant percentage of ABS monthly, with no defaults, losses or repurchases,

•

each scheduled monthly payment on the Receivables is made on the last day of each month and each month has 30 days,

•

distributions on the Certificates are made on each Distribution Date (and each such date is assumed to be the [   ]th day of each applicable month),

•

the balance in the Reserve Account on each Distribution Date is equal to the Specified Reserve Account Balance, and

•

the Servicer does not exercise its option to purchase the Receivables.   

The ABS Table sets forth the percent of the Initial Class A Principal Balance and the percent of the Initial Class B Principal Balance that would be outstanding after each of the Distribution Dates shown and the corresponding weighted average lives at various constant ABS percentages.

The ABS Table also assumes that the Receivables have been aggregated into six hypothetical pools with all of the Receivables within each pool having the following characteristics and that the level scheduled monthly payment for each of the six pools, which is based on its aggregate principal balance, weighted average APR, weighted average original term to maturity and weighted average remaining term to maturity as of the cutoff date, will be such that each pool will fully amortize by the end of its remaining term to maturity.

Pool	Remaining Term to Maturity Range (in months)	Aggregate Principal Balance	Weighted Average Contract Rate	Weighted Average Original Term to Maturity (in Months)	Weighted Average Remaining Term to Maturity (in Months)
1		$	%
2		$	%
3		$	%
4		$	%

The actual characteristics and performance of the Receivables will differ from the assumptions used in constructing the ABS Tables.  The assumptions used are hypothetical and have been provided only to give a general sense of how the principal cash flows might behave under varying prepayment scenarios.  For example, it is very unlikely that the Receivables will prepay at a constant level of ABS until maturity or that all of the Receivables will prepay at the same level of ABS.  Moreover, the diverse terms of Receivables within each of the hypothetical pools could produce slower or faster principal distributions than indicated in the ABS Table at the various constant percentages of ABS specified, even if the original and remaining terms to maturity of the Receivables are as assumed.  Any difference between assumptions and the actual characteristics and performance of the Receivables, or actual prepayment experience, will affec t the percentages of initial balances outstanding over time and the weighted average lives of the Class A Certificates and the Class B Certificates.

Percent of Initial Class Principal Balance at Various ABS Percentages
	Class A Certificates Assumed ABS Percentage1
Distribution Dates	[   ]%	[   ]%	[   ]%	[   ]%
Closing Date	100	100	100	100
[                        ]
[                        ]
[                        ]
Weighted Average Life (years)2

_______________________

1.

An asterisk “*” means a percent of initial Certificate principal balance of more than zero and less than 0.5%.

2.

The weighted average life of a Certificate is determined by (i) multiplying the amount of each principal payment of such Certificate by the number of years from the date of the issuance of such Certificate to the Distribution Date on which such principal payment is made, (ii) adding the results and (iii) dividing the sum by the initial principal balance of such Certificate.

The ABS Tables have been prepared based on the assumptions described above (including the assumptions regarding the characteristics and performance of the Receivables which will differ from the actual characteristics and performance thereof) and should be read in conjunction therewith.

Percent of Initial Certificate Balance at Various ABS Percentages
	Class B Certificates Assumed ABS Percentage
Distribution Dates	[   ]%	[   ]%	[   ]%	[   ]%
Closing Date	100	100	100	100
[                        ]
[                        ]
[                        ]
[                        ]

The ABS Tables have been prepared based on the assumptions described above (including the assumptions regarding the characteristics and performance of the Receivables which will differ from the actual characteristics and performance thereof) and should be read in conjunction therewith.

USE OF PROCEEDS

The net proceeds from the sale of the Certificates will be applied by the Depositor first, to deposit approximately $[    ] into the Reserve Account and second, the balance to purchase the Receivables and the other Trust Property from the Sponsor.

DESCRIPTION OF THE CERTIFICATES

The Certificates will be issued pursuant to the Agreement, substantially in the form filed as an exhibit to the Registration Statement.  The following information summarizes all material provisions of the Certificates and the Agreement.  The following summary supplements the description of the general terms and provisions of the Certificates of any given Series and the related Agreement set forth in the Prospectus, to which description reference is made by this prospectus supplement.

Overview of the Certificates

The Class A Certificates will be issued in an initial aggregate principal amount of $[                 ] (the “Initial Class A Principal Balance”) and the Class B Certificates will be issued in an initial aggregate principal amount of $[                 ] (the “Initial Class B Principal Balance”).  The Certificates will evidence fractional undivided interests in the assets of the Issuing Entity to be created pursuant to the Agreement.  The Class A Certificates will evidence in the aggregate an undivided ownership interest of approximately [       ]% of the Issuing Entity (the “Class A Percentage”) and the Class B Certificates will evidence in the aggregate an undivided ownership interest of approximately [   & nbsp;     ]% of the Issuing Entity (the “Class B Percentage”).

The Certificates will constitute Fixed Rate Securities, as this term is defined under “Certain Information Regarding the Securities — Fixed Rate Securities” in the Prospectus.  Interest on the outstanding principal amount of each class of Certificates will accrue at the fixed rate per annum specified for that class on the cover page of this prospectus supplement (each rate, a “Pass-Through Rate”).  Interest on the outstanding principal amount of each class of Certificates will accrue at the related Pass-Through Rate from and including [                 ], in the case of the first Distribution Date, or from and including the most recent Distribution Date on which interest has been paid to but excluding the following Distribution Date (each representing an “Interest Period”).  Interest on the Certificates will be calcul ated on the basis of a 360 day year consisting of twelve 30 day months.  Distributions of principal and interest will be made on the [  ]th day of each month, or if the [____]th day is not a business day on the next succeeding Business Day (each, a “Distribution Date”), commencing [                 ].  Distributions on a Distribution Date will be made to Certificateholders of record on the Business Day prior to the applicable Distribution Date, or if definitive Certificates have been issued, the last day of the month prior to a Distribution Date (each date, a “Record Date”).  A “Business Day” is a day other than a Saturday, a Sunday or a day on which banking institutions or trust companies in New York, New York, [              ] or [              ] are authorized by law, regulation, executive order or governmental decree to be closed.

The Certificates will be available in book-entry form through the facilities of The Depository Trust Company in the United States and Clearstream, Luxembourg and the Euroclear System in Europe.  See “Certain Information Regarding the Securities—Book-Entry Registration” and “—Definitive Securities” in the Prospectus and Annex I to the Prospectus.

The Pooling and Servicing Agreement

Sale and Assignment of the Receivables

Information regarding the conveyance of the Receivables by the Sponsor to the Depositor and by the Depositor to the Trust on the Closing Date pursuant to the Agreement is set forth in the Prospectus under “Description of the Transfer and Servicing Agreements -- Sale and Assignment of Receivables.”

Accounts

The Servicer will establish one or more segregated accounts (the “Collection Account”), in the name of the Trustee on behalf of the Trust and the Certificateholders, into which all payments made on or with respect to the Receivables will be deposited.  The Servicer will also establish a segregated account (the “Class A Distribution Account”), in the name of the Trustee on behalf of the Trust and the Class A Certificateholders, and a segregated account (the “Class B Distribution Account”), in the name of the Trustee on behalf of the Trust and the Class B Certificateholders, from which all distributions with respect to the Class A Certificates and the Class B Certificates, respectively, will be made.  The Servicer will establish a segregated account (the “Reserve Account”), in the name of [        ], as collateral agent, on behalf of the Certificateholders.   The Servicer will establish an additional account (the “Payahead Account”), in the name of the Trustee on behalf of the Trust and the Certificateholders, into which early payments by or on behalf of Obligors on Actuarial Receivables will be deposited until the time the payment becomes due.  Until the time payments are transferred from the Payahead Account to the Collection Account, they will not constitute collected interest or collected principal and will not be available for distribution to the Certificateholders.  The Collection Account, the Class A Distribution Account, the Class B Distribution Account, the Payahead Account and the Reserve Account are sometimes referred to as the “Trust Accounts.”  The Reserve Account will be maintained for the benefit of the Certificateholders, but will not be an asset of the Trust.

Servicing Compensation

The Servicer will be entitled compensated as described under “—Fees and Expenses of the Trust Fund”, which will be paid in the order of priority described herein.  See “Description of the Transfer and Servicing Agreement—Servicing Compensation and Payment of Expenses” in the Prospectus.

Distributions on Certificates

Deposits to the Collection Account.  On or before the earlier of the [tenth] Business Day of the month in which a Distribution Date occurs and the [fourth] Business Day preceding that Distribution Date (the “Determination Date”), the Servicer will provide the Trustee with information with respect to the preceding Collection Period, including the aggregate amounts of the following:

•

Collections on the Receivables,

•

Advances to be remitted by the Servicer,

•

Liquidated Receivables, if any, and

•

Purchase Amounts of the Receivables to be repurchased by the Sponsor or purchased by the Servicer with respect to the Distribution Date.

On or before the Business Day preceding each Distribution Date, the Servicer will cause the Interest Collections and the Principal Collections for the Distribution Date to be deposited into the Collection Account.

“Collections” for any Distribution Date will equal the sum of Interest Collections and Principal Collections for the related Distribution Date.

“Interest Collections” for any Distribution Date will equal the sum of the following amounts with respect to any Distribution Date, computed, with respect to Simple Interest Receivables, in accordance with the simple interest method, and, with respect to Actuarial Receivables, in accordance with the actuarial method:

•

that portion of all collections on the Receivables allocable to interest in respect of the preceding Collection Period, including with respect to Actuarial Receivables, amounts withdrawn from the Payahead Account and allocable to interest and excluding amounts deposited into the Payahead Account and allocable to interest, in each case in respect of the related Collection Period;

•

all proceeds, other than any proceeds from any Dealer commission (“Liquidation Proceeds”) of the liquidation of Liquidated Receivables, net of expenses incurred by the Servicer in connection with the liquidation and any amounts required by law to be remitted to the Obligor on the Liquidated Receivables, to the extent attributable to interest due on the Liquidated Receivables, which became Liquidated Receivables during the Collection Period in accordance with the Servicer’s customary servicing procedures;

•

the Purchase Amount of each Receivable that was repurchased by the Sponsor or purchased by the Servicer during the preceding Collection Period to the extent attributable to accrued interest on that Receivable;

•

all monies collected, from whatever source, other than any proceeds from any Dealer commission, in respect to Liquidated Receivables during any Collection Period following the Collection Period in which the Receivable was written off, net of the sum of any amounts expended by the Servicer for the account of the Obligor and any amounts required by law to be remitted to the Obligor (“Recoveries”); and

•

all Advances with respect to interest for the related Distribution Date.

In calculating the Interest Collections, all payments and proceeds, including Liquidation Proceeds, of any Receivables repurchased by the Sponsor or purchased by the Servicer the Purchase Amount of which has been included in the Interest Collections on a prior Distribution Date will be excluded.

“Principal Collections” for any Distribution Date will equal the sum of the following amounts with respect to any Distribution Date, computed, with respect to Simple Interest Receivables, in accordance with the simple interest method, and with respect to Actuarial Receivables, in accordance with the actuarial method:

•

that portion of all collections on the Receivables allocable to principal in respect of the preceding Collection Period, without regard to any extensions or modifications effected after the Cutoff Date, other than with respect to any extensions or modifications in connection with Cram Down Losses during the related Collection Period, including with respect to Actuarial Receivables, amounts withdrawn from the Payahead Account and allocable to principal and excluding amounts deposited into the Payahead Account and allocable to principal, in each case in respect of the related Collection Period;

•

Liquidation Proceeds attributable to the principal amount of Receivables which became Liquidated Receivables during the preceding Collection Period in accordance with the Servicer’s customary servicing procedures with respect to the Liquidated Receivables;

•

all Advances made by the Servicer of principal due on the Actuarial Receivables in respect of the preceding Collection Period;

•

to the extent attributable to principal, the Purchase Amount of each Receivable repurchased by the Sponsor or purchased by the Servicer during the preceding Collection Period; and

•

partial prepayments on Receivables in respect of the preceding Collection Period relating to refunds of extended service contracts, or of physical damage, credit life, credit accident or health insurance premium, disability insurance policy premiums, but only if these costs or premiums were financed by the respective Obligor and only to the extent not included in the first bullet point above.

In calculating the Principal Collections, all payments and proceeds, including Liquidation Proceeds, of any Receivables repurchased by the Sponsor or purchased by the Servicer the Purchase Amount of which has been included in the Principal Collections on a prior Distribution Date will be excluded.

Withdrawals from the Payahead Account.  On or before the Business Day preceding each Distribution Date, the Servicer will or will cause the Trustee to (x) deposit into the Collection Account in immediately available funds, the portion of Payaheads constituting scheduled payments on Actuarial Receivables or that are to be applied to prepay Actuarial Receivables in full and (y) distribute to the Depositor, in immediately available funds, all investment earnings on funds in the Payahead Account with respect to the preceding Collection Period.  

Monthly Withdrawals from the Collection Account.  Except as set forth under “—Collections on Actuarial Receivables” below, on each Distribution Date, the Servicer shall instruct the Trustee to withdraw from the Collection Account and deposit in the Payahead Account in immediately available funds, the aggregate Payaheads collected during the preceding Collection Period.  On each Distribution Date, the Servicer shall calculate the amounts set forth below and shall instruct the Trustee to make the following deposits and distributions, after payment to the Servicer from the Collection Account of amounts in reimbursement of Advances previously made by the Servicer (as described below under “—Advances”), to the extent of Interest Collections (and, in the case of shortfalls occurring under clause (2) below in the Class A Interest Distribution, the Class B Percentage of Principal Collections to the extent o f such shortfalls):

(1)  

to the Servicer, the Servicing Fee and if the Servicer is an entity other than [        ], or [        ] or one of their affiliates, the Non-Affiliated Servicing Fee;

(2)

to the Class A Distribution Account, after the application of clause (1), the Class A Interest Distribution; and

(3)

to the Class B Distribution Account, after the application of clauses (1) and (2), the Class B Interest Distribution.

On each Distribution Date, the Servicer shall calculate the amounts set forth below and shall instruct the Trustee to make the following deposits and distributions, to the extent of Principal Collections and Interest Collections remaining after the application of clauses (1), (2) and (3) above:

(1)

to the Class A Distribution Account, the Class A Principal Distribution;

(2)

to the Class B Distribution Account, after the application of clause (4), the Class B Principal Distribution; and

(3)

to the Reserve Account, any amounts remaining after the application of clauses (1) through (5); these amounts to be distributed as described below under “Credit Enhancement—Reserve Account.”

To the extent necessary to satisfy the distributions described in clauses (1) through (5) above, the Servicer shall calculate the amounts set forth below and shall instruct the Trustee to withdraw from the Reserve Account and deposit in the Class A Distribution Account or the Class B Distribution Account as described below in the following order of priority on each Distribution Date:

(1)

an amount equal to the excess of the Class A Interest Distribution over the sum of Interest Collections (net of amounts paid to the Servicer pursuant to clause (1) of the preceding paragraph) and the Class B Percentage of Principal Collections will be deposited into the Class A Distribution Account;

(2)

an amount equal to the excess of the Class B Interest Distribution over the portion of Interest Collections (net of amounts paid to the Servicer pursuant to clause (1) of the preceding paragraph) remaining after the distribution of the Class A Interest Distribution will be deposited into the Class B Distribution Account;

(3)

an amount equal to the excess of the Class A Principal Distribution over the portion of Principal Collections and Interest Collections (net of amounts paid to the Servicer pursuant to clause (1) of the preceding paragraph) remaining after the distribution of the Class A Interest Distribution and the Class B Interest Distribution will be deposited into the Class A Distribution Account; and

(4)

an amount equal to the excess of the Class B Principal Distribution over the portion of Principal Collections and Interest Collections remaining (net of amounts paid to the Servicer pursuant to clause (1) of the preceding paragraph) after the distribution of the Class A Interest Distribution, the Class B Interest Distribution and the Class A Principal Distribution will be deposited into the Class B Distribution Account.

On each Distribution Date, all amounts on deposit in the Class A Distribution Account will be distributed to the Class A Certificateholders and all amounts on deposit in the Class B Distribution Account will be distributed to the Class B Certificateholders.

Fees and Expenses of the Trust Fund

In consideration of their duties on behalf of the Trust Fund, the Servicer, the Trustee and the Collateral Agent will receive from the assets of the Trust Fund certain fees as set forth in the following table:

Fee Payable to:	Frequency of Payment:	Amount of Fee:	How and When Fee Is Paid:
Servicer	[monthly]	[(a) A monthly fee paid to the Servicer out of interest collections received from the Receivables in an amount equal to the product of one-twelfth of [    ]% per annum (the “Servicing Fee Rate”) for so long as [               ] or an affiliate thereof is the Servicer, and [    ]% per annum (the “Non-Affiliated Servicing Fee Rate”) if [               ] or an affiliate thereof is no longer the Servicer  and the Pool Balance as of the first day of the Collection Period.] [(b) any late fees, prepayment charges and other administrative fees or similar charges allowed by applicable law with respect to the Receivables, and will be entitled to reimbursement from the Issuing Entity for various expenses.]	[Deducted by the Servicer from interest collections in respect of each Receivable serviced by the Servicer, before payment of any amounts to certificateholders.]
Trustee	[monthly]	[A monthly fee paid to the Trustee by the Servicer out of the Servicer’s fee.]	[Paid by the Servicer before payment of any amounts to certificateholders.]
Collateral Agent	[monthly]	[A monthly fee paid to the Collateral Agent by the Servicer out of the Servicer’s fee.]	[Paid by the Servicer before payment of any amounts to certificateholders.]
[Other Applicable Party]	[_____]	[_____]	[_____]

[[None of the fees set forth in table above may be changed without amendment of the Agreement as described under “The Agreement—Amendment”.]]

[[Expenses of the Servicer, the Trustee and the Collateral Agent will be reimbursed before payments are made on the certificates.]]

Example of Distributions

The following sets forth an example of collection of payments from Obligors on the Receivables, transfer of amounts among the Trust Accounts, and distributions on the certificates for the Distribution Date in [_______]:

On or before the earlier of the [tenth] business day of the month in which a Distribution Date occurs and the [fourth] business day preceding such Distribution Date	Determination Date	The Servicer will provide the Trustee with information with respect to the preceding Collection Period, including the aggregate amounts of Collections on the Receivables, Advances to be remitted by the Servicer, Liquidated Receivables, if any, and Purchase Amounts of the Receivables to be repurchased by the Sponsor or purchased by the Servicer with respect to the related Distribution Date.
On or before the business day preceding each Distribution Date	[Servicer Remittance Date]	The Servicer will or will cause the Trustee to (x) deposit into the Collection Account in immediately available funds, the portion of Payaheads constituting scheduled payments on Actuarial Receivables or that are to be applied to prepay Actuarial Receivables in full and (y) distribute to the Depositor, in immediately available funds, all investment earnings on funds in the Payahead Account with respect to the preceding Collection Period. The Servicer will cause the Interest Collections and Principal Collections for such Distribution Date to be deposited into the Collection Account.
The Business Day immediately prior to a Distribution Date or, if definitive certificates are issued, the last day of the month prior to a Distribution Date.	Record Date:	Distributions will be made to certificateholders of record for all applicable classes as of the Record Date.
The [__]th day of each month (or if the [__]h day is not a business day, the next business day),	Distribution Date:	The Servicer shall calculate the amounts set forth above under “—Distributions on the Certificates—Monthly Withdrawals from the Collection Account” and shall instruct the Trustee to make the deposits and distributions described therein.

Succeeding months follow the same pattern.

Related Definitions

For purposes hereof, the following terms have the following meanings:

 “Class A Interest Carryover Shortfall” means, with respect to any Distribution Date, the excess of Class A Monthly Interest for the preceding Distribution Date and any outstanding Class A Interest Carryover Shortfall on the preceding Distribution Date, over the amount in respect of interest that is actually deposited in the Class A Distribution Account on the preceding Distribution Date, plus 30 days of interest on that excess, to the extent permitted by law, at the Class A Pass-Through Rate.

“Class A Interest Distribution” means, with respect to any Distribution Date, the sum of Class A Monthly Interest for the Distribution Date and the Class A Interest Carryover Shortfall for the Distribution Date.

“Class A Monthly Interest” means, with respect to any Distribution Date, the product of (x) one-twelfth of the Class A Pass-Through Rate and (y) the Class A Principal Balance as of the immediately preceding Distribution Date, after giving effect to any payments made on that Distribution Date, or, in the case of the first Distribution Date, the Initial Class A Principal Balance.

“Class A Monthly Principal” means, with respect to any Distribution Date, the Class A Percentage of Principal Collections for the Distribution Date plus the sum of (1) the Class A Percentage of Realized Losses with respect to Receivables which became Liquidated Receivables during the related Collection Period and (2) the Class A Percentage of the aggregate amount of Cram Down Losses during the related Collection Period.

“Class A Pass-Through Rate” means, with respect to the Class A Certificates, [______]% per annum.

“Class A Principal Balance” equals the Initial Class A Principal Balance, as reduced by all amounts allocable to principal on the Class A Certificates previously distributed to Class A Certificateholders.

“Class A Principal Carryover Shortfall” means, with respect to any Distribution Date, the excess of Class A Monthly Principal for the preceding Distribution Date and any outstanding Class A Principal Carryover Shortfall on the preceding Distribution Date over the amount in respect of principal that is actually deposited in the Class A Distribution Account on the preceding Distribution Date.

“Class A Principal Distribution” means, with respect to any Distribution Date, the sum of Class A Monthly Principal for that Distribution Date and the Class A Principal Carryover Shortfall for that Distribution Date; provided, however, that the Class A Principal Distribution shall not exceed the Class A Principal Balance immediately prior to that Distribution Date.  In addition, on the Final Scheduled Distribution Date, the principal required to be deposited in the Class A Distribution Account will include the lesser of:

(a)

any principal due and remaining unpaid on each Receivable in the Trust as of the Final Scheduled Maturity Date; or

(b)

the portion of the amount required to be deposited under clause (a) above that is necessary, after giving effect to the other amounts to be deposited in the Class A Distribution Account on the applicable Distribution Date and allocable to principal, to reduce the Class A Principal Balance to zero.

“Class B Interest Carryover Shortfall” means, with respect to any Distribution Date, the excess of Class B Monthly Interest for the preceding Distribution Date and any outstanding Class B Interest Carryover Shortfall on the preceding Distribution Date, over the amount in respect of interest that is actually deposited in the Class B Distribution Account on the preceding Distribution Date, plus 30 days of interest on this excess, to the extent permitted by law, at the Class B Pass-Through Rate.

“Class B Interest Distribution” means, with respect to any Distribution Date, the sum of Class B Monthly Interest for that Distribution Date and the Class B Interest Carryover Shortfall for that Distribution Date.

“Class B Monthly Interest” means, with respect to any Distribution Date, the product of (x) one-twelfth of the Class B Pass-Through Rate and (y) the Class B Principal Balance as of the immediately preceding Distribution Date, after giving effect to any payments made on that Distribution Date, or, in the case of the first Distribution Date, the Initial Class B Principal Balance.

“Class B Monthly Principal” means, with respect to any Distribution Date, the Class B Percentage of Principal Collections for that Distribution Date plus the sum of (1) the Class B Percentage of Realized Losses with respect to Receivables which became Liquidated Receivables during the related Collection Period and (2) the Class B Percentage of the aggregate amount of Cram Down Losses during the related Collection Period.

“Class B Pass-Through Rate” means, with respect to the Class B Certificates, [______]% per annum.

“Class B Principal Balance” equals the Initial Class B Principal Balance, as reduced by all amounts allocable to principal on the Class B Certificates previously distributed to Class B Certificateholders.

“Class B Principal Carryover Shortfall” means, with respect to any Distribution Date, the excess of Class B Monthly Principal for the preceding Distribution Date and any outstanding Class B Principal Carryover Shortfall on the preceding Distribution Date over the amount in respect of principal that is actually deposited in the Class B Distribution Account on the preceding Distribution Date.

“Class B Principal Distribution” means, with respect to any Distribution Date, the sum of Class B Monthly Principal for that Distribution Date and the Class B Principal Carryover Shortfall for that Distribution Date; provided, however, that the Class B Principal Distribution shall not exceed the Class B Principal Balance immediately prior to that Distribution Date.  In addition, on the Final Scheduled Distribution Date, the principal required to be distributed to Class B Certificateholders will include the lesser of:

(a)

any principal due and remaining unpaid on each Receivable in the Trust as of the Final Scheduled Maturity Date; or

(b)

the portion of the amount required to be deposited under clause (a) above that is necessary, after giving effect to the other amounts to be deposited in the Class B Distribution Account on the Distribution Date and allocable to principal, to reduce the Class B Principal Balance to zero, and, in the case of clauses (a) and (b), remaining after any required distribution of the amount described in clause (a) to the Class A Distribution Account.

“Cram Down Loss” means, with respect to a Receivable if a court of appropriate jurisdiction in a bankruptcy or insolvency proceeding shall have issued an order reducing the amount owed on the Receivable or otherwise modifying or restructuring the scheduled payments to be made on the Receivable, an amount equal to:

(1)

the excess of the principal balance of the Receivable immediately prior to the court order over the principal balance of the Receivable as so reduced; and

(2)

if the issuing court shall have issued an order reducing the effective rate of interest on the Receivable, the net present value, using as the discount rate the higher of the APR on the Receivable or the rate of interest, if any, specified by the court in the order, of the scheduled payments as so modified or restructured.

A “Cram Down Loss” shall be deemed to have occurred on the date of issuance of the court order.

 “Liquidated Receivables” means, Receivables (x) which have been liquidated by the Servicer through the sale of the related Financed Vehicle, (y) as to which all or a portion representing 10% or more of a scheduled payment due is 120 or more days delinquent or (z) with respect to which proceeds have been received which, in the Servicer’s judgment, constitute the final amounts recoverable in respect of such Receivable.  A Receivable first becomes a Liquidated Receivable upon the earliest to occur of (x), (y) or (z) above.

The “Pool Balance” at any time will represent the aggregate principal balance of the Receivables at the end of the preceding Collection Period, after giving effect to all payments, other than Payaheads, received from Obligors and Purchase Amounts to be remitted by the Servicer and the Sponsor, as the case may be, all for the related Collection Period, all losses realized on Receivables that became Liquidated Receivables during the related Collection Period and all Cram Down Losses for the related Collection Period.

“Realized Losses” means, for any period, the excess of the principal balance of a Liquidated Receivable over Liquidation Proceeds to the extent allocable to principal.

Advances

With respect to any Distribution Date, the Servicer may, in its sole discretion, make a payment (an “Advance”) with respect to each Receivable, other than a Liquidated Receivable, equal to (A) with respect to Simple Interest Receivables, the excess, if any, of (x) the product of the principal balance of such Receivable as of the last day of the related Collection Period and one-twelfth of its APR, over (y) the interest actually received by the Servicer with respect to such Receivable from the Obligor or from the payment of the Repurchase Amount during or with respect to such Collection Period and (B) with respect to Actuarial Receivables, the scheduled payment of principal and interest due during the related Collection Period but not received.  The Servicer may elect not to make any Advance with respect to a Receivable to the extent that the Servicer, in its sole discretion, determines that such Advance is not recoverable from sub sequent payments on such Receivable or from funds in the Reserve Account.

With respect to Simple Interest Receivables, to the extent that the amount set forth in clause (y) above plus amounts withdrawn from the Reserve Account during or with respect to the related Collection Period and allocable to interest with respect to a Simple Interest Receivable is greater than the amount set forth in clause (x) above with respect to a Simple Interest Receivable, this amount shall be distributed to the Servicer on the related Distribution Date to reimburse the Servicer for previous unreimbursed Advances with respect to that Simple Interest Receivable.  Before a Simple Interest Receivable becomes a Liquidated Receivable, this reimbursement will only be from accrued interest due from the Obligor under that Receivable.  Collections on an Actuarial Receivable made during a Collection Period shall be applied first to repay any unreimbursed Advances on that Actuarial Receivable.

In addition, on the Business Day before each Distribution Date the Trustee shall withdraw from the Reserve Account an amount equal to the amount of any outstanding Advances on Liquidated Receivables to the extent not recovered from Liquidation Proceeds.

The Servicer will deposit all Advances with respect to any Distribution Date into the Collection Account on the Business Day before each Distribution Date.

Collections on Actuarial Receivables

To the extent that collections on an Actuarial Receivable during a Collection Period exceed the outstanding Advances on the Actuarial Receivable, the collections shall then first be applied to the scheduled payment on that Receivable.  If any collections remaining after the scheduled payment is made are insufficient to prepay the Actuarial Receivable in full, then, the remaining collections (the “Payaheads”) shall be transferred to and kept in the Payahead Account, until a later Collection Period where the collections may be transferred to the Collection Account and applied either to the scheduled payment or to prepay the Actuarial Receivable in full.  The scheduled payment with respect to an Actuarial Receivable is that portion of the payment required to be made by the related Obligor during each calendar month sufficient to amortize the principal balance of that Actuarial Receivable under the actuarial method over the term of the Actuarial Receivable and to provide interest at the APR of that Actuarial Receivable.  Notwithstanding the foregoing, so long as the Servicer is not required to remit collections to the Collection Account within two Business Days of receipt, the Servicer will not be required to deposit Payaheads to the Payahead Account but shall be required to deposit Payaheads to the Collection Account as described above.

Credit Enhancement

Subordination of the Class B Certificates.  The rights of the Class B Certificateholders to receive distributions with respect to the Receivables will be subordinated to the rights of the Class A Certificateholders to the extent described below.  This subordination is intended to enhance the likelihood of timely receipt by Class A Certificateholders of the full amount of interest and principal required to be paid to them, and to afford such Class A Certificateholders limited protection against losses in respect of the Receivables.

No distribution will be made to the Class B Certificateholders on any Distribution Date in respect of interest until the full amount of interest on the Class A Certificates payable on such Distribution Date has been distributed to the Class A Certificateholders.  No distribution will be made to the Class B Certificateholders on any Distribution Date in respect of principal until the full amount of interest on and principal of the Class A Certificates and interest on the Class B Certificates payable on such Distribution Date has been distributed to the Class A Certificateholders and the Class B Certificateholders, respectively.  Distributions of interest on the Class B Certificates, however, to the extent of collections on or in respect of the Receivables allocable to interest and certain available amounts on deposit in the Reserve Account, will not be subordinated to the payment of principal of the Class A Certificates.

Reserve Account.  In the event of delinquencies or losses on the Receivables, the protection afforded to the Class A Certificateholders will be effected both by the preferential right of the Class A Certificateholders to receive current distributions with respect to the Receivables, to the extent described above under “-- Subordination of the Class B Certificates,” prior to any distribution being made on a Distribution Date to the Class B Certificateholders, and to receive amounts on deposit in the Reserve Account.  Amounts on deposit in the Reserve Account will also be generally available to cover shortfalls in required distributions to the Class B Certificateholders, in respect of interest, after payment of interest on the Class A Certificates and, in respect of principal, after payment of interest on and principal of the Class A Certificates and interest on the Class B Certificates.  The Reserve Account will no t be a part of or otherwise includible in the Trust Fund and will be a segregated trust account held by the Collateral Agent for the benefit of the Certificateholders.

On the Closing Date, the Depositor will deposit $[                 ] ([                 ]% of the Initial Pool Balance) (the “Reserve Account Initial Deposit”) into the Reserve Account.  The Reserve Account Initial Deposit will be augmented on each Distribution Date by deposit in the Reserve Account of Collections remaining after distribution of the Servicing Fee and amounts to be paid to Class A Certificateholders and Class B Certificateholders as described above under “—Distributions on Certificates.”  To the extent that amounts on deposit in the Reserve Account after distributions on a Distribution Date exceed the Specified Reserve Account Balance, such excess will be released first, to the Servicer (if the Servicer is [         ]), in an amount equal to the Non-Affiliated Servicing Fee, together with any portion of the Non-Affiliated Servicing Fee that remains unpaid from prior Distribution Dates, and second, to the Depositor.  Upon any such release to the Depositor of amounts from the Reserve Account, neither the Class A Certificateholders nor the Class B Certificateholders will have any further rights in, or claims to, such amounts.

“Specified Reserve Account Balance” with respect to any Distribution Date will equal [                 ]% of the Pool Balance as of the last day of the related Collection Period, but in any event will not be less than the lesser of:

(1)

[                 ] ([                 ]% of the Initial Pool Balance), and

(2)

the Pool Balance;

provided, that if the Average Net Loss Ratio exceeds [                 ]% or the Average Delinquency Percentage exceeds [                 ]% on a Distribution Date, beginning with the [                 ] Distribution Date, the Specified Reserve Account Balance for the Distribution Date shall be calculated using a percentage of [                 ]%.

“Aggregate Net Losses” means, for any Distribution Date, the amount equal to (1) the aggregate Principal Balance of all Receivables that became Liquidated Receivables during the related Collection Period minus (2) the Liquidation Proceeds allocable to principal collected during the related Collection Period with respect to any Liquidated Receivables.

“Average Delinquency Percentage” means, for any Distribution Date, the average of the Delinquency Percentages for the Distribution Date and the preceding two Distribution Dates.

“Average Net Loss Ratio” means, for any Distribution Date, the average of the Net Loss Ratios for the Distribution Date and the preceding two Distribution Dates.

“Delinquency Percentage” means, for any Distribution Date, the sum of the outstanding Principal Balances of all Receivables which are 60 days or more delinquent, including Receivables relating to Financed Vehicles that have been repossessed, as of the close of business on the last day of the Collection Period immediately preceding the Distribution Date, determined in accordance with the Servicer’s normal practices, this sum expressed as a percentage of the Pool Balance as of the close of business on the last day of the related Collection Period.

“Liquidation Proceeds” means with respect to any Receivable,

(1)

insurance proceeds,

(2)

the monies collected during a Collection Period from whatever source on a Liquidated Receivable and

(3)

proceeds of a Financed Vehicle sold after repossession, in each case, net of any liquidation expenses and payments required by law to be remitted to the Obligor.

“Net Loss Ratio” means, for any Distribution Date, an amount expressed as a percentage, equal to the product of (A) twelve and (B) (1) the Aggregate Net Losses for the Distribution Date, divided by (2) the average of the Pool Balances on each of the first day of the related Collection Period and the last day of the related Collection Period.

The Specified Reserve Account Balance may be reduced to a lesser amount; provided, that the reduction may not adversely affect any rating of the Certificates by a Rating Agency.

In no circumstances will the Depositor be required to deposit any amounts in the Reserve Account other than the Reserve Account Initial Deposit to be made on the Closing Date.

Amounts held from time to time in the Reserve Account will continue to be held for the benefit of the Certificateholders and may be invested in Eligible Investments.  Any loss on an investment will be charged to the Reserve Account.  Any investment earnings, net of losses, will be paid to the Depositor.

The time necessary for the Reserve Account to reach and maintain the Specified Reserve Account Balance at any time after the date of issuance of the Certificates will be affected by the delinquency, credit loss and repossession and prepayment experience of the Receivables and, therefore, cannot be accurately predicted.

If on any Distribution Date the protection afforded the Class A Certificates by the Class B Certificates and by the Reserve Account is exhausted, the Class A Certificateholders will directly bear the risks associated with ownership of the Receivables.  If on any Distribution Date amounts on deposit in the Reserve Account have been depleted, the protection afforded the Class B Certificates by the Reserve Account will be exhausted and the Class B Certificateholders will directly bear the risks associated with ownership of the Receivables.

None of the Class B Certificateholders, the Trustee, the Servicer, the Sponsor or the Depositor will be required to refund any amounts properly distributed or paid to them, whether or not there are sufficient funds on any subsequent Distribution Date to make full distributions to the Class A Certificateholders.

Termination

The Servicer will be permitted, at its option, in the event that the Pool Balance as of the last day of a Collection Period has declined to 10% or less of the Initial Pool Balance, to purchase from the Issuing Entity, on any Distribution Date occurring in a subsequent Collection Period, all remaining Receivables in the Trust Fund at a purchase price equal to the sum of the Class A Principal Balance and the Class B Principal Balance plus accrued and unpaid interest at the applicable Pass-Through Rates.  The exercise of this right will effect an early retirement of the Certificates.  See “Description of the Transfer and Servicing Agreements -- Termination” in the Prospectus.

Duties of the Trustee

The Trustee will make no representations as to the validity or sufficiency of the Agreement, the Certificates, other than the execution and authentication of the Certificates, the Receivables or any related documents, and will not be accountable for the use or application by the Depositor or the Servicer of any funds paid to the Depositor or the Servicer in respect of the Certificates or the Receivables, or the investment of any monies by the Servicer before the monies are deposited into the Collection Account.  The Trustee will not independently verify the Receivables.  If no Event of Servicing Termination (as described in the Prospectus) has occurred and is continuing, the Trustee will be required to perform only those duties specifically required of it under the Agreement.  Generally, those duties are limited to the receipt of the various certificates, reports or other instruments required to be furnished to the Trustee under t he Agreement, in which case it will only be required to examine them to determine whether they conform to the requirements of the Agreement.  The Trustee will not be charged with knowledge of a failure by the Servicer to perform its duties under the Agreement which failure constitutes an Event of Servicing Termination unless a responsible officer of the Trustee obtains actual knowledge of the failure as specified in the Agreement.

The Trustee will be under no obligation to exercise any of the rights or powers vested in it by the Agreement or to make any investigation of matters arising under the Agreement or to institute, conduct or defend any litigation under the Agreement or in relation to the Agreement at the request, order or direction of any of the Certificateholders, unless the Certificateholders have offered the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities which may be incurred in or by an exercise of the Trustee’s rights or powers or an investigation.  No Class A Certificateholder or Class B Certificateholder will have any right under the Agreement to institute any proceeding with respect to the Agreement, unless the holder has given the Trustee written notice of default and unless, with respect to the Class A Certificates, the holders of Class A Certificates evidencing not less than a majority o f the aggregate outstanding principal balance of the Class A Certificates or, with respect to the Class B Certificates, the holders of Class B Certificates evidencing not less than a majority of the aggregate outstanding principal balance of the Class B Certificates, have made a written request to the Trustee to institute a proceeding in its own name as Trustee under the Agreement and have offered to the Trustee reasonable indemnity, and the Trustee for 30 days has neglected or refused to institute any proceedings.

The Trustee

[        ], a national banking association, will act as Trustee under the Agreement.  The Trustee, in its individual capacity or otherwise, and any of its affiliates, may hold Certificates in their own names or as pledgee.  In addition, for the purpose of meeting the legal requirements of some jurisdictions, the Servicer and the Trustee, acting jointly, or in some instances, the Trustee, acting alone, will have the power to appoint co-trustees or separate trustees of all or any part of the Trust.  In the event of an appointment, all rights, powers, duties and obligations conferred or imposed upon the Trustee by the Agreement will be conferred or imposed upon the Trustee and the co-trustee or separate trustee jointly, or, in any jurisdiction where the Trustee is incompetent or unqualified to perform certain acts, singly upon the co-trustee or separate trustee who shall exercise and perform these r ights, powers, duties and obligations solely at the direction of the Trustee.

The Trustee may resign at any time, in which event the Servicer will be obligated to appoint a successor trustee.  The Servicer may also remove the Trustee if the Trustee ceases to be eligible to serve, becomes legally unable to act, is adjudged insolvent or is placed in receivership or similar proceedings.  In these circumstances, the Servicer will be obligated to appoint a successor trustee.  However, any resignation or removal of the Trustee and appointment of a successor trustee will not become effective until acceptance of the appointment by the successor trustee.

The Agreement will provide that the Servicer will pay the Trustee’s fees.  The Agreement will also provide that the Trustee will be entitled to indemnification by the Depositor for, and will be held harmless against, any loss, liability or expense incurred by the Trustee not resulting from the Trustee’s own willful misfeasance, bad faith or negligence.  Indemnification will be unavailable to the Trustee to the extent that any loss, liability or expense results from a breach of any of the Trustee’s representations or warranties set forth in the Agreement, and for any tax, other than those for which the Depositor or the Servicer is required to indemnify the Trustee.

The Trustee’s Corporate Trust Office is located at [                 ].  The Depositor, the Servicer, the Seller and their respective affiliates may have other banking relationships with the Trustee and its affiliates in the ordinary course of their business.

In the Agreement, [        ] will agree to perform certain bond administration, distribution obligations and custodial functions on behalf of the Trustee and to act as successor servicer if [        ] is removed as servicer.  In performing these functions, [        ] will be entitled to all of the rights, powers and indemnities afforded to the Trustee under the Agreement.

The Collateral Agent

[        ], a national banking association, will act as the Collateral Agent under the Agreement.

[Regulation AB Item 1108 compliant description of Collateral Agent].

[THE INSURER]

[General]

[[_______________] (the “Insurer” or “[_______________]”) is a monoline financial guaranty insurance company incorporated under the laws of the State of New York.  The Insurer is currently licensed to do insurance business in, and is subject to the insurance regulation and supervision by, all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Singapore.]

[The Insurer is an indirect wholly owned subsidiary of [_______________], a [___________] (“[_______________]”).  Through its subsidiaries, [_______________] is a leading provider of insurance and reinsurance coverages and financial products and services to industrial, commercial and professional service firms, insurance companies and other enterprises on a worldwide basis.  The ordinary shares of [_______________] are publicly traded in the United States and listed on the New York Stock Exchange (NYSE: [_________]).  [_______________] is not obligated to pay the debts of or claims against the Insurer.]

[Reinsurance]

[The Insurer has entered into a facultative quota share reinsurance agreement with [____________] (“[_______________]”), an insurance company organized under the laws of [______________], and an affiliate of the Insurer.  Pursuant to this reinsurance agreement, the Insurer expects to cede up to 90% of its business to [_______________].  The Insurer may also cede reinsurance to third parties on a transaction-specific basis, which cessions may be any or a combination of quota share, first loss or excess of loss.  Such reinsurance is used by the Insurer as a risk management device and to comply with statutory and rating agency requirements and does not alter or limit the Insurer's obligations under any financial guaranty insurance policy.  With respect to any transaction insured by [_______________], the percentage of risk ceded to [_______________] may be less than 90% depending on certain factors including, without l imitation, whether [_______________] has obtained third party reinsurance covering the risk.  As a result, there can be no assurance as to the percentage reinsured by [_______________] of any given financial guaranty insurance policy issued by [_______________], including the Policy.]

[Based on the audited financials of [_______________], as of December 31, 2004, [_______________] had total assets, liabilities, redeemable preferred shares and shareholders’ equity of $[___________], $[___________], $[___________] and $[___________], respectively, determined in accordance with generally accepted accounting principles in the United States (“US GAAP”). [_______________]’s insurance financial strength is rated “Aaa” by Moody’s and “AAA” by S&P and Fitch Inc. In addition, [_______________] has obtained a financial enhancement rating of “AAA” from S&P.]  

[The obligations of [_______________] to the Insurer under the reinsurance agreement described above are unconditionally guaranteed by [___________] ("[_______________]"), a Bermuda exempted company and one of the world's leading excess commercial insurers.  [_______________] is a wholly owned indirect subsidiary of [_______________].  In addition to A.M. Best’s financial strength rating of “A+” and issuer credit rating of “aa-”, [_______________]’s insurance financial strength rating is “Aa2” (as of September 13, 2005, [_______________] is on review for downgrade) by Moody’s, “AA-” by Standard & Poor’s (on September 20, 2005, Standard & Poor’s placed [_______________] on CreditWatch with negative implications) and “AA-” (Outlook Stable) by Fitch.]  

[The rating agencies have taken certain actions with respect to [_______________] and various insurance operating subsidiaries of [_______________], as described below.  Moody’s placed the “A2” senior debt rating of [_______________] and the other insurance financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) on review for possible downgrade on September 13, 2005.  Standard & Poor’s placed the “A” senior debt rating of [_______________] and the other financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) on CreditWatch with negative implications on September 20, 2005.  Fitch downgraded the long term issuer rating of [_______________] and the insurer financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) from “A” to “A-” on October 26, 2005.  A.M. Best placed each of [___________]’s (which does not include [_______________] or [_______________]) and [_______________]’s respective financial strength ratings of “A+” and their issuer credit ratings of “aa-” under review with negative implications on September 15, 2005. ]

[The ratings of [_______________], [_______________] or any other member of the [_______________] group of companies are not recommendations to buy, sell or hold certificates, including the certificates and are subject to revision or withdrawal at any time by Moody’s, Standard & Poor’s or Fitch.]

[Notwithstanding the capital support provided to the Insurer described in this section, the certificateholders will have direct recourse against the Insurer only, and neither [_______________] nor [_______________] will be directly liable to the certificateholders.]

[Financial Strength and Financial Enhancement Ratings of [_______________]]

[The Insurer's insurance financial strength is rated “Aaa” by Moody’s and “AAA” by Standard & Poor’s and Fitch, Inc. (“Fitch”).  In addition, [_______________] has obtained a financial enhancement rating of “AAA” from Standard & Poor’s.  These ratings reflect Moody’s, Standard & Poor’s and Fitch's current assessment of the Insurer's creditworthiness and claims-paying ability as well as the reinsurance arrangement with [_______________] described under "Reinsurance" above.]

[The above ratings are not recommendations to buy, sell or hold certificates, including the certificates and are subject to revision or withdrawal at any time by Moody’s, Standard & Poor’s or Fitch.  Any downward revision or withdrawal of these ratings may have an adverse effect on the market price of the certificates.  The Insurer does not guaranty the market price of the certificates nor does it guaranty that the ratings on the certificates will not be revised or withdrawn.]

[Capitalization of the Insurer]

[Based on the audited financials of [_______________], as of December 31, 2004, [_______________] had total assets, liabilities, and shareholder’s equity of $[______________], $[______________], and $[______________], respectively, determined in accordance with U.S. GAAP.]

Based on the audited statutory financial statements for [_______________] as of December 31, 2004 filed with the State of New York Insurance Department, [_______________] has total admitted assets of $[______________], total liabilities of $[______________] and total capital and surplus of $[______________] determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities (“SAP”).  

[Incorporation by Reference of Financials

]

For further information concerning [_______________] and [_______________], see the financial statements of [_______________] and [_______________], and the certificates thereto, incorporated by reference in this prospectus supplement.  The financial statements of [_______________] and [_______________] are included as exhibits to the periodic reports filed with the Certificates and Exchange Commission (the “Commission”) by [_______________] and may be reviewed at the EDGAR website maintained by the Commission.  All financial statements of  [_______________] and [_______________] included in, or as exhibits to, documents filed by [_______________] pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act Act of 1934 on or prior to the date of this prospectus supplement, or after the date of this prospectus supplement but prior to termination of the offering of the certificates, shall be deemed incorpor ated by reference in this prospectus supplement.  Except for the financial statements of [_______________] and [_______________], no other information contained in [_______________]'s reports filed with the Commission is incorporated by reference. Copies of the statutory quarterly and annual statements filed with the State of New York Insurance Department by [_______________] are available upon request to the State of New York Insurance Department.]

[Regulation of the Insurer]

[The Insurer is regulated by the Superintendent of Insurance of the State of New York.  In addition, the Insurer is subject to regulation by the insurance laws and regulations of the other jurisdictions in which it is licensed.  As a financial guaranty insurance company licensed in the State of New York, the Insurer is subject to Article 69 of the New York Insurance Law, which, among other things, limits the business of each insurer to financial guaranty insurance and related lines, prescribes minimum standards of solvency, including minimum capital requirements, establishes contingency, loss and unearned premium reserve requirements, requires the maintenance of minimum surplus to policyholders and limits the aggregate amount of insurance which may be written and the maximum size of any single risk exposure which may be assumed.  The Insurer is also required to file detailed annual financial statements with the New York Insurance Department and similar supervisory agencies in each of the other jurisdictions in which it is licensed.]

[The extent of state insurance regulation and supervision varies by jurisdiction, but New York and most other jurisdictions have laws and regulations prescribing permitted investments and governing the payment of dividends, transactions with affiliates, mergers, consolidations, acquisitions or sales of assets and incurrence of liabilities for borrowings.]

 [THE FINANCIAL GUARANTY INSURANCE POLICIES ISSUED BY THE INSURER, INCLUDING THE INSURANCE POLICY, ARE NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.]

[The principal executive offices of the Insurer are located at [____________] and its telephone number at this address is [____________].]

[THE POLICY]

[[__________], in consideration of the payment of a premium and subject to the terms of the insurance policy, thereby unconditionally and irrevocably guarantees to any certificateholder that an amount equal to each full and complete Insured Amount will be received from [__________] by the Trustee or its successors, as Trustee for the certificateholders, on behalf of the certificateholders, for distribution by the Trustee to each certificateholder of that certificateholder’s proportionate share of the Insured Amount.]

[[__________]’s obligations under the insurance policy, with respect to a particular Insured Amount, will be discharged to the extent funds equal to the applicable Insured Amount are deposited in the account specified by the Trustee, whether or not those funds are properly applied by the Trustee. Insured Amounts will be paid only at the time set forth in the insurance policy, and no accelerated Insured Amounts will be paid regardless of any acceleration of the certificates, unless the acceleration is at the sole option of [__________]. ]

[Notwithstanding the foregoing paragraph, the insurance policy does not cover shortfalls, if any, attributable to the liability of the issuer or the Trustee for withholding taxes, if any (including interest and penalties in respect of any liability for withholding taxes).]

[[__________] will pay any Insured Amount that is an Avoided Payment on the business day following receipt on a business day by [__________] of the following:

•

a certified copy of the order requiring the return of an avoided payment, with respect to which order the appeal period has expired without an appeal having been filed;  

•

an assignment in a form attached to the insurance policy, irrevocably assigning to [__________] all rights and claims of the certificateholder relating to or arising under the certificates against the debtor which made the avoided payment or otherwise with respect to the avoided payment; and  

•

an appropriately completed and executed demand for payment in the form attached to the insurance policy;  

provided that if these documents are received after 10:00 a.m., New York time, on that business day, they will be deemed to be received on the following business day. Payments by [__________] will be disbursed to the receiver or the trustee in bankruptcy named in the final order of the court exercising jurisdiction on behalf of the certificateholder and not to any certificateholder directly unless the certificateholder has returned principal or interest paid on the certificates to the receiver or trustee in bankruptcy, in which case that payment will be disbursed to the Trustee for distribution to the certificateholder upon proof of such payment reasonably satisfactory to [__________].]

[[__________] will pay any other amount payable under the insurance policy no later than 2:00 p.m., New York time, on the later of the distribution date on which the related Scheduled Payment is due or the business day following receipt in New York, New York by [__________] of a notice from the Trustee specifying the Insured Amount which is due and owing on the applicable distribution date, provided that if the notice is received after 10:00 a.m., New York time, on that business day, it will be deemed to be received on the following business day.]

[Subject to the terms of the Agreement, [__________] will be subrogated to the rights of each certificateholder to receive payments under the certificates to the extent of any payment by [__________] under the insurance policy.]

[As used in the insurance policy, the following terms shall have the following meanings:

“Avoided Payment” means any amount previously distributed to a certificateholder on the certificates that is recoverable and sought to be recovered as a voidable payment in an insolvency proceeding, in accordance with a final nonappealable order of a court having competent jurisdiction.

“Insured Amount” means, that portion of Scheduled Payments that shall become due for payment but shall be unpaid by reason of nonpayment.

“Insured Payment” means (a) as of any distribution date, any Scheduled Payment and (b) any Avoided Payment.

“Scheduled Payment” for any distribution date, an amount equal to the excess, if any, of: (a) the sum, without duplication, of (i) the Certificateholders’ Interest Distributable Amount and (ii) the Certificateholders’ First Principal Distributable Amount (other than the amount specified in clause (2)(b) of the definition thereof) for the related distribution date over (b) the amount actually deposited into the certificate distribution account on the related distribution date.]

[Capitalized terms used in the insurance policy and not otherwise defined in the insurance policy shall have the meanings set forth in the Agreement as of the date of execution of the insurance policy, without giving effect to any subsequent amendment or modification to the Agreement unless such amendment or modification has been approved in writing by [__________].]

[The insurance policy is not cancelable for any reason. The premium on the insurance policy is not refundable for any reason including payment, or provision being made for payment, prior to the maturity of the certificates.]

[The insurance policy is being issued under and pursuant to, and will be construed under, the laws of the State of New York, without giving effect to the conflict of laws principles thereof.]

[The insurance provided by the insurance policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law.]

[OTHER CREDIT ENHANCEMENT PROVIDER]

[Regulation AB Item 1114 compliant description of any other credit enhancement provider.]

[DERIVATIVE INSTRUMENTS]

[The Interest Rate Swap Agreement and the Swap Provider]

[The Offered Certificates and Class B Certificates will have the benefit of an interest rate swap agreement.  On or before the Closing Date, the Trustee will enter into an interest rate swap agreement (the “Interest Rate Swap Agreement”) with [_______] (the “Swap Provider”).  A separate trust created under the pooling and servicing agreement (the "Supplemental Interest Trust") will hold the Interest Rate Swap Agreement documented by a 1992 ISDA Master Agreement (Multicurrency-Cross Border), together with a Schedule and Confirmation between The Trustee, on behalf of the Supplemental Interest Trust, and the Swap Provider. ]

[The significance percentage, as calculated in accordance with Item 1115 of Regulation AB is less than 10%.]

[If significance percentage, as calculated in accordance with Item 1115 of Regulation AB, is 10% or more, provide financial information required by Item 1115 of Regulation AB.]

[Pursuant to the Interest Rate Swap Agreement, on each Distribution Date, (i) the Securities Administrator (on behalf of the Supplemental Interest Trust and from funds of such trust) will be obligated to pay to the Swap Provider, a fixed amount equal to the product of (x) [__]%, (y) the Swap Notional Amount for that Distribution Date set forth in the Interest Rate Swap Agreement and (z) a fraction, the numerator of which is 30 (or, for the first Distribution Date, the number of days elapsed from the Closing Date to but excluding the first Distribution Date on a 30/360 basis), and the denominator of which is 360 (the “Securities Administrator Swap Payment”); and (ii) the Swap Provider will be obligated to pay to the Supplemental Interest Trust for the benefit of the holders of the Offered Certificates and the Class B Certificates (the “Swap Provider Payment”), a floating amount equal to the product of (x) one-mon th LIBOR (as determined pursuant to the Interest Rate Swap Agreement), (y) the Swap Notional Amount for that Distribution Date set forth in the Interest Rate Swap Agreement, and (z) a fraction, the numerator of which is the actual number of days elapsed from the previous Distribution Date to but excluding the current Distribution Date (or, for the first Distribution Date, the actual number of days elapsed from the Closing Date to but excluding the first Distribution Date), and the denominator of which is 360.  A net payment will be required to be made on each Distribution Date (each such net payment, a “Net Swap Payment”) (a) by the Securities Administrator to the Swap Provider, to the extent that the fixed amount exceeds the corresponding floating amount, or (b) by the Swap Provider to the Securities Administrator, to the extent that the floating amount exceeds the corresponding fixed amount. Payments received by the Supplemental Interest Trust pursuant to the Interest Rate Swap Agreement wil l be available for distributions of Interest Carry Forward Amounts, Net WAC Rate Carryforward Amounts, amounts necessary to maintain the Required Overcollateralization Amount and Allocated Realized Loss Amounts.]

[The “Swap Notional Amount” with respect to each Distribution Date commencing in [______, __], is set forth below (which will be substantially the same schedule as set forth in the Interest Rate Swap Agreement).  The Interest Rate Swap Agreement will terminate immediately following the Distribution Date in [______, __], unless terminated earlier upon the occurrence of a Swap Default, an Early Termination Event or an Additional Termination Event (each as defined below).]

Distribution Date	Swap Notional Amount
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]

[The respective obligations of the Swap Provider and the Supplemental Interest Trust to pay specified amounts due under the Interest Rate Swap Agreement will be subject to the following conditions precedent: (1) no Swap Default or event that with the giving of notice or lapse of time or both would become a Swap Default, in each case, in respect of the other party, shall have occurred and be continuing with respect to the Interest Rate Swap Agreement and (2) no “Early Termination Date” (as defined in the ISDA Master Agreement) has occurred or been effectively designated with respect to the Interest Rate Swap Agreement.]

[An Interest Rate Cap Agreement]

[The Class [__] certificates will have the benefit of the Interest Rate Cap Agreement. Pursuant to the Interest Rate Cap Agreement, with respect to any Distribution Date, commencing with the Distribution Date in [__], 20[ ], on or prior to the Distribution Date in [__], 20[ ], [_______], (the “Cap Provider”), will be obligated to pay to the trust administrator, an amount equal to the product of (a) the excess, if any, of (i) the then current one-month LIBOR rate (determined in accordance with the Interest Rate Cap Agreement) up to a maximum of [__]% (the “Maximum Cap Rate”) and (ii) a specified strike rate of [__]% (the “Cap Strike Rate”) and (b) the Interest Rate Cap Agreement Notional Amount set forth on the schedule attached as Annex B hereto for that Distribution Date, determined on a 30/360 Basis. (each such payment, the “Cap Agreement Payment”). The Interest Rate Cap Agreement will terminate after th e Distribution Date in [__], 20[ ].

The obligations of the Cap Provider are limited to those specifically set forth in the Interest Rate Cap Agreement. The Cap Provider conducts business in the over-the-counter derivatives market, engaging in a variety of derivatives products, including interest rate swaps, currency swaps, credit default swaps and interest rate options with institutional clients.

For the Class [__] certificates and each Distribution Date prior to and including the Distribution Date in [__], 20[ ],  any Cap Agreement Payment received by the trust administrator will be used to pay the related Cap Amount to such classes of certificates, as described below under “––The Reserve Funds.”  Amounts received on  the Interest Rate Cap Agreement will not be available to make distributions on any class of Certificates other than the Class [__] certificates.

The Interest Rate Cap Agreement will be governed by and construed in accordance with the law of the State of New York. The obligations of the Cap Provider are limited to those specifically set forth in the Interest Rate Cap Agreement. The Class [__] certificates do not represent an obligation of the Cap Provider. The holders of the Class [__] certificates are not parties to or beneficiaries under the Interest Rate Cap Agreement and will not have any right to proceed directly against the cap provider in respect of its obligations under the Interest Rate Cap Agreement.]

[A Yield Maintenance Agreement]

The Issuing Entity will enter into a Yield Maintenance Agreement for the benefit of the Class [__] Certificates.  Under the Yield Maintenance Agreement, the Counterparty will agree to pay to the Issuing Entity two Business Days prior to each Distribution Date beginning in [__], 20[ ] and to and including the Distribution Date in [__], 20[ ], an amount equal to the product of:

1.

the excess, if any, of LIBOR (as calculated under the related Yield Maintenance Agreement subject to the Rate Cap Ceiling) over the Cap Strike Rate for that Distribution Date;

2.

the related Scheduled Notional Amount for that Distribution Date; and

3.

a fraction, the numerator of which is the actual number of days elapsed from the previous Distribution Date to but excluding the current Distribution Date, and the denominator of which is 360.

The Scheduled Notional Amounts for each Yield Maintenance Agreement decline in accordance with the expected amortization of the Mortgage Loans.  The Yield Maintenance Agreements will terminate immediately following the Distribution Date in [__], 20[ ].

The Yield Maintenance Agreements will be governed by and construed in accordance with the law of the State of New York and will be documented under the ISDA Master Agreement, as supplemented by the schedule and the confirmation.  The obligations of the Counterparty are limited to those specifically set forth in the related Yield Maintenance Agreement.

Any amounts received by the Securities Administrator under a Yield Maintenance Agreement will be distributed as follows:

1.

to the Reserve Fund, in an amount equal to the Basis Risk Shortfall Carryover Amount for the Class [__] Certificates for such Distribution Date;

2.

to the Principal Remittance Amount, the Net Cumulative Realized Loss Amount on such Distribution Date;

3.

to the Class [__] Certificates, any applicable Unpaid Realized Loss Amounts, and

4.

to the Class [__] Certificates, any remaining amounts.

FEDERAL INCOME TAX CONSEQUENCES

Upon the issuance of the Certificates, McKee Nelson LLP, special tax counsel (“Federal Tax Counsel”), will deliver its opinion to the effect that, under then current law, assuming compliance with the Agreement, the Issuing Entity will be classified for federal income tax purposes as a grantor trust and not as an association taxable as a corporation.  Accordingly, each Certificateholder will be subject to federal income taxation as if it owned directly its interest in each asset owned by the Issuing Entity and paid directly its share of expenses paid by the Issuing Entity.  Certain individuals, estates, trusts and partnerships may be limited in their ability to fully deduct the expenses of the Issuing Entity.  See “Material Federal Income Tax Consequences” in the Prospectus for a discussion of those limits.

For federal income tax purposes, the Depositor will be deemed to have retained a fixed portion of the interest due on each Receivable (the “Spread”).  The Spread will be treated as “stripped coupons” within the meaning of Section 1286 of the Internal Revenue Code of 1986, as amended (the “Code”).  The Servicer may also be deemed to have retained a “stripped coupon” if and to the extent that the Servicing Fee is determined to be unreasonable.  In addition, because the Class B Pass-Through Rate exceeds the Class A Pass-Through Rate, a portion of the interest accrued on each Receivable will be treated as a “stripped coupon” purchased by the Class B Certificateholders.  Accordingly, each Class A Certificateholder will be treated as owning its pro rata percentage interest in the principal of, and interest payable on, each Receivable (minus the portion of the interest payable on suc h Receivable that is treated as Spread, as a stripped coupon retained by the Servicer or as a stripped coupon purchased by the Class B Certificateholders), and such interest in each Receivable will be treated as a “stripped bond” within the meaning of Section 1286 of the Code.  Similarly, each Class B Certificateholder will be treated as owning its pro rata percentage interest in the principal of each Receivable, plus a disproportionate share of the interest payable on each Receivable.

Class A Certificateholders

Because the Class A Certificates represent stripped bonds, they will be subject to the original issue discount (“OID”) rules of the Code.  Accordingly, the tax treatment of a Class A Certificateholder will depend upon whether the amount of OID on a Class A Certificate is less than a statutorily defined de minimis amount.  See “Material Federal Income Tax Consequences -- Grantor Trusts – Stripped Certificates” for a discussion regarding the calculation of OID, if any, on stripped bonds.

If the amount of OID is de minimis under the OID provisions of the Code, the Class A Certificates would not be treated as having OID.  Each Class A Certificateholder would be required to report on its federal income tax return its share of the gross income of the Issuing Entity, including interest and certain other charges accrued on the Receivables and any gain upon collection or disposition of the Receivables (but not including any portion of the Receivables treated as “stripped coupons” as described above that are treated as owned by other parties).  Such gross income attributable to interest on the Receivable would exceed the Class A Pass-Through Rate by an amount equal to the Class A Certificateholder’s share of the expenses of the Issuing Entity for the period during which it owns a Class A Certificate.  As indicated above, a Class A Certificateholder generally would be entitled to deduct its share of expenses of the Issuing Entity, subject to certain limitations that apply in the case of Certificateholders that are individuals, trusts, estates or partnerships.  Any amounts received by a Class A Certificateholder from the Reserve Account or from the subordination of the Class B Certificates will be treated for federal income tax purposes as having the same character as the payments they replace.  A Class A Certificateholder would report its share of the income of the Issuing Entity under its usual method of accounting.  Accordingly, interest would be includable in a Certificateholder’s gross income when it accrues on the Receivables, or, in the case of Certificateholders who are cash basis taxpayers, when received by the Servicer on behalf of Certificateholders.  The actual amount of discount on a Receivable would be includable in income as principal payments are received on the Receivables.

If OID relating to a Class A Certificate is not de minimis, a Class A Certificateholder will be required to include in income, in addition to the amounts described above, any OID as it accrues, regardless of when cash payments are received, using a method reflecting a constant yield on the Receivables.

Although the Trustee intends to account for OID, if any, reportable by holders of Class A Certificates by reference to the price paid for a Class A Certificate by an initial purchaser, the amount of OID will differ for subsequent purchasers.  Such subsequent purchasers should consult their tax advisers regarding the proper calculation of OID on the interest in the Receivables represented by a Class A Certificate.

Class B Certificateholders

In General.  Except as described below, it is believed that the Class B Certificateholders will be subject to tax in the same manner as Class A Certificateholders.  However, no federal income tax authorities address the precise method of taxation of an instrument such as the Class B Certificates and Federal Tax Counsel cannot opine on this issue.  In the absence of applicable authorities, the Trustee intends to report income to Class B Certificateholders in the manner described below.

Each Class B Certificateholder will be treated as owning (x) the Class B Percentage of each Receivable plus (y) a disproportionate portion of the interest on each Receivable (not including the Spread).  Income will be reported to a Class B Certificateholder based on the assumption that all amounts payable to the Class B Certificateholders are taxable under the coupon stripping provisions of the Code and treated as a single obligation.  In applying those provisions, the Trustee will take the position that a Class B Certificateholder’s entire share of the interest on a Receivable will qualify as “qualified stated interest.” Thus, except to the extent modified by the effects of subordination of the Class B Certificates, as described below, income will be reported to Class B Certificateholders in the manner described above for holders of the Class A Certificates.

Effect Of Subordination

If the Certificateholders of one Class of Certificates receive distributions of less than their share of the Issuing Entity’s receipts of principal or interest (the “Shortfall Amount”) because of the subordination of the Certificates, it is believed that such Certificateholders would probably be treated for federal income tax purposes as if they had:

(1)  received as distributions their full share of such receipts,

(2)  paid over to the Certificateholders of the other Class of Certificates an amount equal to such Shortfall Amount, and

(3)  retained the right to reimbursement of such amounts to the extent of future collections otherwise available for deposit in the Reserve Account.

However, Federal Tax Counsel cannot opine to such treatment.

Under this treatment,

(a)  Class B Certificateholders would be required to accrue as current income any interest, OID income, or (to the extent paid on the Receivables) accrued market discount of the Issuing Entity that was a component of the Shortfall Amount, even though such amount was in fact paid to the Class A Certificateholders,

(b) a loss would only be allowed to the Class B Certificateholders when their right to receive reimbursement of such Shortfall Amount became worthless (i.e., when it became clear that that amount would not be available from any source to reimburse such loss), and

(c)  reimbursement of such Shortfall Amount prior to such a claim of worthlessness would not be taxable income to Class B Certificateholders because such amount was previously included in income.

Those results should not significantly affect the inclusion of income for Class B Certificateholders on the accrual method of accounting, but could accelerate inclusion of income to Class B Certificateholders on the cash method of accounting by, in effect, placing them on the accrual method.  Moreover, the character and timing of loss deductions are unclear and all Class B Certificateholders are encouraged to consult their tax advisors regarding such character and timing.

All Certificateholders should see “Material Federal Income Tax Consequences” in the Prospectus for a more detailed discussion of the material federal income tax consequences of the purchase, ownership and disposition of the Certificates.

STATE AND LOCAL TAX CONSEQUENCES

The discussion under “Federal Income Tax Consequences” above does not address the tax consequences of purchase, ownership or disposition of the Certificates under any state or local tax law.  We recommend that investors consult their own tax advisors regarding state and local tax consequences.

ERISA CONSIDERATIONS

A fiduciary of a pension, profit-sharing, retirement or other employee benefit plan subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), should consider the fiduciary standards under ERISA in the context of the plan’s particular circumstances before authorizing an investment of a portion of such plan’s assets in the Certificates.  Accordingly, pursuant to Section 404 of ERISA, such fiduciary should consider among other factors:

(1)  whether the investment is for the exclusive benefit of plan participants and their beneficiaries;

(2)  whether the investment satisfies the applicable diversification requirements;

(3)  whether the investment is in accordance with the documents and instruments governing the plan; and

(4)  whether the investment is prudent, considering the nature of the investment.  Fiduciaries of plans also should consider ERISA’s prohibition on improper delegation of control over, or responsibility for, plan assets.

In addition, benefit plans subject to ERISA, as well as individual retirement accounts or certain types of Keogh plans not subject to ERISA but subject to Section 4975 of the Code and any entity whose source of funds for the purchase of Certificates includes plan assets by reason of a plan or account investing in such entity (each, a “Plan”), are prohibited from engaging in a broad range of transactions involving Plan assets and persons having certain specified relationships to a Plan (“Parties in Interest” and “Disqualified Persons”).  Such transactions are treated as “prohibited transactions” under Sections 406 and 407 of ERISA and excise taxes are imposed upon such persons by Section 4975 of the Code.

An investment in Certificates by a Plan might result in the assets of the Issuing Entity being deemed to constitute Plan assets, which in turn might mean that certain aspects of such investment, including the operation of the Issuing Entity, might be prohibited transactions under ERISA and the Code.  Neither ERISA nor the Code defines the term “plan assets.”  Under Section 2510.3-101 of the United States Department of Labor (“DOL”) regulations (the “Regulation”), a Plan’s assets may include an interest in the underlying assets of an entity (such as a trust) for certain purposes, including the prohibited transaction provisions of ERISA and the Code, if the Plan acquires an “equity interest” in such entity, unless certain exceptions apply.  The Depositor believes that the Certificates will give Certificateholders an equity interest in the Issuing Entity for purposes of the Regulation and can give no assurance that the Certificates will qualify for any of the exceptions under the Regulation.

As a result, the assets of the Issuing Entity may be considered the assets of any Plan which acquires a Certificate.

The DOL has granted to Deutsche Bank Securities Inc. an individual exemption, Prohibited Transaction Exemption 94-84, and to Deutsche Morgan Grenfell/C.J. Lawrence Inc., similar approval (FAN 97-03E), which were both amended and restated pursuant to Prohibited Transaction Exemption 2002-41 (“PTE 2002-41”) (collectively, the “Exemption”) which is applicable to Certificates which meet its requirements whenever Deutsche Bank Securities Inc. or its affiliate is the sole underwriter, manager or co-manager of an underwriting syndicate or is the selling or placement agent.  The Exemption generally exempts from the application of the prohibited transaction provisions of Section 406 of ERISA and the excise taxes imposed on such prohibited transactions pursuant to Section 4975(a) and (b) of the Code and Section 502(i) of ERISA certain transactions relating to the initial purchase, holding and subsequent resale by Plans of certific ates in pass-through trusts that consist of certain receivables, loans and other obligations that meet the conditions and requirements set forth in the Exemption.  The receivables covered by the Exemption include motor vehicle installment obligations such as the Receivables.  The Depositor believes that the Exemption will apply to the acquisition, holding and resale of the Certificates by a Plan and that all conditions of the Exemption other than those within the control of the investors have been or will be met.

All Certificateholders should refer to “ERISA Considerations” in the Prospectus for a detailed discussion of the general and specific conditions of the Exemption.

If the general conditions of the Exemption are satisfied, the Exemption may provide relief from the restrictions imposed by Sections 406(a) and 407(a) of ERISA as well as the excise taxes imposed by Section 4975(a) and (b) of the Code by reason of Section 4975(c)(1)(A) through (D) of the Code, in connection with the direct or indirect sale, exchange, transfer or holding of the Certificates by a Plan.  However, no exemption is provided from the restrictions of Sections 406(a)(1)(E), 406(a)(2) and 407 of ERISA for the acquisition or holding of a Certificate on behalf of an “Excluded Plan” by any person who has discretionary authority or renders investment advice with respect to the assets of such Excluded Plan.  For purposes of the Certificates an Excluded Plan is a Plan sponsored by any member of the Restricted Group.

If certain specific conditions of the Exemption are also satisfied, the Exemption may provide relief from the restrictions imposed by Sections 406(b)(l) and (b)(2) and 407(a) of ERISA and the taxes imposed by Section 4975(a) and (b) of the Code by reason of Section 4975(c)(1)(E) of the Code in connection with the direct or indirect sale, exchange, transfer or holding of Certificates in the initial issuance of Certificates between the Depositor or the Underwriters and a Plan other than an Excluded Plan when the person who has discretionary authority or renders investment advice with respect to the investment of Plan assets in the Certificates is (a) an Obligor with respect to 5% or less of the fair market value of the Receivables or (b) an affiliate of such person.

The Exemption also may provide relief from the restriction imposed by Sections 406(a) and 407(a) of ERISA and the taxes imposed by Section 4975(c)(1)(A) through (D) of the Code if such restrictions are deemed to otherwise apply merely because a person is deemed to be a party in interest or a disqualified person with respect to an investing Plan by virtue of providing services to a Plan (or by virtue of having certain specified relationships to such a person) solely as a result of such Plan’s ownership of Certificates.

Before purchasing a Certificate, a fiduciary of a Plan should itself confirm (a) that the Certificates constitute “certificates” for purposes of the Exemption and (b) that the specific conditions set forth in Section II of the Exemption and the other requirements set forth in the Exemption will be satisfied.

Any Plan fiduciary considering whether to purchase a Certificate on behalf of a Plan are encouraged to consult with its counsel regarding the applicability of the fiduciary responsibility and prohibited transaction provisions of ERISA and the Code to such investment.

UNDERWRITING

Subject to the terms and conditions set forth in the Underwriting agreement relating to the Certificates (the “Underwriting Agreement”), the Depositor has agreed to sell to [                 ] and [Deutsche Bank Securities Inc.] (together, the “Underwriters”), and each of the Underwriters has severally agreed to purchase, the principal amount of Class A Certificates and Class B Certificates set forth opposite its name below, subject to the satisfaction of certain conditions precedent.

Underwriter	Principal Amount of Class A Certificates	Principal Amount of Class B Certificates
[           ]	$[                 ]	$[                 ]
[Deutsche Bank Securities Inc.]	$[                 ]	$[                 ]
Total	$[                 ]	$[                 ]

The Depositor has been advised by the Underwriters that the Underwriters propose to offer the Certificates to the public initially at the public offering prices set forth on the cover page of this Prospectus, and to certain dealers at these prices less a concession of [                 ]% per Class A Certificate and [                 ]% per Class B Certificate; that the Underwriters and these dealers may allow a discount of [                 ]% per Class A Certificate and [                 ]% per Class B Certificate on the sale to certain other dealers; and that after the initial public offering of the Certificates, the public offe ring prices and the concessions and discounts to dealers may be changed by the Underwriters.

Until the distribution of the Certificates is completed, rules of the Securities and Exchange Commission may limit the ability of the Underwriters and certain selling group members to bid for and purchase the Certificates.  As an exception to these rules, the Underwriters are permitted to engage in certain transactions that stabilize the prices of the Certificates.  These transactions consist of bids or purchases for the purpose of pegging, fixing or maintaining the price of such Certificates.

In general, purchases of a security for the purpose of stabilization or to reduce a short position could cause the price of the security to be higher than it might be in the absence of purchases for these purposes.

Neither the Depositor nor either Underwriter makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the prices of the Certificates.  In addition, neither the Depositor nor either Underwriter makes any representation that either Underwriter will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

[Deutsche Bank Securities Inc.] is an affiliate of the Depositor and the Seller.

This Prospectus Supplement may be used by [Deutsche Bank Securities Inc.], an affiliate of the Depositor, in connection with offers and sales relating to market-making transactions in the Certificates in which [Deutsche Bank Securities Inc.] acts as principal. [Deutsche Bank Securities Inc.] may also act as agent in such transactions.  Sales will be made at prices related to the prevailing prices at the time of sale.

The Depositor has agreed to indemnify the Underwriters against particular liabilities, including civil liabilities under the Securities Act, or contribute to payments which the Underwriters may be required to make in respect of these liabilities.  In the opinion of the Commission, this indemnification is against public policy as expressed in the Securities Act and, may, therefore, be unenforceable.

The Trustee or the Collateral Agent, as applicable, may, from time to time, invest the funds in the Trust Accounts in Eligible Investments acquired from either of the Underwriters.

RATINGS

It is a condition to the issuance of the Certificates that the Certificates receive at least the following ratings from [             ] (“[             ]”) and [             ] (“[             ]”):

Certificates	[             ]	[             ]
Class A Certificates	[___]	[___]
Class B Certificates	[___]	[___]

The ratings of the Class A Certificates will be based primarily on the Receivables, the Reserve Account, and the terms of the Certificates, including the subordination provided by the Class B Certificates.  The ratings of the Class B Certificates will be based primarily on the Receivables and the Reserve Account.  The ratings of the Certificates should be evaluated independently from similar ratings on other types of securities.  The ratings do not address the possibility that Certificateholders may suffer a lower than anticipated yield.

There can be no assurance that any rating will remain in effect for any given period of time or that a rating will not be lowered or withdrawn by the assigning Rating Agency if, in its judgment, circumstances so warrant.  In the event that the rating initially assigned to any of the Certificates is subsequently lowered or withdrawn for any reason, no person or entity will be obligated to provide any additional credit enhancement with respect to these certificates.  There can be no assurance whether any other rating agency will rate any of the Certificates, or if one does, what rating would be assigned by any other rating agency.  A security rating is not a recommendation to buy, sell or hold securities.

The rating agencies have stated that it is their standard policy to monitor ratings on publicly offered certificates for which a rating has been provided, as to each rating agency rating each class of certificates in accordance with the rating agencies’ particular surveillance policies, unless the issuer requests a rating without surveillance.  A rating agency will monitor the rating it issues on an ongoing basis and may update the rating after conducting its regular review of the issuer’s creditworthiness or after conducting a review of the status of the rating upon becoming aware of any information that might reasonably be expected to result in a change of rating.  The depositor has not requested that any rating agency not monitor their ratings of the certificates, and the depositor has not requested that any rating agency use any monitoring procedures other than their standard monitoring procedures.

LEGAL PROCEEDINGS

[There are no material legal proceedings pending against the Sponsor, the Depositor, the Trustee, the Issuing Entity, the Collateral Agent, [any affiliated Servicer, any 20% concentration unaffiliated Servicer, any 20% concentration Originator], or with respect to which the property of any of the foregoing transaction parties is subject, that are material to the certificateholders.  No legal proceedings against any of the foregoing transaction parties is known to be contemplated by governmental authorities, that are material to the certificateholders.]

AFFILIATIONS, RELATIONSHIPS AND RELATED TRANSACTIONS

[There are no affiliations between the Sponsor, the Depositor or the Issuing Entity and any of [any affiliated Servicer, any 20% concentration unaffiliated Servicer], the Trustee, the Collateral Agent, [any 10% concentration Originator] or [any credit enhancement provider or derivatives counterparty].  There are no affiliations among [any affiliated Servicer, any 20% concentration unaffiliated Servicer], the Trustee, the Collateral Agent, [any 10% concentration Originator] or [any credit enhancement provider or derivatives counterparty].  There are currently no business relationships, agreements, arrangements, transactions or understandings between (a) the Sponsor, the Depositor or the Issuing Entity and (b) any of the parties referred to in the preceding sentence, or any of their respective affiliates, that were entered into outside the normal course of business or that contain terms other than would be obtained in an arm’s lengt h transaction with an unrelated third party and that are material to the investor's understanding of the certificates, or that relate to the certificates or the pooled assets.  No such business relationship, agreement, arrangement, transaction or understanding has existed during the past two years.]

LEGAL MATTERS

Certain legal matters with respect to the Certificates will be passed upon for the Sponsor by [        ].  Certain legal matters with respect to the Certificates will be passed upon for the Underwriter by McKee Nelson LLP, New York, New York.  McKee Nelson LLP also will pass upon the material federal income tax consequences related to the Certificates.

PROSPECTUS

ACE SECURITIES CORP.

Depositor

Asset Backed Certificates

Asset Backed Notes

(Issuable in Series)

Auto Receivables and Receivables Securities Trusts

____________________

The Issuing Entities:

Each issuing entity will be established to hold assets generally consisting of one or more of the following:

1.  One or more pools of

·

motor vehicle installment loan agreements or motor vehicle retail installment sale contracts secured by new and used automobiles, recreational vehicles, including motor homes, campers, motorcycles, all-terrain-vehicles, and snowmobiles, vans, trucks, buses and/or trailers, and security interests in the vehicles financed by the motor vehicle installment loan agreements or retail installment sale contracts,

·

private securities evidencing ownership interests in or secured by loans similar to the types of loans described above;

2.  Government Securities;

3.  All monies due under the above assets, which may be net of amounts payable to the servicer; and

4.  Funds or accounts established for the related issuing entity, or one or more forms of enhancement.

The prospectus supplement for your particular issuing entity specifies the assets in the issuing entity.

The Securities:

ACE Securities Corp. will sell the securities pursuant to a prospectus supplement.  The securities will be grouped into one or more series, each having its own distinct designation.  Each series will be issued in one or more classes and will evidence beneficial ownership of, or be secured by, the assets in the issuing entity that the series relates to.  A prospectus supplement for a series will specify all of the terms of the series and of each of the classes in the series.  The securities represent obligations of the issuing entity only and do not represent an interest in or obligation of the depositor, the sponsor, the servicer or any of their affiliates.

Consider carefully the risk factors beginning on page 6 of this prospectus:

Neither the SEC nor any state securities commission has approved or disapproved the offered securities or determined if this prospectus is accurate or complete. Making any contrary representation is a criminal offense.

<R>The date of this prospectus is February 22, 2007.</R>

IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT

We provide information to you about the securities in two separate documents that progressively provide varying levels of detail:

·

This prospectus, which provides general information, some of which may not apply to a particular series of securities including your series, and

·

The accompanying prospectus supplement, which will describe the specific terms of the offered securities.

Whenever we use words like “intends,” “anticipates” or “expects” or similar words in this prospectus, we are making a forward-looking statement, or a projection of what we think will happen in the future.  Forward-looking statements are inherently subject to a variety of circumstances, many of which are beyond our control and could cause actual results to differ materially from what we anticipate.  Any forward-looking statements in this prospectus speak only as of the date of this prospectus.  We do not assume any responsibility to update or review any forward-looking statement contained in this prospectus to reflect any change in our expectation about the subject of that forward-looking statement or to reflect any change in events, conditions or circumstances on which we have based any forward-looking statement.

TABLE OF CONTENTS

Risk Factors

6

The Issuing Entities

10

The Trustee

12

The Sponsor

12

The Depositor

12

The Receivables Pools

13

Delinquencies, Repossessions and Net Losses

15

New and Used Financed Vehicles

15

Static Pool Data

15

The Collateral Certificates

16

Enhancement Relating to Collateral Certificates

17

Additional Information

17

The Government Securities

18

Treasury Bonds

19

Treasury Strips

19

GSE Bonds

20

Private Label Custody Receipt Securities

24

Weighted Average Life of the Securities

27

Pool Factors and Trading Information

28

The Seller and the Servicer

29

Use of Proceeds

29

Description of the Notes

29

Distribution of Principal and Interest

30

Revolving Period

31

Provisions of the Indenture

31

The Indenture Trustee

36

Description of the Certificates

36

Distributions of Principal and Interest

37

Certain Information Regarding the Securities

38

Book-Entry Registration

38

Definitive Securities

40

Statements to Securityholders

41

List of Securityholders

42

Description of the Transfer and Servicing Agreements

43

Sale and Assignment of Primary Assets

43

Trust Accounts

45

Pre-Funding

46

Servicing Procedures

48

Collections

48

Advances

49

Net Deposits

50

Servicing Compensation and Payment Of Expenses

50

Distributions

51

Credit and Cash Flow Enhancement

51

Evidence as to Compliance

53

Statements to trustees and the Trust

54

Certain Matters Regarding the Servicer

54

Servicer Defaults

55

Rights Upon Servicer Default

55

Waiver of Past Defaults

56

Amendment

56

Payment in Full of the notes

57

Termination

57

Certain Legal Aspects of the Receivables

58

Security Interests in Financed Vehicles

58

Repossession

60

Notice of Sale; Redemption Rights

60

Deficiency Judgments and Excess Proceeds

61

Consumer Protection Laws

61

Other Limitations

62

Material Federal Income Tax Consequences

63

Trusts That Issue Notes

63

Grantor Trusts

80

Penalty Avoidance

87

ERISA Considerations

87

General

87

ERISA Considerations Relating to Certificates

88

ERISA Considerations Relating to Notes

93

Plan of Distribution

94

Legal Matters

95

Prospectus Supplement

96

Reports to Securityholders

96

Available Information

96

Incorporation of Certain Documents by Reference

97

Rating

98

INDEX OF TERMS

99

Initial Settlement

105

Secondary Market Trading

106

Certain U.S. Federal Income Tax Documentation Requirements

108

Risk Factors

The following information, which you should carefully consider, identifies certain significant sources of risk associated with an investment in the certificates and the notes.  You should also carefully consider the information set forth under “Risk Factors” in the prospectus supplement.

Limited Liquidity May Result in Delays in your Ability to Sell securities or Lower Returns	There will be no market for the securities of any series prior to their issuance, and there can be no assurance that a secondary market will develop.  If a secondary market does develop, there can be no assurance that it will provide holders with liquidity of investment or that the market will continue for the life of the securities of the related series.  Deutsche Bank Securities Inc. presently expects to make a secondary market in the securities, but has no obligation to do so.  Absent a secondary market for the securities you may experience a delay if you choose to sell your securities or the price you receive may be less than you would receive for a comparable liquid security.
Limited Assets for Payments - No Recourse to depositor, Seller or Servicer	The depositor does not have, nor is it expected to have, any significant assets.  The securities of a series will be payable solely from the assets of the issuing entity’s trust fund for that series. Except for any related insurance policies or credit support, there will be no recourse to the depositor or any other person for any default on the notes or any failure to receive distributions on the certificates with respect to any series.  Consequently, holders of securities of each series must rely solely upon payments with respect to the assets constituting the issuing entity’s trust fund for a series of securities, including, if applicable, any amounts available pursuant to any enhancement for that series, for the payment of principal of and interest on the securities of that series. The only obligations, if any, of the depositor with respect to the securities of any series will be with respect to its breach of specific representations and warranties.  The depositor does not have, and is not expected in the future to have, any significant assets with which to meet any obligation to repurchase assets with respect to which there has been a breach of any representation or warranty.  If, for example, the depositor were required to repurchase a receivable, its only sources of funds to make the repurchase would be from funds obtained from the enforcement of a corresponding obligation, if any, on the part of the originator of the receivable, or the seller, as the case may be, or from a reserve fund established to provide funds for repurchases.  If the depositor does not have sufficient assets and no other party is obligated to repurchase defective assets, you may experience a loss.
Limits on Enhancement May Result in Losses to You	Although we intend the enhancement for the securities to reduce the risk of delinquent payments or losses to holders of a series of securities entitled to the benefit of the enhancement, the amount of the enhancement will be limited, as set forth in the related prospectus supplement.  In addition, the amount available will decline and could be depleted prior to the payment in full of the related series of securities, and losses on the primary assets could result in losses to holders of those securities.
Timing and Rate of Prepayments May Result in Lower Yield	The yield to maturity experienced by a holder of securities may be affected by the rate and timing of payments of principal of the receivables or of the underlying receivables relating to the private securities.  The rate and timing of principal payments of the securities of a series will be affected by a number of factors, including the following: · the extent of prepayments, which may be influenced by a variety of factors, · the manner of allocating principal payments among the classes of securities of a series as specified in the related prospectus supplement, and · the exercise of any right of optional termination. Prepayments may also result from repurchases of receivables or underlying receivables, as applicable, due to material breaches of the seller’s or the depositor’s representations or warranties. Interest payable on the securities of a series on a distribution date will include all interest accrued during the period specified in the related prospectus supplement.  In the event interest accrues during the calendar month prior to a distribution date, the effective yield to holders will be reduced from the yield that would otherwise be obtainable if interest payable on the security were to accrue through the day immediately preceding each distribution date, and the effective yield at par to holders will be less than the indicated coupon rate.
Risks of Subordinated Securities	To the extent specified in the applicable prospectus supplement, distributions of interest on and principal of one or more classes of securities of a series may be subordinated in priority of payment to interest and principal due on one or more other classes of securities of the related series.  Any subordinated securities will be affected to a greater degree by any losses on the receivables or of the underlying receivables relating to the private securities.
Potential Lack of Security	The depositor will assign security interests in the financed vehicles securing the receivables to the related issuing entity. Due to administrative burden and expense, however, we will not cause the certificates of title to the financed vehicles to be amended to reflect the assignment to the issuing entity unless otherwise specified in the prospectus supplement. In the absence of amendment, an issuing entity may not have a perfected security interest in the financed vehicles securing the receivables in some states. If an issuing entity does not have a perfected security interest in a financed vehicle, its ability to realize in the event of a default on that financed vehicle may be adversely affected.   To the extent that the issuing entity’s security interest in a financed boat is perfected, the issuing entity will have a prior claim over subsequent purchasers of such financed boat and holders of subsequently perfected security interests in such financed boat.  Under the laws of many states, certain possessory liens for repairs on a boat and storage, as well as certain rights in favor of federal and state governmental authorities arising from the use of a boat in connection with illegal activities, may take priority even over a perfected security interest.  Under the Ship Mortgage Statutes, certain preferred maritime liens will have priority over security interests in financed boats perfected under federal law.  Certain federal tax liens may have priority over the lien of a secured party. In addition, through fraud or negligence, the issuing entity could lose its security interest or the priority of its secu rity interest in a financed boat.  If a security interest in a financed boat is initially perfected (by titling or UCC filing) under applicable state law and the financed boat subsequently is federally documented, the issuing entity could lose the priority of its security interest in such financed boat to a purchaser thereof or to the holder of a subsequently perfected Preferred Mortgage covering such financed boat.  See “Certain Legal Aspects of the Receivables--Security Interests in the Financed Vehicles.”  ACE Securities Corp. shall not have an obligation to repurchase a contract as to which any of the aforementioned occurrences result in the issuing entity’s losing the priority of its security interest or its security interest in such financed boat after the date such security interest was conveyed to the issuing entity.
Risk of Commingling	We will require the servicer to deposit all payments on the receivables collected during each collection period into the related collection account within two business days of receipt of the payments.  However, if a servicer satisfies particular requirements for less frequent remittances we will not require the servicer to deposit the amounts into the collection account until the business day preceding each distribution date. Pending deposit into the collection account, collections may be invested by the servicer at its own risk and for its own benefit and will not be segregated from funds of the servicer. If the servicer were unable to remit the funds, the applicable securityholders might incur a loss. To the extent set forth in the related prospectus supplement, the servicer may, in order to satisfy the requirements described above, obtain a letter of credit or other security for the benefit of the related issuing entity to secure timely remittances of collections on the receivables.
Removal of a Servicer After a Servicer Default	The related prospectus supplement may provide that with respect to a series of securities issued by an owner trust, upon the occurrence of a servicer default, the related indenture trustee or noteholders may remove the servicer without the consent of the related trustee or any certificateholders. The trustee or the certificateholders with respect to a series may not have the ability to remove the servicer if a servicer default occurs. In addition, the noteholders with respect to a series have the ability, with specified exceptions, to waive defaults by the servicer, including defaults that could materially adversely affect the certificateholders of the series.
Book-Entry Registration--Beneficial Owners Not Recognized by Trust	Issuance of the securities in book-entry form may reduce the liquidity of these securities in the secondary trading market since investors may be unwilling to purchase securities for which they cannot obtain physical certificates.  Since transactions in the securities can be effected only through The Depository Trust depositor and any other entities set forth in the related prospectus supplement, your ability to pledge a security to persons or entities that do not participate in The Depository Trust depositor or any other entities or otherwise to take actions in respect of the related securities may be limited due to lack of a physical certificate representing the securities. You may experience some delay in the receipt of distributions of interest and principal on the securities since the distributions will be forwarded by the trustee to The Depository Trust depositor and The Depository Trust depositor will credit the distributions to the accounts of its participants which will subsequently credit them to your account either directly or indirectly through indirect participants.
You may be unable to reinvest distributions in comparable investments.	Asset backed securities, like the securities, usually produce more returns of principal to investors when market interest rates fall below the interest rates on the receivables and produce less returns of principal when market interest rates are above the interest rates on the receivables. As a result, you are likely to receive more money to reinvest at a time when other investments generally are producing a lower yield than that on the securities, and are likely to receive less money to reinvest when other investments generally are producing a higher yield than that on the securities.  You will bear the risk that the timing and amount of distributions on your securities will prevent you from attaining your desired yield.
Withdrawal or downgrading of initial ratings will reduce the prices for securities.	A security rating is not a recommendation to buy, sell or hold securities.  Similar ratings on different types of securities do not necessarily mean the same thing.  You are encouraged to analyze the significance of each rating independently from any other rating.  Any rating agency may change its rating of the securities after those securities are issued if that rating agency believes that circumstances have changed.  Any subsequent change in rating will likely reduce the price that a subsequent purchaser will be willing to pay for the securities.
The securities are not suitable investments for all investors.	The securities are not a suitable investment for any investor that requires a regular or predictable schedule of payments or payment on any specific date.  The securities are complex investments that should be considered only by investors who, either alone or with their financial, tax and legal advisors, have the expertise to analyze the prepayment, reinvestment, default and market risk, the tax consequences of an investment, and the interaction of these factors.

The Issuing Entities

With respect to each series of securities, ACE Securities Corp. as depositor (the “depositor”) will establish a separate issuing entity that is a trust (each, referred to as an “issuing entity” or a “Trust”) pursuant to a trust agreement (a “Trust Agreement”) between the depositor and the related trustee or pooling and servicing agreement (a “Pooling and Servicing Agreement”) among the depositor, the servicer and the trustee for the related Trust, as applicable, for the transactions described in this prospectus and in the related prospectus supplement. The property of each issuing entity will include Primary Assets and all payments due under the Primary Assets on and after the applicable cutoff date in the case of Precomputed Receivables and all payments received under the Precomputed Receivables on and after the applicable cutoff date or closing date, as specifi ed in the related prospectus supplement, in the case of Simple Interest Receivables, Collateral Certificates, Government Securities and Private Label Custody Receipt Securities. On the applicable closing date, after the issuance of the notes and/or certificates of a given series, the depositor will transfer or sell Primary Assets to the issuing entity in the outstanding principal amount specified in the related prospectus supplement. The property of each issuing entity may also include:

·

amounts as from time to time may be held in separate trust accounts established and maintained pursuant to the related Trust Agreement, sale and servicing agreement (a “Sale and Servicing Agreement”) among the depositor, the servicer and the related issuing entity or Pooling and Servicing Agreement, as applicable, and the proceeds of these accounts, as described in this prospectus and in the related prospectus supplement;

·

security interests in vehicles financed by the Receivables (the “Financed Vehicles”) and any other interest of a seller in the Financed Vehicles;

·

the rights to proceeds from claims on physical damage, credit life and disability insurance policies covering Financed Vehicles or the obligors, as the case may be;

·

any property that has secured a Receivable and that has been acquired by the applicable issuing entity; and

·

any and all proceeds of the Primary Assets or the foregoing.

To the extent specified in the related prospectus supplement, a Reserve Account or other form of credit enhancement may be a part of the property of a given issuing entity or may be held by the trustee for the benefit of holders of the related securities.

The servicer specified in the related prospectus supplement, as servicer under the Pooling and Servicing Agreement or Sale and Servicing Agreement, as applicable, will service the Receivables held by each issuing entity and will receive fees for these services. See “Description of the Transfer and Servicing Agreements—Servicing Compensation and Payment of Expenses” in this prospectus and “Description of the Transfer and Sale and Servicing Agreement—Servicing Compensation” in the related prospectus supplement. To facilitate the servicing of Receivables and unless otherwise specified in the related prospectus supplement, each seller and each trustee will authorize the servicer to retain physical possession of the Receivables held by each issuing entity and other documents relating to possession of the Receivables as custodian for each issuing entity. Due to the administrative burden a nd expense, the certificates of title to the Financed Vehicles will not be amended to reflect the sale and assignment of the security interest in the Financed Vehicles to an issuing entity. In the absence of an amendment, an issuing entity may not have a perfected security interest in some of the Financed Vehicles in some states. See “Certain Legal Aspects of the Receivables” and “Description of the Transfer and Servicing Agreements—Sale and Assignment of Primary Assets”. In the case of Primary Assets consisting of Collateral Certificates, Government Securities and/or Private Label Custody Receipt Securities, the trustee specified in the related prospectus supplement will manage the Collateral Certificates, Government Securities and/or Private Label Custody Receipt Securities.

If the protection provided to (1) holders of notes issued by an owner trust by the subordination of the related certificates and by the Reserve Account, if any, or any other available form of credit enhancement for the series or (2) certificateholders by any Reserve Account or other form of credit enhancement is insufficient, the noteholders or certificateholders, as the case may be, will have to look to payments by or on behalf of obligors on Receivables or on the Collateral Certificates, the Government Securities, and the Private Label Custody Receipt Securities, as applicable, and the proceeds from the repossession and sale of Financed Vehicles that secure defaulted Receivables for distributions of principal and interest on the securities. In this event, some factors, such as the applicable issuing entities not having perfected security interests in all of the Financed Vehicles, may limit the ability of an is suing entity to realize on the collateral securing the related Primary Assets, or may limit the amount realized to less than the amount due under Receivables. Securityholders may be subject to delays in payment on, or may incur losses on their investment in, the securities as a result of defaults or delinquencies by obligors and depreciation in the value of the related Financed Vehicles. See “Description of the Transfer and Servicing Agreements—Credit and Cash Flow Enhancement” and “Certain Legal Aspects of the Receivables”.

The principal offices of each issuing entity and the related trustee will be specified in the applicable prospectus supplement.

The Trustee

The trustee for each Trust will be specified in the related prospectus supplement. The trustee’s liability in connection with the issuance and sale of the related securities is limited solely to the express obligations of the trustee set forth in the related Trust Agreement and Sale and Servicing Agreement or the related Pooling and Servicing Agreement, as applicable. A trustee may resign at any time, in which event the servicer will be obligated to appoint a successor trustee. The servicer may also remove the related trustee if the trustee ceases to be eligible to continue as trustee under the related Trust Agreement or Pooling and Servicing Agreement, as applicable, and will be obligated to appoint a successor trustee. Any resignation or removal of a trustee and appointment of a successor trustee will not become effective until the acceptance of the appointment by the successor trustee.

The Sponsor

The sponsor will be DB Structured Products, Inc., a Delaware corporation, referred to herein as the Sponsor, for each series of securities unless otherwise indicated in the related prospectus supplement.  The Sponsor maintains its principal office at 60 Wall Street, New York, New York  10005.  Its telephone number is (212) 250-2500.

With respect to any series of securities, if so specified in the related prospectus supplement, the Sponsor will also act as servicer or master servicer for the mortgage pool.  If so, the Sponsor will service the Designated Mortgage Assets in accordance with the description of the applicable servicing procedures contained in this prospectus under “Description of the Securities.”

The Depositor

ACE Securities Corp., the depositor, is a special purpose corporation incorporated in the State of Delaware on June 3, 1998.  The principal executive offices of the depositor are located at 6525 Morrison Boulevard, Suite 318, Charlotte, North Carolina 28211.  Its telephone number is (704) 365-0569.  The depositor does not have, nor is it expected in the future to have, any significant assets.

The limited purposes of the depositor are, in general, to acquire, own and sell mortgage loans and financial assets; to issue, acquire, own, hold and sell securities and notes secured by or representing ownership interests in mortgage loans and other financial assets, collections on the mortgage loans and related assets; and to engage in any acts that are incidental to, or necessary, suitable or convenient to accomplish, these purposes.

All of the shares of capital stock of the depositor are held by Altamont Holdings Corp., a Delaware corporation.

The Receivables Pools

The motor vehicle installment loan agreements or motor vehicle retail installment sale contracts secured by new and used automobiles, recreational vehicles, including motor homes, campers, motorcycles, all-terrain-vehicles and snowmobiles, vans, trucks, buses and/or trailers (the “Receivables”) in a Receivables Pool have been or will be originated or acquired by a seller in the ordinary course of business, in accordance with its credit and underwriting standards as described in the related prospectus supplement.

The Receivables to be sold to each issuing entity will be selected from a seller’s portfolio for inclusion in a Receivables Pool based on rating agency criteria, compliance with representations and warranties, and conformity to criteria relating to the characterization of the Certificates and Notes for tax, ERISA, Form S-3 eligibility and any other criteria specified in the related prospectus supplement.  Each Receivable

·

is secured by a new or used vehicle,

·

was originated or acquired, either from a motor vehicle dealer or a financial institution, by the seller,

·

provides for level monthly payments, except for the last payment, which may be different from the level payments, that, unless otherwise provided in the related prospectus supplement, amortize the amount financed over the original term to maturity of the related Receivable,

·

is a Precomputed Receivable or a Simple Interest Receivable and

·

satisfies the other criteria, if any, set forth in the related prospectus supplement. No selection procedures believed by the seller to be adverse to Securityholders were or will be used in selecting the Receivables.

“Precomputed Receivables” consist of either (1) monthly actuarial receivables (“Actuarial Receivables”) or (2) receivables that provide for allocation of payments according to the “sum of periodic balances” or “sum of monthly payments” method, similar to the “Rule of 78s” (“Rule of 78S Receivables”). An Actuarial Receivable provides for amortization of the loan over a series of fixed level monthly installment payments. Each monthly installment, including the monthly installment representing the final payment on the Receivable, consists of (x) an amount of interest equal to 1/12 of the stated contract interest rate under the related Receivable multiplied by the unpaid principal balance of the loan, plus (y) an amount allocable to principal equal to the remainder of the monthly payment. A Rule of 78s Receivable provides for the payment by the obligor of a specified total amount of payments, payable in equal monthly installments on each due date, which total represents the principal amount financed plus add-on interest in an amount calculated at the stated contract interest rate under the related Receivable for the term of the receivable. The rate at which the amount of add-on interest is earned and, correspondingly, the amount of each fixed monthly payment allocated to reduction of the outstanding principal amount are calculated in accordance with the Rule of 78s.

“Simple Interest Receivables” are receivables that provide for the amortization of the amount financed under them over a series of fixed level monthly payments. However, unlike the monthly payment under an Actuarial Receivable, each monthly payment consists of an installment of interest that is calculated on the basis of the outstanding principal balance of the receivable multiplied by the stated contract interest rate under the related Receivable and further multiplied by the period elapsed, as a fraction of a calendar year, since the preceding payment of interest was made. As payments are received under a Simple Interest Receivable, the amount received generally is applied first to interest accrued to the date of payment and the balance is applied to reduce the unpaid principal balance.  Accordingly, if an obligor pays a fixed monthly installment before its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be less than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly greater. Conversely, if an obligor pays a fixed monthly installment after its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be greater than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly less. In either case, the obligor is obligated to pay a fixed monthly installment until the final scheduled payment date, at which time the amount of the final installment may be increased or decreased as necessary to repay the then outstanding principal balance.

In the event of the prepayment in full, voluntarily or by acceleration, of a Rule of 78s Receivable, under the terms of the contract a “refund” or “rebate” will be made to the obligor of the portion of the total amount of payments then due and payable allocable to “unearned” add-on interest, calculated in accordance with a method equivalent to the Rule of 78s. If an Actuarial Receivable is prepaid in full, with minor variations based upon state law, the Actuarial Receivable requires that the rebate be calculated on the basis of a constant interest rate. If a Simple Interest Receivable is prepaid, rather than receive a rebate, the obligor is required to pay interest only to the date of prepayment. The amount of a rebate under a Rule of 78s Receivable generally will be less than the amount of a rebate on an Actuarial Receivable and generally will be less than the remaining scheduled p ayments of interest that would have been due under a Simple Interest Receivable for which all payments were made on schedule.

To the extent provided in the related prospectus supplement, each issuing entity will account for the Rule of 78s Receivables as if the Receivables were Actuarial Receivables. Amounts received upon prepayment in full of a Rule of 78s Receivable in excess of the then outstanding principal balance of the Receivable and accrued interest on the Receivable, calculated pursuant to the actuarial method, will not be paid to noteholders or passed through to certificateholders of the applicable series, but will be paid to the servicer as additional servicing compensation.

Information with respect to each Receivables Pool will be set forth in the related prospectus supplement, including, to the extent appropriate, the composition and distribution by annual percentage rate and by states of origination of the Receivables, the portion of each Receivables Pool consisting of Precomputed Receivables and of Simple Interest Receivables, and the portion of each Receivables Pool secured by new vehicles and by used vehicles.

Delinquencies, Repossessions and Net Losses

Information concerning the experience of a seller pertaining to delinquencies, repossessions and net losses with respect to Receivables will be set forth in each prospectus supplement. There can be no assurance that the delinquency, repossession and net loss experience on any Receivables Pool will be comparable to prior experience or to the information.

New and Used Financed Vehicles

The extension of credit to an obligor on a Receivable is based on an assessment of an applicant’s ability to repay the amounts due on the Receivable and the adequacy of the related Financed Vehicle. An assessment generally does not distinguish between new or used vehicles. Rather, the amount advanced under a motor vehicle loan generally will not exceed 100% of the value of the collateral unless otherwise specified in the related prospectus supplement. For new motor vehicles, the value equals the dealer invoice for the motor vehicle that serves as collateral, plus sales tax, license fee, title fee, the cost of service and warranty contracts, and any premium for credit life and disability insurance obtained in connection with the loan. For used motor vehicles, the value equals the wholesale price reported in the most recent edition of the National Automotive dealers Association Used Car Guide, the National Au to Research Division Black Book or any other industry guide as specified in the related prospectus supplement, plus sales tax, license fee, title fee, the cost of service and warranty contracts, and any premium for credit life and disability insurance obtained in connection with the loan. The maximum age of any used motor vehicle acceptable as collateral generally is ten model years. Additional information with respect to delinquencies, repossessions and net losses with respect to Receivables secured by new or used Financed Vehicles will be set forth in each prospectus supplement.

Static Pool Data

If specified in the related prospectus supplement, static pool data with respect to the delinquency, cumulative loss and prepayment data for each issuing entity will be made available through a website.  The prospectus supplement related to each series for which the static pool data is provided through a website will contain the website address to obtain this information.  Except as stated below, the static pool data provided through any website will be deemed part of this prospectus and the registration statement of which this prospectus is a part from the date of the related prospectus supplement.  

Notwithstanding the foregoing, the following information shall not be deemed part of the prospectus or the registration statement of which this prospectus is a part:

·

with respect to information regarding prior securitized pools of the depositor that do not include the currently offered pool, information regarding prior securitized pools that were established before January 1, 2006; and

·

with respect to information regarding the pool described in the related prospectus supplement, information about the pool for periods before January 1, 2006.

Copies of the static pool data presented on a website and deemed part of this prospectus may be obtained upon written request by the securityholders of the related series at the address specified in the related prospectus supplement.  Copies of information related to the period prior to January 1, 2006 may also be obtained upon written request.

The Collateral Certificates

The primary assets (“Primary Assets”) for a series will include Receivables or Collateral Certificates, which include certificates evidencing an undivided interest in, or notes or loans secured by, Receivables. These Collateral Certificates will have previously been offered and distributed to the public pursuant to an effective registration statement or are being registered under the securities Act in connection with the offering of a series of securities, which offering, distribution and registration may have been undertaken, or may be undertaken, by the depositor and/or one or more affiliates of the depositor, in each case, subject to exceptions which, if applicable, will be described in the related prospectus supplement. Collateral Certificates will have been issued pursuant to a pooling and servicing agreement, a sale and servicing agreement, a trust agreement, an indenture or similar agreement (an “Underlying Trust Agreement”).  The servicer (the “Underlying Servicer”) of the underlying motor vehicle installment loans or sale contracts will have entered into the Underlying Trust Agreement with a trustee (the “Underlying Trustee”).

The issuer of the Collateral Certificates (the “Underlying Issuer”) will be

·

a financial institution, corporation or other entity engaged generally in the business of purchasing or originating motor vehicle installment loan agreements and motor vehicle retail installment sale contracts,

·

a limited purpose corporation organized for the purpose of, among other things, establishing trusts, acquiring and selling receivables to the trusts and selling beneficial interests in these trusts, or

·

one of the trusts.

If so specified in the related prospectus supplement, the Underlying Issuer may be the depositor and/or one or more affiliates of the depositor.  The obligations of the Underlying Issuer will generally be limited to specific representations and warranties with respect to the assets conveyed by it to the related issuing entity. The related prospectus supplement will, subject to exceptions which, if applicable, will be described in the related prospectus supplement, provide that the Underlying Issuer will not have guaranteed any of the assets conveyed to the related issuing entity or any of the Collateral Certificates issued under the Underlying Trust Agreement.

Distributions of principal and interest will be made on the Collateral Certificates on the dates specified in the related prospectus supplement. The Collateral Certificates may be entitled to receive nominal or no principal distribution or nominal or no interest distributions. Principal and interest distributions will be made on the Collateral Certificates by the Underlying Trustee or the Underlying Servicer. The Underlying Issuer or the Underlying Servicer may have the right to repurchase assets underlying the Collateral Certificates after a specific date or under other circumstances specified in the related prospectus supplement.

Enhancement Relating to Collateral Certificates

Enhancement only in the form of reserve funds, subordination of other securities issued in connection with the Collateral Certificates, guarantees, letters of credit, cash collateral accounts, insurance policies may be provided with respect to the Receivables underlying the Collateral Certificates or with respect to the Collateral Certificates themselves. The type, characteristics and amount of enhancement will be a function of particular characteristics of the Receivables and other factors and will have been established for the Collateral Certificates on the basis of requirements of rating agencies.

Additional Information

The related prospectus supplement for a series for which the Primary Assets include Collateral Certificates will specify, to the extent relevant and to the extent the information is reasonably available to the depositor and the depositor reasonably believes the information to be reliable:

·

the aggregate approximate principal amount and type of the Collateral Certificates to be included in the Primary Assets;

·

the characteristics of the receivables which comprise the underlying assets for the Collateral Certificates;

·

the expected and final maturity of the Collateral Certificates;

·

the interest rate of the Collateral Certificates;

·

the Underlying Issuer, the Underlying Servicer, if other than the Underlying Issuer, and the Underlying Trustee for the Collateral Certificates;

·

characteristics of the enhancement, if any, such as reserve funds, insurance funds, insurance policies, letters of credit or guarantees relating to the receivables underlying the Collateral Certificates or to the Collateral Certificates themselves;

·

the terms on which the underlying receivables for the Collateral Certificates may, or are required to, be purchased prior to their stated maturity or the stated maturity of the Collateral Certificates; and

·

the terms on which receivables may be substituted for those originally underlying the Collateral Certificates.

The Government Securities

Primary Assets for a series may include, but will not consist entirely of, any combination of

·

receipts or other instruments created under the Department of the Treasury’s Separate Trading of Registered Interest and Principal of securities, or STRIPS, program (“Treasury Strips”), which interest and/or principal strips evidence ownership of specific interest and/or principal payments to be made on particular United States Treasury Bonds (“Treasury Bonds”),

·

Treasury Bonds and

·

other debt securities (“GSEs Bonds”) of United States government sponsored enterprises (“GSEs”; and together with Treasury Strips and Treasury Bonds, collectively, “Government Securities”).

The Government Securities, if any, included in an issuing entity are intended to assure investors that funds are available to make specified payments of principal and/or interest due on the related securities. Accordingly, the Government Securities, if any, included in an issuing entity are intended both to (1) support the ratings assigned to these securities, and (2) perform a function similar to that described in this prospectus under “Description of the Transfer and Servicing Agreements—Credit and Cash Flow Enhancement”.  A description of the respective general features of Treasury Bonds, Treasury Strips and GSE Bonds is set forth below.

The prospectus supplement for each series of securities the issuing entity with respect to which contains Government Securities will contain information as to:

(1)

the title and series of each Government Security, the aggregate principal amount, denomination and form of each Government Security;

(2)

the limit, if any, upon the aggregate principal amount of the Government Security;

(3)

the dates on which, or the range of dates within which, the principal of, and premium, if any, on, the Government Security will be payable;

(4)

the rate or rates, or the method of determination of the rate or rates, at which the Government Security will bear interest, if any, the date or dates from which the interest will accrue, and the dates on which the interest will be payable;

(5)

whether the Government Security was issued at a price lower than the principal amount of that Government Security;

(6)

material events of default or restrictive covenants provided for with respect to the Government Security;

(7)

the rating of the Government Security, if any;

(8)

the issuer of each Government Security;

(9)

the material risks, if any, posed by any Government Securities and issuers of the Government Securities (which risks, if appropriate, will be described in the “Risk Factors” section of the related prospectus supplement); and

(10)

any other material terms of the Government Security.

With respect to a Trust which includes a pool of Government Securities, the related prospectus supplement will, to the extent applicable, describe the composition of the Government Securities’ pool, particular material events of default or restrictive covenants common to the Government Securities, and, on an aggregate, percentage or weighted average basis, as applicable, the characteristics of the pool with respect to the terms set forth in (3), (4) and (5) of the preceding sentence and any other material terms regarding the pool. The Government Securities included in an issuing entity will be senior, unsecured, nonredeemable obligations of the issuer of the Government Securities, will be denominated in United States dollars and, if rated, will be rated at least investment grade by at least one nationally recognized rating agency. In addition, the inclusion of Government Securities in an issuing entity with respect to a seri es of securities is conditioned upon their characteristics being in form and substance satisfactory to the Rating Agency rating the related series of securities.

Treasury Bonds

Treasury Bonds are issued by and are the obligations of the United States of America. Accordingly, the payment of principal and interest on each Treasury Bond will be guaranteed by the full faith and credit of the United States of America. Interest is typically payable on the Bonds semiannually. Treasury Bonds are issued in registered form in denominations of $1,000, $5,000, $10,000, $100,000 and $1,000,000 and in book-entry form in integral multiples of these amounts.

Treasury Strips

In general, Treasury Strips are created by separating, or stripping, the principal and interest components of Treasury Bonds that have an original maturity of 10 or more years from the date of issue. A particular Treasury Strip evidences ownership of the principal payment or one of the periodic interest payments, generally semiannual, due on the Treasury Bond to which the Treasury Strip relates.

In 1985 the Department of the Treasury announced that all new issues of Treasury Bonds with maturities of 10 years or more would be transferable in their component pieces on the Federal Reserve wire system. In so doing, the Treasury created a generic, book-entry Treasury Strip named STRIPS (Separate Trading of Registered Interest and Principal of Securities) which, unlike private label Treasury Strips, can be issued without the need for a custodial arrangement. The STRIPS program has eclipsed the private sector programs (which are described below under “—Private Label Custody Receipt Securities”), and investment banks no longer sponsor new issues of custodial receipts.

Treasury Strips may be either “serial” or “callable”. A serial Treasury Strip evidences ownership of one of the periodic interest payments to be made on a Treasury Bond. No payments are made on the Treasury Strip, nor is it redeemable, prior to its maturity, at which time the holder becomes entitled to receive a single payment of the face amount of the Treasury Strip. Callable Treasury Strips relate to payments scheduled to be made after the related Treasury Bonds have become subject to redemption. These Treasury Strips evidence ownership of both principal of the related Treasury Bonds and each of the related interest payments commencing, typically, on the first interest payment date following the first optional redemption date. If the underlying Treasury Bonds are actually redeemed, holders of callable Treasury Strips generally receive a payment equal to the principal portion of the total fa ce amount of the Treasury Strips plus the interest payment represented by the Treasury Strips maturing on the redemption date. No callable Treasury Strips will be included in a Trust. The face amount of any Treasury Strip is the aggregate of all payments scheduled to be received on the Treasury Strip. Treasury Strips are available in registered form and generally may be transferred and exchanged by the holders of the Treasury Strips in accordance with procedures applicable to the particular issue of the Treasury Strips.

A holder of a private label Treasury Strip, as opposed to a STRIP, cannot enforce payment on that Treasury Strip against the Treasury. Instead, the holder must look to the custodian for payment. The custodian, and the holder of a Treasury Strip that obtains ownership of the underlying Treasury Bond, can enforce payment of the underlying Treasury Bond against the Treasury. If any private label Treasury Strips are included in a Trust with respect to any series of securities, the prospectus supplement for the series will include the identity and a brief description of each custodian that issued the Treasury Strips. If the depositor knows that the depositor of the Treasury Bonds underlying the Treasury Strips is the depositor or any of its affiliates, the depositor will disclose that fact in the related prospectus supplement.

GSE Bonds

As specified in the applicable prospectus supplement, the obligations of one or more of the following GSEs may be included in a Trust: Federal National Mortgage Association (“Fannie Mae”), Federal Home Loan Mortgage Association (“Freddie Mac”), REFCO, Tennessee Valley Authority (“TVA”), Federal Home Loan Banks (“FHLB”), to the extent the obligations represent the joint and several obligations of the twelve Federal Home Loan Banks, and Federal Farm Credit Banks (“FFCB”). GSE debt securities are exempt from registration under the securities Act pursuant to Section 3(a)(2) of the securities Act, or are deemed by statute to be so exempt, and are not required to be registered under the Exchange Act. The securities of any GSE, including a GSE Guaranteed Bond, will be included in a Trust only to the extent that (1) its obligations are supported by the full faith and cre dit of the United States government or (2) the organization makes publicly available its annual report which shall include financial statements or similar financial information with respect to the organization (a “GSE Issuer”). Unless otherwise specified in the related prospectus supplement, the GSE Bonds will not be guaranteed by the United States and do not constitute a debt or obligation of the United States or of any agency or instrumentality of the United States other than the related GSE.

Unless otherwise specified in the related prospectus supplement, none of the GSE Bonds will have been issued pursuant to an indenture, and no trustee is provided for with respect to any GSE Bonds. There will generally be a fiscal agent (“Fiscal Agent”) for an issuer of GSE Bonds whose actions will be governed by a fiscal agency agreement. A Fiscal Agent is not a trustee for the holders of the GSE Bonds and does not have the same responsibilities or duties to act for the holders as would a trustee.

GSE Bonds may be subject to particular contractual and statutory restrictions which may provide some protection to securityholders against the occurrence or effects of specified events. Unless otherwise specified in the related prospectus supplement, each GSE is limited to activities as will promote its statutory purposes as set forth in the publicly available information with respect to the issuer. A GSE’s promotion of its statutory purposes, as well as its statutory, structural and regulatory relationships with the federal government, may cause or require the GSE to conduct its business in a manner that differs from what an enterprise which is not a GSE might employ.

The Federal National Mortgage Association

Fannie Mae is a federally chartered and stockholder owned corporation organized and existing under the Federal National Mortgage Association Charter Act. It is the largest investor in home mortgage loans in the United States. Fannie Mae originally was established in 1938 as a corporation wholly owned by the United States government to provide supplemental liquidity to the mortgage market and was transformed into a stockholder owned and privately managed corporation by legislation enacted in 1968 and 1970. Fannie Mae provides funds to the mortgage market by purchasing mortgage loans from lenders, thus replenishing their funds for additional lending. Fannie Mae acquires funds to purchase loans from many capital market investors that ordinarily may not invest in mortgage loans, therefore expanding the total amount of funds available for housing. Operating nationwide, Fannie Mae helps to redistribute mortgage funds from capital-surplus to capital-short areas. Fannie Mae also issues mortgage-backed securities (“MBS”). Fannie Mae receives guaranty fees for its guaranty of timely payment of principal of and interest on MBS. Fannie Mae issues MBS primarily in exchange for pools of mortgage loans from lenders. The issuance of MBS enables Fannie Mae to further its statutory purpose of increasing the liquidity of residential mortgage loans.

Fannie Mae prepares an Information Statement annually which describes Fannie Mae, its business and operations and contains Fannie Mae’s audited financial statements. From time to time Fannie Mae prepares supplements to its Information Statement which include specific unaudited financial data and other information concerning the business and operations of Fannie Mae.

The Federal Home Loan Mortgage Corporation

Freddie Mac is a publicly held government-sponsored enterprise created on July 24, 1970 pursuant to the Federal Home Loan Mortgage Corporation Act, Title III of the Emergency Home Finance Act of 1970, as amended (the “FHLMC Act”). Freddie Mac’s statutory mission is to provide stability in the secondary market for home mortgages, to respond appropriately to the private capital market and to provide ongoing assistance to the secondary market for home mortgages, including mortgages secured by housing for low- and moderate-income families involving a reasonable economic return to Freddie Mac, by increasing the liquidity of mortgage investments and improving the distribution of investment capital available for home mortgage financing. The principal activity of Freddie Mac consists of the purchase of conventional residential mortgages and participation interests in those mortgages from mortgage lending institutions and the sale of guaranteed mortgage securities backed by the mortgages so purchased. Freddie Mac generally matches and finances its purchases of mortgages with sales of guaranteed securities. Mortgages retained by Freddie Mac are financed with short- and long-term debt, cash temporarily held pending disbursement to security holders, and equity capital.

The Resolution Funding Corporation

REFCO is a mixed-ownership government corporation established by Title V of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”). The sole purpose of REFCO is to provide financing for the Resolution Trust Corporation (the “RTC”). REFCO is to be dissolved, as soon as practicable, after the maturity and full payment of all obligations issued by it. REFCO is subject to the general oversight and direction of the Oversight Board, which is comprised of the Secretary of the Treasury, the Chairman of the Board of Governors of the Federal Reserve System, the Secretary of Housing and Urban Development and two independent members to be appointed by the President with the advice and consent of the Senate. The day-to-day operations of REFCO are under the management of a three-member Directorate comprised of the Director of the Office of Finance of the FHLB and two members se lected by the Oversight Board from among the presidents of the twelve FHLB.

The RTC was established by FIRREA to manage and resolve cases involving failed savings and loan institutions pursuant to policies established by the Oversight Board. The RTC was granted authority to issue nonvoting capital certificates to REFCO in exchange for the funds transferred from REFCO to the RTC. Pursuant to FIRREA, the net proceeds of these obligations are used to purchase nonvoting capital certificates issued by the RTC or to retire previously issued REFCO obligations.

The Federal Home Loan Banks

The Federal Home Loan Banks constitute a system of twelve federally chartered corporations (collectively, the “FHLB”), each wholly owned by its member institutions. The mission of the FHLB is to enhance the availability of residential mortgage credit by providing a readily available, low-cost source of funds to their member institutions. A primary source of funds for the FHLB is the proceeds from the sale to the public of debt instruments issued as consolidated obligations, which are the joint and several obligations of all the FHLB. The FHLB are supervised and regulated by the Federal Housing Finance Board, which is an independent federal agency in the executive branch of the United States government, but obligations of the FHLB are not obligations of the United States government.

Tennessee Valley Authority

TVA is a wholly owned corporate agency and instrumentality of the United States of America established pursuant to the Tennessee Valley Authority Act of 1933, as amended (the “TVA Act”). TVA’s objective is to develop the resources of the Tennessee Valley region in order to strengthen the regional and national economy and the national defense. The programs of TVA consist of power and nonpower programs. For the fiscal year ending September 30, 1995, TVA received $139 million in congressional appropriations from the federal government for the nonpower programs. The power program is required to be self-supporting from revenues it produces. The TVA Act authorizes TVA to issue evidences of indebtedness that may be serviced only from proceeds of its power program. TVA bonds are not obligations of or guaranteed by the United States government.

Federal Farm Credit Banks

The Farm Credit System is a nationwide system of lending institutions and affiliated service and other entities (the “System”). Through its Banks (“FCBs”) and related associations, the System provides credit and related services to farmers, ranchers, producers and harvesters of aquatic products, rural homeowners, some farm-related businesses, agricultural and aquatic cooperatives and rural utilities. System institutions are federally chartered under the Farm Credit Act of 1971, as amended (the “Farm Credit Act”), and are subject to regulation by a Federal agency, the Farm Credit Administration (the “FCA”). The FCBs and associations are not commonly owned or controlled. They are cooperatively owned, directly or indirectly, by their respective borrowers. Unlike commercial banks and other financial institutions that lend to the agricultural sector in addition to other sectors of the economy, under the Farm Credit Act the System institutions are restricted solely to making loans to qualified borrowers in the agricultural sector, to some related businesses and to rural homeowners. Moreover, the System is required to make credit and other services available in all areas of the nation. In order to fulfill its broad statutory mandate, the System maintains lending units in all 50 states and the Commonwealth of Puerto Rico.

The System obtains funds for its lending operations primarily from the sale of debt securities issued under Section 4.2(d) of the Farm Credit Act (“Systemwide Debt Securities”). The FCBs are jointly and severally liable on all Systemwide Debt Securities. Systemwide Debt Securities are issued by the FCBs through the Federal Farm Credit Banks Funding Corporation, as agent for the FCBs (the “Funding Corporation”).

Private Label Custody Receipt Securities

If so specified in the applicable prospectus supplement, the issuing entity for a series may include, but will not consist entirely of, any combination of (1) receipts or other instruments, other than Treasury Strips, evidencing ownership of specific interest and/or principal payments to be made on particular Treasury Bonds held by a custodian (“Private Label Custody Strips”) and (2) receipts or other instruments evidencing ownership of specific interest and/or principal payments to be made on specific Resolution Funding Corporation (“REFCO”) bonds (“REFCO Strips”; and together with Private Label Custody Strips, “Private Label Custody Receipt Securities”). The Private Label Custody Receipt Securities, if any, included in an issuing entity are intended to assure investors that funds are available to make specified payments of principal and/or interest due on the related sec urities. Accordingly, the Private Label Custody Receipt Securities, if any, included in an issuing entity are intended both to (1) support the ratings assigned to the securities, and (2) perform a function similar to that described in this prospectus under “Description of the Transfer and Servicing Agreements—Credit and Cash Flow Enhancement”. A description of the respective general features of Private Label Custody Strips and REFCO Strips is set forth below.

The prospectus supplement for each series of securities the issuing entity with respect to which contains Private Label Custody Receipt Securities will contain information as to:

(1)

the title and series of each Private Label Custody Receipt Security, the aggregate principal amount, denomination and form of each Private Label Custody Receipt Security;

(2)

the limit, if any, upon the aggregate principal amount of each Private Label Custody Receipt Security;

(3)

the dates on which, or the range of dates within which, the principal of, and premium, if any, on, each Private Label Custody Receipt Security will be payable;

(4)

the rate or rates, or the method of determination of the rate or rates, at which each Private Label Custody Receipt Security will bear interest, if any, the date or dates from which the interest will accrue, and the dates on which the interest will be payable;

(5)

whether each Private Label Custody Receipt Security was issued at a price lower than the principal amount of that Private Label Custody Receipt Security;

(6)

material events of default or restrictive covenants provided for with respect to each Private Label Custody Receipt Security;

(7)

the rating of each Private Label Custody Receipt Security, if any;

(8)

the issuer of each Private Label Custody Receipt Security;

(9)

the material risks, if any, posed by each Private Label Custody Receipt Security and the issuer of each Private Label Custody Receipt Security, which risks, if appropriate, will be described in the “Risk Factors” section of the related prospectus supplement; and

(10)

any other material terms of each Private Label Custody Receipt Security.

With respect to an issuing entity which includes a pool of Private Label Custody Receipt Securities, the related prospectus supplement will, to the extent applicable, describe the composition of the Private Label Custody Receipt Securities’ pool, particular material events of default or restrictive covenants common to the Private Label Custody Receipt Securities, and, on an aggregate, percentage or weighted average basis, as applicable, the characteristics of the pool with respect to the terms set forth in (3), (4) and (5) of the preceding sentence and any other material terms regarding the pool.

The Private Label Custody Receipt Securities included in an issuing entity will be senior, unsecured, nonredeemable obligations of the issuers of the Private Label Custody Receipt Securities, will be denominated in United States dollars and, if rated, will be rated at least investment grade by at least one nationally recognized rating agency. In addition, the inclusion of Private Label Custody Receipt Securities in an issuing entity with respect to a series of securities is conditioned upon their characteristics being in form and substance satisfactory to the Rating Agency rating the related series of securities. Each issuing entity will be provided with an opinion of counsel to the issuing entity to the effect that the Private Label Custody Receipt Securities included in the issuing entity are exempt from the registration requirements of the securities Act. A copy of the opinion will be filed with the SEC in a Current Report on Form 8-K or in a post-effective amendment to the Registration Statement.

Private Label Custody Strips

The first “stripping” of Treasury Bonds occurred in the 1970s when government securities dealers physically separated coupons from definitive certificates and offered them to investors as tax-deferred investments. Investors were able to purchase the “strip” at a deep discount and pay no federal income tax until resale or maturity. This tax treatment was limited in 1982 by the Tax Equity and Fiscal Responsibility Act (“TEFRA”) which required holders of strips to accrue a portion of the discount toward par annually and report this accrual, even though unrealized, as taxable income. TEFRA also required that all new Treasury issues be made available only in book-entry form.

The shift to “book-entry only” Treasury Bonds created a shortage of the physical certificates needed for stripping. In response, various dealers created custodial receipt programs in which Treasury Bonds in book-entry form were deposited with custodians who would then issue certificates evidencing rights in principal and interest payments. Some of the better known programs first came to market in 1982 and 1983. Although available eventually in denominations as small as $1,000, these custodial receipts lacked the liquidity of the physical strips. While physical strips had multiple market-makers, custodial receipts were proprietary and, as such, the sole market-maker would usually be an affiliate of the program’s sponsor. As a result, the market that developed for the receipts was segmented.

In early 1984, a group of dealers sought to enhance the liquidity of custodial receipts by developing a generic, multiple market-maker security known as a TR (Treasury Receipt). A large secondary market quickly developed in these generic Treasury Strips.

Treasury Receipts, physical strips and the proprietary receipts trade at varying discounts from STRIPS which reflect, among other things, lower levels of liquidity and the structuring difference discussed above.

A holder of a Private Label Custody Strip, as opposed to a STRIP, cannot enforce payment on a Treasury Strip against the Treasury, instead, the holder must look to the custodian for payment. The custodian, and the holder of a Private Label Custody Strip that obtains ownership of the underlying Treasury Bond, can enforce payment of the underlying Treasury Bond against the Treasury. If any Private Label Custody Strips are included in an issuing entity with respect to any series of securities, the prospectus supplement for the series will include the identity and a brief description of each custodian that issued the Private Label Custody Strips. If the depositor knows that the depositor of the Treasury Bonds underlying the Private Label Custody Strips is the depositor or any of its affiliates, the depositor will disclose this fact in the related prospectus supplement.

REFCO Strips

A REFCO Bond may be divided into its separate components, consisting of: (1) each future semiannual interest distribution (an “Interest Component”); and (2) the principal payment (the “Principal Component”) (each component individually referred to in this prospectus as a “REFCO Strip”). REFCO Strips are not created by REFCO. Instead, third parties such as investment banking firms create them. Each REFCO Strip has an identifying designation and CUSIP number. REFCO Strips generally trade in the market for Treasury Strips at yields of a few basis points over Treasury Strips of similar maturities. REFCO Strips are viewed generally by the market as liquid investments.

For a REFCO Bond to be separated into its components, the par amount of the REFCO Bond must be in an amount which, based on the stated interest rate of the REFCO Bond, will produce a semiannual interest payment of $1,000 or an integral multiple of $1,000. REFCO Bonds may be separated into their components at any time from the issue date until maturity. Once created, REFCO Strips are maintained and transferred in integral multiples of $1,000.

A holder of a REFCO Strip cannot enforce payment on the REFCO Strip against REFCO. Instead, the holder must look to the custodian for payment. The custodian, and the holder of a REFCO Strip that obtains ownership of the underlying REFCO Bond, can enforce payment of the underlying REFCO Bond against REFCO. The identity and a brief description of each custodian that has issued any REFCO Strip included in a Trust will be set forth in the related prospectus supplement. If the depositor knows that the depositor of the REFCO Bonds underlying the REFCO Strips included in the Trust is the depositor or any of its affiliates, the depositor will disclose this fact in the related prospectus supplement.

Weighted Average Life of the Securities

The weighted average life of the notes, if any, and the certificates of any series generally will be influenced by the rate at which the principal balances of the related Primary Assets are paid, which payment may be in the form of scheduled amortization or prepayments. With respect to securities backed by Receivables and to receivables underlying Collateral Certificates, the term “prepayments” includes prepayments in full, partial prepayments, including those related to rebates of extended warranty contract costs and insurance premiums, liquidations due to defaults, as well as receipts of proceeds from physical damage, credit life and disability insurance policies, or the Repurchase Amount of Receivables and/or Collateral Certificates repurchased by the depositor or a seller or purchased by a servicer for administrative reasons. With respect to securities backed by Government Securities and/or Private Label Custody Receipt Securities, as applicable, the term “prepayments” means the Repurchase Amount of Government Securities and/or Private Label Custody Receipt Securities repurchased by the depositor or purchased by a servicer for administrative reasons. Substantially all of the Receivables and receivables underlying Collateral Certificates are prepayable at any time without penalty to the obligor. The rate of prepayment of automotive receivables is influenced by a variety of economic, social and other factors, including the fact that an obligor generally may not sell or transfer the Financed Vehicle securing a receivable without the consent of the related seller. The rate of prepayment on receivables may also be influenced by the structure of the loan. In addition, under some circumstances, the related seller will be obligated to repurchase Receivables from a given issuing entity pursuant to the related Receivables Purchase Agreement as a result of breaches of representations and warranties, an d the servicer will be obligated to purchase Receivables from the issuing entity pursuant to the Sale and Servicing Agreement or Pooling and Servicing Agreement as a result of breaches of specific covenants. See “Description of the Transfer and Servicing Agreements—Sale and Assignment of Primary Assets” and “Servicing Procedures”. See also “Certain Matters Regarding the Servicer—Termination” regarding the servicer’s option to purchase Primary Assets from a given Trust.

In light of the above considerations, there can be no assurance as to the amount of principal payments to be made on the notes and/or certificates of a series on each Distribution Date since the amount will depend, in part, on the amount of principal collected on the related Primary Assets during the applicable Collection Period. Any reinvestment risks resulting from a faster or slower incidence of payment of Primary Assets will be borne entirely by the noteholders and certificateholders. The related prospectus supplement may set forth some additional information with respect to the maturity and prepayment considerations applicable to particular Primary Assets and the related series of securities.

Pool Factors and Trading Information

The “Note Pool Factor” for each class of notes will be a seven-digit decimal which the servicer or trustee will compute prior to each distribution with respect to the class of notes indicating the remaining outstanding principal balance of that class of notes, as of the applicable Distribution Date, after giving effect to payments to be made on the applicable Distribution Date, as a fraction of the initial outstanding principal balance of the class of notes. The “Certificate Pool Factor” for each class of certificates will be a seven-digit decimal which the servicer or trustee will compute prior to each distribution with respect to the class of certificates indicating the remaining certificate balance of the class of certificates, as of the applicable Distribution Date, after giving effect to distributions to be made on the applicable Distribution Date, as a fraction of the initial certificat e balance of the class of certificates. Each Note Pool Factor and each Certificate Pool Factor will be 1.0000000 as of the related closing date, and after will decline to reflect reductions in the outstanding principal balance of the applicable class of notes or the reduction of the certificate balance of the applicable class of certificates. A noteholder’s portion of the aggregate outstanding principal balance of the related class of notes will be the product of (1) the original denomination of the noteholder’s note and (2) the applicable Note Pool Factor at the time of determination. A certificateholder’s portion of the aggregate outstanding certificate balance for the related class of certificates will be the product of (a) the original denomination of the certificateholder’s certificate and (b) the applicable Certificate Pool Factor at the time of determination.

As provided in the related prospectus supplement, the noteholders, if any, and the certificateholders will receive reports on or about each Distribution Date concerning payments received on the Receivables, the Pool Balance and each Note Pool Factor or Certificate Pool Factor, as applicable. In addition, Securityholders of record during any calendar year will be furnished information for tax reporting purposes not later than the latest date permitted by law. See “Certain Information Regarding the Securities— Statements to Securityholders”.

The Seller and the Servicer

Information with respect to the seller and the servicer will be set forth in the related prospectus supplement.

Use of Proceeds

If so provided in the related prospectus supplement, the net proceeds from the sale of the securities of a series will be applied by the applicable issuing entity to the purchase of the Primary Assets from the depositor or the seller, as applicable and any other use specified in the prospectus supplement. The depositor will use the portion of the net proceeds paid to it to purchase the Primary Assets and any other use specified in the prospectus supplement.

Description of the Notes

Each issuing entity that is an owner trust will issue one or more classes of notes pursuant to an indenture (an “Indenture”) between the related owner trust and the indenture trustee, a form of which has been filed as an exhibit to the Registration Statement of which this prospectus forms a part. The following summary describes the material provisions of each Indenture which are anticipated to be common to any notes included in a series of securities. The following summary does not purport to be a complete description of all terms of the related notes or Indenture and therefore is subject to, and is qualified in its entirely by reference to, the provisions of the related notes and Indenture.

If so specified in the related prospectus supplement, each class of notes will initially be represented by one or more certificates registered in the name of the nominee of DTC (together with any successor depositor selected by the Trust, the “Depository”). The notes will be available for purchase in minimum denominations of $1,000 or any other minimum denomination as shall be specified in the related prospectus supplement and integral multiples of $1,000 or any other minimum denomination so specified in the related prospectus supplement in book-entry form or any other form as shall be specified in the related prospectus supplement. If the notes are available in book-entry form only, the depositor has been informed by DTC that DTC’s nominee will be Cede unless another nominee is specified in the related prospectus supplement. Accordingly, the nominee is expected to be the holder of record of the n otes of each class. If the notes are available in book-entry form only, unless and until Definitive notes are issued under the limited circumstances described in this prospectus or in the related prospectus supplement, no noteholder will be entitled to receive a physical certificate representing a note. If the notes are available in book-entry form only, all references in this prospectus and in the related prospectus supplement to actions by noteholders refer to action taken by DTC upon instructions from it participating organizations, and all references in this prospectus and in the related prospectus supplement to distributions, notices, reports and statements to noteholders refer to distributions, notices, reports and statements to DTC or its nominee, as registered holder of the notes, for distribution to noteholders in accordance with DTC’s procedures with respect to distributions. See “Certain Information Regarding the Securities—Book-Entry Registration” and “—Definitive Se curities”.

Distribution of Principal and Interest

The timing and priority of payment, seniority, allocations of losses, interest rate and amount of or method of determining payments of principal and interest on each class of notes of a series will be described in the related prospectus supplement. The right of holders of any class of notes to receive payments of principal and interest may be senior or subordinate to the rights of holders of one or more other class or classes of notes of the series, as described in the related prospectus supplement. The related prospectus supplement may provide that payments of interest on the notes will be made prior to payments of principal on the notes. If so provided in the related prospectus supplement, a series of notes may include one or more classes of strip notes entitled to (1) principal payments with disproportionate, nominal or no interest payments or (2) interest payments with disproportionate, nominal or no princip al payments. Each class of notes may have a different interest rate, which may be a fixed, variable or adjustable interest rate, and which may be zero for some classes of strip notes, or any combination of the foregoing. The related prospectus supplement will specify the interest rate for each class of notes of a series or the method for determining the interest rate. One or more classes of notes of a series may be redeemable in whole or in part under the circumstances specified in the related prospectus supplement, including as a result of the exercise by the servicer of its option to purchase the related Receivable Pool. See “Certain Matters Regarding the Servicer—Termination”.

To the extent specified in any prospectus supplement, one or more classes of notes of a given series may have fixed principal payment schedules, as set forth in the prospectus supplement. Holders of any notes will be entitled to receive payments of principal on any given Distribution Date in the applicable amount set forth on the schedule with respect to the notes, in the manner and to the extent set forth in the related prospectus supplement.

The related prospectus supplement may also provide that payment of interest to noteholders of all classes within a series will have the same priority. Under some circumstances, the amount available for payments could be less than the amount of interest payable on the notes on a Distribution Date, in which case each class of notes will receive its ratable share, based upon the aggregate amount of interest due to the class of notes, of the aggregate amount available to be distributed on the date as interest on the notes of the series. See “Description of the Transfer and Servicing Agreements—Distributions” and “—Credit and Cash Flow Enhancement”.

In the case of a series of securities issued by an issuing entity that includes two or more classes of notes, the sequential order and priority of payment in respect of principal and interest, and any schedule or formula or other provisions applicable to the determination of the sequential order and priority of payment in respect of principal and interest, of each class will be set forth in the related prospectus supplement. Payments in respect of principal of and interest on any class of notes will be made on a pro rata basis among all the noteholders of the class or by any other method as is specified in the prospectus supplement.

If specified in the related prospectus supplement, the issuing entity may issue securities from time to time and use the proceeds of this issuance to make principal payments with respect to a series.

Revolving Period

The applicable prospectus supplement may provide that all or a portion of the principal collections may be applied by the issuing entity to the acquisition of subsequent Receivables or Collateral Certificates during a specified period rather than used to distribute payments of principal to holders of securities during that period.  These securities would then possess an interest only period, also commonly referred to as a “revolving period”, which will be followed by an “amortization period”, during which principal will be paid.  Any interest only or revolving period may terminate prior to the end of the specified period and result in the earlier than expected principal repayment of the securities.

Provisions of the Indenture

Events of Default; Rights upon Event of Default. “Events of Default” in respect of a series of notes under the related Indenture will consist of:

(1)

a default for five days or more in the payment of any interest on any note;

(2)

a default in the payment of the principal of, or any installment of the principal of, any note when the same becomes due and payable;

(3)

a default in the observance or performance of any material covenant or agreement of the related Trust made in the related Indenture and the continuation of any default for a period of 30 days, or for a longer period, not in excess of 90 days, as may be reasonably necessary to remedy the default; provided that the default is capable of remedy within 90 days or less and servicer on behalf of the related trustee delivers an Officer’s Certificate to the related indenture trustee to the effect that the trustee has commenced, or will promptly commence and diligently pursue, all reasonable efforts to remedy the default, after notice of the default is given to the related issuing entity by the applicable indenture trustee or to the Trust and the related indenture trustee by the holders of 25% of the aggregate outstanding principal amount of the notes;

(4)

any representation or warranty made by the issuing entity in the related Indenture or in any certificate delivered pursuant to the related Indenture or in connection with the related Indenture having been incorrect in a material respect as of the time made, if the breach is not cured with 30 days, or for a longer period, not in excess of 90 days, as may be reasonably necessary to remedy the default; provided that the default is capable of remedy within 90 days or less and servicer on behalf of the related trustee delivers an Officer’s Certificate to the related indenture trustee to the effect that the trustee has commenced, or will promptly commence and diligently pursue, all reasonable efforts to remedy the default, after notice of the breach is given to the issuing entity by the applicable indenture trustee or to the Trust and the indenture trustee by the holder of 25% of the aggregate outstanding princi pal amount of the notes;

(5)

particular events of bankruptcy, insolvency, receivership or liquidation with respect to the Trust or a substantial part of the property of the issuing entity; and

(6)

any other events as may be specified in the prospectus supplement.

The amount of principal required to be paid to noteholders of each series under the related Indenture on any Distribution Date generally will be limited to amounts available to be deposited in the applicable Note Distribution Account. Therefore, the failure to pay principal on a class of notes generally will not result in the occurrence of an Event of Default until the applicable final scheduled Distribution Date for the class of notes.

If an Event of Default should occur and be continuing with respect to the notes of any series, the related indenture trustee or holders of a majority in principal amount of the notes may declare the principal of the notes to be immediately due and payable. This declaration may, under some circumstances, be rescinded by the holders of a majority in principal amount of the notes then outstanding.

If the notes of any series are declared due and payable following an Event of Default, the related indenture trustee may institute proceedings to collect amounts due on the notes, foreclose on the property of the issuing entity, exercise remedies as a secured party, sell the related Primary Assets or elect to have the applicable issuing entity maintain possession of the Primary Assets and continue to apply collections on these Primary Assets as if there had been no declaration of acceleration. Subject to particular limitations that, if applicable, will be specified in the related prospectus supplement, the indenture trustee will be prohibited from selling the Primary Assets following an Event of Default, other than a default in the payment of any principal of, or a default for five days or more in the payment of any interest on, any note of the series, unless

·

the holders of all outstanding notes consent to the sale,

·

the proceeds of the sale are sufficient to pay in full the principal of and the accrued interest on the outstanding notes at the date of sale or

·

the indenture trustee determines that the proceeds of the Primary Assets would not be sufficient on an ongoing basis to make all payments on the notes as these payments would have become due if these obligations had not been declared due and payable, and the indenture trustee obtains the consent of the holders of 66 2/3% of the aggregate outstanding principal amount of the notes.

Subject to the provisions of the applicable Indenture relating to the duties of the related indenture trustee, if an Event of Default occurs and is continuing with respect to a series of notes, the indenture trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the holders of the notes if it reasonably believes it will not be adequately indemnified against the costs, expenses and liabilities that might be incurred by it in complying with the request. Subject to the provisions for indemnification and particular limitations contained in the related Indenture, the holders of a majority of the aggregate outstanding principal amount of the notes of a series will have the right to direct the time, method and place of conducting any proceeding or exercising any remedy available to the related indenture trustee. In addition, the holders of n otes representing a majority of the aggregate outstanding principal amount of the notes may, in some cases, waive any default with respect to the notes, except a default in the payment of principal of or interest on any note or a default in respect of a covenant or provision of the Indenture that cannot be modified or amended without the waiver or consent of the holders of all the outstanding notes of the series.

Except to the extent provided in the related prospectus supplement, no holder of a note will have the right to institute any proceeding with respect to the related Indenture, unless:

·

the holder previously has given to the applicable indenture trustee written notice of a continuing Event of Default;

·

the holders of not less than 25% of the outstanding principal amount of the notes have made written request to the indenture trustee to institute a proceeding in its own name as indenture trustee;

·

the holder or holders have offered the indenture trustee reasonable indemnity;

·

the indenture trustee has for 60 days failed to institute a proceeding; and

·

no direction inconsistent with a written request has been given to the indenture trustee during the 60-day period by the holders of a majority of the outstanding principal amount of the notes of the series.

With respect to any issuing entity that issues notes, none of the related indenture trustee in its individual capacity, the related trustee in its individual capacity, any holder of a certificate representing an ownership interest in the issuing entity, or any of their respective beneficiaries, agents, officers, directors, employees, affiliates, successors or assigns will, in the absence of an express agreement to the contrary, be personally liable for the payment of the principal of or interest on the related notes or for the agreements of the Trust contained in the applicable Indenture.

No issuing entity may engage in any activity other than as described in this prospectus or in the related prospectus supplement. No issuing entity will incur, assume or guarantee any indebtedness other than indebtedness incurred pursuant to the related notes and the related Indenture, pursuant to any Advances made to it by the servicer or otherwise in accordance with the Related Documents.

Certain Covenants. Each Indenture will provide that the related issuing entity may not consolidate with or merge into any other entity, unless

·

the entity formed by or surviving the consolidation or merger is organized under the laws of the United States, any state or the District of Columbia;

·

the entity expressly assumes the issuing entity’s obligation to make due and punctual payments upon the notes of the related series and to perform or observe every agreement and covenant of the issuing entity under the Indenture;

·

no Event of Default shall have occurred and be continuing immediately after the merger or consolidation;

·

the issuing entity has been advised by each Rating Agency that the merger or consolidation will not result in the qualification, reduction or withdrawal of its then-current rating of any class of the notes or certificates of the series;

·

the issuing entity has received an opinion of counsel to the effect that the consolidation or merger would have no material adverse tax consequence to the Trust or to any related noteholder or certificateholder;

·

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

·

the issuing entity has delivered to the related indenture trustee an Officer’s Certificate and an opinion of counsel that the merger complies with the requirements and conditions precedent of the Indenture.

No issuing entity that issues notes will:

·

except as expressly permitted by the applicable Indenture, the applicable Transfer and Servicing Agreements or other documents with respect to the Trust (the “Related Documents”), sell, transfer, exchange or otherwise dispose of any of the assets of the issuing entity;

·

claim any credit on or make any deduction from the principal and interest payment in respect to the related notes, other than amounts withheld under the Code or applicable state tax laws, or assert any claim against any present or former holder of the notes because of the payment of taxes levied or assessed upon the issuing entity;

·

dissolve or liquidate in whole or in part;

·

permit the validity or effectiveness of the related Indenture to be impaired or permit any person to be released from any covenants or obligations with respect to the related notes under the Indenture except as may be expressly permitted by the related Indenture;

·

permit any lien, charge, excise, claim, security interest, mortgage or other encumbrance to be created on or extent to or otherwise arise upon or burden the assets of the issuing entity or any part of the issuing entity, or any interest in the issuing entity or the proceeds of the issuing entity; or

·

permit the lien of the related Indenture not to constitute a valid first priority security interest, other than with respect to a tax, mechanics’ or similar lien, in the asset of the issuing entity.

Each indenture trustee and the related noteholders, by accepting the related notes, will covenant that they will not at any time institute against the applicable Trust any bankruptcy, reorganization or other proceeding under any federal or state bankruptcy or similar law.

Modification of Indenture. Each owner trustee and the related indenture trustee may, with the consent of the holders of a majority of the aggregate outstanding principal amount of the notes of the related series, execute a supplemental indenture to add provisions to, change in any manner or eliminate any provisions of, the related Indenture, or modify (except as provided below) in any manner the rights of the related noteholders. Except as otherwise provided in the related Indenture, without the consent of the holder of each outstanding note affected by the related supplemental indenture, no supplemental indenture will:

·

change the due date of any installment of principal of or interest on any note or reduce the principal amount of any note, the interest rate specified on any note or the redemption price with respect to any note, change the provisions of the related Indenture relating to the application of collections on, or the proceeds of the sale of, the property of the related issuing entity to payment of principal or interest on the notes of the series, or change any place of payment where or the coin or currency in which any note or any interest on any note is payable;

·

impair the right to institute suit for the enforcement of specific provisions of the related Indenture;

·

reduce the percentage of the aggregate amount of the outstanding notes of the series, the consent of the holders of which is required for any supplemental indenture or for any waiver of compliance with specific provisions of the related Indenture or of particular defaults under the related Indenture and their consequences as provided for in the related Indenture;

·

modify or alter the provisions of the related Indenture regarding the voting of notes held by the applicable owner trust, any other obligor on the notes, the seller or an affiliate of any of them;

·

reduce the percentage of the aggregate outstanding amount of the notes, the consent of the holders of which is required to direct the related indenture trustee to sell or liquidate the Primary Assets if the proceeds of the sale would be insufficient to pay the principal amount and accrued and unpaid interest on the outstanding notes of the series;

·

decrease the percentage of the aggregate principal amount of the notes required to amend the sections of the related Indenture that specify the percentage of the aggregate principal amount of the notes of the series necessary to amend the related Indenture or other related agreements; or

·

permit the creation of any lien ranking prior to or on a parity with the lien of the related Indenture with respect to any of the collateral for the notes or, except as otherwise permitted or contemplated in the Indenture, terminate the lien of the related Indenture on any of the collateral or deprive the holder of any note of the security afforded by the lien of the related Indenture.

An issuing entity that is an owner trust and the related indenture trustee may also enter into supplemental indentures, without obtaining the consent of the noteholders of the related series,

(1)

to cure any ambiguity;

(2)

to correct or supplement any provisions in the Indenture; or

(3)

for the purpose of, among other things, adding any provisions to or changing in any manner or eliminating any of the provisions of the related Indenture;

provided that the action referred to in clause (3) above will not materially and adversely affect the interest of any noteholder.

Annual Compliance Statement. Each owner trust will be required to file annually with the related indenture trustee a written statement as to the fulfillment of its obligations under the Indenture.

Indenture Trustee’s Annual Report. If required by the Trust Indenture Act, the indenture trustee for each issuing entity that is an owner trust will mail each year to all related noteholders a brief report relating to its eligibility and qualification to continue as indenture trustee under the related Indenture, any amounts advanced by it under the Indenture, the amount, interest rate and maturity date of particular indebtedness, if any, owing by the owner trust to the applicable indenture trust in its individual capacity, the property and funds physically held by the indenture trustee as indenture trustee and any action taken by it that materially affects the related notes that has not been previously reported.

Satisfaction and Discharge of Indenture. Each Indenture will be discharged with respect to the collateral securing the related notes upon the delivery to the related indenture trustee for cancellation of all of the notes or, with limitations, upon deposit with the indenture trustee of funds sufficient for the payment in full of all the notes.

The Indenture Trustee

The indenture trustee for a series of notes will be specified in the related prospectus supplement. The indenture trustee for any series may resign at any time, in which event the related issuing entity will be obligated to appoint a successor indenture trustee for the series. Additionally, the holders of a majority of the outstanding amount of the notes of a series may remove the related indenture trustee and appoint a successor indenture trustee. An issuing entity may also remove the related indenture trustee if the indenture trustee ceases to be eligible to continue in that capacity under the related Indenture, if particular insolvency events occur with respect to the indenture trustee or if the indenture trustee otherwise becomes incapable of acting as indenture trustee. In these circumstances, the issuing entity will be obligated to appoint a successor indenture trustee for the applicable series of notes. N o resignation or removal of the indenture trustee and appointment of a successor indenture trustee for a series of notes will become effective until the acceptance of the appointment by the successor indenture trustee for the series and payment of all fees and expenses owed to the outgoing indenture trustee.

Description of the Certificates

Each issuing entity may issue one or more classes of certificates pursuant to a Trust Agreement or Pooling and Servicing Agreement, as applicable. A form of each of the Trust Agreement and the Pooling and Servicing Agreement has been filed as an exhibit to the Registration Statement of which this prospectus forms a part. The following summary describes the material provisions of the Trust Agreement and the Pooling and Servicing Agreement, in each case, which are anticipated to be common to any certificates included in a series of securities. The following summary does not purport to be a complete description of all terms of the related certificates, Trust Agreement or Pooling and Servicing Agreement and therefore is subject to, and is qualified in its entirety by reference to, the provisions of the related certificates and Trust Agreement or Pooling and Servicing Agreement, as applicable.

If so specified in the related prospectus supplement and except for the certificates, if any, of a series purchased by the depositor, a seller or any of their respective affiliates, each class of certificates will initially be represented by one or more certificates registered in the name of the Depository. The certificates will be available for purchase in minimum denominations of $10,000 or any other minimum denomination as shall be specified in the related prospectus supplement and integral multiples of $1,000 in excess of $10,000 or any other minimum denomination so specified in the related prospectus supplement in book-entry form only, or any other form as shall be specified in the related prospectus supplement. If the certificates are available in book-entry form only, the depositor has been informed by DTC that DTC’s nominee will be Cede. Accordingly, the nominee is expected to be the holder of recor d of the certificates of any series. If the certificates are available in book-entry form only, unless and until Definitive certificates are issued under the limited circumstances described in this prospectus or in the related prospectus supplement, no certificateholder, other than the depositor, a seller or any of their respective affiliates, will be entitled to receive a physical certificate representing a certificate. If the certificates are available in book-entry form only, all references in this prospectus and in the related prospectus supplement to actions by certificateholders refer to actions taken by DTC upon instructions from the Participants, and all references in this prospectus and in the related prospectus supplement to distributions, notices, reports and statements to certificateholders refer to distributions, notices, reports and statements to DTC or its nominee, as the case may be, as the registered holder of the certificates, for distribution to certificateholders in accordance with DTC
46;s procedures with respect to distributions. See “Certain Information Regarding the Securities—Book-Entry Registration” and “—Definitive Securities”. Any certificate of a series owned by the depositor, a seller or any of their respective affiliates will be entitled to equal and proportionate benefits under the applicable Trust Agreement or Pooling and Servicing Agreement, as applicable, except that, unless otherwise provided in the related Trust Agreement, the certificates will be deemed not to be outstanding for the purpose of determining whether the requisite percentage of certificateholders has given any request, demand, authorization, direction, notice, or consent or taken any other action under the Related Documents.

Distributions of Principal and Interest

The timing and priority of distributions, seniority, allocations of losses, certificate pass-through rate and amount of or method of determining distributions with respect to principal and interest on each class of certificates of a series will be described in the related prospectus supplement. Distributions of interest on these certificates will be made on the dates specified in the related prospectus supplement (the “Distribution Date”) and will be made prior to distributions with respect to principal of the certificates. To the extent provided in the related prospectus supplement, a series of certificates may include one or more classes of strip certificates entitled to (1) principal distributions with disproportionate, nominal or no interest distributions or (2) interest distributions with disproportionate, nominal or no principal distributions. Each class of certificates may have a different certi ficate pass-through rate, which may be a fixed, variable or adjustable certificate pass-through rate, and which may be zero for some classes of strip certificates, or any combination of the foregoing. The related prospectus supplement will specify the certificate pass-through rate for each class of certificates of a series or the method for determining the certificate pass-through rate.

In the case of a series of securities that includes two or more classes of certificates, the timing, sequential order, priority of payment or amount of distributions in respect of interest and principal, and any schedule or formula or other provisions applicable to the determination of the timing, sequential order, priority of payment or amount of distributions in respect of interest and principal, of each class will be as set forth in the related prospectus supplement. In the case of certificates issued by an owner trust, distributions in respect of these certificates will be subordinated to payments in respect of the notes of the related series and to the extent described in the related prospectus supplement. Distributions in respect of interest on and principal of any class of certificates will be made on a pro rata basis among all holders of certificates of the class.

Certain Information Regarding the Securities

Book-Entry Registration

If so specified in the related prospectus supplement, DTC will act as securities depositor for each class of securities offered by this prospectus. Each class of securities initially will be represented by one or more certificates registered in the name of Cede, the nominee of DTC. As the nominee of DTC, it is anticipated that the only “noteholder” and/or “certificateholder” with respect to a series of securities will be Cede. Beneficial owners of the securities (“Security Owners”) will not be recognized as “noteholders” by the related indenture trustee, as the term is used in each Indenture, or as “certificateholders” by the related trustee, as the term is used in each Trust Agreement or Pooling and Servicing Agreement, as applicable, and Security Owners will be permitted to exercise the rights of noteholders or certificateholders only indirectly through DTC and its participating members (“Participants”).

DTC is a limited purpose trust depositor organized under the laws of the State of New York, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the Uniform Commercial Code (the “UCC”) in effect in the State of New York, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for the Participants and to facilitate the clearance and settlement of securities transactions between Participants through electronic book-entries, thus eliminating the need for physical movement of certificates. Participants include securities brokers and dealers, banks, trust companies and clearing corporations. Indirect access to the DTC system also is available to banks, brokers, dealers and trust companies that cle ar through or maintain a custodial relationship with a Participant, either directly or indirectly (the “Indirect Participants”).

Security Owners that are not Participants or Indirect Participants but desire to purchase, sell or otherwise transfer ownership of, or an interest in, the securities may do so only through Participants and Indirect Participants. In addition, all Security Owners will receive all distributions of principal and interest from the related indenture trustee or the related trustee, as applicable, through Participants or Indirect Participants. Under a book-entry format, Security Owners may experience some delay in their receipt of payments, since these payments will be forwarded by the applicable trustee or indenture trustee to DTC’s nominee. DTC will then forward the payments to the Participants, which will then forward them to Indirect Participants or Security Owners.

Under the rules, regulations and procedures creating and affecting DTC and its operations (the “Rules”), DTC is required to make book-entry transfers among Participants on whose behalf it acts with respect to the securities and to receive and transmit distributions of principal of and interest on the securities. Participants and Indirect Participants with which Security Owners have accounts with respect to the securities similarly are required to make book-entry transfers and to receive and transmit the payments on behalf of their respective Security Owners. Accordingly, although Security Owners will not possess physical certificates representing the securities, the Rules provide a mechanism by which Participants and Indirect Participants will receive payments and transfer or exchange interests, directly or indirectly, on behalf of Security Owners.

Because DTC can act only on behalf of Participants, who in turn may act on behalf of Indirect Participants, the ability of a Security Owner to pledge securities to persons or entities that do not participate in the DTC system, or otherwise take actions with respect to the securities, may be limited due to the lack of a physical certificate representing the securities.

DTC has advised the depositor that it will take any action permitted to be taken by a Security Owner under the Indenture, Trust Agreement or Pooling and Servicing Agreement, as applicable, only at the direction of one or more Participants to whose account with DTC the securities are credited. DTC may take conflicting actions with respect to other undivided interests to the extent that these actions are taken on behalf of Participants whose holdings include the undivided interests.

Clearstream Banking, société anonyme, 67 Bd Grande-Duchesse Charlotte, L-2967 Luxembourg (“Clearstream, Luxembourg”), was incorporated in 1970 as “Cedel S.A.”, a depositor with limited liability under Luxembourg law (a société anonyme).  Cedel S.A. subsequently changed its name to Cedelbank.  On January 10, 2000, Cedelbank’s parent depositor, Cedel International, société anonyme (“CI”) merged its clearing, settlement and custody business with that of Deutsche Börse Clearing AG (“DBC”).  The merger involved the transfer by CI of substantially all of its assets and liabilities (including its shares in CB) to a new Luxembourg depositor, New Cedel International, société anonyme (“New CI”), which is 50% owned by CI and 50% owned by DBC’s parent depositor Deutsche Börse AG.  The shareholder s of these two entities are banks, securities dealers and financial institutions.  Cedel International currently has 92 shareholders, including U.S. financial institutions or their subsidiaries.  No single entity may own more than 5 percent of Cedel International’s stock.

Further to the merger, the Board of Directors of New Cedel International decided to rename the companies in the group in order to give them a cohesive brand name.  The new brand name that was chosen is “Clearstream”.  With effect from January 14, 2000 New CI has been renamed “Clearstream International, société anonyme”.  On January 18, 2000, Cedelbank was renamed “Clearstream Banking, société anonyme”, and Cedel Global Services was renamed “Clearstream Services, société anonyme”.

On January 17, 2000 DBC was renamed “Clearstream Banking AG”.  This means that there are now two entities in the corporate group headed by Clearstream International which share the name “Clearstream Banking”, the entity previously named “Cedelbank” and the entity previously named “Deutsche Borse Clearing AG”.

Clearstream, Luxembourg holds securities for its customers (“Clearstream, Luxembourg Participants”) and facilitates the clearance and settlement of securities transactions between Clearstream, Luxembourg customers through electronic book-entry changes in accounts of Clearstream, Luxembourg customers, thereby eliminating the need for physical movement of certificates.  Transactions may be settled by Clearstream, Luxembourg in any of 36 currencies, including United States Dollars.  Clearstream, Luxembourg provides to its customers, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing.  Clearstream, Luxembourg also deals with domestic securities markets in over 30 countries through established depository and custodial relationships.  Clearstream, Luxembourg is registered as a ban k in Luxembourg, and as such is subject to regulation by the Commission de Surveillance du Secteur Financier, “CSSF”, which supervises Luxembourg banks.  Clearstream, Luxembourg’s customers are world-wide financial institutions including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations.  Clearstream, Luxembourg’s U.S. customers are limited to securities brokers and dealers, and banks.  Currently, Clearstream, Luxembourg has approximately 2,000 customers located in over 80 countries, including all major European countries, Canada, and the United States.  Indirect access to Clearstream, Luxembourg is available to other institutions that clear through or maintain a custodial relationship with an account holder of Clearstream, Luxembourg.  Clearstream, Luxembourg has established an electronic bridge with Morgan Guaranty Trust depositor of New York as the Operator of the Euroclear System (MGT/EOC) in Brussels to facilitate settlement of trades between Clearstream, Luxembourg and MGT/EOC.

Except as required by law, none of Deutsche Bank Securities Inc., the depositor, the related seller, the related servicer, or related indenture trustee, if any, or the related trustee will have any liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of securities of any series held by DTC’s nominee, or for maintaining, supervising or reviewing any records relating to the beneficial ownership interests.

Definitive Securities

If so stated in the related prospectus supplement, the notes and/or certificates of a given series will be issued in fully registered, certificated form (“Definitive notes” and “Definitive certificates”, respectively, and, collectively, “Definitive Securities”) to noteholders or certificateholders or their respective nominees, rather than to DTC or its nominee, only if

·

the related trustee of a grantor trust or the related indenture trustee in the case of an owner trust, as applicable, determines that DTC is no longer willing or able to discharge properly its responsibilities as Depository with respect to the related securities and the indenture trustee or trustee, as applicable, is unable to locate a qualified successor,

·

the indenture trustee or trustee, as applicable, elects, at its option, to terminate the book-entry system through DTC or

·

after the occurrence of an Event of Default or Servicer Default, Security Owners representing at least a majority of the outstanding principal amount of the notes or certificates, as applicable, of the series, advise the related trustee through DTC that the continuation of a book-entry system through DTC, or a successor to DTC, is no longer in the best interests of the related Security Owners.

Upon the occurrence of any of the events described in the immediately preceding paragraph, the related trustee or indenture trustee, as applicable, will be required to notify the related Security Owners, through Participants, of the availability of Definitive Securities. Upon surrender by DTC of the certificates representing all securities of any affected class and the receipt of instructions for re-registration, the trustee will issue Definitive Securities to the related Security Owners. Distributions on the related Definitive Securities will subsequently be made by the related trustee or indenture trustee, as applicable, directly to the holders in whose name the related Definitive Securities are registered at the close of business on the applicable record date, in accordance with the procedures set forth in this prospectus and in the related Indenture or the related Trust Agreement or Pooling and Servicing Agr eement, as applicable. Distributions will be made by check mailed to the address of the holders as they appear on the register specified in the related Indenture, Trust Agreement or Pooling and Servicing Agreement, as applicable; however, the final payment on any securities, whether Definitive Securities or securities registered in the name of a Depository or its nominee, will be made only upon presentation and surrender of the securities at the office or agency as specified in the notice of final distribution to Securityholders.

Definitive Securities will be transferable and exchangeable at the offices of the related trustee or indenture trustee, or any security registrar appointed by the related trustee or the indenture trustee, as applicable. No service charge will be imposed for any registration of transfer or exchange, but the trustee or indenture trustee may require payment of a sum sufficient to cover any tax or other governmental charge imposed in connection with a registration of transfer or exchange.

Statements to Securityholders

With respect to each series of securities, on or prior to each Distribution Date, the related servicer will prepare and forward to the related indenture trustee or trustee to be included with the distribution to each Securityholder of record a statement setting forth for the related Collection Period the following information, and any other information specified in the related prospectus supplement:

(1)

the amount of the distribution allocable to principal of each class of securities of the series;

(2)

the amount of the distribution allocable to interest on each class of securities of the series;

(3)

if applicable, the amount of the Servicing Fee paid to the related servicer with respect to the related Collection Period;

(4)

the outstanding principal balance and Note Pool Factor for each class of notes, if any, and the certificate balance and Certificate Pool Factor for each class of certificates of the series as of the related record date;

(5)

the balance of any Reserve Account or other form of credit enhancement, after giving effect to any additions to the balance of the Reserve Account or withdrawals from the Reserve Account or reductions to the Reserve Account to be made on the following Distribution Date; and

(6)

the aggregate amount of realized losses, if any, in respect of Receivables and any other loss, delinquency or other ratios set forth in the related prospectus supplement for the related Collection Period.

Items (1), (2) and (4) above with respect to the notes or certificates of a series will be expressed as a dollar amount per $1,000 of initial principal balance of the notes or the initial certificate balance of the certificates, as applicable.

In addition, within the prescribed period of time for tax reporting purposes after the end of each calendar year during the term of each issuing entity, the related trustee or indenture trustee, as applicable, will mail to each person who at any time during the related calendar year shall have been a registered Securityholder a statement containing information for the purposes of the Securityholder’s preparation of federal income tax returns. See “Material Federal Income Tax Consequences”.

List of Securityholders

Three or more holders of the notes of any series or one or more holders of the notes evidencing not less than 25% of the aggregate outstanding principal balance of the notes of the series may, by written request to the related indenture trustee, obtain access to the list of all noteholders maintained by the indenture trustee for the purpose of communicating with other noteholders with respect to their rights under the related Indenture or under the notes. The indenture trustee may elect not to afford the requesting noteholders access to the list of noteholders if it agrees to mail the desired communication or proxy, on behalf of and at the expense of the requesting noteholders, to all noteholders of the series.

Three or more holders of the certificates of any series or one or more holders of the certificates evidencing not less than 25% of the certificate balance of the certificates may, by written request to the related trustee, obtain access to the list of all certificateholders maintained by the trustee for the purpose of communicating with other certificateholders with respect to their rights under the related Trust Agreement or Pooling and Servicing Agreement, as applicable, or under the certificates.

Description of the Transfer and Servicing Agreements

The following summary describes the material provisions, in each case, to the extent anticipated to be common to any series of securities, of:

·

each Receivables Purchase Agreement pursuant to which the seller will transfer Receivables to the depositor,

·

each Trust Agreement or Pooling and Servicing Agreement pursuant to which an issuing entity will be created, Collateral Certificates, Government Securities and/or Private Label Custody Receipt Securities, as applicable, may be sold or transferred to the issuing entity, certificates will be issued, and the servicer will service Receivables and the trustee will manage Government Securities, if any and Private Label Custody Receipt Securities, if any, in the case of an issuing entity that is a grantor trust,

·

each Sale and Servicing Agreement pursuant to which the depositor will transfer Receivables to an issuing entity and the servicer will service Receivables, in the case of an owner trust, or

·

in the case of securities backed by Collateral Certificates, each Trust Agreement pursuant to which an issuing entity will be created, Collateral Certificates will be sold or transferred to the issuing entity, Government Securities and Private Label Custody Receipt Securities may be sold or transferred to the issuing entity and a trustee will manage Collateral Certificates, Government Securities, if any, and Private Label Custody Receipt Securities, if any (collectively, the “Transfer and Servicing Agreements”).

Forms of the Transfer and Servicing Agreements have been filed as exhibits to the Registration Statement of which this prospectus forms a part. The following summary does not purport to be a complete description of all of the terms of the Transfer and Servicing Agreements and therefore is subject to, and is qualified in its entirety by reference to, the provisions of the related Transfer and Servicing Agreement.

Sale and Assignment of Primary Assets

In the case of Primary Assets consisting of Receivables, on or prior to the related closing date, a seller will transfer and assign to the depositor, pursuant to a Receivables Purchase Agreement, without recourse, all of its right, title and interest in and to Receivables in the outstanding principal amount specified in the related prospectus supplement, including its security interests in the related Financed Vehicles. Each Receivable will be identified in a schedule appearing as an exhibit to the related Receivables Purchase Agreement (the “Schedule of Receivables”).

In each Receivables Purchase Agreement the seller will represent and warrant to the depositor, among other things, that

·

the information set forth in the Schedule of Receivables is correct in all material respects as of the applicable cutoff date;

·

the obligor on each Receivable is contractually required to maintain physical damage insurance covering the related Financed Vehicle in accordance with the seller’s normal requirements;

·

on the closing date, the Receivables are free and clear of all security interests, liens, charges and encumbrances, and no offsets, defenses or counterclaims have been asserted or threatened;

·

at the closing date, each of the Receivables is secured by a perfected, first-priority security interest in the related Financed Vehicle in favor of the seller;

·

each Receivable, at the time it was originated, complied and, on the closing date complies, in all material respects with applicable federal and state laws, including, without limitation, consumer credit, truth-in-lending, equal credit opportunity and disclosure laws; and

·

any other representations and warranties that may be set forth in the related prospectus supplement.

To the extent specified in the related prospectus supplement, as of the last day of the second Collection Period, or, if the seller so elects, the last day of the first Collection Period, following the discovery by or notice to the seller of any breach of a representation and warranty of the seller that materially and adversely affects the interests of the related issuing entity in any Receivable, the seller will be obligated to repurchase the Receivable, unless the seller cures the breach in a timely fashion. The purchase price for any of these Receivables will be equal to the unpaid principal balance owed by the obligor on the Receivable, plus accrued and unpaid interest on the unpaid principal balance at the applicable APR to the last day of the month of repurchase (the “Repurchase Amount”). This repurchase obligation will constitute the sole remedy available to the Securityholders, the related trus tee and any related indenture trustee for any uncured breach.

On the related closing date, the depositor will transfer and assign to the related Trust, pursuant to a Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, without recourse, all of its right, title and interest in and to Primary Assets in the outstanding principal amount specified in the related prospectus supplement. Concurrently with the transfer and assignment of Primary Assets to the related issuing entity, the related trustee or indenture trustee, as applicable, will execute, authenticate and deliver the related securities.

Pursuant to the terms of the Sale and Servicing Agreement or the Pooling and Servicing Agreement, as applicable, the depositor will assign to the related issuing entity the representations and warranties made by the related seller under the related Receivables Purchase Agreement for the benefit of the related Securityholders and will make limited representations and warranties with respect to the other Primary Assets included in the issuing entity. To the extent that the related seller does not repurchase a Primary Asset in the event of a breach of its representations and warranties with respect to the Primary Asset, the depositor will not be required to repurchase the Primary Asset unless the breach also constitutes a breach of one of the depositor’s representations and warranties under the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, with respect to that Primary Asset, if any, and the breach materially and adversely affects the interests of the Securityholders in any Primary Asset. Neither the seller nor the depositor will have any other obligation with respect to the Primary Assets or the securities.

Trust Accounts

With respect to each owner trust, the servicer will establish and maintain with the related indenture trustee, or the trustee will establish and maintain, (a) one or more accounts, on behalf of the related Securityholders, into which all payments made on or in respect of the related Primary Assets will be deposited (the “Collection Account”) and (b) an account, in the name of the indenture trustee on behalf of the noteholders, into which amounts released from the Collection Account and any Reserve Account or other form of credit enhancement for payment to the noteholders will be deposited and from which all distributions to the noteholders will be made (the “Note Distribution Account”). With respect to each issuing entity that is an owner trust or grantor trust, the servicer or the related trustee will establish and maintain an account, in the name of the trustee on behalf of the certificateh olders, into which amounts released from the Collection Account and any Reserve Account or other form of credit enhancement for distribution to the certificateholders will be deposited and from which all distributions to the certificateholders will be made (the “Certificate Distribution Account”). With respect to any issuing entity that is a grantor trust, the servicer or the related trustee will also establish and maintain the Collection Account and any other Trust Account in the name of the related trustee on behalf of the related certificateholders.

If so provided in the related prospectus supplement, the servicer will establish for each series of securities an additional account (the “Payahead Account”), in the name of the related indenture trustee, in the case of an issuing entity that is an owner trust, or trustee, in the case of an issuing entity that is a grantor trust, into which, to the extent required in the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, early payments made by or on behalf of obligors on Precomputed Receivables will be deposited until the time these payments become due. Until the time payments are transferred from the Payahead Account to the Collection Account, they will not constitute collected interest or collected principal and will not be available for distribution to noteholders or certificateholders. Any other accounts to be established with respect to an issuing entity will b e described in the related prospectus supplement.

For each series of securities, funds in the Collection Account, Note Distribution Account, Certificate Distribution Account and any Reserve Account or other accounts identified in the related prospectus supplement (collectively, the “Trust Accounts”) will be invested as provided in the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, in Eligible Investments. “Eligible Investments” will generally be limited to investments acceptable to the Rating Agencies as being consistent with the rating of the related securities. Eligible Investments will generally be limited to obligations or securities that mature on or before the date of the next scheduled distribution to Securityholders of the series. However, to the extent permitted by the Rating Agencies, funds in any Reserve Account may be invested in securities that will not mature prior to the date of the nex t scheduled distribution with respect to the notes or certificates and will not be sold prior to maturity to meet any shortfalls. Thus, the amount of available funds on deposit in a Reserve Account at any time may be less than the balance of that Reserve Account. If the amount required to be withdrawn from a Reserve Account to cover shortfalls in collections on the related Receivables (as provided in the related prospectus supplement) exceeds the amount of available funds on deposit in the Reserve Account, a temporary shortfall in the amounts distributed to the related noteholders or certificateholders could result, which could, in turn, increase the average life of the related notes or certificates. Unless otherwise and to the extent provided in the related prospectus supplement, investment earnings on funds deposited in the Trust Accounts, net of losses and investment expenses (collectively, “Investment Earnings”), will be deposited in the applicable Collection Account on each Distribution Date a nd will be treated as collections of interest on the related Receivables.

The Trust Accounts will be maintained as Eligible Deposit Accounts. “Eligible Deposit Account” means either (a) a segregated account with an Eligible Institution or (b) a segregated trust account with the corporate trust department of a depositor institution organized under the laws of the United States of America or any one of the states of the United States of America 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 the account, so long as any of the securities of the depositor institution have a credit rating from each Rating Agency in one of its generic rating categories that signifies investment grade. “Eligible Institution” means, with respect to a Trust, (a) the corporate trust department of the related indenture trustee or trustee, as applicable, or (b) a depositor institution organized un der the laws of the United States of America or any one of the states of the United States of America or the District of Columbia, or any domestic branch of a foreign bank, (1) that has either (A) a long-term unsecured debt rating acceptable to the Rating Agencies or (B) a short-term unsecured debt rating or certificate of deposit rating acceptable to the Rating Agencies and (2) whose deposits are insured by the FDIC.

Pre-Funding

If so specified in the related prospectus supplement, a portion of the issuance proceeds of the securities of a particular series (this amount, the “Pre-Funded Amount”) will be deposited in an account (the “Pre-Funding Account”) to be established with the trustee, which will be used to acquire additional Receivables from time to time during the time period specified in the related prospectus supplement (the “Pre-Funding Period”). Prior to the investment of the Pre-Funded Amount in additional Receivables, the Pre-Funded Amount may be invested in one or more Eligible Investments. Except as otherwise provided in the applicable Agreement, an “Eligible Investment” is any of the following, in each case as determined at the time of the investment or contractual commitment to invest in the relevant Eligible Investment, to the extent these investments would not require registration of the Trust Fund as an investment depositor pursuant to the Investment depositor Act of 1940:

(a)

negotiable instruments or securities represented by instruments in bearer or registered or book-entry form which evidence

(1)

obligations which have the benefit of the full faith and credit of the United States of America, including depositor receipts issued by a bank as custodian with respect to any instrument or security held by the custodian for the benefit of the holder of the depositor receipt,

(2)

demand deposits or time deposits in, or bankers’ acceptances issued by, any depositary institution or trust depositor incorporated under the laws of the United States of America or any state of the United States of America and subject to supervision and examination by Federal or state banking or depositary institution authorities; provided that at the time of the trustee’s investment or contractual commitment to invest in the relevant Eligible Investment, the certificates of deposit or short-term deposits, if any, or long-term unsecured debt obligations, other than the obligations whose rating is based on collateral or on the credit of a Person other than the institution or trust depositor, of the depositary institution or trust depositor has a credit rating in the highest rating category from each Rating Agency,

(3)

certificates of deposit having a rating in the highest rating category from each Rating Agency or

(4)

investments in money market funds which are, or which are composed of instruments or other investments which are, rated in the highest rating category from each Rating Agency;

(b)

demand deposits in the name of the trustee in any depositary institution or trust depositor referred to in clause (a)(2) above;

(c)

commercial paper, having original or remaining maturities of no more than 270 days, having a credit rating in the highest rating category from each Rating Agency;

(d)

Eurodollar time deposits that are obligations of institutions whose time deposits carry a credit rating in the highest rating category from each Rating Agency;

(e)

repurchase agreements involving any Eligible Investment described in any of clauses (a)(1), (a)(3) or (d) above, so long as the other party to the repurchase agreement has its long-term unsecured debt obligations rated in the highest rating category from each Rating Agency; and

(f)

any other investment with respect to which each Rating Agency rating the securities indicates will not result in the reduction or withdrawal of its then existing rating of the securities. Except as otherwise provided in the applicable Agreement, any Eligible Investment must mature no later than the Business Day prior to the next Distribution Date.

During any Pre-Funding Period, the seller or any other party specified in the related prospectus supplement will be obligated, subject only to the availability of additional Receivables, to transfer to the related issuing entity additional Receivables from time to time during the related Pre-Funding Period. Additional Receivables will be required to satisfy specific eligibility criteria more fully set forth in the related prospectus supplement, which eligibility criteria will be consistent with the eligibility criteria of the Receivables included in the issuing entity as of the closing date subject to exceptions as are expressly stated in the related prospectus supplement.

Although the specific parameters of the Pre-Funding Account with respect to any issuance of securities will be specified in the related prospectus supplement, it is anticipated that:

·

the Pre-Funding Period will not exceed 90 days from the related closing date;

·

that the additional loans to be acquired during the Pre-Funding Period will be subject to the same representations and warranties as the Receivables included in the related issuing entity on the closing date, although additional criteria may also be required to be satisfied, as described in the related prospectus supplement; and

·

the Pre-Funded Amount will not exceed 25% of the principal amount of the securities issued pursuant to a particular offering.

Servicing Procedures

To assure uniform quality in servicing the Receivables and to reduce administrative costs, the depositor and each issuing entity will designate the servicer as custodian to maintain possession, as the issuing entity’s agent, of the related Receivables and any other documents relating to the Receivables. The seller’s and the servicer’s accounting records and computer systems will be marked to reflect the sale and assignment of the related Receivables to each issuing entity, and UCC financing statements reflecting the sale and assignment will be filed.

The servicer will make reasonable efforts to collect all payments due with respect to the Receivables and will, consistent with the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, follow the collection procedures as it follows with respect to comparable Receivables it services for itself and others. The prospectus supplement will specify that the servicer may, in its discretion, arrange with the obligor on a Receivable to extend or modify the payment schedule, but no arrangement will, if inconsistent with its normal procedures, for purposes of any Sale and Servicing Agreement or Pooling and Servicing Agreement, reduce the contract rate of, the amount of the scheduled payments under, or extend the final payment date of, any Receivable beyond the “Final Scheduled Maturity Date” (as the term is defined with respect to any Receivables Pool in the related prospectus s upplement). Some arrangements may result in the servicer purchasing the Receivables for the Repurchase Amount, while others may result in the servicer making Advances. The servicer may sell the related Financed Vehicle securing any Receivable at a public or private sale, or take any other action permitted by applicable law. See “Certain Legal Aspects of the Receivables”.

Collections

With respect to each issuing entity, the servicer or the trustee will deposit all payments on the related Primary Assets, from whatever source, and all proceeds of the related Primary Assets, collected during the period specified in the related prospectus supplement (a “Collection Period”) into the related Collection Account not later than two business days after receipt of payments and proceeds of the related Primary Assets or any other period as specified in the related prospectus supplement. However, notwithstanding the foregoing, these amounts may be remitted to the Collection Account by the servicer on a monthly basis on or prior to the applicable Distribution Date if no Servicer Default exists and each other condition to making deposits less frequently than daily as may be specified by the Rating Agencies or set forth in the related prospectus supplement is satisfied. Pending deposit into the Col lection Account, the collections may be invested by the servicer at its own risk and for its own benefit and will not be segregated from its own funds. If the servicer were unable to remit the funds to the Collection Account on any Distribution Date, Securityholders might incur a loss. To the extent set forth in the related prospectus supplement, the servicer may, in order to satisfy the requirements described above, obtain a letter of credit or other security for the benefit of the related Trust to secure timely remittances of collections on the related Primary Assets and payment of the aggregate Repurchase Amount with respect to Receivables repurchased by the servicer.

Collections on a Precomputed Receivable during any Collection Period will be applied first to the repayment of any outstanding Precomputed Advances made by the servicer with respect to the Receivable, as described below, and then to the scheduled monthly payment due on the Receivable. Any portion of the collections remaining after the scheduled monthly payment has been made (these excess amounts, the “Payaheads”) will, unless the remaining amount is sufficient to prepay the Precomputed Receivable in full, and subject to limitations which, if applicable, will be specified in the related prospectus supplement, be transferred to and kept in the Payahead Account until a later Distribution Date on which the Payaheads may be applied either to the scheduled monthly payment due during the related Collection Period or to prepay the Receivable in full.

Advances

If specified in the related prospectus supplement, to the extent the collections of interest and principal on a Precomputed Receivable for a Collection Period fall short of the related scheduled payment, the servicer generally will advance the shortfall (a “Precomputed Advance”). The servicer will be obligated to make a Precomputed Advance on a Precomputed Receivable only to the extent that the servicer, in its sole discretion, expects to recoup the Advance from subsequent collections or recoveries on the Receivable or other Precomputed Receivables in the related Receivables Pool. The servicer will deposit the Precomputed Advance in the applicable Collection Account on or before the business day preceding the applicable Distribution Date. The servicer will recoup its Precomputed Advance from subsequent payments by or on behalf of the related obligor or from insurance or liquidation proceeds with respec t to the related Receivable and will release its right to reimbursement in conjunction with its purchase of the Receivable as servicer or, upon determining that reimbursement from the preceding sources is unlikely, will recoup its Precomputed Advance from any collections made on other Precomputed Receivables in the related Receivables Pool.

If specified in the related prospectus supplement, on or before the business day prior to each Distribution Date, the servicer will deposit into the related Collection Account an amount equal to the amount of interest that would have been due on the related Simple Interest Receivables at their respective annual percentage rates for the related Collection Period, assuming that the Simple Interest Receivables are paid on their respective due dates, minus the amount of interest actually received on the Simple Interest Receivables during the applicable Collection Period (a “Simple Interest Advance”, and together with Precomputed Advances, “Advances”). If the calculation results in a negative number, an amount equal to the amount shall be paid to the servicer in reimbursement of outstanding Simple Interest Advances. In addition, if specified in the related prospectus supplement, if a Simple Intere st Receivable becomes a Liquidated Receivable (as the term is defined in the related prospectus supplement), the amount of accrued and unpaid interest on the Simple Interest Receivable that became a Liquidated Receivable, but not including interest for the then current collection Period, will be withdrawn from the Collection Account and paid to the servicer in reimbursement of outstanding Simple Interest Advances. No advances of principal will be made with respect to Simple Interest Receivables.

Net Deposits

For administrative convenience, unless the servicer or the trustee is required to remit collections to the Collection Account on a daily basis as described under “Collections” above, the servicer or the trustee will be permitted to make deposits of collections, aggregate Advances and Repurchase Amounts for any issuing entity for or in respect of each Collection Period net of distributions to be made to the servicer with respect to the Collection Period. The servicer also may cause a single, net transfer to be made from the Collection Account to the Payahead Account, or vice versa.

Servicing Compensation and Payment Of Expenses

To the extent provided in the related prospectus supplement, with respect to each issuing entity the related servicer will be entitled to receive, out of interest collected on or in respect of the related Primary Assets serviced by the servicer, a fee for each Collection Period (the “Servicing Fee”) in an amount equal to the percentage per annum specified in the related prospectus supplement (the “Servicing Fee Rate”) of the Pool Balance related to the Primary Assets as of the first day of the related Collection Period. Unless otherwise provided in the related prospectus supplement, the Servicing Fee, together with any portion of the Servicing Fee that remains unpaid from prior Distribution Dates, will be paid solely to the extent of the Interest Distribution Amount; however, the Servicing Fee will be paid prior to the distribution of any portion of the Interest Distribution Amount to the hol ders of the notes or certificates of any series.

To the extent provided in the related prospectus supplement, the servicer will also collect and retain any late fees, prepayment charges and other administrative fees or similar charges allowed by applicable law with respect to Receivables and will be entitled to reimbursement from each Trust for some liabilities. Payments by or on behalf of obligors will be allocated to scheduled payments under the related Receivable and late fees and other charges in accordance with the servicer’s normal practices and procedures.

If applicable, the Servicing Fee will compensate the servicer for performing the functions of a third party servicer of motor vehicle receivables as an agent for the related issuing entity, including collecting and posting all payments, responding to inquiries of obligors on the Receivables, investigating delinquencies, sending payment statements and reporting the collateral. The Servicing Fee will also compensate the servicer for administering the Receivables, including making Advances, accounting for collection, furnishing monthly and annual statements to the related indenture trustee and/or trustee, and generating federal income tax information for the issuing entity and for the related noteholders and/or certificateholders as well as the issuing entity’s compliance with the reporting provisions under the Exchange Act. The Servicing Fee may also reimburse the servicer for particular taxes, the fees of th e related indenture trustee and/or trustee, accounting fees, outside auditor fees, date processing cost and other costs incurred in connection with administering the Primary Assets.

Distributions

With respect to each series of securities, beginning on the Distribution Date specified in the related prospectus supplement, distributions of principal and interest, or, where applicable, principal only or interest only, on each class of securities entitled to these distributions will be made by the related trustee or indenture trustee, as applicable, to the certificateholders and noteholders of the series. The timing, calculation, allocation, order, source and priorities of, and requirements for, all payments to the holders of each class of notes and/or distributions to holders of each class of certificates will be set forth in the related prospectus supplement.

With respect to each issuing entity, on each Distribution Date collections on or in respect of the related Primary Assets will be transferred from the Collection Account to the Note Distribution Account or Certificate Distribution Account, as applicable, for distribution to the noteholders and certificateholders to the extent provided in the related prospectus supplement. Credit enhancement, such as a Reserve Account, will be available to cover shortfalls in the amount available for distribution on the date to the extent specified in the related prospectus supplement. As and to the extent described in the related prospectus supplement, distributions in respect of principal of a class of securities of a series may be subordinate to distributions in respect of interests on the class, and distributions in respect of one or more classes of certificates of the series may be subordinate to payments in respect of the n otes, if any, of the series or other classes of certificates. Distributions of principal on the securities of a series may be based on the amount of principal collected or due, or the amount of realized losses incurred, in a Collection Period.

Credit and Cash Flow Enhancement

The amounts and types of any credit and cash flow enhancement arrangements and the provider of the credit and cash flow enhancement arrangements, if applicable, with respect to each class of securities of a series will be set forth in the related prospectus supplement. To the extent provided in the related prospectus supplement, credit or cash flow enhancement may only be in the form of subordination of one or more classes of securities, Reserve Accounts, spread accounts, letters of credit, surety bonds, insurance policies, over-collateralization, credit or liquidity facilities, guaranteed investment contracts, interest rate swap agreements, interest rate cap or floor agreements, currency swap agreements or similar agreements provided to reduce the effects of interest rate or currency exchange rate fluctuations on the Assets or on one or more classes of Notes or Certificates, as applicable, or other interest rate protection agree ments, repurchase obligations, cash deposits, or any combination of the foregoing. If specified in the applicable prospectus supplement, credit or cash flow enhancement for a class of securities may cover one or more other classes of securities of the same series, and credit enhancement for a series of securities may cover one or more other series of securities.

The existence of a Reserve Account or other form of credit enhancement for the benefit of any class or series of securities is intended to enhance the likelihood of receipt by the Securityholders of the class or series of the full amount of principal and interest due on the applicable class or series and to decrease the likelihood that the Securityholders will experience losses. The credit enhancement for a class or series of securities will not, as a general rule, provide protection against all types of loss and will not guarantee repayment of all principal and interest on a class or series of securities. If losses occur which exceed the amount covered by credit enhancement or which are not covered by the credit enhancement, Securityholders will bear their allocable share of these losses, as described in the prospectus supplement. In addition, if a form of credit enhancement covers more than one series of secur ities, Securityholders of any series will be subject to the risk that credit enhancement may be exhausted by the claims of Securityholders of other series.

Reserve Account. If so provided in the related prospectus supplement, pursuant to the related Transfer and Servicing Agreement, the depositor or the seller will establish for a series or class or classes of securities an account (the “Reserve Account”), which will be maintained with the related indenture trustee or trustee, as applicable. A Reserve Account will be funded by an initial deposit by the depositor or the seller, as applicable, on the closing date in the amount set forth in the related prospectus supplement. As further described in the related prospectus supplement, the amount on deposit in the Reserve Account may be increased or reinstated on each Distribution Date, to the extent described in the related prospectus supplement, by the deposit there of amounts from collections on the Primary Assets. The related prospectus supplement will describe the circumstances under which and the m anner in which distributions may be made out of the Reserve Account, either to holders of the securities covered by the Reserve Account or to the depositor, the seller or to any other entity.

Financial Guaranty Insurance Policy or Surety Bond.  Credit enhancement may be provided in the form of a financial guaranty insurance policy or a surety bond issued by an insurer named in the policy or surety bond, if specified in the prospectus supplement.

Letter of Credit.  Alternative credit support for a series of Notes, as applicable, may be provided by the issuance of a letter of credit by the bank or financial institution specified in the prospectus supplement.  The coverage, amount and frequency of any reduction in coverage provided by a letter of credit issued for a series of Notes, as applicable, will be set forth in the prospectus supplement relating to that series.

Subordinate Securities.  One or more classes of Notes, as applicable, of a series may be Subordinate Notes, as applicable, if specified in the prospectus supplement.  The rights of the holders of Subordinate Notes, as applicable, to receive distributions of principal and interest from the Collection Account on any Distribution Date will be subordinated to those rights of the holders of Senior Notes, as applicable.  The subordination of a class may apply only in the event of (or may be limited to) particular types of losses or shortfalls.  The prospectus supplement will set forth information concerning the amount of subordination of a class or classes of Subordinate Notes, as applicable, in a series, the circumstances in which that subordination will be applicable and the manner, if any, in which the amount of subordination will be effected.

Overcollateralization. If specified in the prospectus supplement, subordination provisions of an issuing entity may be used to accelerate to a limited extent the amortization of one or more classes of Notes, as applicable, relative to the amortization of the related Assets.  The accelerated amortization is achieved by the application of excess interest to the payment of principal of one or more classes of Notes, as applicable.  This acceleration feature creates, for the Assets or groups of Assets, overcollateralization, which is the excess of the total principal balance of the related Assets, or a group of related Assets, over the principal balance of the related class or classes of Notes or Certificates, as applicable.  This acceleration may continue for the life of the related Security, or may be limited.  In the case of limited acceleration, once the required level of overcollateral ization is reached, and subject to the provisions specified in the prospectus supplement, the limited acceleration feature may cease, unless necessary to maintain the required level of overcollateralization.

Limited Guarantee.  If specified in the prospectus supplement for a series of Notes or Certificates, as applicable, credit enhancement may be provided in the form of a limited guarantee issued by a guarantor named in the prospectus supplement.  Any guarantee specified in the prospectus supplement, if any, will be exempt from registration under the Securities Act.

Evidence as to Compliance

Each Pooling and Servicing Agreement and Sale and Servicing Agreement will provide that on or before a specified date in each year, beginning with the first year after the year in which the cut-off date occurs, each party responsible for the servicing function will provide to the depositor and the indenture trustee and/or trustee a report on an assessment of compliance with the minimum servicing criteria established in Item 1122(a) of Regulation AB (the “AB Servicing Criteria”).  The AB Servicing Criteria include specific criteria relating to the following areas: general servicing considerations, cash collection and administration, investor remittances and reporting, and pool asset administration.  Such report will indicate that the AB Servicing Criteria were used to test compliance on a platform level basis and will set out any material instances of noncompliance.

Each Pooling and Servicing Agreement and Sale and Servicing Agreement will also provide that the each party responsible for the servicing function will deliver along with its report on assessment of compliance, an attestation report from a firm of independent public accountants on the assessment of compliance with the AB Servicing Criteria.

Each Pooling and Servicing Agreement and Sale and Servicing Agreement will also provide for delivery to the indenture trustee and/or trustee, on or before a specified date in each year, of a separate annual statement of compliance from each entity responsible for the servicing function to the effect that, to the best knowledge of the signing officer, the servicer has fulfilled in all material respects its obligations under the Pooling and Servicing Agreement or Sale and Servicing Agreement throughout the preceding year or, if there has been a material failure in the fulfillment of any obligation, the statement shall specify such failure and the nature and status thereof.  This statement may be provided as a single form making the required statements as to more than one Pooling and Servicing Agreement or Sale and Servicing Agreement.

Copies of the annual reports of assessment of compliance, attestation reports, and statements of compliance may be obtained by securityholders without charge upon written request to the indenture trustee or trustee.  These items will be filed with the issuing entity’s annual report on Form 10-K, to the extent required under Regulation AB.

Statements to trustees and the Trust

Prior to each Distribution Date with respect to each series of securities, the servicer will provide to the applicable indenture trustee, if any, and the applicable trustee as of the close of business on the last day of the preceding Collection Period a statement setting forth substantially the same information as is required to be provided in the periodic reports provided to Securityholders of the series as described under “Certain Information Regarding the Securities—Statements to Securityholders”.

Certain Matters Regarding the Servicer

Each Sale and Servicing Agreement and Pooling and Servicing Agreement will provide that the servicer may not resign from its obligations and duties as servicer under the applicable Agreement, except upon determination that the servicer’s performance of his duties is no longer permissible under applicable law or if resignation is required by regulatory authorities. No resignation will become effective until the related indenture trustee or trustee, as applicable, or a successor servicer has assumed the servicing obligations and duties under the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable.

Each Sale and Servicing Agreement and Pooling and Servicing Agreement will further provide that neither the servicer nor any of its directors, officers, employees and agents will be under any liability to the related issuing entity or Securityholders for taking any action or for refraining from taking any action pursuant to the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, or for errors in judgment; provided, that neither the servicer nor any person will be protected against any liability that would otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence in the performance of the servicer’s duties or by reason of reckless disregard of its obligations and duties under the applicable Agreement. In addition, each Sale and Servicing Agreement and Pooling and Servicing Agreement will provide that the servicer is under no obligation to appear in, prosecute or defend any legal action that is not incidental to its servicing responsibilities under the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, and that, in its opinion, may cause it to incur any expense or liability.

Under the circumstances specified in each Sale and Servicing Agreement and Pooling and Servicing Agreement, any entity into which the servicer may be merged or consolidated, or any entity resulting from any merger or consolidation to which the servicer is a party, or any entity succeeding to all or substantially all of the business of the servicer, or any corporation which assumes the obligations of the servicer, will be the successor to the servicer under the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable.

Servicer Defaults

A “Servicer Default” under each Sale and Servicing Agreement and Pooling and Servicing Agreement will consist of:

(1)

any failure by the servicer to deliver to the related trustee or indenture trustee, as applicable, for deposit in any of the Trust Accounts any required payment or to direct the related trustee or indenture trustee, as applicable, to make any required distributions from the Trust Accounts, which failure continues unremedied for five business days after discovery by an officer of the servicer or written notice of failure is given (a) to the servicer by the related trustee or indenture trustee, as applicable, or (b) to the servicer and to the related trustee or indenture trustee, as applicable, by holders of notes, if any, evidencing not less that 25% of the aggregate outstanding principal amount of the notes or, in the event a series of securities includes no notes or if the notes have been paid in full, by holders of certificates evidencing not less that 25% of the certificate balance;

(2)

any failure by the servicer duly to observe or perform in any material respect any covenant or agreement in the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, which failure materially and adversely affects the rights of the related Securityholders and which continues unremedied for 60 days after written notice of failure is given to the servicer in the same manner described in clause (1) above;

(3)

specific events of bankruptcy, insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings and particular actions by the servicer indicating its insolvency, reorganization pursuant to bankruptcy proceedings or inability to pay its obligations; and

(4)

any other events as may be set forth in the related prospectus supplement.

Rights Upon Servicer Default

Generally, in the case of an issuing entity that is an owner trust, as long as a Servicer Default under the related Sale and Servicing Agreement remains unremedied, the related indenture trustee or holders of notes of the related series evidencing not less than 50% of the aggregate principal amount of the notes then outstanding may terminate all the rights and obligations of the servicer under the related Sale and Servicing Agreement, and upon this termination the indenture trustee or a successor servicer appointed by the indenture trustee will succeed to all the responsibilities, duties and liabilities of the servicer under the related Sale and Servicing Agreement and will be entitled to similar compensation arrangements. Generally, in the case of an issuing entity that is a grantor trust, as long as a Servicer Default under the related Pooling and Servicing Agreement remains unremedied, the related trustee or holders of certificates of the related series evidencing not less than 25% of the certificate balance may terminate all the rights and obligations of the servicer under the related Pooling and Servicing Agreement, and upon this termination the trustee or a successor servicer appointed by the trustee will succeed to all the responsibilities, duties and liabilities of the servicer under the related Pooling and Servicing Agreement and will be entitled to similar compensation arrangements. If, however, a bankruptcy trustee or similar official has been appointed for the servicer, and no Servicer Default other than the appointment has occurred, the trustee or official may have the power to prevent any indenture trustee or the related noteholders or the trustee or the related certificateholders from effecting a transfer of servicing. If the related indenture trustee, if any, or the related trustee is unwilling or unable to act as successor to the servicer, the indenture trustee or trustee, as applicable, may appoin t, or may petition a court of competent jurisdiction to appoint, a successor with a net worth of at least $100,000,000 and whose regular business includes the servicing of motor vehicle receivables. The indenture trustee, if any, or the trustee may arrange for compensation to be paid to the successor servicer, which in no event may be greater than the compensation payable to the servicer under the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable.

Waiver of Past Defaults

To the extent provided in the related prospectus supplement, (1) in the case of an issuing entity that is a owner trust, holders of the related notes evidencing not less than a majority of the aggregate outstanding principal amount of the notes, or of certificates evidencing not less than a majority of the outstanding certificate balance, in the case of any default that does not adversely affect the indenture trustee or noteholders, and (2) in the case of each issuing entity that is a grantor trust, holders of certificates evidencing not less than a majority of the certificate balance, may, on behalf of all the noteholders and certificateholders, waive any default by the servicer in the performance of its obligations under the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, and its consequences, except a default in making any required deposits to or payments from any Trust Account or in respect of a covenant or provision in the Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, that cannot be modified or amended without the consent of each Securityholder, in which event the related waiver will require the approval of holders of all of the securities of the series. No waiver will impair the Securityholders’ right with respect to any subsequent Servicer Default.

Amendment

Unless otherwise provided in the related prospectus supplement, each of the Transfer and Servicing Agreements may be amended by the parties to the Transfer and Servicing Agreements without the consent of the related noteholders or certificateholders:

(1)

to cure any ambiguity,

(2)

to correct or supplement any provisions in the related Transfer and Servicing Agreement, or

(3)

for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, the related Transfer and Servicing Agreement;

provided, that any action in this clause (3) will not, in the opinion of counsel satisfactory to the related trustee or indenture trustee, as applicable, adversely affect in any material respect the interests of the depositor or any noteholder.

The Transfer and Servicing Agreements may also be amended from time to time by the parties to the Transfer and Servicing Agreements with the consent of the holders of notes evidencing at least a majority of the aggregate principal amount of the then outstanding notes, if any, and with the consent of the holders of certificates evidencing at least a majority of the aggregate principal amount of the then outstanding certificates, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the related Transfer and Servicing Agreement or of modifying in any manner the rights of the noteholders or certificateholders, as applicable; provided that no amendment may (1) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on or in respect of the related Primary Assets or distributions that are required to be made fo r the benefit of the noteholders or certificateholders or (2) reduce the aforesaid percentage of the notes or certificates of the series the holders of which are required to consent to any amendment, without the consent of the holders of all of the outstanding notes or certificates, as the case may be, of the series.

Payment in Full of the notes

Upon the payment in full of all outstanding notes of a given series and the satisfaction and discharge of the related Indenture, the related trustee will succeed to all the rights of the indenture trustee, and the certificateholders of the series generally will succeed to the rights of the noteholders of the series under the related Sale and Servicing Agreement.

Termination

The obligations of the related servicer, the related trustee and the related indenture trustee, if any, with respect to an issuing entity pursuant to the related Transfer and Servicing Agreement will terminate upon the latest to occur of

·

the maturity or other liquidation of the last Primary Asset and the disposition of any amounts received upon liquidation of any remaining Primary Asset,

·

the payment to noteholders, if any, and certificateholders of all amounts required to be paid to them pursuant to the Transfer and Servicing Agreements and

·

the occurrence of either event described below.

In order to avoid excessive administrative expenses, the related servicer will be permitted, at its option, to purchase from an issuing entity all remaining Primary Assets as of the end of any Collection Period, if the then outstanding Pool Balance is 10%, or, if any seller is a bank, 5%, or less of the Pool Balance as of the related cutoff date, at a purchase price equal to the price specified in the related prospectus supplement.

If and to the extent provided in the related prospectus supplement, the indenture trustee or trustee, as applicable, will, within ten days following a Distribution Date as of which the Pool Balance is equal to or less than the percentage of the original Pool Balance specified in the related prospectus supplement, solicit bids for the purchase of the Primary Assets remaining in the Trust, in the manner and subject to the terms and conditions set forth in the related prospectus supplement. If the indenture trustee or trustee receives satisfactory bids as described in the related prospectus supplement, then the Primary Assets remaining in the Trust will be sold to the highest bidder.

Certain Legal Aspects of the Receivables

Security Interests in Financed Vehicles

In states in which retail installment contracts such as the Receivables evidence the credit sale of automobiles, recreational vehicles, vans, trucks, buses and trailers by dealers to obligors, the contracts also constitute personal property security agreements and include grants of security interests in the vehicles under the UCC as in effect in these states. Perfection of security interests in the automobiles, recreational vehicles, vans, trucks, buses and trailers financed, directly or indirectly, by a seller is generally governed by the motor vehicle registration laws of the state in which the vehicle is located. In general, a security interest in automobiles, recreational vehicles, vans, trucks, buses and trailers is perfected by obtaining the certificate of title to the Financed Vehicle or notation of the secured party’s lien on the vehicles’ certificate of title.

Generally all of the Receivables name the seller as obligee or assignee and as the secured party. The seller will take all actions necessary under the laws of the state in which the Financed Vehicle is located to perfect the seller’s security interest in the Financed Vehicle, including, where applicable, having a notation of its lien recorded on the vehicle’s certificate of title or file a UCC-1 Financing Statement. If the seller, because of clerical error or otherwise, has failed to take action with respect to Financed Vehicle, it will not have a perfected security interest and its security interest may be subordinate to the interest of, among others, subsequent purchasers of the Financed Vehicle that give value without notice of the seller’s security interest and to whom a certificate of ownership is issued in the purchaser’s name, holders of perfected security interests in the Financed Veh icle and the trustee in bankruptcy of the obligor. The seller’s security interest may also be subordinate to third parties in the event of fraud or forgery by the obligor or administrative error by state recording officials or in the circumstances noted below.

Pursuant to each Sale and Servicing Agreement and Pooling and Servicing Agreement, the seller will assign its interests in the Financed Vehicles securing the related Receivables to the related Trust. However, because of administrative burden and expense, neither the seller nor the related trustee will amend any certificate of title to identify the issuing entity as the new secured party on the certificates of title relating to the Financed Vehicles. Unless otherwise specified in the related prospectus supplement, the servicer will hold certificates of title relating to the Financed Vehicles in its possession as custodian for the issuing entity pursuant to the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable. See “Description of the Transfer and Servicing Agreements—Sale and Assignment of Primary Assets”.

In most states, assignments such as those under the related Trust Agreement or Pooling and Servicing Agreement, as applicable, are effective conveyances of a security interest in the related Financed Vehicle without amendment of any lien noted on the vehicle’s certificate of title, and the assignee succeeds by assignment to the assignor’s rights as secured party. Although re-registration of the motor vehicle is not necessary in these states to convey a perfected security interest in the Financed Vehicles to an issuing entity, because the related issuing entity will not be listed as legal owner on the certificates of title to the Financed Vehicles, an issuing entity’s security interest could be defeated through fraud or negligence. However, in the absence of fraud or forgery by the vehicle owner or the servicer or administrative error by state of local agencies, the notation of the seller’s li en on a certificate of title will be sufficient to protect an issuing entity against the rights of subsequent purchasers of a Financed Vehicle or subsequent creditors who take a security interest in a Financed Vehicle. If there are any Financed Vehicles as to which the seller fails to obtain a first-priority perfected security interest, the issuing entity’s security interest would be subordinate to, among others, subsequent purchasers of Financed Vehicles and holders of perfected security interests in Financed Vehicles.  A failure, however, would constitute a breach of the seller’s representations and warranties under the related Receivables Purchase Agreement and the seller will be required to repurchase the Receivable from the Trust unless the breach is cured in a timely manner. See “Description of the Transfer and Servicing Agreements—Sale and Assignment of Primary Assets” and “Risk Factors—Potential Lack of Security”.

Under the laws of most states in which a perfected security interest is governed by a certificate of title statute, a perfected security interest in a motor vehicle continues for four months after the vehicle is moved to a new state from the one in which it is initially registered and after until the owner re-registers the motor vehicle in the new state. A majority of these states require surrender of a certificate of title to re-register a vehicle. Accordingly, a secured party must surrender possession if it holds the certificate of title of the vehicle or, in the case of vehicles registered in states providing for the notation of a lien on the certificate of title but not possession by the secured party, the secured party would receive notice of surrender from the state of re-registration if the security interest is noted on the certificate of title. Thus, the secured party would have the opportunity to reperf ect its security interest in the vehicle in the state of relocation. However, these procedural safeguards will not protect the secured party if, through fraud, forgery or administrative error, an obligor somehow procures a new certificate of title that does not list the secured party’s lien. Additionally, in states that do not require a certificate of title for registration of a vehicle, re-registration could defeat perfection. In the ordinary course of servicing the Receivables, the servicer will take steps to effect re-perfection upon receipt of notice of re-registration or information from the obligor as to relocation. Similarly, when an obligor sells a Financed Vehicle and the purchaser of that Financed Vehicle attempts to re-register the vehicle, the seller must surrender possession of the certificate of title or will receive notice as a result of having its lien noted on the certificate of title and accordingly will have an opportunity to require satisfaction of the related Receivable before its l ien is released. Under each Sale and Servicing Agreement and Pooling and Servicing Agreement, the servicer will be obligated to take appropriate steps, at its own expense, to maintain perfection of security interests in the related Financed Vehicles and is obligated to purchase the related Receivable if it fails to do so.

In states which the perfection of a security interest is governed by the filing of a UCC-1 financing statement, or the obligor moves from a title state to a non-title state, the servicer will file a UCC-1 financing statement in the new state of the obligor as soon as possible after receiving notice of the obligor’s change of residence. UCC-1 financing statements expire after five years. When the term of a loan exceeds five years, the filing must be continued in order to maintain the servicer’s perfected security interest. The servicer takes steps to effect continuation. In the event that an obligor moves to a state other than the state in which the UCC-1 financing statement is filed or in some states to a different county in the state, under the laws of most states the perfection of the security interest in the motor vehicle would continue for four months after relocation, unless the perfection in the original jurisdiction would have expired earlier. A new financing statement must be filed in the state of relocation or, if the state is a title state, a notation on the certificate of title must be made in order to continue the security interest. The servicer generally takes steps to effect re-perfection upon notification of an address change. Generally, in both title states and in non-title states, the servicer will not re-perfect a state law security interest which has expired or where the obligor has moved if the Receivable has a small balance, a short remaining term and the obligor has a good payment record.

Under the laws of most states, liens for repairs performed on a motor vehicle and liens for unpaid taxes take priority over even a perfected, first-priority security interest in the vehicle. The Code also grants priority to particular federal tax liens over the lien of a secured party. The laws of some states and federal law permit the confiscation of motor vehicles by governmental authorities under some circumstances if used in unlawful activities, which may result in the loss of a secured party’s perfected security interest in a confiscated motor vehicle. In each Receivables Purchase Agreement, the seller will represent and warrant that, as of the date any Receivable is sold to the Trust, the security interest in the related Financed Vehicle is or will be prior to all other present liens, other than tax liens and other liens that arise by operation of law, upon and security interests in the Financed Vehic le. However, liens for repairs or taxes could arise, or the confiscation of a Financed Vehicle could occur, at any time during the term of a Receivable. No notice will be given to the related trustee, the related indenture trustee, if any, or related Securityholders in the event a lien arises or confiscation occurs. Any lien or confiscation arising or occurring after the closing date will not give rise to a repurchase obligation of the seller under the related Receivables Purchase Agreement.

Repossession

In the event of default by an obligor, the holder of the related retail installment sale contract has all the remedies of a secured party under the UCC, except where specifically limited by other state laws. The UCC remedies of a secured party include the right to repossession by self-help means, unless these means would constitute a breach of the peace. Self-help repossession is the method employed by the servicer in most cases and is accomplished simply by taking possession of the related motor vehicle. In cases where the obligor objects or raises a defense to repossession, or if otherwise required by applicable state law, a court order must be obtained from the appropriate state court, and the vehicle must then be recovered in accordance with that order. In some jurisdictions, the secured party is required to notify an obligor debtor of the default and the intent to repossess the collateral and to give the ob ligor a period of time within which to cure the default prior to repossession. Generally, the right to cure may only be exercised on a limited number of occasions during the term of the related contract.

Notice of Sale; Redemption Rights

The UCC and other state laws require the secured party to provide the obligor with reasonable notice of the date, time and place of any public sale and/or the date after which any private sale of the collateral may be held. The obligor has the right to redeem the collateral prior to actual sale by paying the secured party the unpaid principal balance of the obligation, accrued interest on the unpaid principal balance of the obligation, plus reasonable expenses for repossessing, holding and preparing the collateral for disposition and arranging for its sale, plus, in some jurisdictions, reasonable attorneys’ fees or, in some states, by payment of delinquent installments or the unpaid principal balance of the related obligation.

Deficiency Judgments and Excess Proceeds

The proceeds of the resale of any Financed Vehicle generally will be applied first to the expenses of resale and repossession and then to the satisfaction of the related indebtedness. While some states impose prohibitions or limitations on deficiency judgments if the net proceeds from any resale do not cover the full amount of the indebtedness, a deficiency judgment can be sought in other states that do not prohibit or limit deficiency judgments. However, the deficiency judgment would be a personal judgment against the obligor for the shortfall, and a defaulting obligor can be expected to have very little capital or sources of income available following repossession; in many cases, therefore, it may not be useful to seek a deficiency judgment or, if one is obtained, it may be settled at a significant discount or be uncollectible. In addition to the notice requirement, the UCC requires that every aspect of the sa le or other disposition, including the method, manner, time, place and terms, be “commercially reasonable”. Generally, courts have held that when a sale is not “commercially reasonable”, the secured party loses its right to a deficiency judgment. In addition, the UCC permits the debtor or other interested party to recover for any loss caused by noncompliance with the provisions of the UCC. Also, prior to a sale, the UCC permits the debtor or other interested person to restrain the secured party from disposing of the collateral if it is established that the secured party is not proceeding in accordance with the “default” provisions under the UCC.

Occasionally, after the resale of a motor vehicle and payment of all related expenses and indebtedness, there is a surplus of funds. In that case, the UCC requires the creditor to remit the surplus to any holder of a subordinate lien with respect to the related vehicle or, if no subordinate lienholder exists, to the former owner of the vehicle.

Consumer Protection Laws

Numerous federal and state consumer protection laws and related regulations impose substantial requirements upon creditors and servicers involved in consumer finance. These laws include the Truth-in-Lending Act, the Equal Credit Opportunity Act, the Federal Trade Commission Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board’s Regulations B and Z, the Soldiers’ and Sailors’ Relief Act, state adaptations of the National Consumer Act and of the Uniform Consumer Credit Code, and state motor vehicle retail installment sales acts, retail installment sales acts and other similar laws. Also, the laws of some states impose finance charge ceilings and other restrictions on consumer transactions and require contract disclosures in addition to those required under other restrictions on consumer tran sactions and require contract disclosures in addition to those required under federal law. These requirements impose specific statutory liabilities upon creditors who fail to comply with their provisions. In some cases, this liability could affect the ability of an assignee, such as an issuing entity, to enforce consumer finance contracts such as Receivables.

The so-called “Holder-in-Due-Course” rule of the Federal Trade Commission (the “FTC Rule”), the provisions of which are generally duplicated by the Uniform Consumer Credit Code, other statutes or the common law, has the effect of subjecting a seller in a consumer credit transaction, and some related creditors and their assignees, to all claims and defenses that the obligor in the transaction could assert against the seller of the goods. Liability under the FTC Rule is limited to the amounts paid by the obligor under the contract, and the holder of the contract may also be unable to collect any balance remaining due under the contract from the obligor. Most of the Receivables will be subject to the requirements of the FTC Rule. Accordingly, each issuing entity, as holder of the related Receivables, will be subject to any claims or defenses that the purchasers of the related Financed Vehicles m ay assert against the sellers of those Financed Vehicles. If an obligor were successful in asserting any claims or defenses, the claim or defense would constitute a breach of the seller’s warranties under the related Receivables Purchase Agreement and would create an obligation of the seller to repurchase the Receivable unless the breach is cured in a timely manner. See “Description of the Transfer and Servicing Agreements—Sale and Assignment of Primary Assets”.

Courts have applied general equitable principles to secured parties pursuing repossession and litigation involving deficiency balances. These equitable principles may have the effect of relieving an obligor from some or all of the legal consequences of a default.

In several cases, consumers have asserted that the self-help remedies of secured parties under the UCC and related laws violate the due process protections of the Fourteenth Amendment to the Constitution of the United States. Courts have generally either upheld the notice provisions of the UCC and related laws as reasonable or have found that the creditors’ repossession and resale do not involve sufficient state action to afford constitutional protection to borrowers.

Under each Receivables Purchase Agreement the seller will represent and warrant that each Receivable complies in all material respects with all applicable federal and state laws. Accordingly, if an obligor has a claim against an issuing entity for a violation of any law and that claim materially and adversely affects the interests of the issuing entity in a Receivable, the violation would constitute a breach of the seller’s representation and warranty and would create an obligation of the seller to repurchase the Receivable unless the breach is cured. See “Description of the Transfer and Servicing Agreements—Sale and Assignment of Primary Assets”.

Other Limitations

In addition to the laws limiting or prohibiting deficiency judgments, numerous other statutory provisions, including federal bankruptcy laws and related state laws, may interfere with or affect the ability of a creditor to realize upon collateral or enforce a deficiency judgment. For example, in a Chapter 13 proceeding under the federal bankruptcy law, a court may prevent a creditor from repossessing a motor vehicle and, as part of the rehabilitation plan, may reduce the amount of the secured indebtedness to the market value of the motor vehicle at the time of bankruptcy, as determined by the court, leaving the party providing financing as a general unsecured creditor for the remainder of the indebtedness. A bankruptcy court may also reduce the monthly payments due under the related contract or change the rate of interest and time of repayment of the indebtedness.

Material Federal Income Tax Consequences

The following is a general discussion of the anticipated material United States federal income tax consequences of the purchase, ownership and disposition of securities.  The summary does not purport to deal with federal income tax consequences applicable to all categories of holders, some of which may be subject to special rules.  For example, it does not discuss the tax treatment of beneficial owners of notes (“Note Owners”) or certificates (“Certificate Owners”) that are insurance companies, regulated investment companies or dealers in securities.  Moreover, there are no cases or Internal Revenue Service (“IRS”) rulings on similar transactions involving both debt and equity interests issued by a trust with terms similar to those of the notes and the certificates.  As a result, the IRS might disagree with all or part of the discussion below.  Prospective i nvestors are urged to consult their own tax advisors in determining the federal, state, local, foreign and any other tax consequences to them of the purchase, ownership and disposition of the notes and the certificates.

The following summary is based upon current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), the Treasury regulations promulgated under the Code and judicial or ruling authority, all of which are subject to change, which change may be retroactive.  Each Trust will be provided with an opinion of tax counsel specified in the related prospectus supplement (“Federal Tax Counsel”) regarding some related federal income tax matters discussed below.  An opinion of Federal Tax Counsel, however, is not binding on the IRS or the courts.  No ruling on any of the issues discussed below will be sought from the IRS.  The opinion of Federal Tax Counsel specifically addresses only those issues specifically identified below as being covered by that opinion; however, the opinion also states that the additional discussion set forth below accurately sets forth the advi ce of Federal Tax Counsel with respect to material federal income tax issues.  For purposes of the following summary, references to the Trust, the notes, the certificates and related terms, parties and documents shall be deemed to refer, unless otherwise specified in this prospectus, to each Trust and the notes, certificates and related terms, parties and documents applicable to the issuing entity.

Trusts That Issue Notes

Tax Characterization of the Trusts.

In the case of an issuing entity that issues one or more classes of notes, Federal Tax Counsel will deliver its opinion that the an issuing entity will not be an association, or publicly traded partnership, taxable as a corporation for federal income tax purposes.  The opinion of Federal Tax Counsel will be based on the assumption that the terms of the Trust Agreement and related documents will be complied with, and on counsel’s conclusions that the nature of the income of the issuing entity, or restrictions, if any, on transfers of the certificates, will exempt the issuing entity from the rule that some publicly traded partnerships are taxable as corporations.

If an issuing entity were taxable as a corporation for federal income tax purposes, the issuing entity would be subject to corporate income tax on its taxable income.  The issuing entity’s taxable income would include all of its income on the related Primary Assets, which might be reduced by its interest expense on the notes.  Any corporate income tax could materially reduce cash available to make payments on the notes and distributions on the certificates, and Certificate Owners, and possibly Note Owners, could be liable for any resulting corporate income tax that is unpaid by the issuing entity.

Tax Consequences to Note Owners.

Treatment of the Notes as Indebtedness.  The issuing entity will agree, and the Note Owners will agree by their purchase of notes, to treat the notes as debt for federal tax purposes.  Federal Tax Counsel will, subject to exceptions which, if applicable, will be specified in the related prospectus supplement, advise the owner trust that the notes will be classified as debt for federal income tax purposes, or classified in any other manner as shall be provided in the related prospectus supplement.  If, contrary to the opinion of Federal Tax Counsel, the IRS successfully asserted that one or more of the classes of notes did not represent debt for federal income tax purposes, the notes would be treated as equity interests in the issuing entity.  If so treated, the issuing entity might be treated as a publicly traded partnership that would be taxable as a corporation unless it met particul ar qualifying income tests, and the resulting taxable corporation would not be able to reduce its taxable income by deductions for interest expense on notes recharacterized as equity.  Treatment of the notes as equity interests in a partnership could have adverse tax consequences to some holders, even if the issuing entity were not treated as a publicly traded partnership taxable as a corporation.  For example, income allocable to foreign holders on such recharacterized notes might be subject to United States tax and United States tax return filing and withholding requirements, income allocable to tax-exempt holders on a recharacterized note would constitute “unrelated business taxable income” if some, but not all, of the notes were recharacterized as equity in a partnership, individual holders might be subject to limitations on their ability to deduct their share of issuing entity expenses, and income from the issuing entity’s assets would be taxable to Note Owners without regard to whether cash distributions are made to such Note Owners and without regard to the Note Owners’ method of tax accounting.  The discussion below assumes that the notes will be characterized as debt for federal income tax purposes.

Interest Income on the Notes-General.  Except as discussed below, interest on a note generally is includable in a Note Owner’s income as ordinary interest income when actually or constructively received, if the Note Owner uses the cash method of accounting for federal income tax purposes, or when accrued, if the Note Owner uses an accrual method of accounting for federal income tax purposes.

Original Issue Discount.  Notes of certain series may be issued with “original issue discount” within the meaning of Section 1273(a) of the Code.  Holders of notes issued with original issue discount generally must include original issue discount in gross income for federal income tax purposes as it accrues, in advance of receipt of the cash attributable to such income, under a method that takes account of the compounding of interest.  The Code requires that information with respect to the original issue discount accruing on any note be reported periodically to the IRS and to certain categories of Note Owners.

Each issuing entity will report original issue discount, if any, to the Note Owners based on the Treasury regulations relating to original issue discount (the “OID Regulations”).  The OID Regulations concerning contingent payment debt instruments do not apply to prepayable debt instruments, such as the notes, and other provisions of the OID Regulations either do not apply as to prepayable securities such as the notes or do not address the unique issues prepayable securities present.

The OID Regulations provide that, in the case of debt instruments such as the notes, (i) the amount and rate of accrual of original issue discount will be calculated based on a reasonable assumed prepayment rate (the “Prepayment Assumption”), and (ii) adjustments will be made in the amount and rate of accrual of such discount to reflect differences between the actual prepayment rate and the Prepayment Assumption.  The method for determining the appropriate assumed prepayment rate will eventually be set forth in Treasury regulations, but those regulations have not yet been issued.  The applicable legislative history indicates, however, that such regulations will provide that the assumed prepayment rate for securities such as the notes will be the rate used in pricing the initial offering of those securities.  If the notes of a series are issued with original issue discount, the Prospectus Supplement for that series of notes will specify the Prepayment Assumption.  However, no representation is made that the notes of that series will, in fact, prepay at a rate based on the Prepayment Assumption or at any other rate.

In general, a note will be considered to be issued with original issue discount if its stated redemption price at maturity exceeds its issue price.  Except as discussed below under”—Payment Lag Notes; Initial Period Considerations,” and”—Qualified Stated Interest,” and in the case of certain Variable Rate Notes (as defined below) and accrual notes, the stated redemption price at maturity of a note is its principal amount.  The issue price of a note is the initial offering price to the public (excluding bond houses and brokers) at which a substantial amount of the class of notes is sold.  Notwithstanding the general definition of original issue discount, such discount will be considered to be zero for any note on which such discount is less than 0.25% of its stated redemption price at maturity multiplied by its weighted average life.  For purposes of this rule, we will compute the weighted average life of a note as the sum, for all distributions included in the stated redemption price at maturity of the note (that is, all payments except payments of qualified stated interest), of the amounts determined by multiplying (i) the number of complete years (rounding down for partial years) from the applicable closing date to the date on which each such distribution is expected to be made, determined under the Prepayment Assumption, by (ii) a fraction, the numerator of which is the amount of such distribution and the denominator of which is the note’s stated redemption price at maturity.  The OID Regulations provide that holders will include any de minimis original issue discount ratably as payments of stated principal are made on the notes.

The Note Owner of a note issued with original issue discount must include in gross income the sum of the “daily portions” of such original issue discount for each day during its taxable year on which it held such note.  In the case of an original Note Owner, the daily portions of original issue discount are determined first by calculating the portion of the original issue discount that accrued during each period (an “accrual period”) that begins on the day following a Distribution Date (or in the case of the first such period, begins on the applicable closing date) and ends on the next succeeding Distribution Date.  The original issue discount accruing during each accrual period is then allocated ratably to each day during such period to determine the daily portion of original issue discount for that day.

The portion of the original issue discount that accrues in any accrual period will equal the excess, if any, of (i) the sum of (A) the present value, as of the end of the accrual period, of all of the distributions to be made on the note, if any, in future periods (taking into account events that have occurred during the accrual period such as prepayments or actual losses) and (B) the distributions made on the note during the accrual period that are included in such note’s stated redemption price at maturity, over (ii) the adjusted issue price of such note at the beginning of the accrual period.  The present value of the remaining distributions referred to in the preceding sentence will be calculated (i) assuming that the notes will be prepaid in future periods at a rate computed in accordance with the Prepayment Assumption and (ii) using a discount rate equal to the original yield to maturity of the n otes.  For these purposes, the original yield to maturity of the notes will be calculated based on their issue price and assuming that the notes will be prepaid in accordance with the Prepayment Assumption.  The adjusted issue price of a note at the beginning of any accrual period will equal the issue price of such note, increased by the portion of the original issue discount that has accrued during prior accrual periods, and reduced by the amount of any distributions made on such note in prior accrual periods that were included in such note’s stated redemption price at maturity.

The daily portions of original issue discount may increase or decrease depending on the extent to which the actual rate of prepayments diverges from the Prepayment Assumption.  If original issue discount accruing during any accrual period computed as described above is negative, a Note Owner may only be entitled to offset such amount against positive original issue discount accruing on such note in future accrual periods.

A subsequent Note Owner that purchases a note issued with original issue discount at a cost that is less than its remaining stated redemption price at maturity will also generally be required to include in gross income, for each day on which it holds such note, the daily portions of original issue discount with respect to the note, calculated as described above.  However, if (i) the excess of the remaining stated redemption price at maturity over such cost is less than (ii) the aggregate amount of such daily portions for all days after the date of purchase until final retirement of such note, then such daily portions will be reduced proportionately in determining the income of such Note Owner.

Qualified Stated Interest.  Interest payable on a note which qualifies as “qualified stated interest” for purposes of the OID Regulations will not be includable in the stated redemption price at maturity of the note.  Conversely, if the interest on a note does not constitute “qualified stated interest,” such interest will be includable in the stated redemption price at maturity of the note and the note, consequently, will have original issue discount.  Interest payments will not qualify as qualified stated interest unless the interest payments are “unconditionally payable.” The OID Regulations state that interest is unconditionally payable if reasonable legal remedies exist to compel timely payment, or the debt instrument otherwise provides terms and conditions that make the likelihood of late payment (other than a late payment that occurs within a reasonable g race period) or nonpayment of interest a remote contingency, as defined in the OID Regulations.   Any terms or conditions that do not reflect arm’s length dealing or that the Note Owner does not intend to enforce are not considered.  Subordinate classes of notes may lack the right to enforce payment until they are the Senior Class.  However, absent guidance to the contrary and unless disclosed in the related prospectus supplement, the Trustee will, for information reporting purposes, treat all stated interest on all classes of notes as qualified stated interest.

Premium.  A purchaser of a note that purchases such note at a cost greater than its remaining stated redemption price at maturity will be considered to have purchased such note at a premium, and may, under Section 171 of the Code, elect to amortize such premium under a constant yield method over the life of the note.  The Prepayment Assumption is probably taken into account in determining the life of the note for this purpose.  Except as provided in regulations, amortizable premium will be treated as an offset to interest income on the note.

Payment Lag Notes; Initial Period Considerations.  Certain notes may provide for distributions of interest based on a period that is the same length as the interval between Distribution Dates but ends prior to each Distribution Date.  Any interest that accrues prior to the applicable closing date may be treated under the OID Regulations either (i) as part of the issue price and the stated redemption price at maturity of the notes or (ii) as not included in the issue price or the stated redemption price.  The OID Regulations provide a special application of the de minimis rule for debt instruments with long first accrual periods where the interest payable for the first period is at a rate which is effectively less than that which applies in all other periods.  In such cases, for the sole purpose of determining whether original issue discount is de minimis, the OID Regulations provide th at the stated redemption price is equal to the instrument’s issue price plus the greater of the amount of foregone interest or the excess (if any) of the instrument’s stated principal amount over its issue price.

Variable Rate Notes.  Under the OID Regulations, notes paying interest at a variable rate (each, a “Variable Rate Note”) are subject to special rules.  A Variable Rate Note will qualify as a “variable rate debt instrument” if (i) its issue price does not exceed the total noncontingent principal payments due under the Variable Rate Note by more than a specified de minimis amount; (ii) it provides for stated interest, paid or compounded at least annually, at a current value of (a) one or more qualified floating rates, (b) a single fixed rate and one or more qualified floating rates, (c) a single objective rate or (d) a single fixed rate and a single objective rate that is a qualified inverse floating rate; and (iii) it does not provide for any principal payments that are contingent, as defined in the OID Regulations, except as provided in (i), above.  The OID Regulations r elating to contingent payment debt instruments do not apply to prepayable debt instruments, such as the notes.  In general, the regulations addressing the treatment of contingent payment obligations require accruing income as a yield comparable to what the issuer would pay on non-contingent debt and then making appropriate adjustments as the contingencies become fixed.  In addition, losses on sale are ordinary to the extent of prior accruals and all gains on sale are ordinary.  As similar approach may ultimately be applied to prepayable obligations such as the notes.

A “qualified floating rate” is any variable rate where variations in the value of such rate can reasonably be expected to measure contemporaneous variations in the cost of newly borrowed funds in the currency in which the Variable Rate Note is denominated.  A multiple of a qualified floating rate will generally not itself constitute a qualified floating rate for purposes of the OID Regulations.  However, a variable rate equal to (i) the product of a qualified floating rate and a fixed multiple that is greater than 0.65 but not more than 1.35 or (ii) the product of a qualified floating rate and a fixed multiple that is greater than 0.65 but not more than 1.35, increased or decreased by a fixed rate will constitute a qualified floating rate for purposes of the OID Regulations.  In addition, under the OID Regulations, two or more qualified floating rates that can reasonably be expected to h ave approximately the same values throughout the term of the Variable Rate Note will be treated as a single qualified floating rate (a “Presumed Single Qualified Floating Rate”).  Two or more qualified floating rates with values within 25 basis points of each other as determined on the Variable Rate Note’s issue date will be conclusively presumed to be a Presumed Single Qualified Floating Rate.  Notwithstanding the foregoing, a variable rate that would otherwise constitute a qualified floating rate, but which is subject to one or more restrictions such as a cap or floor, will not be a qualified floating rate for purposes of the OID Regulations unless the restriction is fixed throughout the term of the Variable Rate Note or the restriction is not reasonably expected as of the issue date to significantly affect the yield of the Variable Rate Note.

An “objective rate” is a rate that is not itself a qualified floating rate but which is determined using a single fixed formula and which is based upon objective financial or economic information.  The OID Regulations also provide that other variable rates may be treated as objective rates if so designated by the IRS in the future.  Despite the foregoing, a variable rate of interest on a Variable Rate Note will not constitute an objective rate if it is reasonably expected that the average value of such rate during the first half of the Variable Rate Note’s term will be either significantly less than or significantly greater than the average value of the rate during the final half of the Variable Rate Note’s term.  Further, an objective rate does not include a rate that is based on information that is within the control of the issuer (or a party related to the issuer) or that is unique to the circumstances of the issuer (or a party related to the issuer).  An objective rate will qualify as a “qualified inverse floating rate” if such rate is equal to a fixed rate minus a qualified floating rate and variations in the rate can reasonably be expected to inversely reflect contemporaneous variations in the qualified floating rate.  The OID Regulations also provide that if a Variable Rate Note provides for stated interest at a fixed rate for an initial period of less than one year followed by a variable rate that is either a qualified floating rate or an objective rate and if the variable rate on the Variable Rate Note’s issue date is intended to approximate the fixed rate, then the fixed rate and the variable rate together will constitute either a single qualified floating rate or objective rate, as the case may be (a “Presumed Single Variable Rate”).  If the value of the variable rate and the initial fixed rate are within 25 basis points of each o ther as determined on the Variable Rate Note’s issue date, the variable rate will be conclusively presumed to approximate the fixed rate.

For Variable Rate Notes that qualify as “variable rate debt instruments” under the OID Regulations and provide for interest at either a single qualified floating rate, a single objective rate, a Presumed Single Qualified Floating Rate or a Presumed Single Variable Rate throughout the term (a “Single Variable Rate Note”), original issue discount is computed as described above in”—Interest Income on the Notes—Original Issue Discount” based on the following: (i) stated interest on the Single Variable Rate Note which is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually will constitute qualified stated interest; (ii) by assuming that the variable rate on the Single Variable Rate Note is a fixed rate equal to: (a) in the case of a Single Variable Rate Note with a qualified floating rate or a qualified inverse floating rate, the value, as of the issue date, of the qualified floating rate or the qualified inverse floating rate or (b) in the case of a Single Variable Rate Note with an objective rate (other than a qualified inverse floating rate), a fixed rate which reflects the reasonably expected yield for such Single Variable Rate Note; and (iii) the qualified stated interest allocable to an accrual period is increased (or decreased) if the interest actually paid during an accrual period exceeds (or is less than) the interest assumed to be paid under the assumed fixed rate described in (ii), above.

In general, any Variable Rate Note other than a Single Variable Rate Note (a “Multiple Variable Rate Note”) that qualifies as a “variable rate debt instrument” will be converted into an “equivalent” fixed rate debt instrument for purposes of determining the amount and accrual of original issue discount and qualified stated interest on the Multiple Variable Rate Note.  The OID Regulations generally require that such a Multiple Variable Rate Note be converted into an “equivalent” fixed rate debt instrument by substituting any qualified floating rate or qualified inverse floating rate provided for under the terms of the Multiple Variable Rate Note with a fixed rate equal to the value of the qualified floating rate or qualified inverse floating rate, as the case may be, as of the Multiple Variable Rate Note’s issue date.  Any objective rate (other than a qualifi ed inverse floating rate) provided for under the terms of the Multiple Variable Rate Note is converted into a fixed rate that reflects the yield that is reasonably expected for the Multiple Variable Rate Note.  (A Multiple Variable Rate Note may not bear more than one objective rate.) In the case of a Multiple Variable Rate Note that qualifies as a “variable rate debt instrument” and provides for stated interest at a fixed rate in addition to either one or more qualified floating rates or a qualified inverse floating rate, the fixed rate is initially converted into a qualified floating rate (or a qualified inverse floating rate, if the Multiple Variable Rate Note provides for a qualified inverse floating rate).  Under such circumstances, the qualified floating rate or qualified inverse floating rate that replaces the fixed rate must be such that the fair market value of the Multiple Variable Rate Note as of the Multiple Variable Rate Note’s issue date is approximately the same as the fair market value of an otherwise identical debt instrument that provides for either the qualified floating rate or qualified inverse floating rate rather than the fixed rate.  Subsequent to converting the fixed rate into either a qualified floating rate or a qualified inverse floating rate, the Multiple Variable Rate Note is then converted into an “equivalent” fixed rate debt instrument in the manner described above.

Once the Multiple Variable Rate Note is converted into an “equivalent” fixed rate debt instrument pursuant to the foregoing rules, the amounts of original issue discount and qualified stated interest, if any, are determined for the “equivalent” fixed rate debt instrument by applying the original issue discount rules to the “equivalent” fixed rate debt instrument in the manner described above in”—Interest Income on the Notes—Original Issue Discount.” A holder of the Multiple Variable Rate Note will account for such original issue discount and qualified stated interest as if the holder held the “equivalent” fixed rate debt instrument.  In each accrual period, appropriate adjustments will be made to the amount of qualified stated interest or original issue discount assumed to have been accrued or paid with respect to the “equivalent” fixed r ate debt instrument in the event that such amounts differ from the actual amount of interest accrued or paid on the Multiple Variable Rate Note during the accrual period.

If a Variable Rate Note does not qualify as a “variable rate debt instrument” under the OID Regulations, then the Variable Rate Note would be treated as a contingent payment debt obligation.  The manner in which a Variable Rate Note would be taxed if such note were treated as a contingent payment debt obligation is not governed by the OID Regulations relating to contingent payment debt obligations which do not apply to prepayable debt instruments, such as the notes, and Treasury regulations do not otherwise address this point and it is unclear how such instruments should be treated.

Market Discount.  A Note Owner that acquires a note at a market discount (that is, a discount that exceeds any unaccrued original issue discount) will recognize gain upon receipt of a principal distribution, regardless of whether the distribution is scheduled or is a prepayment.  In particular, the Note Owner will be required to allocate that principal distribution first to the portion of the market discount on such note that has accrued but has not previously been includable in income, and will recognize ordinary income to that extent.  In general terms, unless Treasury regulations when issued provide otherwise, market discount on a note may be treated, at the election of the holder of the note, as accruing either (i) under a constant yield method, taking into account the Prepayment Assumption, or (ii) in proportion to accruals of original issue discount (or, if there is no original issue discount, in proportion to stated interest on the note).

In addition, a Note Owner may be required to defer deductions for a portion of the Note Owner’s interest expense on any debt incurred or continued to purchase or carry a note purchased with market discount.  The deferred portion of any interest deduction would not exceed the portion of the market discount on the note that accrues during the taxable year in which such interest would otherwise be deductible and, in general, would be deductible when such market discount is included in income upon receipt of a principal distribution on, or upon the sale of, the note.  The Code requires that information necessary to compute accruals of market discount be reported periodically to the IRS and to certain categories of Note Owners.

Notwithstanding the above rules, market discount on a note will be considered to be zero if such discount is less than 0.25% of the remaining stated redemption price at maturity of such note multiplied by its weighted average remaining life.  Weighted average remaining life presumably is calculated in a manner similar to weighted average life (described above under”—Interest Income on the Notes—Original Issue Discount”), taking into account distributions (including prepayments) prior to the date of acquisition of such note by the subsequent purchaser.  If market discount on a note is treated as zero under this rule, the actual amount of such discount must be allocated to the remaining principal distributions on such note in proportion to the amounts of such principal distributions, and when each such distribution is made, gain equal to the discount, if any, allocated to the distribu tion will be recognized.

Election to Treat All Interest Under the Constant Yield Rules.  The OID Regulations allow a holder of a Note to elect to include in gross income all interest that accrues on such debt instrument using the constant yield method.  For purposes of this election, interest includes stated interest, original issue discount, and market discount, as adjusted to account for any premium.  If an election were to be made with respect to a Note with market discount, the Note Owner would be deemed to have made an election to include in income currently market discount with respect to all other debt instruments having market discount that the grantor trust certificateholder acquires during the year of the election or afterward.  See”—Market Discount” above.  Similarly, a Note Owner that makes this election for a Note that is acquired at a premium will be deemed to have made an ele ction to amortize bond premium with respect to all debt instruments having amortizable bond premium that the grantor trust Note Owner owns at the beginning of the first taxable year to which the election applies or acquires afterward.  See “—Premium” above.  The election to accrue interest, discount and premium on a constant yield method with respect to a Note is irrevocable.  Note Owners should consult their own tax advisors regarding the availability or advisability of such an election.

Sales of Notes.  If a note is sold, the seller will recognize gain or loss equal to the difference between the amount realized on the sale and its adjusted basis in the note.  A holder’s adjusted basis in a note generally equals the cost of the note to the holder, increased by income reported by the holder with respect to the note and reduced (but not below zero) by distributions on the note (other than qualified stated interest) received by the holder and by amortized premium.  Subject to the discussion of the rules applicable to contingent payment debt obligations above, any such gain or loss generally will be capital gain or loss provided the note is held as a capital asset, except for gain recognized on the sale of a note by a seller who purchased the note at a market discount would be taxable as ordinary income in an amount not exceeding the portion of such discount that accrued d uring the period the note was held by such seller, reduced by any market discount includable in income under the rules described above under”—Interest Income on the Notes—Market Discount.”  Further, the notes will be “evidences of indebtedness” within the meaning of Section 582(c)(1) of the Code, so that gain or loss recognized from a sale of a note by a bank or other financial institution to which such section applies would be ordinary income or loss.

Allocations of Realized Losses.  The manner losses are claimed on the notes as a result of defaults by the underlying obligors is complex and differs depending on the characterization of the person considered the issuer of the notes for federal tax purposes.  Whether the notes are governed by the loss rules for bad debts under Code Section 166 or for worthless securities under Code Section 165 depends on whether the notes are considered issued by a corporation.  If there is a single corporate holder of the Certificates constituting all of the equity interests in the issuing Trust Fund, then the issuing Trust will be a disregarded entity and the notes will be considered issued by a corporation subject to the loss rules of Code Section 165 (which affects both timing and character of loss for corporate taxpayers, and character and possibly timing for other taxpayers).  If the notes are co nsidered issued by a grantor trust, then the notes may be treated as issued in proportion to the nature of the Certificateholders (e.g, if some Certificateholders are natural persons or partnerships and some are corporations, losses on the notes would be governed in part by Code Section 166 and in part by Code Section 165).  If the notes are considered issued by a partnership then they would be governed by the rules under Code Section 166.  Investors should consult their tax advisors as to the character and timing of any loss that can be claimed with respect to a note.

Short-Term Notes.  In the case of a note with a maturity of one year or less from its issue date (a “Short-Term Note”), no interest is treated as qualified stated interest, and therefore all interest is included in original issue discount.  Note Owners that report income for federal income tax purposes on an accrual method and some other Note Owners, including banks and certain dealers in securities, (collectively, “Short-Term Accruers”) are required to include original issue discount in income on Short-Term Notes on a straight-line basis, unless an election is made to accrue the original issue discount according to a constant yield method based on daily compounding.

Any other Note Owner of a Short-Term Note is not required to accrue original issue discount for federal income tax purposes, unless it elects to do so.  In the case of a Note Owner that is not required, and does not elect, to include original issue discount in income currently, any gain realized on the sale, exchange or retirement of a Short-Term Note is ordinary income to the extent of the original issue discount accrued on a straight-line basis, or, if elected, according to a constant yield method based on daily compounding, through the date of sale, exchange or retirement.  In addition, Note Owners that are not required, and do not elect, to include original issue discount in income currently are required to defer deductions for any interest paid on indebtedness incurred or continued to purchase or carry a Short-Term Note in an amount not exceeding the deferred interest income with respect to the Sh ort-Term Note, which includes both the accrued original issue discount and accrued interest that are payable but that have not been included in gross income, until the deferred interest income is realized.  A Note Owner may elect to apply the foregoing rules, except for the rule characterizing gain on sale, exchange or retirement as ordinary, with respect to “acquisition discount” rather than original issue discount.  Acquisition discount is the excess of the stated redemption price at maturity of the Short-Term Note over the Note Owner’s basis in the Short-Term Note.  This election applies to all obligations acquired by the taxpayer on or after the first day of the first taxable year to which the election applies, unless revoked with the consent of the IRS.  A Note Owner’s tax basis in a Short-Term Note is increased by the amount included in the Note Owner’s income with respect to the note.

Foreign Investors in Notes.  Except as discussed below, a Note Owner that is not a “United States person” (as defined below) generally will not be subject to United States income or withholding tax in respect of a distribution on a note provided that (i) the holder complies to the extent necessary with certain certification requirements, which generally relate to the identity of the beneficial owner and the status of the beneficial owner as a person that is not a United States person (as defined below), (ii) the holder is not a “10-percent shareholder” within the meaning of Section 871(h)(3)(B) of the Code, which could be interpreted to include a person that directly or indirectly owns 10% or more of the certificates in the issuing entity, (iii) the holder is not a “controlled foreign corporation” (as defined in the Code) related to the issuing entity or related to a 10 percent holder of certificates in the issuing entity, and (iv) the holder is not engaged in a United States trade or business, or otherwise subject to federal income tax as a result of any direct or indirect connection to the United States other than through its ownership of a note.  For these purposes, the term “United States person” means (i) a citizen or resident of the United States, (ii) a corporation or partnership (or other entity properly treated as a corporation or partnership for federal income tax purposes) created or organized in or under the laws of the United States or any State thereof or the District of Columbia, (iii) an estate whose income is includable in gross income for United States federal income taxation regardless of its source, and (iv) a trust for which one or more United States persons have the authority to control all substantial decisions and for which a court of the United States can exercise primary supervision over the trust’s administration and certain el igible trusts that have elected to be treated as United States persons.  A “Foreign Person” is any person that is not a United States person.  Each Note Owner should consult its tax advisors regarding the tax documentation and certifications that must be provided to secure the exemption from United States withholding taxes.

Any capital gain realized on the sale, redemption, retirement or other taxable disposition of a note by a Foreign Person generally will be exempt from United States federal income and withholding tax, provided that (i) such gain is not effectively connected with the conduct of a trade or business in the United States by the Foreign Person and (ii) in the case of an individual Foreign Person, the Foreign Person is not present in the United States for 183 days or more in the taxable year.

If the interest, gain or income on a note held by a Foreign Person is effectively connected with the conduct of a trade or business in the United States by the Foreign Person (although exempt from the withholding tax previously discussed if the holder provides an appropriate statement establishing that such income is so effectively connected), the holder generally will be subject to United States federal income tax on the interest, gain or income at regular federal income tax rates.  In addition, if the Foreign Person is a foreign corporation, it may be subject to a branch profits tax equal to 30% of its “effectively connected earnings and profits,” within the meaning of the Code, for the taxable year, as adjusted for certain items, unless it qualifies for a lower rate under an applicable tax treaty (as modified by the branch profits tax rules).

Backup Withholding on Notes.  Distributions made on the notes and proceeds from the sale of notes to or through certain brokers may be subject to a “backup” withholding tax on “reportable payments” (including interest accruals, original issue discount, and, under certain circumstances, distributions in reduction of principal amount) if the holder of the notes fails to comply with certain identification procedures, unless the Note Owner is an exempt recipient under applicable provisions of the Code and, if necessary, demonstrates such status.  Any amounts so withheld from distributions on the notes would be refunded by the IRS or allowable as a credit against the Note Owner’s federal income tax.

Reportable Transactions. Pursuant to recently enacted legislation, a penalty in the amount of $10,000 in the case of a natural person and $50,000 in any other case is imposed on any taxpayer that fails to timely file an information return with the IRS with respect to a “reportable transaction” (as defined in Section 6011 of the Code). The rules defining “reportable transactions” are complex, and include transactions that result in certain losses that exceed threshold amounts. Prospective investors are advised to consult their own tax advisers regarding any possible disclosure obligations in light of their particular circumstances.

Tax Consequences to Certificate Owners of Owner Trust

Treatment of the Issuing Entity as a Partnership.  The correct characterization of a Trust that has issued debt and is not otherwise taxed as a corporation is uncertain.  If the Trust has only a single class of equity and the trustee does not have the authority to accept any additional assets after the initial acquisition of receivables (except within a certain prescribed pre-funding period not exceeding three months) and has very limited powers of investment (for example does not hold any reserve fund that could ultimately flow to the Certificateholders if not needed to pay the noteholders) the Trust could qualify as a grantor trust with interest expense.  As a consequence, each Certificateholder would be treated as owning a pro rata share of the Trust assets, earning income thereon and incurring the expenses of the Trust (including the interest expense on the notes).  See  7;Grantor Trusts.”  If a Trust that issues notes intends to take the position that Certificateholders hold interests in a grantor trust it will be disclosed in the related prospectus supplement.  In addition, it is possible that a Trust that issued notes could qualify as a partnership eligible to make an election under Section 761 to not be taxed under the main partnership provisions of the Code (although certain ancillary provisions, including the rules relating to audits of partnerships, would continue to apply).  Such an election would cause Certificateholders to be treated as essentially the same as holding an interest in a grantor trust.  However, the IRS has recently taken a narrow interpretation of the type of entities that qualify for this election, which may not include a Trust.  If a Trust that is treated as a partnership intends to report in accordance with having made an election under Section 761 to be excluded from the main partnership provisions of the Code the co nsequences of such reporting will be disclosed in the related prospectus supplement along with a description of the consequences of making such an election.  If there is only one Certificateholder in a Trust that represents all of the equity of the Trust for federal income tax purposes, the separate existence of the Trust is disregarded, and the Certificateholder is treated as the owner of all of the assets of the Trust and as the issuer of the notes of the Trust for federal income tax purposes.  For all other Trust that issue notes.  The Trust will agree, and the related Certificate Owners will agree by their purchase of certificates, if there is more than one Certificate Owner, to treat the Trust as a partnership for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, with the assets of the partnership being the assets held by the Trust, the partners of the partnership being the Certificate Owners, including, to the extent relevan t, the seller in its capacity as recipient of distributions from any reserve fund, and the notes being debt of the partnership, and if there is one Certificate Owner, to treat the Certificate Owner as the owner of the assets of the Trust and to treat the Trust as a disregarded entity.  However, the proper characterization of the arrangement involving the Trust, the certificates, the notes, the seller, the depositor and the servicer is not certain because there is no authority on transactions closely comparable to that contemplated in this prospectus.

A variety of alternative characterizations are possible.  For example, because the certificates have certain features characteristic of debt, the certificates might be considered debt of the Trust.  Generally, provided such certificates are issued at or close to face value, any such characterization would not result in materially adverse tax consequences to holders of Certificates as compared to the consequences from treatment of the certificates as equity in a partnership, described below.  The following discussion assumes that the certificates represent equity interests in a partnership.

Partnership Taxation.  As a partnership, the Trust will not be subject to federal income tax.  Rather, each Certificate Owner will be required to take into account separately the Certificate Owner’s allocable share of income, gains, losses, deductions and credits of the Trust, whether or not there is a corresponding cash distribution.  The Trust will generally be required to use an accrual method of accounting and a tax year based on the tax year of its certificateholders.  Thus, cash basis holders will in effect be required to report income from the certificates on the accrual basis and Certificate Owners may become liable for taxes on Trust income even if they have not received cash from the Trust to pay the taxes.  The Trust’s income will consist primarily of interest and finance charges earned on the related Primary Assets, including appropriate adjustments for marke t discount, original issue discount and bond premium, and any gain upon collection or disposition of the Primary Assets.

The Trust’s deductions will consist primarily of interest accruing with respect to the notes, servicing and other fees, and losses or deductions upon collection or disposition of Primary Assets.

The federal income tax treatment of any Collateral Certificates held by the Trust will depend on the terms of the Collateral Certificates and their characterization (for example, as indebtedness) for federal income tax purposes.

The tax items of a partnership are allocable to the partners in accordance with the Code, Treasury regulations and the partnership agreement (i.e., the Trust Agreement and related documents).  To the extent that there is more than one class of equity (or potentially more than one class of equity) the related prospectus supplement will describe the manner in which income from the assets of the Trust Fund will be allocated.

Assuming notes are also issued, all or substantially all of the taxable income allocated to a Certificate Owner that is a pension, profit sharing or employee benefit plan or other tax-exempt entity, including an individual retirement account, will constitute “unrelated business taxable income” generally taxable to the holder under the Code.

An individual taxpayer’s share of expenses of the Trust, including fees to the servicer, but not interest expense, would be miscellaneous itemized deductions and thus deductible only to the extent such expenses plus all other miscellaneous itemized deductions exceeds two percent of the individual’s adjusted gross income.  An individual taxpayer will be allowed no deduction for his share of expenses of the Trust, other than interest, in determining his liability for alternative minimum tax.  In addition, Section 68 of the Code, provides that the amount of itemized deductions otherwise allowable for the taxable year for an individual whose adjusted gross income exceeds a prescribed threshold amount (which is adjusted annually for inflation) will be reduced by the lesser of (1) 3% of the excess of adjusted gross income over the specified threshold amount or (2) 80% of the amount of itemized dedu ctions otherwise allowable for the applicable taxable year.  The reduction under Code Section 68 is itself reduced by one-third for taxable years beginning in 2006 and 2007, two-thirds for taxable years beginning in 2008 and 2009, and fully reduced for taxable years beginning in 2010 with no reduction thereafter.  Accordingly, deductions might be disallowed to the individual in whole or in part and might result in the Certificate Owner being taxed on an amount of income that exceeds the amount of cash actually distributed to the holder over the life of the Trust.  In the case of a partnership that has 100 or more partners and elects to be treated as an “electing large partnership,” 70% of that partnership’s miscellaneous itemized deductions will be disallowed, although the remaining deductions will generally be allowed at the partnership level and will not be subject to the 2% floor that would otherwise be applicable to individual partners.

The Trust intends to make all tax calculations relating to income and allocations to Certificate Owners on an aggregate basis to the extent relevant.  If the IRS were to require that the calculations be made separately for each Primary Asset, the calculations may result in some timing and character differences under some circumstances.

Discount and Premium.  The purchase price paid by the Trust for the related Primary Assets may be greater or less than the remaining principal balance of the Primary Assets at the time of purchase.  If so, the Primary Assets will have been acquired at a premium or market discount, as the case may be.  See “Tax Consequences to Note Owners—Premium” and”— Market Discount” above.  If the Primary Assets are debt instruments, the yield on which may be affected by prepayments, the trust will be required to use a prepayment assumption for purposes of calculating accruals of original issue discount and market discount and amortization of premium.  As indicated above, the Trust will make this calculation on an aggregate basis, but it is possible that the IRS might require that it be recomputed on a Primary Asset-by-Primary Asset basis.  Further, to the ext ent a Primary Asset is a Treasury Strip, Private Label Custody Strip, REFCO Strip or other instrument evidencing ownership of specific interest and/or principal of a particular bond, it will be subject to the rules relating to original issue discount (in lieu of the rules relating to market discount).  See “ Tax Consequences to Note Owners—Original Issue Discount” above.

If the Trust acquires the Primary Assets at a market discount or premium, the Trust will elect to include any market discount in income currently as it accrues over the life of the Primary Assets or to offset any premium against interest income on the Primary Assets.  As indicated above, a portion of the market discount income or premium deduction may be allocated to Certificate Owners.

Section 708 Termination.  Under Section 708 of the Code, the Trust will be deemed to terminate for federal income tax purposes if 50% or more of the capital and profits interests in the Trust are sold or exchanged within a 12-month period.  If a termination occurs under Section 708 of the Code, the Trust will be considered to contribute its assets to a new Trust, which would be treated as a new partnership, in exchange for certificates in the new Trust.  The original Trust will then be deemed to distribute the certificates in the new Trust to each of the owners of certificates in the original Trust in liquidation of the original Trust.  The Trust will not comply with particular technical requirements that might apply when a constructive termination occurs.  As a result, the Trust may be subject to some tax penalties and may incur additional expenses if it is required to comply wit h those requirements.  Furthermore, the Trust might not be able to comply with these requirements due to lack of data.

Disposition of Certificates.  Generally, capital gain or loss will be recognized on a sale of certificates in an amount equal to the difference between the amount realized and the seller’s tax basis in the certificates sold.  Any gain or loss would be long-term capital gain or loss if the Certificate Owner’s holding period exceeded one year.  A Certificate Owner’s tax basis in a Certificate will generally equal its cost, increased by its share of Trust income allocable to the Certificate Owner and decreased by any distributions received or losses allocated with respect to the certificate.  In addition, both the tax basis in the certificates and the amount realized on a sale of a certificate would include the Certificate Owner’s share, determined under Treasury Regulations, of the notes and other liabilities of the Trust.  A Certificate Owner acquiring certifica tes at different prices will generally be required to maintain a single aggregate adjusted tax basis in the certificates and, upon a sale or other disposition of some of the certificates, allocate a portion of the aggregate tax basis to the certificates sold, rather than maintaining a separate tax basis in each certificate for purposes of computing gain or loss on a sale of that certificate.  A portion holding rule is applied, however, if a Certificateholder has held some of its interest in the Partnership Trust Fund for one year or less and some of its interest for more than one year and a “by lot” identification is not permitted.

If a Certificate Owner is required to recognize an aggregate amount of income (not including income attributable to disallowed itemized deductions described above) over the life of the certificates that exceeds the aggregate cash distributions with respect to the certificates, the excess will generally give rise to a capital loss upon the retirement of the certificates.

Allocations Between Transferors and Transferees.  In general, the Trust’s taxable income and losses will be determined monthly and the tax items for a particular calendar month will be apportioned among the Certificate Owners in proportion to the principal amount of certificates owned by them as of the close of the last day of the applicable month.  As a result, a Certificate Owner purchasing certificates may be allocated tax items, which will affect the purchaser’s tax liability and tax basis, attributable to periods before the actual transaction.

The use of a monthly convention may not be permitted by existing Treasury regulations.  If a monthly convention is not allowed, or only applies to transfers of less than all of the partner’s interest, taxable income or losses of the Trust might be reallocated among the Certificate Owners.  The Trust’s method of allocation between transferors and transferees may be revised to conform to a method permitted by future laws, regulations or other IRS guidance.

Section 731 Distributions.  In the case of any distribution to a Certificate Owner, no gain will be recognized to that Certificate Owner to the extent that the amount of any money distributed for that Certificate does not exceed the adjusted basis of that Certificate Owner’s interest in the Certificate.  To the extent that the amount of money distributed exceeds that Certificate Owner’s adjusted basis, gain will be currently recognized.  In the case of any distribution to a Certificate Owner, no loss will be recognized except upon a distribution in liquidation of a Certificate Owner’s interest.  Any gain or loss recognized by a Certificate Owner generally will be capital gain or loss.

Section 754 Election.  In the event that a Certificate Owner sells its certificates at a profit (or loss), the purchasing Certificate Owner will have a higher (or lower) basis in the certificates than the selling Certificate Owner had.  The tax basis of the Trust’s assets will not be adjusted to reflect that higher (or lower) basis unless there is a “substantial basis reduction” within the meaning of Section 734 of the Code or unless the Trust were to file an election under Section 754 of the Code.  Because the trust will most likely qualify as a “securitization partnership” within the meaning of Section 743(f) of the Code, there will not be a substantial basis reduction with respect to the sale of the certificates.  With respect to the election under Section 754 of the Code, in order to avoid the administrative complexities that would be involved in keeping ac curate accounting records, as well as potentially onerous information reporting requirements, the Trust current does not intend to make an election under Section 754 of the Code.  As a result, Certificate Owners might be allocated a greater or lesser amount of Trust income than would be appropriate based on their own purchase price for certificates.

Administrative Matters.  The trustee is required to keep or cause to be kept complete and accurate books of the Trust.  For each trust which is not a fixed pool of assets or that has multiple classes of equity ownership, the trustee will file a partnership information return (IRS Form 1065) with the IRS for each taxable year of the Trust and will report each Certificate Owner’s allocable share of items of Trust income and expense to Certificate Owners and the IRS on Schedule K-1.  The Trust will provide the Schedule K-1 information to nominees that fail to provide the Trust with the information statement described below and the nominees will be required to forward this information to the beneficial owners of the certificates.  Generally, holders must timely file tax returns that are consistent with the information return filed by the Trust or be subject to penalties unless the hol der notifies the IRS of all the inconsistencies.

Under Section 6031 of the Code, any person that holds certificates as a nominee at any time during a calendar year is required to furnish the Trust with a statement containing specific information on the nominee, the beneficial owners and the certificates so held.  The information includes (1) the name, address and taxpayer identification number of the nominee and (2) as to each beneficial owner:  (a) the name, address and identification number of such person, (b) whether such person is a United States person, a tax-exempt entity or a foreign government, an international organization, or any wholly owned agency or instrumentality of either of the foregoing, and (c) particular information on certificates that were held, bought or sold on behalf of the person throughout the year.

In addition, brokers and financial institutions that hold certificates through a nominee are required to furnish directly to the Trust information as to themselves and their ownership of certificates.  A clearing agency registered under Section 17A of the Exchange Act is not required to furnish any information statement to the Trust.  The information referred to above for any calendar year must be furnished to the Trust on or before the following January 31.  Nominees, brokers and financial institutions that fail to provide the Trust with the information described above may be subject to penalties.

The depositor ordinarily will be designated as the tax matters partner for each Trust in the related Trust Agreement and, as the tax matters partner, will be responsible for representing the Certificate Owners in some specific disputes with the IRS.  The Code provides for administrative examination of a partnership as if the partnership were a separate and distinct taxpayer.  Generally, the statute of limitations for partnership items does not expire before the later of three years after the date on which the partnership information return is filed or the last day for filing the return for the applicable year, determined without regard to extensions.  Any adverse determination following an audit of the return of the Trust by the appropriate taxing authorities could result in an adjustment of the returns of the Certificate Owners, and, under some circumstances, a Certificate Owner may be precluded from separately litigating a proposed adjustment to the items of the Trust.  An adjustment could also result in an audit of a Certificate Owner’s returns and adjustments of items not related to the income and losses of the Trust.

A special audit system exists for qualifying large partnerships that have elected to apply a simplified flow-through reporting system under Sections 771 through 777 of the Code.  Unless otherwise specified in the applicable Prospectus Supplement, a Trust will not elect to apply the simplified flow-through reporting system.

Taxation of Tax Exempt Owners.  Certificate Owners that are tax-exempt will be subject to the tax on unrelated business taxable income (also known as UBTI), if the trust has issued other securities that are debt, or treated as debt, for federal income tax purposes.

Taxation of Certain Foreign Certificate Owners.  As used below, the term “Non-United States Owner” means a Certificate Owner that is not a United States person, as defined under “Tax Consequences to Note Owners—Foreign Investors in Notes,” above.

It is not clear whether the Trust would be considered to be engaged in a trade or business in the United States for purposes of federal withholding taxes with respect to Non-United States Owners because there is no clear authority dealing with that issue under facts substantially similar to those described in this Prospectus.  Although it is not expected that the Trust would be engaged in a trade or business in the United States for these purposes, the Trust will withhold as if it were so engaged in order to protect the Trust from possible adverse consequences of a failure to withhold.  The Trust expects to withhold on the portion of its taxable income that is allocable to Non-United States Owners pursuant to Section 1446 of the Code, as if the income were effectively connected to a U.S. trade or business, at a rate equal to the highest income tax rate applicable to corporations for Non-United States O wners that are taxable as corporations and at a rate equal to the highest income tax rate applicable to individuals for all other Non-United States Owners.

Subsequent adoption of Treasury regulations or the issuance of other administrative pronouncements may require the Trust to change its withholding procedures.

Each Non-United States Owner might be required to file a U.S. individual or corporate income tax return on its share of the Trust’s income including, in the case of a corporation, a return in respect of the branch profits tax.  Assuming the Trust is not engaged in a U.S. trade or business, a Non-United States Owner would be entitled to a refund with respect to all or a portion of taxes withheld by the Trust if, in particular, the Owner’s allocable share of interest from the Trust constituted “portfolio interest” under the Code.

The interest, however, may not constitute “portfolio interest” if, among other reasons, the underlying obligation is not in registered form or if the interest is determined without regard to the income of the Trust, in the later case, the interest being properly characterized as a guaranteed payment under Section 707(c) of the Code.  If this were the case, Non-United States Owners would be subject to a United States federal income and withholding tax at a rate of 30 percent on the Trust’s gross income, without any deductions or other allowances for costs and expenses incurred in producing the income, unless reduced or eliminated pursuant to an applicable treaty.  In this case, a Non-United States Owner would only be entitled to a refund for that portion of the taxes, if any, in excess of the taxes that should have been withheld with respect to the interest.

Backup Withholding.  Distributions made on the certificates and proceeds from the sale of the certificates will be subject to a “backup” withholding tax if, in general, the Certificate Owner fails to comply with particular identification procedures, unless the holder is an exempt recipient under applicable provisions of the Code and, if necessary, demonstrates such status.  Any amounts so withheld would be refunded by the IRS or allowable as a credit against the Certificate Owner’s federal income tax.

Reportable Transactions. Pursuant to recently enacted legislation, a penalty in the amount of $10,000 in the case of a natural person and $50,000 in any other case is imposed on any taxpayer that fails to timely file an information return with the IRS with respect to a “reportable transaction” (as defined in Section 6011 of the Code). The rules defining “reportable transactions” are complex, and include transactions that result in certain losses that exceed threshold amounts. Prospective investors are advised to consult their own tax advisers regarding any possible disclosure obligations in light of their particular circumstances.

Grantor Trusts

Characterization.  In the case of a grantor trust, Federal Tax Counsel will deliver its opinion that the Trust will not be classified as an association taxable as a corporation and that the Trust will be classified as a grantor trust under subpart E, Part I of subchapter J of chapter 1 of subtitle A of the Code.  In this case, beneficial owners of certificates (referred to in this Prospectus as “grantor trust certificateholders”) will be treated for federal income tax purposes as owners of a portion of the Trust’s assets as described below.  The certificates issued by a Trust that is treated as a grantor trust are referred to in this Prospectus as “grantor trust certificates”.

Taxation of Grantor Trust Certificateholders.  Subject to the discussion below under “Stripped Certificates” and “Subordinated Certificates,” each grantor trust certificateholder will be treated as the owner of a pro rata undivided interest in the Primary Assets and other assets of the Trust.  Accordingly, and subject to the discussion below of the recharacterization of the Servicing Fee, each grantor trust certificateholder must include in income its pro rata share of the interest and other income from the Primary Assets, including any interest, original issue discount, market discount, prepayment fees, assumption fees, and late payment charges with respect to the assets, and, subject to limitations discussed below, may deduct its pro rata share of the fees and other deductible expenses paid by the Trust, at the same time and to the same extent as these items would be includ ed or deducted by the grantor trust certificateholder if the grantor trust certificateholder held directly a pro rata interest in the assets of the Trust and received and paid directly the amounts received and paid by the Trust.  Any amounts received by a grantor trust certificateholder in lieu of amounts due with respect to any Primary Asset because of a default or delinquency in payment will be treated for federal income tax purposes as having the same character as the payments they replace.

Each grantor trust certificateholder will be entitled to deduct its pro rata share of servicing fees, prepayment fees, assumption fees, any loss recognized upon an assumption and late payment charges retained by the servicer, provided that these amounts are reasonable compensation for services rendered to the Trust.  Grantor trust certificateholders that are individuals, estates or trusts will be entitled to deduct their share of expenses only to the extent these expenses plus all other miscellaneous itemized deductions exceed two percent of the grantor trust certificateholder’s adjusted gross income, and will be allowed no deduction for these expenses in determining their liabilities for alternative minimum tax.  In addition, Section 68 of the Code provides that the amount of itemized deductions otherwise allowable for the taxable year for an individual whose adjusted gross income exceeds a presc ribed threshold amount will be reduced by the lesser of (1) 3% of the excess of adjusted gross income over the specified threshold amount (adjusted annually for inflation) or (2) 80% of the amount of itemized deductions otherwise allowable for the applicable taxable year.  The reduction under Code Section 68 is itself reduced by one-third for taxable years beginning in 2006 and 2007, two-thirds for taxable years beginning in 2008 and 2009, and fully reduced for taxable years beginning in 2010 with no reduction thereafter.  In the case of a partnership that has 100 or more partners and elects to be treated as an “electing large partnership,” 70% of the partnership’s miscellaneous itemized deductions will be disallowed, although the remaining deductions will generally be allowed at the partnership level and will not be subject to the 2% floor that would otherwise be applicable to individual partners.

The servicing compensation to be received by the servicer may be questioned by the IRS as exceeding a reasonable fee for the services being performed in exchange for the servicing compensation, and a portion of the servicing compensation could be recharacterized as an ownership interest retained by the servicer or other party in a portion of the interest payments to be made with respect to the Trust’s assets.  In this event, a certificate might be treated as a Stripped Certificate subject to the stripped bond rules of Section 1286 of the Code and the original issue discount provisions rather than to the market discount and premium rules.  See the discussion below under “—Stripped Certificates”.  Except as discussed below under “Stripped Certificates” or “—Subordinated Certificates,” this discussion assumes that the servicing fees paid to the servicer do not exceed reasonable servicing compensation.

A purchaser of a grantor trust certificate will be treated as purchasing an interest in each Primary Asset in the Trust at a price determined by allocating the purchase price paid for the certificate among all Primary Assets in proportion to their fair market values at the time of the purchase of the certificate.  To the extent that the portion of the purchase price of a grantor trust certificate allocated to a Primary Asset is less than or greater than the portion of the stated redemption price at maturity of the Primary Asset, the interest in the Primary Asset will have been acquired at a discount or premium.  See “—Market Discount” and “—Premium,” below.

The treatment of any discount on a Primary Asset will depend on whether the discount represents original issue discount or market discount.  Except as indicated otherwise in the applicable Prospectus Supplement, it is not expected that any Primary Asset (other than a Primary Asset that is a Treasury Strip, Private Label Custody Strip, REFCO Strip or other instrument evidencing ownership of specific interest and/or principal of a particular bond) will have original issue discount (except as discussed below under “Stripped Certificates” or “Subordinated Certificates”).  For the rules governing original issue discount, see “Trusts That Issue Notes—Tax Consequences to Note Owners—Original Issue Discount” above.  However, in the case of Primary Assets that constitute short-term Government Securities the rules set out above dealing with short-term obligations (see “Trusts That Issue Notes—Tax Consequences to Note Owners— Short-Term Notes” above) are applied with reference to acquisition discount rather than original issue discount, if the obligations constitute “short-term Government obligations” within the meaning of Section 1271(a)(3)(B) of the Code.  Further, if 20 percent or more of the grantor trust certificateholders are Short-Term Accruers, all holders of grantor trust certificates may be required to accrue acquisition discount or original issue discount, as the case may be, with respect to short-term obligations held by the Trust in the same manner as a Short-Term Accruer would accrue such discount.  See “Trusts That Issue Notes—Tax Consequences to Note Owners— Short-Term Notes” above.

The information provided to grantor trust certificateholders will not include information necessary to compute the amount of discount or premium, if any, at which an interest in each Primary Asset is acquired.

Market Discount.  A grantor trust certificateholder that acquires an undivided interest in Primary Assets may be subject to the market discount rules of Sections 1276 through 1278 to the extent an undivided interest in a Primary Asset is considered to have been purchased at a “market discount”.  For a discussion of the market discount rules under the Code, see “Trusts That Issue Notes—Tax Consequences to Note Owners—Market Discount” above.  As discussed above, to the extent a Primary Asset is a Treasury Strip, Private Label Custody Strip, REFCO Strip or other instrument evidencing ownership of specific interest and/or principal of a particular bond, it will be subject to the rules relating to original issue discount (in lieu of the rules relating to market discount).  See “ Tax Consequences to Note Owners—Original Issue Discount” above.

Premium.  To the extent a grantor trust certificateholder is considered to have purchased an undivided interest in a Primary Asset for an amount that is greater than the stated redemption price at maturity of the interest, the grantor trust certificateholder will be considered to have purchased the interest in the Primary Asset with “amortizable bond premium” equal in amount to the excess.  For a discussion of the rules applicable to amortizable bond premium, see “Trusts That Issue Notes—Tax Consequences to Note Owners—Premium” above.

Stripped Certificates.  Some classes of certificates may be subject to the stripped bond rules of Section 1286 of the Code and for purposes of this discussion will be referred to as “Stripped Certificates.” In general, a Stripped Certificate will be subject to the stripped bond rules where there has been a separation of ownership of the right to receive some or all of the principal payments on a Primary Asset from ownership of the right to receive some or all of the related interest payments.  In general, where a separation has occurred, under the stripped bond rules of Section 1286 of the Code, the holder of a right to receive a principal or interest payment on the bond is required to accrue into income, on a constant yield basis under rules governing original issue discount (see “Trusts That Issue Notes—Tax Consequences to Note Owners—Original Issue Discount”), th e difference between the holder’s initial purchase price for the right to receive and the principal or interest payment to be received with respect to that right.

Certificates will constitute Stripped Certificates and will be subject to these rules under various circumstances, including the following:

·

if any servicing compensation is deemed to exceed a reasonable amount (see “Taxation of Grantor Trust Certificateholders,” above);

·

if the depositor or any other party retains a retained yield with respect to the Primary Assets held by the Trust;

·

if two or more classes of certificates are issued representing the right to non-pro rata percentages of the interest or principal payments on the Trust’s assets; or

·

if certificates are issued which represent the right to interest-only payments or principal-only payments.

The tax treatment of the Stripped Certificates with respect to the application of the original issue discount provisions of the Code is currently unclear.  However, the trustee intends to treat each Stripped Certificate as a single debt instrument issued on the day it is purchased for purposes of calculating any original issue discount.  Original issue discount with respect to a Stripped Certificate must be included in ordinary gross income for federal income tax purposes as it accrues in accordance with the constant yield method that takes into account the compounding of interest and this accrual of income may be in advance of the receipt of any cash attributable to that income.  See “Trusts That Issue Notes—Tax Consequences to Note Owners—Original Issue Discount” above.  For purposes of applying the original issue discount provisions of the Code, the issue price of a Str ipped Certificate will be the purchase price paid by each holder of the Stripped Certificate and the stated redemption price at maturity may include the aggregate amount of all payments to be made with respect to the Stripped Certificate whether or not denominated as interest.  The amount of original issue discount with respect to a Stripped Certificate may be treated as zero under the original issue discount de minimis rules described above.

The precise tax treatment of Stripped Coupon Certificates is substantially uncertain.  The Code could read literally to require that OID computations be made for each payment from each receivable.  However, based on IRS guidance, it appears that all payments from a receivable underlying a Stripped Coupon Certificate should be treated as a single installment obligation subject to the OID rules of the Code, in which case, all payments from the receivable would be included in the receivable’s stated redemption price at maturity for purposes of calculating income on the Stripped Coupon Certificate under the OID rules of the Code.

Based on current authority it is unclear under what circumstances, if any, the prepayment of receivables will give rise to a loss to the holder of a Stripped Bond Certificate purchased at a premium or a Stripped Coupon Certificate.  The Code provides that a prepayment assumption must be used to accrue income on any pool of debt instruments the yield on which can be affected by prepayments.  There is no guidance as to whether a Stripped Coupon Certificate or Stripped Bond Certificate would represent an interest in a pool of debt instruments for purposes of this Code provision.  In addition, the manner in which to take prepayments into account is uncertain.  It is possible that no loss may be available as a result of any particular prepayment, except perhaps to the extent that even if no further prepayments were received a Certificateholder would be unable to recover its basis.  In additio n, amounts received in redemption for debt instruments issued by natural persons purchased or issued after June 8, 1997 are treated as received in exchange therefor (that is treated the same as obligations issued by corporations).  This change could affect the character of any loss.

Holders of Stripped Bond Certificates and Stripped Coupon Certificates are encouraged to consult with their own tax advisors regarding the proper treatment of these certificates for federal income tax purposes.

Subordinated Certificates.  In the event the Trust issues two classes of grantor trust certificates that are identical except that one class is a subordinate class, with a relatively high certificate pass-through rate, and the other is a senior class, with a relatively low certificate pass-through rate (referred to in this Prospectus as the “Subordinate Certificates” and “Senior Certificates”, respectively), the grantor trust certificateholders in the aggregate will be deemed to have acquired the following assets: (1) the principal portion of each Primary Asset plus a portion of the interest due on each Primary Asset (the “Trust Stripped Bond”), and (2) a portion of the interest due on each Primary Asset equal to the difference between the certificate pass-through rate on the Subordinate Certificates and the certificate pass-through rate on the Senior Certificates, if an y, which difference is then multiplied by the Subordinate Class Percentage (the “Trust Stripped Coupon”).  The “Subordinate Class Percentage” equals the initial aggregate principal amount of the Subordinate Certificates divided by the sum of the initial aggregate principal amount of the Subordinate Certificates and the Senior Certificates.  The “Senior Class Percentage” equals the initial aggregate principal amount of the Senior Certificates divided by the sum of the initial aggregate principal amount of the Subordinate Certificates and the Senior Certificates.

The Senior Certificateholders in the aggregate will own the Senior Class Percentage of the Trust Stripped Bond and accordingly each Senior Certificateholder will be treated as owning its pro rata share of such asset.  The Senior Certificateholders will not own any portion of the Trust Stripped Coupon.  The Subordinate Certificateholders in the aggregate own both the Subordinate Class Percentage of the Trust Stripped Bond plus 100% of the Trust Stripped Coupon, if any, and accordingly each Subordinate Certificateholder will be treated as owning its pro rata share in both assets.  The Trust Stripped Bond will be treated as a “stripped bond” and the Trust Stripped Coupon will be treated as “stripped coupons” within the meaning of Section 1286 of the Code.

Although not entirely clear, the interest income on the Subordinate Certificates and the portion of the Servicing Fee allocable to such certificates that does not constitute excess servicing will be treated by the Trust as qualified stated interest, assuming the interest with respect to the Primary Assets would otherwise qualify as qualified stated interest.  Accordingly, except to the extent modified below, the income of the Subordinate Certificates will be reported in the same manner as described generally above for holders of Senior Certificates.

If the Subordinate Certificateholders receive distribution of less than their share of the Trust’s receipts of principal or interest (the “Shortfall Amount”) because of the subordination of the Subordinate Certificates, holders of Subordinate Certificates would probably be treated for federal income tax purposes as if they had

received as distributions their full share of receipts;

paid over to the Senior Certificateholders an amount equal to the Shortfall Amount; and

retained the right to reimbursement of the relevant amounts to the extent these amounts are otherwise available as a result of collections on the Primary Assets or amounts available from a reserve account or other form of credit enhancement, if any.

Under this analysis,

Subordinate Certificateholders would be required to accrue as current income any interest income, original issue discount, or (to the extent paid on assets of the Trust) accrued market discount of the Trust that was a component of the Shortfall Amount, even though that amount was in fact paid to the Senior Certificateholders;

a loss would only be allowed to the Subordinate Certificateholders when their right to receive reimbursement of the Shortfall Amount became worthless (i.e., when it becomes clear that amount will not be available from any source to reimburse the loss); and

reimbursement of the Shortfall Amount prior to a claim of worthlessness would not be taxable income to Subordinate Certificateholders because the amount was previously included in income.

Those results should not significantly affect the inclusion of income for Subordinate Certificateholders on the accrual method of accounting, but could accelerate inclusion of income to Subordinate Certificateholders on the cash method of accounting by, in effect, placing them on the accrual method.  Moreover, the character and timing of loss deductions are unclear.  Subordinate Certificateholders are strongly urged to consult their own tax advisors regarding the appropriate timing, amount and character of any losses sustained with respect to the Subordinate Certificates including any loss resulting from the failure to recover previously accrued interest or discount income.

Election to Treat All Interest as Original Issue Discount.  The Treasury Regulations relating to original issue discount permit a grantor trust certificateholder to elect to accrue all interest, discount, including de minimis market or original issue discount, reduced by any premium, in income as interest, based on a constant yield method.  If an election were to be made with respect to an interest in a Primary Asset with market discount, the Certificate Owner would be deemed to have made an election to include in income currently market discount with respect to all other debt instruments having market discount that the grantor trust certificateholder acquires during the year of the election or afterward.  See”—Market Discount” above.  Similarly, a grantor trust certificateholder that makes this election for an interest in a Primary Asset that is acquired at a premium wi ll be deemed to have made an election to amortize bond premium with respect to all debt instruments having amortizable bond premium that the grantor trust certificateholder owns at the beginning of the first taxable year to which the election applies or acquires afterward.  See “—Premium” above.  The election to accrue interest, discount and premium on a constant yield method with respect to a grantor trust certificate is irrevocable.

Sale or Exchange of a Grantor Trust Certificate.  Sale or exchange of a grantor trust certificate prior to its maturity will result in gain or loss equal to the difference, if any, between the amount realized, exclusive of amounts attributable to accrued and unpaid interest, which will be treated as ordinary income, allocable to the Primary Asset and the owner’s adjusted basis in the grantor trust certificate.  The adjusted basis generally will equal the seller’s cost for the grantor trust certificate, increased by the original issue discount and any market discount included in the seller’s gross income with respect to the grantor trust certificate, and reduced, but not below zero, by any premium amortized by the seller and by principal payments on the grantor trust certificate previously received by the seller.  The gain or loss will, except as discussed below, be capital ga in or loss to an owner for which the Primary Assets represented by a grantor trust certificate are “capital assets” within the meaning of Section 1221.  A capital gain or loss will be long-term or short-term depending on whether or not the grantor trust certificate has been owned for the long-term capital gain holding period, currently more than one year.

Notwithstanding the foregoing, any gain realized on the sale or exchange of a grantor trust certificate will be ordinary income to the extent of the seller’s interest in accrued market discount on Primary Assets not previously taken into income.  See “—Market Discount,” above.  Further, grantor trust certificates will represent “evidences of indebtedness” within the meaning of Section 582(c)(1) to the extent these assets of the grantor trust would be so treated.  Accordingly, gain or loss recognized from the sale of a grantor trust certificate by a bank or thrift institution to which such section applied will be treated as ordinary gain or loss to the extent selling the assets of the grantor trust directly would be so treated.

Foreign Investors in Grantor Trust Certificates.  A holder of grantor trust certificate who is not a “United States person” (as defined above at “Trusts That Issue Notes—Tax Consequences to Note Owners—Foreign Investors in Notes”) and is not subject to federal income tax as a result of any direct or indirect connection to the United States other than its ownership of a grantor trust certificate generally will not be subject to United States income or withholding tax in respect of payments of interest or original issue discount on its grantor trust certificate to the extent attributable to debt obligations held by the Trust that were originated after July 18, 1984, provided that the grantor trust certificateholder complies to the extent necessary with certain certification requirements which generally relate to the identity of the beneficial owner and the status of the be neficial owner as a person that is not a United States person.  Interest or original issue discount on a grantor trust certificate attributable to debt obligations held by the Trust that were originated prior to July 19, 1984 will be subject to a 30% withholding tax (unless such tax is reduced or eliminated by an applicable tax treaty).  All holders of grantor trust certificates should consult their tax advisors regarding the tax documentation and certifications that must be provided to secure any applicable exemptions from United States withholding taxes.

Any capital gain realized on the sale or other taxable disposition of a grantor trust certificate by a Foreign Person (as defined above at “Trusts That Issue Notes—Tax Consequences to Note Owners—Foreign Investors in Notes”) generally will be exempt from United States federal income and withholding tax, provided that (i) such gain is not effectively connected with the conduct of a trade or business in the United States by the Foreign Person and (ii) in the case of an individual Foreign Person, the Foreign Person is not present in the United States for 183 days or more in the taxable year.

If the interest, gain or income with respect to a grantor trust certificate held by a Foreign Person is effectively connected with the conduct of a trade or business in the United States by the Foreign Person (although exempt from the withholding tax previously discussed if the holder provides an appropriate statement establishing that such income is so effectively connected), the holder generally will be subject to United States federal income tax on the interest, gain or income at regular federal income tax rates.  In addition, if the Foreign Person is a foreign corporation, it may be subject to a branch profits tax equal to 30% of its “effectively connected earnings and profits,” within the meaning of the Code, for the taxable year, as adjusted for certain items, unless it qualifies for a lower rate under an applicable tax treaty (as modified by the branch profits tax rules).

Backup Withholding.  Distributions made on the grantor trust certificates and proceeds from the sale of the grantor trust certificates will be subject to a “backup” withholding tax if, in general, the grantor trust certificateholder fails to comply with particular identification procedures, unless the holder is an exempt recipient under applicable provisions of the Code and, if necessary, demonstrates such status.  Any amounts so withheld would be refunded by the IRS or allowable as a credit against the grantor trust certificateholder’s federal income tax.

Reportable Transactions. Pursuant to recently enacted legislation, a penalty in the amount of $10,000 in the case of a natural person and $50,000 in any other case is imposed on any taxpayer that fails to timely file an information return with the IRS with respect to a “reportable transaction” (as defined in Section 6011 of the Code). The rules defining “reportable transactions” are complex, and include transactions that result in certain losses that exceed threshold amounts. Prospective investors are advised to consult their own tax advisers regarding any possible disclosure obligations in light of their particular circumstances.

Penalty Avoidance

The summary of tax considerations contained herein was written to support the promotion and marketing of the securities, and was not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding United States federal income tax penalties that may be imposed. Each taxpayer is encouraged to seek advice based on the taxpayer's particular circumstances from an independent tax advisor.

State and Local Tax Considerations

The discussion above does not address the tax consequences of purchase, ownership or disposition of certificates or notes under any state or local tax laws.  We recommend that investors consult their own tax advisors regarding state and local tax consequences.  In particular, individuals should consider the deductibility of the expenses (including interest expense) of the partnership.

* * *

THE TAX DISCUSSIONS SET FORTH ABOVE ARE INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A NOTE OWNER’S OR CERTIFICATE OWNER’S PARTICULAR TAX SITUATION.  PROSPECTIVE PURCHASERS OF NOTES OR CERTIFICATES SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF NOTES AND CERTIFICATES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL AND FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.

ERISA Considerations

General

A fiduciary of a pension, profit-sharing, retirement or other employee benefit plan subject to Title I of ERISA should consider the fiduciary standards under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) in the context of the plan’s particular circumstances before authorizing an investment of a portion of such plan’s assets in the Securities.  Accordingly, pursuant to Section 404 of ERISA, such fiduciary should consider among other factors (i) whether the investment is for the exclusive benefit of plan participants and their beneficiaries; (ii) whether the investment satisfies the applicable diversification requirements; (iii) whether the investment is in accordance with the documents and instruments governing the plan; and (iv) whether the investment is prudent, considering the nature of the investment.  Fiduciaries of plans also should consider ERISA
46;s prohibition on improper delegation of control over, or responsibility for, plan assets.

In addition, employee benefit plans or other retirement arrangements subject to ERISA, as well as individual retirement accounts, certain types of Keogh plans not subject to ERISA but subject to Section 4975 of the Code, or any entity (including insurance depositor separate or general accounts) whose underlying assets include plan assets by reason of such plans, arrangements or accounts investing in the entity (each, a “Plan”) are prohibited from engaging in a broad range of transactions involving Plan assets and persons having certain specified relationships to a Plan (“parties in interest” and “disqualified persons”).  Such transactions are treated as “prohibited transactions” under Sections 406 of ERISA and excise taxes and/or other penalties are imposed upon such persons under ERISA and/or Section 4975 of the Code unless an exemption applies.  The depositor, underwriter of the Securities, the servicer, the trustee, the indenture trustee and certain of their affiliates might be considered “parties in interest” or “disqualified persons” with respect to a Plan.  If so, the acquisition, holding or disposition of Securities by or on behalf of such Plan could be considered to give rise to a “prohibited transaction” within the meaning of ERISA and the Code unless a statutory, regulatory or administrative exception or exemption is available.

ERISA Considerations Relating to Certificates

Plan Assets.  In 29 C.F.R §2510.3-101 (the “Plan Asset Regulations”), the U.S. Department of Labor (“DOL”) has defined what constitutes “plan assets” for purposes of ERISA and Section 4975 of the Code.  The Plan Asset Regulations provide that if a Plan makes an investment in an “equity interest” in an entity, an undivided portion of the assets of the entity will be considered the assets of such Plan unless certain exceptions set forth in such Regulations apply.  The Certificates will be deemed an equity interest for purposes of the Plan Asset Regulations, and the depositor can give no assurance that the Certificates will qualify for any of the exceptions under the Plan Asset Regulations.  As a result, (i) a Plan may be deemed to have acquired an interest in the assets of the Trust and not merely an interest in the Certificates, (ii) the fidu ciary investment standards of ERISA could apply to such assets and (iii) transactions occurring in the course of managing, operating and servicing the Trust and its assets might constitute prohibited transactions, unless a statutory, regulatory or administrative exemption applies.

Underwriter Exemption

General Discussion.  The DOL has granted to Deutsche Bank Securities Inc. an individual exemption, Prohibited Transaction Exemption 94-84, and to Deutsche Morgan Grenfell/C.J. Lawrence Inc., similar approval (FAN 97-03E), which were both amended and restated pursuant to Prohibited Transaction Exemption 2002-41 (“PTE 2002-41”) (collectively, the “Exemption”) which is applicable to Certificates which meet its requirements whenever Deutsche Bank Securities Inc. or its affiliate is the sole underwriter, manager or co-manager of an underwriting syndicate or is the selling or placement agent.  The Exemption generally exempts certain transactions from the application of certain of the prohibited transaction provisions of ERISA and the Code provided that the conditions set forth in the Exemption are satisfied.  These transactions include the servicing, managing and operation of investment trusts holding fixed (generally non-revolving pools) of enumerated categories of assets which include (i) the Receivables and (ii) securities previously issued under the Exemption and the purchase, sale and holding of Certificates which represent beneficial ownership interests in the assets of such trusts.

General Conditions of Exemption.  The Exemption sets forth general conditions which must be satisfied for a transaction involving the purchase, sale and holding of the Certificates to be eligible for exemptive relief thereunder.  First, the acquisition of Certificates by Plans must be on terms that are at least as favorable to the Plan as they would be in an arm’s-length transaction with an unrelated party.  Second, the receivables held by the issuing entity must be secured.  Third, unless the Certificates are issued in “designated transactions” (as described below) and are backed by fully-secured Receivables, they may not be subordinated.  Fourth, the Certificates at the time of acquisition by the Plan must be rated in one of the three (or in the case of designated transactions, four) highest generic rating categories by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., Moody’s Investors Services, Inc. or Fitch, Inc. (each, a “Rating Agency”).  Fifth, the trustee and the indenture trustee generally cannot be affiliates of any member of the “Restricted Group” other than the underwriter.  The “Restricted Group” consists of any (i) underwriter as defined in the Exemption, (ii) the depositor, (iii) the servicer, (iv) the counterparty of any “interest swap” (as described below) held as an asset of the issuing entity and (v) any obligor with respect to Receivables constituting more than 5% of the aggregate unamortized principal balance of the Receivables held in the issuing entity as of the date of initial issuance of the Certificates.  Sixth, the sum of all payments made to, and retained by, such underwriters must represent not more than reasonable compensation for underwriting the Certificates; the sum of all payments made to, and retained by, the depositor pursuant to th e assignment of the Receivables to the related issuing entity must represent not more than the fair market value of such Receivables; and the sum of all payments made to, and retained by, the servicer must represent not more than reasonable compensation for such person’s services under the Agreement and reimbursement of such person’s reasonable expenses in connection therewith.  Seventh, (i) the investment pool must consist only of assets of the type enumerated in the Exemption and which have been included in other investment pools; (ii) Certificates evidencing interests in such other investment pools must have been rated in one of the three (or in the case of designated transactions, four) highest generic rating categories by one of the Rating Agencies for at least one year prior to a Plan’s acquisition of Certificates; and (iii) Certificates evidencing interests in such other investment pools must have been purchased by investors other than Plans for at least one year prior to a Plan
46;s acquisition of Certificates.  Finally, the investing Plan must be an accredited investor as defined in Rule 501(a)(1) of Regulation D of the Commission under the Securities Act of 1933, as amended.  The depositor assumes that only Plans which are accredited investors under the federal securities laws will be permitted to purchase the Certificates.

Types of Trusts.  The types of issuing entities permitted under the Exemption include owner-trusts, as well as grantor trusts.  Owner-trusts are subject to certain restrictions in their governing documents to ensure that their assets may not be reached by the creditors of the depositor in the event of bankruptcy or other insolvency and must provide certain legal opinions.

Designated Transactions.  In the case where the Certificates are backed by Trust assets such as the Receivables which are secured motor vehicle receivables, credit instruments or obligations that bear interest or are purchased a discount as described and defined in the Exemption as designated transactions (“Designated Transactions”), the Exemption permits the Certificates issued by the Trust in such transactions to be rated in one of the highest four generic rating categories by a Rating Agency and/or to be subordinated.  The Receivables are the type of assets which qualify for Designated Transaction treatment unless otherwise specified in the Prospectus Supplement.

Coverage for Certificates Not Exemption Eligible.  In the event that Certificates do not meet the requirements of the Exemption solely because they are Subordinate Certificates or fail to meet a minimum rating requirement under the Exemption, certain Plans may be eligible to purchase Certificates pursuant to Section III of Prohibited Transaction Class Exemption 95-60 (“PTCE 95-60”) which permits insurance depositor general accounts as defined in PTCE 95-60 to purchase such Certificates if they otherwise meet all of the other requirements of the Exemption.

Permitted Assets.  The Exemption permits an interest-rate swap to be an asset of an issuing entity which issues Certificates acquired by Plans in an initial offering or in the secondary market.  An interest-rate swap (or if purchased by or on behalf of the issuing entity) an interest-rate cap contract (collectively, a “Swap” or “Swap Agreement”) is a permitted issuing entity asset if it:  (a) is an “eligible Swap;” (b) is with an “eligible counterparty;” (c) is purchased by a “qualified plan investor;” (d) meets certain additional specific conditions which depend on whether the Swap is a “ratings dependent Swap” or a “non-ratings dependent Swap” and (e) permits the issuing entity to make termination payments to the Swap (other than currently scheduled payments) solely from excess spread or amounts otherwise payable to the servicer or depositor.

An “eligible Swap” is one which:  (a) is denominated in U.S. dollars; (b) pursuant to which the issuing entity pays or receives, on or immediately prior to the respective payment or distribution date for the class of Certificates to which the Swap relates, a fixed rate of interest or a floating rate of interest based on a publicly available index (e.g., LIBOR or the U.S. Federal Reserve’s Cost of Funds Index (COFI)), with the issuing entity receiving such payments on at least a quarterly basis and obligated to make separate payments no more frequently than the counterparty, with all simultaneous payments being netted (“Allowable Interest Rate”); (c) has a notional amount that does not exceed either:  (i) the principal balance of the class of Certificates to which the Swap relates, or (ii) the portion of the principal balance of such class represented by obligations ( 7;Allowable Notional Amount”); (d) is not leveraged (i.e., payments are based on the applicable notional amount, the day count fractions, the fixed or floating rates permitted above, and the difference between the products thereof, calculated on a one-to-one ratio and not on a multiplier of such difference) (“Leveraged”); (e) has a final termination date that is either the earlier of the date on which the issuer terminates or the related class of Certificates are fully repaid and (f) does not incorporate any provision which could cause a unilateral alteration in the requirements described in (a) to (d) above.

An “eligible counterparty” means a bank or other financial institution which has a rating at the date of issuance of the Certificates, which is in one of the three highest long-term credit rating categories or one of the two highest short-term credit rating categories, utilized by at least one of the Rating Agencies rating the Certificates; provided that, if a counterparty is relying on its short-term rating to establish eligibility hereunder, such counterparty must either have a long-term rating in one of the three highest long-term rating categories or not have a long-term rating from the applicable Rating Agency.

A “qualified plan investor” is a Plan or Plans where the decision to buy such class of Certificates is made on behalf of the Plan by an independent fiduciary qualified to understand the Swap transaction and the effect the Swap would have on the rating of the Certificates and such fiduciary is either (a) a “qualified professional asset manager” (“QPAM”) under Prohibited Transaction Class Exemption 84-14 (“PTCE 84-14”) (see below), (b) an “in-house asset manager” under Prohibited Transaction Class Exemption 96-23 (“PTCE 96-23”) (see below) or (c) has total assets (both Plan and non-Plan) under management of at least $100 million at the time the Certificates are acquired by the Plan.

In “ratings dependent Swaps” (where the rating of a class of Certificates is dependent on the terms and conditions of the Swap), the Swap Agreement must provide that if the credit rating of the counterparty is withdrawn or reduced by any Rating Agency below a level specified by the Rating Agency, the servicer must, within the period specified under the Pooling and Servicing Agreement:  (a) obtain a replacement Swap Agreement with an eligible counterparty which is acceptable to the Rating Agency and the terms of which are substantially the same as the current Swap Agreement (at which time the earlier Swap Agreement must terminate); or (b) cause the Swap counterparty to establish any collateralization or other arrangement satisfactory to the Rating Agency such that the then current rating by the Rating Agency of the particular class of Certificates will not be withdrawn or reduced (and the terms of the Swap Agreement must specifically obligate the counterparty to perform these duties for any class of Certificates with a term of more than one year).  In the event that the servicer fails to meet these obligations, Plan certificateholders must be notified in the immediately following periodic report which is provided to certificateholders but in no event later than the end of the second month beginning after the date of such failure.  Sixty days after the receipt of such report, the exemptive relief provided under the Exemption will prospectively cease to be applicable to any class of Certificates held by a Plan which involves such ratings dependent Swap.

“Non-ratings dependent Swaps” (those where the rating of the Certificates does not depend on the terms and conditions of the Swap) are subject to the following conditions. If the credit rating of the counterparty is withdrawn or reduced below the lowest level permitted above, the servicer will, within a specified period after such rating withdrawal or reduction: (a) obtain a replacement Swap Agreement with an eligible counterparty, the terms of which are substantially the same as the current Swap Agreement (at which time the earlier Swap Agreement must terminate); (b) cause the counterparty to post collateral with the issuing entity in an amount equal to all payments owed by the counterparty if the Swap transaction were terminated; or (c) terminate the Swap Agreement in accordance with its terms.

An “eligible yield supplement agreement” is any yield supplement agreement or similar arrangement (or if purchased by or on behalf of the issuing entity) an interest rate cap contract to supplement the interest rates otherwise payable on obligations held by the Trust (“EYS Agreement”).  If the EYS Agreement has a notional principal amount and/or is written on an International Swaps and Derivatives Association, Inc. (ISDA) form, the EYS Agreement may only be held as an asset of the issuing entity if it meets the following conditions:  (a) it is denominated in U.S. dollars; (b) it pays an Allowable Interest Rate; (c) it is not Leveraged; (d) it does not allow any of these three preceding requirements to be unilaterally altered without the consent of the trustee; (e) it is entered into between the issuing entity and an eligible counterparty and (f) it has an Allowable Notional Amount.< /P>

Pre-Funding Accounts.  The Exemption extends exemptive relief to Certificates issued in transactions using pre-funding accounts whereby a portion of the Receivables backing the Certificates are transferred to the issuing entity within a specified period following the Closing Date (“DOL Pre-Funding Period”) (see below) instead of requiring that all such Receivables be either identified or transferred on or before the Closing Date, provided that the following conditions are met.  First, the ratio of the amount allocated to the Pre-Funding Account to the total principal amount of the Certificates being offered (“Pre-Funding Limit”) must not exceed twenty-five percent (25%).  Second, all Receivables transferred after the Closing Date (referred to here as “Additional Receivables”) must meet the same terms and conditions for eligibility as the original Receivables us ed to create the issuing entity, which terms and conditions have been approved by the Rating Agency.  Third, the transfer of such Additional Receivables to the issuing entity during the DOL Pre-Funding Period must not result in the Certificates receiving a lower credit rating from the Rating Agency upon termination of the DOL Pre-Funding Period than the rating that was obtained at the time of the initial issuance of the Certificates by the issuing entity.  Fourth, solely as a result of the use of pre-funding, the weighted average annual percentage interest rate (the “average interest rate”) for all of the Receivables in the issuing entity at the end of the DOL Pre-Funding Period must not be more than 100 basis points lower than the average interest rate for the Receivables which were transferred to the issuing entity on the Closing Date.  Fifth, either: (i) the characteristics of the Additional Receivables must be monitored by an insurer or other credit support provider which is inde pendent of the depositor; or (ii) an independent accountant retained by the depositor must provide the depositor with a letter (with copies provided to the Rating Agency, the underwriter and the trustee) stating whether or not the characteristics of the Additional Receivables conform to the characteristics described in the Prospectus, Prospectus Supplement, Private Placement Memorandum (“Offering Documents”) and/or the Agreement.  In preparing such letter, the independent accountant must use the same type of procedures as were applicable to the Receivables which were transferred as of the Closing Date.  Sixth, the DOL Pre-Funding Period must end no later than three months or 90 days after the Closing Date or earlier, in certain circumstances, if the amount on deposit in the Pre-Funding Account is reduced below the minimum level specified in the Agreement or an event of default occurs under the Agreement.  Seventh, amounts transferred to any Pre-Funding Account and/or Capitalized Inte rest Account used in connection with the pre-funding may be invested only in investments which are permitted by the Rating Agency and (i) are direct obligations of, or obligations fully guaranteed as to timely payment of principal and interest by, the United States or any agency or instrumentality thereof (provided that such obligations are backed by the full faith and credit of the United States); or (ii) have been rated (or the obligor has been rated) in one of the three highest generic rating categories by the Rating Agency (“Acceptable Investments”).  Eighth, certain disclosure requirements must be met.

Limitations on Scope of the Exemption.  If the general conditions of the Exemption are satisfied, the Exemption may provide an exemption from the restrictions imposed by ERISA and the Code in connection with the initial acquisition, transfer or holding, and the acquisition or disposition in the secondary market, of the Certificates by Plans.  However, no exemption is provided from the restrictions of ERISA for the acquisition or holding of a Certificates on behalf of an “Excluded Plan” by any person who is a fiduciary with respect to the assets of such Excluded Plan.  For those purposes, an Excluded Plan is a Plan sponsored by any member of the Restricted Group.  Exemptive relief may also be provided for the acquisition, holding and disposition of Certificates by Plans if the fiduciary or its affiliate is the obligor with respect to 5% or less of the fair market value of the Receivables in the issuing entity provided that:  (i) the Plan is not an Excluded Plan, (ii) each Plan’s investment in each class of Certificates does not exceed 25% of the outstanding Certificates in the class, (iii) after the Plan’s acquisition of the Certificates, no more than 25% of the assets over which the fiduciary has investment authority are invested in Certificates of the issuing entity containing assets which are sold or serviced by the same entity and (iv) in the case of initial issuance (but not secondary market transactions), at least 50% of each class of Certificates and at least 50% of the aggregate interests in the issuing entity are acquired by persons independent of the Restricted Group.

ERISA Considerations Relating to Notes

Under the Plan Asset Regulations, the assets of the issuing entity would be treated as “plan assets” of a Plan for the purposes of ERISA and the Code only if the Plan acquires an “equity interest” in the issuing entity and none of the exceptions contained in the Plan Asset Regulations is applicable.  An equity interest is defined under the Plan Asset Regulations as an interest other than an instrument which is treated as indebtedness under applicable local law and which has no substantial equity features.  Assuming that the notes are treated as indebtedness without substantial equity features for purposes of the Plan Asset Regulations, then such notes will be eligible for purchase by Plans.  However, without regard to whether the notes are treated as an “equity interest” for such purposes, the acquisition or holding of notes by or on behalf of a Plan could be consider ed to give rise to a prohibited transaction if the issuing entity or any of its affiliates is or becomes a party in interest or disqualified person with respect to such Plan, or in the event that a note is purchased in the secondary market and such purchase constitutes a sale or exchange between a Plan and a party in interest or disqualified person with respect to such Plan. There can be no assurance that the issuing entity or any of its affiliates will not be or become a party in interest or a disqualified person with respect to a Plan that acquires notes.

The Exemption permits issuing entities that are grantor trusts, owner-trusts, or FASITs to issue notes, as well as Certificates, provided a legal opinion is received to the effect that the noteholders have a perfected security interest in the issuing entity’s assets.  The exemptive relief provided under the Exemption for any prohibited transactions which could be caused as a result of the operation, management or servicing of the issuing entity and its assets would not be necessary with respect to notes with no substantial equity features which are issued as obligations of the issuing entity.  However, effective for the acquisition, holding or transfer of notes between a Plan and a party in interest, the Exemption would provide prohibited transaction exemptive relief, provided that the same conditions of the Exemption described above relating to Certificates are met with respect to the notes. &nbs p;The same limitations of such exemptive relief relating to acquisitions of Certificates by fiduciaries with respect to Excluded Plans would also be applicable to the notes as described herein in “Limitations on Scope of the Exemption.”

In the event that the Exemption is not applicable to the notes, one or more other prohibited transactions exemptions may be available to Plans purchasing or transferring the notes depending in part upon the type of Plan fiduciary making the decision to acquire the notes and the circumstances under which such decision is made.  These exemptions include, but are not limited to, Prohibited Transaction Class Exemption 90-1 (regarding investments by insurance depositor pooled separate accounts), Prohibited Transaction Class Exemption 91-38 (regarding investments by bank collective investments funds), PTCE 84-14 (regarding transactions effected by “qualified professional asset managers”), PTCE 95-60 (regarding investments by insurance depositor general accounts) and PTCE 96-23 (regarding transactions effected by “in-house asset managers”) (collectively, the “Investor-Based Exemptions” ;).  However, even if the conditions specified in these Investor-Based Exemptions are met, the scope of the relief provided under such Exemptions might or might not cover all acts which might be construed as prohibited transactions.

EACH PROSPECTUS SUPPLEMENT WILL CONTAIN INFORMATION CONCERNING CONSIDERATIONS RELATING TO ERISA AND THE CODE THAT ARE APPLICABLE TO THE RELATED SECURITIES.  BEFORE PURCHASING SECURITIES IN RELIANCE ON THE EXEMPTION, THE INVESTOR-BASED EXEMPTIONS OR ANY OTHER EXEMPTION, A FIDUCIARY OF A PLAN SHOULD ITSELF CONFIRM THAT REQUIREMENTS SET FORTH IN SUCH EXEMPTION WOULD BE SATISFIED.

ANY PLAN INVESTOR WHO PROPOSES TO USE “PLAN ASSETS” OF ANY PLAN TO PURCHASE SECURITIES OF ANY SERIES OR CLASS SHOULD CONSULT WITH ITS COUNSEL WITH RESPECT TO THE POTENTIAL CONSEQUENCES UNDER ERISA AND SECTION 4975 OF THE CODE OF THE ACQUISITION AND OWNERSHIP OF SUCH SECURITIES.

Governmental plans and church plans as defined in ERISA are not subject to ERISA or Code Section 4975, although they may elect to be qualified under Section 401(a) of the Code and exempt from taxation under Section 501(a) of the Code and would then be subject to the prohibited transaction rules set forth in Section 503 of the Code.  In addition, governmental plans may be subject to federal, state and local laws which are to a material extent similar to the provisions of ERISA or a Code Section 4975 (“Similar Law”).  A fiduciary of a governmental plan should make its own determination as to the propriety of an investment in Securities under applicable fiduciary or other investment standards and the need for the availability of any exemptive relief under any Similar Law.

Plan of Distribution

On the terms and conditions set forth in an underwriting agreement with respect to the notes, if any, of a given series and an underwriting agreement with respect to the certificates of the series (collectively, the “Underwriting Agreements”), the depositor will agree to cause the related issuing entity to sell to the underwriters named in the Underwriting Agreement and in the related prospectus supplement, and each of these underwriters will severally agree to purchase, the principal amount of each class of notes and certificates, as the case may be, of the related series set forth in the related Underwriting Agreement and in the related prospectus supplement.

In the Underwriting Agreements with respect to any given series of securities, the several underwriters will agree, subject to the terms and conditions set forth in the related Underwriting Agreement, to purchase all of the notes and certificates, as the case may be, described in the related Underwriting Agreement that are offered by this prospectus and by the related prospectus supplement if any of the notes and certificates, as the case may be, are purchased.

Each prospectus supplement will either (1) set forth the price at which each class of notes and certificates, as the case may be, being offered by the related prospectus supplement will be offered to the public and any concessions that may be offered to particular dealers participating in the offering of the notes and certificates, as the case may be, or (2) specify that the related notes and certificates, as the case may be, are to be resold by the underwriters in negotiated transactions at varying prices to be determined at the time of sale. After the initial public offering of any notes and certificates, as the case may be, public offering prices and concessions may be changed.

Pursuant to the Receivables Purchase Agreement between the seller, or its affiliate, and the depositor, the seller will indemnify the depositor and the related underwriters against specific civil liabilities, including liabilities under the securities Act, or contribute to payments the depositor and the several underwriters may be required to make in respect of the Receivables Purchase Agreement.

Each issuing entity may, from time to time, invest the funds in its Trust Accounts in Eligible Investments acquired from the underwriters.

Pursuant to each of the Underwriting Agreements with respect to a given series of securities, the closing of the sale of any class of securities will be conditioned on the closing of the sale of all other classes under the related Underwriting Agreement.

The place and time of delivery for the notes and certificates, as the case may be, in respect of which this prospectus is delivered will be set forth in the related prospectus supplement.

If and to the extent required by applicable law or regulation, this prospectus and the prospectus supplement will also be used by the Underwriter after the completion of the offering in connection with offers and sales related to market-making transactions in the offered securities in which the Underwriter acts as principal. The Underwriter may also act as agent in these transactions. Sales will be made at negotiated prices determined at the time of sale.

Legal Matters

Some legal matters relating to the securities of any series will be passed upon by the law firms specified in the related prospectus supplement. Some related federal income tax and other matters will be passed upon for the Trust and the seller, by the law firms specified in the related prospectus supplement.

Prospectus Supplement

The prospectus supplement relating to a series of securities to be offered under this prospectus will, among other things, set forth with respect to each class of securities:

·

the interest rate and authorized denominations, as applicable, of each class of securities;

·

specific information concerning the Primary Assets and the related seller and servicer, as applicable;

·

the terms of any Credit or Cash Flow Enhancement applicable to any class or classes of securities;

·

information concerning any other assets in the related issuing entity;

·

the expected date or dates on which the principal amount, if any, of each class of securities will be paid to holders of the securities;

·

the extent to which any class within a series is subordinated to any other class of the same series; and

·

additional information with respect to the plan of distribution of the securities.

Reports to Securityholders

With respect to each series of securities, the servicer of the related Primary Assets will prepare for distribution to the related Securityholders monthly and annual reports concerning the securities and the related Trust. See “Certain Information Regarding the Securities--Statements to Securityholders.”

Available Information

The depositor has filed with the Securities and Exchange Commission (the “Commission”) a Registration Statement on Form S-3 (together with all amendments and exhibits to the Registration Statement, the “Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the securities being offered by this prospectus.  This prospectus, which forms a part of the Registration Statement, omits some of the information contained in the Registration Statement pursuant to the rules and regulations of the Commission.  The Registration Statement and the exhibits to the Registration Statement can be inspected and copied at the public reference facilities maintained by the Commission at 100 F Street NE, Washington, D.C. 20549, and at Regional Offices in the following locations:

·

Chicago Regional Office, 175 West Jackson Boulevard, Suite 900, Chicago, Illinois 60604; and

·

New York Regional Office, 3 World Financial Center, Room 4300, New York, New York 10281.

Copies of these materials can also be obtained from the Public Reference Section of the Commission, 100 F Street NE, Washington, D.C. 20549, at prescribed rates.

The Commission also maintains a site on the world wide web at “http://www.sec.gov” at which users can view and download copies of reports, proxy and information statements and other information filed electronically through the Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) system.  The depositor has filed the Registration Statement, including all exhibits to the Registration Statement, through the EDGAR system and therefore these materials should be available by logging onto the Commission’s web site.  The Commission maintains computer terminals providing access to the EDGAR system at each of the offices referred to above.

As to each issuing entity that is no longer required to file reports under the Exchange Act, periodic distribution reports will be posted on the depositor’s website referenced above as soon as practicable.  Annual reports of assessment of compliance with the AB Servicing Criteria, attestation reports, and statements of compliance will be provided to registered holders of the related securities upon request free of charge.  See “Description of the Transfer and Servicing Agreements — Evidence as to Compliance”.

Incorporation of Certain Documents by Reference

All documents subsequently filed by or on behalf of the issuing entity referred to in the prospectus supplement with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of this prospectus and prior to the termination of any offering of the Notes or Certificates, as applicable, issued by that issuing entity will be deemed to be incorporated by reference in this prospectus and to be a part of this prospectus from the date of the filing of those documents. Any statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus will be deemed to be modified or superseded for all purposes of this prospectus to the extent that a statement contained in this prospectus (or in the prospectus supplement) or in any other subsequently filed document that also is or is deemed to be incorporated by reference modifies or replaces that statemen t. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.  All documents subsequently filed by the depositor pursuant to Sections 13(a) or 15(d) of the Exchange Act in respect of any offering prior to the termination of the offering of the offered securities shall also be deemed incorporated by reference into this prospectus and the related prospectus supplement.  

The trustee and/or indenture trustee on behalf of any issuing entity will provide without charge to each person to whom this prospectus is delivered, upon request, a copy of any or all of the documents referred to above that have been or may be incorporated by reference in this prospectus (not including exhibits to the information that is incorporated by reference unless the exhibits are specifically incorporated by reference into the information that this prospectus incorporates).  Requests for information should be directed to the corporate trust office of the trustee and/or indenture trustee specified in the prospectus supplement.

Rating

As a condition to the issuance of any class of offered notes or offered certificates, as applicable, they must not be rated lower than investment grade; that is, they must be rated in one of the four highest rating categories, by a rating agency.

A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating organization.  Each security rating should be evaluated independently of any other security rating.

INDEX OF TERMS

Page

Actuarial Receivables

9

Advances

39

Cede

4

Certificate Distribution Account

35

Certificate Owners

50

Certificate Pool Factor

21

Code

50

Collection Account

35

Collection Period

38

Definitive certificates

32

Definitive notes

32

Definitive Securities

32

Depository

22

Distribution Date

29

DTC

4

Eligible Deposit Account

36

Eligible Institution

36

Eligible Investment

37

Eligible Investments

36

Events of Default

24

Exchange Act

78

Fannie Mae

14

Farm Credit Act

17

FCA

18

FCBs

17

Federal Tax Counsel

50

FFCB

14

FFEL

16

FHLB

14

FHLMC Act

15

Final Scheduled Maturity Date

38

Financed Vehicles

7

FIRREA

16

Fiscal Agent

14

Freddie Mac

14

FTC Rule

49

Funding Corporation

18

Government Securities

12

grantor trust certificateholders

64

grantor trust certificates

64

GSE Issuer

14

GSEs

12

GSEs Bonds

12

Indenture

22

Indirect Participants

30

Interest Component

20

Investment Earnings

36

IRS

50

MBS

15

Multiple Variable Rate Note

55

Non-United States Owner

63

Note Distribution Account

35

Note Owners

50

Note Pool Factor

21

Participants

30

Payahead Account

35

Payaheads

39

Pooling and Servicing Agreement

7

Precomputed Advance

39

Precomputed Receivables

9

Pre-Funded Amount

36

Pre-Funding Account

36

Pre-Funding Period

36

Prepayment Assumption

51

Presumed Single Qualified Floating Rate

54

Presumed Single Variable Rate

54

Primary Assets

10

Principal Component

20

Private Label Custody Receipt Securities

18

Private Label Custody Strips

18

Receivables

8

REFCO

18

REFCO Strip

20

Registration Statement

78

Related Documents

26

Repurchase Amount

35

Reserve Account

41

RTC

16

Rule of 78S Receivables

9

Rules

30

Sale and Servicing Agreement

7

Sallie Mae

14

Schedule of Receivables

34

Securities Act

78

Security Owners

30

Senior Certificates

67

Senior Class Percentage

67

Servicer Default

43

Servicing Fee

40

Servicing Fee Rate

40

Shortfall Amount

67

Short-Term Note

57

Simple Interest Advance

39

Simple Interest Receivables

9

Single Variable Rate Note

54

Stripped Certificates

66

Subordinate Certificates

67

Subordinate Class Percentage

67

System

17

Systemwide Debt Securities

18

TEFRA

19

Transfer and Servicing Agreements

34

Treasury Bonds

12

Treasury Strips

12

Trust

7

Trust Accounts

36

Trust Agreement

7

Trust Stripped Bond

67

Trust Stripped Coupon

67

TVA

14

TVA Act

17

UCC

30

Underlying Issuer

11

Underlying Servicer

11

Underlying Trust Agreement

11

Underlying Trustee

11

Underwriting Agreements

76

United States person

57

Variable Rate Note

53

1997 Act

69

Actuarial Receivables

7

Advances

39

Cede

1

Certificate Distribution Account

3

Certificate Owners

50

Certificate Pool Factor

20

Code

50

Collection Account

35

Collection Period

38

Definitive certificates

31

Definitive notes

31

Definitive Securities

31

Depository

21

Distribution Date

28

DTC

1

Eligible Deposit Account

36

Eligible Institution

36

Eligible Investment

36

Eligible Investments

35

Events of Default

23

Exchange Act

79

Fannie Mae

12

Farm Credit Act

16

FCA

16

FCBs

16

Federal Tax Counsel

50

FFCB

13

FFEL

14

FHLB

13

FHLMC Act

14

Final Scheduled Maturity Date

38

Financed Vehicles

5

FIRREA

15

Fiscal Agent

13

Freddie Mac

12

FTC Rule

49

Funding Corporation

17

Government Securities

10

grantor trust certificateholders

64

grantor trust certificates

64

GSE Issuer

13

GSEs

10

GSEs Bonds

10

Indenture

21

Indirect Participants

29

Interest Component

19

Investment Earnings

36

IRS

50

MBS

13

Multiple Variable Rate Note

55

Non-United States Owner

63

Note Distribution Account

35

Note Owners

50

Note Pool Factor

20

Participants

29

Payahead Account

35

Payaheads

39

Pooling and Servicing Agreement

5

Precomputed Advance

39

Precomputed Receivables

7

Pre-Funded Amount

36

Pre-Funding Account

36

Pre-Funding Period

36

Prepayment Assumption

52

Presumed Single Qualified Floating Rate

54

Presumed Single Variable Rate

55

Primary Assets

9

Principal Component

19

Private Label Custody Receipt Securities

17

Private Label Custody Strips

17

Receivables

6

REFCO

17

REFCO Strip

19

Registration Statement

79

Related Documents

25

Repurchase Amount

34

Reserve Account

41

RTC

5

Rule of 78S Receivables

7

Rules

29

Sale and Servicing Agreement

5

Sallie Mae

12

Schedule of Receivables

34

Securities Act

79

Security Owners

29

Senior Certificates

67

Senior Class Percentage

67

Servicer Default

43

Servicing Fee

40

Servicing Fee Rate

40

Shortfall Amount

68

Short-Term Note

57

Simple Interest Advance

39

Simple Interest Receivables

7

Single Variable Rate Note

55

Stripped Certificates

66

Subordinate Certificates

67

Subordinate Class Percentage

67

System

16

Systemwide Debt Securities

16

TEFRA

18

Transfer and Servicing Agreements

33

Treasury Bonds

10

Treasury Strips

10

Trust

5

Trust Accounts

35

Trust Agreement

5

Trust Stripped Bond

67

Trust Stripped Coupon

67

TVA

13

TVA Act

16

UCC

29

Underlying Issuer

9

Underlying Servicer

9

Underlying Trust Agreement

9

Underlying Trustee

9

Underwriting Agreements

77

United States person

58

Variable Rate Note

54

Annex I

Global Clearance, Settlement and Tax Documentation Procedures

Except in some limited circumstances, the globally offered securities (the “Global securities”) will be available only in book-entry form. Unless otherwise specified in the related prospectus supplement, investors in the Global securities may hold Global securities through any of The Depository Trust depositor (“DTC”), Clearstream, Luxembourg or Euroclear.  Unless otherwise specified in the related prospectus supplement, Global securities will be tradable as home market instruments in both the European and U.S. domestic markets.  Unless otherwise specified in the related prospectus supplement, Initial settlement and all secondary trades will settle in same-day funds.

Secondary market trading between investors holding Global securities through Clearstream, Luxembourg and Euroclear will be conducted in the ordinary way in accordance with their normal rules and operating procedures and in accordance with conventional eurobond practice (i.e., seven calendar day settlement).

Secondary market trading between investors holding Global securities through DTC will be conducted according to the rules and procedures applicable to U.S. corporate debt obligations.

Secondary cross-market trading between Clearstream, Luxembourg or Euroclear and DTC Participants holding securities will be effected on a delivery-against-payment basis through the respective Depositaries of Clearstream, Luxembourg and Euroclear, in this capacity, and as DTC Participants.

Non-U.S. holders of Global securities will be subject to U.S. withholding taxes unless the holders meet particular requirements and deliver appropriate U.S. tax documents to the securities clearing organizations or their participants.

Initial Settlement

All Global securities will be held in book-entry form by The Depository Trust depositor (“DTC”) in the name of Cede & Co. (“Cede”) as nominee of DTC. Securityholders’ interests in the Global securities will be represented through financial institutions acting on their behalf as direct and indirect Participants in DTC.  As a result, Clearstream, Luxembourg and Euroclear will hold positions on behalf of their participants through their respective Depositaries, which in turn will hold these positions in accounts as DTC Participants.

Securityholders electing to hold their Global securities through DTC will follow the settlement practices applicable to U.S. corporate debt obligations. Securityholder securities custody accounts will be credited with their holdings against payment in same-day funds on the settlement date.

Securityholders electing to hold their Global securities through Clearstream, Luxembourg or Euroclear accounts will follow the settlement procedures applicable to conventional eurobonds, except that there will be no temporary global security and no “lock-up” or restricted period.  Global securities will be credited to the securities custody accounts on the settlement date against payment in same-day funds.

Secondary Market Trading

Since the purchaser determines the place of delivery, it is important to establish at the time of the trade where both the purchaser’s and seller’s accounts are located to ensure that settlement can be made on the desired value date.

Trading between DTC Participants. Secondary market trading between DTC Participants will be settled using the procedures applicable to U.S. corporate debt obligations in same-day funds.

Trading between Clearstream, Luxembourg and/or Euroclear Participants. Secondary market trading between Clearstream, Luxembourg Participants or Euroclear Participants will be settled using the procedures applicable to conventional eurobonds in same-day funds.

Trading between DTC seller and Clearstream, Luxembourg or Euroclear purchaser.  When Global securities are to be transferred from the account of a DTC Participant to the account of a Clearstream, Luxembourg Clearstream, Luxembourg Participant or a Euroclear Participant, the purchaser will send instructions to Clearstream, Luxembourg or Euroclear through a Clearstream, Luxembourg Participant or Euroclear Participant at least one business day prior to settlement. Clearstream, Luxembourg or Euroclear will instruct the respective Depositary, as the case may be, to receive the Global securities against payment. Payment will include interest accrued on the Global securities from and including the last coupon payment date to and excluding the settlement date.  Payment will then be made by the respective Depositary to the DTC Participant’s account against delivery of the Global securities.  Af ter settlement has been completed, the Global securities will be credited to the respective clearing system and by the clearing system, in accordance with its usual procedures, to the Clearstream, Luxembourg Participant’s or Euroclear Participant’s account.  The Global securities credit will appear the next day (European time) and the cash debit will be back-valued to, and the interest on the Global securities will accrue from, the value date, which would be the preceding day when settlement occurred in New York. If settlement is not completed on the intended value date (i.e., the trade fails), the Clearstream, Luxembourg or Euroclear cash debit will be valued instead as of the actual settlement date.

Clearstream, Luxembourg Participants and Euroclear Participants will need to make available to the respective clearing systems the funds necessary to process same-day funds settlement.  The most direct means of doing so is to pre-position funds for settlement, either from cash on hand or existing lines of credit, as they would for any settlement occurring within Clearstream, Luxembourg or Euroclear. Under this approach, they may take on credit exposure to Clearstream, Luxembourg or Euroclear until the Global securities are credited to their accounts one day later.

As an alternative, if Clearstream, Luxembourg or Euroclear has extended a line of credit to them, Clearstream, Luxembourg Participants or Euroclear Participants can elect not to pre-position funds and allow that credit line to be drawn upon the finance settlement. Under this procedure, Clearstream, Luxembourg Participants or Euroclear Participants purchasing Global securities would incur overdraft charges for one day, assuming they cleared the overdraft when the Global securities were credited to their accounts.  However, interest on the Global securities would accrue from the value date.  Therefore, in many cases the investment income on the Global securities earned during that one-day period may substantially reduce or offset the amount of the overdraft charges, although this result will depend on each Clearstream, Luxembourg Participant’s or Euroclear Participant’s particular cost of funds .

Since the settlement is taking place during New York business hours, DTC Participants can employ their usual procedures for sending Global securities to the respective Depositary for the benefit of Clearstream, Luxembourg Participants or Euroclear Participants.  The sale proceeds will be available to the DTC seller on the settlement date.  Thus, to the DTC Participant a cross-market transaction will settle no differently than a trade between two DTC Participants.

Trading between Clearstream, Luxembourg or Euroclear seller and DTC purchaser.  Due to time zone differences in their favor, Clearstream, Luxembourg Participants and Euroclear Participants may employ their customary procedures for transactions in which Global securities are to be transferred by the respective clearing system, through the respective Depositary, to a DTC Participant.  The seller will send instructions to Clearstream, Luxembourg or Euroclear through a Clearstream, Luxembourg Participant or Euroclear Participant at least one business day prior to settlement.  In these cases, Clearstream, Luxembourg or Euroclear will instruct the respective Depositary, as appropriate, to deliver the bonds to the DTC Participant’s account against payment. Payment will include interest accrued on the Global securities from and including the last coupon payment date to and excluding the settle ment date. The payment will then be reflected in the account of the Clearstream, Luxembourg Participant or Euroclear Participant the following day, and receipt of the cash proceeds in the Clearstream, Luxembourg Participant’s or Euroclear Participant’s account would be back-valued to the value date, which would be the preceding day, when settlement occurred in New York. Should the Clearstream, Luxembourg Participant or Euroclear Participant have a line of credit with its respective clearing system and elect to be in debit in anticipation of receipt of the sale proceeds in its account, the back-valuation will extinguish any overdraft charges incurred over that one-day period.  If settlement is not completed on the intended value date (i.e., the trade fails), receipt of the cash proceeds in the Clearstream, Luxembourg Participant’s or Euroclear Participant’s account would instead be valued as of the actual settlement date.  Finally, day traders that use Clearstream, Luxembourg or Euroclear and that purchase Global securities from DTC Participants for delivery to Clearstream, Luxembourg Participants or Euroclear Participants should note that these trades would automatically fail on the sale side unless affirmative action were taken.  At least three techniques should be readily available to eliminate this potential problem:

(a)

borrowing through Clearstream, Luxembourg or Euroclear for one day, until the purchase side of the day trade is reflected in their Clearstream, Luxembourg or Euroclear accounts, in accordance with the clearing system’s customary procedures;

(b)

borrowing the Global securities in the U.S. from a DTC Participant no later than one day prior to settlement, which would give the Global securities sufficient time to be reflected in their Clearstream, Luxembourg or Euroclear account in order to settle the sale side of the trade; or

(c)

staggering the value dates for the buy and sell sides of the trade so that the value date for the purchase from the DTC Participant is at least one day prior to the value date for the sale to the Clearstream, Luxembourg Participant or Euroclear Participant.

Certain U.S. Federal Income Tax Documentation Requirements

A beneficial owner of Global securities holding securities through Clearstream, Luxembourg or Euroclear, or through DTC will be subject to the 30% U.S. withholding tax that generally applies to payments of interest, including original issue discount, on registered debt issued by U.S. Persons or to backup withholding, at a rate of up to 31% unless (1) each clearing system, bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business in the chain of intermediaries between the beneficial owner and the U.S. entity required to withhold tax complies with applicable certification requirements and (2) the beneficial owner takes one of the following steps to obtain an exemption or reduced tax rate:

Exemption for non-U.S. Persons (Form W-8BEN). Beneficial owners of securities that are non-U.S. Persons can obtain a complete exemption from the withholding tax by filing a signed Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. If the information shown on Form W-8 BEN changes, a new Form W-8 BEN  must be filed within 30 days of the change.

Exemption for non-U.S. Persons with effectively connected income (Form W-8ECI). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S. branch, for which the interest income is effectively connected with its conduct of a trade or business in the United States, can obtain an exemption from the withholding tax by filing Form W-8ECI (Certificate of Foreign Person’s Claim for Exemption from Withholding on Income Effectively Connected with the Conduct of a Trade or Business in the United States).

Exemption or reduced rate for non-U.S. Persons resident in treaty countries (Form W-8BEN). Non-U.S. Persons that are beneficial owners of securities residing in a country that has a tax treaty with the United States can obtain an exemption or reduced tax rate, depending on the treaty terms, by filing Form W-8BEN (including Part II thereof). If the treaty provides only for a reduced rate, the beneficial owner may still be entitled to complete exemption from withholding under the first exemption discussed above.

Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain complete exemption from the withholding tax by filing Form W-9 (Request for Taxpayer Identification Number and Certification).

U.S. Federal Income Tax Reporting Procedure. The beneficial owner of a Global Security files by submitting the appropriate form to the person through whom it holds, the clearing agency, in the case of persons holding directly on the books of the clearing agency. Form W-8BEN and Form W-8ECI are generally effective for three calendar years from the close of the calendar year in which it is collected.

The term “U.S. Person” means (1) a citizen or resident of the United States, (2) a corporation or partnership (or other entity properly classified as a corporation or partnership for U.S. Federal income tax purposes) organized in or under the laws of the United States or any state or the District of Columbia,  (3) an estate the income of which is includible in gross income for United States tax purposes, regardless of its source, or (4)  a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have authority to control all substantial decisions of the trust.  Notwithstanding the preceding sentence, to the extent provided in regulations, trusts in existence on August 20, 1996 and treated as United States persons prior to that date that elect to continue to be so treated also will be consi dered U.S. Persons. Treasury regulations provide certain presumptions regarding the entity classification and foreign or U.S. status of a holder that a payor generally must apply in the absence of appropriate documentation from the holder, and provide detailed documentation and procedures for holders claiming withholding tax exemptions through intermediaries.  Prospective investors are urged to consult their tax advisors regarding the effect of these regulations on their ability to claim and the means for claiming exemptions from or reduced rates of U.S. withholding taxes.

This summary does not deal with all aspects of U.S. Federal income tax withholding that may be relevant to foreign holders of the Global securities. Investors are advised to consult their own tax advisers for specific tax advice concerning their holding and disposing of the Global securities.

The information in this prospectus supplement is not complete and may be changed.  We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective.  This prospectus supplement is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED [_________]

PROSPECTUS SUPPLEMENT (to prospectus dated [            ])

$[               ] (Approximate)

ACE SECURITIES CORP., [______] Boat Owner Trust [______], Series  [       ]

Asset Backed Notes

[______] Boat OwnerTrust [______]

Issuing Entity

[DB Structured Products, Inc.]

Sponsor

ACE Securities Corp.

Depositor

[               ]

Servicer

Notes Offered • $[      ], [     ]% Class A-1 Asset Backed Notes • $[      ], [     ]% Class A-2 Asset Backed Notes Assets • Retail boat receivables Credit Enhancement Class A-1 Notes • Subordination of Class A-2 Notes • Reserve account • [Financial guaranty insurance policy issued by [         ]] Class A-2 Notes • [Financial guaranty insurance policy issued by [         ]] [Describe other credit enhancement provided by [_____]] Expected Ratings • [      ] or equivalent for the Class A -1 Notes • [      ] or equivalent for the Class A -2 Notes Consider carefully the risk factors beginning on page S-[  ] of this prospectus supplement and on page [  ] of the prospectus. For a list of capitalized terms used in this prospectus supplement and the prospectus, see the index of defined terms beginning on page S-[  ] of this prospectus supplement and on page [  ] of the prospectus. The notes will represent interests in the Issuing Entity only and will not represent interests in or obligations of the sponsor, the depositor or any of their affiliates. Distributions on the notes will be made on the [__]th day of each month, or, if such day is not a business day, on the next succeeding business day, beginning in [__]. This prospectus supplement may be used to offer and sell the notes only if accompanied by the prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these notes or determined if this prospectus supplement or the attached prospectus is accurate or complete.  Making any contrary representation is a criminal offense.

[Deutsche Bank Securities Inc.] is purchasing the class A-1 notes from the Issuing Entity at approximately [   ]% of the principal amount of the class A-1 notes plus accrued interest from [     ], [      ] and the class A-2 notes at approximately [____]% of the principal amount of the class A-2 notes plus accrued interest from [                ].  [Deutsche Bank Securities Inc.] is offering the class A-1 notes and class A-2 notes from time to time in negotiated transactions or at varying prices which will be determined at the time of sale.  The aggregate proceeds to the Issuing Entity, before deducting expenses payable by or on behalf of the Issuing Entity estimated at $[     ], will be $[     ].

[Deutsche Bank Securities]

The date of this prospectus supplement is [         ].

Important Notice About Information Presented in this
Prospectus Supplement and the Accompanying Prospectus:

We provide information to you about the notes offered by this prospectus supplement in two separate documents that progressively provide more detail: (1) the accompanying prospectus, which provides general information, some of which may not apply to your notes, and (2) this prospectus supplement, which describes the specific terms of your notes.

If the information regarding the notes is more specific in this prospectus supplement than in the prospectus, then you should rely on the information in this prospectus supplement.

You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus.  We have not authorized anyone to provide you with different information.

We are not offering the notes in any state where the offer is not permitted.  We do not claim that the information in this prospectus supplement and prospectus is accurate as of any date other than the dates stated on their respective covers.

Dealers will deliver a prospectus supplement and prospectus when acting as underwriters of the notes and with respect to their unsold allotments or subscriptions.  In addition, all dealers selling the notes will be required to deliver a prospectus supplement and prospectus for ninety days following the date of this prospectus supplement.

We include cross-references in this prospectus supplement and the accompanying prospectus to captions in these materials where you can find further related discussions.  The following table of contents and the table of contents included in the accompanying prospectus provide the pages on which these captions are located.

TABLE OF CONTENTS

Prospectus Supplement

Caption

Page

Summary of Terms

1

Risk Factors

1

Formation of the Issuing Entity

3

The Trust Property

6

The Receivables Pool

7

Static Pool Information

14

The Originators

14

The Servicer

14

The Backup Servicer

15

Maturity and prepayment considerations

16

Yield Considerations

18

Use of Proceeds

19

Description of the Notes

19

Description of the Transaction Documents

36

[Other Credit Enhancement Provider]

49

[Derivative Instruments]

49

Federal Income Tax Consequences

49

Certain State Tax Consequences

51

ERISA Considerations

51

Underwriting

52

Ratings

53

Legal Proceedings

53

Affiliations, Relationships and Related Transactions

54

[Experts

54

Legal Matters

54

SUMMARY OF TERMS

This summary highlights selected information from this prospectus supplement and does not contain all of the information that you need to consider in making your investment decision.  To understand all of the terms of the offering of the notes, it is necessary that you read carefully this entire prospectus supplement and accompanying prospectus.

While this summary contains an overview of certain calculations, cash flow priorities, and other information to aid your understanding, you should read carefully the full description of these calculations, cash flow priorities and other information in this prospectus supplement and the accompanying prospectus before making any investment decision.

Issuing Entity	[      ] Boat Owner Trust [      ]-[      ], a Delaware business trust.
Depositor	Ace Securities Corp.  See “The Depositor” in the Prospectus.
Servicer	[      ].
Sponsor	[      ].  See “The Sponsor” in the Prospectus.
Originators	[_________________________], with respect to approximately [__]% of the receivables by aggregate principal balance as of the Cut-off Date. The remainder of the receivables were originated by various originators, none of which have originated more than 10% of the receivables.  See “The Originators” in this prospectus supplement.
Owner Trustee	[      ].
Indenture Trustee	[      ].
Backup Servicer	[      ].
[The Insurer	[________] is a [          ] financial guaranty insurance company. [          ] will issue a policy, which will guarantee the payment of timely interest and principal due on the class A-1 notes and class A-2 notes but only as set forth in the section of this prospectus supplement titled “The Policy.”]
[Any credit enhancement provider referenced in Items 1114(b) and 1115 of Regulation AB]	[      ].
Closing Date	On or about [      ].
[Initial] Cut-off Date	The [close] [opening] of business on [      ].

Description of the Notes

The issuing entity will issue three classes of asset backed notes.  The class A-1 notes will be designated as the “Class A-1 Notes” and the class A-2 notes will be designated as the “Class A-2 Notes”.  The Class A-1 Notes together with the Class A-2 Notes will be designated as the “Class A Notes”. The class B notes will be designated as the “Class B Notes.” Only the Class A Notes are offered to you pursuant to this prospectus supplement.  Any information in this prospectus supplement relating to the Class B Notes is presented solely to provide you with a better understanding of the Class A Notes.

Each of the Class A-1 Notes and Class A-2 Notes will have the initial principal amount and the interest rate set forth in the following table. The dates on which the final payment of principal and interest on each of the Class A-1 Notes and Class A-2 Notes is scheduled to be made are also set forth in the following table.

Class	Initial Note Principal Balance	Interest Rate	Final Scheduled Payment Date
A-1	$ [          ]	[       ]%	[          ]
A-2	$ [          ]	[       ]%	[          ]

The Class A Notes will initially be issued in book-entry form only. The Class A Notes will be issued in minimum denominations of $1,000 and multiples of $1,000 in excess of $1,000.

The Class A-[  ] Notes will not receive any payment of principal on a payment date until the full amount of the Class A-[  ] Notes principal has been paid in full.  On each payment date, the Class B Notes will not receive any payment of interest or principal until all amounts due the Class A Notes on the payment date have been paid in full.

Payment Dates

The payment date will be the [  ]th day of each month, or, if that day is not a business day, on the next succeeding business day. The first payment date will be [          ].

The record date for all payment dates is the [   ]th day of each month, or, if that day is not a business day, on the prior business day.

Interest

In the case of the first payment date, interest will accrue from [          ] through and excluding the first payment date of [          ]. For any subsequent payment interest will accrue on the Class A Notes during the month preceding each payment date. Interest on the notes will be calculated on a “30/360” basis.

Principal

Prior to achieving a required level of

overcollateralization, the amount of principal

available to be distributed to the Class A Notes is generally equal to (1) the amount of collections on the boat loan pool allocable to principal during the prior calendar month plus any losses recognized on the boat loan pool during the prior calendar month and (2) a specified amount of excess interest received on the boat loan pool during the prior calendar month, after paying specific expenses of the issuing entity, interest on the Class A Notes and funding the reserve account to the required level, necessary to achieve the required level of overcollateralization.

Once the required level of overcollateralization has been reached, the amount of principal available to be distributed to the Class A Notes will be equal to (1) the amount of collections on the boat loan pool allocable to principal during the prior calendar month plus any losses recognized on the boat loan pool during the prior calendar month less (2) the excess of (a) the amount of overcollateralization on the payment date less (b) the required level of overcollateralization on the payment date.  Additionally, once the required level of overcollateralization has been reached, excess interest will no longer be used to create any further overcollateralization.

Principal distributable to the Class A Notes will be distributed first to the Class A-1 Notes until its principal balance is reduced to zero and then will be distributed to the Class A-2 Notes until its principal balance has been reduced to zero.

In addition, the outstanding principal amount of the Class A Notes, to the extent not previously paid, will be payable on the final scheduled payment date of the related class of notes.

The Trust Fund’s Assets

The trust fund’s assets will include:

●

[non-prime] retail installment sale contracts secured by new and used boats, boat motors, jet skis and waverunners;

●

monies due on, or received under the receivables, after [          ];

●

an assignment of the security interests in the boats, boat motors, jet skis and waverunners securing the boat loan pool;

●

the related files;

●

all rights to proceeds from claims on physical damage, credit life and disability insurance policies covering the boats or the obligors;

●

all rights to liquidation proceeds with respect to the boat loan pool;

●

an assignment of the rights of the depositor under a receivables purchase agreement with [          ];

●

an assignment of the rights of [          ] against dealers under agreements between [          ] and these dealers;

●

specific bank accounts;

●

all proceeds of the foregoing; and

●

particular rights under the principal transaction documents for this offering.

The Boat Loan Pool

The boat loans consist of [non-prime] retail installment sale contracts originated by dealers and then acquired by [          ] pursuant to its contract acquisition program. [The retail installment sale contracts consist primarily of contracts with individuals with less than perfect credit due to various factors. These factors include the manner in which the individuals have handled previous credit, the limited extent of their prior credit history and/or their limited financial resources.]

The depositor expects that the receivables will have the following characteristics as of [   ].  As of the closing date, no more than 5% of the receivables will have characteristics that differ from those described in this prospectus supplement as of [   ].

Number of contracts

[   ]

Principal Amount

$[   ]

Annual Percentage Rates

[   ]% to [    ]%

Weighted Average Annual Percentage Rate

[   ]%

Original term

[   ] months to [   ] months

Weighted Average original term

[   ] months

Remaining term

[   ] months to [__] months

Weighted Average remaining term

[   ]%

New

[   ]

Used

[   ]

States

      [______]

[   ]%

      [______]

[   ]%

Balloon Loans

[   ]

[For approximately [      ]% of the principal amount of the receivables, the amount of the receivable was more than the value of the financed boat at the time the loan was made.]

[Pre-Funding Feature

Approximately $[          ] of the proceeds of the notes will be held by [          ]in an account which is formed solely to hold this money, and used to purchase additional boat loans with the prior written consent of [          ] in each case. The Issuing Entity will purchase from the depositor additional [non-prime] boat loans from time to time on or before [          ], [          ], from funds on deposit in this account. The obligation of the depositor to sell additional boat loans to the issuing entity is conditioned on these loans having been sold to the depositor from [          ].

The boat loans acquired by the issuing entity during the period between the day of the closing and [          ], will also be originated or acquired by [          ]. The characteristics of the subsequently-acquired boat loans are not expected to differ to any great extent from the boat loans acquired by the issuing entity on the day of the closing.]

Removal and Substitution of a Receivable

[Regulation AB Item 1103(a)(6) compliant description of removal or substitution of receivables in connection with material document defects or breaches of representations and warranties].

[Trigger Events]

[Regulation AB Item 1103(a)(3)(vii) compliant description of any events in the transaction agreements that can trigger liquidation or amortization of the receivables or other performance triggers that would alter the transaction structure or the flow of funds].

[Other Credit Enhancement]

[Regulation AB Item 1103(a)(3)(ix) compliant description of any other credit enhancement].

[Additional Series or Classes Backed by Receivables]

[Regulation AB Item 1103(a)(4) compliant description of any outstanding series or classes of notes that are backed by the receivables or otherwise have claims on the receivables.  Regulation AB compliant description of any circumstances in which additional series or classes of notes may be issued that are backed by the receivables, with specification if noteholder approval is necessary for such issuances and if noteholders will receive notice of such issuances].

[Revolving Periods]

[Regulation AB Item 1103(a)(5) compliant description of any revolving periods].

Fees and Expenses

Prior to the distribution of any interest to the noteholders, the servicer will be entitled to receive a servicing fee for each collection period in an amount equal to the product of one-twelfth of [    ]% per annum for so long as [               ] or an affiliate thereof is the servicer, and [    ]% per annum if [               ] or an affiliate thereof is no longer the servicer and the aggregate principal balance of the receivables as of the first day of the collection period.  See “Description of the Transfer and Servicing Agreement--Servicing Compensation and Payment of Expenses” in the Prospectus.

[Regulation AB Item 1103(a)(7) compliant description of any other fees and expenses].

Optional Termination

When the principal amount of the receivables is 10% or less than it was on the cut-off date, the servicer may buy the receivables.  If the servicer does not do so, the indenture trustee will try to sell the receivables to another buyer.  In either case, you must receive the principal amount of your notes and all accrued but unpaid interest or the receivables will not be sold.

Final Scheduled Maturity Dates

The final scheduled maturity date of the notes is [__________].  The actual date on which the aggregate outstanding principal amount of the notes is paid may be earlier than the final scheduled maturity date based on a variety of factors.

Expected Final Distribution Dates

The expected final distribution date of each class of notes is [

], based on the assumption that the servicer has exercised its option to purchase all the receivables as described in “Optional Termination” above.  Due to losses and prepayments on the receivables, the final distribution dates on each class of notes may be substantially earlier or later than such date.

[The Insurance Policy

On the day of the closing, [          ] will issue a financial guaranty insurance policy for the benefit of the Class A noteholders. Pursuant to this policy, [_________] will unconditionally and irrevocably guarantee the payments of interest and principal for each payment date with respect to the Class A Notes required to be made during the term of the policy, subject to the further provisions of the policy as described in this prospectus supplement. The Class B Notes do not have the benefit of the policy.]

Optional Redemption

The notes, if still outstanding, may be redeemed in whole, but not in part, on any payment date on which [          ] exercises its “clean-up call” option to purchase the boat loan pool. This can only occur after the pool balance declines to 10% or less of the original pool balance. [          ]’s exercise of the “clean-up call” is also subject to the satisfaction of particular conditions[, including obtaining the prior written consent, in some circumstances, of [          ]]. The redemption price is equal to the unpaid principal amount of the notes plus accrued and unpaid interest on the notes.

Mandatory Redemption

[If Pre-Funding Account Is Not Depleted

Each of the Class A-1 Notes and Class A-2 Notes will be redeemed in part on a pro rata basis if any portion of the $[          ] deposited in a segregated pre-funding account with [          ] remains on deposit in that account on [          ], or prior to this date if the amount remaining in the account is less than $[_________], provided, however if the amount remaining in the pre-funding account is less than $[_________], only the Class A-1 Notes will be redeemed.]

Upon Event Of Default

The notes may be accelerated and subject to immediate payment at par upon the occurrence of an event of default under the indenture. [So long as [          ] is not in default, the power to declare an event of default will be held by [          ]].  In the case of an event of default, the notes will automatically be accelerated and subject to immediate payment at par. [The policy issued by [          ] does not guarantee payment of any amounts that become due on an accelerated basis, unless [          ] elects, in its sole discretion, to pay the amounts in whole or in part.]

Tax Consequences

McKee Nelson LLP, special federal tax counsel, will deliver an opinion of counsel that, for federal income tax purposes, the Class A Notes will be treated as indebtedness and the issuing entity will not be an association, or publicly traded partnership, taxable as a corporation. Each noteholder, by accepting a Class A Note, will agree to treat the notes as indebtedness.

The tax code is complex, and we recommend that you and your tax advisors review the information under the caption “Federal Income Tax Consequences” in this prospectus supplement and under the caption “Material Federal Income Tax Consequences” in the prospectus.

ERISA Considerations

Subject to particular considerations discussed in this prospectus supplement under “ERISA Considerations,” the Class A Notes are eligible for purchase by employee benefit plans.  See “ERISA Considerations” in this prospectus supplement and the prospectus.

Ratings

It is a condition to the issuance of the Class A Notes that the Class A Notes receive at least the following ratings from [______________] and [_________________]:

Notes	[____]	[____]
Class A-1 Notes	[__]	[__]
Class A-2 Notes	[__]	[__]

RISK FACTORS

The following information, which you should carefully consider, identifies certain significant sources of risk associated with an investment in the securities.  You should also carefully consider the information set forth under “Risk Factors” in the prospectus.

The information relating to the boat loans may not reflect actual experience.	There can be no assurance that the net loss experience calculated and presented in this prospectus supplement by [       ] with respect to its portfolio of serviced contracts will reflect actual experience with respect to the boat loans included in the issuing entity. In addition, there can be no assurance that the future delinquency or loan loss experience of the servicer with respect to the boat loans will be better or worse than that set forth in this prospectus supplement with respect to [       ]’s servicing portfolio.
The [       ] finance program and the nature of obligors may increase the risk of delinquencies and losses.	[       ]generally originated by boat dealers for sale and assignment to [       ]. [       ] purchases retail installment sale contracts which may not meet the credit standards of traditional primary lenders. As a result, the underwriting standards applied by [       ] are not as stringent as those of the finance companies of boat manufacturers or other financial institutions. The [       ] finance program focuses on the non-prime market, including borrowers with sub-standard credit profiles who may not be able to receive financing from more traditional sources. The borrowers may have had credit problems in the past, including prior delinquencies, repossessions, bankruptcy filings or charge-offs by other credit companies. Accordingly, borrowers may have greater difficulty or be less likely to make their scheduled payments. The number of delinquencies and losses on the boat loans is expected to be higher than would be the case with lower risk borrowers. Due to the credit quality of these borrowers, the boat loans have been originated with higher annual percentage interest rates than more traditional lenders charge lower risk borrowers. Any increase in losses on the boat loans will result in accelerated prepayments on the Class A Notes. Any reinvestment risks associated with prepayment will be borne by the noteholders. Additionally, if [       ], as the security insurer, defaults under the policy, you will bear the risk of loss on the boat loans. You are urged to consider the credit quality of the boat loans when analyzing an investment in the notes.
A change in servicer may adversely affect collections on the boat loans.	[       ] believes that its credit loss and delinquency experience reflect in part its trained staff and collection procedures. If a servicer termination event occurs under the sale and servicing agreement and [       ] is removed as servicer, or if [       ] resigns or is terminated as servicer, the backup servicer has agreed to assume the obligations of successor servicer. Typically, a change in servicers results in a temporary disruption of servicing. There can be no assurance, however, that collections with respect to the boat loans will not be adversely affected by any change in servicer.
The rate at which the Class A Notes will amortize cannot be predicted.	Interest on the boat loans will be payable to the holders of the Class A Notes on each payment date. This amount will equal one-twelfth of the interest rate on the note balance of the class as of the close of business on the last day of the month immediately preceding the payment date. The boat loans have different APRs. All of the boat loans are prepayable at any time. The rate of prepayments on the boat loans may be influenced by a variety of economic, social and other factors. These factors include the fact that a consumer obligor generally may not sell or transfer the related financed boat securing an boat loan without the consent of [       ] unless the loan is repaid by the Obligor at the time of the sale or transfer. The rate of prepayment on the boat loans may also may be influenced by the structure of the loan, the nature of the consumer obligors and the related financed boats and servicing decisions. In addition, under some circumstances, [       ] is obligated to purchase boat loans as a result of breaches of particular representations and warranties, pursuant to the sale and servicing agreement and the receivables purchase agreement. Under some circumstances, the servicer is ob ligated to purchase boat loans pursuant to the sale and servicing agreement as a result of specified uncured breaches of covenants by it. The servicer may also purchase all the boat loans if the pool balance has declined to less than 10% of the original pool balance, subject to specified limitations in the sale and servicing agreement. [       ] is not aware of publicly available industry statistics that set forth principal prepayment experience for boat retail installment contracts similar to the boat loans. None of the issuing entity, the depositor or [       ] make any representation as to the actual prepayment rates on the boat loans. [       ], however, believes that the actual rate of prepayments will result in the Class A Notes being repaid prior to their respective final scheduled payment date. The amounts paid to noteholders will include prepayments on the boat loans. The noteholders will bear all reinvestment risk resulting from the timing of payments on the notes.
Effect of litigation on [       ]’s financial condition.	Due to the consumer-oriented nature of [       ]’s industry and the application of particular laws and regulations, industry participants are regularly named as defendants in litigation alleging violations of federal and state laws and regulations and consumer law torts, including fraud. Many of these actions involve alleged violations of consumer protection laws. A significant judgment against [       ] or others within the industry could have a material adverse effect on [       ]. It could affect [       ]’s financial condition, results of operations and/or its ability to perform its obligations under the receivables purchase agreement, the sale and servicing agreement and the trust agreement.
Events of default under the indenture may result in an acceleration.	Upon the occurrence of an event of default under the indenture, so long as _[       ] shall not have defaulted and the default is not continuing, [       ] as indenture trustee, will continue to submit claims under the insurance policy as necessary in accordance with the terms of the insurance policy to enable the issuing entity to continue to make payments due with respect to the Class A Notes on each payment date. However, following the occurrence of an event of default, [       ] may, at its option, elect to cause the liquidation of the assets of the issuing entity, in whole or in part, and pay all or any portion of the outstanding amount of the Class A Notes, plus accrued interest on the Class A Notes.
[If the Issuing Entity does not use all of the money in the pre-funding account a mandatory redemption of a portion of the Class A Notes could result.	If the issuing entity has not used all of the money deposited in the pre-funding account to purchase additional boat loans by [       ], [       ], then the holders of each of the Class A-1 Notes and the Class A-2 Notes will receive a pro rata prepayment of principal in an amount equal to the unused amount or if the amount remaining in the pre-funding account is less than $[____________], only the Class A-1 Notes will be redeemed. Any reinvestment risk from the mandatory redemption of a portion of the Class A Notes from the unused amount will be borne by the holders of the Class A Notes.]
The concentration of the receivables in specific geographic areas may increase the risk of loss.	Economic conditions in the states where obligors reside may affect the delinquency, loan loss and repossession experience of the trust fund with respect to the receivables.  As of the cut-off date, the billing addresses of the obligors with respect to approximately [      ]%, [      ]%, and [      ]% of the principal amount of the receivables were located in [      ],  [      ]  and [      ], respectively.  Economic conditions in any state or region may decline over time and from time to time.  Because of the concentration of the obligors in certain states, any adverse economic conditions in those states may have a greater effect on the performance of the notes than if the concentration did not exist.
[Additional Applicable Risk Factors]	[____________________]

FORMATION OF THE ISSUING ENTITY

The Issuing Entity

[      ] Boat Owner Trust [    ]-[    ] is a [business] trust to be formed by the Depositor under the laws of the State of Delaware pursuant to a trust agreement between the Depositor and the Owner Trustee, dated as of [________] (the “Trust Agreement”) for the transactions described in the Prospectus.  [The Trust Agreement constitutes the “governing instrument” under the laws of the State of Delaware.]   On or about [       ] (the “Closing Date”), the Issuing Entity will issue Class A-1 [       ]% Asset Backed Notes (the “Class A-1 Notes”), Class A-2 [       ]% Asset Backed Notes (the “Class A-2 Notes”, and together with the Class A-1 Notes, the “Class A Notes”) and Class B [       ]% Asset Backed N otes (the “Class B Notes” and, together with the Class A Notes, the “Notes.”) The Class A-1 Notes will have an aggregate original principal amount of $[       ], the Class A-2 Notes will have an aggregate original principal amount of $[       ] and the Class B Notes will have an aggregate original principal amount of $[       ]. Only the Class A Notes are offered to you pursuant to this prospectus supplement. Any information in this prospectus supplement relating to the Class B Notes is presented solely to provide you with a better understanding of the Class A Notes. On the Closing Date, the Issuing Entity will also issue an Asset Backed Certificate (the “Certificate”) which represents the equity ownership in the issuing entity and is subordinate in right of payment to the Notes. The Certificate is not being offered by this prospectus supplement.

After its formation, the Issuing Entity will not engage in any activity other than:

•

acquiring, holding and managing retail installment sales contracts secured by new and used boats, boat motors, jet skis and waverunners and the related trailers financed by  these retail installment sales contracts (the “Receivables”) and the other assets of the Issuing Entity and proceeds therefrom,

•

issuing the Notes and the Certificate,

•

making payments on the Notes and

•

engaging in other activities that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith.

The foregoing restrictions are contained in the Trust Agreement.  [These restrictions cannot be amended without the consent of holders of Notes evidencing at least 51% of the voting rights].  For a description of other provisions relating to amending the Trust Agreement, see “[[_______________]]” in the base prospectus.

The assets of the Issuing Entity will consist of the Receivables and certain related assets.

The Issuing Entity’s fiscal year end is [______].

The proceeds from the initial sale of the Notes will be used by the Issuing Entity to purchase the Initial Receivables from the Depositor pursuant to the Sale and Servicing Agreement [and to fund deposits in the Pre-Funding Account and the Capitalized Interest Account].  The Servicer will service the Receivables pursuant to the Sale and Servicing Agreement and will be compensated for acting as Servicer. See “Description of the Transaction Documents—Servicing Compensation” in this prospectus supplement.

The Issuing Entity’s principal offices are located in Wilmington, Delaware, in care of [       ], as Owner Trustee, at the address listed below under “—The Owner Trustee.”

Capitalization of the Issuing Entity

The following table illustrates the capitalization of the Issuing Entity as of the [Initial] Cut-off Date, as if the issuance and sale of the Notes had taken place on such date:

Class A-1 Notes	$[      ]
Class A-2 Notes	$[      ]
Class B Notes	$[      ]
Total	$[      ]

The Owner Trustee

[       ], the Owner Trustee (the “Owner Trustee”) under the Trust Agreement dated as of [       ], as amended as of [       ] among the Sponsor, the Depositor and the Owner Trustee (the “Trust Agreement”) is a [       ] and its principal offices are located at [       ]. The Owner Trustee will perform limited administrative functions under the Trust Agreement. The Owner Trustee’s liability in connection with the issuance and sale of the Notes is limited solely to the express obligations of the Owner Trustee set forth in the Trust Agreement and the Sale and Servicing Agreement.

[Provide Reg AB Item 1109(b) compliant description of the extent of the Owner Trustee’s prior experience serving as a trustee for asset-backed securities transactions involving asset pools of retail boat receivables.]

[Provide Reg AB Item 1109(c) compliant description of the Owner Trustee’s duties and responsibilities regarding the asset-backed securities under the governing documents and under applicable law, and of any actions required by the Owner Trustee, including whether notices are required to investors, rating agencies or other third parties, upon an event of default, potential event of default (and how defined) or other breach of a transaction covenant and any required percentage of a class or classes of asset-backed securities that is needed to require the Owner Trustee to take action.]

[Provide Reg AB Item 1109(d) compliant description of any limitations on the Owner Trustee’s liability under the transaction agreements regarding the asset-backed securities transaction.]

[Provide Reg AB Item 1109(e) compliant description of any indemnification provisions that entitle the Owner Trustee to be indemnified from the cash flow that otherwise would be used to pay the asset-backed securities.]

[Provide Reg AB Item 1109(f) compliant description of any contractual provisions or understandings regarding the Owner Trustee’s removal, replacement or resignation, as well as how the expenses associated with changing from one owner trustee to another owner trustee will be paid.]

The Indenture Trustee

[          ], a [national banking association], will be the Indenture Trustee under the Indenture dated as of [________] among the Issuing Entity and the Indenture Trustee (the “Indenture”).  The Depositor maintains normal commercial banking relations with the Indenture Trustee.

[Provide Reg AB Item 1109(b) compliant description of the extent of the Indenture Trustee’s prior experience serving as a trustee for asset-backed securities transactions involving asset pools of retail boat receivables.]

[Provide Reg AB Item 1109(c) compliant description of the Indenture Trustee’s duties and responsibilities regarding the asset-backed securities under the governing documents and under applicable law, and of any actions required by the Indenture Trustee, including whether notices are required to investors, rating agencies or other third parties, upon an event of default, potential event of default (and how defined) or other breach of a transaction covenant and any required percentage of a class or classes of asset-backed securities that is needed to require the Indenture Trustee to take action.]

[Provide Reg AB Item 1109(d) compliant description of any limitations on the Indenture Trustee’s liability under the transaction agreements regarding the asset-backed securities transaction.]

[Provide Reg AB Item 1109(e) compliant description of any indemnification provisions that entitle the Indenture Trustee to be indemnified from the cash flow that otherwise would be used to pay the asset-backed securities.]

[Provide Reg AB Item 1109(f) compliant description of any contractual provisions or understandings regarding the Indenture Trustee’s removal, replacement or resignation, as well as how the expenses associated with changing from one Indenture trustee to another Indenture trustee will be paid.]

THE TRUST PROPERTY

The Notes will be collateralized by the Trust Property. Each Note represents a limited obligation of the Issuing Entity secured by the Trust Property.  On the Closing Date, the Depositor will buy the Receivables from the Sponsor and the Depositor will sell the Receivables to the Issuing Entity.  The Servicer will, directly or through subservicers, service the Receivables.  The Trust Property also includes:

•

[non-prime] boat retail installment sale contracts (the “[Initial] Receivables”) secured by new and used boats, boat motors, jet skis and waverunners (the “[Initial] Financed Boats”);

•

monies due or received under the Initial Receivables [(a)] with respect to the [Initial] Receivables, after [       ] (the “[Initial] Cutoff Date”), [or (b) with respect to the Subsequent Receivables after the related cutoff date (each a “Subsequent Cutoff Date”);]

•

amounts as from time to time may be held in one or more separate trust accounts established and maintained by the Indenture Trustee, including the Collection Account, [the Pre-Funding Account and the Capitalized Interest Account], and the proceeds of these accounts, as described below (see “Description of the Transaction Documents—Accounts”);

•

security interests in the Financed Boats granted by the obligors (the “Obligors”) pursuant to the Receivables and any accessions;

•

the interest of the Sponsor in any proceeds from claims on any credit life, credit disability, and physical damage insurance policies or other insurance policies covering the Financed Boats or Obligors;

•

specific rights under the Sale and Servicing Agreement and the Receivables Purchase Agreement;

•

amounts payable to the Sponsor under all Dealer Recourse obligations;

•

all items contained in the related receivable files and any and all other documents that the Sponsor keeps on file in accordance with its customary procedures relating to the Receivables;

•

property, including the right to receive future Liquidation Proceeds, that secures any of the Receivables and that has been acquired pursuant to the liquidation of any Receivable; and

•

any and all payments on and proceeds of the foregoing.

[Additional [non-prime] retail installment sale contracts (the “Subsequent Receivables”) secured by new and used boats, boat motors, jet skis and waverunners (the “Subsequent Financed Boats”) and related property are intended to be purchased by the Issuing Entity from the Sponsor from time to time on or before [       ], from funds on deposit in the Pre-Funding Account. The Subsequent Receivables will be purchased by the Depositor from the Sponsor pursuant to one or more subsequent purchase agreements (each, a “Subsequent Purchase Agreement”) between the Depositor and the Sponsor, and from the Depositor by the Issuing Entity pursuant to one or more subsequent transfer agreements. The purchase by the Issuing Entity of the Initial Receivables and the Subsequent Receivables are in this prospectus supplement referred to as the “Receivables,” and the Initial Financed Boats and the Subsequent Financed Boats are in this prospectus supplement referred to as the “Financed Boats.”]

Pursuant to the dealer agreement between the Dealer and the Sponsor, a Dealer generally is obligated to pay the Sponsor for the unpaid balance of those Receivables which do not meet limited representations made by the Dealers (these obligations referred to in this prospectus supplement as “Dealer Recourse”). These representations and warranties relate primarily to the origination of the contracts and the perfection of the security interests in the related Financed Boats, and do not typically relate to the creditworthiness of the related Obligors or the collectability of the relevant contracts. Although the Dealer Agreements with respect to the Receivables will not be assigned to the Issuing Entity or Indenture Trustee, the Receivables Purchase Agreement and the Sale and Servicing Agreement will require the Sponsor to cause the amount of any recovery in respect to any Receivable pursuant to any Dealer Recourse to be deposited in the Col lection Account in satisfaction of the Sponsor’s obligations under the Sale and Servicing Agreement. The sales by the Dealers of installment sale contracts to the Sponsor do not generally provide for recourse against the Dealers for unpaid amounts in the event of a default by an Obligor under the installment sales contract, other than in connection with the breach of the foregoing representations and warranties. There can be no assurance that the Sponsor will pursue all claims under the Dealer Agreements nor that the Sponsor will prevail if any claim is made.

The Receivables were generally originated by Dealers in accordance with the Sponsor’s requirements under agreements with Dealers for assignment to the Sponsor and were so assigned. All the [Initial] Receivables will be sold and assigned by the Sponsor to the Depositor pursuant to the Receivables Purchase Agreement and by the Depositor to the Issuing Entity pursuant to the Sale and Servicing Agreement on or prior to the Closing Date. [The Subsequent Receivables will be sold and assigned on one or more future dates occurring no later than [       ] (each, a “Subsequent Transfer Date”).] The Indenture Trustee, as custodian, will hold the original installment sales contract or promissory note as well as copies of documents and instruments relating to each Receivable (the “Receivables File”).

Pursuant to the Indenture, the Issuing Entity will grant a security interest in the Trust Property in favor of the Indenture Trustee on behalf of the Noteholders and for the benefit of the [       ] (the “Insurer”) in support of the obligations owing to it under the Insurance and Indemnity Agreement, dated as of [       ], between the Sponsor, the Issuing Entity, the Certificateholder and the Insurer. Any proceeds of the security interest in the Trust Property would be distributed according to the Indenture as described under “The Notes—Priority of Distribution Amounts.” The Insurer would be entitled to the distributions only after payment of amounts owing to, among others, Noteholders.

THE RECEIVABLES POOL

Pursuant to the Receivables Purchase Agreement, the Sponsor will sell and assign to the Depositor all of its right, title and interest in and to the Receivables and the other Trust Property, and the Depositor, pursuant to the Sale and Servicing Agreement, will sell and assign to the Issuing Entity all of its right, title and interest in and to the Receivables and any other Trust Property. The Issuing Entity will then pledge all of its right, title and interest in and to the Receivables to the Indenture Trustee for the benefit of the Noteholders and the Insurer pursuant to the Indenture. The Receivables consist of non-prime boat retail installment sales contracts. The Receivables were purchased by the Sponsor in the ordinary course of its business pursuant to its finance programs and underwriting standards. As detailed in this prospectus supplement, credit guidelines may be less stringent than those applied in the origination of other boat loans by other lenders. See “The Originators.”

No selection procedures adverse to the Noteholders [or the Insurer] were utilized in selecting the [Initial] Receivables sold and assigned to the Depositor and then sold and assigned to the Issuing entity. The Receivables existing as of the [Initial] Cutoff Date were selected from the Sponsor’s portfolio according to several criteria. Among the criteria, each Receivable:

(1)

arises from the delivery and acceptance of a Financed Boat and which delivery and acceptance has been fully performed by the Obligor and the Dealer party to the transaction,

(2)

arises from the normal course of the Dealer’s business,

(3)

is not in default,

(4)

the Obligor of which is a natural person residing in any state or the District of Columbia,

(5)

the Obligor of which is not a government or a governmental subdivision or agency,

(6)

met the Sponsor’s underwriting criteria at the time of purchase,

(7)

is denominated and payable in Dollars in the United States,

(8)

is in full force and effect and constitutes the legal, valid and binding obligation of the Obligor in accordance with its terms,

(9)

is not subject to any dispute, litigation, counterclaim or defense, or any offset or right of offset at the time of purchase by the Sponsor, any exercisable right of rescission,

(10)

is not more than [       ] days past due,

(11)

has an original term to scheduled maturity of not less than [       ] or more than [____] months,

(12)

has a remaining term to scheduled maturity of not less than [       ] months or greater than [____] months,

(13)

provides for equal monthly payments which will cause the Receivable to fully amortize [       ] during its term,

(14)

has a remaining principal balance of not less than $[       ] or more than $[       ],

(15)

has an APR of not less than [       ]% and

(16)

the model year of the related Financed Boat is not earlier than [       ].

As of the Cut-off Date, no Obligor on any Receivable was noted in the related records of the Servicer as being the subject of any pending bankruptcy or insolvency proceeding.  The latest scheduled maturity of any Receivable is not later than [      ].  No selection procedures believed by the Depositor to be adverse to the Noteholders were used in selecting the Receivables.

The Depositor considers an account past due if any portion of the payment due on a due date is not received by the succeeding due date for that account.

Payments on the Receivables

All of the Receivables provide for the payment by the related Obligor of a specific total amount of payments, payable in substantially equal monthly installments on each scheduled payment date, which total represents the amount financed plus interest charges on the amount financed for the term of the Receivable. Each Receivable provides for repayment of the Amount Financed by an Obligor according to:

•

the Rule of 78’s (a “Rule of 78’s Receivables”),

•

the actuarial method (an “Actuarial Receivable” and together with Rule of 78’s Receivables, the “Precomputed Receivables”) or

•

the simple interest method (a “Simple Interest Receivable”).

Under a Rule of 78’s Receivable, the rate at which the amount of finance charges is earned and, correspondingly, the amount of each scheduled monthly payment allocated to reduction of the outstanding principal balance of the related Receivable are calculated in accordance with the “Rule of 78’s”. Under the Rule of 78’s, the portion of a payment allocable to interest earned during that month is determined by multiplying the total amount of interest payable over the term of the Receivable by a fraction, the denominator of which is equal to the sum of a series of numbers beginning with one and ending with the number of scheduled monthly payments due under the related Receivable, and the numerator of which is the number of payments remaining under the Receivable before giving effect to the payment to which the fraction is being applied. The difference between the amount of the scheduled monthly payment made by the Obligor and the amount of earned interest calculated for the month is applied to principal reduction.

An Actuarial Receivable provides for amortization of the loan over a series of fixed level monthly installments. Each scheduled monthly payment is deemed to consist of an amount of interest equal to one-twelfth of the stated APR of the Receivable multiplied by the outstanding principal balance of the Receivable and an amount of principal equal to the remainder of the scheduled monthly payment.

All payments received by the Servicer on or in respect of Precomputed Receivables, including the final scheduled payment, will be allocated pursuant to the Sale and Servicing Agreement on an actuarial basis. No adjustment will be made in the event of early or late payments, although in the latter case, the Obligor may be subject to a late charge.

“Simple Interest Receivables” provide for the amortization of the amount financed under the Receivable over a series of fixed level monthly payments. However, unlike the monthly payment under Rule of 78s Receivables, each monthly payment consists of an installment of interest which is calculated on the basis of the outstanding principal balance of the receivable multiplied by the stated APR and further multiplied by the period elapsed, as a fraction of a calendar year, since the preceding payment of interest was made. As payments are received under a Simple Interest Receivable, the amount received is applied first to interest accrued to the date immediately preceding the date of payment and the balance is applied to reduce the unpaid principal balance. Accordingly, if an Obligor pays a fixed monthly installment before its scheduled due date, the portion of the payment allocable to interest for the period since the pre ceding payment was made will be less than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly greater. Conversely, if an Obligor pays a fixed monthly installment after its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be greater than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly less. In either case, the Obligor pays a fixed monthly installment until the final scheduled payment date, at which time the amount of the final installment is increased or decreased as necessary to repay the then outstanding principal balance.

In the event of a prepayment in full, voluntarily or by acceleration, of a Precomputed Receivable, a “rebate” in the loan accounting records of the Servicer may be made to the Obligor of that portion of the total amount of payments under the relevant Receivable allocable to “unearned” finance charges. In the event of the prepayment in full, voluntarily or by acceleration, of a Simple Interest Receivable, a “rebate” will not be made to the Obligor, but the Obligor will be required to pay interest only to the date immediately preceding the date of prepayment. The amount of a rebate under a Precomputed Receivable generally will be less than or equal to the remaining scheduled payments of interest that would have been due under a Simple Interest Receivable for which all remaining payments were made on schedule.

The amount of a rebate under a Rule of 78’s Receivable calculated in accordance with the Rule of 78’s generally will be less than the amount of a rebate on an Actuarial Receivable calculated in accordance with the actuarial method. Distributions to Noteholders will not be affected by Rule of 78’s rebates under the Rule of 78’s Receivables because pursuant to the Sale and Servicing Agreements distributions will be determined using the actuarial method. Amounts received upon prepayment in full of a Rule of 78’s Receivable in excess of the then outstanding principal balance of the Receivable and accrued interest on the then outstanding principal balance of the Receivable, calculated pursuant to the actuarial method, will not be passed through to Noteholders.

Purchase or Replacement Obligations

Pursuant to the Receivables Purchase Agreement and the Sale and Servicing Agreement, the Sponsor will be obligated to repurchase or replace, subject to limits on replacement set forth in the Sale and Servicing Agreement, any Receivable sold and assigned to the Issuing Entity as to which a breach has occurred as to particular representations or warranties made by the Sponsor with respect to the Receivable, if the breach has not been cured by the last day of the first full calendar month following the discovery by or notice to the Sponsor of the breach, if the breach will materially and adversely affect the interests of the Noteholders, the Insurer or the Issuing Entity in the relevant Receivable. The Indenture Trustee will also have rights to enforce the obligations of the Sponsor under the Receivables Purchase Agreement. See “Description of the Transaction Documents—Sale and Assignment of Receivables” and “T rust Property” in this prospectus supplement.

The Sale and Servicing Agreement also provides that if the Servicer breaches certain of its servicing obligations under the Sale and Servicing Agreement, including but not limited to its obligation to maintain perfection of the first priority security interest of the Sponsor created by each Receivable in the related Financed Boat, or other covenants with regard to the Servicer, in each case only in a manner that materially and adversely affects the interests of the Noteholders, the Insurer or the Issuing Entity in any Receivable, the Servicer will purchase or replace the relevant Receivable from the Issuing Entity, unless the breach has been cured by the last day of the first full calendar month following the discovery by or notice to the Servicer of the breach.

Composition of the Pool of Initial Receivables

The tables below set forth information regarding the composition and characteristics of the pool of Receivables as of the [Initial] Cutoff Date. It is expected that the composition and characteristics of the Receivables on the Closing Date will be similar to the information set forth below. However, some Receivables may be excluded on the Closing Date as of a result of particular administrative considerations. The Sponsor does not believe that the characteristics of the Receivables included in the Issuing Entity on the Closing Date in the aggregate will differ materially from the information set forth in this prospectus supplement.

Composition of the Receivables as of the [Initial] Cut-off Date
	New Financed Boats	Used Financed Boats	Total
Aggregate Principal Balance	$[__________]	$[__________]	$[__________]
Number of Receivables	[__________]	[__________]	[__________]
Average Principal Balance	$[__________]	$[__________]	$[__________]
Average Original Balance	$[__________]	$[__________]	$[__________]
Weighted Average Contract Rate	[_______]%	[_______]%	[_______]%
Contract Rate (Range)	[___]% - [___]%	[___]% - [___]%	[___]% - [___]%
Weighted Average Original Term (months)	[_______]	[_______]	[_______]
Original Term (Range) (months)	[____] to [_____]	[____] to [_____]	[____] to [_____]
Weighted Average Remaining Term (months)	[_______]	[_______]	[_______]
Remaining Term (Range) (months)	[____] to [_____]	[____] to [_____]	[____] to [_____]
Weighted Average FICO score	[_______]	[_______]	[_______]
FICO score (Range)	[____] to [_____]	[____] to [_____]	[____] to [_____]

Distribution by Remaining Term of the Receivables as of the [Initial] Cut-off Date
Remaining Term (Range)	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
Less than [_____] months	[____________]	$[__________]	[___________]%
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
Total		$	100.00%

Distribution by Annual Percentage Rate of the Receivables as of the [Initial] Cut-off Date
Annual % Rate Range	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
[_____]% to below	[____________]	$	%
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[____]% and above	[____________]	[____________]	[____________]
Total		$	100.00%

Geographic Distribution of the Receivables as of the [Initial] Cut-off Date
State1	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
[      ]	[____________]	$	%
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
Others2
Total		$	100.00%

____________________

1.

Based on billing addresses of the Obligors as of the Cut-off Date, which may differ from the state of origination of the Receivable.

2.

Includes [    ] other states and [    ] none of which have a concentration of Receivables in excess of [    ]% of the aggregate principal balance.

Distribution by Remaining Principal Balance of the Receivables as of the [Initial] Cut-off  Date
Remaining Principal Balance (Range)	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
$ 2,500 to $ 4,999	[____________]	$	%
$ 5,000 to $ 7,499	[____________]	[____________]	[____________]
$ 7,500 to $ 9,999	[____________]	[____________]	[____________]
$10,000 to $12,499	[____________]	[____________]	[____________]
$12,500 to $14,999	[____________]	[____________]	[____________]
$15,000 to $17,499	[____________]	[____________]	[____________]
$17,500 to $19,999	[____________]	[____________]	[____________]
$20,000 to $22,499	[____________]	[____________]	[____________]
$22,500 to $24,999	[____________]	[____________]	[____________]
$25,000 to $27,499	[____________]	[____________]	[____________]
$27,500 to $29,999	[____________]	[____________]	[____________]
$30,000 to $32,499	[____________]	[____________]	[____________]
$32,500 to $34,999	[____________]	[____________]	[____________]
$35,000 to $37,499	[____________]	[____________]	[____________]
$37,500 to $39,999	[____________]	[____________]	[____________]
$40,000 to $41,499	[____________]	[____________]	[____________]
$42,500 to $44,999	[____________]	[____________]	[____________]
$45,000 to $47,499	[____________]	[____________]	[____________]
$47,500 to $49,999	[____________]	[____________]	[____________]
$50,000 to $52,499	[____________]	[____________]	[____________]
$52,500 to $54,999	[____________]	[____________]	[____________]
Total		$	100.00%

Distribution by FICO Score of the Receivables as of the [Initial] Cut-off Date
Annual % Rate Range	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool Balance
[______] to [______]	[____________]	$	%
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] and above	[____________]	[____________]	[____________]
Total		$	100.00%

Receivable Delinquencies and Losses

For information regarding delinquencies and losses on the Receivables, see the tables below.  A Receivable is considered to be delinquent when a payment due on any due date remains unpaid as of the close of business on the last business day immediately prior to the next monthly due date.  The determination as to whether a loan falls into this category is made as of the close of business on the last business day of each month.

30 -  59 Days (times):	Number of Receivables	% by Receivable Count	Principal Balance Outstanding as of the Cutoff Date	% of Aggregate Principal Balance Outstanding as of the Cutoff Date
0	[________]	[______]%	[_______._]	[__.__]
1	[________]	[______]%	[_______._]	[__.__]
2	[________]	[______]%	[_______._]	[__.__]
Total	[________]	100.00%	[_______._]	100.00

60 -  89 Days (times):	Number of Receivables	% by Receivable Count	Principal Balance Outstanding as of the Cutoff Date	% of Aggregate Principal Balance Outstanding as of the Cutoff Date
0	[________]	[______]	[_______._]	[__.__]
1	[________]	[______]	[_______._]	[__.__]
2	[________]	[______]	[_______._]	[__.__]
Total	[________]	100.00	[_______._]	100.00

[No Receivable has been delinquent more than 90 days since origination.]

STATIC POOL INFORMATION

Static pool information material to this offering may be found at [website address].

Information provided through the Internet address above will not be deemed to be a part of this prospectus or the registration statement for the notes offered hereby if it relates to any prior notes pool or vintage formed before January 1, 2006, or with respect to the mortgage pool (if applicable) any period before January 1, 2006.

THE ORIGINATORS

General

[____], [____] and  [____] are the originators of the receivables with respect to approximately [___]%, [___]% and [___]%, respectively, of the receivables by aggregate principal balance as of the Cut-off Date, along with various other originators, none of which originated more than 10% of the receivables by aggregate principal balance as of the Cut-off Date (each, an “Originator”).

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

THE SERVICER

[____________], a [describe form of organization of the servicer], (the “Servicer”) will initially service the Receivables pursuant to a sale and servicing agreement, to be dated as of [      ] (the “Sale and Servicing Agreement”), among the Sponsor, the Depositor, the Issuing Entity and the Servicer.  

The Servicer will perform the functions of a third-party servicer of boat loans as an agent for their beneficial owner.  [These servicer functions will include:

•

collecting and posting all payments;

•

responding to obligor inquiries regarding the boat loans;

•

investigating delinquencies;

•

reporting tax information to obligors;

•

paying boat disposition costs with respect to defaulted accounts;

•

monitoring the collateral;

•

accounting for collections;

•

furnishing monthly and annual statements to the Issuing Entity with respect to distributions; and

•

generating federal income tax information. ]

 [Regulation AB Item 1108 compliant description of the Servicer.]

Delinquency Experience (Dollars in Thousands)
	At December 31,
	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]
	Number of Loans	Dollars	Percent	Number of Loans	Dollars	Percent	Number of Loans	Dollars	Percent
Principal Amount Outstanding1
Delinquencies2
30-59 Days
60-89 Days
90-119 Days
over 120 days
Total Delinquencies as a  Percentage of the Total Amount Outstanding

________________________

1.

Principal Amount Outstanding is the aggregate remaining principal balance of all Receivables serviced, net of unearned interest.

2.

The period of delinquency is based on the number of days scheduled payments are contractually past due.  Includes repossessions on hand which have not been charged-off.  A receivable is 30 days contractually past due if a scheduled payment has not been received by the subsequent calendar month’s scheduled payment date.

THE BACKUP SERVICER

If a Servicer Termination Event occurs and remains unremedied and the Sponsor is terminated as Servicer or resigns as Servicer, in each case in accordance with the Sale and Servicing Agreement, [       ], a [       ], will serve as Backup Servicer.

The Backup Servicer will receive a fee on each Payment Date equal to one-twelfth the product of [       ] basis points and the then outstanding Note Balance as compensation for, among other things, (1) standing by to act as successor Servicer and (2) confirming particular calculations made by the Servicer on the monthly statement to Noteholders, including but not limited to (a) interest and principal payments due to the Noteholders and (b) some of the Receivables performance ratios. In addition, following the resignation or removal of the Servicer, the Backup Servicer will be reimbursed for particular costs and expenses associated with the transition of the Backup Servicer to Servicer (the “Servicer Transition Expenses”).

[Regulation AB Item 1108 compliant description of the Backup Servicer.]

MATURITY AND PREPAYMENT CONSIDERATIONS

All the Receivables are prepayable at any time. The rate of prepayments on the Receivables may be influenced by a variety of economic, social and other factors, including the fact that an Obligor generally may not sell or transfer the Financed Boat securing a Receivable without the consent of the Sponsor unless the loan is repaid by the Obligor at the time of the sale or transfer.  For this purpose the term “prepayments” includes prepayments in full, or in part, including, without limitation, some partial prepayments related to refunds of extended service contract costs and unearned insurance premiums, liquidations due to default, as well as receipts of proceeds from physical damage, credit life and credit accident and health insurance policies and other Receivables repurchased for administrative reasons.  The rate of prepayment on the Receivables may also be influenced by the structure of the loan, the natu re of the Obligors and the Financed Boats and servicing decisions as discussed above. In addition, under some circumstances, the Sponsor is obligated to repurchase or replace Receivables as a result of breaches of representations and warranties pursuant to the Sale and Servicing Agreement and the Receivables Purchase Agreement, and under some circumstances, the Servicer is obligated to purchase Receivables pursuant to the Sale and Servicing Agreement as a result of breaches of specific covenants. Subject to particular conditions, the Servicer has the option to purchase the Receivables when the aggregate principal balance of the Receivables is 10% or less of the Original Pool Balance.

If prepayments are received on the Receivables, the actual weighted average life of the Receivables may be shorter than the scheduled weighted average life, i.e., the weighted average life assuming that payments will be made as scheduled and that no prepayments will be made. “Weighted Average Life” means the average amount of time during which each dollar of principal on a Receivable is outstanding.

Any reinvestment risks resulting from a faster or slower incidence of prepayment of Receivables will be borne by the Noteholders. See also “The Notes—Optional Purchase of Receivables” regarding the Servicer’s right to purchase the Receivables and the other Trust Property on any Determination Date as of which the Aggregate Principal Balance has declined to less than 10% of the Original Pool Balance.

[Prepayments on boat receivables can be measured relative to a prepayment standard or model.  The model used in this Prospectus, the Absolute Prepayment Model (“ABS”), represents an assumed rate of prepayment each month relative to the original number of receivables in a pool of receivables.   ABS further assumes that all the receivables are the same size and amortize at the same rate and that each receivable in each month of its life will either be paid as scheduled or be prepaid in full.   For example, in a pool of receivables originally containing 10,000 receivables, a 1% ABS rate means that 100 receivables prepay each month.   ABS does not purport to be an historical description of prepayment experience or a prediction of the anticipated rate of prepayment of any pool of receivables, including the Receivables.

The table captioned “Percent of Initial Note Principal Balance at Various ABS Percentages” (the “ABS Table”) has been prepared on the basis of the characteristics of the Receivables.   The ABS Table assumes that

•

the Issuing Entity includes two pools of Receivables with the characteristics set forth in the following table;

•

the Receivables prepay in full at the specified constant percentage of ABS monthly, with no defaults, losses or repurchases;

•

each scheduled monthly payment on the Receivables is made on the last day of each month and each month has 30 days;

•

the initial principal amount of each of the Class A-1 Notes and Class A-2 Notes are as set forth on the cover page of this prospectus supplement;

•

interest accrues during each Interest Period at the following assuming coupon rates; Class A-1 Notes, [______]% and Class A-2 Notes, [______]%;

•

payments on the Notes are made on each Distribution Date (and each such date is assumed to be the [   ] day of each applicable month);

•

the Class A Notes are purchased on [       ];

•

the scheduled monthly payment for each Receivable has been calculated on the basis of the assumed characteristics in the following table so that each Receivable will amortize in amounts sufficient to repay the Principal Balance of the Receivable by its indicated remaining term to maturity;

•

the first due date for each Receivable is the last day of the month of the assumed cutoff date for each Receivable as set forth in the following table;

•

[the entire Pre-Funded Amount is used to purchase Subsequent Receivables;]

•

the Servicer does exercise its option to purchase the Receivables; and

•

the difference between the gross APR and the net APR is equal to the Servicer Fee, and the net APR is further reduced by the fees due to the Indenture Trustee, the Backup Servicer [and the Insurer].

Pool	Aggregate Principal Balance	Gross APR (%)	Assumed Cutoff Date	Original Term to Maturity (in Months)	Remaining Term to Scheduled Maturity (in Months)
1	$[______]	[       ]	[       ]	[       ]	[       ]
2	$[______]	[       ]	[       ]	[       ]	[       ]
Total	$[______]

The ABS Table sets forth the percent of the initial principal amount of the Notes that would be outstanding after each of the Distribution Dates shown and the corresponding weighted average lives thereof at various constant ABS percentages.

The actual characteristics and performance of the Receivables will differ from the assumptions used in constructing the ABS Table.   The assumptions used are hypothetical and have been provided only to give a general sense of how the principal cash flows might behave under varying prepayment scenarios.   For example, it is very unlikely that the Receivables will prepay at a constant level of ABS until maturity or that all of the Receivables will prepay at the same level of ABS or that the coupon rates on the Notes will remain constant.   Moreover, the diverse terms of Receivables could produce slower or faster principal distributions than indicated in the ABS Table at the various constant percentages of ABS specified, even if the original and remaining terms to maturity of the Receivables are as assumed.  Any difference between such assumptions and the actual characteristics and performance of the Receivables, including actual prepayment experience or losses, will affect the percentages of initial balances outstanding over time and the weighted average lives of the Notes.]

Percent of Initial Note Principal Balance at Various ABS Percentages(1)
	Class A-1 Notes Assumed ABS Percentage
Payment Dates	[   ]%	[   ]%	[   ]%	[   ]%
Closing Date	100	100	100	100
[                        ]
[                        ]
[                        ]
Weighted Average Life (years) (2)

_______________________

(1)The percentages in this table have been rounded to nearest whole number.

(2)The weighted average life of a note is determined by (1) multiplying the amount of each principal payment on a note by the number of years from the date of the Issuance of the note to the related Payment Date, (b) adding the results and (c) dividing the sum by the related initial principal amount of the note.

Percent of Initial Note Principal Balance at Various ABS Percentages(1)
	Class A-2 Notes Assumed ABS Percentage
Payment Dates	[   ]%	[   ]%	[   ]%	[   ]%
Closing Date	100	100	100	100
[                        ]
[                        ]
[                        ]
Weighted Average Life (years) (2)

_______________________

(1)The percentages in this table have been rounded to nearest whole number.

(2)The weighted average life of a note is determined by (a) multiplying the amount of each principal payment on a note by the number of years from the date of the Issuance of the note to the related Payment Date, (b) adding the results and (c) dividing the sum by the related initial principal amount of the note.

YIELD CONSIDERATIONS

Other than on the first Payment Date, on each Payment Date, interest on the Receivables will be passed through to the Noteholders in an amount equal to one-twelfth of the Interest Rate multiplied by the Note Balance of the applicable Class on the last day of the immediately preceding Collection Period. In the event of prepayments on Receivables, Noteholders will nonetheless be entitled to receive interest for the full month on the Notes. See also “The Receivables—Payments on the Receivables” in this prospectus supplement.

USE OF PROCEEDS

The Issuing Entity will use the net proceeds from the sale of the Notes to purchase Receivables from the Depositor [and to make the initial deposit into the Capitalized Interest Account and the Pre-Funding Account]. The Depositor will use the net proceeds paid to the Depositor by the Issuing Entity to purchase Receivables from the Sponsor, which in turn will use the proceeds to pay related expenses and repay specific warehouse loans and any additional proceeds will be added to the Sponsor’s general funds and used for its general corporate purposes.

DESCRIPTION OF THE NOTES

The Notes will be issued pursuant to the terms of the Indenture, substantially in the form filed as an exhibit to the Registration Statement.  The following information summarizes all material provisions of the Notes and the Indenture.  The following summary supplements the description of the general terms and provisions of the Notes of any given Series and the related Indenture set forth in the Prospectus, to which description reference is hereby made.

The Notes

The Class A Notes initially will be represented by notes registered in the name of Cede & Co., as the nominee of The Depository Trust Company (“DTC”), and will only be available in the form of book-entries on the records of DTC and participating members of DTC in denominations of $1,000. All references to “Holders” or “Noteholders” and to authorized denominations, when used with respect to the Notes, shall reflect the rights of Note Owners, and limitations of Note Owners, as they may be indirectly exercised through DTC and its participating members, except as otherwise specified in this prospectus supplement. See “Certain Information Regarding the Securities—Book-Entry Regulation” in the prospectus supplement and Annex I to the prospectus.

In general, the Class A-1 Noteholders will be entitled to receive, on each Payment Date, the Class A-1 Principal Payment Amount and the Class A-1 Interest Payment Amount and the Class A-2 Noteholders will be entitled to receive, on each Payment Date, the Class A-2 Principal Payment Amount and the Class A-2 Interest Payment Amount, subject to the priority of payments as described in “—Priority of Distribution Amounts.” Payments on the Notes will be made from the Note Distribution Account.

In general, the Class A-1 Noteholders will be entitled to receive, on each Payment Date, the Class A-1 Principal Payment Amount and the Class A-1 Interest Payment Amount and the Class A-2 Noteholders will be entitled to receive, on each Payment Date, the Class A-2 Principal Payment Amount and the Class A-2 Interest Payment Amount, subject to the priority of payments as described in “—Priority of Distribution Amounts.” Payments on the Notes will be made from the Note Distribution Account.

[Mandatory Redemption

The Class A Notes will be redeemed in part on the Mandatory Redemption Date in the event that any portion of the Pre-Funded Amount remains on deposit in the Pre-Funding Account at the end of the Funding Period. The aggregate principal amount of the Class A Notes to be redeemed will be an amount equal to the remaining Pre-Funded Amount on that date (the “Class A Mandatory Redemption Amount”). The Class A Mandatory Redemption Amount will be distributed pro rata to each of the Class A-1 Notes and the Class A-2 Notes, based on the current principal balance of each Class, provided, however, that if the amount remaining in the Pre-Funding Account is less than $[_____________], only the Class A-1 Notes will be redeemed.]

Optional Purchase of Receivables

As an administrative convenience, the Servicer may purchase all the Receivables and other Trust Property on any Payment Date if, as of the last day of the related Collection Period, the Aggregate Principal Balance has declined to less than 10% of [the sum of (1)] the Aggregate Principal Balance as of the [Initial] Cutoff Date [plus (2) the aggregate principal balances of the Subsequent Receivables added to the Issuing Entity as of their respective Cutoff Dates] (the “Original Pool Balance”). To exercise this option, the Servicer must pay the aggregate Purchase Amounts for the Receivables [and obtain the prior written consent of the Insurer, or if the redemption would result in a claim under the Policy or if the redemption would result in any amount owing to the Insurer remaining unpaid.] Upon exercising the option, the Servicer will succeed to all interests in and to the Trust Property. The purchase price paid by the Servicer will be d eposited into the Collection Account and distributed pursuant to “—Priority of Distribution Amounts” below. See “Certain Matters Regarding the Servicer—Termination” in the accompanying prospectus.

This purchase will cause a redemption of the Notes; provided, however, that the Servicer will provide the Indenture Trustee, the Backup Servicer, [the Insurer] and the Rating Agencies at least 10 days’ prior written notice of any redemption. The Indenture Trustee will give notice to each Noteholder at least five days prior to any redemption. The redemption price for each Note will be no less than the outstanding principal balance of the relevant Note on the date of redemption plus accrued and unpaid interest on the outstanding principal balance (the “Redemption Price”). The Servicer will deposit the Redemption Price into the Collection Account, and the Indenture Trustee will distribute the amounts so deposited in accordance with the “Priority of Distribution Amounts” below.

Distributions from the Issuing Entity

No later than 12:00 p.m. New York City time on each Determination Date, the Servicer will inform the Indenture Trustee of the amount of aggregate collections on the Receivables and the aggregate Purchase Amount of Receivables to be purchased by the Servicer with respect to the related Collection Period. The Servicer will determine prior to the Determination Date, the Class A-1 Interest Payment Amount, the Class A-1 Principal Payment Amount, the Class A-2 Interest Payment Amount, the Class A-2 Principal Payment Amount, the Payment Amount, the amounts, if any, required to be deposited in the Class A Reserve Account, the Class A Overcollateralization Amount and the Class A Target Overcollateralization Amount.

For purposes of this prospectus supplement, the following terms shall have the following meanings:

“Aggregate Principal Balance” means, with respect to the Closing Date, the Cutoff Date Principal Balance, and with respect to any Determination Date, the sum of the Principal Balances, computed as of the last day of the related Collection Period end date, for all Receivables, other than Liquidated Receivables and Purchased Receivables.

“Amount Financed” means, with respect to a Receivable, the aggregate amount advanced extended under the Receivable toward the purchase price of the Financed Boat and related costs, including amounts of credit extended in respect of accessories, insurance premiums, service and warranty policies or contracts and other items customarily financed as part of boat retail installment contracts or promissory notes, and related costs.

“Available Funds” means, with respect to any Determination Date, the sum of

(1)

the “Collected Funds” received by the Servicer during the related Collection Period,

(2)

all Purchase Amounts deposited in the Collection Account for the related Collection Period,

(3)

all income received from investments of funds in the Collection Account during the related Collection Period,

[(4)

the Monthly Capitalized Interest Amount with respect to the Payment Date,]

[(5)

the Insurer Optional Deposit, if any, and]

[(6)

any remaining Pre-Funded Amount applied to the mandatory redemption of Notes.]

“Certificateholder” means the holder of a Certificate

“Class” means a class of Notes.

“Class A Interest Carryover Shortfall” means, as of the close of business on any Payment Date, the sum of (1) the Class A-1 Interest Carryover Shortfall and (2) the Class A-2 Interest Carryover Shortfall.

“Class A Interest Payment Amount” means, with respect to any Payment Date, the sum of (1) the Class A-1 Interest Payment Amount and (2) the Class A-2 Interest Payment Amount.

[“Class A Mandatory Redemption Amount” means the amount, if any, remaining of the Pre-Funded Amount on the Mandatory Redemption Date.]

“Class A Overcollateralization Amount” means, with respect to any Payment Date, an amount equal to the excess, if any, of:

[(1)

the sum of,

(a)]

 the remaining Aggregate Principal Balance as of the last day of the related Collection Period [and

(b)

 all amounts, if any, in the Pre-Funding Account,] over

(2)

 the remaining Class A Note Balance, after giving effect to the amounts payable on the Payment Date pursuant to clauses (1) through (5) under “—Priority of Distribution Amounts” on the Payment Date.

“Class A Principal Payment Amount” means, with respect to any Payment Date, the sum of the Class A-1 Principal Payment Amount and the Class A-2 Principal Payment Amount.

“Class A Target Overcollateralization Amount” means, with respect to any Payment Date, an amount equal to the product of (1) [       ]%[, or any lesser percentage as the Insurer may decide in its sole discretion,] and (2) [the sum of (a)] the remaining Aggregate Principal Balance[, and (b) amounts, if any, in the Pre-Funded Account, each] determined as of the last day of the related Collection Period.

“Class A-1 Final Scheduled Payment Date” means [       ] or, if this day is not a Business Day, the next succeeding Business Day.

 “Class A-1 Interest Carryover Shortfall” means, as of the close of business on any Payment Date, the excess of (a) the Class A-1 Interest Payment Amount for the Payment Date and any outstanding Class A-1 Interest Carryover Shortfall from the immediately preceding Payment Date plus interest on this outstanding Class A-1 Interest Carryover Shortfall, to the extent permitted by law, at the Class A-1 Interest Rate from the preceding Payment Date through the current Payment Date, calculated on the basis of a 360-day year consisting of twelve 30-day months, over (b) the amount of interest that the Holders of the Class A-1 Notes actually received on the current Payment Date.

“Class A-1 Interest Payment Amount” means, with respect to any Payment Date, 30 days’ interest, calculated on the basis of a 360-day year consisting of twelve 30-day months or, in the case of the first Payment Date, the number of days (on a “30/360” basis) from and including [       ], to but excluding [       ], at the Class A-1 Interest Rate on the Class A-1 Note Balance as of the close of business on the last day of the related Collection Period.

[“Class A-1 Mandatory Redemption Amount” means, (1) with respect to the Mandatory Redemption Date on which the Class A Mandatory Redemption Amount is less than $100,000, the Class A Mandatory Redemption Amount, and (2) with respect to any Payment Date on which the Class A Mandatory Redemption Amount is greater than $[__________], the product of (A) the Class A Mandatory Redemption Amount and (B) a fraction, the numerator of which is the Class A-1 Note Balance as of the class of business on the date prior to the related Payment Date and the denominator of which is the Class A Note Balance as of the class of business on the date prior to the related Payment Date.]

“Class A-1 Principal Carryover Shortfall” means, as of the close of business on any Payment Date, the excess of (a) the Class A-1 Principal Payment Amount and any outstanding Class A-1 Principal Carryover Shortfall from the immediately preceding Payment Date, over (b) the amount of principal that the Holders of the Class A-1 Notes actually received on the current Payment Date.

“Class A-1 Principal Payment Amount” means:

(a)

with respect to any Payment Date other than the Class A-1 Final Scheduled Payment Date: the lesser of,

(1)

the Class A-1 Note Balance immediately prior to the Payment Date and

[(2)

the sum of

(A)]

the Principal Payment Amount [and

(B)

the Class A-1 Mandatory Redemption Amount] and

(b)

with respect to the Class A-1 Final Scheduled Payment Date, the then outstanding Class A-1 Note Balance.

“Class A-2 Final Scheduled Payment Date” means [       ], or, if this day is not a Business Day, the next succeeding Business Day.

“Class A-2 Interest Payment Amount” means, with respect to any Payment Date, 30 days’ interest, calculated on the basis of a 360-day year consisting of twelve 30-day months or, in the case of the first Payment Date, the number of days (on a “30/360” basis) from and including [       ], to but excluding [       ], at the Class A-2 Interest Rate on the Class A-2 Note Balance as of the close of business on the last day of the related Collection Period.

 “Class A-2 Interest Carryover Shortfall” means, as of the close of business on any Payment Date, the excess of (a) the Class A-2 Interest Payment Amount for the Payment Date and any outstanding Class A-2 Interest Carryover Shortfall from the immediately preceding Payment Date plus interest on the outstanding Class A-2 Interest Carryover Shortfall, to the extent permitted by law, at the Class A-2 Interest Rate from the preceding Payment Date through the current Payment Date, calculated on the basis of a 360-day year consisting of twelve 30-day months, over (b) the amount of interest that the Holders of the Class A-2 Notes actually received on the current Payment Date.

[“Class A-2 Mandatory Redemption Amount” means, with respect to the Mandatory Redemption Payment Date, the positive difference, if any, between the Class A Mandatory Redemption Amount and the Class A-1 Mandatory Redemption Amount.]

“Class A-2 Principal Carryover Shortfall” means, as of the close of business on any Payment Date, the excess of (a) the Class A-2 Principal Payment Amount and any outstanding Class A-2 Principal Carryover Shortfall from the immediately preceding Payment Date, over (b) the amount of principal that the Holders of the Class A-2 Notes actually received on the current Payment Date.

“Class A-2 Principal Payment Amount” means:

(a)

with respect to any Payment Date other than the Class A-2 Final Scheduled Payment Date: the lesser of,

(1)

the Class A-2 Note Balance immediately prior to the Payment Date, and

[(2)

the difference between

(A)]

[the sum of] the Principal Payment Amount [and the Class A-2 Mandatory Redemption Amount] and

(B)

the Class A-1 Principal Payment Amount and

(b)

with respect to the Class A-2 Final Scheduled Payment Date, the then outstanding Class A-2 Note Balance.

“Class B Interest Carryover Shortfall” means, as of the close of business on any Payment Date, the excess of (a) the Class B Interest Payment Amount for the Payment Date and any outstanding Class B Interest Carryover Shortfall from the immediately preceding Payment Date plus interest on the outstanding Class B Interest Carryover Shortfall, to the extent permitted by law, at the Class B Interest Rate from the preceding Payment Date through the current Payment Date, calculated on the basis of a 360-day year consisting of twelve 30-day months, over (b) the amount of interest that the Holders of the Class B Notes actually received on the current Payment Date.

“Class B Interest Payment Amount” means, with respect to any Payment Date, 30 days’ interest, calculated on the basis of a 360-day year consisting of twelve 30-day months or, in the case of the first Payment Date, the number of days (on a “30/360” basis) from and including [       ] to but excluding [       ], at the Class B Interest Rate on the Class B Note Balance as of the close of business on the last day of the related Collection Period.

“Class B Note Balance” means an amount equal to $[       ] on the Closing Date and after, an amount equal to the initial Class B Note Balance reduced by all amounts distributed to the Class B Noteholders that are allocable to principal.

“Class B Principal Payment Amount” means:

(a)

with respect to any Payment Date other than the Class B Final Scheduled Payment Date: the lesser of,

(x)

the Class B Note Balance immediately prior to the Payment Date, and

(y)

amounts remaining from the sum of,

(A)

Available Funds and

(B)

amounts available from the Class A Reserve Account in accordance with the terms of the Sale and Servicing Agreement, after application of priorities First through Ninth under “—Priority of Distribution Amounts,” and

(b)

with respect to the Class B Final Scheduled Payment Date, the then outstanding Class B Note Balance.

“Collected Funds” means with respect to any Determination Date, the amount of funds in the Collection Account representing collections on the Receivables received by the Servicer during the related Collection Period, including all Liquidation Proceeds collected during the related Collection Period, but excluding any Purchase Amounts, and all amounts paid by Dealers under Dealer Agreements or Dealer Assignments with respect to the Receivables during the related Collection Period.

“Collection Period” means with respect to any Payment Date or Determination Date, the calendar month preceding the month in which the Payment Date or Determination Date occurs.

“Contract Scheduled Payment” means, for any Collection Period for any Receivable, the amount indicated in the Receivable as required to be paid by the Obligor in the relevant Collection Period, without giving effect to deferments of payments granted to Obligors by the Servicer pursuant to the Sale and Servicing Agreement or any rescheduling of payments in an insolvency or similar proceeding.

“Controlling Party” means [the Insurer, so long as an Insurer Default shall not have occurred and be continuing, otherwise,] the Indenture Trustee for the benefit of the Noteholders; provided, however, that the Owner Trustee for the benefit of the Certificateholder will be the Controlling Party after all unpaid principal and interest on the Notes shall have been paid in full and all amounts due to the Insurer have been paid and the Policy has expired in accordance with its terms.

“Corporate Trust Office” means the office of the Indenture Trustee at which its corporate trust business shall be principally administered, which office as of the date of this prospectus supplement is located at [       ].

“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 a Receivable or otherwise modifying or restructuring the Contract Scheduled Payments to be made on a Receivable, an amount equal to (1) the excess of the Principal Balance of the Receivable immediately prior to the order over the Principal Balance of the Receivable as so reduced and/or (2) if the court shall have issued an order reducing the effective rate of interest on the Receivable, the net present value, using as the discount rate the higher of the APR on the Receivable or the rate of interest, if any, specified by the court in the order, of the Contract Scheduled Payments as so modified or restructured. A Cram Down Loss shall be deemed to have occurred on the date of issuance of the order.

“Cutoff Date” means [with respect to the Initial Receivables, the Initial Cutoff Date, and with respect to the Subsequent Receivables, the Subsequent Cutoff Date.]

“Dealer Agreement” means an agreement generally between the Sponsor and a Dealer relating to the sale of retail installment contracts to the Sponsor and all documents and instruments relating to that agreement.

“Dealer Assignment” means with respect to a Receivable, the executed assignment conveying a Receivable to the Sponsor.

“Defaulted Receivable” means any Receivable with respect to which any of the following shall have occurred:

•

for which the related Financed Boat has been repossessed by the Servicer;

•

for which all or more than 10% of any payment is 120 days or more past due; or

•

a Contract with respect to which the Servicer has determined in good faith that all amounts expected to be recovered have been received.

“Deficiency Claim Amount” means with respect to any Determination Date, the positive difference, if any, of (1) the sum of the related Scheduled Payments plus the amounts described in clauses (1), (2) and (3) under the heading “The Notes—Priority of Distribution Amounts” minus (2) the amount of Available Funds with respect to the Determination Date, which amount will be withdrawn from the Class A Reserve Account to the extent funds are on deposit tin this prospectus supplement in accordance with the terms of the Class A Reserve Account Agreement and deposited into the Collection Account on the related Payment Date.

“Determination Date” means with respect to a Collection Period, the [___]th Business Day preceding the Payment Date in the next calendar month; provided, however that the first Determination Date will be the Closing Date.

“Draw Date” means, with respect to any Payment Date the third business Day (as defined in the Policy) immediately preceeding the Payment Date.

“Excess Overcollateralization Amount” means, with respect to any Payment Date, the excess, if any, of

(1)

the Class A Overcollateralization Amount calculated for this purpose only without deduction for any Excess Overcollateralization Amount (i.e., assuming that the entire amount described in clause (x) of the definition of “Principal Payment Amount” is distributed as principal on the Class A Notes) over

(2)

the Class A Target Overcollateralization Amount on the Payment Date.

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

[“Insurer Optional Deposit” means, with respect to any Payment Date, an amount delivered by the Insurer, at its sole option, other than amounts in respect of a Policy Claim Amount, for deposit into the Collection Account for any of the following purposes:

(1)

to provide funds in respect of the payment of fees or expenses of any provider of services to the Issuing Entity with respect to the Payment Date; or

(2)

to include this amount as part of the Additional Funds Available for the Payment Date to the extent that without this amount a draw would be required to be made on the Policy.]

“Liquidated Receivable” means any Receivable with respect to which any of the following shall have occurred with respect to any Collection Period:

•

the sale of the Financed Boat;

•

for which all or more than 10% of any Contract Scheduled Payment is 120 days or more past due, except in the case of repossessed Financed Boats,

•

the Servicer has determined in good faith that all amounts it expects to be recovered have been received, or

•

90 days have elapsed since the Servicer repossessed the Financed Boat.

“Liquidation Proceeds” means with respect to a Liquidated Receivable,

•

proceeds from the disposition of Financed Boats securing the Liquidated Receivables,

•

any insurance proceeds or rebates, or

•

other monies received from the Obligor or otherwise, less amounts required to be refunded to the Obligor.

“Managed Receivable” means any retail installment contract, including any related promissory note, for a Financed Boat, and all rights and obligations under the retail installment contract, generally originated by and currently serviced by the Sponsor for Obligors.

“Note Balance” means the sum of the Class A Note Balance and Class B Note Balance.

“Note Majority” means as of any date of determination, Holders of Class A-1 Notes and Class A-2 Notes and Class B Notes representing more than 50% of the Note Balance.

“OC Stabilization Date” means the first Payment Date on which the Class A Overcollateralization Amount equals the Class A Target Overcollateralization Amount.

“Payment Amount” means with respect to a Payment Date, the sum of (1) the Available Funds as of the last day of a Collection Period, plus (2) the Deficiency Claim Amount, if any, with respect to the Payment Date.

“Person” means any legal person, including any individual, corporation, limited liability company, partnership, joint venture, estate, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision of these or any other entity.

[“Policy Claim Amount” means, for any Payment Date, the excess, if any, of

(1)

the sum of the Class A Interest Payment Amount and the Class A Principal Payment Amount for the Payment Date over

(2)

the sum of

(a)

the amounts actually deposited into the Class A Note Distribution Account on the related Payment Date and

(b)

the Additional Funds Available to pay the Class A Interest Payment Amount or the Class A Principal Payment Amount if any, for the Payment Date.]

“Principal Balance” of a Receivable:

•

as of the Cutoff Date, means the Amount Financed minus

(1)

in the case of a Precomputed Receivable, that portion of all payments, including all Contract Scheduled Payments and any prepayments in full or partial prepayments, actually received on or prior to that date and allocable to principal in accordance with the actuarial method and

(2)

in the case of a Simple Interest Receivable, that portion of all payments, including all Contract Scheduled Payments and any prepayments in full or partial prepayments, actually received on or prior to that date and allocable to principal in accordance with the simple interest method, and

•

as of any date after the Cutoff Date, means the Principal Balance as of the Cutoff Date minus

(1)

in the case of a Precomputed Receivable, that portion of all payments, including all Contract Scheduled Payments and any prepayments in full or partial prepayments, actually received on or prior to that date, but after the Cutoff Date, and allocable to principal in accordance with the actuarial method,

(2)

in the case of a Simple Interest Receivable, that portion of all payments, including all Contract Scheduled Payments and any prepayments in full or partial prepayments, actually received on or prior to that date, but after the Cutoff Date, and allocable to principal in accordance with the simple interest method and

(3)

any Cram Down Loss in respect of the Receivable. The Principal Balance of a Liquidated Receivable for purposes other than the definition of Principal Payment Amount shall be equal to $0.

“Principal Payment Amount” means the amount equal to the excess, if any, of (x) the sum of the following amounts, without duplication:

•

the principal portion of all Contract Scheduled Payments received during the Collection Period on Precomputed Receivables, calculated in accordance with the actuarial method, and all payments of principal received on Simple Interest Receivables, calculated in accordance with the simple interest method, during the Collection Period;

•

the principal portion of all prepayments received during the related Collection Period;

•

the portion of the Purchase Amount allocable to principal of each Receivable that became a Purchased Receivable as of the last day of the related Collection Period and, at the option of the Insurer, the Principal Balance of each Receivable that was required to be but was not so purchased or repurchased;

•

the Principal Balance of each Receivable that first became a Liquidated Receivable during the related Collection Period; and

•

the aggregate amount of Cram Down Losses with respect to the Receivables that have occurred during the related Collection Period, over

(y) the Excess Overcollateralization Amount, if any, for the Payment Date.

“Purchase Amount” means, with respect to a Receivable, the Principal Balance plus interest on the Principal Balance at the respective APR from the last day through which interest has been paid to the last day of the immediately preceding Collection Period if purchased prior to the Determination Date immediately following the end of the Collection Period, and otherwise through the last day of the month of repurchase.

“Purchased Receivable” means a Receivable that was purchased as of the close of business on the last day of a Collection Period by the Sponsor or the Servicer as the result of the violation of particular representations or warranties of the Sponsor under the Sale and Servicing Agreement or a breach by the Servicer of some of the Servicer’s obligations.

“Rating Agency Condition” means with respect to any action, that the Rating Agency has been given prior notice of and that the Rating Agency has notified the Sponsor, the Sponsor, the Servicer and the Indenture Trustee in writing that the action will not result in a reduction or withdrawal of the then current rating of the Notes.

“Sale and Servicing Agreement” means the Sale and Servicing Agreement between the Sponsor, in its individual capacity and as Servicer, the Depositor, the Issuing Entity, as purchaser, and [       ], as Indenture Trustee and Backup Servicer.

“Servicer’s Certificate” means with respect to each Collection Period, a certificate, completed by and executed on behalf of the Servicer, in accordance with the applicable Sale and Servicing Agreement provisions.

“Servicer Receivables Files” means the following documents or instruments in the Servicer’s possession with respect to each Receivable: (1) documents evidencing or relating to any Insurance Policy; and (2) any and all other documents, in original or electronic form, that the Servicer keeps on file in accordance with its customary procedures relating to the individual Receivable, Obligor or Financed Boat.

“State” means any state of the United States or the District of Columbia.

“Transaction Documents” means the Sale and Servicing Agreement, the Indenture, the Trust Agreement, the Notes, the Receivables Purchase Agreement, the Underwriting Agreement and the other agreements executed in connection with the closing of the transactions described in this prospectus supplement.

“Trust Agreement” means the Trust Agreement between the Depositor, the Certificateholder, the Sponsor, and [       ], as Owner Trustee.

Calculation of Payment Amounts.  The Class A-1 Noteholders will be entitled to receive, to the extent funds are available, the Class A-1 Principal Payment Amount and the Class A-1 Interest Payment Amount with respect to each Payment Date. The Class A-2 Noteholders will be entitled to receive to the extent funds are available, the Class A-2 Principal Payment Amount and the Class A-2 Interest Payment Amount with respect to each Payment Date, subject to the priority of payments as described in “—Priority of Distribution Amounts”. The “Class A-1 Note Balance” will initially represent $[       ], and afterward, an amount equal to the initial Class A-1 Note Balance reduced by all amounts distributed to the Noteholders that are allocable to principal. The “Class A-2 Note Balance” will initially represent $[       ], and afterward, an amount equal to the initial Class A-2 Note Balance reduced by all amounts distributed to the Class A-2 Noteholders that are allocable to principal.

Priority of Distribution Amounts

On each Payment Date, the Indenture Trustee will, based on the information contained in the Servicer’s Certificate delivered on the related Determination Date, distribute the following amounts in the following order of priority:

(1)

first, from the Available Funds, to the Servicer, the Servicer Fee (as defined in this prospectus supplement) for the related Collection Period, and any Servicer Expenses for the related or any prior Collection Period and other amounts mistakenly deposited in the Collection Account belonging to the Servicer, if any, or otherwise required to be distributed to the Servicer in accordance with the Sale and Servicing Agreement;

(2)

second, from the remaining Available Funds, to the Lockbox Bank, the Indenture Trustee, the Owner Trustee and the Backup Servicer, any accrued and unpaid fees and in the case of the Backup Servicer, Servicer Transition Expenses, if any, up to an amount specified in the Sale and Servicing Agreement, in each case, to the extent the Person (as defined in this prospectus supplement) has not previously received this amount from the Servicer;

(3)

third, from the remaining Available Funds, pro rata in respect of the amounts due, (a) to the Class A-1 Noteholders, the Class A-1 Interest Payment Amount for the Payment Date and the Class A-1 Interest Carryover Shortfall, if any, and (b) to the Class A-2 Noteholders, the Class A-2 Interest Payment Amount for the Payment Date and the Class A-2 Interest Carryover Shortfall, if any;

(4)

fourth, from the remaining Available Funds, to the Class A-1 Noteholders, the Class A-1 Principal Payment Amount for the Payment Date, and the Class A-1 Principal Carryover Shortfall, if any;

(5)

fifth, from the remaining Available Funds, to the Class A-2 Noteholders, the Class A-2 Principal Payment Amount for the Payment Date, and the Class A-2 Principal Carryover Shortfall, if any;

[(6)

sixth, from the remaining Available Funds, to the Insurer to the extent of any amounts owing the Insurer under the Insurance Agreement;]

(7)

seventh, from the remaining Available Funds, to the Class A Reserve Account to the extent necessary to increase the amount on deposit tin this prospectus supplement to its then required level;

(8)

eighth, on or prior to the OC Stabilization Date, from the remaining Available Funds, and together with amounts, if any, available in accordance with the terms of the Class A Reserve Account Agreement, sequentially, to the Class A-1 Noteholders and to the Class A-2 Noteholders, as principal, until the Class A Target Overcollateralization Amount is achieved;

(9)

ninth, from the remaining Available Funds, to the Class B Noteholders, the Class B Interest Payment Amount for the Payment Date and the Class B Interest Carryover Shortfall, if any;

(10)

tenth, from the remaining Available Funds, and together with amounts, if any, available from the Class A Reserve Account in accordance with the terms of the Sale and Servicing Agreement, to the Class B Noteholders, the Class B Principal Payment Amount; and

(11)

eleventh, from the remaining Available Funds, to the Class A Reserve Account, or as otherwise specified in the Trust Documents, any remaining funds.

Payment Date Calculations and Payments

In the event that any Servicer’s Certificate delivered by the Servicer indicates that the Available Funds with respect to a Payment Date are insufficient to fund in full the related Scheduled Payments plus the amounts described in clauses (1), (2) [and (6)] above in “—Priority of Distribution Amounts”, the Indenture Trustee shall request the Deficiency Claim Amount from the Class A Reserve Account, at the time required by and pursuant to, the Class A Reserve Account Agreement. Any funds received by the Indenture Trustee pursuant to this request will be deposited in the Collection Account and paid on the related Payment Date to the persons entitled to the funds, in the amounts described in clauses (1) through [(6)] of “—Priority of Distributions” in accordance with the priority of payment. [Further, in the event that any Servicer’s Certificate delivered by the Servicer indicates that the sum of (1) the Avai lable Funds with respect to a Payment Date, plus (2) any related Deficiency Claim Amount funds deposited in the Collection Account or otherwise received by the Indenture Trustee is insufficient to fund in full the related Scheduled Payments, the Indenture Trustee shall furnish to the Insurer no later than 12:00 noon New York City time on the related Draw Date a completed notice of claim in the amount of the Policy Claim Amount.  Amounts paid by the Insurer pursuant to any notice of claim shall be deposited by the Insurer into the Note Distribution Account for payment to Noteholders on the Payment Date.]

Statements to Noteholders

On each Payment Date, the Indenture Trustee must provide to each Class A Noteholder[, the Insurer] and the Rating Agencies a statement prepared by the Servicer based on the information in the related Servicer’s Certificate, which statement sets forth the information required under the Sale and Servicing Agreement. Each statement will include the following information with respect to the Payment Date or the immediately preceding Collection Period, as applicable:

(1)

the amount of the payment allocable to interest with respect to the Class A-1 Notes, the Class A-2 Notes and the Class B Notes, as applicable;

(2)

the amount of the payment allocable to principal on or with respect to the Class A-1 Notes, the Class A-2 Notes and the Class B Notes;

(3)

the amount of the payment pursuant to a claim on the Policy;

(4)

the amount of fees paid by the Issuing Entity with respect to the related Collection Period, including any Servicer Fee and Servicer Expenses;

(5)

the Class A-1 Note Balance, the Class A-2 Note Balance and the Class B Note Balance;

(6)

the Class A-1 Interest Carryover Shortfall, the Class A-2 Interest Carryover Shortfall and the Class B Interest Carryover Shortfall, if any, and the Class A-1 Principal Carryover Shortfall, the Class A-2 Principal Carryover Shortfall and the Class B Principal Carryover Shortfall, if any;

(7)

the Class A-1 Note Factor, the Class A-2 Note Factor and the Class B Note Factor;

[(8)

for each date during the Pre-Funding Period, the remaining Pre-Funded Amount, the amount in the Pre-Funding Account and the amount remaining the Capitalized Interest Account;]

(9)

the number of Receivables and the aggregate Principal Balance due of the Receivables, for which the related Obligors are delinquent in making Contract Scheduled Payments (A) between 31 and 60 days, (B) between 61 and 90 Days, (C) between 91 and 120 days and (D) more than 120 days;

(10)

the number of Receivables which became Liquidated Receivables, and the aggregate principal amount of the Receivables which became Liquidated Receivables net of Recoveries;

(11)

the number of Receivables which became Defaulted Receivables, and the aggregate principal amount of these Receivables;

(12)

the number and the aggregate Purchase Amount of Receivables that became Purchased Receivables during the related Collection Period and the number and aggregate Purchase Amount of Receivables that were required to be repurchased during the related Collection Period but were not so repurchased;

(13)

the Principal Balance, APR and model year of each Receivable that was replaced and the Principal Balance, APR and model year of the corresponding Replacement Receivable;

(14)

the number and the aggregate Principal Balance of Receivables with respect to which, to the knowledge of the Servicer, Obligors became the subject of bankruptcy proceedings during the Collection Period, or during a prior Collection Period, if the Servicer first became aware of the proceeding during the current Collection Period;

(15)

the amount of any Deficiency Claim Amounts deposited in the Collection Account from the Class A Reserve Account;

(16)

the Class A Overcollateralization Amount and the Class A Target Overcollateralization Amount; and

(17)

the beginning balance, amount of claims paid, amount of deposits made, and ending balance of the applicable collateral self-insurance fund, if any.

Each amount set forth pursuant to subclauses (1), (2) and (5) will be expressed as a dollar amount per $1,000 of the initial principal amount of a Note.

Unless and until Definitive Notes are issued, the reports will be sent on behalf of the Trust to Cede & Co., as registered holder of the Class A Notes and the nominee of DTC. See “Reports to Securityholders” and “Description of the Notes” in the prospectus. Within the required period of time after the end of each calendar year, the Indenture Trustee will furnish to each person who at any time during the calendar year was a Noteholder, a statement as to the aggregate amounts of interest and principal paid to that Noteholder and any other information as the Servicer deems necessary to enable the Noteholder to prepare its tax returns. See “Certain Federal Income Tax Consequences.”

Credit Support

The Class A Overcollaterization Amount and the Class A Reserve Account (a funded cash reserve account (the “Class A Reserve Account”)), result in credit support for the Class A Notes. This credit support is required to be increased to, and subsequently maintained at, a level established by the Insurer. This level changes over time. [The Insurer may permit the required level of credit support provided by the Class A Reserve Account and the Class A Overcollateralization Amount to be reduced, or “step down”, over time without the consent of Noteholders.]

Overcollaterization.

Overcollaterization for the Class A Notes is created as a result of the application of “excess interest” and “excess principal” to the payment of principal on the Class A Notes. The “excess interest” is interest which is collected on the Receivables in excess of the amount of interest that is paid on the Class A Notes, used to pay specific fees, or, under some circumstances, deposited to the Class A Reserve Account. This application of excess interest results in the outstanding principal balance of the Class A Notes amortizing more quickly than the Pool Balance. The “excess principal” is the principal allocated to the Class A Notes which is in excess of the principal the Class A Notes would receive if the principal collected on the Receivables were distributed pro rata to the Class A Notes and Class B Notes based on their relative outstanding principal balances. This application of the “excess princip al” results in the outstanding principal balance on the Class A Notes amortizing more quickly than the Aggregate Principal Balance on a percentage basis.

[If the Insurer permits the required level of overcollaterization to step down, principal collections which would otherwise be paid through to the Class A Noteholders as part of the Class A Principal Payment Amount may be instead released to the Class B Noteholders or the Certificateholder.]

Subordination.

As of the Closing Date, the principal balance of the Class B Notes equals [____]% of the Note Balance. The transaction is structured so that until the OC Stabilization Date, the Class B Note Balance will grow as a percentage of the Note Balance. The Class B Notes are subordinated in right of payment to the payment of the Class A Notes. No payments of principal will be made to the Class B Notes until the OC Stabilization Date. Payment of interest on the Class B Notes is subordinated to payment of interest and principal on the Class A Notes, the funding of the Class A Reserve Account and, until the OC Stabilization Date, the payment of excess interest as additional principal to the Class A Notes. If there are losses on the Receivables, those losses will be borne entirely by the Certificateholder and by the Class B Notes before there are any losses on the Class A Notes.

Class A Reserve Account.

The Class A Reserve Account will be funded with an initial cash deposit on the Closing Date. On each subsequent Payment Date, the Indenture Trustee will be required to deposit additional amounts into the Class A Reserve Account from payments on the Receivables as described under “The Notes—Priority of Distribution Amounts” above to the extent that the balance on deposit tin this prospectus supplement is below the then required level. Amounts, if any, on deposit in the Class A Reserve Account on a Payment Date will be available to the extent provided in the Class A Reserve Account Agreement to fund any Deficiency Claim Amount with respect to the Payment Date. Amounts on deposit in the Class A Reserve Account on any Payment Date on or prior to the OC Stabilization Date, after giving effect to all distributions made on the Payment Date, in excess of the specified Class A Reserve Account Requirements for the Payment Date shall be dist ributed to Class A Noteholders as a prepayment of principal on the Class A Notes. On any Payment Date after the OC Stabilization Date, the excess funds may be released to the Class B Noteholders or the Certificateholder without the consent of the Class A Noteholders.

In addition, the Certificateholder, [the Insurer] and the Collateral Agent under the Class A Reserve Account Agreement may amend the Class A Reserve Account Agreement, [and any provisions in the Insurance Agreement relating to the Class A Reserve Account], in any respect, including, without limitation, reducing or eliminating the funding requirements of the Class A Reserve Account or permitting these funds to be used for the benefit of persons other than Class A Noteholders, without the consent of, or notice to, the Trustee, the Owner Trustee or the Noteholders. The Collateral Agent shall not withhold or delay its consent with respect to any amendment that does not adversely affect the Collateral Agent in its individual capacity. [Notwithstanding any reduction in or elimination of the funding requirements of the Class A Reserve Account or the depletion of the Class A Reserve Account, the Insurer will be obligated on each Payment Date to fund the full amount of each Scheduled Payment required to be paid by the Payment Date, and which would not be in the absence of a payment under the Policy. If the Insurer breaches its obligations, any losses on the Receivables will be borne first by the Class B Noteholders and then by the Noteholders.]

The Indenture

The Indenture Trustee. [       ] is the Indenture Trustee under the Indenture. For the purpose of meeting the legal requirements of some jurisdictions, the Indenture Trustee may appoint co-trustees or separate trustees of all or any part of the trust estate and confer upon this party any powers, duties, obligations, rights and trusts as the Indenture Trustee deems necessary, or desirable. In the event of an appointment, all rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee by the Indenture will be conferred or imposed upon the Indenture Trustee and the separate trustee or co-trustee jointly, or, in any jurisdiction in which the Indenture Trustee shall be incompetent or unqualified to perform particular acts, singly upon the separate trustee or co-trustee who will exercise and perform these rights, powers, duties, and obligations solely at the direction of the Indent ure Trustee.

The Indenture Trustee may resign at any time after 60 days’ written notice to the Issuing Entity, [the Insurer] and Noteholders in which event the Controlling Party will be obligated to appoint a successor trustee. The Controlling Party may remove the Indenture Trustee if, among other reasons, the Indenture Trustee ceases to be eligible to continue as the Indenture Trustee under the Indenture, becomes legally unable to act or becomes insolvent. In these circumstances, the Controlling Party will be obligated to appoint a successor trustee. Any resignation or removal of the Indenture Trustee and appointment of a successor trustee will not become effective until acceptance of the appointment of a successor trustee.

The Sale and Servicing Agreement will provide that the Indenture Trustee will be entitled to indemnification by the Servicer for, and will be held harmless against, any loss, liability, fee, disbursement or expense incurred by the Indenture Trustee not resulting from the Indenture Trustee’s own willful misfeasance, bad faith or negligence and other than by reason of a breach of any of the Indenture Trustee’s representations or warranties set forth in the Sale and Servicing Agreement. The Sale and Servicing Agreement will further provide that the Servicer will indemnify the Indenture Trustee for some of the taxes that may be asserted in connection with the transaction.

The Indenture Trustee makes no representations as to the validity or sufficiency of the Sale and Servicing Agreement, the Notes, other than the authentication of the Notes, or any Receivables or the Related Documents and is not accountable for the use or application by the Sponsor or the Servicer of any funds paid to the Sponsor or the Servicer in respect of the Notes or the Receivables, or the investment of any monies received by the Servicer before the monies are deposited in the Collection Account. The Indenture Trustee has not independently verified the Receivables. The Indenture Trustee is required to perform only those duties specifically required of it under the Sale and Servicing Agreement and the Indenture. The Indenture Trustee shall determine whether the certificates, reports or other instruments required to be furnished to the Indenture Trustee under the Sale and Servicing Agreement and the Indenture conform to the requirements of th e Sale and Servicing Agreement and the Indenture, respectively.

Modification of Indenture Without Noteholder Consent.  The Issuing Entity and Indenture Trustee may, [with the prior written consent of the Insurer, prior to the occurrence and continuance of an Insurer Default, but without consent of the Noteholders,] enter into one or more supplemental indentures for any of the following purposes:

•

to correct or amplify the description of the property subject to the lien of the Indenture or add additional property to it;

•

to evidence the succession of another Person to the Issuing Entity and the assumption by the successor of the covenants of the Issuing Entity;

•

to add additional covenants for the benefit of the Noteholders or to surrender any right or power conferred on the Issuing Entity;

•

to convey, transfer, assign, mortgage or pledge any additional property to or with the Indenture Trustee;

•

to cure any ambiguity, or to correct or supplement any provision in the Indenture or in any supplemental indenture that may be inconsistent with any other provision of the Indenture or any supplemental indenture;

•

to add to or change any of the provisions of the Indenture as shall be necessary and permitted to facilitate the administration by more than one trustee; and

•

to add any provisions to, change in any manner or eliminate any of the provisions of the Indenture or modify in any manner the rights of Noteholders under the Indenture; provided that any action must not, as evidenced by an opinion of counsel, adversely affect in any material respect the interests of any Noteholder.

Modification of Indenture With Noteholder Consent.  With the prior written consent of [the Insurer, prior to the occurrence and continuance of an Insurer Default,] and the Note Majority, the Issuing Entity and the Indenture Trustee may execute one or more supplemental indentures to add, change or eliminate any other provisions of the Indenture, modify in any manner the rights of the Noteholders or provide for the acceptance of the appointment of a successor Indenture Trustee. Without the prior written consent of [the Insurer, prior to the occurrence and continuance of an Insurer Default,] and the Holder of each outstanding related Note affected, however, no supplemental indenture will:

•

change the due date of any installment of principal of or interest on any Note or reduce the principal amount of any Note, the interest rate on the Note or the redemption price with respect to the Note, change the provisions of the Indenture relating to the application of collections on, or the proceeds of the sale of, the collateral to the payment of principal of or interest on the Notes, change any place of payment where or the coin or currency in which any Note or any interest on the Note is payable;

•

impair the right to institute suit for the enforcement of particular provisions of the Indenture regarding payment;

•

reduce the percentage of the aggregate amount of the outstanding Notes the consent of the Holders of which is required for any supplemental indenture or the consent of the Holders of which is required for any waiver of compliance with particular provisions of the Indenture or of some of the defaults under the Indenture and their consequences as provided for in the Indenture;

•

modify or alter the provisions of the Indenture regarding particular aspects of what constitutes an “Outstanding” Note;

•

reduce the percentage of the aggregate outstanding amount of the Notes the consent of the Holders of which is required to direct the Indenture Trustee to sell or liquidate the Receivables if the proceeds of the sale would be insufficient to pay the principal amount and accrued but unpaid interest on the outstanding Notes;

•

modify the provision of the Indenture requiring consent of Noteholders except to increase the percentage of the aggregate principal amount of the Notes required to amend the sections of the Indenture or to provide additional provisions requiring the consent of each Noteholder prior to modification or waiver;

•

modify any of the provisions of the Indenture affecting the calculation of the amount of any payment of interest or principal due on any Note on any Payment Date;

•

permit the creation of any lien ranking prior to or on a parity with the lien of the Indenture with respect to any of the collateral for the Notes or, except as otherwise permitted or contemplated in the Indenture, terminate the lien of the Indenture on any collateral or deprive the Holder of any Note of the security afforded by the lien of the Indenture; or

•

become effective if the Rating Agency Condition has not been satisfied with respect to it.

Note Factors; Statement to Noteholders; Servicer Reports to the Indenture Trustee.

The “Class A-1 Note Factor” will be a seven-digit decimal number that the Servicer will compute each month indicating the Class A-1 Note Balance as of the close of business on the last day of the related Collection Period in that month as a fraction of the respective original outstanding principal balance of the Class A-1 Notes. The Class A-1 Note Factor will be 1.0000000 as of the Cutoff Date; and afterward, the Class A-1 Note Factor will decline to reflect reductions in the Class A-1 Note Balance as a result of scheduled payments collected, partial prepayments, prepayments and liquidations of the Receivables. The amount of a Class A-1 Noteholder’s pro rata share of the Class A-1 Note Balance can be determined on any date by multiplying the original denomination of the Holder’s Note by the Class A-1 Note Factor as of the close of business on the most recent Payment Date.

The “Class A-2 Note Factor” will be a seven-digit decimal number that the Servicer will compute each month indicating the Class A-2 Note Balance as of the close of business on the last day of the related Collection Period in that month as a fraction of the respective original outstanding principal balance of the Class A-2 Notes. The Class A-2 Note Factor will be 1.0000000 as of the Cutoff Date; and afterward, the Class A-2 Note Factor will decline to reflect reductions in the Class A-2 Note Balance as a result of scheduled payments collected, partial prepayments, prepayments and liquidations of the Receivables. The amount of a Class A-2 Noteholder’s pro rata share of the Class A-2 Note Balance can be determined on any date by multiplying the original denomination of the Holder’s Note by the Class A-2 Note Factor as of the close of business on the most recent Payment Date.

Under the Sale and Servicing Agreement, the Servicer will perform some monitoring and reporting functions for the Issuing Entity, including the preparation and delivery of the Servicer’s certificate on each Determination Date to the Indenture Trustee, the Backup Servicer,[ the Insurer,] and the Rating Agencies setting forth specified information with respect to the preceding Collection Period.

Within the prescribed period of time for tax reporting purposes after the end of each calendar year during the term of the Sale and Servicing Agreement, the Indenture Trustee will be required to mail to each person who at any time during the relevant calendar year will have been a Noteholder, a statement containing information related to the Noteholder’s preparation of federal income tax returns.

Fees and Expenses of the Trust Fund

In consideration of their duties on behalf of the Trust Fund, the Servicer, the Backup Servicer, the Owner Trustee and the Indenture Trustee will receive from the assets of the Trust Fund certain fees as set forth in the following table:

Fee Payable to:	Frequency of Payment:	Amount of Fee:	How and When Fee Is Paid:
Servicer	[monthly]	[(a) A monthly fee paid to the Servicer out of interest collections received from the Receivables in an amount equal to the product of one-twelfth of [    ]% per annum (the “Servicing Fee Rate”) and the Pool Balance as of the first day of the Collection Period.] [(b) any late fees, prepayment charges and other administrative fees or similar charges allowed by applicable law with respect to the Receivables, and will be entitled to reimbursement from the Issuing Entity for various expenses.]	[Deducted by the Servicer from interest collections in respect of each Receivable serviced by the Servicer, before payment of any amounts to noteholders.]
Owner Trustee	[monthly]	[A monthly fee paid to the Owner Trustee by the Servicer out of the Servicer’s fee.]	[Paid by the Servicer before payment of any amounts to noteholders.]
Indenture Trustee	[monthly]	[A monthly fee paid to the Indenture Trustee by the Servicer out of the Servicer’s fee.]	[Paid by the Servicer before payment of any amounts to noteholders.]
Backup Servicer	[monthly]	[(a) A monthly fee paid to the Backup Servicer out of interest collections received from the Receivables in an amount equal to the product of one-twelfth of [    ]% per annum (the “Servicing Fee Rate”) and the Pool Balance as of the first day of the Collection Period.] [(b) any late fees, prepayment charges and other administrative fees or similar charges allowed by applicable law with respect to the Receivables, and will be entitled to reimbursement from the Issuing Entity for various expenses.]	[Deducted by the Backup Servicer from interest collections in respect of each Receivable serviced by the Backup Servicer, before payment of any amounts to noteholders.]
[Other Applicable Party]	[_____]	[_____]	[_____]

[[None of the fees set forth in table above may be changed without amendment of the related Transaction Agreement]].

[[Expenses of the Servicer, the Backup Servicer, the Owner Trustee and the Indenture Trustee will be reimbursed before payments are made on the notes.]]

Example of Distributions

The following sets forth an example of collection of payments from Obligors on the Receivables, transfer of amounts among the Trust Accounts, and distributions on the notes for the Distribution Date in [_______]:

[On or before the earlier of the [eighth] business day of the month in which a Distribution Date occurs and the [fourth] business day preceding such Distribution Date]	Determination Date	[The Servicer will calculate the Total Distribution Amount, the Interest Distribution Amount, the Available Principal, the Principal Distribution Amount, the Total Servicing Fee, the Noteholders’ Interest Distributable Amount, the Noteholders’ Principal Distributable Amount, the Advances, if any, to be made by the Servicer of interest and principal due on the Actuarial Receivables, the amount, if any, to be withdrawn from the Payahead Account and deposited in the Collection Account, the amount, if any, to be withdrawn from the Reserve Account and deposited in the Collection Account and the amount, if any, to be withdrawn from the Reserve Account and paid to the Depositor, in each case, with respect to such Distribution Date.]
[On or before each Distribution Date]	[Servicer Remittance Date]	[The Servicer will cause the Indenture Trustee to withdraw from the Payahead Account and deposit into the Collection Account in immediately available funds, the portion of Payaheads constituting scheduled payments on Actuarial Receivables or that are to be applied to prepay Actuarial Receivable in full and distribute to the Depositor, in immediately available funds, all investment earnings on funds in the Payahead Account with respect to the preceding Collection Period.] [The Servicer will deposit any advances for such Distribution Date into the Collection Account.] [The Servicer shall cause the Indenture Trustee to withdraw from the Reserve Account and deposit in the Collection Account the Reserve Account Transfer Amount.]
[On or before the business day preceding each Distribution Date]	[Servicer Remittance Date]	the Servicer will cause the Interest Distribution Amount and the Available Principal for such Distribution Date to be deposited into the Collection Account.
Last day of the month prior to the related Distribution Date	Record Date:	[Distributions will be made to noteholders of record for all applicable classes as of the Record Date].
The [__]th day of each month (or if the [__]h day is not a business day, the next business day),	Distribution Date:	[The Servicer will cause the Indenture Trustee to withdraw the Total Distribution Amount for deposit into the Note Distribution Account and the Indenture Trustee will make distributions to Noteholders from amounts on deposit in the Note Distribution Account.]

Succeeding months follow the same pattern.

DESCRIPTION OF THE TRANSACTION DOCUMENTS

The following summary describes some of the terms of the Transaction Documents. Forms of the Transaction Documents have been filed as exhibits to the Registration Statement. This summary does not purport to be complete and is subject to, and qualified in its entirety by reference to, all the provisions in the Transaction Documents. The following summary supplements the description of the general terms and provisions of the Transfer and Servicing Agreements (as this term is used in the prospectus) set forth in the prospectus, to which description reference is made by this prospectus supplement.

Sale and Assignment of Receivables

Certain information regarding the conveyance of the Receivables by the Sponsor to the Depositor and by the Depositor to the Issuing Entity on the Closing Date pursuant to the Sale and Servicing Agreement is set forth in the Prospectus under “Description of the Transfer and Servicing Agreements--Sale and Assignment of Receivables.”  See also “The Receivables” in this prospectus supplement and “The Receivables Pools” in the prospectus for additional information regarding the Receivables and some of the obligations of the Sponsor and the Servicer with respect to the Receivables.

At the time of issuance of the Notes, the Sponsor will sell and assign to the Depositor, the Sponsor’s entire interest in the Receivables, including its security interests in the Financed Boats, and the Depositor will sell and assign to the Issuing Entity the Depositor’s entire interest in the Receivables, including the security interests in the Financed Boats. On or before the Closing Date, the Issuing Entity will pledge the Receivables to the Indenture Trustee for the benefit of the Noteholders and the Insurer pursuant to the Indenture. Each Receivable will be identified in a schedule to the Sale and Servicing Agreement. The Indenture Trustee will, concurrently with the pledge, authenticate and deliver the Notes, which have been executed on behalf of the Issuing Entity.

[Any conveyance of Subsequent Receivables is subject to the satisfaction, on or before the related Subsequent Transfer Date, of the following conditions, among others:

(1)

each Subsequent Receivable satisfies the eligibility criteria specified in the Sale and Servicing Agreement;

[(2)

the Insurer, so long as no Insurer Default shall have occurred and be continuing, shall in its absolute and sole discretion have approved the transfer of the Subsequent Receivables to the Issuing Entity;]

(3)

the Sponsor will not have selected the Subsequent Receivable in a manner that it believes is adverse to the interests of the Noteholders or the Insurer;

(4)

as of each applicable Subsequent Cutoff Date, the Receivables in the Issuing Entity together with the Subsequent Receivables to be conveyed by the Sponsor as of the Subsequent Cutoff Date, meet the following criteria, computed based on the characteristics of the Initial Receivables on the Initial Cutoff Date and any Subsequent Receivables on the related Subsequent Cutoff Date:

(a)

the weighted average APR of the Receivables will not be less than one percent less than the weighted average APR of the Initial Receivables on the Initial Cutoff Date;

(b)

the remaining term of the Receivables will not be greater than [___] months nor less than [       ] months;

(c)

not more than [       ]% of the Principal Balances of the Receivables will be attributable to Loans for the purchase of used Financed Boats;

(d)

the APR is not less than [       ]% nor more than [       ]%; and

(e)

no boat is older than a [       ] model year, and the Issuing Entity, the Indenture Trustee, the Owner Trustee

[(f)

and the Insurer shall have received written confirmation from a firm of certified independent public accountants as to the satisfaction of the criteria in clauses (a) through (e) above;]

(5)

the Sponsor shall have executed and delivered to the Issuing Entity, with a copy to the Indenture Trustee, a Subsequent Transfer Agreement conveying the Subsequent Receivable to the Issuing Entity, including a schedule identifying the Subsequent Receivables;

(6)

the Sponsor shall have delivered certain opinions of counsel to the Indenture Trustee, [the Insurer,] the Owner Trustee and the Rating Agencies with respect to the validity of the conveyance of the Subsequent Receivables; and

(7)

the Rating Agencies shall have each notified the Sponsor, the Owner Trustee, the Indenture Trustee [and the Insurer] in writing that, following the addition of all of the Subsequent Receivables, each of the Class A-1 Notes and the Class A-2 Notes will be rated [       ] by [       ] and [       ] by [       ].]

Pursuant to the Receivables Purchase Agreement and the Sale and Servicing Agreement, the Sponsor will represent and warrant that, among other things:

•

as of [each] [the] Cutoff Date, the information provided in the schedule to the Sale and Servicing Agreement with respect to the Receivables is correct in all material respects;

•

at the date of issuance of the Notes[ and any Subsequent Transfer Date], the Receivables are free and clear of all liens or claims and no right of setoff, counterclaim or rescission has been asserted or, to the best of its knowledge, threatened with respect to the Receivables;

•

at the date of issuance of the Notes [and any Subsequent Transfer Date], each of the Receivables is secured by, or will be when all necessary steps have been taken to result in, a first priority perfected security interest in the Financed Boat in favor of the Sponsor and this security interest has been validly assigned to the Sponsor, the Issuing Entity and the Indenture Trustee; and

•

each Receivable, at the time it was originated, complied, and at the date of issuance of the Notes [and any Subsequent Transfer Date], complies in all material respects with applicable federal, state and local laws, including consumer credit, truth in lending, equal credit opportunity and disclosure laws.

Pursuant to the Receivables Purchase Agreement and the Sale and Servicing Agreement, the Sponsor will be obligated to repurchase or replace subject to limits on replacement set forth in the Sale and Servicing Agreement a Receivable from the Issuing Entity, if the interests of the Noteholders,[ the Insurer] or the Issuing Entity in the Receivable are materially adversely affected by a breach of any representation or warranty made by the Sponsor, with respect to the Receivable, if the breach has not been cured following discovery by or notice to the Sponsor of the breach. Pursuant to the Sale and Servicing Agreement, the Servicer will be obligated to purchase or replace a Receivable from the Issuing Entity if the interests of the Noteholders, [the Insurer] or the Issuing Entity in the Receivables are materially adversely affected by a breach of some of its servicing obligations under the Sale and Servicing Agreement, including its obligation to ma intain perfection of the first priority security interest created by each Receivable in the related Financed Boat or other covenants with respect to the Servicer, if the breach has not been cured following the discovery or notice to the Servicer of the breach. Each Receivable will be purchased from the Issuing Entity or replaced by the Sponsor or the Servicer, as the case may be, at a price equal to the Purchase Amount. The purchase or replacement obligations will constitute the sole remedy available to the Noteholders or the Indenture Trustee for any uncured breaches.

Pursuant to the Sale and Servicing Agreement, the Servicer will service and administer the Receivables. The documents evidencing the Receivables will be delivered to the Indenture Trustee on the Closing Date. In addition, the Sponsor’s accounting records and computer systems will be marked to reflect the sale and assignment, and UCC financing statements reflecting the sale and assignment will be filed. See “Certain Legal Aspects of the Receivables—Security Interests in Financed Boats” in the accompanying prospectus.

Accounts

Each Obligor has been instructed to make payments with respect to the Receivables after the applicable Cutoff Date to a Lockbox which has been established and will be maintained by [                  ] (the “Lockbox Bank”). Upon receipt of payments in the Lockbox, the Lockbox Bank will deposit funds into an account maintained by the Lockbox Bank at a depository institution (the “Lockbox Account”) acceptable to the [Indenture Trustee][Insurer]. The Indenture Trustee will establish the Collection Account (the “Collection Account”) in the name of the Indenture Trustee for the benefit of the Noteholders [and the Insurer]. All payments made on or with respect to the Receivables previously deposited in the Lockbox Account will be transferred to the Collection Account within two Business Days of the receipt of available funds tin this pros pectus supplement. Upon receipt, but in no event later than two Business Days after the receipt of amounts in respect of Receivables, each of the Servicer and the Sponsor will remit all amounts received by it in respect of the Receivables in the form of checks with payment coupons directly to the Lockbox. Other payments received by each of the Servicer and the Sponsor will be deposited into a local servicing account for processing, and then transferred to the Collection Account within two Business Days of the receipt of available funds tin this prospectus supplement. The Collection Account will be maintained with the Indenture Trustee as long as the Indenture Trustee’s deposits have a rating acceptable to the Insurer and the Rating Agencies. If the deposits of the Indenture Trustee no longer have an acceptable rating, the Indenture Trustee shall cause the accounts to be moved to a bank or trust company having acceptable ratings.

The Indenture Trustee will also establish and maintain an account, in its name, on behalf of Noteholders and the Insurer, in which amounts released from the Collection Account for distribution to Noteholders will be deposited and from which all distributions to Noteholders will be made (the “Note Distribution Account”).

[On the Closing Date, a cash amount equal to approximately $[       ] (the “Initial Pre-Funded Amount”) will be deposited in an account (the “Pre-Funding Account”) which will be established with the Indenture Trustee. The “Funding Period” is the period from the Closing Date until the earliest of the date on which:

(1)

the amount on deposit in the Pre-Funding Account is less than $100,000,

(2)

a Servicer Termination Event occurs under the Sale and Servicing Agreement or an Insurance Agreement Event of Default occurs, or

(3)

the Payment Date in [       ].

The Initial Pre-Funded Amount, as reduced from time to time during the Funding Period by the amount used to purchase Subsequent Receivables in accordance with the Sale and Servicing Agreement, is referred to in this prospectus supplement as the “Pre-Funded Amount.” The Sponsor expects that the Pre-Funded Amount will be reduced to less than $[___________] on or before the Payment Date in [       ]. Any Pre-Funded Amount remaining at the end of the Funding Period will be payable to the Noteholders as described in this prospectus supplement. The “Mandatory Redemption Date” is the earlier of (1) the Payment Date in [       ] and (2) if the last day of the Funding Period occurs on or prior to the Determination Date in [       ], then the [       ] Payment Date.

On the Closing Date, a cash amount shall be deposited in an account (the “Capitalized Interest Account”) which will be established with the Indenture Trustee. The amount, if any, deposited in the Capitalized Interest Account will be applied on the Payment Dates occurring in [       ], [       ] and [       ], and to fund an amount (the “Monthly Capitalized Interest Amount”) equal to the amount of interest accrued for each Payment Date at the excess of (1) the weighted average interest rate on the Class A Notes over (2) [       ]%, on the portion of the Class A Notes having a principal balance in excess of the Aggregate Principal Balances of the Receivables. Any amounts remaining in the Capitalized Interest Account on the Mandatory Redemption Date and not used for these purposes are required to be paid to the Class A Noteholders on the relevant date. See “Description of the Transaction Documents—Accounts.”]

All of these Accounts shall be Eligible Deposit Accounts (as defined in the prospectus) acceptable to the Insurer, so long as no Insurer Default has occurred and is continuing.

Consistent with the Sale and Servicing Agreement and its normal collection practices and procedures, the Servicer may, in its discretion, arrange with the Obligor on a Receivable to extend or modify the payment schedule, subject to particular limitations. No extension or modification in accordance with the Sale and Servicing Agreement will result in a repurchase obligation for the Servicer.

Servicing Procedures

The Servicer will make all reasonable efforts to collect all payments due with respect to the Receivables and will continue these collection procedures as it follows with respect to all comparable boat receivables that it services for itself or others, in a manner consistent with the Sale and Servicing Agreement. If the Servicer determines that eventual payment in full of a Receivable is unlikely, the Servicer will follow its normal collection practices and procedures, including the repossession and disposition of the Financed Boat securing the Receivable at a public or private auction, or the taking of any other action permitted by applicable law.

The Servicer will not be required under the Sale and Servicing Agreement to make any advances of principal or interest due on any Receivable.

Collections

The Servicer or the Sponsor, as the case may be, will remit or cause to be remitted the aggregate Purchase Amount of any Receivables required to be purchased by it from the Issuing Entity to the Collection Account. Under the Sale and Servicing Agreement, the amounts of any recoveries in respect of any Receivables repurchased by Dealers pursuant to any Dealer Recourse constitute collections on the Receivables.

For purposes of the Sale and Servicing Agreement, collections on a Receivable, other than a Receivable purchased by the Servicer or the Sponsor, which are not late fees or other administrative fees and expenses collected during a Collection Period are required to be applied first to the Contract Scheduled Payment. To the extent that the collections on a Receivable during a Collection Period exceed the Contract Scheduled Payment on the Receivable, the collections are required to be applied to prepay the Receivable in full. If the collections are insufficient to prepay the Receivable in full, any partial prepayment of principal during a Collection Period will be immediately applied to reduce the principal balance of the Receivable during that Collection Period.

Servicing Compensation

The Servicer is entitled under the Sale and Servicing Agreement to receive on each Payment Date a fee (the “Servicer Fee”) equal to the sum of (a) the product of one-twelfth and [       ]% (the “Servicing Fee Rate”) and the Principal Balance outstanding at the beginning of the calendar month immediately preceding the month in which the Payment Date occurs and (b) any late fees. If the Backup Servicer, or any other entity becomes the successor Servicer, it will receive compensation at the Servicing Fee Rate. The Servicer will also be reimbursed for particular expenses related to the repossession of Financed Boats (the “Servicer Expenses”). The Servicer Fee and Servicer Expenses will be paid out of collections from the Receivables pursuant to the distribution described under “The Notes—Priority of Distribution Amounts”.

The Servicer Fee and the Servicer Expenses will compensate the Servicer for performing the functions of a third-party servicer of the Receivables as an agent for the Issuing Entity, including collecting and posting all payments, responding to inquiries of Obligors on the Receivables, investigating delinquencies, reporting any required tax information to Obligors, paying costs of collections and monitoring the collateral. In addition, the Servicer Fee will (a) compensate the Servicer for administering the Receivables, including accounting for collections, furnishing monthly and annual statements with respect to payments and generating federal income tax information, if any, and (b) reimburse the Servicer for some of the taxes, independent accountants’ fees and other costs incurred in connection with administering the Receivables.

Backup Servicing and Backup Servicing Compensation

Pursuant to the Sale and Servicing Agreement, [       ] will perform particular duties as the Backup Servicer. In addition, following the resignation or removal of the Servicer, the Backup Servicer has agreed to serve as the successor Servicer under the Sale and Servicing Agreement. The Backup Servicer will be required to carry out its duties in accordance with the customary and usual procedures of institutions which perform similar functions. On each Payment Date, the Backup Servicer will be entitled to receive a fee for acting as Backup Servicer (the “Backup Servicer Fee”) equal to one-twelfth the product of [       ] basis points and the outstanding Note Balance. In addition, following the resignation or removal of the Servicer, the Backup Servicer will be reimbursed for particular costs and expenses associated with the transition of the Backup Servicer to Servicer (the
47;Servicer Transition Expenses”).

The Sale and Servicing Agreement will provide that the Backup Servicer may not resign from its obligations and duties as Backup Servicer under the Sale and Servicing Agreement, except upon determination that, by reason of a change in legal requirements, the Backup Servicer’s performance of these duties would be in violation of particular legal requirements and the Controlling Party does not elect to waive the obligations of the Backup Servicer to perform the duties that render it legally unable to act or to delegate those duties to another Person. No resignation will become effective until a successor backup servicer has assumed the Backup Servicer’s servicing obligations and duties under the Sale and Servicing Agreement. Notwithstanding the foregoing, the Backup Servicer may resign for any reason, provided an entity acceptable to the Controlling Party has assumed the Backup Servicer’s obligations and duties under the Sale and Ser vicing Agreement prior to the effectiveness of any resignation and the Rating Agency Condition is also satisfied with respect to the resignation and assumption of the Backup Servicer’s obligations.

Certain Matters Regarding the Servicer

The Sale and Servicing Agreement will provide that the Servicer may not resign from its obligations and duties as Servicer under the Sale and Servicing Agreement, except (1) upon determination that, by reason of a change in legal requirements, the Servicer’s performance of these duties would be in violation of particular legal requirements and (2) [the Insurer, or, if an Insurer Default has occurred and is continuing,] a Note Majority, does not elect to waive the obligations of the Servicer to perform the duties that render it legally unable to act or to delegate those duties to another Person. No resignation will become effective until the Backup Servicer or a successor servicer has assumed the Servicer’s servicing obligations and duties under the Sale and Servicing Agreement.

The Sale and Servicing Agreement will further provide that neither the Servicer nor any of its stockholders, directors, officers, employees or agents, will be liable to the Issuing Entity or the Indenture Trustee for taking any action or for refraining from taking any action pursuant to the Sale and Servicing Agreement; provided, however, that neither the Servicer nor any Person will be protected against any liability that would otherwise be imposed by reason of the Servicer’s material breach of the Sale and Servicing Agreement, willful misfeasance, bad faith or negligence, other than errors in judgment, in the performance of its duties.

Subject to the provisions of the Sale and Servicing Agreement, any entity into which the Servicer may be merged or consolidated, resulting from any merger, conversion or consolidation to which the Servicer is a party, which acquires all or substantially all of the assets of the Servicer, or succeeding to the business of the Servicer, which in any case assumes the obligations of the Servicer, will be the successor of the Servicer, under the Sale and Servicing Agreement. [The Servicer may at any time perform specific duties as Servicer through other subcontractors with the prior written consent of the Insurer.]

Servicer Termination Events; Rights Upon Servicer Termination Event

A “Servicer Termination Event” under the Sale and Servicing Agreement will include:

•

the Servicer’s failure to make deposits into the Collection Account or to deliver to the Indenture Trustee any proceeds or payments payable to the Noteholders or the Insurer required to be so deposited or delivered in accordance with the Sale and Servicing Agreement, which failure continues unremedied for a period of two Business Days, one Business Day with respect to payment of Purchase Amounts, after the earlier of (x) discovery of the failure by the Servicer and (y) notice of the failure is given by the Indenture Trustee to the Servicer;

•

the Servicer’s failure or failures to satisfy any other covenant or agreement set forth in the Sale and Servicing Agreement, which failure or failures, individually or in the aggregate, materially and adversely affect the rights of Noteholders or the Insurer and remains uncured for a period of 60 days after the earlier of the date on which [(a)] it obtains actual knowledge of the failure [or (b) it receives written notice of the failure from (1) the Insurer or the Indenture Trustee or (2) if an Insurer Default has occurred and is continuing, the Note Majority];

•

particular events of insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings with respect to the Servicer indicating its insolvency;

•

[Insurer Events of Default]

•

any representation or warranty shall prove to be incorrect in any material respect and this incorrectness shall have a material adverse effect on the interest of the Issuing Entity, the Noteholders [or the Insurer] in the Receivables, which has not been cured within 30 days.

As long as a Servicer Termination Event under the Sale and Servicing Agreement remains unremedied, [(x) provided that no Insurer Default shall have occurred and be continuing, the Insurer in its sole and absolute discretion, or (y) if an Insurer Default shall have occurred and be continuing,] then the Note Majority may terminate all of the rights and obligations of the Servicer under the Sale and Servicing Agreement. Upon termination, all authority, power, obligations and responsibilities of the Servicer under the Sale and Servicing Agreement, other than obligations and responsibilities arising prior to the termination, will automatically pass to the Backup Servicer, or other successor servicer [appointed by the Insurer, provided that no Insurer Default shall have occurred and be continuing.]

Waiver of Past Defaults

As set forth under “Certain Matters Regarding Servicer—Waiver of Past Defaults” in the prospectus, the Insurer may, so long as no Insurer Default shall have occurred and be continuing, on behalf of the Noteholders, waive any default by the Servicer in the performance of its obligations under the Sale and Servicing Agreement and its consequences. No waiver will impair the Noteholders’ rights with respect to subsequent defaults.

Amendment

The Sale and Servicing Agreement may be amended by the Issuing Entity, the Sponsor, the Servicer, the Depositor, the Indenture Trustee and the Backup Servicer, [with the prior written consent of the Insurer, so long as no Insurer Default has occurred and is continuing,] but without the consent of any of the Certificateholders or the Noteholders, to cure any ambiguity, to correct or supplement any provision in this prospectus supplement or for the purpose of adding any provision to or changing in any manner or eliminating any provision of this prospectus supplement or modifying in any manner the rights of the Noteholders; provided, however, that the action must not, as evidenced by an opinion of counsel, adversely affect in any material respect the interests of the Noteholders. The Sponsor, the Issuing Entity, the Servicer, the Depositor, the Backup Servicer and the Indenture Trustee may also amend the Sale and Servicing Agreement with the prior written consent of [the Insurer, so long as no Insurer Default has occurred and is continuing, and] a Note Majority to add, change or eliminate any provisions of the Sale and Servicing Agreement or to modify the rights of the Noteholders; provided, however, that the action will not:

•

increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on Receivables or distributions that are required to be made for the benefit of the Noteholders or Certificateholders;

•

reduce the aforesaid percentage of the Noteholders or Certificateholders which is required to consent to any amendment, without, in either case, the consent of the Holders of all Notes and Certificates outstanding; [provided, further, that if an Insurer Default has occurred and is continuing, the action shall not materially adversely affect the interest of the Insurer;] or

•

result in a downgrade or withdrawal of the then current rating of the Notes by the Rating Agencies without the consent of each Noteholder.

The above should in no way be construed to require the consent of the Noteholders or Certificateholders to a reduction in the Target Overcollateralization Amount or the required level of the Class A Reserve Account.

List of Noteholders; Voting of Notes

Upon written request by three or more Noteholders or any one or more Noteholders with an aggregate principal balance evidencing not less than 25% of the Note Balance and upon compliance by these Noteholders with other provisions of the Sale and Servicing Agreement, the Indenture Trustee will afford the Noteholders, within five Business Days after receipt of the request, access during business hours to the current list of Noteholders for purposes of communicating with other Noteholders with respect to their rights under the Sale and Servicing Agreement and the Notes.

If the Sponsor or the Servicer or any of their affiliates owns any Notes, the Note will not have voting rights under the Sale and Servicing Agreement or the other Related Documents.

The Sale and Servicing Agreement will not provide for the holding of any annual or other meetings of Noteholders.

Termination

The respective obligations of the Issuing Entity, the Sponsor, the Servicer, the Depositor, the Backup Servicer and the Indenture Trustee pursuant to the Sale and Servicing Agreement will terminate upon the latest of:

•

the maturity or other liquidation of the last Receivable and the payment to Noteholders and the Insurer of amounts required to be paid under the Notes, the Indenture [and the Insurance Agreement];

•

[the expiration of the Policy in accordance with its terms; or]

•

the payment to Noteholders of all amounts required to be paid to them pursuant to the Indenture and the expiration of any related preference period.

In order to avoid excessive administrative expense, the Servicer has the option to purchase from the Issuing Entity, as of the last day of any month as of which the Aggregate Principal Balance with respect to the Receivables is less than or equal to 10% of the Original Pool Balance, all remaining Receivables at a price equal to the aggregate of the Purchase Amounts of the Receivables as of that last day, plus the appraised value of any other property held by the Issuing Entity, [with the prior written consent of the Insurer, if the redemption would result in a claim under the Policy or if the redemption would result in any amount owing to the Insurer remaining unpaid.] The Indenture Trustee will give written notice of termination to each Noteholder of record. The final distribution to any Noteholder will be made only upon surrender and cancellation of that Holder’s Note at the office or agency of the Indenture Trustee specified in the notic e of termination; provided, however, that if on the Payment Date upon which final payment of the Notes is to be made, there are five or fewer Noteholders of record, the final payment to that Noteholder will be made by check or wire transfer as described above and each Noteholder shall present and surrender its Note at the office or agency designated in the notice of final distribution referred to above within 30 days after the Payment Date.

[THE INSURER]

[General]

[[_______________] (the “Insurer” or “[_______________]”) is a monoline financial guaranty insurance company incorporated under the laws of the State of New York.  The Insurer is currently licensed to do insurance business in, and is subject to the insurance regulation and supervision by, all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Singapore.]

[The Insurer is an indirect wholly owned subsidiary of [_______________], a [___________] (“[_______________]”).  Through its subsidiaries, [_______________] is a leading provider of insurance and reinsurance coverages and financial products and services to industrial, commercial and professional service firms, insurance companies and other enterprises on a worldwide basis.  The ordinary shares of [_______________] are publicly traded in the United States and listed on the New York Stock Exchange (NYSE: [_________]).  [_______________] is not obligated to pay the debts of or claims against the Insurer.]

[Reinsurance]

[The Insurer has entered into a facultative quota share reinsurance agreement with [____________] (“[_______________]”), an insurance company organized under the laws of [______________], and an affiliate of the Insurer.  Pursuant to this reinsurance agreement, the Insurer expects to cede up to 90% of its business to [_______________].  The Insurer may also cede reinsurance to third parties on a transaction-specific basis, which cessions may be any or a combination of quota share, first loss or excess of loss.  Such reinsurance is used by the Insurer as a risk management device and to comply with statutory and rating agency requirements and does not alter or limit the Insurer's obligations under any financial guaranty insurance policy.  With respect to any transaction insured by [_______________], the percentage of risk ceded to [_______________] may be less than 90% depending on certain factors including, without l imitation, whether [_______________] has obtained third party reinsurance covering the risk.  As a result, there can be no assurance as to the percentage reinsured by [_______________] of any given financial guaranty insurance policy issued by [_______________], including the Policy.]

[Based on the audited financials of [_______________], as of December 31, 2004, [_______________] had total assets, liabilities, redeemable preferred shares and shareholders’ equity of $[___________], $[___________], $[___________] and $[___________], respectively, determined in accordance with generally accepted accounting principles in the United States (“US GAAP”). [_______________]’s insurance financial strength is rated “Aaa” by Moody’s and “AAA” by S&P and Fitch Inc. In addition, [_______________] has obtained a financial enhancement rating of “AAA” from S&P.]  

[The obligations of [_______________] to the Insurer under the reinsurance agreement described above are unconditionally guaranteed by [___________] ("[_______________]"), a Bermuda exempted company and one of the world's leading excess commercial insurers.  [_______________] is a wholly owned indirect subsidiary of [_______________].  In addition to A.M. Best’s financial strength rating of “A+” and issuer credit rating of “aa-”, [_______________]’s insurance financial strength rating is “Aa2” (as of September 13, 2005, [_______________] is on review for downgrade) by Moody’s, “AA-” by Standard & Poor’s (on September 20, 2005, Standard & Poor’s placed [_______________] on CreditWatch with negative implications) and “AA-” (Outlook Stable) by Fitch.]  

[The rating agencies have taken certain actions with respect to [_______________] and various insurance operating subsidiaries of [_______________], as described below.  Moody’s placed the “A2” senior debt rating of [_______________] and the other insurance financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) on review for possible downgrade on September 13, 2005.  Standard & Poor’s placed the “A” senior debt rating of [_______________] and the other financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) on CreditWatch with negative implications on September 20, 2005.  Fitch downgraded the long term issuer rating of [_______________] and the insurer financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) from “A” to “A-” on October 26, 2005.  A.M. Best placed each of [___________]’s (which does not include [_______________] or [_______________]) and [_______________]’s respective financial strength ratings of “A+” and their issuer credit ratings of “aa-” under review with negative implications on September 15, 2005. ]

[The ratings of [_______________], [_______________] or any other member of the [_______________] group of companies are not recommendations to buy, sell or hold notes, including the notes and are subject to revision or withdrawal at any time by Moody’s, Standard & Poor’s or Fitch.]

[Notwithstanding the capital support provided to the Insurer described in this section, the noteholders will have direct recourse against the Insurer only, and neither [_______________] nor [_______________] will be directly liable to the noteholders.]

[Financial Strength and Financial Enhancement Ratings of [_______________]]

[The Insurer's insurance financial strength is rated “Aaa” by Moody’s and “AAA” by Standard & Poor’s and Fitch, Inc. (“Fitch”).  In addition, [_______________] has obtained a financial enhancement rating of “AAA” from Standard & Poor’s.  These ratings reflect Moody’s, Standard & Poor’s and Fitch's current assessment of the Insurer's creditworthiness and claims-paying ability as well as the reinsurance arrangement with [_______________] described under "Reinsurance" above.]

[The above ratings are not recommendations to buy, sell or hold notes, including the notes and are subject to revision or withdrawal at any time by Moody’s, Standard & Poor’s or Fitch.  Any downward revision or withdrawal of these ratings may have an adverse effect on the market price of the notes.  The Insurer does not guaranty the market price of the notes nor does it guaranty that the ratings on the notes will not be revised or withdrawn.]

[Capitalization of the Insurer]

[Based on the audited financials of [_______________], as of December 31, 2004, [_______________] had total assets, liabilities, and shareholder’s equity of $[______________], $[______________], and $[______________], respectively, determined in accordance with U.S. GAAP.]

Based on the audited statutory financial statements for [_______________] as of December 31, 2004 filed with the State of New York Insurance Department, [_______________] has total admitted assets of $[______________], total liabilities of $[______________] and total capital and surplus of $[______________] determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities (“SAP”).  

[Incorporation by Reference of Financials

]

For further information concerning [_______________] and [_______________], see the financial statements of [_______________] and [_______________], and the notes thereto, incorporated by reference in this prospectus supplement.  The financial statements of [_______________] and [_______________] are included as exhibits to the periodic reports filed with the Securities and Exchange Commission (the “Commission”) by [_______________] and may be reviewed at the EDGAR website maintained by the Commission.  All financial statements of  [_______________] and [_______________] included in, or as exhibits to, documents filed by [_______________] pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 on or prior to the date of this prospectus supplement, or after the date of this prospectus supplement but prior to termination of the offering of the notes, shall be deemed incorporated by reference in this prospectus supplement.  Except for the financial statements of [_______________] and [_______________], no other information contained in [_______________]'s reports filed with the Commission is incorporated by reference. Copies of the statutory quarterly and annual statements filed with the State of New York Insurance Department by [_______________] are available upon request to the State of New York Insurance Department.]

[Regulation of the Insurer]

[The Insurer is regulated by the Superintendent of Insurance of the State of New York.  In addition, the Insurer is subject to regulation by the insurance laws and regulations of the other jurisdictions in which it is licensed.  As a financial guaranty insurance company licensed in the State of New York, the Insurer is subject to Article 69 of the New York Insurance Law, which, among other things, limits the business of each insurer to financial guaranty insurance and related lines, prescribes minimum standards of solvency, including minimum capital requirements, establishes contingency, loss and unearned premium reserve requirements, requires the maintenance of minimum surplus to policyholders and limits the aggregate amount of insurance which may be written and the maximum size of any single risk exposure which may be assumed.  The Insurer is also required to file detailed annual financial statements with the New York Insurance Department and similar supervisory agencies in each of the other jurisdictions in which it is licensed.]

[The extent of state insurance regulation and supervision varies by jurisdiction, but New York and most other jurisdictions have laws and regulations prescribing permitted investments and governing the payment of dividends, transactions with affiliates, mergers, consolidations, acquisitions or sales of assets and incurrence of liabilities for borrowings.]

 [THE FINANCIAL GUARANTY INSURANCE POLICIES ISSUED BY THE INSURER, INCLUDING THE INSURANCE POLICY, ARE NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.]

[The principal executive offices of the Insurer are located at [____________] and its telephone number at this address is [____________].]

[THE POLICY

The following summary of the terms of the Policy does not purport to be complete and is qualified in its entirety by reference to the Policy.

Simultaneously with the issuance of the Class A Notes, the Insurer will deliver the Policy to the Indenture Trustee for the benefit of each Class A Noteholder. Under the Policy, the Insurer will unconditionally and irrevocably guarantee to the Indenture Trustee, on each Payment Date, for the benefit of each Class A Noteholder the full and complete payment of (1) Scheduled Payments on the Class A Notes and (2) the amount of any Scheduled Payment which subsequently is avoided in whole or in part as a preference payment under applicable law. In the event the Indenture Trustee fails to make a claim under the Policy, Class A Noteholders do not have the right to make a claim directly under the Policy, but may sue to compel the Indenture Trustee to do so.

“Scheduled Payments” means payments which are scheduled to be made on the Class A Notes during the term of the Policy in accordance with the original terms of the Class A Notes when issued and without regard to any subsequent amendment or modification of the Class A Notes, the Sale and Servicing Agreement or the Indenture that has not been consented to by the Insurer, which “Scheduled Payments”, are

(1)

the Class A Interest Payment Amount, with respect to a Payment Date and

(2)

the Class A Principal Payment Amount with respect to a Payment Date. Scheduled Payments do not include payments which become due on an accelerated basis as a result of

•

a default by the Issuing Entity,

•

an election by the Issuing Entity to pay principal on an accelerated basis,

•

the occurrence of an Event of Default under the Indenture or

•

any other cause,

unless the Insurer elects, in its sole discretion, to pay in whole or in part the principal due upon acceleration, together with any accrued interest to the date of acceleration.

In the event the Insurer does not so elect, the Policy will continue to guarantee Scheduled Payments due on the Class A Notes in accordance with their original terms. Scheduled Payments shall not include

(1)

any portion of a Class A Interest Payment Amount due to the Class A Noteholders because the appropriate notice and certificate for payment in proper form was not timely Received by the Insurer,

(2)

any portion of a Class A Interest Payment Amount due to Class A Noteholders representing interest on any Class A Interest Carryover Shortfall or

(3)

any Class A Mandatory Redemption Amounts,

unless the Insurer elects, in its sole discretion, to pay the amount in whole or in part. Scheduled Payments shall not include, any amounts due in respect of the Class A Notes attributable to any increase in interest rate, penalty or other sum payable by the Issuing Entity by reason of any default or event of default in respect of the Class A Notes or by reason of any deterioration of the creditworthiness of the Issuing Entity nor shall coverage be provided under the Policy in respect of any taxes, withholding or other charge imposed with respect to any Noteholder by any governmental authority due in connection with the payment of any Scheduled Payment to a Class A Noteholder.

Payment of claims on the Policy made in respect of Scheduled Payments will be made by the Insurer following Receipt by the Insurer of the appropriate notice for payment on the later to occur of (1) 12:00 noon, New York City time, on the third Business Day following Receipt of notice for payment, and (2) 12:00 noon, New York City time, on the date on which the payment was due on the Class A Notes.

If payment of any amount avoided as a preference under applicable bankruptcy, insolvency, receivership or similar law is required to be made under the Policy, the Insurer shall cause the payment to be made on the later of

(a)

the date when due to be paid pursuant to the Order referred to below or

(b)

the first to occur of

(1)

the fourth Business Day following Receipt by the Insurer from the Indenture Trustee of

(A)

a certified copy of the order (the “Order”) of the court or other governmental body that exercised jurisdiction to the effect that the Class A Noteholder is required to return Scheduled Payments made with respect to the Class A Notes during the term of the Policy because the payments were avoidable as preference payments under applicable bankruptcy law,

(B)

a certificate of the Class A Noteholder that the Order has been entered and is not subject to any stay and

(C)

an assignment duly executed and delivered by the Class A Noteholder, in a form as is reasonably required by the Insurer and provided to the Class A Noteholder by the Insurer, irrevocably assigning to the Insurer all rights and claims of the Class A Noteholder relating to or arising under the Class A Notes against the Issuing Entity or otherwise with respect to the preference payment, or

(2)

the date of Receipt by the Insurer from the Indenture Trustee of the items referred to in clauses (A), (B) and (C) above if, at least four Business Days prior to the date of Receipt, the Insurer shall have Received written notice from the Indenture Trustee that these items were to be delivered on that date and the date was specified in the notice.

This payment shall be disbursed to the receiver, conservator, debtor-in-possession or trustee in bankruptcy named in the Order and not to the Indenture Trustee or any Class A Noteholder directly, unless a Class A Noteholder has previously paid the amount to the receiver, conservator, debtor-in-possession or trustee in bankruptcy named in the Order, in which case the payment shall be disbursed to the Indenture Trustee for distribution to the Class A Noteholder upon proof of the payment reasonably satisfactory to the Insurer. In connection with the foregoing, the Insurer shall have the rights provided pursuant to the Sale and Servicing Agreement including, without limitation, the right to direct all matters relating to any preference claim and subrogation to the rights of the Indenture Trustee and each Class A Noteholder in the conduct of any proceeding with respect to a preference claim.

Other Provisions of the Policy

The terms “Receipt” and “Received” with respect to the Policy shall mean actual delivery to the Insurer and to its fiscal agent, if any, prior to 12:00 noon, New York City time, on a Business Day; delivery either on a day that is not a Business Day or after 12:00 noon, New York City time, shall be deemed to be Received on the next succeeding Business Day. If any notice or certificate given under the Policy by the Indenture Trustee is not in proper form or is not properly completed, executed or delivered, it shall be denied not to have been Received, and the Insurer or its fiscal agent shall promptly so advise the Indenture Trustee, and the Indenture Trustee may submit an amended notice.

Under the Policy, “Business Day” means any day other than a Saturday, Sunday, legal holiday or other day on which commercial banking institutions in Wilmington, Delaware, the City of New York or any other location of any successor Servicer, successor Owner Trustee or successor Indenture Trustee are authorized or obligated by law, executive order or governmental decree to be closed.

The Insurer’s obligations under the Policy in respect of Scheduled Payments shall be discharged to the extent funds are transferred to the Indenture Trustee as provided in the Policy whether or not the funds are properly applied by the Indenture Trustee.

The Insurer shall be subrogated to the rights of each Class A Noteholder to receive payments of principal and interest to the extent of any payment by the Insurer under the Policy.

Claims under the Policy constitute direct, unsecured and unsubordinated obligations of the Insurer ranking not less than pari passu with other unsecured and unsubordinated indebtedness of the Insurer for borrowed money. Claims against the Insurer under the Policy and each other financial guaranty insurance policy issued by the Policy constitute pari passu claims against the general assets of the Insurer. The terms of the Policy cannot be modified or altered by any other agreement or instrument, or by the merger, consolidation or dissolution of the Issuing Entity. The Policy may not be canceled or revoked prior to distribution in full of all Scheduled Payments with respect to the Notes. The Policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law. The Policy is governed by the laws of the State of New York.

It is a condition to issuance that the Class A Notes be rated [       ] by [       ] and [       ] by [       ]. The ratings by the Rating Agencies of the Class A Notes will be based on the issuance of the Policy. A rating is not a recommendation to purchase, hold or sell Class A Notes. In the event that the rating initially assigned to any of the Class A Notes is subsequently lowered or withdrawn for any reason, including by reason of a downgrading of the claims-paying ability of the Insurer, no person or entity will be obligated to provide any additional credit enhancement with respect to the Class A Notes. Any reduction or withdrawal of a rating may have an adverse effect on the liquidity and market price of the Notes. See “Ratings” in this prospectus supplement.]

[OTHER CREDIT ENHANCEMENT PROVIDER]

[Regulation AB Item 1114 compliant description of any other credit enhancement provider.]

[DERIVATIVE INSTRUMENTS]

[The Interest Rate Swap Agreement and the Swap Provider]

[The Offered Certificates and Class B Certificates will have the benefit of an interest rate swap agreement.  On or before the Closing Date, the Trustee will enter into an interest rate swap agreement (the “Interest Rate Swap Agreement”) with [_______] (the “Swap Provider”).  A separate trust created under the pooling and servicing agreement (the "Supplemental Interest Trust") will hold the Interest Rate Swap Agreement documented by a 1992 ISDA Master Agreement (Multicurrency-Cross Border), together with a Schedule and Confirmation between The Trustee, on behalf of the Supplemental Interest Trust, and the Swap Provider. ]

[The significance percentage, as calculated in accordance with Item 1115 of Regulation AB is less than 10%.]

[If significance percentage, as calculated in accordance with Item 1115 of Regulation AB, is 10% or more, provide financial information required by Item 1115 of Regulation AB.]

[Pursuant to the Interest Rate Swap Agreement, on each Distribution Date, (i) the Securities Administrator (on behalf of the Supplemental Interest Trust and from funds of such trust) will be obligated to pay to the Swap Provider, a fixed amount equal to the product of (x) [__]%, (y) the Swap Notional Amount for that Distribution Date set forth in the Interest Rate Swap Agreement and (z) a fraction, the numerator of which is 30 (or, for the first Distribution Date, the number of days elapsed from the Closing Date to but excluding the first Distribution Date on a 30/360 basis), and the denominator of which is 360 (the “Securities Administrator Swap Payment”); and (ii) the Swap Provider will be obligated to pay to the Supplemental Interest Trust for the benefit of the holders of the Offered Certificates and the Class B Certificates (the “Swap Provider Payment”), a floating amount equal to the product of (x) one-mon th LIBOR (as determined pursuant to the Interest Rate Swap Agreement), (y) the Swap Notional Amount for that Distribution Date set forth in the Interest Rate Swap Agreement, and (z) a fraction, the numerator of which is the actual number of days elapsed from the previous Distribution Date to but excluding the current Distribution Date (or, for the first Distribution Date, the actual number of days elapsed from the Closing Date to but excluding the first Distribution Date), and the denominator of which is 360.  A net payment will be required to be made on each Distribution Date (each such net payment, a “Net Swap Payment”) (a) by the Securities Administrator to the Swap Provider, to the extent that the fixed amount exceeds the corresponding floating amount, or (b) by the Swap Provider to the Securities Administrator, to the extent that the floating amount exceeds the corresponding fixed amount. Payments received by the Supplemental Interest Trust pursuant to the Interest Rate Swap Agreement wil l be available for distributions of Interest Carry Forward Amounts, Net WAC Rate Carryforward Amounts, amounts necessary to maintain the Required Overcollateralization Amount and Allocated Realized Loss Amounts.]

[The “Swap Notional Amount” with respect to each Distribution Date commencing in [______, __], is set forth below (which will be substantially the same schedule as set forth in the Interest Rate Swap Agreement).  The Interest Rate Swap Agreement will terminate immediately following the Distribution Date in [______, __], unless terminated earlier upon the occurrence of a Swap Default, an Early Termination Event or an Additional Termination Event (each as defined below).]

Distribution Date	Swap Notional Amount
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]

[The respective obligations of the Swap Provider and the Supplemental Interest Trust to pay specified amounts due under the Interest Rate Swap Agreement will be subject to the following conditions precedent: (1) no Swap Default or event that with the giving of notice or lapse of time or both would become a Swap Default, in each case, in respect of the other party, shall have occurred and be continuing with respect to the Interest Rate Swap Agreement and (2) no “Early Termination Date” (as defined in the ISDA Master Agreement) has occurred or been effectively designated with respect to the Interest Rate Swap Agreement.]

[An Interest Rate Cap Agreement]

[The Class [__] certificates will have the benefit of the Interest Rate Cap Agreement. Pursuant to the Interest Rate Cap Agreement, with respect to any Distribution Date, commencing with the Distribution Date in [__], 20[ ], on or prior to the Distribution Date in [__], 20[ ], [_______], (the “Cap Provider”), will be obligated to pay to the trust administrator, an amount equal to the product of (a) the excess, if any, of (i) the then current one-month LIBOR rate (determined in accordance with the Interest Rate Cap Agreement) up to a maximum of [__]% (the “Maximum Cap Rate”) and (ii) a specified strike rate of [__]% (the “Cap Strike Rate”) and (b) the Interest Rate Cap Agreement Notional Amount set forth on the schedule attached as Annex B hereto for that Distribution Date, determined on a 30/360 Basis. (each such payment, the “Cap Agreement Payment”). The Interest Rate Cap Agreement will terminate after th e Distribution Date in [__], 20[ ].

The obligations of the Cap Provider are limited to those specifically set forth in the Interest Rate Cap Agreement. The Cap Provider conducts business in the over-the-counter derivatives market, engaging in a variety of derivatives products, including interest rate swaps, currency swaps, credit default swaps and interest rate options with institutional clients.

For the Class [__] certificates and each Distribution Date prior to and including the Distribution Date in [__], 20[ ],  any Cap Agreement Payment received by the trust administrator will be used to pay the related Cap Amount to such classes of certificates, as described below under “––The Reserve Funds.”  Amounts received on  the Interest Rate Cap Agreement will not be available to make distributions on any class of Certificates other than the Class [__] certificates.

The Interest Rate Cap Agreement will be governed by and construed in accordance with the law of the State of New York. The obligations of the Cap Provider are limited to those specifically set forth in the Interest Rate Cap Agreement. The Class [__] certificates do not represent an obligation of the Cap Provider. The holders of the Class [__] certificates are not parties to or beneficiaries under the Interest Rate Cap Agreement and will not have any right to proceed directly against the cap provider in respect of its obligations under the Interest Rate Cap Agreement.]

[A Yield Maintenance Agreement]

The Issuing Entity will enter into a Yield Maintenance Agreement for the benefit of the Class [__] Certificates.  Under the Yield Maintenance Agreement, the Counterparty will agree to pay to the Issuing Entity two Business Days prior to each Distribution Date beginning in [__], 20[ ] and to and including the Distribution Date in [__], 20[ ], an amount equal to the product of:

1.

the excess, if any, of LIBOR (as calculated under the related Yield Maintenance Agreement subject to the Rate Cap Ceiling) over the Cap Strike Rate for that Distribution Date;

2.

the related Scheduled Notional Amount for that Distribution Date; and

3.

a fraction, the numerator of which is the actual number of days elapsed from the previous Distribution Date to but excluding the current Distribution Date, and the denominator of which is 360.

The Scheduled Notional Amounts for each Yield Maintenance Agreement decline in accordance with the expected amortization of the Mortgage Loans.  The Yield Maintenance Agreements will terminate immediately following the Distribution Date in [__], 20[ ].

The Yield Maintenance Agreements will be governed by and construed in accordance with the law of the State of New York and will be documented under the ISDA Master Agreement, as supplemented by the schedule and the confirmation.  The obligations of the Counterparty are limited to those specifically set forth in the related Yield Maintenance Agreement.

Any amounts received by the Securities Administrator under a Yield Maintenance Agreement will be distributed as follows:

1.

to the Reserve Fund, in an amount equal to the Basis Risk Shortfall Carryover Amount for the Class [__] Certificates for such Distribution Date;

2.

to the Principal Remittance Amount, the Net Cumulative Realized Loss Amount on such Distribution Date;

3.

to the Class [__] Certificates, any applicable Unpaid Realized Loss Amounts, and

4.

to the Class [__] Certificates, any remaining amounts.

FEDERAL INCOME TAX CONSEQUENCES

The following is a general summary of some of the related Federal income tax consequences of the purchase, ownership and disposition of the Class A Notes. This discussion does not address every aspect of the Federal income tax laws that may be relevant to holders of Class A Notes in light of their personal investment circumstances or to particular types of Class A Noteholders subject to special treatment under the Federal income tax laws, including, without limitation, banks and thrifts, insurance companies, dealers in securities, foreign investors, regulated investment companies, individuals, trusts and estates and pass-through entities, the equity holders of which are any of the foregoing. This discussion is directed to prospective purchasers who purchase Class A Notes in the initial distribution of the Class A Notes and who hold the Class A Notes as “capital assets” within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). Prospective purchasers are urged to consult their own tax advisors in determining the Federal, state, local, foreign and any other tax consequences to them of the purchase, ownership and disposition of the Class A Notes.

The following summary is based upon current provisions of the Code, the Treasury regulations promulgated under the Code, judicial authority, and ruling authority, all of which are subject to change, which change may be retroactive. The Issuing Entity will be provided with an opinion of Federal Tax Counsel regarding some of the related Federal income tax matters discussed below. An opinion of Federal Tax Counsel, however, is not binding on the Internal Revenue Service (the “IRS”) or the courts. Moreover, there are no cases or IRS rulings on similar transactions with terms similar to those of the Class A Notes. As a result, the IRS may disagree with all or a part of the discussion below. No ruling on any of the issues discussed below will be sought from the IRS.

Tax Characterization of the Issuing Entity

McKee Nelson LLP will deliver its opinion that the Issuing Entity will not be classified as an association, or publicly traded partnership taxable as a corporation for Federal income tax purposes. This opinion will be based on the assumption of compliance by all parties with the terms of the Trust Agreement and related documents.

If the Issuing Entity were taxable as a corporation for Federal income tax purposes, the Issuing Entity would be subject to corporate income tax on its taxable income. The Issuing Entity’s taxable income would include all its income on the Receivables, possibly reduced by its interest expense on the Class A Notes. Any corporate income tax could materially reduce cash available to make payments on the Class A Notes and distributions on the Certificates, and Certificateholders, could be liable for any tax that is not paid by the Issuing Entity.

Tax Consequences to Holders of the Class A Notes

Treatment of the Class A Notes as Indebtedness.  The Issuing Entity will agree, and the Class A Noteholders will agree by their purchase of Class A Notes, to treat the Class A Notes as debt for Federal, state and local income and franchise tax purposes. Federal Tax Counsel will advise the Issuing Entity that in its opinion the Class A Notes will be classified as debt for Federal income tax purposes.

The prepayment assumption that is used in determining the accrual of original issue discount, market discount or premium with respect to the Notes is [100% Prepayment Assumption], as defined below.  However, no representation is made that the loans will prepay in accordance with this assumption or in accordance with any other assumption.  The [100% Prepayment Assumption] assumes a [constant prepayment rate of ___%].

Alternatively, if, contrary to the opinion of Federal Tax Counsel, the Class A Notes were not properly classified as debt and Issuing Entity were treated as a publicly traded partnership taxable as a corporation, it would be subject to Federal income tax, and any similar state or local taxes, at corporate tax rates on its taxable income generated by ownership of the Receivables.  This tax could result in reduced distributions to Class A Noteholders. Distributions to Class A Noteholders generally would not be deductible in computing the taxable income of the publicly traded partnership. In addition, all or a portion of any distributions would, to the extent of the current and accumulated earnings and profits of the corporation, be treated as dividend income to the Class A Noteholders, and in the case of Class A Noteholders that are foreign persons would be subject to withholding tax.

Interest Income and OID on the Class A Notes.

It is not anticipated that the Class A Notes will be issued with original issue discount (“OID”) within the meaning of Section 1273 of the Code. The stated interest on the Class A Notes will be taxable to a Class A Noteholder as ordinary interest income when received or accrued in accordance with the Class A Noteholder’s method of tax accounting. If the Class A Notes were treated as being issued with OID, the excess of the “stated redemption price at maturity” of the Class A Notes over their issue price would constitute OID. Under the OID Regulations, a holder of a Class A Note issued with a de minimis amount of OID must include this OID in income, on a pro rata basis, as principal payments are made on the Class A Note. A subsequent purchaser who buys a Class A Note for more or less than its principal amount will generally be subject, respectively, to the premium amortization or market discount rules of the Code.

Sale or Other Disposition.

If a Class A Noteholder sells a Class A Note, the holder will recognize gain or loss in an amount equal to the difference between the amount realized on the sale and the holder’s adjusted tax basis in the Class A Note. The adjusted tax basis of a Class A Note to a particular Class A Noteholder will equal the holder’s cost for the Class A Note, increased by any market discount, and gain previously included by the Class A Noteholder in income with respect to the Class A Note and decreased by the amount of premium, if any, previously amortized and by the amount of principal payments previously received by the Class A Noteholder with respect to the related Class A Note. Any gain or loss will be capital gain or loss, except for gain representing accrued interest, including OID, and accrued market discount not previously included in income. Capital losses generally may be used by a corporate taxpayer only to offset capital gains, and by an i ndividual taxpayer only to the extent of capital gains plus $3,000 of other income.

Foreign Holders.

Except as discussed below, a Class A Noteholder that is not a “United States person” (as defined below) generally will not be subject to United States income or withholding tax in respect of a distribution on a Class A Note provided that (i) the holder complies to the extent necessary with certain certification requirements, which generally relate to the identity of the beneficial owner and the status of the beneficial owner as a person that is not a United States person (as defined below), (ii) the holder is not a “10-percent shareholder” within the meaning of Section 871(h)(3)(B) of the Code, which could be interpreted to include a person that directly or indirectly owns 10% or more of the certificates in the Issuing Entity or the equity in the Sponsor or the Depositor, (iii) the holder is not a “controlled foreign corporation” (as defined in the Code) related to the Issuing Entity or related to a 10 percent holde r of certificates in the Issuing Entity or equity in the Sponsor or the Depositor, and (iv) the holder is not engaged in a United States trade or business, or otherwise subject to Federal income tax as a result of any direct or indirect connection to the United States other than through its ownership of a Class A Note.  For these purposes, the term “United States person” means (i) a citizen or resident of the United States, (ii) a corporation or partnership (or other entity properly treated as a corporation or partnership for Federal income tax purposes) created or organized in or under the laws of the United States or any State thereof or the District of Columbia, (iii) an estate whose income is includable in gross income for United States Federal income taxation regardless of its source, and (iv) a trust for which one or more United States persons have the authority to control all substantial decisions and for which a court of the United States can exercise primary supervision over the trust ’s administration and certain eligible trusts that elect to be treated as United States persons.  A “Foreign Person” is any person that is not a United States person.  Each Class A Noteholder should consult its tax advisors regarding the tax documentation and certifications that must be provided to secure the exemption from United States withholding taxes.

Any capital gain realized on the sale, redemption, retirement or other taxable disposition of a Class A Note by a Foreign Person generally will be exempt from United States Federal income and withholding tax, provided that (i) such gain is not effectively connected with the conduct of a trade or business in the United States by the Foreign Person and (ii) in the case of an individual Foreign Person, the Foreign Person is not present in the United States for 183 days or more in the taxable year.

If the interest, gain or income on a Class A Note held by a Foreign Person is effectively connected with the conduct of a trade or business in the United States by the Foreign Person (although exempt from the withholding tax previously discussed if the holder provides an appropriate statement establishing that such income is so effectively connected), the holder generally will be subject to United States Federal income tax on the interest, gain or income at regular Federal income tax rates.  In addition, if the Foreign Person is a foreign corporation, it may be subject to a branch profits tax equal to 30% of its effectively connected earnings and profits,” within the meaning of the Code, for the taxable year, as adjusted for certain items, unless it qualifies for a lower rate under an applicable tax treaty (as modified by the branch profits tax rules).

If the IRS were to contend successfully that the Class A Notes are interests in a partnership, not taxable as a corporation, a Class A Noteholder that is a foreign person might be required to file a United States. Federal income tax return and pay tax on its share of partnership income at regular United States tax rates, including the branch profits tax, and could be subject to withholding tax on its share of partnership income. If the Class A Notes were recharacterized as interests in a “publicly traded partnership” taxable as a corporation, distributions on the Class A Notes treated as dividends would generally be subject to withholding tax on the gross amount of the dividends at the rate of 30% unless the rate were reduced by an applicable treaty. If the Class A Notes are recharacterized as equity interests in a partnership, or, contrary to the opinion of Federal Tax Counsel, in a publicly traded partnership taxable as a corporation , any taxes required to be so withheld will be treated for all purposes of the Class A Notes as having been paid to the related Class A Noteholder.

Backup Withholding. Distributions made on the Class A Notes and proceeds from the sale of Class A Notes to or through certain brokers may be subject to a “backup” withholding tax on “reportable payments” (including interest accruals, original issue discount, and, under certain circumstances, distributions in reduction of principal amount) if the holder of the Class A Notes fails to comply with certain identification procedures, unless the Class A Noteholder is an exempt recipient under applicable provisions of the Code and, if necessary, demonstrates such status.  Any amounts so withheld from distributions on the Class A Notes would be refunded by the IRS or allowable as a credit against the Class A Noteholder’s Federal income tax.

CERTAIN STATE TAX CONSEQUENCES

In addition to the federal income tax consequences described in “Material Federal Income Tax Consequences” above, potential purchasers should consider the state income tax consequences of the acquisition, ownership and disposition of the Class A Notes. State income tax law may vary substantially from state to state, and this discussion does not purport to describe any aspect of the income tax laws of any state. Therefore, potential purchasers should consult their own tax advisors with respect to the various tax consequences of an investment in the Class A Notes.

ERISA CONSIDERATIONS

General

Section 406 of ERISA prohibits, and Section 4975 of the Code imposes adverse tax consequences on, certain transactions between any benefit plan which is subject to Title I of ERISA and/or Section 4975 of the Code or is an entity which is deemed to hold the assets of the foregoing (the “Plan”) and persons that are “parties in interest” under ERISA or “disqualified persons” under the Code with respect to such Plan.  A violation of these “prohibited transaction” rules may result in excise taxes and other penalties and liabilities under ERISA and the Code for such persons.

Certain transactions involving the assets of an issuing entity might be deemed to constitute prohibited transactions under Section 406 ERISA and Section 4975 of the Code with respect to a Plan that purchased notes issued by that issuing entity if assets of the issuing entity were deemed to be assets of the Plan.  Under the regulation issued by the United States Department of Labor set forth at 29 C.F.R. Section 2510.3-101 governing the definition of “plan assets” for purposes of the fiduciary responsibility and prohibited transaction provisions of ERISA and Section 4975 of the Code (the “Plan Asset Regulations”), the assets of an issuing entity would be treated as plan assets of the Plan for the purposes of ERISA and the Code only if the Plan acquired an “equity interest” in the issuing entity and none of the exceptions contained in the Plan Asset Regulations was applicable.  An equity interest is defined under the Plan Asset Regulations as an interest other than an instrument which is treated as indebtedness under applicable local law and which has no substantial equity features.

Purchases of the Notes

Although there is little guidance on the subject, the notes should be treated as indebtedness without substantial equity features for purposes of the Plan Asset Regulations.  This determination is based in part upon (i) tax counsel’s opinion that notes transferred on the closing date to parties unrelated to the holder of the Residual Certificates will be classified as debt for U. S. federal income tax purposes and that retained notes, if later sold to a party unrelated to the holder of the Residual Certificates for cash, will be classified as debt instruments for U.S. federal income tax purposes as of the date of such sale, based on certain assumptions (including that the rating of the notes as of the closing date has not declined below investment grade) and (ii) the traditional debt features of the notes, including the reasonable expectation of purchasers of the notes that they will be repaid when due, as well as the absence of conversion rights, warrants an d other typical equity features.  Based upon the foregoing and other considerations, subject to the considerations described below, the notes may be purchased by a Plan.

Without regard to whether the notes are considered an “equity interest” in the issuing entity under the Plan Asset Regulations, the acquisition or holding of notes by or on behalf of a Plan could be considered to give rise to a prohibited transaction if the underwriters, the issuing entity, the owner trustee or the indenture trustee, or any of their respective affiliates is or becomes a party in interest or a disqualified person with respect to such Plan.  In that case, PTE 84-14 (relating to transactions effected by a “qualified professional asset manager”); PTE 90-1 (relating to transactions involving insurance company pooled separate accounts); PTE 91-38 (relating to transactions involving bank collective investment funds); PTE 95-60 (relating to transactions involving insurance company general accounts); PTE 96-23 (relating to transactions effected by an “in-house asset manager”); and any other applicable exemption granted by the U.S. Department of Labor (the “Investor Based Exemptions) could be applicable, depending on the type of Plan involved and the circumstances of the plan fiduciary’s decision to acquire a note.  Even if the conditions specified in one or more of the Investor-Based Exemptions are met, the scope of the relief provided by these exemptions might or might not cover all acts that might be construed as prohibited transactions.  There can be no assurance that any of the Investor-Based Exemptions, or any other exemption, will be available with respect to any particular transaction involving the notes.

Certain employee benefit plans, including governmental plans (as defined in Section 3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and foreign plans are not subject to the ERISA requirements but may be subject to federal, state, local or foreign laws that are substantially similar to ERISA or the Code (“Similar Law”), such plans, together with Plans are referred to herein as “Benefit Plans.”

The notes should not be purchased with the assets of a Plan if the depositor, the servicer, the master servicer, the indenture trustee, the owner trustee, the underwriters or any of their affiliates is a fiduciary or gives investment advice with respect to such Plan or is an employer maintaining or contributing to such Plan, unless such purchase and holding of the notes would be covered by an applicable prohibited transaction exemption.

Each purchaser and transferee of a note will be deemed to represent and warrant to the issuing entity that either (i) it is not a Benefit Plan or (ii) it is a Benefit Plan and its acquisition and holding of such notes will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code which is not covered under an Investor-Based Exemption or some other applicable exemption, and will not cause a non-exempt violation of any substantially Similar Law.

Prospective Benefit Plan investors in notes should consult with their legal advisors concerning the impact of ERISA and the Code, the availability of other exemptions from the prohibited transaction rules that may apply to them, and the potential consequences in their specific circumstances, prior to making an investment in the notes.  Each Benefit Plan fiduciary should also determine whether under the general fiduciary standards of investment prudence and diversification, an investment in the notes is appropriate for the Benefit Plan, taking into account the overall investment policy of the Plan and the composition of the Benefit Plan’s investment portfolio.

UNDERWRITING

Subject to the terms and conditions set forth in an underwriting agreement dated [                  ] (the “Underwriting Agreement”), the Depositor has agreed to cause the Issuing Entity to sell to [Deutsche Bank Securities Inc.] (the “Underwriter”), and the Underwriter has agreed to purchase, all of the Class A Notes.

Under the terms and conditions of the Underwriting Agreement, the Underwriter is committed to take and pay for all the Class A Notes offered by this prospectus supplement, if any are taken.

The Sponsor has been advised by the Underwriter that the Underwriter proposes to offer the Class A Notes from time to time for sale in negotiated transactions or otherwise, at prices determined at the time of sale. The Underwriter may effect these transactions by selling Class A Notes to or through dealers and these dealers may receive compensation in the form of underwriting discounts, concessions or commissions from the Underwriter and any purchasers of Class A Notes for whom they may act as agents. The Underwriter and any dealers that participate with the Underwriter in the distribution of the Class A Notes may be deemed to be underwriters, and any discounts or commissions received by them and any profit on the resale of Class A Notes by them may be deemed to be underwriting discounts or commissions under the Securities Act of 1933, as amended (the “Securities Act”).

The Class A Notes are a new issue of securities with no established trading market. The Issuing Entity has been advised by the Underwriter that it intends to make a market in the Class A Notes, but the Underwriter is not obligated to make a market and may discontinue market making at any time without notice. No assurance can be given as to the liquidity of the trading market for the Class A Notes.

An affiliate of the underwriter provides a warehouse facility to the Sponsor.

The Sponsor has agreed to indemnify the Underwriter against particular types of liabilities, including liabilities under the Securities Act.

RATINGS

It is a condition to issuance that each of the Class A-1 Notes and the Class A-2 Notes be rated [       ] by [       ] and [       ] by [       ]. The ratings by the Rating Agencies of the Class A Notes will be based on the issuance of the Policy. A rating is not a recommendation to purchase, hold or sell Class A Notes. In the event that the rating initially assigned to any of the Class A Notes is subsequently lowered or withdrawn for any reason, including by reason of a downgrading of the claims-paying ability of the Insurer, no person or entity will be obligated to provide any additional credit enhancement with respect to the Class A Notes. Any reduction or withdrawal of a rating may have an adverse effect on the liquidity and market price of the Class A Notes.

The rating agencies have stated that it is their standard policy to monitor ratings on publicly offered notes for which a rating has been provided, as to each rating agency rating each class of notes in accordance with the rating agencies’ particular surveillance policies, unless the issuer requests a rating without surveillance.  A rating agency will monitor the rating it issues on an ongoing basis and may update the rating after conducting its regular review of the issuer’s creditworthiness or after conducting a review of the status of the rating upon becoming aware of any information that might reasonably be expected to result in a change of rating.  The depositor has not requested that any rating agency not monitor their ratings of the notes, and the depositor has not requested that any rating agency use any monitoring procedures other than their standard monitoring procedures.

LEGAL PROCEEDINGS

[There are no material legal proceedings pending against the Sponsor, the Depositor, the Owner Trustee, the Indenture Trustee, the Issuing Entity, [any affiliated Servicer, any 20% concentration unaffiliated Servicer, any 20% concentration Originator], or with respect to which the property of any of the foregoing transaction parties is subject, that are material to the noteholders.  No legal proceedings against any of the foregoing transaction parties is known to be contemplated by governmental authorities, that are material to the noteholders.]

AFFILIATIONS, RELATIONSHIPS AND RELATED TRANSACTIONS

[There are no affiliations between the Sponsor, the Depositor or the Issuing Entity and any of [any affiliated Servicer, any 20% concentration unaffiliated Servicer], the Owner Trustee, the Indenture Trustee, [any 10% concentration Originator] or [any credit enhancement provider or derivatives counterparty].  There are no affiliations among [any affiliated Servicer, any 20% concentration unaffiliated Servicer], the Owner Trustee, the Indenture Trustee, [any 10% concentration Originator] or [any credit enhancement provider or derivatives counterparty].  There are currently no business relationships, agreements, arrangements, transactions or understandings between (a) the Sponsor, the Depositor or the Issuing Entity and (b) any of the parties referred to in the preceding sentence, or any of their respective affiliates, that were entered into outside the normal course of business or that contain terms other than would be obtained in an ar m’s length transaction with an unrelated third party and that are material to the investor's understanding of the notes, or that relate to the notes or the pooled assets.  No such business relationship, agreement, arrangement, transaction or understanding has existed during the past two years.]

[EXPERTS

The consolidated balance sheets of Financial Security and Subsidiaries as of December 31, [       ] and [       ] and the related consolidated statements of income, changes in shareholder’s equity and cash flows for each of the three years in the period ended December 31, [       ], incorporated by reference in this prospectus supplement, have been incorporated in this prospectus supplement in reliance on the report of [       ], independent accountants, given on the authority of that firm as experts in accounting and auditing.]

LEGAL MATTERS

Some legal matters relating to the Class A Notes and some related federal income tax and other matters will be passed upon for the Sponsor by [       ].  Some legal matters relating to the Class A Notes will be passed upon for the Underwriter and the Depositor by McKee Nelson LLP, New York, New York.

The information in this prospectus supplement is not complete and may be changed.  We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective.  This prospectus supplement is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED [_________]

PROSPECTUS SUPPLEMENT (to prospectus dated [            ])

$[               ] (Approximate)

ACE SECURITIES CORP., [______] Boat Trust [______], Series  [       ]

Asset Backed Notes

[______] Boat Trust [______]

Issuing Entity

[DB Structured Products, Inc.]

Sponsor

ACE Securities Corp.

Depositor

 [               ]

Servicer

Securities Offered • $[      ], [     ]% Class [_____] asset backed notes • $[      ], [     ]% Class [_____] asset backed notes • $[      ], [     ]% asset backed certificates Assets • Retail boat receivables Credit Enhancement • Subordination of the certificates • Reserve account • [Describe any other credit enhancement provided by [_____]] Expected Ratings • [      ] or equivalent for the notes • [      ] or equivalent for the certificates Consider carefully the risk factors beginning on page S-[  ] of this prospectus supplement and on page [  ] of the prospectus. For a list of capitalized terms used in this prospectus supplement and the prospectus, see the index of defined terms beginning on page S-[  ] of this prospectus supplement and on page [  ] of the prospectus. The notes will represent interests in the Issuing Entity only and will not represent interests in or obligations of the sponsor, the depositor or any of their affiliates. Distributions on the notes will be made on the [__]th day of each month, or, if such day is not a business day, on the next succeeding business day, beginning in [__]. This prospectus supplement may be used to offer and sell the notes only if accompanied by the prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this prospectus supplement or the attached prospectus is accurate or complete.  Making any contrary representation is a criminal offense.

Subject to the satisfaction of certain conditions, the underwriter named below is offering the notes and certificates at the price to public shown.  The securities will be delivered in book entry form only on or about [        ].

	Price to Public	Underwriting Discounts & Commissions	Proceeds to the Depositor(1)
Per Note	[    ]%	[    ]%	[    ]%
Per Certificate	[    ]%	[    ]%	[    ]%
Total	$[     ]	$[     ]	$[     ]

___________________________

1  Before deducting expenses, estimated to be $ [      ].

[Deutsche Bank Securities]

The date of this prospectus supplement is [         ].

Important Notice About Information Presented in this
Prospectus Supplement and the Accompanying Prospectus:

We provide information to you about the securities offered by this prospectus supplement in two separate documents that progressively provide more detail: (1) the accompanying prospectus, which provides general information, some of which may not apply to your securities, and (2) this prospectus supplement, which describes the specific terms of your securities.

If the information regarding the securities is more specific in this prospectus supplement than in the prospectus, then you should rely on the information in this prospectus supplement.

You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus.  We have not authorized anyone to provide you with different information.

We are not offering the securities in any state where the offer is not permitted.  We do not claim that the information in this prospectus supplement and prospectus is accurate as of any date other than the dates stated on their respective covers.

Dealers will deliver a prospectus supplement and prospectus when acting as underwriters of the securities and with respect to their unsold allotments or subscriptions.  In addition, all dealers selling the securities will be required to deliver a prospectus supplement and prospectus for ninety days following the date of this prospectus supplement.

We include cross-references in this prospectus supplement and the accompanying prospectus to captions in these materials where you can find further related discussions.  The following table of contents and the table of contents included in the accompanying prospectus provide the pages on which these captions are located.

TABLE OF CONTENTS

Prospectus Supplement

Caption

Page

Summary of Terms

1

Risk Factors

1

Formation of the Trust

3

The Trust Property

4

The Receivables Pool

5

STATIC POOL INFORMATION

10

THE ORIGINATORS

11

The Servicer

11

[Weighted Average Life of the Securities]

12

Use of Proceeds

15

Description of the Notes

15

Description of the Certificates

16

Description of the Transfer and Servicing Agreements

17

Federal Income Tax Consequences

27

State and Local Tax Consequences

31

ERISA Considerations

36

Underwriting

38

RATINGS

39

LEGAL PROCEEDINGS

39

AFFILIATIONS, RELATIONSHIPS AND RELATED TRANSACTIONS

39

Legal Matters

40

SUMMARY OF TERMS

This summary highlights selected information from this prospectus supplement and does not contain all of the information that you need to consider in making your investment decision.  To understand all of the terms of the offering of the securities, it is necessary that you read carefully this entire prospectus supplement and accompanying prospectus.

While this summary contains an overview of certain calculations, cash flow priorities, and other information to aid your understanding, you should read carefully the full description of these calculations, cash flow priorities and other information in this prospectus supplement and the accompanying prospectus before making any investment decision.

Issuing Entity	[      ] Boat Trust [      ]-[      ], a limited purpose Delaware business trust.
Depositor	Ace Securities Corp.  See “The Depositor” in the Prospectus.
Servicer	[      ].
Sponsor	[      ].  See “The Sponsor” in the Prospectus.
Originators	[_________________________], with respect to approximately [__]% of the receivables by aggregate principal balance as of the Cut-off Date. The remainder of the receivables were originated by various originators, none of which have originated more than 10% of the receivables.  See “The Originators” in this prospectus supplement.
Owner Trustee	[      ].
Indenture Trustee	[      ].
[Any credit enhancement provider referenced in Items 1114(b) and 1115 of Regulation AB]	[      ].
Closing Date	On or about [      ].
Cut-off Date	The [close] [opening] of business on [      ].
Distribution Dates	[      ] of each month or the next business day if the [      ] day is not a business day, beginning in [      ].
Record Dates	Last day of the month prior to a distribution date.
Minimum Denominations	$[25,000].
Form	Book-entry.
Interest Accrual Method	30/360.
Final Scheduled Distribution Date	[      ] for the notes and [      ] for the certificates.

The Receivables

The receivables are amounts owed by individuals under retail installment sale contracts to purchase or refinance new or used boats, boat motors, jet skis and waverunners.

The depositor expects that the receivables will have the following characteristics as of [   ].  As of the closing date, no more than 5% of the receivables will have characteristics that differ from those described in this prospectus supplement as of [   ].

Number of contracts

[   ]

Principal Amount

$[   ]

Annual Percentage Rates

[   ]% to [    ]%

Weighted Average Annual Percentage Rate

[   ]%

Original term

[   ] months to [   ] months

Weighted Average original term

[   ] months

Remaining term

[   ] months to [__] months

Weighted Average remaining term

[   ]%

New

[   ]

Used

[   ]

States

[   ]

[   ]

[   ]

Balloon Loans

[   ]

[For approximately [      ]% of the principal amount of the receivables, the amount of the receivable was more than the value of the financed boat at the time the loan was made.]

Removal and Substitution of a Receivable

[Regulation AB Item 1103(a)(6) compliant description of removal or substitution of receivables in connection with material document defects or breaches of representations and warranties].

Interest Distributions

On each distribution date, if the trust fund has sufficient cash, it will pay you the interest accrued on your securities during the related interest period.  Interest periods begin on the prior distribution date and run through the day before the current distribution date. The first interest period, however, begins on the closing date and runs through the day before the first distribution date.  We will assume that each year has 360 days.

Principal Distributions

The trust fund will pay all principal collections to the noteholders until the notes are paid in full.  The trust fund will not pay any principal collections to the certificateholders until the notes are paid in full.

Reserve Account

There will be a reserve account to help cover cash flow shortfalls.  Initially, the account will be $[      ]. On each distribution date amounts remaining after distribution of the total servicing fee and amounts to be paid to the noteholders and certificateholders will be deposited in the reserve account until the amount equals a specified amount.

[Trigger Events]

[Regulation AB Item 1103(a)(3)(vii) compliant description of any events in the transaction agreements that can trigger liquidation or amortization of the receivables or other performance triggers that would alter the transaction structure or the flow of funds].

[Other Credit Enhancement]

[Regulation AB Item 1103(a)(3)(ix) compliant description of any other credit enhancement].

[Additional Series or Classes Backed by Receivables]

[Regulation AB Item 1103(a)(4) compliant description of any outstanding series or classes of securities that are backed by the receivables or otherwise have claims on the receivables.  Regulation AB compliant description of any circumstances in which additional series or classes of securities may be issued that are backed by the receivables, with specification if security holder approval is necessary for such issuances and if security holders will receive notice of such issuances].

[Revolving Periods]

[Regulation AB Item 1103(a)(5) compliant description of any revolving periods].

[Prefunding Periods]

[Regulation AB Item 1103(a)(5) compliant description of any prefunding periods].

Fees and Expenses

Prior to the distribution of any interest to the noteholders or the certificateholders, the servicer will be entitled to receive a servicing fee for each collection period in an amount equal to the product of one-twelfth of [    ]% per annum for so long as [               ] or an affiliate thereof is the servicer, and [    ]% per annum if [               ] or an affiliate thereof is no longer the servicer and the aggregate principal balance of the receivables as of the first day of the collection period.  See “Description of the Transfer and Servicing Agreement--Servicing Compensation and Payment of Expenses” in the Prospectus.

[Regulation AB Item 1103(a)(7) compliant description of any other fees and expenses].

Optional Termination

When the principal amount of the receivables is 10% or less than it was on the cut-off date, the servicer may buy the receivables.  If the servicer does not do so, the Indenture trustee will try to sell the receivables to another buyer.  In either case, you must receive the principal amount of your securities and all accrued but unpaid interest or the receivables will not be sold.

Final Scheduled Maturity Dates

The final scheduled maturity date of the securities is [__________].  The actual date on which the aggregate outstanding principal amount of the securities is paid may be earlier than the final scheduled maturity date based on a variety of factors.

Expected Final Distribution Dates

The expected final distribution date of each class of securities is [                   ], based on the assumption that the servicer has exercised its option to purchase all the receivables as described in “Optional Termination” above.  Due to losses and prepayments on the receivables, the final distribution dates on each class of securities may be substantially earlier or later than such date.

Tax Consequences

McKee Nelson LLP, special federal tax counsel to the trust fund, is of the opinion that, for federal income tax purposes the notes will constitute indebtedness and the certificates will constitute interests in a trust fund that will not be treated as an association taxable as a corporation or publicly traded partnership taxable as a corporation. The trust and holders of the certificates will agree by their purchase of certificates, if there is more than one holder of the certificates, to treat the trust as a partnership for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, with the assets of the partnership being the assets held by the trust, the holders of the certificates as partners of the partnership and the notes as debt of the partnership, and if there is one holder of certificates, to treat that holder as the owner of the assets of the trust and to treat the trust as a disregarded entity.

The tax code is complex, and we recommend that you and your tax advisors review the information under the caption “Federal Income Tax Consequences” in this prospectus supplement and under the caption “Material Federal Income Tax Consequences” in the prospectus.

ERISA Considerations

The notes may be purchased by ERISA and other retirement plans if one or more administrative exemptions apply. The certificates may not be purchased by ERISA or other retirement plans.  See “ERISA Considerations” in this prospectus supplement and the prospectus.

Ratings

It is a condition to the issuance of the securities that the securities receive at least the following ratings from [______________] and [_________________]:

Securities	[____]	[____]
Class [__] Notes	[__]	[__]
Class [__] Notes	[__]	[__]
Certificates	[__]	[__]
Class [__]	[__]	[__]

RISK FACTORS

The following information, which you should carefully consider, identifies certain significant sources of risk associated with an investment in the securities.

Certain features of the receivables pool may result in losses.	There are a number of features of the receivables in the pool that create additional risk of loss, including the following:
Certain obligors have little equity in their financed boats which may result in more severe losses.	For approximately [      ]% of the principal amount of the receivables, the original principal amount of the loan exceeded the cost of the related boat.  Although each such obligor was required to make a downpayment from the obligor’s own funds, those obligors have no equity in their boats.  While those borrowers had excellent credit histories at the time, the lack of any equity in the boat may make it more likely that those obligors will default if their personal financial conditions change.  In addition, if such an obligor defaults and the boat is repossessed, the trust fund is likely to suffer a loss.
The concentration of the receivables in specific geographic areas may increase the risk of loss.	Economic conditions in the states where obligors reside may affect the delinquency, loan loss and repossession experience of the trust fund with respect to the receivables.  As of the cut-off date, the billing addresses of the obligors with respect to approximately [      ]%, [      ]%, and [      ]% of the principal amount of the receivables were located in [      ],  [      ]  and [      ], respectively.  Economic conditions in any state or region may decline over time and from time to time.  Because of the concentration of the obligors in certain states, any adverse economic conditions in those states may have a greater effect on the performance of the securities than if the concentration did not exist.
Newly originated loans may be more likely to default which may cause losses.	Defaults on boat loans tend to occur at higher rates during the early years of the boat loans.  Substantially all of the boat loans will have been originated within [      ] months prior to the sale to the trust fund.  As a result, the trust fund may experience higher rates of default than if the boat loans had been outstanding for a longer period of time.
Balloon loans may have a higher rates of default which may cause losses.	A balloon loan has monthly payments that will not fully pay off the loan balance by the maturity date.  As a result the borrower usually will have to refinance the balloon loan in order to pay the amount due.  The borrower may not be able to refinance the balloon loan for any number of reasons, including the level of available interest rates, the age or condition of the boat, or the borrower’s payment or credit history.  The trust fund will not have any funds to refinance a balloon loan, and the Sponsor is not obligated to do so.
Certificates will absorb cash shortfalls and losses before the notes.	The certificateholders will not receive any distribution of interest until the full amount of interest on the notes has been paid on each distribution date.  The certificateholders will not receive any distributions of principal until the notes have been repaid in full.  Holders of the certificates must rely for repayment upon payments on the receivables, and, if and to the extent available, amounts on deposit in the reserve account.  If funds in the reserve account are exhausted, the trust fund will depend solely on current distributions on the receivables to make payments on the securities.  Delinquent payments on the receivables may result in a shortfall in the distributions on the certificates on any distribution date due to the priority of payments on the notes.  Although on each distribution date distributions of interest on the certificates ranks senior to payments of principal of the notes, after an event of default or an acceleration of the notes, the principal amount of the notes must be paid in full prior to the distribution of any amounts on the certificates.
Your yield to maturity may be reduced by prepayments.	The pre-tax yield to maturity is uncertain and will depend on a number of factors including the following:
The rate of return of principal is uncertain.	The amount of distributions of principal of the securities and the time when you receive those distributions depends on the amount and the times at which borrowers make principal payments on the receivables.  Those principal payments may be regularly scheduled payments or unscheduled payments resulting from prepayments or defaults of the receivables.
An early termination will shorten the life of your investment which may reduce your yield to maturity.	If the receivables are sold upon exercise of the servicer’s optional termination or the auction call, you will receive the principal amount of your securities plus accrued interest through the related interest period.  Because your securities will no longer be outstanding, you will not receive the additional interest payments that you would have received had the securities remained outstanding.  If you bought your securities at par or at a premium, your yield to maturity will be lower than it would have been if the optional termination or auction call had not been exercised.
[Additional Applicable Risk Factors]	[____________________]

FORMATION OF THE ISSUING ENTITY

The Issuing Entity

[      ] Boat Trust [    ]-[    ] is a business trust to be formed by the Depositor under the laws of the State of Delaware pursuant to a trust agreement between the Depositor and the Owner Trustee, dated as of [________] (the “Trust Agreement”) for the transactions described in the Prospectus.  The Trust Agreement constitutes the “governing instrument” under the laws of the State of Delaware.  After its formation, the Issuing Entity will not engage in any activity other than:

•

acquiring, holding and managing the Receivables and the other assets of the Issuing Entity and proceeds therefrom,

•

issuing the Certificates and the Notes,

•

making payments on the Certificates and the Notes and

•

engaging in other activities that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith.

The foregoing restrictions are contained in the Trust Agreement.  [These restrictions cannot be amended without the consent of holders of Certificates evidencing at least 51% of the voting rights.]  For a description of other provisions relating to amending the Trust Agreement, see “[[_______________]]” in the base prospectus.

The assets of the Issuing Entity will consist of the Receivables and certain related assets.

The Issuing Entity’s fiscal year end is [______].

The Issuing Entity will initially be capitalized with equity of $[      ], excluding amounts deposited in the Reserve Account, representing the initial principal balance of the Certificates.  The Notes and Certificates will be transferred by the Issuing Entity to the Depositor in exchange for the Receivables.  The Certificates and the Notes will be sold to the Underwriter for cash.  The Servicer will initially service the Receivables pursuant to a sale and servicing agreement, to be dated as of [      ] (the “Sale and Servicing Agreement”), among the Sponsor, the Depositor, the Issuing Entity and the Servicer, and will be compensated for acting as the Servicer.  See “Description of the Transfer and Servicing Agreements--Servicing Compensation” in this prospectus supplement and “--Servicing Compensation and Payment of Expenses” in the Prospectus. & nbsp;To facilitate servicing and to minimize administrative burden and expense, the Servicer will be appointed custodian for the Receivables by the Issuing Entity, but will not stamp the Receivables to reflect the sale and assignment of the Receivables to the Issuing Entity, nor amend the certificates of title of the Financed Boats.

If the protection provided to the investment of the Securityholders in the Issuing Entity by the Reserve Account is insufficient, the Issuing Entity will look to the Obligors on the Receivables, and the proceeds from the repossession and sale of Financed Boats which secure defaulted Receivables.  In such event, there may not be sufficient funds to make distributions with respect to the Securities.

The Issuing Entity’s principal offices are in [      ], in care of [      ], as Owner Trustee, at the address listed below under “--The Owner Trustee.”

Capitalization of the Issuing Entity

The following table illustrates the capitalization of the Issuing Entity as of the Cut-off Date, as if the issuance and sale of the Notes and the Certificates had taken place on such date:

Notes	$[      ]
Certificates	$[      ]
Total	$[      ]

The Owner Trustee

[      ], a [national banking association] is the Owner Trustee under the Trust Agreement. [      ] is a [      ] and its principal offices are located at [      ], [      ].  The Owner Trustee will perform limited administrative functions under the Trust Agreement, including making distributions from the Certificate Distribution Account. The Owner Trustee’s liability in connection with the issuance and sale of the Certificates and the Notes is limited solely to the express obligations of the Owner Trustee set forth in the Trust Agreement.

[Provide Reg AB Item 1109(b) compliant description of the extent of the Owner Trustee’s prior experience serving as a trustee for asset-backed securities transactions involving asset pools of retail boat receivables.]

[Provide Reg AB Item 1109(c) compliant description of the Owner Trustee’s duties and responsibilities regarding the asset-backed securities under the governing documents and under applicable law, and of any actions required by the Owner Trustee, including whether notices are required to investors, rating agencies or other third parties, upon an event of default, potential event of default (and how defined) or other breach of a transaction covenant and any required percentage of a class or classes of asset-backed securities that is needed to require the Owner Trustee to take action.]

[Provide Reg AB Item 1109(d) compliant description of any limitations on the Owner Trustee’s liability under the transaction agreements regarding the asset-backed securities transaction.]

[Provide Reg AB Item 1109(e) compliant description of any indemnification provisions that entitle the Owner Trustee to be indemnified from the cash flow that otherwise would be used to pay the asset-backed securities.]

[Provide Reg AB Item 1109(f) compliant description of any contractual provisions or understandings regarding the Owner Trustee’s removal, replacement or resignation, as well as how the expenses associated with changing from one owner trustee to another owner trustee will be paid.]

THE TRUST PROPERTY

The Notes will be collateralized by the Trust Property (other than the Certificate Distribution Account). Each Certificate represents a fractional undivided interest in the Trust. The “Trust Property” will include the Receivables, which were originated indirectly by Dealers and purchased indirectly by the Sponsor pursuant to agreements with Dealers (“Dealer Agreements”).  On the Closing Date, the Depositor will buy the Receivables from the Sponsor and the Depositor will sell the Receivables to the Trust.  The Servicer will, directly or through subservicers, service the Receivables.  The Trust Property also includes:

•

all monies received under the Receivables on and after the Cut-off Date and, with respect to Receivables which are Actuarial Receivables, monies received thereunder prior to the Cut-off Date that are due on or after the Cut-off Date;

•

such amounts as from time to time may be held in the Collection Account, the Reserve Account, the Payahead Account, the Note Distribution Account and the Certificate Distribution Account, established and maintained by the Servicer pursuant to the Sale and Servicing Agreement as described below;

•

security interests in the Financed Boats;

•

the rights of the Sponsor to receive proceeds from claims under certain insurance policies;

•

the rights of the Trust under the Sale and Servicing Agreement;

•

the rights of the Sponsor to refunds for the costs of extended service contracts and to refunds of unearned premiums with respect to credit life and credit accident and health insurance policies covering the Financed Boats or the retail purchasers of, or other persons owing payments on, the Financed Boats (the “Obligors”);

•

all right, title and interest of the Sponsor (other than with respect to any Dealer commission) with respect to the Receivables under the related Dealer Agreements;

•

rights with respect to any repossessed Financed Boats; and

•

all proceeds (within the meaning of the UCC) of the foregoing.

The Reserve Account will be maintained in the name of the Indenture Trustee for the benefit of the Noteholders and the Certificateholders.

THE RECEIVABLES POOL

Pool Composition

[The receivables pool consists of amounts owed by individuals under retail installment sale contracts to purchase or refinance new or used boats, recreational boats, including motor homes, campers, motorcycles, all-terrain-boats and snowmobiles, vans trucks, buses and trailers (the “Receivables”).]

The Receivables were selected from the Sponsor’s portfolio by several criteria, including, as of the Cut-off Date, the following:

•

each Receivable has a scheduled maturity of not later than the Final Scheduled Maturity Date;

•

each Receivable was originated in the United States of America;

•

each Receivable has an original term to maturity of not more than [      ] months and a remaining term to maturity of [      ] months or less as of the Cut-off Date;

•

approximately [      ]% of the Initial Pool Balance was secured by new Financed Boats, and approximately [      ]% of the Initial Pool Balance was secured by used Financed Boats;

•

each Receivable provides for level monthly payments which fully amortize the amount financed except, in the case of Simple Interest Receivables, for the last payment, which may be different from the level payment;

•

each Receivable is not more than [      ] days contractually past due as of the Cut-off Date and is not more than [      ] months paid ahead;

•

each Receivable has an outstanding principal balance between $[      ] and $[      ];

•

the Obligor with respect to each Receivable has a FICO score between [______] and [______];

•

and each Receivable has an APR of no less than [      ]%.

As of the Cut-off Date, no Obligor on any Receivable was noted in the related records of the Servicer as being the subject of any pending bankruptcy or insolvency proceeding.  The latest scheduled maturity of any Receivable is not later than [      ].  No selection procedures believed by the Depositor to be adverse to Certificateholders or the Noteholders were used in selecting the Receivables.

The Depositor considers an account past due if any portion of the payment due on a due date is not received by the succeeding due date for that account.

The composition, distribution by remaining term, distribution by APR, geographic distribution and distribution by remaining principal of the Receivables, in each case, as of the Cut-off Date are set forth in the tables below.  The percentages in the following tables may not add to 100% due to rounding.

Composition of the Receivables as of the Cut-off Date
	New Financed Boats	Used Financed Boats	Total
Aggregate Principal Balance	$[__________]	$[__________]	$[__________]
Number of Receivables	[__________]	[__________]	[__________]
Average Principal Balance	$[__________]	$[__________]	$[__________]
Average Original Balance	$[__________]	$[__________]	$[__________]
Weighted Average Contract Rate	[_______]%	[_______]%	[_______]%
Contract Rate (Range)	[___]% - [___]%	[___]% - [___]%	[___]% - [___]%
Weighted Average Original Term (months)	[_______]	[_______]	[_______]
Original Term (Range) (months)	[____] to [_____]	[____] to [_____]	[____] to [_____]
Weighted Average Remaining Term (months)	[_______]	[_______]	[_______]
Remaining Term (Range) (months)	[____] to [_____]	[____] to [_____]	[____] to [_____]
Weighted Average FICO score	[_______]	[_______]	[_______]
FICO score (Range)	[____] to [_____]	[____] to [_____]	[____] to [_____]

Distribution by Remaining Term of the Receivables as of the Cut-off Date
Remaining Term (Range)	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
Less than [_____] months	[____________]	$[__________]	[___________]%
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
Total		$	100.00%

Distribution by Annual Percentage Rate of the Receivables as of the Cut-off Date
Annual % Rate Range	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
[_____]% to below	[____________]	$	%
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[____]% and above	[____________]	[____________]	[____________]
Total		$	100.00%

Geographic Distribution of the Receivables as of the Cut-off Date
State1	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
[      ]	[____________]	$	%
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
Others2
Total		$	100.00%

____________________

1.

Based on billing addresses of the Obligors as of the Cut-off Date, which may differ from the state of origination of the Receivable.

2.

Includes [    ] other states and [    ] none of which have a concentration of Receivables in excess of [    ]% of the aggregate principal balance.

Distribution by Remaining Principal Balance of the Receivables as of the Cut-off  Date
Remaining Principal Balance (Range)	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
$ 2,500 to $ 4,999	[____________]	$	%
$ 5,000 to $ 7,499	[____________]	[____________]	[____________]
$ 7,500 to $ 9,999	[____________]	[____________]	[____________]
$10,000 to $12,499	[____________]	[____________]	[____________]
$12,500 to $14,999	[____________]	[____________]	[____________]
$15,000 to $17,499	[____________]	[____________]	[____________]
$17,500 to $19,999	[____________]	[____________]	[____________]
$20,000 to $22,499	[____________]	[____________]	[____________]
$22,500 to $24,999	[____________]	[____________]	[____________]
$25,000 to $27,499	[____________]	[____________]	[____________]
$27,500 to $29,999	[____________]	[____________]	[____________]
$30,000 to $32,499	[____________]	[____________]	[____________]
$32,500 to $34,999	[____________]	[____________]	[____________]
$35,000 to $37,499	[____________]	[____________]	[____________]
$37,500 to $39,999	[____________]	[____________]	[____________]
$40,000 to $41,499	[____________]	[____________]	[____________]
$42,500 to $44,999	[____________]	[____________]	[____________]
$45,000 to $47,499	[____________]	[____________]	[____________]
$47,500 to $49,999	[____________]	[____________]	[____________]
$50,000 to $52,499	[____________]	[____________]	[____________]
$52,500 to $54,999	[____________]	[____________]	[____________]
Total		$	100.00%

Distribution by FICO Score of the Receivables as of the Cut-off Date
Annual % Rate Range	Number of Receivables	Aggregate Principal Balance	Percentage of Original Pool  Balance
[______] to [______]	[____________]	$	%
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] and above	[____________]	[____________]	[____________]
Total		$	100.00%

As of the Cut-off Date, approximately [     ]% of the aggregate principal balance of the Receivables, constituting [     ]% of the number of Receivables, were between 1 payment and [    ] payments paid-ahead.

As of the Cut-off Date, approximately [   ]% of the aggregate principal balance of the Receivables, constituting [     ]% of the number of Receivables, are Actuarial Receivables.  ”Actuarial Receivables” are receivables that provide for amortization of the amount financed over a series of fixed, level-payment monthly installments.  Each monthly installment, including the monthly installment representing the final payment on the Receivable, consists of an amount of interest equal to 1/12 of the Annual Percentage Rate (“APR”) of the amount financed multiplied by the unpaid principal balance of the amount financed, and an amount of principal equal to the remainder of the monthly payment.

As of the Cut-off Date, approximately [   ]% of the aggregate principal balance of the Receivables, constituting [   ]% of the number of Receivables, are Simple Interest Receivables.  ”Simple Interest Receivables” are receivables that provide for the amortization of the amount financed under the receivable over a series of fixed level monthly payments. However, unlike the monthly payment under an Actuarial Receivable, each monthly payment includes an installment of interest which is calculated on the basis of the outstanding principal balance of the receivable multiplied by the stated APR and further multiplied by the period elapsed (as a fraction of a calendar year) since the preceding payment of interest was made. As payments are received under a Simple Interest Receivable, the amount received is applied first to interest accrued to the date of payment and the balance is applied to reduce the unpaid principal balance. Accordingly, if an Obligor pays a fixed monthly installment before its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be less than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly greater. Conversely, if an Obligor pays a fixed monthly installment after its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be greater than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly less. In either case, the Obligor pays a fixed monthly installment until the final scheduled payment date, at which time the amount of the final installment is increased or decreased as necessary to repay the then outstanding principal balance.

If an Actuarial Receivable is prepaid in full, with minor variations based upon state law, under the terms of the boat retail installment sale contract or loan agreement, as the case may be, a “refund” or “rebate” will be made to the borrower of the portion of the total amount of payments then due and payable under such contract or agreement allocable to “unearned” interest, calculated on the basis of a constant interest rate.  If a Simple Interest Receivable is prepaid, rather than receive a rebate, the borrower is required to pay interest only to the date of prepayment.  The amount of a rebate under an Actuarial Receivable generally will be less than the remaining scheduled payments of interest that would have been due under a Simple Interest Receivable for which all payments were made on schedule.

The Servicer may accede to an Obligor’s request to pay scheduled payments in advance, in which event the Obligor will not be required to make another regularly scheduled payment until the time a scheduled payment not paid in advance is due.  The amount of any payment (which are not amounts representing Payaheads) made in advance will be treated as a principal prepayment and will be distributed as part of the Principal Distribution Amount in the month following the Collection Period in which the prepayment was made.  See “Maturity and Prepayment Considerations” in the Prospectus.

Receivable Delinquencies and Losses

For information regarding delinquencies and losses on the Receivables, see the tables below.  A Receivable is considered to be delinquent when a payment due on any due date remains unpaid as of the close of business on the last business day immediately prior to the next monthly due date.  The determination as to whether a loan falls into this category is made as of the close of business on the last business day of each month.

30 -  59 Days (times):	Number of Receivables	% by Receivable Count	Principal Balance Outstanding as of the Cutoff Date	% of Aggregate Principal Balance Outstanding as of the Cutoff Date
0	[________]	[______]%	[_______._]	[__.__]
1	[________]	[______]%	[_______._]	[__.__]
2	[________]	[______]%	[_______._]	[__.__]
Total	[________]	100.00%	[_______._]	100.00

60 -  89 Days (times):	Number of Receivables	% by Receivable Count	Principal Balance Outstanding as of the Cutoff Date	% of Aggregate Principal Balance Outstanding as of the Cutoff Date
0	[________]	[______]	[_______._]	[__.__]
1	[________]	[______]	[_______._]	[__.__]
2	[________]	[______]	[_______._]	[__.__]
Total	[________]	100.00	[_______._]	100.00

[No Receivable has been delinquent more than 90 days since origination.]

STATIC POOL INFORMATION

Static pool information material to this offering may be found at [website address].

Information provided through the Internet address above will not be deemed to be a part of this prospectus or the registration statement for the securities offered hereby if it relates to any prior securities pool or vintage formed before January 1, 2006, or with respect to the mortgage pool (if applicable) any period before January 1, 2006.

THE ORIGINATORS

General

[____], [____] and  [____] are the originators of the receivables with respect to approximately [___]%, [___]% and [___]%, respectively, of the receivables by aggregate principal balance as of the Cut-off Date, along with various other originators, none of which originated more than 10% of the receivables by aggregate principal balance as of the Cut-off Date (each, an “Originator”).

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

THE SERVICER

[____________], a [describe form of organization of the servicer], (the “Servicer”) will initially service the Receivables pursuant to a sale and servicing agreement, to be dated as of [      ] (the “Sale and Servicing Agreement”), among the Sponsor, the Depositor, the Issuing Entity and the Servicer.  

The Servicer will perform the functions of a third-party servicer of boat loans as an agent for their beneficial owner.  [These servicer functions will include:

•

collecting and posting all payments;

•

responding to obligor inquiries regarding the boat loans;

•

investigating delinquencies;

•

reporting tax information to obligors;

•

paying boat disposition costs with respect to defaulted accounts;

•

monitoring the collateral;

•

accounting for collections;

•

furnishing monthly and annual statements to the Issuing Entity with respect to distributions; and

•

generating federal income tax information. ]

 [Regulation AB Item 1108 compliant description of the Servicer.]

Delinquency Experience (Dollars in Thousands)
	At December 31,
	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]
	Number of Loans	Dollars	Percent	Number of Loans	Dollars	Percent	Number of Loans	Dollars	Percent
Principal Amount Outstanding1
Delinquencies2
30-59 Days
60-89 Days
90-119 Days
over 120 days
Total Delinquencies as a  Percentage of the Total Amount Outstanding

________________________

1.

Principal Amount Outstanding is the aggregate remaining principal balance of all Receivables serviced, net of unearned interest.

2.

The period of delinquency is based on the number of days scheduled payments are contractually past due.  Includes repossessions on hand which have not been charged-off.  A receivable is 30 days contractually past due if a scheduled payment has not been received by the subsequent calendar month’s scheduled payment date.

[WEIGHTED AVERAGE LIFE OF THE SECURITIES]

[Prepayments on boat receivables can be measured relative to a prepayment standard or model.  The model used in this Prospectus, the Absolute Prepayment Model (“ABS”), represents an assumed rate of prepayment each month relative to the original number of receivables in a pool of receivables.   ABS further assumes that all the receivables are the same size and amortize at the same rate and that each receivable in each month of its life will either be paid as scheduled or be prepaid in full.   For example, in a pool of receivables originally containing 10,000 receivables, a 1% ABS rate means that 100 receivables prepay each month.   ABS does not purport to be an historical description of prepayment experience or a prediction of the anticipated rate of prepayment of any pool of receivables, including the Receivables.

As the rate of payment of principal of the Notes and in respect of the Certificate Balance will depend on the rate of payment (including prepayments) of the principal balance of the Receivables, final payment of  the Notes could occur significantly earlier than the Final Scheduled Maturity Date for the Notes.  The final distribution in respect of the Certificates also could occur prior to the Final Scheduled Distribution Date for the Certificates.  Reinvestment risk associated with early payment of the Notes and the Certificates will be borne exclusively by the Noteholders and the Certificateholders, respectively.

The table captioned “Percent of Initial Note Principal Balance or Initial Certificate Balance at Various ABS Percentages” (the “ABS Table”) has been prepared on the basis of the characteristics of the Receivables.   The ABS Table assumes that

•

the Receivables prepay in full at the specified constant percentage of ABS monthly, with no defaults, losses or repurchases,

•

each scheduled monthly payment on the Receivables is made on the last day of each month and each month has 30 days,

•

payments on the Notes and distributions on the Certificates are made on each Distribution Date (and each such date is assumed to be the [   ] day of each applicable month),

•

the balance in the Reserve Account on each Distribution Date is equal to the Specified Reserve Account Balance, and

•

the Servicer does not exercise its option to purchase the Receivables.   The first two pools have an assumed cut-off date of [   ] and the remaining pools have an assumed cut-off date of [   ].

The ABS Table sets forth the percent of the initial principal amount of the Notes and the percent of the initial Certificate Balance that would be outstanding after each of the Distribution Dates shown and the corresponding weighted average lives thereof at various constant ABS percentages.

The ABS Table also assumes that the Receivables have been aggregated into four hypothetical pools with all of the Receivables within each such pool having the following characteristics and that the level scheduled monthly payment for each of the four pools (which is based on its aggregate principal balance, APR, original term to maturity as of the Cut-off Date) will be such that each pool will fully amortize by the end of its remaining term to maturity.

Pool	Remaining Term to Maturity Range (in months)	Aggregate Principal Balance	Weighted Average Contract Rate	Weighted Average Original Term to Maturity (in Months)	Weighted Average Remaining Term to Maturity (in Months)
1		$	%
2		$	%
3		$	%
4		$	%

The actual characteristics and performance of the Receivables will differ from the assumptions used in constructing the ABS Table.   The assumptions used are hypothetical and have been provided only to give a general sense of how the principal cash flows might behave under varying prepayment scenarios.   For example, it is very unlikely that the Receivables will prepay at a constant level of ABS until maturity or that all of the Receivables will prepay at the same level of ABS.   Moreover, the diverse terms of Receivables within each of the four hypothetical pools could produce slower or faster principal distributions than indicated in the ABS Table at the various constant percentages of ABS specified, even if the original and remaining terms to maturity of the Receivables are as assumed.  Any difference between such assumptions and the actual characteristics and performance of the Receivables, or actual prepay ment experience, will affect the percentages of initial balances outstanding over time and the weighted average lives of the Notes and the Certificates.]

Percent of Initial Note Principal Balance at Various ABS Percentages
	Notes Assumed ABS Percentage1
Distribution Dates	[   ]%	[   ]%	[   ]%	[   ]%
Closing Date	100	100	100	100
[                        ]
[                        ]
[                        ]
Weighted Average Life (years)2

_______________________

1.

An asterisk “*” means a percent of initial Note principal balance of more than zero and less than 0.5%.

2.

The weighted average life of a Note is determined by (i) multiplying the amount of each principal payment of such Note by the number of years from the date of the issuance of such Note to the Distribution Date on which such principal payment is made, (ii) adding the results and (iii) dividing the sum by the initial principal balance of such Note.

The ABS Tables have been prepared based on the assumptions described above (including the assumptions regarding the characteristics and performance of the Receivables which will differ from the actual characteristics and performance thereof) and should be read in conjunction therewith.

Percent of Initial Certificate Balance at Various ABS Percentages
	Certificates Assumed ABS Percentage
Distribution Dates	[   ]%	[   ]%	[   ]%	[   ]%
Closing Date	100	100	100	100
[                        ]
[                        ]
[                        ]
[                        ]

The ABS Tables have been prepared based on the assumptions described above (including the assumptions regarding the characteristics and performance of the Receivables which will differ from the actual characteristics and performance thereof) and should be read in conjunction therewith.

USE OF PROCEEDS

The net proceeds from the sale of the Securities will be applied by the Depositor first, to deposit approximately $[    ] into the Reserve Account and second, the balance to purchase the Receivables and the other Trust Property from the Sponsor.

DESCRIPTION OF THE NOTES

The Notes will be issued pursuant to the terms of the Indenture, substantially in the form filed as an exhibit to the Registration Statement.  The following information summarizes all material provisions of the Notes and the Indenture.  The following summary supplements the description of the general terms and provisions of the Notes of any given Series and the related Indenture set forth in the Prospectus, to which description reference is hereby made.

The Notes

Payments of Interest.  The Notes will constitute [Fixed Rate] Securities, as such term is defined under “Certain Information Regarding the Securities--Fixed Rate Securities” in the Prospectus.  Interest on the outstanding principal amount of the Notes will accrue at the Interest Rate and will be payable to the Noteholders monthly on each Distribution Date, commencing [    ].  Interest will accrue from and including the Closing Date (in the case of the first Distribution Date), or from and including the most recent Distribution Date on which interest has been paid to but excluding the following Distribution Date (each representing an “Interest Period”).  Interest on the Notes will be calculated on the basis of a 360 day year consisting of twelve 30 day months.  Interest payments on the Notes will generally be derived from the Total Distribution Amount remaining after the payment o f the Servicing Fee for the related Collection Period and all accrued and unpaid Servicing Fees for prior Collection Periods (the “Total Servicing Fee”).  See “Description of the Transfer and Servicing Agreements--Distributions” and “--Credit Enhancement--Reserve Account” in this prospectus supplement.  Interest payments to the Noteholders will have the same priority.  Under certain circumstances, the amount available for interest payments could be less than the amount of interest payable on the Notes on any Distribution Date.  Interest accrued as of any Distribution Date but not paid on such Distribution Date will be due on the next Distribution Date, together with interest on such amount at the Interest Rate.

Payments of Principal.   Principal payments will be made to the Noteholders on each Distribution Date in an amount equal to the Noteholders’ Percentage of the Principal Distribution Amount in respect of such Collection Period, subject to certain limitations.  Principal payments on the Notes will be generally derived from the Total Distribution Amount remaining after the payment of the Total Servicing Fee, the Noteholders’ Interest Distributable Amount and the Certificateholders’ Interest Distributable Amount; provided, however, that following the occurrence and during the continuation of certain Events of Default or an acceleration of the Notes, the Noteholders will be entitled to be paid in full before the distributions may be made on the Certificates.  See “Description of the Transfer and Servicing Agreements--Distributions” and “--Credit Enhancement--Reserve Account” in this prospe ctus supplement.

The principal balance of the Notes, to the extent not previously paid, will be due on the Note Final Scheduled Distribution Date.  The actual date on which the aggregate outstanding principal amount of the Notes is paid may be earlier than the Note Final Scheduled Distribution Date based on a variety of factors.

Optional Redemption.   The Notes will be redeemed in whole, but not in part, on any Distribution Date on which the Servicer exercises its option to purchase the Receivables.   The Servicer may purchase the Receivables when the Pool Balance has declined to 5% or less of the Initial Pool Balance.  The redemption price will be equal to the unpaid principal amount of the Notes and the Certificates plus accrued and unpaid interest thereon.  See “Description of the Transfer and Servicing Agreements--Termination” in the Prospectus.

Auction Sale.  In the event of an Auction Sale, the Notes will be redeemed in an amount equal to the unpaid principal amount of the then outstanding Notes plus accrued and unpaid interest thereon at the Interest Rate.  See “Description of the Transfer and Servicing Agreements--Termination” in the Prospectus.

The Indenture Trustee.

 [          ], a [national banking association], will be the Indenture Trustee under the Indenture.  The Depositor maintains normal commercial banking relations with the Indenture Trustee.

[Provide Reg AB Item 1109(b) compliant description of the extent of the Indenture Trustee’s prior experience serving as a trustee for asset-backed securities transactions involving asset pools of retail boat receivables.]

[Provide Reg AB Item 1109(c) compliant description of the Indenture Trustee’s duties and responsibilities regarding the asset-backed securities under the governing documents and under applicable law, and of any actions required by the Indenture Trustee, including whether notices are required to investors, rating agencies or other third parties, upon an event of default, potential event of default (and how defined) or other breach of a transaction covenant and any required percentage of a class or classes of asset-backed securities that is needed to require the Indenture Trustee to take action.]

[Provide Reg AB Item 1109(d) compliant description of any limitations on the Indenture Trustee’s liability under the transaction agreements regarding the asset-backed securities transaction.]

[Provide Reg AB Item 1109(e) compliant description of any indemnification provisions that entitle the Indenture Trustee to be indemnified from the cash flow that otherwise would be used to pay the asset-backed securities.]

[Provide Reg AB Item 1109(f) compliant description of any contractual provisions or understandings regarding the Indenture Trustee’s removal, replacement or resignation, as well as how the expenses associated with changing from one Indenture trustee to another Indenture trustee will be paid.]

DESCRIPTION OF THE CERTIFICATES

The Certificates will be issued pursuant to the terms of the Trust Agreement, substantially in the form filed as an exhibit to the Registration Statement.  The following information summarizes all material provisions of the Certificates and the Trust Agreement.  The following summary supplements the description of the general terms and provisions of the Certificates of any given Series and the related Trust Agreement set forth in the Prospectus, to which description reference is hereby made.

The Certificates

Distributions of Interest.  Certificateholders will be entitled to distributions of interest in an amount equal to accrued interest on the Certificate Balance at the Pass-Through Rate.  Such amounts will be distributable monthly on each Distribution Date commencing [          ].  [The Certificates will constitute Fixed Rate Securities, as such term is defined under “Certain Information Regarding the Securities--Fixed Rate Securities”] in the Prospectus.  That interest entitlement will accrue from and including the Closing Date (in the case of the first such Distribution Date) or from the most recent Distribution Date on which interest distributions have been made to but excluding such Distribution Date and will be calculated on the basis of a 360-day year of twelve 30-day months. Interest distributions with respect to the Certificates will be funded from the portio n of the Total Distribution Amount remaining after the distribution of the Total Servicing Fee and the Noteholders’ Interest Distributable Amount.  On any Distribution Date, the Certificateholders’ Interest Distributable Amount will equal 30 days’ interest at the Pass-Through Rate on the Certificate Balance (or, in the case of the first Distribution Date, interest accrued from and including the Closing Date to but excluding the first Distribution Date) plus any amounts due but not paid on previous Distribution Dates with interest thereon at the Pass-Through Rate.  See “Description of the Transfer and Servicing Agreements--Distributions” and “--Credit Enhancement--Reserve Account” herein.

Distributions of Principal Payments.   Certificateholders will be entitled to distributions of principal on each Distribution Date commencing on the Distribution Date on which the Notes have been paid in full, in an amount equal to the Certificateholders’ Percentage of the Principal Distribution Amount in respect of the related Collection Period, subject to certain limitations.  Distributions with respect to principal payments will generally be funded from the portion of the Total Distribution Amount remaining after the distribution of the Total Servicing Fee, the Noteholders’ Distributable Amount, if any, and the Certificateholders’ Interest Distributable Amount.  See “Description of the Transfer and Servicing Agreement--Distributions” and “--Credit Enhancement--Reserve Account” in this prospectus supplement.

On and after any Distribution Date on which the Notes have been paid in full, funds in the Reserve Account will be applied to reduce the Certificate Balance to zero if, after giving effect to all distributions to the Servicer, the Noteholders and the Certificateholders on such Distribution Date, the amount on deposit in the Reserve Account is equal to or greater than the Certificate Balance.

Subordination of Certificates.   The rights of Certificateholders to receive distributions of interest are subordinated to the rights of Noteholders to receive payments of interest.  In addition, the Certificateholders have no right to receive distributions of principal until the principal amount of the Notes has been paid in full.   Consequently, funds on deposit in the Collection Account (including amounts deposited therein from the Reserve Account) will be applied to the payment of interest on the Notes before distributions of interest on the Certificates and will be applied to the payment of principal on the Notes before distributions of principal on the Certificates.   In addition, following the occurrence of certain Events of Default or an acceleration of the Notes, the Noteholders will be entitled to be paid in full before the Certificateholders are entitled to any distributions.

Optional Prepayment.  If the Servicer exercises its option to purchase the Receivables when the Pool Balance declines to 5% or less of the Initial Pool Balance, Certificateholders will receive an amount in respect of the Certificates equal to the Certificate Balance together with accrued and unpaid interest thereon, which distribution will effect early retirement of the Certificates.   See “Description of the Transfer and Servicing Agreements--Termination” in the Prospectus.

Auction Sale.  In the event of an Auction Sale, the Certificates will be prepaid at a price equal to the Certificate Balance plus accrued and unpaid interest thereon at the Pass-Through Rate.  See “Description of the Transfer and Servicing Agreements--Termination” in the Prospectus.

DESCRIPTION OF THE TRANSFER AND SERVICING AGREEMENTS

The following information summarizes all material provisions of the Sale and Servicing Agreement, substantially in the form filed as an exhibit to the Registration Statement, pursuant to which the Trust is purchasing and the Servicer is undertaking to service the Receivables and the Trust Agreement pursuant to which the Trust will be created and the Certificates will be issued (collectively the “Transfer and Servicing Agreements”).  The following summary supplements the description of the general terms and provisions of the Transfer and Servicing Agreements set forth in the Prospectus, to which description reference is hereby made.

Sale and Assignment of Receivables

Certain information regarding the conveyance of the Receivables by the Sponsor to the Depositor and by the Depositor to the Trust on the Closing Date pursuant to the Sale and Servicing Agreement is set forth in the Prospectus under “Description of the Transfer and Servicing Agreements--Sale and Assignment of Receivables.”

Accounts

[The assets of the Trust will not include a Pre-Funding Account.]  All other Accounts referred to under “Description of the Transfer and Servicing Agreements--Accounts” in the Prospectus, as well as a Reserve Account, will be established by the Servicer and maintained  with the Indenture Trustee in the name of the Indenture Trustee on behalf of the Noteholders and the Certificateholders.

Distributions

Deposits to the Collection Account.  On or before the earlier of the [eighth] business day of the month in which a Distribution Date occurs and the [fourth] business day preceding such Distribution Date (the “Determination Date”), the Servicer will calculate the Total Distribution Amount, the Interest Distribution Amount, the Available Principal, the Principal Distribution Amount, the Total Servicing Fee, the Noteholders’ Interest Distributable Amount, the Noteholders’ Principal Distributable Amount, the Certificateholders’ Interest Distributable Amount, the Certificateholders’ Principal Distributable Amount, the Advances, if any, to be made by the Servicer of interest and principal due on the Actuarial Receivables, the amount, if any, to be withdrawn from the Payahead Account and deposited in the Collection Account, the amount, if any, to be withdrawn from the Reserve Account and deposited in the Collec tion Account and the amount, if any, to be withdrawn from the Reserve Account and paid to the Depositor, in each case, with respect to such Distribution Date.

On or before each Distribution Date, the Servicer will cause the Indenture Trustee to withdraw from the Payahead Account and

•

deposit into the Collection Account in immediately available funds, the portion of Payaheads constituting scheduled payments on Actuarial Receivables or that are to be applied to prepay Actuarial Receivable in full and

•

distribute to the Depositor, in immediately available funds, all investment earnings on funds in the Payahead Account with respect to the preceding Collection Period.  On or before each Distribution Date the Servicer will deposit any advances for such Distribution Date into the Collection Account.

On or before the business day preceding each Distribution Date, the Servicer will cause the Interest Distribution Amount and the Available Principal for such Distribution Date to be deposited into the Collection Account.  On or before each Distribution Date, the Servicer shall cause the Indenture Trustee to withdraw from the Reserve Account and deposit in the Collection Account an amount (the “Reserve Account Transfer Amount”) equal to the lesser of

•

the amount of cash or other immediately available funds in the Reserve Account on such Distribution Date (before giving effect to any withdrawals therefrom relating to such Distribution Date) or

•

the amount, if any, by which

•

the sum of the Total Servicing Fee, the Noteholders’ Interest Distributable Amount, the Certificateholders’ Interest Distributable Amount, the Noteholders’ Principal Distributable Amount and the Certificateholders’ Principal Distributable Amount for such Distribution Date exceeds

•

the sum of the Interest Distribution Amount and the Available Principal for such Distribution Date.

The “Interest Distribution Amount” for a Distribution Date will be the sum of the following amounts with respect to any Distribution Date, computed, with respect to Simple Interest Receivables, in accordance with the simple interest method, and with respect to Actuarial Receivables, in accordance with the actuarial method:

•

that portion of all collections on the Receivables allocable to interest in respect of the preceding Collection Period (including, with respect to Actuarial Receivables, amounts withdrawn from the Payahead Account and allocable to interest and excluding amounts deposited into the Payahead Account and allocable to interest, in each case, in respect of the preceding Collection Period);

•

all proceeds (other than any proceeds from any Dealer commission) (“Liquidation Proceeds”) of the liquidation of Liquidated Receivables, net of expenses incurred by the Servicer in connection with such liquidation and any amounts required by law to be remitted to the Obligor on such Liquidated Receivables, to the extent attributable to interest due thereon, which became Liquidated Receivables during such Collection Period in accordance with the Servicer’s customary servicing procedures;

•

all advances made by the Servicer of interest due on the Actuarial Receivables in respect of the preceding Collection Period;

•

the Purchase Amount of each Receivable that was repurchased by the Sponsor or purchased by the Servicer during the preceding Collection Period to the extent attributable to accrued interest thereon;

•

all monies collected, from whatever source (other than any proceeds from any Dealer commission), in respect to Liquidated Receivables during any Collection Period following the Collection Period in which such Receivable was written off, net of the sum of any amounts expended by the Servicer for the account of the Obligor and any amounts required by law to be remitted to the Obligor (“Recoveries”); and

•

investment earnings for such Distribution Date;

In calculating the Interest Distribution Amount, the following shall be excluded:  all payments and proceeds (including Liquidation Proceeds) of any Receivables

•

repurchased by the Sponsor or purchased by the Servicer, the Purchase Amount of which has been included in the Interest Distribution Amount on a prior Distribution Date and

•

received on Actuarial Receivables and distributed to the Servicer, with respect to such Distribution Date, as reimbursement for any unreimbursed advances in accordance with the Sale and Servicing Agreement.

The “Available Principal” for a Distribution Date will be the sum of the following amounts with respect to any Distribution Date, computed, with respect to Simple Interest Receivables, in accordance with the simple interest method, and, with respect to Actuarial Receivables, in accordance with the actuarial method:

•

that portion of all collections on the Receivables allocable to principal in respect of the preceding Collection Period (including, with respect to Actuarial Receivables, amounts withdrawn from the Payahead Account and allocable to principal and excluding amounts deposited into the Payahead Account and allocable to principal, in each case, in respect of the preceding Collection Period);

•

Liquidation Proceeds attributable to the principal amount of Receivables which became Liquidated Receivables during the preceding Collection Period in accordance with the Servicer’s customary servicing procedures with respect to such Liquidated Receivables;

•

all advances made by the Servicer of principal due on the Actuarial Receivables in respect of the preceding Collection Period;

•

to the extent attributable to principal, the Purchase Amount of each Receivable repurchased by the Sponsor or purchased by the Servicer during the preceding Collection Period; and

•

partial prepayments on Receivables in respect of the preceding Collection Period relating to refunds of extended service contracts, or of physical damage, credit life, credit accident or health insurance premium, disability insurance policy premiums, but only if such costs or premiums were financed by the respective Obligor and only to the extent not included in the first bullet point above.

In calculating the Available Principal, the following shall be excluded:  all payments and proceeds (including Liquidation Proceeds) of any Receivables

•

repurchased by the Sponsor or purchased by the Servicer the Purchase Amount of which has been included in the Available Principal on a prior Distribution Date, and

•

received on Actuarial Receivables and distributed to the Servicer, with respect to such Distribution Date, as reimbursement for any unreimbursed advances in accordance with the Sale and Servicing Agreement.

The “Principal Distribution Amount” for a Distribution Date will be the sum of the following amounts with respect to the preceding Collection Period:

(1)

(a) with respect to Simple Interest Receivables, that portion of all collections on the Receivable allocable to principal in respect of the preceding Collection Period and (b) with respect to Actuarial Receivables the sum of

(2)

the amount of all scheduled payments allocable to principal due during the preceding Collection Period and

(3)

the portion of all prepayments in full allocable to principal received during the preceding Collection Period,

in the case of both (a) and (b) without regard to any extensions or modifications thereof effected after the Cut-off Date, other than with respect to any extensions or modifications in connection with Cram Down Losses during such Collection Period;

(1)

the principal balance of each Receivable that was repurchased by the Sponsor or purchased by the Servicer in each case during the preceding Collection Period (except to the extent included in (1) above);

(2)

the principal balance of each Liquidated Receivable which became such during the preceding Collection Period (except to the extent included in (1) above);

(3)

partial prepayments on Receivables in respect of the preceding Collection Period relating to refunds of extended service contracts, or of physical damage, credit life, credit accident or health insurance premium, disability insurance policy premiums, but only if such costs or premiums were financed by the respective Obligor and only to the extent not included in clause (1) above; and

(4)

the aggregate amount of Cram Down Losses during such Collection Period.

Monthly Withdrawals from Collection Account.  On each Distribution Date, the Servicer shall instruct the Indenture Trustee to withdraw from the Collection Account and deposit in the Payahead Account in immediately available funds, the aggregate Payaheads collected during the preceding Collection Period.  On each Distribution Date, the Servicer shall instruct the Indenture Trustee to make the following withdrawals, based upon the calculations set forth in “Deposits to the Collection Account” above, deposits and distributions, in the amounts and in the order of priority specified below, to the extent of the sum of the Interest Distribution Amount and the Available Principal in respect of such Distribution Date and the Reserve Account Transfer Amount in respect of such Distribution Date (the “Total Distribution Amount”):

(1)

from the Collection Account to the Servicer, from the Total Distribution Amount, the Total Servicing Fee;

(2)

from the Collection Account to the Note Distribution Account, from the Total Distribution Amount remaining after the application of clause (1), the Noteholders’ Interest Distributable Amount;

(3)

from the Collection Account to the Certificate Distribution Account, from the Total Distribution Amount remaining after the application of clauses (1) and (2), the Certificateholders’ Interest Distributable Amount;

(4)

from the Collection Account to the Note Distribution Account, from the Total Distribution Amount remaining after the application of clauses (1) through (3), the Noteholders’ Principal Distributable Amount;

(5)

from the Collection Account to the Certificate Distribution Account, from the Total Distribution Amount remaining after the application of clauses (1) through (4), the Certificateholders’ Principal Distributable Amount; and

(6)

from the Collection Account to the Reserve Account, any amounts remaining after the application of clauses (1) through (5).

Notwithstanding the foregoing, following the occurrence and during the continuation of certain Events of Default or an acceleration of the Notes, the Total Distribution Amount remaining after the application of clauses (1) and (2) above will be deposited in the Note Distribution Account to the extent necessary to reduce the principal balance of the Notes to zero.

On each Distribution Date, all amounts on deposit in the Note Distribution Account will be paid in the following order of priority:

(1)

first, to the Noteholders, accrued and unpaid interest on the outstanding principal balance of the Notes at the Interest Rate; and

(2)

second, to the Noteholders in reduction of principal until the principal balance of the Notes has been reduced to zero;

On each Distribution Date, all amounts on deposit in the Certificate Distribution Account will be distributed to the Certificateholders in the following order of priority:

(1)

first, to the Certificateholders, accrued and unpaid interest on the Certificate Balance at the Pass-Through Rate; and

(2)

second, to the Certificateholders in reduction of principal until the principal balance of the Certificates has been reduced to zero.

Fees and Expenses of the Trust Fund

In consideration of their duties on behalf of the Trust Fund, the Servicer, the Owner Trustee and the Indenture Trustee will receive from the assets of the Trust Fund certain fees as set forth in the following table:

Fee Payable to:	Frequency of Payment:	Amount of Fee:	How and When Fee Is Paid:
Servicer	[monthly]	[(a) A monthly fee paid to the Servicer out of interest collections received from the Receivables in an amount equal to the product of one-twelfth of [    ]% per annum for so long as [               ] or an affiliate thereof is the Servicer, and [    ]% per annum if [               ] or an affiliate thereof is no longer the Servicer (the “Servicing Fee Rate”) and the Pool Balance as of the first day of the Collection Period.] [(b) any late fees, prepayment charges and other administrative fees or similar charges allowed by applicable law with respect to the Receivables, and will be entitled to reimbursement from the Issuing Entity for various expenses.]	[Deducted by the Servicer from interest collections in respect of each Receivable serviced by the Servicer, before payment of any amounts to securityholders.]
Owner Trustee	[monthly]	[A monthly fee paid to the Owner Trustee by the Servicer out of the Servicer’s fee.]	[Paid by the Servicer before payment of any amounts to securityholders.]
Indenture Trustee	[monthly]	[A monthly fee paid to the Indenture Trustee by the Servicer out of the Servicer’s fee.]	[Paid by the Servicer before payment of any amounts to securityholders.]
[Other Applicable Party]	[_____]	[_____]	[_____]

The Servicing Fee, together with any portion of the Servicing Fee that remains unpaid from prior Distribution Dates (the “Total Servicing Fee”), will be paid from the Total Distribution Amount.  The Total Servicing Fee will be paid prior to the distribution of any portion of the Interest Distribution Amount to the Noteholders or the Certificateholders.  See “Description of the Transfer and Servicing Agreement--Servicing Compensation and Payment of Expenses” in the Prospectus.

[[None of the fees set forth in table above may be changed without amendment of the Pooling Agreement as described under “The Pooling and Servicing Agreement—Amendment”.]]

[[Expenses of the Servicer, the Owner Trustee and the Indenture Trust will be reimbursed before payments are made on the securities.]]

Example of Distributions

The following sets forth an example of collection of payments from Obligors on the Receivables, transfer of amounts among the Trust Accounts, and distributions on the securities for the Distribution Date in [_______]:

[On or before the earlier of the [eighth] business day of the month in which a Distribution Date occurs and the [fourth] business day preceding such Distribution Date]	Determination Date	[The Servicer will calculate the Total Distribution Amount, the Interest Distribution Amount, the Available Principal, the Principal Distribution Amount, the Total Servicing Fee, the Noteholders’ Interest Distributable Amount, the Noteholders’ Principal Distributable Amount, the Certificateholders’ Interest Distributable Amount, the Certificateholders’ Principal Distributable Amount, the Advances, if any, to be made by the Servicer of interest and principal due on the Actuarial Receivables, the amount, if any, to be withdrawn from the Payahead Account and deposited in the Collection Account, the amount, if any, to be withdrawn from the Reserve Account and deposited in the Collection Account and the amount, if any, to be withdrawn from the Reserve Account and paid to the Depositor, in each case, with respect to such Distribution Date.]
[On or before each Distribution Date]	[Servicer Remittance Date]	[The Servicer will cause the Indenture Trustee to withdraw from the Payahead Account and deposit into the Collection Account in immediately available funds, the portion of Payaheads constituting scheduled payments on Actuarial Receivables or that are to be applied to prepay Actuarial Receivable in full and distribute to the Depositor, in immediately available funds, all investment earnings on funds in the Payahead Account with respect to the preceding Collection Period.] [The Servicer will deposit any advances for such Distribution Date into the Collection Account.] [The Servicer shall cause the Indenture Trustee to withdraw from the Reserve Account and deposit in the Collection Account the Reserve Account Transfer Amount.]
[On or before the business day preceding each Distribution Date]	[Servicer Remittance Date]	the Servicer will cause the Interest Distribution Amount and the Available Principal for such Distribution Date to be deposited into the Collection Account.
Last day of the month prior to the related Distribution Date	Record Date:	[Distributions will be made to securityholders of record for all applicable classes as of the Record Date].
The [__]th day of each month (or if the [__]h day is not a business day, the next business day),	Distribution Date:	[The Servicer will cause the Indenture Trustee to withdraw the Total Distribution Amount for deposit into the Note Distribution Account and Certificate Distribution Account, as applicable, and the Indenture Trustee will make distributions to Noteholders and Certificateholders from amounts on deposit in the Note Distribution Account and Certificate Distribution Account, respectively.]

Succeeding months follow the same pattern.

Related Definitions

For purposes hereof, the following terms have the following meanings:

“Collection Period” means, with respect to a Distribution Date, (x) in the case of the initial Distribution Date, the period from and including the Cut-off Date through and including [    ] and (y) thereafter, the calendar month preceding the related Distribution Date.

“Cram Down Loss” means, with respect to a Receivable if a court of appropriate jurisdiction in a bankruptcy or 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 the principal balance of such Receivable immediately prior to such order over the principal balance of such Receivable as so reduced and/or

•

if such court shall have issued an order reducing the effective rate of interest on such Receivable, the net present value (using as the discount rate the higher of the APR on such Receivable or the rate of interest, if any, specified by the court in such order) of the scheduled payments as so modified or restructured.

A “Cram Down Loss” shall be deemed to have occurred on the date of issuance of such order.

The “Pool Balance” at any time will represent the aggregate principal balance of the Receivables at the end of the preceding Collection Period, after giving effect to all payments (other than Payaheads) received from Obligors, Purchase Amounts and advances to be remitted by the Depositor, the Servicer and the Sponsor, as the case may be, all for such Collection Period, all losses realized on Receivables that became Liquidated Receivables during such Collection Period and all Cram Down Losses for such Collection Period.

“Realized Losses” means the excess of the principal balance of a Liquidated Receivable over Liquidation Proceeds to the extent allocable to principal.

“Liquidated Receivables” means, Receivables (1) which have been liquidated by the Servicer through the sale of the related Financed Boat, (2) as to which all or a portion representing 10% or more of a scheduled payment due is [150] or more days delinquent or (3) with respect to which proceeds have been received which, in the Servicer’s judgment, constitute the final amounts recoverable in respect of such Receivable.

“Noteholders’ Distributable Amount” means, with respect to any Distribution Date, the sum of the Noteholders’ Principal Distributable Amount and the Noteholders’ Interest Distributable Amount.

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

“Noteholders’ Monthly Interest Distributable Amount” means, with respect to any Distribution Date, the product of (x) one-twelfth of the Interest Rate (or, in the case of the first Distribution Date, the Interest Rate multiplied by a fraction, the numerator of which is the number of days elapsed from and including the Closing Date to but excluding such Distribution Date and the denominator of which is 360) and (y) the outstanding principal balance of the Notes on the immediately preceding Distribution Date, after giving effect to all distributions of principal to the Noteholders on such Distribution Date (or, in the case of the first Distribution Date, on the Closing Date).

“Noteholders’ Interest Carryover Shortfall” means, with respect to any Distribution Date, the excess of the Noteholders’ Monthly Interest Distributable Amount for the preceding Distribution Date and any outstanding Noteholders’ Interest Carryover Shortfall on such preceding Distribution Date over the amount in respect of interest that is actually deposited in the Note Distribution Account on such preceding Distribution Date, plus interest on the amount of interest due but not paid to Noteholders on the preceding Distribution Date, to the extent permitted by law, at the Interest Rate borne by the Notes from such preceding Distribution Date through the current Distribution Date.

“Noteholders’ Principal Distributable Amount” means, with respect to any Distribution Date, the sum of the Noteholders’ Monthly Principal Distributable Amount for such Distribution Date and the Noteholders’ Principal Carryover Shortfall as of the close of the preceding Distribution Date; provided, however, that the Noteholders’ Principal Distributable Amount shall not exceed the outstanding principal balance of the Notes.  In addition, on the Note Final Scheduled Distribution Date, the principal required to be deposited in the Note Distribution Account will include the amount necessary (after giving effect to the other amounts to be deposited in the Note Distribution Account on such Distribution Date and allocable to principal) to reduce the outstanding principal balance of the Notes to zero.

“Noteholders” Monthly Principal Distributable Amount” means, with respect to any Distribution Date, the Noteholders’ Percentage of the Principal Distribution Amount.

“Noteholders’ Percentage” means (a) for each Distribution Date until the principal balance of the Notes is reduced to zero, 100%, and (b) zero for each Distribution Date thereafter.

“Noteholders’ Principal Carryover Shortfall” means, as of the close of any Distribution Date, the excess of the Noteholders’ Monthly Principal Distributable Amount and any outstanding Noteholders’ Principal Carryover Shortfall from the preceding Distribution Date over the amount in respect of principal that is actually deposited in the Note Distribution Account.

“Certificateholders’ Distributable Amount” means, with respect to any Distribution Date, the sum of the Certificateholders’ Principal Distributable Amount and the Certificateholders’ Interest Distributable Amount.

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

“Certificateholders’ Monthly Interest Distributable Amount” means, with respect to any Distribution Date, the product of (x) one-twelfth of the Pass-Through Rate (or, in the case of the first Distribution Date, the Pass-Through Rate multiplied by a fraction, the numerator of which is the number of days elapsed from and including the Closing Date to but excluding such Distribution Date) and the denominator of which is 360) and (y) the Certificate Balance on the immediately preceding Distribution Date, after giving effect to all payments of principal to the Certificateholders on or prior to such Distribution Date (or, in the case of the first Distribution Date, on the Closing Date).

“Certificateholders’ Interest Carryover Shortfall” means, with respect to any Distribution Date, the excess of the Certificateholders’ Monthly Interest Distributable Amount for the preceding Distribution Date and any outstanding Certificateholders’ Interest Carryover Shortfall on such preceding Distribution Date, over the amount in respect of interest at the Pass-Through Rate that is actually deposited in the Certificate Distribution Account on such preceding Distribution Date, plus interest on such excess, to the extent permitted by law, at the Pass-Through Rate from and including such preceding Distribution Date to but excluding the current Distribution Date.

“Certificateholders’ Principal Distributable Amount” means, with respect to any Distribution Date, the sum of the Certificateholders’ Monthly Principal Distributable Amount for such Distribution Date and the Certificateholders’ Principal Carryover Shortfall as of the close of the preceding Distribution Date; provided, however, that the Certificateholders’ Principal Distributable Amount shall not exceed the Certificate Balance.  In addition, on the Certificate Final Scheduled Distribution Date, the principal required to be distributed to Certificateholders will include the lesser of:

•

any payments of principal due and remaining unpaid on each Receivable in the Trust as of the Final Scheduled Maturity Date or

•

the portion of the amount that is necessary (after giving effect to the other amounts to be deposited in the Certificate Distribution Account on such Distribution Date and allocable to principal) to reduce the Certificate Balance to zero, in either case after giving effect to any required distribution of the Noteholders’ Principal Distributable Amount to the Note Distribution Account.  

In addition, on any Distribution Date on which, after giving effect to all distributions to the Servicer, the Noteholders and the Certificateholders on such Distribution Date, the outstanding principal balance of the Notes is zero and the amount on deposit in the Reserve Account is equal to or greater than the Certificate Balance, the Certificateholders’ Principal Distributable Amount shall include an amount equal to such Certificate Balance.

“Certificateholders’ Monthly Principal Distributable Amount” means, with respect to any Distribution Date, the Certificateholders’ Percentage of the Principal Distribution Amount or, with respect to any Distribution Date on or after the Distribution Date on which the outstanding principal balance of the Notes is reduced to zero, 100% of the Principal Distribution Amount (less any amount required on the first such Distribution Date to reduce the outstanding principal balance of the Notes to zero, which shall be deposited into the Note Distribution Account).

“Certificateholders’ Percentage” means 100% minus the Noteholders’ Percentage.

“Certificateholders’ Principal Carryover Shortfall” means, as of the close of any Distribution Date, the excess of the Certificateholders’ Monthly Principal Distributable Amount and any outstanding Certificateholders’ Principal Carryover Shortfall from the preceding Distribution Date, over the amount in respect of principal that is actually deposited in the Certificate Distribution Account on such Distribution Date.

“Certificate Balance” equals, initially, $[          ] and, thereafter, equals the initial Certificate Balance, reduced by all amounts allocable to principal previously distributed to Certificateholders.

“Pass-Through Rate” means, with respect to the Certificates, [    ]% per annum.

Credit Enhancement

Reserve Account.  Pursuant to the Sale and Servicing Agreement, the Reserve Account will be created and maintained with the Indenture Trustee.  On the Closing Date, the Depositor will deposit $[    ] ([    ]% of aggregate initial principal balance of the Notes plus the initial Certificate Balance) (the “Reserve Account Initial Deposit”) in the Reserve Account.  The Reserve Account Initial Deposit will be augmented on each Distribution Date by the deposit in the Reserve Account of amounts remaining after distribution of the Total Servicing Fee and amounts to be paid to the Noteholders and Certificateholders.  If the amount on deposit in the Reserve Account on any Distribution Date (after giving effect to all deposits or withdrawals therefrom on such Distribution Date) is greater than the Specified Reserve Account Balance for such Distribution Date, the Servicer will instruct the I ndenture Trustee to distribute the amount of the excess to the Depositor.  Upon any distribution to the Depositor of amounts from the Reserve Account, neither the Noteholders nor the Certificateholders will have any rights in, or claims to, such amounts.  In certain circumstances, funds in the Reserve Account will be used to reduce the Certificate Balance to zero.

“Specified Reserve Account Balance” with respect to any Distribution Date generally means the greater of

•

[    ]% of the sum of the aggregate outstanding principal amount of the Notes and the outstanding Certificate Balance on such Distribution Date (after giving effect to all payments on the Notes and distributions with respect to the Certificates to be made on such Distribution Date) or

•

[    ]% of the aggregate initial principal balance of the Notes plus the initial Certificate Balance.  In no circumstances will the Depositor be required to deposit any amounts in the Reserve Account other than the Reserve Account Initial Deposit to be made on the Closing Date.

Subordination of the Certificates.  The rights of the Certificateholders to receive distributions will be subordinated to the rights of the Noteholders following the occurrence of certain Events of Default or an acceleration of the Notes.  The subordination of the Certificates is intended to enhance the likelihood of receipt by Noteholders of amounts due them and to decrease the likelihood that the Noteholders will experience losses.  In addition, the Reserve Account is intended to enhance the likelihood of receipt by Noteholders and Certificateholders of amounts due them and to decrease the likelihood that the Noteholders and Certificateholders will experience losses.  However, in certain circumstances, the Reserve Account could be depleted.  If the amount required to be withdrawn from the Reserve Account to cover shortfalls in collections on the Receivables exceeds the amount on deposit in the Reserve Account a temporary shortfall in the amounts distributed to the Noteholders or the Certificateholders could result.  In addition, depletion of the Reserve Account ultimately could result in losses to Noteholders and Certificateholders.

[THE INSURER]

[General]

[[_______________] (the “Insurer” or “[_______________]”) is a monoline financial guaranty insurance company incorporated under the laws of the State of New York.  The Insurer is currently licensed to do insurance business in, and is subject to the insurance regulation and supervision by, all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Singapore.]

[The Insurer is an indirect wholly owned subsidiary of [_______________], a [___________] (“[_______________]”).  Through its subsidiaries, [_______________] is a leading provider of insurance and reinsurance coverages and financial products and services to industrial, commercial and professional service firms, insurance companies and other enterprises on a worldwide basis.  The ordinary shares of [_______________] are publicly traded in the United States and listed on the New York Stock Exchange (NYSE: [_________]).  [_______________] is not obligated to pay the debts of or claims against the Insurer.]

[Reinsurance]

[The Insurer has entered into a facultative quota share reinsurance agreement with [____________] (“[_______________]”), an insurance company organized under the laws of [______________], and an affiliate of the Insurer.  Pursuant to this reinsurance agreement, the Insurer expects to cede up to 90% of its business to [_______________].  The Insurer may also cede reinsurance to third parties on a transaction-specific basis, which cessions may be any or a combination of quota share, first loss or excess of loss.  Such reinsurance is used by the Insurer as a risk management device and to comply with statutory and rating agency requirements and does not alter or limit the Insurer's obligations under any financial guaranty insurance policy.  With respect to any transaction insured by [_______________], the percentage of risk ceded to [_______________] may be less than 90% depending on certain factors including, without l imitation, whether [_______________] has obtained third party reinsurance covering the risk.  As a result, there can be no assurance as to the percentage reinsured by [_______________] of any given financial guaranty insurance policy issued by [_______________], including the Policy.]

[Based on the audited financials of [_______________], as of December 31, 2004, [_______________] had total assets, liabilities, redeemable preferred shares and shareholders’ equity of $[___________], $[___________], $[___________] and $[___________], respectively, determined in accordance with generally accepted accounting principles in the United States (“US GAAP”). [_______________]’s insurance financial strength is rated “Aaa” by Moody’s and “AAA” by S&P and Fitch Inc. In addition, [_______________] has obtained a financial enhancement rating of “AAA” from S&P.]  

[The obligations of [_______________] to the Insurer under the reinsurance agreement described above are unconditionally guaranteed by [___________] ("[_______________]"), a Bermuda exempted company and one of the world's leading excess commercial insurers.  [_______________] is a wholly owned indirect subsidiary of [_______________].  In addition to A.M. Best’s financial strength rating of “A+” and issuer credit rating of “aa-”, [_______________]’s insurance financial strength rating is “Aa2” (as of September 13, 2005, [_______________] is on review for downgrade) by Moody’s, “AA-” by Standard & Poor’s (on September 20, 2005, Standard & Poor’s placed [_______________] on CreditWatch with negative implications) and “AA-” (Outlook Stable) by Fitch.]  

[The rating agencies have taken certain actions with respect to [_______________] and various insurance operating subsidiaries of [_______________], as described below.  Moody’s placed the “A2” senior debt rating of [_______________] and the other insurance financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) on review for possible downgrade on September 13, 2005.  Standard & Poor’s placed the “A” senior debt rating of [_______________] and the other financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) on CreditWatch with negative implications on September 20, 2005.  Fitch downgraded the long term issuer rating of [_______________] and the insurer financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) from “A” to “A-” on October 26, 2005.  A.M. Best placed each of [___________]’s (which does not include [_______________] or [_______________]) and [_______________]’s respective financial strength ratings of “A+” and their issuer credit ratings of “aa-” under review with negative implications on September 15, 2005. ]

[The ratings of [_______________], [_______________] or any other member of the [_______________] group of companies are not recommendations to buy, sell or hold securities, including the notes and are subject to revision or withdrawal at any time by Moody’s, Standard & Poor’s or Fitch.]

[Notwithstanding the capital support provided to the Insurer described in this section, the noteholders will have direct recourse against the Insurer only, and neither [_______________] nor [_______________] will be directly liable to the noteholders.]

[Financial Strength and Financial Enhancement Ratings of [_______________]]

[The Insurer's insurance financial strength is rated “Aaa” by Moody’s and “AAA” by Standard & Poor’s and Fitch, Inc. (“Fitch”).  In addition, [_______________] has obtained a financial enhancement rating of “AAA” from Standard & Poor’s.  These ratings reflect Moody’s, Standard & Poor’s and Fitch's current assessment of the Insurer's creditworthiness and claims-paying ability as well as the reinsurance arrangement with [_______________] described under "Reinsurance" above.]

[The above ratings are not recommendations to buy, sell or hold securities, including the notes and are subject to revision or withdrawal at any time by Moody’s, Standard & Poor’s or Fitch.  Any downward revision or withdrawal of these ratings may have an adverse effect on the market price of the notes.  The Insurer does not guaranty the market price of the notes nor does it guaranty that the ratings on the notes will not be revised or withdrawn.]

[Capitalization of the Insurer]

[Based on the audited financials of [_______________], as of December 31, 2004, [_______________] had total assets, liabilities, and shareholder’s equity of $[______________], $[______________], and $[______________], respectively, determined in accordance with U.S. GAAP.]

Based on the audited statutory financial statements for [_______________] as of December 31, 2004 filed with the State of New York Insurance Department, [_______________] has total admitted assets of $[______________], total liabilities of $[______________] and total capital and surplus of $[______________] determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities (“SAP”).  

[Incorporation by Reference of Financials

]

For further information concerning [_______________] and [_______________], see the financial statements of [_______________] and [_______________], and the notes thereto, incorporated by reference in this prospectus supplement.  The financial statements of [_______________] and [_______________] are included as exhibits to the periodic reports filed with the Securities and Exchange Commission (the “Commission”) by [_______________] and may be reviewed at the EDGAR website maintained by the Commission.  All financial statements of  [_______________] and [_______________] included in, or as exhibits to, documents filed by [_______________] pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 on or prior to the date of this prospectus supplement, or after the date of this prospectus supplement but prior to termination of the offering of the notes, shall be deemed incorporated by reference in this prospectus supplement.  Except for the financial statements of [_______________] and [_______________], no other information contained in [_______________]'s reports filed with the Commission is incorporated by reference. Copies of the statutory quarterly and annual statements filed with the State of New York Insurance Department by [_______________] are available upon request to the State of New York Insurance Department.]

[Regulation of the Insurer]

[The Insurer is regulated by the Superintendent of Insurance of the State of New York.  In addition, the Insurer is subject to regulation by the insurance laws and regulations of the other jurisdictions in which it is licensed.  As a financial guaranty insurance company licensed in the State of New York, the Insurer is subject to Article 69 of the New York Insurance Law, which, among other things, limits the business of each insurer to financial guaranty insurance and related lines, prescribes minimum standards of solvency, including minimum capital requirements, establishes contingency, loss and unearned premium reserve requirements, requires the maintenance of minimum surplus to policyholders and limits the aggregate amount of insurance which may be written and the maximum size of any single risk exposure which may be assumed.  The Insurer is also required to file detailed annual financial statements with the New York Insurance Department and similar supervisory agencies in each of the other jurisdictions in which it is licensed.]

[The extent of state insurance regulation and supervision varies by jurisdiction, but New York and most other jurisdictions have laws and regulations prescribing permitted investments and governing the payment of dividends, transactions with affiliates, mergers, consolidations, acquisitions or sales of assets and incurrence of liabilities for borrowings.]

[THE FINANCIAL GUARANTY INSURANCE POLICIES ISSUED BY THE INSURER, INCLUDING THE INSURANCE POLICY, ARE NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.]

[The principal executive offices of the Insurer are located at [____________] and its telephone number at this address is [____________].]

[THE POLICY]

[[__________], in consideration of the payment of a premium and subject to the terms of the insurance policy, thereby unconditionally and irrevocably guarantees to any securityholder that an amount equal to each full and complete Insured Amount will be received from [__________] by the Indenture Trustee or its successors, as Indenture Trustee for the securityholders, on behalf of the securityholders, for distribution by the Indenture Trustee to each securityholder of that securityholder’s proportionate share of the Insured Amount.]

[[__________]’s obligations under the insurance policy, with respect to a particular Insured Amount, will be discharged to the extent funds equal to the applicable Insured Amount are deposited in the account specified by the Indenture Trustee, whether or not those funds are properly applied by the Indenture Trustee. Insured Amounts will be paid only at the time set forth in the insurance policy, and no accelerated Insured Amounts will be paid regardless of any acceleration of the notes, unless the acceleration is at the sole option of [__________]. ]

[Notwithstanding the foregoing paragraph, the insurance policy does not cover shortfalls, if any, attributable to the liability of the issuer or the Indenture Trustee for withholding taxes, if any (including interest and penalties in respect of any liability for withholding taxes).]

[[__________] will pay any Insured Amount that is an Avoided Payment on the business day following receipt on a business day by [__________] of the following:

•

a certified copy of the order requiring the return of an avoided payment, with respect to which order the appeal period has expired without an appeal having been filed;  

•

an assignment in a form attached to the insurance policy, irrevocably assigning to [__________] all rights and claims of the securityholder relating to or arising under the notes against the debtor which made the avoided payment or otherwise with respect to the avoided payment; and  

•

an appropriately completed and executed demand for payment in the form attached to the insurance policy;  

provided that if these documents are received after 10:00 a.m., New York time, on that business day, they will be deemed to be received on the following business day. Payments by [__________] will be disbursed to the receiver or the trustee in bankruptcy named in the final order of the court exercising jurisdiction on behalf of the securityholder and not to any securityholder directly unless the securityholder has returned principal or interest paid on the notes to the receiver or trustee in bankruptcy, in which case that payment will be disbursed to the Indenture Trustee for distribution to the securityholder upon proof of such payment reasonably satisfactory to [__________].]

[[__________] will pay any other amount payable under the insurance policy no later than 2:00 p.m., New York time, on the later of the distribution date on which the related Scheduled Payment is due or the business day following receipt in New York, New York by [__________] of a notice from the Indenture Trustee specifying the Insured Amount which is due and owing on the applicable distribution date, provided that if the notice is received after 10:00 a.m., New York time, on that business day, it will be deemed to be received on the following business day.]

[Subject to the terms of the Indenture and the Sale and Servicing Agreement, [__________] will be subrogated to the rights of each securityholder to receive payments under the notes to the extent of any payment by [__________] under the insurance policy.]

[As used in the insurance policy, the following terms shall have the following meanings:

“Avoided Payment” means any amount previously distributed to a securityholder on the notes that is recoverable and sought to be recovered as a voidable payment in an insolvency proceeding, in accordance with a final nonappealable order of a court having competent jurisdiction.

“Insured Amount” means, that portion of Scheduled Payments that shall become due for payment but shall be unpaid by reason of nonpayment.

“Insured Payment” means (a) as of any distribution date, any Scheduled Payment and (b) any Avoided Payment.

“Scheduled Payment” for any distribution date, an amount equal to the excess, if any, of: (a) the sum, without duplication, of (i) the Noteholders’ Interest Distributable Amount and (ii) the Noteholders’ First Principal Distributable Amount (other than the amount specified in clause (2)(b) of the definition thereof) for the related distribution date over (b) the amount actually deposited into the note distribution account on the related distribution date.]

[Capitalized terms used in the insurance policy and not otherwise defined in the insurance policy shall have the meanings set forth in the Indenture and the Sale and Servicing Agreement as of the date of execution of the insurance policy, without giving effect to any subsequent amendment or modification to the Indenture or the Sale and Servicing Agreement unless such amendment or modification has been approved in writing by [__________].]

[The insurance policy is not cancelable for any reason. The premium on the insurance policy is not refundable for any reason including payment, or provision being made for payment, prior to the maturity of the notes.]

[The insurance policy is being issued under and pursuant to, and will be construed under, the laws of the State of New York, without giving effect to the conflict of laws principles thereof.]

[The insurance provided by the insurance policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law.]

[OTHER CREDIT ENHANCEMENT PROVIDER]

[Regulation AB Item 1114 compliant description of any other credit enhancement provider.]

[DERIVATIVE INSTRUMENTS]

[The Interest Rate Swap Agreement and the Swap Provider]

[The Offered Certificates and Class B Certificates will have the benefit of an interest rate swap agreement.  On or before the Closing Date, the Trustee will enter into an interest rate swap agreement (the “Interest Rate Swap Agreement”) with [_______] (the “Swap Provider”).  A separate trust created under the pooling and servicing agreement (the "Supplemental Interest Trust") will hold the Interest Rate Swap Agreement documented by a 1992 ISDA Master Agreement (Multicurrency-Cross Border), together with a Schedule and Confirmation between The Trustee, on behalf of the Supplemental Interest Trust, and the Swap Provider. ]

[The significance percentage, as calculated in accordance with Item 1115 of Regulation AB is less than 10%.]

[If significance percentage, as calculated in accordance with Item 1115 of Regulation AB, is 10% or more, provide financial information required by Item 1115 of Regulation AB.]

[Pursuant to the Interest Rate Swap Agreement, on each Distribution Date, (i) the Securities Administrator (on behalf of the Supplemental Interest Trust and from funds of such trust) will be obligated to pay to the Swap Provider, a fixed amount equal to the product of (x) [__]%, (y) the Swap Notional Amount for that Distribution Date set forth in the Interest Rate Swap Agreement and (z) a fraction, the numerator of which is 30 (or, for the first Distribution Date, the number of days elapsed from the Closing Date to but excluding the first Distribution Date on a 30/360 basis), and the denominator of which is 360 (the “Securities Administrator Swap Payment”); and (ii) the Swap Provider will be obligated to pay to the Supplemental Interest Trust for the benefit of the holders of the Offered Certificates and the Class B Certificates (the “Swap Provider Payment”), a floating amount equal to the product of (x) one-mon th LIBOR (as determined pursuant to the Interest Rate Swap Agreement), (y) the Swap Notional Amount for that Distribution Date set forth in the Interest Rate Swap Agreement, and (z) a fraction, the numerator of which is the actual number of days elapsed from the previous Distribution Date to but excluding the current Distribution Date (or, for the first Distribution Date, the actual number of days elapsed from the Closing Date to but excluding the first Distribution Date), and the denominator of which is 360.  A net payment will be required to be made on each Distribution Date (each such net payment, a “Net Swap Payment”) (a) by the Securities Administrator to the Swap Provider, to the extent that the fixed amount exceeds the corresponding floating amount, or (b) by the Swap Provider to the Securities Administrator, to the extent that the floating amount exceeds the corresponding fixed amount. Payments received by the Supplemental Interest Trust pursuant to the Interest Rate Swap Agreement wil l be available for distributions of Interest Carry Forward Amounts, Net WAC Rate Carryforward Amounts, amounts necessary to maintain the Required Overcollateralization Amount and Allocated Realized Loss Amounts.]

[The “Swap Notional Amount” with respect to each Distribution Date commencing in [______, __], is set forth below (which will be substantially the same schedule as set forth in the Interest Rate Swap Agreement).  The Interest Rate Swap Agreement will terminate immediately following the Distribution Date in [______, __], unless terminated earlier upon the occurrence of a Swap Default, an Early Termination Event or an Additional Termination Event (each as defined below).]

Distribution Date	Swap Notional Amount
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]

[The respective obligations of the Swap Provider and the Supplemental Interest Trust to pay specified amounts due under the Interest Rate Swap Agreement will be subject to the following conditions precedent: (1) no Swap Default or event that with the giving of notice or lapse of time or both would become a Swap Default, in each case, in respect of the other party, shall have occurred and be continuing with respect to the Interest Rate Swap Agreement and (2) no “Early Termination Date” (as defined in the ISDA Master Agreement) has occurred or been effectively designated with respect to the Interest Rate Swap Agreement.]

[An Interest Rate Cap Agreement]

[The Class [__] certificates will have the benefit of the Interest Rate Cap Agreement. Pursuant to the Interest Rate Cap Agreement, with respect to any Distribution Date, commencing with the Distribution Date in [__], 20[ ], on or prior to the Distribution Date in [__], 20[ ], [_______], (the “Cap Provider”), will be obligated to pay to the trust administrator, an amount equal to the product of (a) the excess, if any, of (i) the then current one-month LIBOR rate (determined in accordance with the Interest Rate Cap Agreement) up to a maximum of [__]% (the “Maximum Cap Rate”) and (ii) a specified strike rate of [__]% (the “Cap Strike Rate”) and (b) the Interest Rate Cap Agreement Notional Amount set forth on the schedule attached as Annex B hereto for that Distribution Date, determined on a 30/360 Basis. (each such payment, the “Cap Agreement Payment”). The Interest Rate Cap Agreement will terminate after th e Distribution Date in [__], 20[ ].

The obligations of the Cap Provider are limited to those specifically set forth in the Interest Rate Cap Agreement. The Cap Provider conducts business in the over-the-counter derivatives market, engaging in a variety of derivatives products, including interest rate swaps, currency swaps, credit default swaps and interest rate options with institutional clients.

For the Class [__] certificates and each Distribution Date prior to and including the Distribution Date in [__], 20[ ],  any Cap Agreement Payment received by the trust administrator will be used to pay the related Cap Amount to such classes of certificates, as described below under “––The Reserve Funds.”  Amounts received on  the Interest Rate Cap Agreement will not be available to make distributions on any class of Certificates other than the Class [__] certificates.

The Interest Rate Cap Agreement will be governed by and construed in accordance with the law of the State of New York. The obligations of the Cap Provider are limited to those specifically set forth in the Interest Rate Cap Agreement. The Class [__] certificates do not represent an obligation of the Cap Provider. The holders of the Class [__] certificates are not parties to or beneficiaries under the Interest Rate Cap Agreement and will not have any right to proceed directly against the cap provider in respect of its obligations under the Interest Rate Cap Agreement.]

[A Yield Maintenance Agreement]

The Issuing Entity will enter into a Yield Maintenance Agreement for the benefit of the Class [__] Certificates.  Under the Yield Maintenance Agreement, the Counterparty will agree to pay to the Issuing Entity two Business Days prior to each Distribution Date beginning in [__], 20[ ] and to and including the Distribution Date in [__], 20[ ], an amount equal to the product of:

1.

the excess, if any, of LIBOR (as calculated under the related Yield Maintenance Agreement subject to the Rate Cap Ceiling) over the Cap Strike Rate for that Distribution Date;

2.

the related Scheduled Notional Amount for that Distribution Date; and

3.

a fraction, the numerator of which is the actual number of days elapsed from the previous Distribution Date to but excluding the current Distribution Date, and the denominator of which is 360.

The Scheduled Notional Amounts for each Yield Maintenance Agreement decline in accordance with the expected amortization of the Mortgage Loans.  The Yield Maintenance Agreements will terminate immediately following the Distribution Date in [__], 20[ ].

The Yield Maintenance Agreements will be governed by and construed in accordance with the law of the State of New York and will be documented under the ISDA Master Agreement, as supplemented by the schedule and the confirmation.  The obligations of the Counterparty are limited to those specifically set forth in the related Yield Maintenance Agreement.

Any amounts received by the Securities Administrator under a Yield Maintenance Agreement will be distributed as follows:

1.

to the Reserve Fund, in an amount equal to the Basis Risk Shortfall Carryover Amount for the Class [__] Certificates for such Distribution Date;

2.

to the Principal Remittance Amount, the Net Cumulative Realized Loss Amount on such Distribution Date;

3.

to the Class [__] Certificates, any applicable Unpaid Realized Loss Amounts, and

4.

to the Class [__] Certificates, any remaining amounts.

FEDERAL INCOME TAX CONSEQUENCES

The following is a general summary of some of the related Federal income tax consequences of the purchase, ownership and disposition of the Class A Notes. This discussion does not address every aspect of the Federal income tax laws that may be relevant to holders of Class A Notes in light of their personal investment circumstances or to particular types of Class A Noteholders subject to special treatment under the Federal income tax laws, including, without limitation, banks and thrifts, insurance companies, dealers in securities, foreign investors, regulated investment companies, individuals, trusts and estates and pass-through entities, the equity holders of which are any of the foregoing. This discussion is directed to prospective purchasers who purchase Class A Notes in the initial distribution of the Class A Notes and who hold the Class A Notes as “capital assets” within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). Prospective purchasers are urged to consult their own tax advisors in determining the Federal, state, local, foreign and any other tax consequences to them of the purchase, ownership and disposition of the Class A Notes.

The following summary is based upon current provisions of the Code, the Treasury regulations promulgated under the Code, judicial authority, and ruling authority, all of which are subject to change, which change may be retroactive. The Issuing Entity will be provided with an opinion of Federal Tax Counsel regarding some of the related Federal income tax matters discussed below. An opinion of Federal Tax Counsel, however, is not binding on the Internal Revenue Service (the “IRS”) or the courts. Moreover, there are no cases or IRS rulings on similar transactions with terms similar to those of the Class A Notes. As a result, the IRS may disagree with all or a part of the discussion below. No ruling on any of the issues discussed below will be sought from the IRS.

Tax Characterization of the Issuing Entity

McKee Nelson LLP will deliver its opinion that the Issuing Entity will not be classified as an association, or publicly traded partnership taxable as a corporation for Federal income tax purposes. This opinion will be based on the assumption of compliance by all parties with the terms of the Trust Agreement and related documents.

If the Issuing Entity were taxable as a corporation for Federal income tax purposes, the Issuing Entity would be subject to corporate income tax on its taxable income. The Issuing Entity’s taxable income would include all its income on the Receivables, possibly reduced by its interest expense on the Class A Notes. Any corporate income tax could materially reduce cash available to make payments on the Class A Notes and distributions on the Certificates, and Certificateholders, could be liable for any tax that is not paid by the Issuing Entity.

Tax Consequences to Holders of the Class A Notes

Treatment of the Class A Notes as Indebtedness.  The Issuing Entity will agree, and the Class A Noteholders will agree by their purchase of Class A Notes, to treat the Class A Notes as debt for Federal, state and local income and franchise tax purposes. Federal Tax Counsel will advise the Issuing Entity that in its opinion the Class A Notes will be classified as debt for Federal income tax purposes.

The prepayment assumption that is used in determining the accrual of original issue discount, market discount or premium with respect to the Notes is [100% Prepayment Assumption], as defined below.  However, no representation is made that the loans will prepay in accordance with this assumption or in accordance with any other assumption.  The [100% Prepayment Assumption] assumes a [constant prepayment rate of ___%].

Alternatively, if, contrary to the opinion of Federal Tax Counsel, the Class A Notes were not properly classified as debt and Issuing Entity were treated as a publicly traded partnership taxable as a corporation, it would be subject to Federal income tax, and any similar state or local taxes, at corporate tax rates on its taxable income generated by ownership of the Receivables.  This tax could result in reduced distributions to Class A Noteholders. Distributions to Class A Noteholders generally would not be deductible in computing the taxable income of the publicly traded partnership. In addition, all or a portion of any distributions would, to the extent of the current and accumulated earnings and profits of the corporation, be treated as dividend income to the Class A Noteholders, and in the case of Class A Noteholders that are foreign persons would be subject to withholding tax.

Interest Income and OID on the Class A Notes.

It is not anticipated that the Class A Notes will be issued with original issue discount (“OID”) within the meaning of Section 1273 of the Code. The stated interest on the Class A Notes will be taxable to a Class A Noteholder as ordinary interest income when received or accrued in accordance with the Class A Noteholder’s method of tax accounting. If the Class A Notes were treated as being issued with OID, the excess of the “stated redemption price at maturity” of the Class A Notes over their issue price would constitute OID. Under the OID Regulations, a holder of a Class A Note issued with a de minimis amount of OID must include this OID in income, on a pro rata basis, as principal payments are made on the Class A Note. A subsequent purchaser who buys a Class A Note for more or less than its principal amount will generally be subject, respectively, to the premium amortization or market discount rules of the Code.

Sale or Other Disposition.

If a Class A Noteholder sells a Class A Note, the holder will recognize gain or loss in an amount equal to the difference between the amount realized on the sale and the holder’s adjusted tax basis in the Class A Note. The adjusted tax basis of a Class A Note to a particular Class A Noteholder will equal the holder’s cost for the Class A Note, increased by any market discount, and gain previously included by the Class A Noteholder in income with respect to the Class A Note and decreased by the amount of premium, if any, previously amortized and by the amount of principal payments previously received by the Class A Noteholder with respect to the related Class A Note. Any gain or loss will be capital gain or loss, except for gain representing accrued interest, including OID, and accrued market discount not previously included in income. Capital losses generally may be used by a corporate taxpayer only to offset capital gains, and by an i ndividual taxpayer only to the extent of capital gains plus $3,000 of other income.

Foreign Holders.

Except as discussed below, a Class A Noteholder that is not a “United States person” (as defined below) generally will not be subject to United States income or withholding tax in respect of a distribution on a Class A Note provided that (i) the holder complies to the extent necessary with certain certification requirements, which generally relate to the identity of the beneficial owner and the status of the beneficial owner as a person that is not a United States person (as defined below), (ii) the holder is not a “10-percent shareholder” within the meaning of Section 871(h)(3)(B) of the Code, which could be interpreted to include a person that directly or indirectly owns 10% or more of the certificates in the Issuing Entity or the equity in the Sponsor or the Depositor, (iii) the holder is not a “controlled foreign corporation” (as defined in the Code) related to the Issuing Entity or related to a 10 percent holde r of certificates in the Issuing Entity or equity in the Sponsor or the Depositor, and (iv) the holder is not engaged in a United States trade or business, or otherwise subject to Federal income tax as a result of any direct or indirect connection to the United States other than through its ownership of a Class A Note.  For these purposes, the term “United States person” means (i) a citizen or resident of the United States, (ii) a corporation or partnership (or other entity properly treated as a corporation or partnership for Federal income tax purposes) created or organized in or under the laws of the United States or any State thereof or the District of Columbia, (iii) an estate whose income is includable in gross income for United States Federal income taxation regardless of its source, and (iv) a trust for which one or more United States persons have the authority to control all substantial decisions and for which a court of the United States can exercise primary supervision over the trust ’s administration and certain eligible trusts that elect to be treated as United States persons.  A “Foreign Person” is any person that is not a United States person.  Each Class A Noteholder should consult its tax advisors regarding the tax documentation and certifications that must be provided to secure the exemption from United States withholding taxes.

Any capital gain realized on the sale, redemption, retirement or other taxable disposition of a Class A Note by a Foreign Person generally will be exempt from United States Federal income and withholding tax, provided that (i) such gain is not effectively connected with the conduct of a trade or business in the United States by the Foreign Person and (ii) in the case of an individual Foreign Person, the Foreign Person is not present in the United States for 183 days or more in the taxable year.

If the interest, gain or income on a Class A Note held by a Foreign Person is effectively connected with the conduct of a trade or business in the United States by the Foreign Person (although exempt from the withholding tax previously discussed if the holder provides an appropriate statement establishing that such income is so effectively connected), the holder generally will be subject to United States Federal income tax on the interest, gain or income at regular Federal income tax rates.  In addition, if the Foreign Person is a foreign corporation, it may be subject to a branch profits tax equal to 30% of its effectively connected earnings and profits,” within the meaning of the Code, for the taxable year, as adjusted for certain items, unless it qualifies for a lower rate under an applicable tax treaty (as modified by the branch profits tax rules).

If the IRS were to contend successfully that the Class A Notes are interests in a partnership, not taxable as a corporation, a Class A Noteholder that is a foreign person might be required to file a United States. Federal income tax return and pay tax on its share of partnership income at regular United States tax rates, including the branch profits tax, and could be subject to withholding tax on its share of partnership income. If the Class A Notes were recharacterized as interests in a “publicly traded partnership” taxable as a corporation, distributions on the Class A Notes treated as dividends would generally be subject to withholding tax on the gross amount of the dividends at the rate of 30% unless the rate were reduced by an applicable treaty. If the Class A Notes are recharacterized as equity interests in a partnership, or, contrary to the opinion of Federal Tax Counsel, in a publicly traded partnership taxable as a corporation , any taxes required to be so withheld will be treated for all purposes of the Class A Notes as having been paid to the related Class A Noteholder.

Backup Withholding. Distributions made on the Class A Notes and proceeds from the sale of Class A Notes to or through certain brokers may be subject to a “backup” withholding tax on “reportable payments” (including interest accruals, original issue discount, and, under certain circumstances, distributions in reduction of principal amount) if the holder of the Class A Notes fails to comply with certain identification procedures, unless the Class A Noteholder is an exempt recipient under applicable provisions of the Code and, if necessary, demonstrates such status.  Any amounts so withheld from distributions on the Class A Notes would be refunded by the IRS or allowable as a credit against the Class A Noteholder’s Federal income tax.

STATE AND LOCAL TAX CONSEQUENCES

The discussion above does not address the tax consequences of purchase, ownership or disposition of the Securities under any state or local tax law.  We recommend that investors consult their own tax advisors regarding state and local tax consequences.

ERISA CONSIDERATIONS

The Notes

General

Section 406 of ERISA prohibits, and Section 4975 of the Code imposes adverse tax consequences on, certain transactions between any benefit plan which is subject to Title I of ERISA and/or Section 4975 of the Code or is an entity which is deemed to hold the assets of the foregoing (the “Plan”) and persons that are “parties in interest” under ERISA or “disqualified persons” under the Code with respect to such Plan.  A violation of these “prohibited transaction” rules may result in excise taxes and other penalties and liabilities under ERISA and the Code for such persons.

Certain transactions involving the assets of an issuing entity might be deemed to constitute prohibited transactions under Section 406 ERISA and Section 4975 of the Code with respect to a Plan that purchased notes issued by that issuing entity if assets of the issuing entity were deemed to be assets of the Plan.  Under the regulation issued by the United States Department of Labor set forth at 29 C.F.R. Section 2510.3-101 governing the definition of “plan assets” for purposes of the fiduciary responsibility and prohibited transaction provisions of ERISA and Section 4975 of the Code (the “Plan Asset Regulations”), the assets of an issuing entity would be treated as plan assets of the Plan for the purposes of ERISA and the Code only if the Plan acquired an “equity interest” in the issuing entity and none of the exceptions contained in the Plan Asset Regulations was applicable.  An equity interest is defined under the Plan Asset Regulations as an interest other than an instrument which is treated as indebtedness under applicable local law and which has no substantial equity features.

Purchases of the Notes

Although there is little guidance on the subject, the notes should be treated as indebtedness without substantial equity features for purposes of the Plan Asset Regulations.  This determination is based in part upon (i) tax counsel’s opinion that notes transferred on the closing date to parties unrelated to the holder of the Residual Certificates will be classified as debt for U. S. federal income tax purposes and that retained notes, if later sold to a party unrelated to the holder of the Residual Certificates for cash, will be classified as debt instruments for U.S. federal income tax purposes as of the date of such sale, based on certain assumptions (including that the rating of the notes as of the closing date has not declined below investment grade) and (ii) the traditional debt features of the notes, including the reasonable expectation of purchasers of the notes that they will be repaid when due, as well as the absence of conversion rights, warrants an d other typical equity features.  Based upon the foregoing and other considerations, subject to the considerations described below, the notes may be purchased by a Plan.

Without regard to whether the notes are considered an “equity interest” in the issuing entity under the Plan Asset Regulations, the acquisition or holding of notes by or on behalf of a Plan could be considered to give rise to a prohibited transaction if the underwriters, the issuing entity, the owner trustee or the indenture trustee, or any of their respective affiliates is or becomes a party in interest or a disqualified person with respect to such Plan.  In that case, PTE 84-14 (relating to transactions effected by a “qualified professional asset manager”); PTE 90-1 (relating to transactions involving insurance company pooled separate accounts); PTE 91-38 (relating to transactions involving bank collective investment funds); PTE 95-60 (relating to transactions involving insurance company general accounts); PTE 96-23 (relating to transactions effected by an “in-house asset manager”); and any other applicable exemption granted by the U.S. Department of Labor (the “Investor Based Exemptions) could be applicable, depending on the type of Plan involved and the circumstances of the plan fiduciary’s decision to acquire a note.  Even if the conditions specified in one or more of the Investor-Based Exemptions are met, the scope of the relief provided by these exemptions might or might not cover all acts that might be construed as prohibited transactions.  There can be no assurance that any of the Investor-Based Exemptions, or any other exemption, will be available with respect to any particular transaction involving the notes.

Certain employee benefit plans, including governmental plans (as defined in Section 3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and foreign plans are not subject to the ERISA requirements but may be subject to federal, state, local or foreign laws that are substantially similar to ERISA or the Code (“Similar Law”), such plans, together with Plans are referred to herein as “Benefit Plans.”

The notes should not be purchased with the assets of a Plan if the depositor, the servicer, the master servicer, the indenture trustee, the owner trustee, the underwriters or any of their affiliates is a fiduciary or gives investment advice with respect to such Plan or is an employer maintaining or contributing to such Plan, unless such purchase and holding of the notes would be covered by an applicable prohibited transaction exemption.

Each purchaser and transferee of a note will be deemed to represent and warrant to the issuing entity that either (i) it is not a Benefit Plan or (ii) it is a Benefit Plan and its acquisition and holding of such notes will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code which is not covered under an Investor-Based Exemption or some other applicable exemption, and will not cause a non-exempt violation of any substantially Similar Law.

Prospective Benefit Plan investors in notes should consult with their legal advisors concerning the impact of ERISA and the Code, the availability of other exemptions from the prohibited transaction rules that may apply to them, and the potential consequences in their specific circumstances, prior to making an investment in the notes.  Each Benefit Plan fiduciary should also determine whether under the general fiduciary standards of investment prudence and diversification, an investment in the notes is appropriate for the Benefit Plan, taking into account the overall investment policy of the Plan and the composition of the Benefit Plan’s investment portfolio.

The Certificates

The Certificates may not be acquired (directly or indirectly) by or on behalf of any Benefit Plan or any entity (including an insurance company general account) whose underlying assets include plan assets of the Benefit Plan by reason of a plan’s investment in the entity.  By acceptance of a Certificate, each Certificateholder will be deemed to have represented and warranted that it is not a Benefit Plan.

UNDERWRITING

Subject to the terms and conditions set forth in the Underwriting agreement relating to the Notes and the Certificates (the “Underwriting Agreement”), the Depositor has agreed to sell to Deutsche Bank Securities Inc. (the “Underwriter”), and the Underwriter has agreed to purchase, the Notes and the Certificates, subject to the satisfaction of certain conditions precedent.

The Depositor has been advised by the Underwriter that the Underwriter proposes to offer the Notes to the public initially at the public offering prices set forth on the cover page of this prospectus supplement, and to certain dealers at such prices less a concession of [   ]% per Note, that the Underwriter and such dealers may allow a discount of [   ]% per Note on the sale to certain other dealers; and that after the initial public offering of the Notes, the public offering prices and the concessions and discounts to dealers may be changed by the Underwriter.

The Depositor has been advised by the Underwriter that the Underwriter proposes to offer the Certificates to the public initially at the public offering price set forth on the cover page of this prospectus supplement, and to certain dealers at such price less a concession of [   ]% per Certificate; that the Underwriter and such dealers may allow a discount of [   ]% per Certificate on the sale to certain other dealers; and that after the initial public offering of the Certificates, the public offering price and the concession and discount to dealers may be changed by the Underwriter.

Until the distribution of the Securities is completed, rules of the Securities and Exchange Commission may limit the ability of the Underwriter and certain selling group members to bid for and purchase the Securities.  As an exception to these rules, the Underwriter is permitted to engage in certain transactions that stabilize the prices of the Securities.  Such transactions consist of bids or purchases for the purpose of pegging, fixing or maintaining the price of such Securities.

In general, purchases of a security for the purpose of stabilization or to reduce a short position could cause the price of the security to be higher than it might be in the absence of such purchases.

Neither the Depositor nor the Underwriter makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the prices of the Securities.  In addition, neither the Depositor nor the Underwriter makes any representation that the Underwriter will engage in such transactions or that such transactions, once commenced, will not be discontinued without notice.

The Depositor has agreed to indemnify the Underwriter against certain liabilities, including civil liabilities under the Securities Act, or contribute to payments which the Underwriter may be required to make in respect thereof.  In the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act and, may, therefore, be unenforceable.

The Trust may, from time to time, invest the funds in the Trust Accounts and the Certificate Distribution Account in Eligible Investments acquired from the Underwriter.

The closing of the sale of the Notes is conditioned on the closing of the sale of the Certificates, and the closing of the sale of the Certificates is conditioned on the closing of the sale of the Notes.

RATINGS

It is a condition to the issuance of the securities that the securities receive at least the following ratings from [             ] (“[             ]”) and [             ] (“[             ]”):

Securities	[             ]	[             ]
Class [__] Notes	[___]	[___]
Class [__] Notes	[___]	[___]
Certificates	[___]	[___]

The rating agencies have stated that it is their standard policy to monitor ratings on publicly offered securities for which a rating has been provided, as to each rating agency rating each class of securities in accordance with the rating agencies’ particular surveillance policies, unless the issuer requests a rating without surveillance.  A rating agency will monitor the rating it issues on an ongoing basis and may update the rating after conducting its regular review of the issuer’s creditworthiness or after conducting a review of the status of the rating upon becoming aware of any information that might reasonably be expected to result in a change of rating.  The depositor has not requested that any rating agency not monitor their ratings of the securities, and the depositor has not requested that any rating agency use any monitoring procedures other than their standard monitoring procedures.

LEGAL PROCEEDINGS

[There are no material legal proceedings pending against the Sponsor, the Depositor, the Owner Trustee, the Indenture Trustee, the Issuing Entity, [any affiliated Servicer, any 20% concentration unaffiliated Servicer, any 20% concentration Originator], or with respect to which the property of any of the foregoing transaction parties is subject, that are material to the securityholders.  No legal proceedings against any of the foregoing transaction parties is known to be contemplated by governmental authorities, that are material to the securityholders.]

AFFILIATIONS, RELATIONSHIPS AND RELATED TRANSACTIONS

[There are no affiliations between the Sponsor, the Depositor or the Issuing Entity and any of [any affiliated Servicer, any 20% concentration unaffiliated Servicer], the Owner Trustee, the Indenture Trustee, [any 10% concentration Originator] or [any credit enhancement provider or derivatives counterparty].  There are no affiliations among [any affiliated Servicer, any 20% concentration unaffiliated Servicer], the Owner Trustee, the Indenture Trustee, [any 10% concentration Originator] or [any credit enhancement provider or derivatives counterparty].  There are currently no business relationships, agreements, arrangements, transactions or understandings between (a) the Sponsor, the Depositor or the Issuing Entity and (b) any of the parties referred to in the preceding sentence, or any of their respective affiliates, that were entered into outside the normal course of business or that contain terms other than would be obtained in an ar m’s length transaction with an unrelated third party and that are material to the investor's understanding of the securities, or that relate to the securities or the pooled assets.  No such business relationship, agreement, arrangement, transaction or understanding has existed during the past two years.]

LEGAL MATTERS

Certain legal matters with respect to the Notes and the Certificates will be passed upon for the Depositor by [        ].  Certain legal matters with respect to the Notes and the Certificates will be passed upon for the Underwriter by McKee Nelson LLP, New York, New York.   McKee Nelson LLP also will pass upon the material federal income tax consequences related to the Notes and the Certificates.  Certain legal matters under the laws of the State of Delaware will  be passed upon for the Depositor by [        ], [        ].

The information in this prospectus supplement is not complete and may be changed.  We may not sell these certificates until the registration statement filed with the Certificates and Exchange Commission is effective.  This prospectus supplement is not an offer to sell these certificates and it is not soliciting an offer to buy these certificates in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED [_________]

PROSPECTUS SUPPLEMENT (to prospectus dated [            ])

$[               ] (Approximate)

ACE SECURITIES CORP., [______] Boat Grantor Trust [______], Series  [       ]

Asset Backed Certificates

[______] Boat Grantor Trust [______]

Issuing Entity

[DB Structured Products, Inc.]

Sponsor

Ace Securities Corp.

Depositor

 [               ]

Servicer

Certificates Offered • $[      ], [     ]% Class A certificates • $[      ], [     ]% Class B certificates Assets • Retail boat receivables Credit Enhancement Class A Certificates • Subordination of Class B certificates • Reserve account Class B Certificates • Reserve account
[Describe other credit enhancement provided by [_____]] Expected Ratings • [      ] or equivalent for the Class A Certificates • [      ] or equivalent for the Class B Certificates Consider carefully the risk factors beginning on page S-[  ] of this prospectus supplement and on page [  ] of the prospectus. For a list of capitalized terms used in this prospectus supplement and the prospectus, see the index of defined terms beginning on page S-[  ] of this prospectus supplement and on page [  ] of the prospectus. The certificates will represent interests in the Issuing Entity only and will not represent interests in or obligations of the sponsor, the depositor or any of their affiliates. Distributions on the certificates will be made on the [__]th day of each month, or, if such day is not a business day, on the next succeeding business day, beginning in [__]. This prospectus supplement may be used to offer and sell the certificates only if accompanied by the prospectus.

Neither the Certificates and Exchange Commission nor any state certificates commission has approved or disapproved these certificates or determined if this prospectus supplement or the attached prospectus is accurate or complete.  Making any contrary representation is a criminal offense.

Subject to the satisfaction of certain conditions, the underwriter named below is offering the certificates at the price to public shown.  The certificates will be delivered in book entry form only on or about [________].

	Price to Public	Underwriting Discounts & Commissions	Proceeds to the Depositor(1)(2)
Per Class A Certificate	[    ]%	[    ]%	[    ]%
Per Class B Certificate	[    ]%	[    ]%	[    ]%
Total	$[     ]	$[     ]	$[     ]

___________________________

1.  Plus accrued interest from [______].

2.  Before deducting expenses, estimated to be $ [      ].

[Deutsche Bank Certificates]

The date of this prospectus supplement is [         ].

Important Notice About Information Presented in this
Prospectus Supplement and the Accompanying Prospectus:

We provide information to you about the certificates offered by this prospectus supplement in two separate documents that progressively provide more detail: (1) the accompanying prospectus, which provides general information, some of which may not apply to your certificates, and (2) this prospectus supplement, which describes the specific terms of your certificates.

If the information regarding the certificates is more specific in this prospectus supplement than in the prospectus, then you should rely on the information in this prospectus supplement.

You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus.  We have not authorized anyone to provide you with different information.

We are not offering the certificates in any state where the offer is not permitted.  We do not claim that the information in this prospectus supplement and prospectus is accurate as of any date other than the dates stated on their respective covers.

Dealers will deliver a prospectus supplement and prospectus when acting as underwriters of the certificates and with respect to their unsold allotments or subscriptions.  In addition, all dealers selling the certificates will be required to deliver a prospectus supplement and prospectus for ninety days following the date of this prospectus supplement.

We include cross-references in this prospectus supplement and the accompanying prospectus to captions in these materials where you can find further related discussions.  The following table of contents and the table of contents included in the accompanying prospectus provide the pages on which these captions are located.

TABLE OF CONTENTS

Prospectus Supplement

Caption

Page

Summary of Terms

1

Risk Factors

1

FORMATION OF THE ISSUING ENTITY

4

The Trust Property

4

The Receivables Pool

5

STATIC POOL INFORMATION

10

THE ORIGINATORS

11

The Servicer

11

Weighted Average Life of the Certificates

12

Use of Proceeds

15

Description of the certificates

15

[The Insurer]

27

[The Policy]

29

[other credit enhancement provider]

31

[derivative instruments]

Federal Income Tax Consequences

31

State and Local Tax Consequences

36

ERISA Considerations

36

Underwriting

38

RATINGS

39

LEGAL PROCEEDINGS

39

AFFILIATIONS, RELATIONSHIPS AND RELATED TRANSACTIONS

39

Legal Matters

40

SUMMARY OF TERMS

This summary highlights selected information from this prospectus supplement and does not contain all of the information that you need to consider in making your investment decision.  To understand all of the terms of the offering of the certificates, it is necessary that you read carefully this entire prospectus supplement and accompanying prospectus.

While this summary contains an overview of certain calculations, cash flow priorities, and other information to aid your understanding, you should read carefully the full description of these calculations, cash flow priorities and other information in this prospectus supplement and the accompanying prospectus before making any investment decision.

Issuing Entity	[      ] Boat Grantor Trust [      ]-[      ].
Depositor	Ace Securities Corp.  See “The Depositor” in the Prospectus.
Servicer	[      ].
Sponsor	[      ].  See “The Sponsor” in the Prospectus.
Originators	[_________________________], with respect to approximately [__]% of the receivables by aggregate principal balance as of the Cut-off Date. The remainder of the receivables were originated by various originators, none of which have originated more than 10% of the receivables.  See “The Originators” in this prospectus supplement.
Trustee	[      ].
Collateral Agent	[      ].
[Any credit enhancement provider referenced in Items 1114(b) and 1115 of Regulation AB]	[      ].
Closing Date	On or about [      ].
Cut-off Date	The [close] [opening] of business on [      ].
Distribution Dates	[      ] of each month or the next business day if the [      ] day is not a business day, beginning in [      ].
Record Dates	The business day immediately prior to a distribution date or, if definitive certificates are issued, the last day of the month prior to a distribution date.
Minimum Denominations	$[25,000, except for one Class B Certificate].
Form	Book-entry.
Interest Accrual Method	30/360.
Final Scheduled Distribution Date	[      ].

The Receivables

The receivables are amounts owed by individuals under fixed rate simple interest or actuarial retail installment sale contracts to purchase or refinance new or used boats, boat motors, jets skis and waverunners, substantially all of which were purchased from boat dealers

The depositor expects that the receivables will have the following characteristics as of [   ].  As of the closing date, no more than 5% of the receivables will have characteristics that differ from those described in this prospectus supplement as of [   ].

Number of receivables

[   ]

Principal amount

$[   ]

Annual percentage rates

[   ]% to [    ]%

Weighted average annual
percentage rate

[   ]%

Original term

[   ] months to [   ] months

Weighted average
original term

[   ] months

Remaining term

[   ] months to [__] months

Weighted average
remaining term

[   ]%

New by principal

[   ]%

Used by principal

[   ]%

Simple interest by principal

[   ]%

Actuarial by principal

[   ]%

States

[___] by principal

[   ]%

[___] by principal

[   ]%

Balloon Loans by principal

[   ]%

[For approximately [      ]% of the principal amount of the receivables, the amount of the receivable was more than the value of the financed boat at the time the loan was made.]

Removal and Substitution of a Receivable

[Regulation AB Item 1103(a)(6) compliant description of removal or substitution of receivables in connection with material document defects or breaches of representations and warranties].

Interest Distributions

On each distribution date, if the trust fund has sufficient cash, it will pay you the interest accrued on your certificates during the related interest period. The trust will not pay interest on the Class B certificates on any distribution date until the Class A certificateholders have received their full payment of interest on that distribution date. Interest periods begin on the prior distribution date and run through the day before the current distribution date.  The first interest period begins on [                 ] and runs through the day before the first distribution date. We will assume that each year has 360 days consisting of twelve 30 day months.

Principal Distributions

The Class A certificates and Class B certificates will be entitled to a pro rata share of the principal collections.  However, the trust will make principal distributions to the Class A certificates before making principal distributions to the Class B certificates on each distribution date.

Reserve Account

There will be a reserve account to help cover cash flow shortfalls.  Initially, the account will be $[      ]. On each distribution date the trustee will deposit amounts remaining after distribution of the servicing fee and amounts to be paid to the certificateholders in the reserve account until the amount equals a specified amount.

[Trigger Events]

[Regulation AB Item 1103(a)(3)(vii) compliant description of any events in the transaction agreements that can trigger liquidation or amortization of the receivables or other performance triggers that would alter the transaction structure or the flow of funds].

 [Other Credit Enhancement]

[Regulation AB Item 1103(a)(3)(ix) compliant description of any other credit enhancement].

[Additional Series or Classes Backed by Receivables]

[Regulation AB Item 1103(a)(4) compliant description of any outstanding series or classes of certificates that are backed by the receivables or otherwise have claims on the receivables.  Regulation AB compliant description of any circumstances in which additional series or classes of certificates may be issued that are backed by the receivables, with specification if certificateholder approval is necessary for such issuances and if certificateholders will receive notice of such issuances].

[Revolving Periods]

[Regulation AB Item 1103(a)(5) compliant description of any revolving periods].

[Prefunding Periods]

[Regulation AB Item 1103(a)(5) compliant description of any prefunding periods].

Fees and Expenses

Prior to the distribution of any interest to the certificateholders, the servicer will be entitled to receive a servicing fee for each collection period in an amount equal to the product of one-twelfth of [    ]% per annum for so long as [               ] or an affiliate thereof is the servicer, and [    ]% per annum if [               ] or an affiliate thereof is no longer the servicer and the aggregate principal balance of the receivables as of the first day of the collection period.  See “Description of the Transfer and Servicing Agreement--Servicing Compensation and Payment of Expenses” in the Prospectus.

[Regulation AB Item 1103(a)(7) compliant description of any trustee fees and any other fees and expenses].

Optional Termination

When the principal amount of the receivables is 10% or less than it was on the cut-off date, the servicer may buy the receivables.  You must receive the principal amount of your certificates and all accrued but unpaid interest or the receivables will not be sold.

Final Scheduled Maturity Dates

The final scheduled maturity date of the certificates is [__________].  The actual date on which the aggregate outstanding principal amount of the certificates is paid may be earlier than the final scheduled maturity date based on a variety of factors.

Expected Final Distribution Dates

The expected final distribution date of each class of certificates is [

], based on the assumption that the servicer has exercised its option to purchase all the receivables as described in “Optional Termination” above.  Due to losses and prepayments on the receivables, the final distribution dates on each class of certificates may be substantially earlier or later than such date.

Tax Consequences

McKee Nelson LLP, special federal tax counsel to the trust, is of the opinion that the trust will be classified, for federal income tax purposes, as a grantor trust and not as an association taxable as a corporation.  Certificateholders must report their respective allocable shares of income earned on trust assets excluding certain amounts retained by the depositor as described in this prospectus supplement and, subject to the limitations applicable to individuals, estates, trusts and partnerships, may deduct their respective allocable shares of reasonable servicing and other fees.  However, the tax code is complex, and we recommend that you and your tax advisors review the information under the caption “Federal Income Tax Consequences” in this prospectus supplement and “Material Federal Income Tax Consequences -- Grantor Trusts” in the prospectus.

ERISA Considerations

The certificates may be purchased by ERISA and other retirement plans if one or more administrative exemptions apply.  See “ERISA Considerations” in this prospectus supplement and the prospectus.

Ratings

It is a condition to the issuance of the certificates that the certificates receive at least the following ratings from [______________] and [_________________]:

Certificates	[____]	[____]
Class A Certificates	[__]	[__]
Class B Certificates	[__]	[__]

RISK FACTORS

The following information, which you should carefully consider, identifies certain significant sources of risk associated with an investment in the certificates.  You should also carefully consider the information set forth under “Risk Factors” in the prospectus.

Certain features of the receivables pool may result in losses.	There are a number of features of the receivables in the pool that create additional risk of loss, including the following:
Certain obligors have little equity in their financed boats which may result in more severe losses.	For approximately [      ]% of the principal amount of the receivables, the original principal amount of the loan exceeded the cost of the related boat.  Although each such obligor was required to make a downpayment from the obligor’s own funds, those obligors have no equity in their boats.  While those borrowers had excellent credit histories at the time, the lack of any equity in the boat may make it more likely that those obligors will default if their personal financial conditions change.  In addition, if such an obligor defaults and the boat is repossessed, the trust fund is likely to suffer a loss.
[The concentration of the receivables in specific geographic areas may increase the risk of loss.	Economic conditions in the states where obligors reside may affect the delinquency, loan loss and repossession experience of the trust fund with respect to the receivables.  As of the cutoff date, with respect to approximately [  ]%, [  ]% and [  ]% of the principal amount of the receivables, obligors took initial title to the boats relating to the receivables in [                 ], [                 ] and [                 ], respectively.  Economic conditions in any state or region may decline over time and from time to time.  Because of the concentration of the obligors in certain states, any adverse economic conditions in those stat es may have a greater effect on the performance of the certificates than if the concentration did not exist.  We are not aware of any adverse economic conditions that are peculiar to [                 ], [                 ] or [                 ] as of the date of this prospectus supplement. In addition, we do not believe that the laws of those states relating to boat financing and the rights of lenders are more burdensome than those in other states.]
Newly originated loans may be more likely to default which may cause losses.	Defaults on boat loans tend to occur at higher rates during the early years of the boat loans. Substantially all of the boat loans will have been originated within [      ] months prior to the sale to the trust fund.  As a result, the trust fund may experience higher rates of default than if the boat loans had been outstanding for a longer period of time.
Balloon loans may have a higher rates of default which may cause losses.	A balloon loan has monthly payments that will not fully pay off the loan balance by the maturity date.  As a result the borrower usually will have to refinance the balloon loan in order to pay the amount due.  The borrower may not be able to refinance the balloon loan for any number of reasons, including the level of available interest rates, the age or condition of the boat, or the borrower’s payment or credit history.  The trust fund will not have any funds to refinance a balloon loan, and the Sponsor is not obligated to do so.
Class B certificates will absorb cash shortfalls and losses before the Class A certificates.	The Class B certificateholders will not receive any distribution of interest until the full amount of interest on the Class A certificates has been paid on each distribution date.  The Class B certificateholders will not receive any distributions of principal until the full amount of principal of the Class A certificates has been paid on that distribution date.  Holders of the certificates must rely for repayment upon payments on the receivables, and, if and to the extent available, amounts on deposit in the reserve account.  If funds in the reserve account are exhausted, the trust will depend solely on current distributions on the receivables to make payments on the certificates.  Delinquent payments on the receivables may result in a shortfall in the distributions on the Class B certificates on any distribution date due to the priority of payments on the Class A certificates.
Your yield to maturity may be reduced by prepayments.	The pre-tax yield to maturity is uncertain and will depend on a number of factors including the following:
The rate of return of principal is uncertain.	The amount of distributions of principal of the certificates and the time when you receive those distributions depends on the amount and the times at which borrowers make principal payments on the receivables.  Those principal payments may be regularly scheduled payments or unscheduled payments resulting from prepayments or defaults of the receivables.
An early termination will shorten the life of your investment which may reduce your yield to maturity.	If the receivables are sold upon exercise of the servicer’s optional termination, you will receive the principal amount of your certificates plus accrued interest through the related interest period. Because your certificates will no longer be outstanding, you will not receive the additional interest payments that you would have received had the certificates remained outstanding. If you bought your certificates at a premium, your yield to maturity will be lower than it would have been if the optional termination had not been exercised.
Class B certificateholders may have to pay taxes on amounts not actually received	For federal income tax purposes, amounts otherwise payable to the owners of the Class B certificates that are paid to the owners of the Class A certificates will be deemed to have been received by the owners of the Class B certificates and then paid by them to the owners of the Class A certificates pursuant to a guaranty.  Accordingly, the owners of the Class B certificates could be liable for taxes on amounts not actually received. See “Federal Income Tax Consequences” in this prospectus supplement and “Material Federal Income Tax Consequences -- Grantor Trusts” in the prospectus.
[Additional Applicable Risk Factors]	[____________________]

FORMATION OF THE ISSUING ENTITY

Pursuant to a pooling and servicing agreement (as amended and supplemented, the “Agreement”), to be dated as of [                 ] (the “Cutoff Date”), among Ace Securities Corp., as depositor (the “Depositor”), [        ], as sponsor (in this capacity, the “Sponsor”) and as servicer (in this capacity, the “Servicer”), [        ], as trustee (the “Trustee”), and [        ], as collateral agent (the “Collateral Agent”), the Depositor will establish [        ] Boat Grantor Trust [   ] (the “Issuing Entity”).   The Agreement constitutes the “governing instrument” under the laws of the State of Delaware.  Pursuant to th e Agreement, the Depositor will establish the Issuing Entity by selling and assigning a pool of fixed rate simple interest and actuarial boat retail installment sales contracts and other boat installment chattel paper (the "Receivables") secured by new and used boats, boat motors, jet skis and waverunners (the "Financed Boats") and the other Issuing Entity Property, as described below under “The Trust Property” to the Issuing Entity in exchange for the $[   ], [   ]% Class A certificates (the “Class A Certificates”) and the $[   ], [   ]% Class B certificates (the “Class B Certificates,” and, together with the Class A Certificates, the “Certificates”).  The Depositor will sell the Certificates to [                 ] and [Deutsche Bank Securities Inc.], (the “Underwriters”) in exchange for cash. All references in this prospectus supplement to sales, assignments and transfers to the Issuing Entity refer to sales, assignments and transfers to the Trustee on behalf of the Issuing Entity for the benefit of the holders of the Certificates (the “Certificateholders”).

The Servicer will, directly or through subservicers, hold the Receivables and the certificates of title or ownership or other documents evidencing the notation of the Seller’s lien on the certificates of title or ownership relating to the Financed Boats as custodian for the Trustee. However, the Receivables will not be marked or stamped to indicate that they have been sold to the Issuing Entity, and the certificates of title for the Financed Boats will not be endorsed or otherwise amended to identify the Trustee as the new secured party. Under the foregoing circumstances and in certain jurisdictions, the Issuing Entity’s interest in the Receivables and the Financed Boats may be defeated.  See  “Certain Legal Aspects of the Receivables” in the Prospectus.

The Issuing Entity will not acquire any contracts or assets other than the Issuing Entity Property, and it is not anticipated that the Issuing Entity will have any need for additional capital resources.  The Issuing Entity will have no operating history upon its establishment and will not engage in any business activity other than acquiring and holding the Trust Property, issuing the Certificates, distributing payments on the Certificates and engaging in other activities that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith.  The foregoing restrictions are contained in the Agreement.  [These restrictions cannot be amended without the consent of holders of Certificates evidencing at least 51% of the voting rights.]  For a description of other provisions relating to amending the Agreement, see “[[_______________]]” in the base prospectus.

The Issuing Entity’s fiscal year end is [______].

The Issuing Entity’s principal offices are in [      ], in care of [      ], as Trustee, at the address listed under “Description of the Certificates—The Trustee”

THE TRUST PROPERTY

Each Certificate represents a fractional undivided interest in the Trust.  The “Trust Property” will include the Receivables, which, except as provided below, were originated by boat dealers (the “Dealers”) and purchased by the Seller pursuant to agreements with Dealers (“Dealer Agreements”).   Approximately [   ]% of the aggregate Principal Balance of the Receivables as of the Cutoff Date (the “Initial Pool Balance”) were directly originated by the Seller in connection with referrals from an insurance company.  On the date of the issuance of the Certificates (the “Closing Date”), the Depositor will buy the Receivables from the Seller and the Depositor will sell the Receivables to the Trust.  The Trust Property also includes:

·

all monies received under the Receivables on and after the Cut-off Date and, with respect to Receivables which are Actuarial Receivables, monies received thereunder prior to the Cut-off Date that are due on or after the Cut-off Date;

·

such amounts as from time to time may be held in the Collection Account, the Reserve Account, the Payahead Account, the Class A Distribution Account and the Class B Distribution Account, established and maintained by the Servicer pursuant to the Agreement as described below;

·

security interests in the Financed Boats;

·

the rights of the Sponsor to receive proceeds from claims under certain insurance policies;

·

the rights of the Trustee on behalf of the Certificateholders under the Agreement;

·

the rights of the Sponsor to refunds for the costs of extended service contracts and to refunds of unearned premiums with respect to credit life and credit accident and health insurance policies covering the Financed Boats or the retail purchasers of, or other persons owing payments on, the Financed Boats (the “Obligors”);

·

all right, title and interest of the Sponsor (other than with respect to any Dealer commission) with respect to the Receivables under the related Dealer Agreements;

·

rights with respect to any repossessed Financed Boats; and

·

all proceeds (within the meaning of the Uniform Commercial Code) of the foregoing.

The Reserve Account will be maintained in the name of the Collateral Agent for the benefit of the Certificateholders, but will not be part of the Trust Fund.

THE RECEIVABLES POOL

Pool Composition

The Receivables were selected from the Sponsor’s portfolio by several criteria, including, as of the Cut-off Date, the following:

·

each Receivable has a scheduled maturity of not later than the Final Scheduled Maturity Date;

·

each Receivable was originated by a Dealer and purchased by the Seller pursuant to a Dealer Agreement; provided, that approximately [   ]% of the Initial Pool Balance was comprised of Receivables originated directly by the Seller in connection with referrals from an insurance company;

·

each Receivable has an original term to maturity of not more than [      ] months and a remaining term to maturity of [      ] months or less as of the Cut-off Date;

·

approximately [      ]% of the Initial Pool Balance was secured by new Financed Boats, and approximately [      ]% of the Initial Pool Balance was secured by used Financed Boats;

·

each Receivable provides for level monthly payments which fully amortize the amount financed except, in the case of Simple Interest Receivables, for the last payment, which may be different from the level payment;

·

each Receivable is not more than [      ] days contractually past due as of the Cut-off Date and is not more than [      ] months paid ahead;

·

each Receivable has an outstanding principal balance between $[      ] and $[      ];

·

the Obligor with respect to each Receivable has a FICO score between [______] and [______];

·

and each Receivable has an APR of no less than [      ]%.

As of the Cut-off Date, no Obligor on any Receivable was noted in the related records of the Servicer as being the subject of any pending bankruptcy or insolvency proceeding.  The latest scheduled maturity of any Receivable is not later than [      ].  The Receivables were selected from the boat retail installment sales contracts and other installment chattel paper secured by Financed Boats (“Boat Loans”) in the portfolio of the Sponsor that met the above criteria.  The Depositor and the Sponsor believe that these selection procedures are not materially adverse to Certificateholders.

The Depositor considers an account past due if any portion of the payment due on a due date is not received by the succeeding due date for that account.

The composition, distribution by remaining term, distribution by APR, geographic distribution, distribution by remaining principal of the Receivables and distribution by FICO scores, in each case, as of the Cut-off Date are set forth in the tables below.  The percentages in the following tables may not add to 100% due to rounding.

Composition of the Receivables as of the Cut-off Date
	New Financed Boats	Used Financed Boats	Total
Aggregate Principal Balance	$[__________]	$[__________]	$[__________]
Number of Receivables	[__________]	[__________]	[__________]
Average Principal Balance	$[__________]	$[__________]	$[__________]
Average Original Balance	$[__________]	$[__________]	$[__________]
Weighted Average Contract Rate	[_______]%	[_______]%	[_______]%
Contract Rate (Range)	[___]% - [___]%	[___]% - [___]%	[___]% - [___]%
Weighted Average Original Term (months)	[_______]	[_______]	[_______]
Original Term (Range) (months)	[____] to [_____]	[____] to [_____]	[____] to [_____]
Weighted Average Remaining Term (months)	[_______]	[_______]	[_______]
Remaining Term (Range) (months)	[____] to [_____]	[____] to [_____]	[____] to [_____]
Weighted Average FICO score	[_______]	[_______]	[_______]
FICO score (Range)	[____] to [_____]	[____] to [_____]	[____] to [_____]

Distribution by Remaining Term of the Receivables as of the Cut-off Date
Remaining Term (Range)	Number of Receivables	Aggregate Principal Balance	Percentage of Initial Pool  Balance
Less than [_____] months	[____________]	$[__________]	[___________]%
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
[_____] to [_____] months	[____________]	[____________]	[____________]
Total		$	100.00%

Distribution by Annual Percentage Rate of the Receivables as of the Cut-off Date
Annual % Rate Range	Number of Receivables	Aggregate Principal Balance	Percentage of Initial Pool  Balance
[_____]% to below	[____________]	$	%
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[_____]% to [_____]%	[____________]	[____________]	[____________]
[____]% and above	[____________]	[____________]	[____________]
Total		$	100.00%

Geographic Distribution of the Receivables as of the Cut-off Date
State1	Number of Receivables	Aggregate Principal Balance	Percentage of Initial Pool  Balance
[      ]	[____________]	$	%
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
[      ]	[____________]	[____________]	[____________]
Others2
Total		$	100.00%

____________________

1.

Based on state where the Obligors took initial title to the boats, which may differ from the state of origination of the Receivable and/or the billing addresses of the Obligors.

2.

Includes [    ] other states and [    ] none of which have a concentration of Receivables in excess of [    ]% of the Initial Pool Balance.

Distribution by Remaining Principal Balance of the Receivables as of the Cut-off  Date
Remaining Principal Balance (Range)	Number of Receivables	Aggregate Principal Balance	Percentage of Initial Pool  Balance
$ 2,500 to $ 4,999	[____________]	$	%
$ 5,000 to $ 7,499	[____________]	[____________]	[____________]
$ 7,500 to $ 9,999	[____________]	[____________]	[____________]
$10,000 to $12,499	[____________]	[____________]	[____________]
$12,500 to $14,999	[____________]	[____________]	[____________]
$15,000 to $17,499	[____________]	[____________]	[____________]
$17,500 to $19,999	[____________]	[____________]	[____________]
$20,000 to $22,499	[____________]	[____________]	[____________]
$22,500 to $24,999	[____________]	[____________]	[____________]
$25,000 to $27,499	[____________]	[____________]	[____________]
$27,500 to $29,999	[____________]	[____________]	[____________]
$30,000 to $32,499	[____________]	[____________]	[____________]
$32,500 to $34,999	[____________]	[____________]	[____________]
$35,000 to $37,499	[____________]	[____________]	[____________]
$37,500 to $39,999	[____________]	[____________]	[____________]
$40,000 to $41,499	[____________]	[____________]	[____________]
$42,500 to $44,999	[____________]	[____________]	[____________]
$45,000 to $47,499	[____________]	[____________]	[____________]
$47,500 to $49,999	[____________]	[____________]	[____________]
$50,000 to $52,499	[____________]	[____________]	[____________]
$52,500 to $54,999	[____________]	[____________]	[____________]
Total		$	100.00%

Distribution by FICO Score of the Receivables as of the Cut-off Date
Annual % Rate Range	Number of Receivables	Aggregate Principal Balance	Percentage of Initial Pool  Balance
[______] to [______]	[____________]	$	%
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] to [______]	[____________]	[____________]	[____________]
[______] and above	[____________]	[____________]	[____________]
Total		$	100.00%

As of the Cut-off Date, approximately [     ]% of the aggregate principal balance of the Receivables, constituting [     ]% of the number of Receivables, were between 1 payment and [    ] payments paid-ahead.

As of the Cut-off Date, approximately [   ]% of the aggregate principal balance of the Receivables, constituting [     ]% of the number of Receivables, are Actuarial Receivables.  ”Actuarial Receivables” are receivables that provide for amortization of the amount financed over a series of fixed, level-payment monthly installments.  Each monthly installment, including the monthly installment representing the final payment on the Receivable, consists of an amount of interest equal to 1/12 of the Annual Percentage Rate (“APR”) of the amount financed multiplied by the unpaid principal balance of the amount financed, and an amount of principal equal to the remainder of the monthly payment.

As of the Cut-off Date, approximately [   ]% of the aggregate principal balance of the Receivables, constituting [   ]% of the number of Receivables, are Simple Interest Receivables.  ”Simple Interest Receivables” are receivables that provide for the amortization of the amount financed under the receivable over a series of fixed level monthly payments. However, unlike the monthly payment under an Actuarial Receivable, each monthly payment includes an installment of interest which is calculated on the basis of the outstanding principal balance of the receivable multiplied by the stated APR and further multiplied by the period elapsed (as a fraction of a calendar year) since the preceding payment of interest was made. As payments are received under a Simple Interest Receivable, the amount received is applied first to interest accrued to the date of payment and the balance is applied to reduce the unpaid principal balance. Accordingly, if an Obligor pays a fixed monthly installment before its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be less than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly greater. Conversely, if an Obligor pays a fixed monthly installment after its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be greater than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly less. In either case, the Obligor pays a fixed monthly installment until the final scheduled payment date, at which time the amount of the final installment is increased or decreased as necessary to repay the then outstanding principal balance.

If an Actuarial Receivable is prepaid in full, with minor variations based upon state law, under the terms of the boat retail installment sale contract or loan agreement, as the case may be, a “refund” or “rebate” will be made to the borrower of the portion of the total amount of payments then due and payable under such contract or agreement allocable to “unearned” interest, calculated on the basis of a constant interest rate.  If a Simple Interest Receivable is prepaid, rather than receive a rebate, the borrower is required to pay interest only to the date of prepayment.  The amount of a rebate under an Actuarial Receivable generally will be less than the remaining scheduled payments of interest that would have been due under a Simple Interest Receivable for which all payments were made on schedule.

The Servicer may accede to an Obligor’s request to pay scheduled payments in advance, in which event the Obligor will not be required to make another regularly scheduled payment until the time a scheduled payment not paid in advance is due.  The amount of any payment (which are not amounts representing Payaheads) made in advance will be treated as a principal prepayment and will be distributed as part of the Principal Distribution Amount in the month following the Collection Period in which the prepayment was made.  See “Maturity and Prepayment Considerations” in the Prospectus.

Receivable Delinquencies and Losses

For information regarding delinquencies and losses on the Receivables, see the tables below.  A Receivable is considered to be delinquent when a payment due on any due date remains unpaid as of the close of business on the last business day immediately prior to the next monthly due date.  The determination as to whether a loan falls into this category is made as of the close of business on the last business day of each month.

30 -  59 Days (times):	Number of Receivables	% by Receivable Count	Principal Balance Outstanding as of the Cutoff Date	% of Aggregate Principal Balance Outstanding as of the Cutoff Date
0	[________]	[______]%	[_______._]	[__.__]
1	[________]	[______]%	[_______._]	[__.__]
2	[________]	[______]%	[_______._]	[__.__]
Total	[________]	100.00%	[_______._]	100.00

60 -  89 Days (times):	Number of Receivables	% by Receivable Count	Principal Balance Outstanding as of the Cutoff Date	% of Aggregate Principal Balance Outstanding as of the Cutoff Date
0	[________]	[______]	[_______._]	[__.__]
1	[________]	[______]	[_______._]	[__.__]
2	[________]	[______]	[_______._]	[__.__]
Total	[________]	100.00	[_______._]	100.00

[No Receivable has been delinquent more than 90 days since origination.]

STATIC POOL INFORMATION

Static pool information material to this offering may be found at [website address].

Information provided through the Internet address above will not be deemed to be a part of this prospectus or the registration statement for the certificates offered hereby if it relates to any prior certificates pool or vintage formed before January 1, 2006, or with respect to the mortgage pool (if applicable) any period before January 1, 2006.

THE ORIGINATORS

General

[____], [____] and  [____] are the originators of the receivables with respect to approximately [___]%, [___]% and [___]%, respectively, of the receivables by aggregate principal balance as of the Cut-off Date, along with various other originators, none of which originated more than 10% of the receivables by aggregate principal balance as of the Cut-off Date (each, an “Originator”).

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

THE SERVICER

[____________], a [describe form of organization of the servicer], (the “Servicer”) will initially service the Receivables pursuant to a the Agreement.  

The Servicer will perform the functions of a third-party servicer of boat loans as an agent for their beneficial owner.  [These servicer functions will include:

·

collecting and posting all payments;

·

responding to obligor inquiries regarding the boat loans;

·

investigating delinquencies;

·

reporting tax information to obligors;

·

paying boat disposition costs with respect to defaulted accounts;

·

monitoring the collateral;

·

accounting for collections;

·

furnishing monthly and annual statements to the Issuing Entity with respect to distributions; and

·

generating federal income tax information. ]

 [Regulation AB Item 1108 compliant description of the Servicer.]

Delinquency Experience (Dollars in Thousands)
	At December 31,
	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]	[     ]
	Number of Loans	Dollars	Percent	Number of Loans	Dollars	Percent	Number of Loans	Dollars	Percent
Principal Amount Outstanding1
Delinquencies2
30-59 Days
60-89 Days
90-119 Days
over 120 days
Total Delinquencies as a  Percentage of the Total Amount Outstanding

________________________

1.

Principal Amount Outstanding is the aggregate remaining principal balance of all Receivables serviced, net of unearned interest.

2.

The period of delinquency is based on the number of days scheduled payments are contractually past due.  Includes repossessions on hand which have not been charged-off.  A receivable is 30 days contractually past due if a scheduled payment has not been received by the subsequent calendar month’s scheduled payment date.

WEIGHTED AVERAGE LIFE OF THE CERTIFICATES

Prepayments on boat receivables can be measured relative to a prepayment standard or model.  The model used in this Prospectus Supplement, the Absolute Prepayment Model (“ABS”), represents an assumed rate of prepayment each month relative to the original number of receivables in a pool of receivables.  ABS further assumes that all the receivables are the same size and amortize at the same rate and that each receivable in each month of its life will either be paid as scheduled or be prepaid in full.  For example, in a pool of receivables originally containing 10,000 receivables, a 1% ABS rate means that 100 receivables prepay each month. ABS does not purport to be an historical description of prepayment experience or a prediction of the anticipated rate of prepayment of any pool of receivables, including the Receivables.

All the Receivables are prepayable at any time.  For this purpose the term “prepayments” includes prepayments by Obligors in full or in part, certain partial prepayments related to liquidations due to default, including rebates of extended warranty contract costs and insurance premiums, as well as receipts of proceeds from physical damage, credit life, theft and disability insurance policies and certain other Receivables, purchased or repurchased pursuant to the terms of the Agreement.  The rate of prepayments on the Receivables may be influenced by a variety of economic, social and other factors, including changes in interest rates and the fact that an Obligor generally may not sell or transfer the Financed Boat securing a Receivable without the consent of the secured party, which generally results in the repayment of the remaining principal balance of the Receivable.  In addition, under some circumstances, the Seller i s obligated to repurchase and the Servicer is obligated to purchase, Receivables pursuant to the Agreement as a result of uncured breaches of representations and warranties in the case of the Seller and uncured breaches of covenants in the case of the Servicer.  In addition, the Servicer has the option to purchase the Receivables when the aggregate principal balance of the Receivables is 10% or less of the Initial Pool Balance, at a purchase price equal to the sum of the Class A Principal Balance and the Class B Principal Balance plus accrued and unpaid interest.  Accordingly, under some circumstances it is likely that the Certificates will be repaid before the Final Scheduled Distribution Date set forth in this prospectus supplement under “Summary of Terms -- Final Scheduled Distribution Date.” Reinvestment risk associated with early payment of the Certificates will be borne exclusively by the Certificateholders.

The table captioned “Percent of Initial Class A and Class B Principal Balance at Various ABS Percentages” (the “ABS Table”) has been prepared on the basis of the characteristics of the Receivables.   The ABS Table assumes that

·

the Receivables prepay in full at the specified constant percentage of ABS monthly, with no defaults, losses or repurchases,

·

each scheduled monthly payment on the Receivables is made on the last day of each month and each month has 30 days,

·

distributions on the Certificates are made on each Distribution Date (and each such date is assumed to be the [   ]th day of each applicable month),

·

the balance in the Reserve Account on each Distribution Date is equal to the Specified Reserve Account Balance, and

·

the Servicer does not exercise its option to purchase the Receivables.   

The ABS Table sets forth the percent of the Initial Class A Principal Balance and the percent of the Initial Class B Principal Balance that would be outstanding after each of the Distribution Dates shown and the corresponding weighted average lives at various constant ABS percentages.

The ABS Table also assumes that the Receivables have been aggregated into six hypothetical pools with all of the Receivables within each pool having the following characteristics and that the level scheduled monthly payment for each of the six pools, which is based on its aggregate principal balance, weighted average APR, weighted average original term to maturity and weighted average remaining term to maturity as of the cutoff date, will be such that each pool will fully amortize by the end of its remaining term to maturity.

Pool	Remaining Term to Maturity Range (in months)	Aggregate Principal Balance	Weighted Average Contract Rate	Weighted Average Original Term to Maturity (in Months)	Weighted Average Remaining Term to Maturity (in Months)
1		$	%
2		$	%
3		$	%
4		$	%

The actual characteristics and performance of the Receivables will differ from the assumptions used in constructing the ABS Tables.  The assumptions used are hypothetical and have been provided only to give a general sense of how the principal cash flows might behave under varying prepayment scenarios.  For example, it is very unlikely that the Receivables will prepay at a constant level of ABS until maturity or that all of the Receivables will prepay at the same level of ABS.  Moreover, the diverse terms of Receivables within each of the hypothetical pools could produce slower or faster principal distributions than indicated in the ABS Table at the various constant percentages of ABS specified, even if the original and remaining terms to maturity of the Receivables are as assumed.  Any difference between assumptions and the actual characteristics and performance of the Receivables, or actual prepayment experience, will affec t the percentages of initial balances outstanding over time and the weighted average lives of the Class A Certificates and the Class B Certificates.

Percent of Initial Class Principal Balance at Various ABS Percentages
	Class A Certificates Assumed ABS Percentage1
Distribution Dates	[   ]%	[   ]%	[   ]%	[   ]%
Closing Date	100	100	100	100
[                        ]
[                        ]
[                        ]
Weighted Average Life (years)2

_______________________

1.

An asterisk “*” means a percent of initial Certificate principal balance of more than zero and less than 0.5%.

2.

The weighted average life of a Certificate is determined by (i) multiplying the amount of each principal payment of such Certificate by the number of years from the date of the issuance of such Certificate to the Distribution Date on which such principal payment is made, (ii) adding the results and (iii) dividing the sum by the initial principal balance of such Certificate.

The ABS Tables have been prepared based on the assumptions described above (including the assumptions regarding the characteristics and performance of the Receivables which will differ from the actual characteristics and performance thereof) and should be read in conjunction therewith.

Percent of Initial Certificate Balance at Various ABS Percentages
	Class B Certificates Assumed ABS Percentage
Distribution Dates	[   ]%	[   ]%	[   ]%	[   ]%
Closing Date	100	100	100	100
[                        ]
[                        ]
[                        ]
[                        ]

The ABS Tables have been prepared based on the assumptions described above (including the assumptions regarding the characteristics and performance of the Receivables which will differ from the actual characteristics and performance thereof) and should be read in conjunction therewith.

USE OF PROCEEDS

The net proceeds from the sale of the Certificates will be applied by the Depositor first, to deposit approximately $[    ] into the Reserve Account and second, the balance to purchase the Receivables and the other Trust Property from the Sponsor.

DESCRIPTION OF THE CERTIFICATES

The Certificates will be issued pursuant to the Agreement, substantially in the form filed as an exhibit to the Registration Statement.  The following information summarizes all material provisions of the Certificates and the Agreement.  The following summary supplements the description of the general terms and provisions of the Certificates of any given Series and the related Agreement set forth in the Prospectus, to which description reference is made by this prospectus supplement.

Overview of the Certificates

The Class A Certificates will be issued in an initial aggregate principal amount of $[                 ] (the “Initial Class A Principal Balance”) and the Class B Certificates will be issued in an initial aggregate principal amount of $[                 ] (the “Initial Class B Principal Balance”).  The Certificates will evidence fractional undivided interests in the assets of the Issuing Entity to be created pursuant to the Agreement.  The Class A Certificates will evidence in the aggregate an undivided ownership interest of approximately [       ]% of the Issuing Entity (the “Class A Percentage”) and the Class B Certificates will evidence in the aggregate an undivided ownership interest of approximately [   & nbsp;     ]% of the Issuing Entity (the “Class B Percentage”).

The Certificates will constitute Fixed Rate Securities, as this term is defined under “Certain Information Regarding the Securities — Fixed Rate Securities” in the Prospectus.  Interest on the outstanding principal amount of each class of Certificates will accrue at the fixed rate per annum specified for that class on the cover page of this prospectus supplement (each rate, a “Pass-Through Rate”).  Interest on the outstanding principal amount of each class of Certificates will accrue at the related Pass-Through Rate from and including [                 ], in the case of the first Distribution Date, or from and including the most recent Distribution Date on which interest has been paid to but excluding the following Distribution Date (each representing an “Interest Period”).  Interest on the Certificates will be calcul ated on the basis of a 360 day year consisting of twelve 30 day months.  Distributions of principal and interest will be made on the [  ]th day of each month, or if the [____]th day is not a business day on the next succeeding Business Day (each, a “Distribution Date”), commencing [                 ].  Distributions on a Distribution Date will be made to Certificateholders of record on the Business Day prior to the applicable Distribution Date, or if definitive Certificates have been issued, the last day of the month prior to a Distribution Date (each date, a “Record Date”).  A “Business Day” is a day other than a Saturday, a Sunday or a day on which banking institutions or trust companies in New York, New York, [              ] or [              ] are authorized by law, regulation, executive order or governmental decree to be closed.

The Certificates will be available in book-entry form through the facilities of The Depository Trust Company in the United States and Clearstream, Luxembourg and the Euroclear System in Europe.  See “Certain Information Regarding the Securities—Book-Entry Registration” and “—Definitive Securities” in the Prospectus and Annex I to the Prospectus.

The Pooling and Servicing Agreement

Sale and Assignment of the Receivables

Information regarding the conveyance of the Receivables by the Sponsor to the Depositor and by the Depositor to the Trust on the Closing Date pursuant to the Agreement is set forth in the Prospectus under “Description of the Transfer and Servicing Agreements -- Sale and Assignment of Receivables.”

Accounts

The Servicer will establish one or more segregated accounts (the “Collection Account”), in the name of the Trustee on behalf of the Trust and the Certificateholders, into which all payments made on or with respect to the Receivables will be deposited.  The Servicer will also establish a segregated account (the “Class A Distribution Account”), in the name of the Trustee on behalf of the Trust and the Class A Certificateholders, and a segregated account (the “Class B Distribution Account”), in the name of the Trustee on behalf of the Trust and the Class B Certificateholders, from which all distributions with respect to the Class A Certificates and the Class B Certificates, respectively, will be made.  The Servicer will establish a segregated account (the “Reserve Account”), in the name of [        ], as collateral agent, on behalf of the Certificateholders.   The Servicer will establish an additional account (the “Payahead Account”), in the name of the Trustee on behalf of the Trust and the Certificateholders, into which early payments by or on behalf of Obligors on Actuarial Receivables will be deposited until the time the payment becomes due.  Until the time payments are transferred from the Payahead Account to the Collection Account, they will not constitute collected interest or collected principal and will not be available for distribution to the Certificateholders.  The Collection Account, the Class A Distribution Account, the Class B Distribution Account, the Payahead Account and the Reserve Account are sometimes referred to as the “Trust Accounts.”  The Reserve Account will be maintained for the benefit of the Certificateholders, but will not be an asset of the Trust.

Servicing Compensation

The Servicer will be entitled compensated as described under “—Fees and Expenses of the Trust Fund”, which will be paid in the order of priority described herein.  See “Description of the Transfer and Servicing Agreement—Servicing Compensation and Payment of Expenses” in the Prospectus.

Distributions on Certificates

Deposits to the Collection Account.  On or before the earlier of the [tenth] Business Day of the month in which a Distribution Date occurs and the [fourth] Business Day preceding that Distribution Date (the “Determination Date”), the Servicer will provide the Trustee with information with respect to the preceding Collection Period, including the aggregate amounts of the following:

·

Collections on the Receivables,

·

Advances to be remitted by the Servicer,

·

Liquidated Receivables, if any, and

·

Purchase Amounts of the Receivables to be repurchased by the Sponsor or purchased by the Servicer with respect to the Distribution Date.

On or before the Business Day preceding each Distribution Date, the Servicer will cause the Interest Collections and the Principal Collections for the Distribution Date to be deposited into the Collection Account.

“Collections” for any Distribution Date will equal the sum of Interest Collections and Principal Collections for the related Distribution Date.

“Interest Collections” for any Distribution Date will equal the sum of the following amounts with respect to any Distribution Date, computed, with respect to Simple Interest Receivables, in accordance with the simple interest method, and, with respect to Actuarial Receivables, in accordance with the actuarial method:

·

that portion of all collections on the Receivables allocable to interest in respect of the preceding Collection Period, including with respect to Actuarial Receivables, amounts withdrawn from the Payahead Account and allocable to interest and excluding amounts deposited into the Payahead Account and allocable to interest, in each case in respect of the related Collection Period;

·

all proceeds, other than any proceeds from any Dealer commission (“Liquidation Proceeds”) of the liquidation of Liquidated Receivables, net of expenses incurred by the Servicer in connection with the liquidation and any amounts required by law to be remitted to the Obligor on the Liquidated Receivables, to the extent attributable to interest due on the Liquidated Receivables, which became Liquidated Receivables during the Collection Period in accordance with the Servicer’s customary servicing procedures;

·

the Purchase Amount of each Receivable that was repurchased by the Sponsor or purchased by the Servicer during the preceding Collection Period to the extent attributable to accrued interest on that Receivable;

·

all monies collected, from whatever source, other than any proceeds from any Dealer commission, in respect to Liquidated Receivables during any Collection Period following the Collection Period in which the Receivable was written off, net of the sum of any amounts expended by the Servicer for the account of the Obligor and any amounts required by law to be remitted to the Obligor (“Recoveries”); and

·

all Advances with respect to interest for the related Distribution Date.

In calculating the Interest Collections, all payments and proceeds, including Liquidation Proceeds, of any Receivables repurchased by the Sponsor or purchased by the Servicer the Purchase Amount of which has been included in the Interest Collections on a prior Distribution Date will be excluded.

“Principal Collections” for any Distribution Date will equal the sum of the following amounts with respect to any Distribution Date, computed, with respect to Simple Interest Receivables, in accordance with the simple interest method, and with respect to Actuarial Receivables, in accordance with the actuarial method:

·

that portion of all collections on the Receivables allocable to principal in respect of the preceding Collection Period, without regard to any extensions or modifications effected after the Cutoff Date, other than with respect to any extensions or modifications in connection with Cram Down Losses during the related Collection Period, including with respect to Actuarial Receivables, amounts withdrawn from the Payahead Account and allocable to principal and excluding amounts deposited into the Payahead Account and allocable to principal, in each case in respect of the related Collection Period;

·

Liquidation Proceeds attributable to the principal amount of Receivables which became Liquidated Receivables during the preceding Collection Period in accordance with the Servicer’s customary servicing procedures with respect to the Liquidated Receivables;

·

all Advances made by the Servicer of principal due on the Actuarial Receivables in respect of the preceding Collection Period;

·

to the extent attributable to principal, the Purchase Amount of each Receivable repurchased by the Sponsor or purchased by the Servicer during the preceding Collection Period; and

·

partial prepayments on Receivables in respect of the preceding Collection Period relating to refunds of extended service contracts, or of physical damage, credit life, credit accident or health insurance premium, disability insurance policy premiums, but only if these costs or premiums were financed by the respective Obligor and only to the extent not included in the first bullet point above.

In calculating the Principal Collections, all payments and proceeds, including Liquidation Proceeds, of any Receivables repurchased by the Sponsor or purchased by the Servicer the Purchase Amount of which has been included in the Principal Collections on a prior Distribution Date will be excluded.

Withdrawals from the Payahead Account.  On or before the Business Day preceding each Distribution Date, the Servicer will or will cause the Trustee to (x) deposit into the Collection Account in immediately available funds, the portion of Payaheads constituting scheduled payments on Actuarial Receivables or that are to be applied to prepay Actuarial Receivables in full and (y) distribute to the Depositor, in immediately available funds, all investment earnings on funds in the Payahead Account with respect to the preceding Collection Period.  

Monthly Withdrawals from the Collection Account.  Except as set forth under “—Collections on Actuarial Receivables” below, on each Distribution Date, the Servicer shall instruct the Trustee to withdraw from the Collection Account and deposit in the Payahead Account in immediately available funds, the aggregate Payaheads collected during the preceding Collection Period.  On each Distribution Date, the Servicer shall calculate the amounts set forth below and shall instruct the Trustee to make the following deposits and distributions, after payment to the Servicer from the Collection Account of amounts in reimbursement of Advances previously made by the Servicer (as described below under “—Advances”), to the extent of Interest Collections (and, in the case of shortfalls occurring under clause (2) below in the Class A Interest Distribution, the Class B Percentage of Principal Collections to the extent o f such shortfalls):

(1)  

to the Servicer, the Servicing Fee and if the Servicer is an entity other than [        ], or [        ] or one of their affiliates, the Non-Affiliated Servicing Fee;

(2)

to the Class A Distribution Account, after the application of clause (1), the Class A Interest Distribution; and

(3)

to the Class B Distribution Account, after the application of clauses (1) and (2), the Class B Interest Distribution.

On each Distribution Date, the Servicer shall calculate the amounts set forth below and shall instruct the Trustee to make the following deposits and distributions, to the extent of Principal Collections and Interest Collections remaining after the application of clauses (1), (2) and (3) above:

(1)

to the Class A Distribution Account, the Class A Principal Distribution;

(2)

to the Class B Distribution Account, after the application of clause (4), the Class B Principal Distribution; and

(3)

to the Reserve Account, any amounts remaining after the application of clauses (1) through (5); these amounts to be distributed as described below under “Credit Enhancement—Reserve Account.”

To the extent necessary to satisfy the distributions described in clauses (1) through (5) above, the Servicer shall calculate the amounts set forth below and shall instruct the Trustee to withdraw from the Reserve Account and deposit in the Class A Distribution Account or the Class B Distribution Account as described below in the following order of priority on each Distribution Date:

(1)

an amount equal to the excess of the Class A Interest Distribution over the sum of Interest Collections (net of amounts paid to the Servicer pursuant to clause (1) of the preceding paragraph) and the Class B Percentage of Principal Collections will be deposited into the Class A Distribution Account;

(2)

an amount equal to the excess of the Class B Interest Distribution over the portion of Interest Collections (net of amounts paid to the Servicer pursuant to clause (1) of the preceding paragraph) remaining after the distribution of the Class A Interest Distribution will be deposited into the Class B Distribution Account;

(3)

an amount equal to the excess of the Class A Principal Distribution over the portion of Principal Collections and Interest Collections (net of amounts paid to the Servicer pursuant to clause (1) of the preceding paragraph) remaining after the distribution of the Class A Interest Distribution and the Class B Interest Distribution will be deposited into the Class A Distribution Account; and

(4)

an amount equal to the excess of the Class B Principal Distribution over the portion of Principal Collections and Interest Collections remaining (net of amounts paid to the Servicer pursuant to clause (1) of the preceding paragraph) after the distribution of the Class A Interest Distribution, the Class B Interest Distribution and the Class A Principal Distribution will be deposited into the Class B Distribution Account.

On each Distribution Date, all amounts on deposit in the Class A Distribution Account will be distributed to the Class A Certificateholders and all amounts on deposit in the Class B Distribution Account will be distributed to the Class B Certificateholders.

Fees and Expenses of the Trust Fund

In consideration of their duties on behalf of the Trust Fund, the Servicer, the Trustee and the Collateral Agent will receive from the assets of the Trust Fund certain fees as set forth in the following table:

Fee Payable to:	Frequency of Payment:	Amount of Fee:	How and When Fee Is Paid:
Servicer	[monthly]	[(a) A monthly fee paid to the Servicer out of interest collections received from the Receivables in an amount equal to the product of one-twelfth of [    ]% per annum (the “Servicing Fee Rate”) for so long as [               ] or an affiliate thereof is the Servicer, and [    ]% per annum (the “Non-Affiliated Servicing Fee Rate”) if [               ] or an affiliate thereof is no longer the Servicer  and the Pool Balance as of the first day of the Collection Period.] [(b) any late fees, prepayment charges and other administrative fees or similar charges allowed by applicable law with respect to the Receivables, and will be entitled to reimbursement from the Issuing Entity for various expenses.]	[Deducted by the Servicer from interest collections in respect of each Receivable serviced by the Servicer, before payment of any amounts to certificateholders.]
Trustee	[monthly]	[A monthly fee paid to the Trustee by the Servicer out of the Servicer’s fee.]	[Paid by the Servicer before payment of any amounts to certificateholders.]
Collateral Agent	[monthly]	[A monthly fee paid to the Collateral Agent by the Servicer out of the Servicer’s fee.]	[Paid by the Servicer before payment of any amounts to certificateholders.]
[Other Applicable Party]	[_____]	[_____]	[_____]

[[None of the fees set forth in table above may be changed without amendment of the Agreement as described under “The Agreement—Amendment”.]]

[[Expenses of the Servicer, the Trustee and the Collateral Agent will be reimbursed before payments are made on the certificates.]]

Example of Distributions

The following sets forth an example of collection of payments from Obligors on the Receivables, transfer of amounts among the Trust Accounts, and distributions on the certificates for the Distribution Date in [_______]:

On or before the earlier of the [tenth] business day of the month in which a Distribution Date occurs and the [fourth] business day preceding such Distribution Date	Determination Date	The Servicer will provide the Trustee with information with respect to the preceding Collection Period, including the aggregate amounts of Collections on the Receivables, Advances to be remitted by the Servicer, Liquidated Receivables, if any, and Purchase Amounts of the Receivables to be repurchased by the Sponsor or purchased by the Servicer with respect to the related Distribution Date.
On or before the business day preceding each Distribution Date	[Servicer Remittance Date]	The Servicer will or will cause the Trustee to (x) deposit into the Collection Account in immediately available funds, the portion of Payaheads constituting scheduled payments on Actuarial Receivables or that are to be applied to prepay Actuarial Receivables in full and (y) distribute to the Depositor, in immediately available funds, all investment earnings on funds in the Payahead Account with respect to the preceding Collection Period. The Servicer will cause the Interest Collections and Principal Collections for such Distribution Date to be deposited into the Collection Account.
The Business Day immediately prior to a Distribution Date or, if definitive certificates are issued, the last day of the month prior to a Distribution Date.	Record Date:	Distributions will be made to certificateholders of record for all applicable classes as of the Record Date.
The [__]th day of each month (or if the [__]h day is not a business day, the next business day),	Distribution Date:	The Servicer shall calculate the amounts set forth above under “—Distributions on the Certificates—Monthly Withdrawals from the Collection Account” and shall instruct the Trustee to make the deposits and distributions described therein.

Succeeding months follow the same pattern.

Related Definitions

For purposes hereof, the following terms have the following meanings:

 “Class A Interest Carryover Shortfall” means, with respect to any Distribution Date, the excess of Class A Monthly Interest for the preceding Distribution Date and any outstanding Class A Interest Carryover Shortfall on the preceding Distribution Date, over the amount in respect of interest that is actually deposited in the Class A Distribution Account on the preceding Distribution Date, plus 30 days of interest on that excess, to the extent permitted by law, at the Class A Pass-Through Rate.

“Class A Interest Distribution” means, with respect to any Distribution Date, the sum of Class A Monthly Interest for the Distribution Date and the Class A Interest Carryover Shortfall for the Distribution Date.

“Class A Monthly Interest” means, with respect to any Distribution Date, the product of (x) one-twelfth of the Class A Pass-Through Rate and (y) the Class A Principal Balance as of the immediately preceding Distribution Date, after giving effect to any payments made on that Distribution Date, or, in the case of the first Distribution Date, the Initial Class A Principal Balance.

“Class A Monthly Principal” means, with respect to any Distribution Date, the Class A Percentage of Principal Collections for the Distribution Date plus the sum of (1) the Class A Percentage of Realized Losses with respect to Receivables which became Liquidated Receivables during the related Collection Period and (2) the Class A Percentage of the aggregate amount of Cram Down Losses during the related Collection Period.

“Class A Pass-Through Rate” means, with respect to the Class A Certificates, [______]% per annum.

“Class A Principal Balance” equals the Initial Class A Principal Balance, as reduced by all amounts allocable to principal on the Class A Certificates previously distributed to Class A Certificateholders.

“Class A Principal Carryover Shortfall” means, with respect to any Distribution Date, the excess of Class A Monthly Principal for the preceding Distribution Date and any outstanding Class A Principal Carryover Shortfall on the preceding Distribution Date over the amount in respect of principal that is actually deposited in the Class A Distribution Account on the preceding Distribution Date.

“Class A Principal Distribution” means, with respect to any Distribution Date, the sum of Class A Monthly Principal for that Distribution Date and the Class A Principal Carryover Shortfall for that Distribution Date; provided, however, that the Class A Principal Distribution shall not exceed the Class A Principal Balance immediately prior to that Distribution Date.  In addition, on the Final Scheduled Distribution Date, the principal required to be deposited in the Class A Distribution Account will include the lesser of:

(a)

any principal due and remaining unpaid on each Receivable in the Trust as of the Final Scheduled Maturity Date; or

(b)

the portion of the amount required to be deposited under clause (a) above that is necessary, after giving effect to the other amounts to be deposited in the Class A Distribution Account on the applicable Distribution Date and allocable to principal, to reduce the Class A Principal Balance to zero.

“Class B Interest Carryover Shortfall” means, with respect to any Distribution Date, the excess of Class B Monthly Interest for the preceding Distribution Date and any outstanding Class B Interest Carryover Shortfall on the preceding Distribution Date, over the amount in respect of interest that is actually deposited in the Class B Distribution Account on the preceding Distribution Date, plus 30 days of interest on this excess, to the extent permitted by law, at the Class B Pass-Through Rate.

“Class B Interest Distribution” means, with respect to any Distribution Date, the sum of Class B Monthly Interest for that Distribution Date and the Class B Interest Carryover Shortfall for that Distribution Date.

“Class B Monthly Interest” means, with respect to any Distribution Date, the product of (x) one-twelfth of the Class B Pass-Through Rate and (y) the Class B Principal Balance as of the immediately preceding Distribution Date, after giving effect to any payments made on that Distribution Date, or, in the case of the first Distribution Date, the Initial Class B Principal Balance.

“Class B Monthly Principal” means, with respect to any Distribution Date, the Class B Percentage of Principal Collections for that Distribution Date plus the sum of (1) the Class B Percentage of Realized Losses with respect to Receivables which became Liquidated Receivables during the related Collection Period and (2) the Class B Percentage of the aggregate amount of Cram Down Losses during the related Collection Period.

“Class B Pass-Through Rate” means, with respect to the Class B Certificates, [______]% per annum.

“Class B Principal Balance” equals the Initial Class B Principal Balance, as reduced by all amounts allocable to principal on the Class B Certificates previously distributed to Class B Certificateholders.

“Class B Principal Carryover Shortfall” means, with respect to any Distribution Date, the excess of Class B Monthly Principal for the preceding Distribution Date and any outstanding Class B Principal Carryover Shortfall on the preceding Distribution Date over the amount in respect of principal that is actually deposited in the Class B Distribution Account on the preceding Distribution Date.

“Class B Principal Distribution” means, with respect to any Distribution Date, the sum of Class B Monthly Principal for that Distribution Date and the Class B Principal Carryover Shortfall for that Distribution Date; provided, however, that the Class B Principal Distribution shall not exceed the Class B Principal Balance immediately prior to that Distribution Date.  In addition, on the Final Scheduled Distribution Date, the principal required to be distributed to Class B Certificateholders will include the lesser of:

(a)

any principal due and remaining unpaid on each Receivable in the Trust as of the Final Scheduled Maturity Date; or

(b)

the portion of the amount required to be deposited under clause (a) above that is necessary, after giving effect to the other amounts to be deposited in the Class B Distribution Account on the Distribution Date and allocable to principal, to reduce the Class B Principal Balance to zero, and, in the case of clauses (a) and (b), remaining after any required distribution of the amount described in clause (a) to the Class A Distribution Account.

“Cram Down Loss” means, with respect to a Receivable if a court of appropriate jurisdiction in a bankruptcy or insolvency proceeding shall have issued an order reducing the amount owed on the Receivable or otherwise modifying or restructuring the scheduled payments to be made on the Receivable, an amount equal to:

(1)

the excess of the principal balance of the Receivable immediately prior to the court order over the principal balance of the Receivable as so reduced; and

(2)

if the issuing court shall have issued an order reducing the effective rate of interest on the Receivable, the net present value, using as the discount rate the higher of the APR on the Receivable or the rate of interest, if any, specified by the court in the order, of the scheduled payments as so modified or restructured.

A “Cram Down Loss” shall be deemed to have occurred on the date of issuance of the court order.

 “Liquidated Receivables” means, Receivables (x) which have been liquidated by the Servicer through the sale of the related Financed Boat, (y) as to which all or a portion representing 10% or more of a scheduled payment due is 120 or more days delinquent or (z) with respect to which proceeds have been received which, in the Servicer’s judgment, constitute the final amounts recoverable in respect of such Receivable.  A Receivable first becomes a Liquidated Receivable upon the earliest to occur of (x), (y) or (z) above.

The “Pool Balance” at any time will represent the aggregate principal balance of the Receivables at the end of the preceding Collection Period, after giving effect to all payments, other than Payaheads, received from Obligors and Purchase Amounts to be remitted by the Servicer and the Sponsor, as the case may be, all for the related Collection Period, all losses realized on Receivables that became Liquidated Receivables during the related Collection Period and all Cram Down Losses for the related Collection Period.

“Realized Losses” means, for any period, the excess of the principal balance of a Liquidated Receivable over Liquidation Proceeds to the extent allocable to principal.

Advances

With respect to any Distribution Date, the Servicer may, in its sole discretion, make a payment (an “Advance”) with respect to each Receivable, other than a Liquidated Receivable, equal to (A) with respect to Simple Interest Receivables, the excess, if any, of (x) the product of the principal balance of such Receivable as of the last day of the related Collection Period and one-twelfth of its APR, over (y) the interest actually received by the Servicer with respect to such Receivable from the Obligor or from the payment of the Repurchase Amount during or with respect to such Collection Period and (B) with respect to Actuarial Receivables, the scheduled payment of principal and interest due during the related Collection Period but not received.  The Servicer may elect not to make any Advance with respect to a Receivable to the extent that the Servicer, in its sole discretion, determines that such Advance is not recoverable from sub sequent payments on such Receivable or from funds in the Reserve Account.

With respect to Simple Interest Receivables, to the extent that the amount set forth in clause (y) above plus amounts withdrawn from the Reserve Account during or with respect to the related Collection Period and allocable to interest with respect to a Simple Interest Receivable is greater than the amount set forth in clause (x) above with respect to a Simple Interest Receivable, this amount shall be distributed to the Servicer on the related Distribution Date to reimburse the Servicer for previous unreimbursed Advances with respect to that Simple Interest Receivable.  Before a Simple Interest Receivable becomes a Liquidated Receivable, this reimbursement will only be from accrued interest due from the Obligor under that Receivable.  Collections on an Actuarial Receivable made during a Collection Period shall be applied first to repay any unreimbursed Advances on that Actuarial Receivable.

In addition, on the Business Day before each Distribution Date the Trustee shall withdraw from the Reserve Account an amount equal to the amount of any outstanding Advances on Liquidated Receivables to the extent not recovered from Liquidation Proceeds.

The Servicer will deposit all Advances with respect to any Distribution Date into the Collection Account on the Business Day before each Distribution Date.

Collections on Actuarial Receivables

To the extent that collections on an Actuarial Receivable during a Collection Period exceed the outstanding Advances on the Actuarial Receivable, the collections shall then first be applied to the scheduled payment on that Receivable.  If any collections remaining after the scheduled payment is made are insufficient to prepay the Actuarial Receivable in full, then, the remaining collections (the “Payaheads”) shall be transferred to and kept in the Payahead Account, until a later Collection Period where the collections may be transferred to the Collection Account and applied either to the scheduled payment or to prepay the Actuarial Receivable in full.  The scheduled payment with respect to an Actuarial Receivable is that portion of the payment required to be made by the related Obligor during each calendar month sufficient to amortize the principal balance of that Actuarial Receivable under the actuarial method over the term of the Actuarial Receivable and to provide interest at the APR of that Actuarial Receivable.  Notwithstanding the foregoing, so long as the Servicer is not required to remit collections to the Collection Account within two Business Days of receipt, the Servicer will not be required to deposit Payaheads to the Payahead Account but shall be required to deposit Payaheads to the Collection Account as described above.

Credit Enhancement

Subordination of the Class B Certificates.  The rights of the Class B Certificateholders to receive distributions with respect to the Receivables will be subordinated to the rights of the Class A Certificateholders to the extent described below.  This subordination is intended to enhance the likelihood of timely receipt by Class A Certificateholders of the full amount of interest and principal required to be paid to them, and to afford such Class A Certificateholders limited protection against losses in respect of the Receivables.

No distribution will be made to the Class B Certificateholders on any Distribution Date in respect of interest until the full amount of interest on the Class A Certificates payable on such Distribution Date has been distributed to the Class A Certificateholders.  No distribution will be made to the Class B Certificateholders on any Distribution Date in respect of principal until the full amount of interest on and principal of the Class A Certificates and interest on the Class B Certificates payable on such Distribution Date has been distributed to the Class A Certificateholders and the Class B Certificateholders, respectively.  Distributions of interest on the Class B Certificates, however, to the extent of collections on or in respect of the Receivables allocable to interest and certain available amounts on deposit in the Reserve Account, will not be subordinated to the payment of principal of the Class A Certificates.

Reserve Account.  In the event of delinquencies or losses on the Receivables, the protection afforded to the Class A Certificateholders will be effected both by the preferential right of the Class A Certificateholders to receive current distributions with respect to the Receivables, to the extent described above under “-- Subordination of the Class B Certificates,” prior to any distribution being made on a Distribution Date to the Class B Certificateholders, and to receive amounts on deposit in the Reserve Account.  Amounts on deposit in the Reserve Account will also be generally available to cover shortfalls in required distributions to the Class B Certificateholders, in respect of interest, after payment of interest on the Class A Certificates and, in respect of principal, after payment of interest on and principal of the Class A Certificates and interest on the Class B Certificates.  The Reserve Account will no t be a part of or otherwise includible in the Trust Fund and will be a segregated trust account held by the Collateral Agent for the benefit of the Certificateholders.

On the Closing Date, the Depositor will deposit $[                 ] ([                 ]% of the Initial Pool Balance) (the “Reserve Account Initial Deposit”) into the Reserve Account.  The Reserve Account Initial Deposit will be augmented on each Distribution Date by deposit in the Reserve Account of Collections remaining after distribution of the Servicing Fee and amounts to be paid to Class A Certificateholders and Class B Certificateholders as described above under “—Distributions on Certificates.”  To the extent that amounts on deposit in the Reserve Account after distributions on a Distribution Date exceed the Specified Reserve Account Balance, such excess will be released first, to the Servicer (if the Servicer is [         ]), in an amount equal to the Non-Affiliated Servicing Fee, together with any portion of the Non-Affiliated Servicing Fee that remains unpaid from prior Distribution Dates, and second, to the Depositor.  Upon any such release to the Depositor of amounts from the Reserve Account, neither the Class A Certificateholders nor the Class B Certificateholders will have any further rights in, or claims to, such amounts.

“Specified Reserve Account Balance” with respect to any Distribution Date will equal [                 ]% of the Pool Balance as of the last day of the related Collection Period, but in any event will not be less than the lesser of:

(1)

[                 ] ([                 ]% of the Initial Pool Balance), and

(2)

the Pool Balance;

provided, that if the Average Net Loss Ratio exceeds [                 ]% or the Average Delinquency Percentage exceeds [                 ]% on a Distribution Date, beginning with the [                 ] Distribution Date, the Specified Reserve Account Balance for the Distribution Date shall be calculated using a percentage of [                 ]%.

“Aggregate Net Losses” means, for any Distribution Date, the amount equal to (1) the aggregate Principal Balance of all Receivables that became Liquidated Receivables during the related Collection Period minus (2) the Liquidation Proceeds allocable to principal collected during the related Collection Period with respect to any Liquidated Receivables.

“Average Delinquency Percentage” means, for any Distribution Date, the average of the Delinquency Percentages for the Distribution Date and the preceding two Distribution Dates.

“Average Net Loss Ratio” means, for any Distribution Date, the average of the Net Loss Ratios for the Distribution Date and the preceding two Distribution Dates.

“Delinquency Percentage” means, for any Distribution Date, the sum of the outstanding Principal Balances of all Receivables which are 60 days or more delinquent, including Receivables relating to Financed Boats that have been repossessed, as of the close of business on the last day of the Collection Period immediately preceding the Distribution Date, determined in accordance with the Servicer’s normal practices, this sum expressed as a percentage of the Pool Balance as of the close of business on the last day of the related Collection Period.

“Liquidation Proceeds” means with respect to any Receivable,

(1)

insurance proceeds,

(2)

the monies collected during a Collection Period from whatever source on a Liquidated Receivable and

(3)

proceeds of a Financed Boat sold after repossession, in each case, net of any liquidation expenses and payments required by law to be remitted to the Obligor.

“Net Loss Ratio” means, for any Distribution Date, an amount expressed as a percentage, equal to the product of (A) twelve and (B) (1) the Aggregate Net Losses for the Distribution Date, divided by (2) the average of the Pool Balances on each of the first day of the related Collection Period and the last day of the related Collection Period.

The Specified Reserve Account Balance may be reduced to a lesser amount; provided, that the reduction may not adversely affect any rating of the Certificates by a Rating Agency.

In no circumstances will the Depositor be required to deposit any amounts in the Reserve Account other than the Reserve Account Initial Deposit to be made on the Closing Date.

Amounts held from time to time in the Reserve Account will continue to be held for the benefit of the Certificateholders and may be invested in Eligible Investments.  Any loss on an investment will be charged to the Reserve Account.  Any investment earnings, net of losses, will be paid to the Depositor.

The time necessary for the Reserve Account to reach and maintain the Specified Reserve Account Balance at any time after the date of issuance of the Certificates will be affected by the delinquency, credit loss and repossession and prepayment experience of the Receivables and, therefore, cannot be accurately predicted.

If on any Distribution Date the protection afforded the Class A Certificates by the Class B Certificates and by the Reserve Account is exhausted, the Class A Certificateholders will directly bear the risks associated with ownership of the Receivables.  If on any Distribution Date amounts on deposit in the Reserve Account have been depleted, the protection afforded the Class B Certificates by the Reserve Account will be exhausted and the Class B Certificateholders will directly bear the risks associated with ownership of the Receivables.

None of the Class B Certificateholders, the Trustee, the Servicer, the Sponsor or the Depositor will be required to refund any amounts properly distributed or paid to them, whether or not there are sufficient funds on any subsequent Distribution Date to make full distributions to the Class A Certificateholders.

Termination

The Servicer will be permitted, at its option, in the event that the Pool Balance as of the last day of a Collection Period has declined to 10% or less of the Initial Pool Balance, to purchase from the Issuing Entity, on any Distribution Date occurring in a subsequent Collection Period, all remaining Receivables in the Trust Fund at a purchase price equal to the sum of the Class A Principal Balance and the Class B Principal Balance plus accrued and unpaid interest at the applicable Pass-Through Rates.  The exercise of this right will effect an early retirement of the Certificates.  See “Description of the Transfer and Servicing Agreements -- Termination” in the Prospectus.

Duties of the Trustee

The Trustee will make no representations as to the validity or sufficiency of the Agreement, the Certificates, other than the execution and authentication of the Certificates, the Receivables or any related documents, and will not be accountable for the use or application by the Depositor or the Servicer of any funds paid to the Depositor or the Servicer in respect of the Certificates or the Receivables, or the investment of any monies by the Servicer before the monies are deposited into the Collection Account.  The Trustee will not independently verify the Receivables.  If no Event of Servicing Termination (as described in the Prospectus) has occurred and is continuing, the Trustee will be required to perform only those duties specifically required of it under the Agreement.  Generally, those duties are limited to the receipt of the various certificates, reports or other instruments required to be furnished to the Trustee under t he Agreement, in which case it will only be required to examine them to determine whether they conform to the requirements of the Agreement.  The Trustee will not be charged with knowledge of a failure by the Servicer to perform its duties under the Agreement which failure constitutes an Event of Servicing Termination unless a responsible officer of the Trustee obtains actual knowledge of the failure as specified in the Agreement.

The Trustee will be under no obligation to exercise any of the rights or powers vested in it by the Agreement or to make any investigation of matters arising under the Agreement or to institute, conduct or defend any litigation under the Agreement or in relation to the Agreement at the request, order or direction of any of the Certificateholders, unless the Certificateholders have offered the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities which may be incurred in or by an exercise of the Trustee’s rights or powers or an investigation.  No Class A Certificateholder or Class B Certificateholder will have any right under the Agreement to institute any proceeding with respect to the Agreement, unless the holder has given the Trustee written notice of default and unless, with respect to the Class A Certificates, the holders of Class A Certificates evidencing not less than a majority o f the aggregate outstanding principal balance of the Class A Certificates or, with respect to the Class B Certificates, the holders of Class B Certificates evidencing not less than a majority of the aggregate outstanding principal balance of the Class B Certificates, have made a written request to the Trustee to institute a proceeding in its own name as Trustee under the Agreement and have offered to the Trustee reasonable indemnity, and the Trustee for 30 days has neglected or refused to institute any proceedings.

The Trustee

[        ], a national banking association, will act as Trustee under the Agreement.  The Trustee, in its individual capacity or otherwise, and any of its affiliates, may hold Certificates in their own names or as pledgee.  In addition, for the purpose of meeting the legal requirements of some jurisdictions, the Servicer and the Trustee, acting jointly, or in some instances, the Trustee, acting alone, will have the power to appoint co-trustees or separate trustees of all or any part of the Trust.  In the event of an appointment, all rights, powers, duties and obligations conferred or imposed upon the Trustee by the Agreement will be conferred or imposed upon the Trustee and the co-trustee or separate trustee jointly, or, in any jurisdiction where the Trustee is incompetent or unqualified to perform certain acts, singly upon the co-trustee or separate trustee who shall exercise and perform these r ights, powers, duties and obligations solely at the direction of the Trustee.

The Trustee may resign at any time, in which event the Servicer will be obligated to appoint a successor trustee.  The Servicer may also remove the Trustee if the Trustee ceases to be eligible to serve, becomes legally unable to act, is adjudged insolvent or is placed in receivership or similar proceedings.  In these circumstances, the Servicer will be obligated to appoint a successor trustee.  However, any resignation or removal of the Trustee and appointment of a successor trustee will not become effective until acceptance of the appointment by the successor trustee.

The Agreement will provide that the Servicer will pay the Trustee’s fees.  The Agreement will also provide that the Trustee will be entitled to indemnification by the Depositor for, and will be held harmless against, any loss, liability or expense incurred by the Trustee not resulting from the Trustee’s own willful misfeasance, bad faith or negligence.  Indemnification will be unavailable to the Trustee to the extent that any loss, liability or expense results from a breach of any of the Trustee’s representations or warranties set forth in the Agreement, and for any tax, other than those for which the Depositor or the Servicer is required to indemnify the Trustee.

The Trustee’s Corporate Trust Office is located at [                 ].  The Depositor, the Servicer, the Seller and their respective affiliates may have other banking relationships with the Trustee and its affiliates in the ordinary course of their business.

In the Agreement, [        ] will agree to perform certain bond administration, distribution obligations and custodial functions on behalf of the Trustee and to act as successor servicer if [        ] is removed as servicer.  In performing these functions, [        ] will be entitled to all of the rights, powers and indemnities afforded to the Trustee under the Agreement.

The Collateral Agent

[        ], a national banking association, will act as the Collateral Agent under the Agreement.

[Regulation AB Item 1108 compliant description of Collateral Agent].

 [THE INSURER]

[General]

[[_______________] (the “Insurer” or “[_______________]”) is a monoline financial guaranty insurance company incorporated under the laws of the State of New York.  The Insurer is currently licensed to do insurance business in, and is subject to the insurance regulation and supervision by, all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Singapore.]

[The Insurer is an indirect wholly owned subsidiary of [_______________], a [___________] (“[_______________]”).  Through its subsidiaries, [_______________] is a leading provider of insurance and reinsurance coverages and financial products and services to industrial, commercial and professional service firms, insurance companies and other enterprises on a worldwide basis.  The ordinary shares of [_______________] are publicly traded in the United States and listed on the New York Stock Exchange (NYSE: [_________]).  [_______________] is not obligated to pay the debts of or claims against the Insurer.]

[Reinsurance]

[The Insurer has entered into a facultative quota share reinsurance agreement with [____________] (“[_______________]”), an insurance company organized under the laws of [______________], and an affiliate of the Insurer.  Pursuant to this reinsurance agreement, the Insurer expects to cede up to 90% of its business to [_______________].  The Insurer may also cede reinsurance to third parties on a transaction-specific basis, which cessions may be any or a combination of quota share, first loss or excess of loss.  Such reinsurance is used by the Insurer as a risk management device and to comply with statutory and rating agency requirements and does not alter or limit the Insurer's obligations under any financial guaranty insurance policy.  With respect to any transaction insured by [_______________], the percentage of risk ceded to [_______________] may be less than 90% depending on certain factors including, without l imitation, whether [_______________] has obtained third party reinsurance covering the risk.  As a result, there can be no assurance as to the percentage reinsured by [_______________] of any given financial guaranty insurance policy issued by [_______________], including the Policy.]

[Based on the audited financials of [_______________], as of December 31, 2004, [_______________] had total assets, liabilities, redeemable preferred shares and shareholders’ equity of $[___________], $[___________], $[___________] and $[___________], respectively, determined in accordance with generally accepted accounting principles in the United States (“US GAAP”). [_______________]’s insurance financial strength is rated “Aaa” by Moody’s and “AAA” by S&P and Fitch Inc. In addition, [_______________] has obtained a financial enhancement rating of “AAA” from S&P.]  

[The obligations of [_______________] to the Insurer under the reinsurance agreement described above are unconditionally guaranteed by [___________] ("[_______________]"), a Bermuda exempted company and one of the world's leading excess commercial insurers.  [_______________] is a wholly owned indirect subsidiary of [_______________].  In addition to A.M. Best’s financial strength rating of “A+” and issuer credit rating of “aa-”, [_______________]’s insurance financial strength rating is “Aa2” (as of September 13, 2005, [_______________] is on review for downgrade) by Moody’s, “AA-” by Standard & Poor’s (on September 20, 2005, Standard & Poor’s placed [_______________] on CreditWatch with negative implications) and “AA-” (Outlook Stable) by Fitch.]  

[The rating agencies have taken certain actions with respect to [_______________] and various insurance operating subsidiaries of [_______________], as described below.  Moody’s placed the “A2” senior debt rating of [_______________] and the other insurance financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) on review for possible downgrade on September 13, 2005.  Standard & Poor’s placed the “A” senior debt rating of [_______________] and the other financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) on CreditWatch with negative implications on September 20, 2005.  Fitch downgraded the long term issuer rating of [_______________] and the insurer financial strength ratings of various insurance operating subsidiaries of [_______________] (other than [_______________] and [_______________]) from “A” to “A-” on October 26, 2005.  A.M. Best placed each of [___________]’s (which does not include [_______________] or [_______________]) and [_______________]’s respective financial strength ratings of “A+” and their issuer credit ratings of “aa-” under review with negative implications on September 15, 2005. ]

[The ratings of [_______________], [_______________] or any other member of the [_______________] group of companies are not recommendations to buy, sell or hold certificates, including the certificates and are subject to revision or withdrawal at any time by Moody’s, Standard & Poor’s or Fitch.]

[Notwithstanding the capital support provided to the Insurer described in this section, the certificateholders will have direct recourse against the Insurer only, and neither [_______________] nor [_______________] will be directly liable to the certificateholders.]

[Financial Strength and Financial Enhancement Ratings of [_______________]]

[The Insurer's insurance financial strength is rated “Aaa” by Moody’s and “AAA” by Standard & Poor’s and Fitch, Inc. (“Fitch”).  In addition, [_______________] has obtained a financial enhancement rating of “AAA” from Standard & Poor’s.  These ratings reflect Moody’s, Standard & Poor’s and Fitch's current assessment of the Insurer's creditworthiness and claims-paying ability as well as the reinsurance arrangement with [_______________] described under "Reinsurance" above.]

[The above ratings are not recommendations to buy, sell or hold certificates, including the certificates and are subject to revision or withdrawal at any time by Moody’s, Standard & Poor’s or Fitch.  Any downward revision or withdrawal of these ratings may have an adverse effect on the market price of the certificates.  The Insurer does not guaranty the market price of the certificates nor does it guaranty that the ratings on the certificates will not be revised or withdrawn.]

[Capitalization of the Insurer]

[Based on the audited financials of [_______________], as of December 31, 2004, [_______________] had total assets, liabilities, and shareholder’s equity of $[______________], $[______________], and $[______________], respectively, determined in accordance with U.S. GAAP.]

Based on the audited statutory financial statements for [_______________] as of December 31, 2004 filed with the State of New York Insurance Department, [_______________] has total admitted assets of $[______________], total liabilities of $[______________] and total capital and surplus of $[______________] determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities (“SAP”).  

[Incorporation by Reference of Financials

]

For further information concerning [_______________] and [_______________], see the financial statements of [_______________] and [_______________], and the certificates thereto, incorporated by reference in this prospectus supplement.  The financial statements of [_______________] and [_______________] are included as exhibits to the periodic reports filed with the Certificates and Exchange Commission (the “Commission”) by [_______________] and may be reviewed at the EDGAR website maintained by the Commission.  All financial statements of  [_______________] and [_______________] included in, or as exhibits to, documents filed by [_______________] pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act Act of 1934 on or prior to the date of this prospectus supplement, or after the date of this prospectus supplement but prior to termination of the offering of the certificates, shall be deemed incorpor ated by reference in this prospectus supplement.  Except for the financial statements of [_______________] and [_______________], no other information contained in [_______________]'s reports filed with the Commission is incorporated by reference. Copies of the statutory quarterly and annual statements filed with the State of New York Insurance Department by [_______________] are available upon request to the State of New York Insurance Department.]

[Regulation of the Insurer]

[The Insurer is regulated by the Superintendent of Insurance of the State of New York.  In addition, the Insurer is subject to regulation by the insurance laws and regulations of the other jurisdictions in which it is licensed.  As a financial guaranty insurance company licensed in the State of New York, the Insurer is subject to Article 69 of the New York Insurance Law, which, among other things, limits the business of each insurer to financial guaranty insurance and related lines, prescribes minimum standards of solvency, including minimum capital requirements, establishes contingency, loss and unearned premium reserve requirements, requires the maintenance of minimum surplus to policyholders and limits the aggregate amount of insurance which may be written and the maximum size of any single risk exposure which may be assumed.  The Insurer is also required to file detailed annual financial statements with the New York Insurance Department and similar supervisory agencies in each of the other jurisdictions in which it is licensed.]

[The extent of state insurance regulation and supervision varies by jurisdiction, but New York and most other jurisdictions have laws and regulations prescribing permitted investments and governing the payment of dividends, transactions with affiliates, mergers, consolidations, acquisitions or sales of assets and incurrence of liabilities for borrowings.]

[THE FINANCIAL GUARANTY INSURANCE POLICIES ISSUED BY THE INSURER, INCLUDING THE INSURANCE POLICY, ARE NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.]

[The principal executive offices of the Insurer are located at [____________] and its telephone number at this address is [____________].]

[THE POLICY]

[[__________], in consideration of the payment of a premium and subject to the terms of the insurance policy, thereby unconditionally and irrevocably guarantees to any certificateholder that an amount equal to each full and complete Insured Amount will be received from [__________] by the Trustee or its successors, as Trustee for the certificateholders, on behalf of the certificateholders, for distribution by the Trustee to each certificateholder of that certificateholder’s proportionate share of the Insured Amount.]

[[__________]’s obligations under the insurance policy, with respect to a particular Insured Amount, will be discharged to the extent funds equal to the applicable Insured Amount are deposited in the account specified by the Trustee, whether or not those funds are properly applied by the Trustee. Insured Amounts will be paid only at the time set forth in the insurance policy, and no accelerated Insured Amounts will be paid regardless of any acceleration of the certificates, unless the acceleration is at the sole option of [__________]. ]

[Notwithstanding the foregoing paragraph, the insurance policy does not cover shortfalls, if any, attributable to the liability of the issuer or the Trustee for withholding taxes, if any (including interest and penalties in respect of any liability for withholding taxes).]

[[__________] will pay any Insured Amount that is an Avoided Payment on the business day following receipt on a business day by [__________] of the following:

·

a certified copy of the order requiring the return of an avoided payment, with respect to which order the appeal period has expired without an appeal having been filed;  

·

an assignment in a form attached to the insurance policy, irrevocably assigning to [__________] all rights and claims of the certificateholder relating to or arising under the certificates against the debtor which made the avoided payment or otherwise with respect to the avoided payment; and  

·

an appropriately completed and executed demand for payment in the form attached to the insurance policy;  

provided that if these documents are received after 10:00 a.m., New York time, on that business day, they will be deemed to be received on the following business day. Payments by [__________] will be disbursed to the receiver or the trustee in bankruptcy named in the final order of the court exercising jurisdiction on behalf of the certificateholder and not to any certificateholder directly unless the certificateholder has returned principal or interest paid on the certificates to the receiver or trustee in bankruptcy, in which case that payment will be disbursed to the Trustee for distribution to the certificateholder upon proof of such payment reasonably satisfactory to [__________].]

[[__________] will pay any other amount payable under the insurance policy no later than 2:00 p.m., New York time, on the later of the distribution date on which the related Scheduled Payment is due or the business day following receipt in New York, New York by [__________] of a notice from the Trustee specifying the Insured Amount which is due and owing on the applicable distribution date, provided that if the notice is received after 10:00 a.m., New York time, on that business day, it will be deemed to be received on the following business day.]

[Subject to the terms of the Agreement, [__________] will be subrogated to the rights of each certificateholder to receive payments under the certificates to the extent of any payment by [__________] under the insurance policy.]

[As used in the insurance policy, the following terms shall have the following meanings:

“Avoided Payment” means any amount previously distributed to a certificateholder on the certificates that is recoverable and sought to be recovered as a voidable payment in an insolvency proceeding, in accordance with a final nonappealable order of a court having competent jurisdiction.

“Insured Amount” means, that portion of Scheduled Payments that shall become due for payment but shall be unpaid by reason of nonpayment.

“Insured Payment” means (a) as of any distribution date, any Scheduled Payment and (b) any Avoided Payment.

“Scheduled Payment” for any distribution date, an amount equal to the excess, if any, of: (a) the sum, without duplication, of (i) the Certificateholders’ Interest Distributable Amount and (ii) the Certificateholders’ First Principal Distributable Amount (other than the amount specified in clause (2)(b) of the definition thereof) for the related distribution date over (b) the amount actually deposited into the certificate distribution account on the related distribution date.]

[Capitalized terms used in the insurance policy and not otherwise defined in the insurance policy shall have the meanings set forth in the Agreement as of the date of execution of the insurance policy, without giving effect to any subsequent amendment or modification to the Agreement unless such amendment or modification has been approved in writing by [__________].]

[The insurance policy is not cancelable for any reason. The premium on the insurance policy is not refundable for any reason including payment, or provision being made for payment, prior to the maturity of the certificates.]

[The insurance policy is being issued under and pursuant to, and will be construed under, the laws of the State of New York, without giving effect to the conflict of laws principles thereof.]

[The insurance provided by the insurance policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law.]

[OTHER CREDIT ENHANCEMENT PROVIDER]

[Regulation AB Item 1114 compliant description of any other credit enhancement provider.]

[DERIVATIVE INSTRUMENTS]

[The Interest Rate Swap Agreement and the Swap Provider]

[The Offered Certificates and Class B Certificates will have the benefit of an interest rate swap agreement.  On or before the Closing Date, the Trustee will enter into an interest rate swap agreement (the “Interest Rate Swap Agreement”) with [_______] (the “Swap Provider”).  A separate trust created under the pooling and servicing agreement (the "Supplemental Interest Trust") will hold the Interest Rate Swap Agreement documented by a 1992 ISDA Master Agreement (Multicurrency-Cross Border), together with a Schedule and Confirmation between The Trustee, on behalf of the Supplemental Interest Trust, and the Swap Provider. ]

[The significance percentage, as calculated in accordance with Item 1115 of Regulation AB is less than 10%.]

[If significance percentage, as calculated in accordance with Item 1115 of Regulation AB, is 10% or more, provide financial information required by Item 1115 of Regulation AB.]

[Pursuant to the Interest Rate Swap Agreement, on each Distribution Date, (i) the Securities Administrator (on behalf of the Supplemental Interest Trust and from funds of such trust) will be obligated to pay to the Swap Provider, a fixed amount equal to the product of (x) [__]%, (y) the Swap Notional Amount for that Distribution Date set forth in the Interest Rate Swap Agreement and (z) a fraction, the numerator of which is 30 (or, for the first Distribution Date, the number of days elapsed from the Closing Date to but excluding the first Distribution Date on a 30/360 basis), and the denominator of which is 360 (the “Securities Administrator Swap Payment”); and (ii) the Swap Provider will be obligated to pay to the Supplemental Interest Trust for the benefit of the holders of the Offered Certificates and the Class B Certificates (the “Swap Provider Payment”), a floating amount equal to the product of (x) one-mon th LIBOR (as determined pursuant to the Interest Rate Swap Agreement), (y) the Swap Notional Amount for that Distribution Date set forth in the Interest Rate Swap Agreement, and (z) a fraction, the numerator of which is the actual number of days elapsed from the previous Distribution Date to but excluding the current Distribution Date (or, for the first Distribution Date, the actual number of days elapsed from the Closing Date to but excluding the first Distribution Date), and the denominator of which is 360.  A net payment will be required to be made on each Distribution Date (each such net payment, a “Net Swap Payment”) (a) by the Securities Administrator to the Swap Provider, to the extent that the fixed amount exceeds the corresponding floating amount, or (b) by the Swap Provider to the Securities Administrator, to the extent that the floating amount exceeds the corresponding fixed amount. Payments received by the Supplemental Interest Trust pursuant to the Interest Rate Swap Agreement wil l be available for distributions of Interest Carry Forward Amounts, Net WAC Rate Carryforward Amounts, amounts necessary to maintain the Required Overcollateralization Amount and Allocated Realized Loss Amounts.]

[The “Swap Notional Amount” with respect to each Distribution Date commencing in [______, __], is set forth below (which will be substantially the same schedule as set forth in the Interest Rate Swap Agreement).  The Interest Rate Swap Agreement will terminate immediately following the Distribution Date in [______, __], unless terminated earlier upon the occurrence of a Swap Default, an Early Termination Event or an Additional Termination Event (each as defined below).]

Distribution Date	Swap Notional Amount
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]
[______ __, ____]	$ [__________]

[The respective obligations of the Swap Provider and the Supplemental Interest Trust to pay specified amounts due under the Interest Rate Swap Agreement will be subject to the following conditions precedent: (1) no Swap Default or event that with the giving of notice or lapse of time or both would become a Swap Default, in each case, in respect of the other party, shall have occurred and be continuing with respect to the Interest Rate Swap Agreement and (2) no “Early Termination Date” (as defined in the ISDA Master Agreement) has occurred or been effectively designated with respect to the Interest Rate Swap Agreement.]

[An Interest Rate Cap Agreement]

[The Class [__] certificates will have the benefit of the Interest Rate Cap Agreement. Pursuant to the Interest Rate Cap Agreement, with respect to any Distribution Date, commencing with the Distribution Date in [__], 20[ ], on or prior to the Distribution Date in [__], 20[ ], [_______], (the “Cap Provider”), will be obligated to pay to the trust administrator, an amount equal to the product of (a) the excess, if any, of (i) the then current one-month LIBOR rate (determined in accordance with the Interest Rate Cap Agreement) up to a maximum of [__]% (the “Maximum Cap Rate”) and (ii) a specified strike rate of [__]% (the “Cap Strike Rate”) and (b) the Interest Rate Cap Agreement Notional Amount set forth on the schedule attached as Annex B hereto for that Distribution Date, determined on a 30/360 Basis. (each such payment, the “Cap Agreement Payment”). The Interest Rate Cap Agreement will terminate after th e Distribution Date in [__], 20[ ].

The obligations of the Cap Provider are limited to those specifically set forth in the Interest Rate Cap Agreement. The Cap Provider conducts business in the over-the-counter derivatives market, engaging in a variety of derivatives products, including interest rate swaps, currency swaps, credit default swaps and interest rate options with institutional clients.

For the Class [__] certificates and each Distribution Date prior to and including the Distribution Date in [__], 20[ ],  any Cap Agreement Payment received by the trust administrator will be used to pay the related Cap Amount to such classes of certificates, as described below under “––The Reserve Funds.”  Amounts received on  the Interest Rate Cap Agreement will not be available to make distributions on any class of Certificates other than the Class [__] certificates.

The Interest Rate Cap Agreement will be governed by and construed in accordance with the law of the State of New York. The obligations of the Cap Provider are limited to those specifically set forth in the Interest Rate Cap Agreement. The Class [__] certificates do not represent an obligation of the Cap Provider. The holders of the Class [__] certificates are not parties to or beneficiaries under the Interest Rate Cap Agreement and will not have any right to proceed directly against the cap provider in respect of its obligations under the Interest Rate Cap Agreement.]

[A Yield Maintenance Agreement]

The Issuing Entity will enter into a Yield Maintenance Agreement for the benefit of the Class [__] Certificates.  Under the Yield Maintenance Agreement, the Counterparty will agree to pay to the Issuing Entity two Business Days prior to each Distribution Date beginning in [__], 20[ ] and to and including the Distribution Date in [__], 20[ ], an amount equal to the product of:

1.

the excess, if any, of LIBOR (as calculated under the related Yield Maintenance Agreement subject to the Rate Cap Ceiling) over the Cap Strike Rate for that Distribution Date;

2.

the related Scheduled Notional Amount for that Distribution Date; and

3.

a fraction, the numerator of which is the actual number of days elapsed from the previous Distribution Date to but excluding the current Distribution Date, and the denominator of which is 360.

The Scheduled Notional Amounts for each Yield Maintenance Agreement decline in accordance with the expected amortization of the Mortgage Loans.  The Yield Maintenance Agreements will terminate immediately following the Distribution Date in [__], 20[ ].

The Yield Maintenance Agreements will be governed by and construed in accordance with the law of the State of New York and will be documented under the ISDA Master Agreement, as supplemented by the schedule and the confirmation.  The obligations of the Counterparty are limited to those specifically set forth in the related Yield Maintenance Agreement.

Any amounts received by the Securities Administrator under a Yield Maintenance Agreement will be distributed as follows:

1.

to the Reserve Fund, in an amount equal to the Basis Risk Shortfall Carryover Amount for the Class [__] Certificates for such Distribution Date;

2.

to the Principal Remittance Amount, the Net Cumulative Realized Loss Amount on such Distribution Date;

3.

to the Class [__] Certificates, any applicable Unpaid Realized Loss Amounts, and

4.

to the Class [__] Certificates, any remaining amounts.

FEDERAL INCOME TAX CONSEQUENCES

Upon the issuance of the Certificates, McKee Nelson LLP, special tax counsel (“Federal Tax Counsel”), will deliver its opinion to the effect that, under then current law, assuming compliance with the Agreement, the Issuing Entity will be classified for federal income tax purposes as a grantor trust and not as an association taxable as a corporation.  Accordingly, each Certificateholder will be subject to federal income taxation as if it owned directly its interest in each asset owned by the Issuing Entity and paid directly its share of expenses paid by the Issuing Entity.  Certain individuals, estates, trusts and partnerships may be limited in their ability to fully deduct the expenses of the Issuing Entity.  See “Material Federal Income Tax Consequences” in the Prospectus for a discussion of those limits.

For federal income tax purposes, the Depositor will be deemed to have retained a fixed portion of the interest due on each Receivable (the “Spread”).  The Spread will be treated as “stripped coupons” within the meaning of Section 1286 of the Internal Revenue Code of 1986, as amended (the “Code”).  The Servicer may also be deemed to have retained a “stripped coupon” if and to the extent that the Servicing Fee is determined to be unreasonable.  In addition, because the Class B Pass-Through Rate exceeds the Class A Pass-Through Rate, a portion of the interest accrued on each Receivable will be treated as a “stripped coupon” purchased by the Class B Certificateholders.  Accordingly, each Class A Certificateholder will be treated as owning its pro rata percentage interest in the principal of, and interest payable on, each Receivable (minus the portion of the interest payable on suc h Receivable that is treated as Spread, as a stripped coupon retained by the Servicer or as a stripped coupon purchased by the Class B Certificateholders), and such interest in each Receivable will be treated as a “stripped bond” within the meaning of Section 1286 of the Code.  Similarly, each Class B Certificateholder will be treated as owning its pro rata percentage interest in the principal of each Receivable, plus a disproportionate share of the interest payable on each Receivable.

Class A Certificateholders

Because the Class A Certificates represent stripped bonds, they will be subject to the original issue discount (“OID”) rules of the Code.  Accordingly, the tax treatment of a Class A Certificateholder will depend upon whether the amount of OID on a Class A Certificate is less than a statutorily defined de minimis amount.  See “Material Federal Income Tax Consequences -- Grantor Trusts – Stripped Certificates” for a discussion regarding the calculation of OID, if any, on stripped bonds.

If the amount of OID is de minimis under the OID provisions of the Code, the Class A Certificates would not be treated as having OID.  Each Class A Certificateholder would be required to report on its federal income tax return its share of the gross income of the Issuing Entity, including interest and certain other charges accrued on the Receivables and any gain upon collection or disposition of the Receivables (but not including any portion of the Receivables treated as “stripped coupons” as described above that are treated as owned by other parties).  Such gross income attributable to interest on the Receivable would exceed the Class A Pass-Through Rate by an amount equal to the Class A Certificateholder’s share of the expenses of the Issuing Entity for the period during which it owns a Class A Certificate.  As indicated above, a Class A Certificateholder generally would be entitled to deduct its share of expenses of the Issuing Entity, subject to certain limitations that apply in the case of Certificateholders that are individuals, trusts, estates or partnerships.  Any amounts received by a Class A Certificateholder from the Reserve Account or from the subordination of the Class B Certificates will be treated for federal income tax purposes as having the same character as the payments they replace.  A Class A Certificateholder would report its share of the income of the Issuing Entity under its usual method of accounting.  Accordingly, interest would be includable in a Certificateholder’s gross income when it accrues on the Receivables, or, in the case of Certificateholders who are cash basis taxpayers, when received by the Servicer on behalf of Certificateholders.  The actual amount of discount on a Receivable would be includable in income as principal payments are received on the Receivables.

If OID relating to a Class A Certificate is not de minimis, a Class A Certificateholder will be required to include in income, in addition to the amounts described above, any OID as it accrues, regardless of when cash payments are received, using a method reflecting a constant yield on the Receivables.

Although the Trustee intends to account for OID, if any, reportable by holders of Class A Certificates by reference to the price paid for a Class A Certificate by an initial purchaser, the amount of OID will differ for subsequent purchasers.  Such subsequent purchasers should consult their tax advisers regarding the proper calculation of OID on the interest in the Receivables represented by a Class A Certificate.

Class B Certificateholders

In General.  Except as described below, it is believed that the Class B Certificateholders will be subject to tax in the same manner as Class A Certificateholders.  However, no federal income tax authorities address the precise method of taxation of an instrument such as the Class B Certificates and Federal Tax Counsel cannot opine on this issue.  In the absence of applicable authorities, the Trustee intends to report income to Class B Certificateholders in the manner described below.

Each Class B Certificateholder will be treated as owning (x) the Class B Percentage of each Receivable plus (y) a disproportionate portion of the interest on each Receivable (not including the Spread).  Income will be reported to a Class B Certificateholder based on the assumption that all amounts payable to the Class B Certificateholders are taxable under the coupon stripping provisions of the Code and treated as a single obligation.  In applying those provisions, the Trustee will take the position that a Class B Certificateholder’s entire share of the interest on a Receivable will qualify as “qualified stated interest.” Thus, except to the extent modified by the effects of subordination of the Class B Certificates, as described below, income will be reported to Class B Certificateholders in the manner described above for holders of the Class A Certificates.

Effect Of Subordination

If the Certificateholders of one Class of Certificates receive distributions of less than their share of the Issuing Entity’s receipts of principal or interest (the “Shortfall Amount”) because of the subordination of the Certificates, it is believed that such Certificateholders would probably be treated for federal income tax purposes as if they had:

(1)  received as distributions their full share of such receipts,

(2)  paid over to the Certificateholders of the other Class of Certificates an amount equal to such Shortfall Amount, and

(3)  retained the right to reimbursement of such amounts to the extent of future collections otherwise available for deposit in the Reserve Account.

However, Federal Tax Counsel cannot opine to such treatment.

Under this treatment,

(a)  Class B Certificateholders would be required to accrue as current income any interest, OID income, or (to the extent paid on the Receivables) accrued market discount of the Issuing Entity that was a component of the Shortfall Amount, even though such amount was in fact paid to the Class A Certificateholders,

(b) a loss would only be allowed to the Class B Certificateholders when their right to receive reimbursement of such Shortfall Amount became worthless (i.e., when it became clear that that amount would not be available from any source to reimburse such loss), and

(c)  reimbursement of such Shortfall Amount prior to such a claim of worthlessness would not be taxable income to Class B Certificateholders because such amount was previously included in income.

Those results should not significantly affect the inclusion of income for Class B Certificateholders on the accrual method of accounting, but could accelerate inclusion of income to Class B Certificateholders on the cash method of accounting by, in effect, placing them on the accrual method.  Moreover, the character and timing of loss deductions are unclear and all Class B Certificateholders are encouraged to consult their tax advisors regarding such character and timing.

All Certificateholders should see “Material Federal Income Tax Consequences” in the Prospectus for a more detailed discussion of the material federal income tax consequences of the purchase, ownership and disposition of the Certificates.

STATE AND LOCAL TAX CONSEQUENCES

The discussion under “Federal Income Tax Consequences” above does not address the tax consequences of purchase, ownership or disposition of the Certificates under any state or local tax law.  We recommend that investors consult their own tax advisors regarding state and local tax consequences.

ERISA CONSIDERATIONS

A fiduciary of a pension, profit-sharing, retirement or other employee benefit plan subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), should consider the fiduciary standards under ERISA in the context of the plan’s particular circumstances before authorizing an investment of a portion of such plan’s assets in the Certificates.  Accordingly, pursuant to Section 404 of ERISA, such fiduciary should consider among other factors:

(1)  whether the investment is for the exclusive benefit of plan participants and their beneficiaries;

(2)  whether the investment satisfies the applicable diversification requirements;

(3)  whether the investment is in accordance with the documents and instruments governing the plan; and

(4)  whether the investment is prudent, considering the nature of the investment.  Fiduciaries of plans also should consider ERISA’s prohibition on improper delegation of control over, or responsibility for, plan assets.

In addition, benefit plans subject to ERISA, as well as individual retirement accounts or certain types of Keogh plans not subject to ERISA but subject to Section 4975 of the Code and any entity whose source of funds for the purchase of Certificates includes plan assets by reason of a plan or account investing in such entity (each, a “Plan”), are prohibited from engaging in a broad range of transactions involving Plan assets and persons having certain specified relationships to a Plan (“Parties in Interest” and “Disqualified Persons”).  Such transactions are treated as “prohibited transactions” under Sections 406 and 407 of ERISA and excise taxes are imposed upon such persons by Section 4975 of the Code.

An investment in Certificates by a Plan might result in the assets of the Issuing Entity being deemed to constitute Plan assets, which in turn might mean that certain aspects of such investment, including the operation of the Issuing Entity, might be prohibited transactions under ERISA and the Code.  Neither ERISA nor the Code defines the term “plan assets.”  Under Section 2510.3-101 of the United States Department of Labor (“DOL”) regulations (the “Regulation”), a Plan’s assets may include an interest in the underlying assets of an entity (such as a trust) for certain purposes, including the prohibited transaction provisions of ERISA and the Code, if the Plan acquires an “equity interest” in such entity, unless certain exceptions apply.  The Depositor believes that the Certificates will give Certificateholders an equity interest in the Issuing Entity for purposes of the Regulation and can give no assurance that the Certificates will qualify for any of the exceptions under the Regulation.

As a result, the assets of the Issuing Entity may be considered the assets of any Plan which acquires a Certificate.

The DOL has granted to Deutsche Bank Securities Inc. an individual exemption, Prohibited Transaction Exemption 94-84, and to Deutsche Morgan Grenfell/C.J. Lawrence Inc., similar approval (FAN 97-03E), which were both amended and restated pursuant to Prohibited Transaction Exemption 2002-41 (“PTE 2002-41”) (collectively, the “Exemption”) which is applicable to Certificates which meet its requirements whenever Deutsche Bank Securities Inc. or its affiliate is the sole underwriter, manager or co-manager of an underwriting syndicate or is the selling or placement agent.  The Exemption generally exempts from the application of the prohibited transaction provisions of Section 406 of ERISA and the excise taxes imposed on such prohibited transactions pursuant to Section 4975(a) and (b) of the Code and Section 502(i) of ERISA certain transactions relating to the initial purchase, holding and subsequent resale by Plans of certific ates in pass-through trusts that consist of certain receivables, loans and other obligations that meet the conditions and requirements set forth in the Exemption.  The receivables covered by the Exemption include boat installment obligations such as the Receivables.  The Depositor believes that the Exemption will apply to the acquisition, holding and resale of the Certificates by a Plan and that all conditions of the Exemption other than those within the control of the investors have been or will be met.

All Certificateholders should refer to “ERISA Considerations” in the Prospectus for a detailed discussion of the general and specific conditions of the Exemption.

If the general conditions of the Exemption are satisfied, the Exemption may provide relief from the restrictions imposed by Sections 406(a) and 407(a) of ERISA as well as the excise taxes imposed by Section 4975(a) and (b) of the Code by reason of Section 4975(c)(1)(A) through (D) of the Code, in connection with the direct or indirect sale, exchange, transfer or holding of the Certificates by a Plan.  However, no exemption is provided from the restrictions of Sections 406(a)(1)(E), 406(a)(2) and 407 of ERISA for the acquisition or holding of a Certificate on behalf of an “Excluded Plan” by any person who has discretionary authority or renders investment advice with respect to the assets of such Excluded Plan.  For purposes of the Certificates an Excluded Plan is a Plan sponsored by any member of the Restricted Group.

If certain specific conditions of the Exemption are also satisfied, the Exemption may provide relief from the restrictions imposed by Sections 406(b)(l) and (b)(2) and 407(a) of ERISA and the taxes imposed by Section 4975(a) and (b) of the Code by reason of Section 4975(c)(1)(E) of the Code in connection with the direct or indirect sale, exchange, transfer or holding of Certificates in the initial issuance of Certificates between the Depositor or the Underwriters and a Plan other than an Excluded Plan when the person who has discretionary authority or renders investment advice with respect to the investment of Plan assets in the Certificates is (a) an Obligor with respect to 5% or less of the fair market value of the Receivables or (b) an affiliate of such person.

The Exemption also may provide relief from the restriction imposed by Sections 406(a) and 407(a) of ERISA and the taxes imposed by Section 4975(c)(1)(A) through (D) of the Code if such restrictions are deemed to otherwise apply merely because a person is deemed to be a party in interest or a disqualified person with respect to an investing Plan by virtue of providing services to a Plan (or by virtue of having certain specified relationships to such a person) solely as a result of such Plan’s ownership of Certificates.

Before purchasing a Certificate, a fiduciary of a Plan should itself confirm (a) that the Certificates constitute “certificates” for purposes of the Exemption and (b) that the specific conditions set forth in Section II of the Exemption and the other requirements set forth in the Exemption will be satisfied.

Any Plan fiduciary considering whether to purchase a Certificate on behalf of a Plan are encouraged to consult with its counsel regarding the applicability of the fiduciary responsibility and prohibited transaction provisions of ERISA and the Code to such investment.

UNDERWRITING

Subject to the terms and conditions set forth in the Underwriting agreement relating to the Certificates (the “Underwriting Agreement”), the Depositor has agreed to sell to [                 ] and [Deutsche Bank Securities Inc.] (together, the “Underwriters”), and each of the Underwriters has severally agreed to purchase, the principal amount of Class A Certificates and Class B Certificates set forth opposite its name below, subject to the satisfaction of certain conditions precedent.

Underwriter	Principal Amount of Class A Certificates	Principal Amount of Class B Certificates
[           ]	$[                 ]	$[                 ]
[Deutsche Bank Securities Inc.]	$[                 ]	$[                 ]
Total	$[                 ]	$[                 ]

The Depositor has been advised by the Underwriters that the Underwriters propose to offer the Certificates to the public initially at the public offering prices set forth on the cover page of this Prospectus, and to certain dealers at these prices less a concession of [                 ]% per Class A Certificate and [                 ]% per Class B Certificate; that the Underwriters and these dealers may allow a discount of [                 ]% per Class A Certificate and [                 ]% per Class B Certificate on the sale to certain other dealers; and that after the initial public offering of the Certificates, the public offe ring prices and the concessions and discounts to dealers may be changed by the Underwriters.

Until the distribution of the Certificates is completed, rules of the Securities and Exchange Commission may limit the ability of the Underwriters and certain selling group members to bid for and purchase the Certificates.  As an exception to these rules, the Underwriters are permitted to engage in certain transactions that stabilize the prices of the Certificates.  These transactions consist of bids or purchases for the purpose of pegging, fixing or maintaining the price of such Certificates.

In general, purchases of a security for the purpose of stabilization or to reduce a short position could cause the price of the security to be higher than it might be in the absence of purchases for these purposes.

Neither the Depositor nor either Underwriter makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the prices of the Certificates.  In addition, neither the Depositor nor either Underwriter makes any representation that either Underwriter will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

[Deutsche Bank Securities Inc.] is an affiliate of the Depositor and the Seller.

This Prospectus Supplement may be used by [Deutsche Bank Securities Inc.], an affiliate of the Depositor, in connection with offers and sales relating to market-making transactions in the Certificates in which [Deutsche Bank Securities Inc.] acts as principal. [Deutsche Bank Securities Inc.] may also act as agent in such transactions.  Sales will be made at prices related to the prevailing prices at the time of sale.

The Depositor has agreed to indemnify the Underwriters against particular liabilities, including civil liabilities under the Securities Act, or contribute to payments which the Underwriters may be required to make in respect of these liabilities.  In the opinion of the Commission, this indemnification is against public policy as expressed in the Securities Act and, may, therefore, be unenforceable.

The Trustee or the Collateral Agent, as applicable, may, from time to time, invest the funds in the Trust Accounts in Eligible Investments acquired from either of the Underwriters.

RATINGS

It is a condition to the issuance of the Certificates that the Certificates receive at least the following ratings from [             ] (“[             ]”) and [             ] (“[             ]”):

Certificates	[             ]	[             ]
Class A Certificates	[___]	[___]
Class B Certificates	[___]	[___]

The ratings of the Class A Certificates will be based primarily on the Receivables, the Reserve Account, and the terms of the Certificates, including the subordination provided by the Class B Certificates.  The ratings of the Class B Certificates will be based primarily on the Receivables and the Reserve Account.  The ratings of the Certificates should be evaluated independently from similar ratings on other types of securities.  The ratings do not address the possibility that Certificateholders may suffer a lower than anticipated yield.

There can be no assurance that any rating will remain in effect for any given period of time or that a rating will not be lowered or withdrawn by the assigning Rating Agency if, in its judgment, circumstances so warrant.  In the event that the rating initially assigned to any of the Certificates is subsequently lowered or withdrawn for any reason, no person or entity will be obligated to provide any additional credit enhancement with respect to these certificates.  There can be no assurance whether any other rating agency will rate any of the Certificates, or if one does, what rating would be assigned by any other rating agency.  A security rating is not a recommendation to buy, sell or hold securities.

The rating agencies have stated that it is their standard policy to monitor ratings on publicly offered certificates for which a rating has been provided, as to each rating agency rating each class of certificates in accordance with the rating agencies’ particular surveillance policies, unless the issuer requests a rating without surveillance.  A rating agency will monitor the rating it issues on an ongoing basis and may update the rating after conducting its regular review of the issuer’s creditworthiness or after conducting a review of the status of the rating upon becoming aware of any information that might reasonably be expected to result in a change of rating.  The depositor has not requested that any rating agency not monitor their ratings of the certificates, and the depositor has not requested that any rating agency use any monitoring procedures other than their standard monitoring procedures.

LEGAL PROCEEDINGS

[There are no material legal proceedings pending against the Sponsor, the Depositor, the Trustee, the Issuing Entity, the Collateral Agent, [any affiliated Servicer, any 20% concentration unaffiliated Servicer, any 20% concentration Originator], or with respect to which the property of any of the foregoing transaction parties is subject, that are material to the certificateholders.  No legal proceedings against any of the foregoing transaction parties is known to be contemplated by governmental authorities, that are material to the certificateholders.]

AFFILIATIONS, RELATIONSHIPS AND RELATED TRANSACTIONS

[There are no affiliations between the Sponsor, the Depositor or the Issuing Entity and any of [any affiliated Servicer, any 20% concentration unaffiliated Servicer], the Trustee, the Collateral Agent, [any 10% concentration Originator] or [any credit enhancement provider or derivatives counterparty].  There are no affiliations among [any affiliated Servicer, any 20% concentration unaffiliated Servicer], the Trustee, the Collateral Agent, [any 10% concentration Originator] or [any credit enhancement provider or derivatives counterparty].  There are currently no business relationships, agreements, arrangements, transactions or understandings between (a) the Sponsor, the Depositor or the Issuing Entity and (b) any of the parties referred to in the preceding sentence, or any of their respective affiliates, that were entered into outside the normal course of business or that contain terms other than would be obtained in an arm’s lengt h transaction with an unrelated third party and that are material to the investor's understanding of the certificates, or that relate to the certificates or the pooled assets.  No such business relationship, agreement, arrangement, transaction or understanding has existed during the past two years.]

LEGAL MATTERS

Certain legal matters with respect to the Certificates will be passed upon for the Sponsor by [        ].  Certain legal matters with respect to the Certificates will be passed upon for the Underwriter by McKee Nelson LLP, New York, New York.  McKee Nelson LLP also will pass upon the material federal income tax consequences related to the Certificates.

PROSPECTUS

ACE SECURITIES CORP.

Depositor

Asset Backed Certificates

Asset Backed Notes

(Issuable in Series)

Boat Receivables and Receivables Securities Trusts

____________________

The Issuing Entities:

Each issuing entity will be established to hold assets generally consisting of one or more of the following:

1.  One or more pools of

·

installment loan agreements or retail installment sale contracts secured by new and used boats, boat motors, jet skis and/or waverunners, and security interests therein,

•

private securities evidencing ownership interests in or secured by loans similar to the types of loans described above;

2.  Government Securities;

3.  All monies due under the above assets, which may be net of amounts payable to the servicer; and

4.  Funds or accounts established for the related issuing entity, or one or more forms of enhancement.

The prospectus supplement for your particular issuing entity specifies the assets in the issuing entity.

The Securities:

ACE Securities Corp. will sell the securities pursuant to a prospectus supplement.  The securities will be grouped into one or more series, each having its own distinct designation.  Each series will be issued in one or more classes and will evidence beneficial ownership of, or be secured by, the assets in the issuing entity that the series relates to.  A prospectus supplement for a series will specify all of the terms of the series and of each of the classes in the series.  The securities represent obligations of the issuing entity only and do not represent an interest in or obligation of the depositor, the sponsor, the servicer or any of their affiliates.

Consider carefully the risk factors beginning on page 6 of this prospectus:

Neither the SEC nor any state securities commission has approved or disapproved the offered securities or determined if this prospectus is accurate or complete. Making any contrary representation is a criminal offense.

<R>The date of this prospectus is February 22, 2007.<R>

IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT

We provide information to you about the securities in two separate documents that progressively provide varying levels of detail:

•

This prospectus, which provides general information, some of which may not apply to a particular series of securities including your series, and

•

The accompanying prospectus supplement, which will describe the specific terms of the offered securities.

Whenever we use words like “intends,” “anticipates” or “expects” or similar words in this prospectus, we are making a forward-looking statement, or a projection of what we think will happen in the future.  Forward-looking statements are inherently subject to a variety of circumstances, many of which are beyond our control and could cause actual results to differ materially from what we anticipate.  Any forward-looking statements in this prospectus speak only as of the date of this prospectus.  We do not assume any responsibility to update or review any forward-looking statement contained in this prospectus to reflect any change in our expectation about the subject of that forward-looking statement or to reflect any change in events, conditions or circumstances on which we have based any forward-looking statement.

TABLE OF CONTENTS

Risk Factors

6

The Issuing Entities

10

The Trustee

12

The Sponsor

12

The Depositor

12

The Receivables Pools

13

Delinquencies, Repossessions and Net Losses

15

New and Used Financed Boats

15

Static Pool Data

15

The Collateral Certificates

16

Enhancement Relating to Collateral Certificates

17

Additional Information

17

The Government Securities

18

Treasury Bonds

19

Treasury Strips

19

GSE Bonds

20

Private Label Custody Receipt Securities

25

Weighted Average Life of the Securities

28

Pool Factors and Trading Information

29

The Seller and the Servicer

29

Use of Proceeds

29

Description of the Notes

30

Distribution of Principal and Interest

30

Revolving Period

31

Provisions of the Indenture

31

The Indenture Trustee

37

Description of the Certificates

37

Distributions of Principal and Interest

38

Certain Information Regarding the Securities

39

Book-Entry Registration

39

Definitive Securities

41

Statements to Securityholders

42

List of Securityholders

43

Description of the Transfer and Servicing Agreements

43

Sale and Assignment of Primary Assets

44

Trust Accounts

45

Pre-Funding

47

Servicing Procedures

49

Collections

49

Advances

50

Net Deposits

50

Servicing Compensation and Payment Of Expenses

51

Distributions

51

Credit and Cash Flow Enhancement

52

Evidence as to Compliance

53

Statements to trustees and the Trust

54

Certain Matters Regarding the Servicer

54

Servicer Defaults

54

Rights Upon Servicer Default

55

Waiver of Past Defaults

56

Amendment

56

Payment in Full of the notes

57

Termination

57

Certain Legal Aspects of the Receivables

57

Security Interests in Financed Boats

57

Repossession

61

Notice of Sale; Redemption Rights

62

Deficiency Judgments and Excess Proceeds

62

Consumer Protection Laws

62

Other Limitations

63

Material Federal Income Tax Consequences

64

Trusts That Issue Notes

64

Grantor Trusts

81

Penalty Avoidance

88

ERISA Considerations

88

General

88

ERISA Considerations Relating to Certificates

89

ERISA Considerations Relating to Notes

94

Plan of Distribution

95

Legal Matters

96

Prospectus Supplement

97

Reports to Securityholders

97

Available Information

97

Incorporation of Certain Documents by Reference

98

Rating

99

INDEX OF TERMS

100

Initial Settlement

106

Secondary Market Trading

107

Certain U.S. Federal Income Tax Documentation Requirements

109

Risk Factors

The following information, which you should carefully consider, identifies certain significant sources of risk associated with an investment in the certificates and the notes.  You should also carefully consider the information set forth under “Risk Factors” in the prospectus supplement.

Limited Liquidity May Result in Delays in your Ability to Sell securities or Lower Returns	There will be no market for the securities of any series prior to their issuance, and there can be no assurance that a secondary market will develop.  If a secondary market does develop, there can be no assurance that it will provide holders with liquidity of investment or that the market will continue for the life of the securities of the related series.  Deutsche Bank Securities Inc. presently expects to make a secondary market in the securities, but has no obligation to do so.  Absent a secondary market for the securities you may experience a delay if you choose to sell your securities or the price you receive may be less than you would receive for a comparable liquid security.
Limited Assets for Payments - No Recourse to depositor, Seller or Servicer	The depositor does not have, nor is it expected to have, any significant assets.  The securities of a series will be payable solely from the assets of the issuing entity’s trust fund for that series. Except for any related insurance policies or credit support, there will be no recourse to the depositor or any other person for any default on the notes or any failure to receive distributions on the certificates with respect to any series.  Consequently, holders of securities of each series must rely solely upon payments with respect to the assets constituting the issuing entity’s trust fund for a series of securities, including, if applicable, any amounts available pursuant to any enhancement for that series, for the payment of principal of and interest on the securities of that series. The only obligations, if any, of the depositor with respect to the securities of any series will be with respect to its breach of specific representations and warranties.  The depositor does not have, and is not expected in the future to have, any significant assets with which to meet any obligation to repurchase assets with respect to which there has been a breach of any representation or warranty.  If, for example, the depositor were required to repurchase a receivable, its only sources of funds to make the repurchase would be from funds obtained from the enforcement of a corresponding obligation, if any, on the part of the originator of the receivable, or the seller, as the case may be, or from a reserve fund established to provide funds for repurchases.  If the depositor does not have sufficient assets and no other party is obligated to repurchase defective assets, you may experience a loss.
Limits on Enhancement May Result in Losses to You	Although we intend the enhancement for the securities to reduce the risk of delinquent payments or losses to holders of a series of securities entitled to the benefit of the enhancement, the amount of the enhancement will be limited, as set forth in the related prospectus supplement.  In addition, the amount available will decline and could be depleted prior to the payment in full of the related series of securities, and losses on the primary assets could result in losses to holders of those securities.
Timing and Rate of Prepayments May Result in Lower Yield	The yield to maturity experienced by a holder of securities may be affected by the rate and timing of payments of principal of the receivables or of the underlying receivables relating to the private securities.  The rate and timing of principal payments of the securities of a series will be affected by a number of factors, including the following: • the extent of prepayments, which may be influenced by a variety of factors, • the manner of allocating principal payments among the classes of securities of a series as specified in the related prospectus supplement, and • the exercise of any right of optional termination. Prepayments may also result from repurchases of receivables or underlying receivables, as applicable, due to material breaches of the seller’s or the depositor’s representations or warranties. Interest payable on the securities of a series on a distribution date will include all interest accrued during the period specified in the related prospectus supplement.  In the event interest accrues during the calendar month prior to a distribution date, the effective yield to holders will be reduced from the yield that would otherwise be obtainable if interest payable on the security were to accrue through the day immediately preceding each distribution date, and the effective yield at par to holders will be less than the indicated coupon rate.
Risks of Subordinated Securities	To the extent specified in the applicable prospectus supplement, distributions of interest on and principal of one or more classes of securities of a series may be subordinated in priority of payment to interest and principal due on one or more other classes of securities of the related series.  Any subordinated securities will be affected to a greater degree by any losses on the receivables or of the underlying receivables relating to the private securities.
Potential Lack of Security	The depositor will assign security interests in the financed vehicles securing the receivables to the related issuing entity. Due to administrative burden and expense, however, we will not cause the certificates of title to the financed vehicles to be amended to reflect the assignment to the issuing entity unless otherwise specified in the prospectus supplement. In the absence of amendment, an issuing entity may not have a perfected security interest in the financed vehicles securing the receivables in some states. If an issuing entity does not have a perfected security interest in a financed vehicle, its ability to realize in the event of a default on that financed vehicle may be adversely affected.   To the extent that the issuing entity’s security interest in a financed boat is perfected, the issuing entity will have a prior claim over subsequent purchasers of such financed boat and holders of subsequently perfected security interests in such financed boat.  Under the laws of many states, certain possessory liens for repairs on a boat and storage, as well as certain rights in favor of federal and state governmental authorities arising from the use of a boat in connection with illegal activities, may take priority even over a perfected security interest.  Under the Ship Mortgage Statutes, certain preferred maritime liens will have priority over security interests in financed boats perfected under federal law.  Certain federal tax liens may have priority over the lien of a secured party. In addition, through fraud or negligence, the issuing entity could lose its security interest or the priority of its secu rity interest in a financed boat.  If a security interest in a financed boat is initially perfected (by titling or UCC filing) under applicable state law and the financed boat subsequently is federally documented, the issuing entity could lose the priority of its security interest in such financed boat to a purchaser thereof or to the holder of a subsequently perfected Preferred Mortgage covering such financed boat.  See “Certain Legal Aspects of the Receivables--Security Interests in the Financed Vehicles.”  ACE Securities Corp. shall not have an obligation to repurchase a contract as to which any of the aforementioned occurrences result in the issuing entity’s losing the priority of its security interest or its security interest in such financed boat after the date such security interest was conveyed to the issuing entity.
Risk of Commingling	We will require the servicer to deposit all payments on the receivables collected during each collection period into the related collection account within two business days of receipt of the payments.  However, if a servicer satisfies particular requirements for less frequent remittances we will not require the servicer to deposit the amounts into the collection account until the business day preceding each distribution date. Pending deposit into the collection account, collections may be invested by the servicer at its own risk and for its own benefit and will not be segregated from funds of the servicer. If the servicer were unable to remit the funds, the applicable securityholders might incur a loss. To the extent set forth in the related prospectus supplement, the servicer may, in order to satisfy the requirements described above, obtain a letter of credit or other security for the benefit of the related issuing entity to secure timely remittances of collections on the receivables.
Removal of a Servicer After a Servicer Default	The related prospectus supplement may provide that with respect to a series of securities issued by an owner trust, upon the occurrence of a servicer default, the related indenture trustee or noteholders may remove the servicer without the consent of the related trustee or any certificateholders. The trustee or the certificateholders with respect to a series may not have the ability to remove the servicer if a servicer default occurs. In addition, the noteholders with respect to a series have the ability, with specified exceptions, to waive defaults by the servicer, including defaults that could materially adversely affect the certificateholders of the series.
Book-Entry Registration--Beneficial Owners Not Recognized by Trust	Issuance of the securities in book-entry form may reduce the liquidity of these securities in the secondary trading market since investors may be unwilling to purchase securities for which they cannot obtain physical certificates.  Since transactions in the securities can be effected only through The Depository Trust depositor and any other entities set forth in the related prospectus supplement, your ability to pledge a security to persons or entities that do not participate in The Depository Trust depositor or any other entities or otherwise to take actions in respect of the related securities may be limited due to lack of a physical certificate representing the securities. You may experience some delay in the receipt of distributions of interest and principal on the securities since the distributions will be forwarded by the trustee to The Depository Trust depositor and The Depository Trust depositor will credit the distributions to the accounts of its participants which will subsequently credit them to your account either directly or indirectly through indirect participants.
You may be unable to reinvest distributions in comparable investments.	Asset backed securities, like the securities, usually produce more returns of principal to investors when market interest rates fall below the interest rates on the receivables and produce less returns of principal when market interest rates are above the interest rates on the receivables. As a result, you are likely to receive more money to reinvest at a time when other investments generally are producing a lower yield than that on the securities, and are likely to receive less money to reinvest when other investments generally are producing a higher yield than that on the securities.  You will bear the risk that the timing and amount of distributions on your securities will prevent you from attaining your desired yield.
Withdrawal or downgrading of initial ratings will reduce the prices for securities.	A security rating is not a recommendation to buy, sell or hold securities.  Similar ratings on different types of securities do not necessarily mean the same thing.  You are encouraged to analyze the significance of each rating independently from any other rating.  Any rating agency may change its rating of the securities after those securities are issued if that rating agency believes that circumstances have changed.  Any subsequent change in rating will likely reduce the price that a subsequent purchaser will be willing to pay for the securities.
The securities are not suitable investments for all investors.	The securities are not a suitable investment for any investor that requires a regular or predictable schedule of payments or payment on any specific date.  The securities are complex investments that should be considered only by investors who, either alone or with their financial, tax and legal advisors, have the expertise to analyze the prepayment, reinvestment, default and market risk, the tax consequences of an investment, and the interaction of these factors.

The Issuing Entities

With respect to each series of securities, ACE Securities Corp. as depositor (the “depositor”) will establish a separate issuing entity that is a trust (each, referred to as an “issuing entity” or a “Trust”) pursuant to a trust agreement (a “Trust Agreement”) between the depositor and the related trustee or pooling and servicing agreement (a “Pooling and Servicing Agreement”) among the depositor, the servicer and the trustee for the related Trust, as applicable, for the transactions described in this prospectus and in the related prospectus supplement. The property of each issuing entity will include Primary Assets and all payments due under the Primary Assets on and after the applicable cutoff date in the case of Precomputed Receivables and all payments received under the Precomputed Receivables on and after the applicable cutoff date or closing date, as specifi ed in the related prospectus supplement, in the case of Simple Interest Receivables, Collateral Certificates, Government Securities and Private Label Custody Receipt Securities. On the applicable closing date, after the issuance of the notes and/or certificates of a given series, the depositor will transfer or sell Primary Assets to the issuing entity in the outstanding principal amount specified in the related prospectus supplement. The property of each issuing entity may also include:

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amounts as from time to time may be held in separate trust accounts established and maintained pursuant to the related Trust Agreement, sale and servicing agreement (a “Sale and Servicing Agreement”) among the depositor, the servicer and the related issuing entity or Pooling and Servicing Agreement, as applicable, and the proceeds of these accounts, as described in this prospectus and in the related prospectus supplement;

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security interests in boats, boat motors, jet skis and/or waverunners and trailers related thereto financed by the Receivables (the “Financed Boats “) and any other interest of a seller in the Financed Boats;

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the rights to proceeds from claims on physical damage, credit life and disability insurance policies covering Financed Boats or the obligors, as the case may be;

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any property that has secured a Receivable and that has been acquired by the applicable issuing entity; and

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any and all proceeds of the Primary Assets or the foregoing.

To the extent specified in the related prospectus supplement, a Reserve Account or other form of credit enhancement may be a part of the property of a given issuing entity or may be held by the trustee for the benefit of holders of the related securities.

The servicer specified in the related prospectus supplement, as servicer under the Pooling and Servicing Agreement or Sale and Servicing Agreement, as applicable, will service the Receivables held by each issuing entity and will receive fees for these services. See “Description of the Transfer and Servicing Agreements—Servicing Compensation and Payment of Expenses” in this prospectus and “Description of the Transfer and Sale and Servicing Agreement—Servicing Compensation” in the related prospectus supplement. To facilitate the servicing of Receivables and unless otherwise specified in the related prospectus supplement, each seller and each trustee will authorize the servicer to retain physical possession of the Receivables held by each issuing entity and other documents relating to possession of the Receivables as custodian for each issuing entity. Due to the administrative burden a nd expense, the certificates of title to the Financed Boats will not be amended to reflect the sale and assignment of the security interest in the Financed Boats to an issuing entity. In the absence of an amendment, an issuing entity may not have a perfected security interest in some of the Financed Boats in some states. See “Certain Legal Aspects of the Receivables” and “Description of the Transfer and Servicing Agreements—Sale and Assignment of Primary Assets”. In the case of Primary Assets consisting of Collateral Certificates, Government Securities and/or Private Label Custody Receipt Securities, the trustee specified in the related prospectus supplement will manage the Collateral Certificates, Government Securities and/or Private Label Custody Receipt Securities.

If the protection provided to (1) holders of notes issued by an owner trust by the subordination of the related certificates and by the Reserve Account, if any, or any other available form of credit enhancement for the series or (2) certificateholders by any Reserve Account or other form of credit enhancement is insufficient, the noteholders or certificateholders, as the case may be, will have to look to payments by or on behalf of obligors on Receivables or on the Collateral Certificates, the Government Securities, and the Private Label Custody Receipt Securities, as applicable, and the proceeds from the repossession and sale of Financed Boats that secure defaulted Receivables for distributions of principal and interest on the securities. In this event, some factors, such as the applicable issuing entities not having perfected security interests in all of the Financed Boats, may limit the ability of an issuing entity to realize on the collateral securing the related Primary Assets, or may limit the amount realized to less than the amount due under Receivables. Securityholders may be subject to delays in payment on, or may incur losses on their investment in, the securities as a result of defaults or delinquencies by obligors and depreciation in the value of the related Financed Boats. See “Description of the Transfer and Servicing Agreements—Credit and Cash Flow Enhancement” and “Certain Legal Aspects of the Receivables”.

The principal offices of each issuing entity and the related trustee will be specified in the applicable prospectus supplement.

The Trustee

The trustee for each Trust will be specified in the related prospectus supplement. The trustee’s liability in connection with the issuance and sale of the related securities is limited solely to the express obligations of the trustee set forth in the related Trust Agreement and Sale and Servicing Agreement or the related Pooling and Servicing Agreement, as applicable. A trustee may resign at any time, in which event the servicer will be obligated to appoint a successor trustee. The servicer may also remove the related trustee if the trustee ceases to be eligible to continue as trustee under the related Trust Agreement or Pooling and Servicing Agreement, as applicable, and will be obligated to appoint a successor trustee. Any resignation or removal of a trustee and appointment of a successor trustee will not become effective until the acceptance of the appointment by the successor trustee.

The Sponsor

The sponsor will be DB Structured Products, Inc., a Delaware corporation, referred to herein as the Sponsor, for each series of securities unless otherwise indicated in the related prospectus supplement.  The Sponsor maintains its principal office at 60 Wall Street, New York, New York  10005.  Its telephone number is (212) 250-2500.

With respect to any series of securities, if so specified in the related prospectus supplement, the Sponsor will also act as servicer or master servicer for the mortgage pool.  If so, the Sponsor will service the Designated Mortgage Assets in accordance with the description of the applicable servicing procedures contained in this prospectus under “Description of the Securities.”

The Depositor

ACE Securities Corp., the depositor, is a special purpose corporation incorporated in the State of Delaware on June 3, 1998.  The principal executive offices of the depositor are located at 6525 Morrison Boulevard, Suite 318, Charlotte, North Carolina 28211.  Its telephone number is (704) 365-0569.  The depositor does not have, nor is it expected in the future to have, any significant assets.

The limited purposes of the depositor are, in general, to acquire, own and sell mortgage loans and financial assets; to issue, acquire, own, hold and sell securities and notes secured by or representing ownership interests in mortgage loans and other financial assets, collections on the mortgage loans and related assets; and to engage in any acts that are incidental to, or necessary, suitable or convenient to accomplish, these purposes.

All of the shares of capital stock of the depositor are held by Altamont Holdings Corp., a Delaware corporation.

The Receivables Pools

The installment loan agreements or retail installment sale contracts secured by new and used boats, boat motors, jet skis and waverunners and trailers related thereto (the “Receivables”) in a Receivables Pool have been or will be originated or acquired by a seller in the ordinary course of business, in accordance with its credit and underwriting standards as described in the related prospectus supplement.

The Receivables to be sold to each issuing entity will be selected from a seller’s portfolio for inclusion in a Receivables Pool based on rating agency criteria, compliance with representations and warranties, and conformity to criteria relating to the characterization of the Certificates and Notes for tax, ERISA, Form S-3 eligibility and any other criteria specified in the related prospectus supplement.  Each Receivable

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is secured by a new or used boat, boat motor, jet ski or waverunner,

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was originated or acquired, either from a boat, boat motor, jet ski or waverunner dealer or a financial institution, by the seller,

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provides for level monthly payments, except for the last payment, which may be different from the level payments, that, unless otherwise provided in the related prospectus supplement, amortize the amount financed over the original term to maturity of the related Receivable,

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is a Precomputed Receivable or a Simple Interest Receivable and

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satisfies the other criteria, if any, set forth in the related prospectus supplement. No selection procedures believed by the seller to be adverse to Securityholders were or will be used in selecting the Receivables.

“Precomputed Receivables” consist of either (1) monthly actuarial receivables (“Actuarial Receivables”) or (2) receivables that provide for allocation of payments according to the “sum of periodic balances” or “sum of monthly payments” method, similar to the “Rule of 78s” (“Rule of 78S Receivables”). An Actuarial Receivable provides for amortization of the loan over a series of fixed level monthly installment payments. Each monthly installment, including the monthly installment representing the final payment on the Receivable, consists of (x) an amount of interest equal to 1/12 of the stated contract interest rate under the related Receivable multiplied by the unpaid principal balance of the loan, plus (y) an amount allocable to principal equal to the remainder of the monthly payment. A Rule of 78s Receivable provides for the payment by the obligor of a specified total amount of payments, payable in equal monthly installments on each due date, which total represents the principal amount financed plus add-on interest in an amount calculated at the stated contract interest rate under the related Receivable for the term of the receivable. The rate at which the amount of add-on interest is earned and, correspondingly, the amount of each fixed monthly payment allocated to reduction of the outstanding principal amount are calculated in accordance with the Rule of 78s.

“Simple Interest Receivables” are receivables that provide for the amortization of the amount financed under them over a series of fixed level monthly payments. However, unlike the monthly payment under an Actuarial Receivable, each monthly payment consists of an installment of interest that is calculated on the basis of the outstanding principal balance of the receivable multiplied by the stated contract interest rate under the related Receivable and further multiplied by the period elapsed, as a fraction of a calendar year, since the preceding payment of interest was made. As payments are received under a Simple Interest Receivable, the amount received generally is applied first to interest accrued to the date of payment and the balance is applied to reduce the unpaid principal balance.  Accordingly, if an obligor pays a fixed monthly installment before its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be less than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly greater. Conversely, if an obligor pays a fixed monthly installment after its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be greater than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly less. In either case, the obligor is obligated to pay a fixed monthly installment until the final scheduled payment date, at which time the amount of the final installment may be increased or decreased as necessary to repay the then outstanding principal balance.

In the event of the prepayment in full, voluntarily or by acceleration, of a Rule of 78s Receivable, under the terms of the contract a “refund” or “rebate” will be made to the obligor of the portion of the total amount of payments then due and payable allocable to “unearned” add-on interest, calculated in accordance with a method equivalent to the Rule of 78s. If an Actuarial Receivable is prepaid in full, with minor variations based upon state law, the Actuarial Receivable requires that the rebate be calculated on the basis of a constant interest rate. If a Simple Interest Receivable is prepaid, rather than receive a rebate, the obligor is required to pay interest only to the date of prepayment. The amount of a rebate under a Rule of 78s Receivable generally will be less than the amount of a rebate on an Actuarial Receivable and generally will be less than the remaining scheduled p ayments of interest that would have been due under a Simple Interest Receivable for which all payments were made on schedule.

To the extent provided in the related prospectus supplement, each issuing entity will account for the Rule of 78s Receivables as if the Receivables were Actuarial Receivables. Amounts received upon prepayment in full of a Rule of 78s Receivable in excess of the then outstanding principal balance of the Receivable and accrued interest on the Receivable, calculated pursuant to the actuarial method, will not be paid to noteholders or passed through to certificateholders of the applicable series, but will be paid to the servicer as additional servicing compensation.

Information with respect to each Receivables Pool will be set forth in the related prospectus supplement, including, to the extent appropriate, the composition and distribution by annual percentage rate and by states of origination of the Receivables, the portion of each Receivables Pool consisting of Precomputed Receivables and of Simple Interest Receivables, and the portion of each Receivables Pool secured by new boats and by used boats.

Delinquencies, Repossessions and Net Losses

Information concerning the experience of a seller pertaining to delinquencies, repossessions and net losses with respect to Receivables will be set forth in each prospectus supplement. There can be no assurance that the delinquency, repossession and net loss experience on any Receivables Pool will be comparable to prior experience or to the information.

New and Used Financed Boats

The extension of credit to an obligor on a Receivable is based on an assessment of an applicant’s ability to repay the amounts due on the Receivable and the adequacy of the related Financed Boat.  An assessment generally does not distinguish between new or used boats.  Rather, the amount advanced under a boat loan generally will not exceed 100% of the value of the collateral unless otherwise specified in the related prospectus supplement.  For new boats, the value equals the dealer invoice for the boat that serves as collateral, plus sales tax, license fee, title fee, the cost of service and warranty contracts, and any premium for credit life and disability insurance obtained in connection with the loan.  For used boats, the value equals the wholesale price reported in the most recent edition of any industry guide as specified in the related prospectus supplement, plus sales tax, license fee, title fee, the cost of service and warranty contracts, and any premium for credit life and disability insurance obtained in connection with the loan.  The maximum age of any used boat acceptable as collateral generally is ten model years.  Additional information with respect to delinquencies, repossessions and net losses with respect to Receivables secured by new or used Financed Boats will be set forth in each prospectus supplement.

Static Pool Data

If specified in the related prospectus supplement, static pool data with respect to the delinquency, cumulative loss and prepayment data for each issuing entity will be made available through a website.  The prospectus supplement related to each series for which the static pool data is provided through a website will contain the website address to obtain this information.  Except as stated below, the static pool data provided through any website will be deemed part of this prospectus and the registration statement of which this prospectus is a part from the date of the related prospectus supplement.  

Notwithstanding the foregoing, the following information shall not be deemed part of the prospectus or the registration statement of which this prospectus is a part:

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with respect to information regarding prior securitized pools of the depositor that do not include the currently offered pool, information regarding prior securitized pools that were established before January 1, 2006; and

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with respect to information regarding the pool described in the related prospectus supplement, information about the pool for periods before January 1, 2006.

Copies of the static pool data presented on a website and deemed part of this prospectus may be obtained upon written request by the securityholders of the related series at the address specified in the related prospectus supplement.  Copies of information related to the period prior to January 1, 2006 may also be obtained upon written request.

The Collateral Certificates

The primary assets (“Primary Assets”) for a series will include Receivables or Collateral Certificates, which include certificates evidencing an undivided interest in, or notes or loans secured by, Receivables. These Collateral Certificates will have previously been offered and distributed to the public pursuant to an effective registration statement or are being registered under the Securities Act in connection with the offering of a series of securities, which offering, distribution and registration may have been undertaken, or may be undertaken, by the depositor and/or one or more affiliates of the depositor, in each case, subject to exceptions which, if applicable, will be described in the related prospectus supplement. Collateral Certificates will have been issued pursuant to a pooling and servicing agreement, a sale and servicing agreement, a trust agreement, an indenture or similar agreement (an “Underlying Trust Agreement”).  The servicer (the “Underlying Servicer”) of the underlying installment loans or sale contracts will have entered into the Underlying Trust Agreement with a trustee (the “Underlying Trustee”).

The issuer of the Collateral Certificates (the “Underlying Issuer”) will be

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a financial institution, corporation or other entity engaged generally in the business of purchasing or originating installment loan agreements and boat retail installment sale contracts secured by boats, boat motors, jet skis and/or waverunners and the related trailors,

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a limited purpose corporation organized for the purpose of, among other things, establishing trusts, acquiring and selling receivables to the trusts and selling beneficial interests in these trusts, or

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one of the trusts.

If so specified in the related prospectus supplement, the Underlying Issuer may be the depositor and/or one or more affiliates of the depositor.  The obligations of the Underlying Issuer will generally be limited to specific representations and warranties with respect to the assets conveyed by it to the related issuing entity. The related prospectus supplement will, subject to exceptions which, if applicable, will be described in the related prospectus supplement, provide that the Underlying Issuer will not have guaranteed any of the assets conveyed to the related issuing entity or any of the Collateral Certificates issued under the Underlying Trust Agreement.

Distributions of principal and interest will be made on the Collateral Certificates on the dates specified in the related prospectus supplement. The Collateral Certificates may be entitled to receive nominal or no principal distribution or nominal or no interest distributions. Principal and interest distributions will be made on the Collateral Certificates by the Underlying Trustee or the Underlying Servicer. The Underlying Issuer or the Underlying Servicer may have the right to repurchase assets underlying the Collateral Certificates after a specific date or under other circumstances specified in the related prospectus supplement.

Enhancement Relating to Collateral Certificates

Enhancement only in the form of reserve funds, subordination of other securities issued in connection with the Collateral Certificates, guarantees, letters of credit, cash collateral accounts, insurance policies may be provided with respect to the Receivables underlying the Collateral Certificates or with respect to the Collateral Certificates themselves. The type, characteristics and amount of enhancement will be a function of particular characteristics of the Receivables and other factors and will have been established for the Collateral Certificates on the basis of requirements of rating agencies.

Additional Information

The related prospectus supplement for a series for which the Primary Assets include Collateral Certificates will specify, to the extent relevant and to the extent the information is reasonably available to the depositor and the depositor reasonably believes the information to be reliable:

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the aggregate approximate principal amount and type of the Collateral Certificates to be included in the Primary Assets;

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the characteristics of the receivables which comprise the underlying assets for the Collateral Certificates;

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the expected and final maturity of the Collateral Certificates;

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the interest rate of the Collateral Certificates;

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the Underlying Issuer, the Underlying Servicer, if other than the Underlying Issuer, and the Underlying Trustee for the Collateral Certificates;

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characteristics of the enhancement, if any, such as reserve funds, insurance funds, insurance policies, letters of credit or guarantees relating to the receivables underlying the Collateral Certificates or to the Collateral Certificates themselves;

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the terms on which the underlying receivables for the Collateral Certificates may, or are required to, be purchased prior to their stated maturity or the stated maturity of the Collateral Certificates; and

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the terms on which receivables may be substituted for those originally underlying the Collateral Certificates.

The Government Securities

Primary Assets for a series may include, but will not consist entirely of, any combination of

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receipts or other instruments created under the Department of the Treasury’s Separate Trading of Registered Interest and Principal of securities, or STRIPS, program (“Treasury Strips”), which interest and/or principal strips evidence ownership of specific interest and/or principal payments to be made on particular United States Treasury Bonds (“Treasury Bonds”),

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Treasury Bonds and

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other debt securities (“GSEs Bonds”) of United States government sponsored enterprises (“GSEs”; and together with Treasury Strips and Treasury Bonds, collectively, “Government Securities”).

The Government Securities, if any, included in an issuing entity are intended to assure investors that funds are available to make specified payments of principal and/or interest due on the related securities. Accordingly, the Government Securities, if any, included in an issuing entity are intended both to (1) support the ratings assigned to these securities, and (2) perform a function similar to that described in this prospectus under “Description of the Transfer and Servicing Agreements—Credit and Cash Flow Enhancement”. A description of the respective general features of Treasury Bonds, Treasury Strips and GSE Bonds is set forth below.

The prospectus supplement for each series of securities the issuing entity with respect to which contains Government Securities will contain information as to:

(1)

the title and series of each Government Security, the aggregate principal amount, denomination and form of each Government Security;

(2)

the limit, if any, upon the aggregate principal amount of the Government Security;

(3)

the dates on which, or the range of dates within which, the principal of, and premium, if any, on, the Government Security will be payable;

(4)

the rate or rates, or the method of determination of the rate or rates, at which the Government Security will bear interest, if any, the date or dates from which the interest will accrue, and the dates on which the interest will be payable;

(5)

whether the Government Security was issued at a price lower than the principal amount of that Government Security;

(6)

material events of default or restrictive covenants provided for with respect to the Government Security;

(7)

the rating of the Government Security, if any;

(8)

the issuer of each Government Security;

(9)

the material risks, if any, posed by any Government Securities and issuers of the Government Securities (which risks, if appropriate, will be described in the “Risk Factors” section of the related prospectus supplement); and

(10)

any other material terms of the Government Security.

With respect to a Trust which includes a pool of Government Securities, the related prospectus supplement will, to the extent applicable, describe the composition of the Government Securities’ pool, particular material events of default or restrictive covenants common to the Government Securities, and, on an aggregate, percentage or weighted average basis, as applicable, the characteristics of the pool with respect to the terms set forth in (3), (4) and (5) of the preceding sentence and any other material terms regarding the pool. The Government Securities included in an issuing entity will be senior, unsecured, nonredeemable obligations of the issuer of the Government Securities, will be denominated in United States dollars and, if rated, will be rated at least investment grade by at least one nationally recognized rating agency. In addition, the inclusion of Government Securities in an issuing entity with respect to a seri es of securities is conditioned upon their characteristics being in form and substance satisfactory to the Rating Agency rating the related series of securities.

Treasury Bonds

Treasury Bonds are issued by and are the obligations of the United States of America. Accordingly, the payment of principal and interest on each Treasury Bond will be guaranteed by the full faith and credit of the United States of America. Interest is typically payable on the Bonds semiannually. Treasury Bonds are issued in registered form in denominations of $1,000, $5,000, $10,000, $100,000 and $1,000,000 and in book-entry form in integral multiples of these amounts.

Treasury Strips

In general, Treasury Strips are created by separating, or stripping, the principal and interest components of Treasury Bonds that have an original maturity of 10 or more years from the date of issue. A particular Treasury Strip evidences ownership of the principal payment or one of the periodic interest payments, generally semiannual, due on the Treasury Bond to which the Treasury Strip relates.

In 1985 the Department of the Treasury announced that all new issues of Treasury Bonds with maturities of 10 years or more would be transferable in their component pieces on the Federal Reserve wire system. In so doing, the Treasury created a generic, book-entry Treasury Strip named STRIPS (Separate Trading of Registered Interest and Principal of Securities) which, unlike private label Treasury Strips, can be issued without the need for a custodial arrangement. The STRIPS program has eclipsed the private sector programs (which are described below under “—Private Label Custody Receipt Securities”), and investment banks no longer sponsor new issues of custodial receipts.

Treasury Strips may be either “serial” or “callable”. A serial Treasury Strip evidences ownership of one of the periodic interest payments to be made on a Treasury Bond. No payments are made on the Treasury Strip, nor is it redeemable, prior to its maturity, at which time the holder becomes entitled to receive a single payment of the face amount of the Treasury Strip. Callable Treasury Strips relate to payments scheduled to be made after the related Treasury Bonds have become subject to redemption. These Treasury Strips evidence ownership of both principal of the related Treasury Bonds and each of the related interest payments commencing, typically, on the first interest payment date following the first optional redemption date. If the underlying Treasury Bonds are actually redeemed, holders of callable Treasury Strips generally receive a payment equal to the principal portion of the total fa ce amount of the Treasury Strips plus the interest payment represented by the Treasury Strips maturing on the redemption date. No callable Treasury Strips will be included in a Trust. The face amount of any Treasury Strip is the aggregate of all payments scheduled to be received on the Treasury Strip. Treasury Strips are available in registered form and generally may be transferred and exchanged by the holders of the Treasury Strips in accordance with procedures applicable to the particular issue of the Treasury Strips.

A holder of a private label Treasury Strip, as opposed to a STRIP, cannot enforce payment on that Treasury Strip against the Treasury. Instead, the holder must look to the custodian for payment. The custodian, and the holder of a Treasury Strip that obtains ownership of the underlying Treasury Bond, can enforce payment of the underlying Treasury Bond against the Treasury. If any private label Treasury Strips are included in a Trust with respect to any series of securities, the prospectus supplement for the series will include the identity and a brief description of each custodian that issued the Treasury Strips. If the depositor knows that the depositor of the Treasury Bonds underlying the Treasury Strips is the depositor or any of its affiliates, the depositor will disclose that fact in the related prospectus supplement.

GSE Bonds

As specified in the applicable prospectus supplement, the obligations of one or more of the following GSEs may be included in a Trust: Federal National Mortgage Association (“Fannie Mae”), Federal Home Loan Mortgage Association (“Freddie Mac”), REFCO, Tennessee Valley Authority (“TVA”), Federal Home Loan Banks (“FHLB”), to the extent the obligations represent the joint and several obligations of the twelve Federal Home Loan Banks, and Federal Farm Credit Banks (“FFCB”). GSE debt securities are exempt from registration under the securities Act pursuant to Section 3(a)(2) of the securities Act, or are deemed by statute to be so exempt, and are not required to be registered under the Exchange Act. The securities of any GSE, including a GSE Guaranteed Bond, will be included in a Trust only to the extent that (1) its obligations are supported by the full faith and cre dit of the United States government or (2) the organization makes publicly available its annual report which shall include financial statements or similar financial information with respect to the organization (a “GSE Issuer”). Unless otherwise specified in the related prospectus supplement, the GSE Bonds will not be guaranteed by the United States and do not constitute a debt or obligation of the United States or of any agency or instrumentality of the United States other than the related GSE.

Unless otherwise specified in the related prospectus supplement, none of the GSE Bonds will have been issued pursuant to an indenture, and no trustee is provided for with respect to any GSE Bonds. There will generally be a fiscal agent (“Fiscal Agent”) for an issuer of GSE Bonds whose actions will be governed by a fiscal agency agreement. A Fiscal Agent is not a trustee for the holders of the GSE Bonds and does not have the same responsibilities or duties to act for the holders as would a trustee.

GSE Bonds may be subject to particular contractual and statutory restrictions which may provide some protection to securityholders against the occurrence or effects of specified events. Unless otherwise specified in the related prospectus supplement, each GSE is limited to activities as will promote its statutory purposes as set forth in the publicly available information with respect to the issuer. A GSE’s promotion of its statutory purposes, as well as its statutory, structural and regulatory relationships with the federal government, may cause or require the GSE to conduct its business in a manner that differs from what an enterprise which is not a GSE might employ.

The Federal National Mortgage Association

Fannie Mae is a federally chartered and stockholder owned corporation organized and existing under the Federal National Mortgage Association Charter Act. It is the largest investor in home mortgage loans in the United States. Fannie Mae originally was established in 1938 as a corporation wholly owned by the United States government to provide supplemental liquidity to the mortgage market and was transformed into a stockholder owned and privately managed corporation by legislation enacted in 1968 and 1970. Fannie Mae provides funds to the mortgage market by purchasing mortgage loans from lenders, thus replenishing their funds for additional lending. Fannie Mae acquires funds to purchase loans from many capital market investors that ordinarily may not invest in mortgage loans, therefore expanding the total amount of funds available for housing. Operating nationwide, Fannie Mae helps to redistribute mortgage funds from capital-surplus to capital-short areas. Fannie Mae also issues mortgage-backed securities (“MBS”). Fannie Mae receives guaranty fees for its guaranty of timely payment of principal of and interest on MBS. Fannie Mae issues MBS primarily in exchange for pools of mortgage loans from lenders. The issuance of MBS enables Fannie Mae to further its statutory purpose of increasing the liquidity of residential mortgage loans.

Fannie Mae prepares an Information Statement annually which describes Fannie Mae, its business and operations and contains Fannie Mae’s audited financial statements. From time to time Fannie Mae prepares supplements to its Information Statement which include specific unaudited financial data and other information concerning the business and operations of Fannie Mae.

The Federal Home Loan Mortgage Corporation

Freddie Mac is a publicly held government-sponsored enterprise created on July 24, 1970 pursuant to the Federal Home Loan Mortgage Corporation Act, Title III of the Emergency Home Finance Act of 1970, as amended (the “FHLMC Act”). Freddie Mac’s statutory mission is to provide stability in the secondary market for home mortgages, to respond appropriately to the private capital market and to provide ongoing assistance to the secondary market for home mortgages, including mortgages secured by housing for low- and moderate-income families involving a reasonable economic return to Freddie Mac, by increasing the liquidity of mortgage investments and improving the distribution of investment capital available for home mortgage financing. The principal activity of Freddie Mac consists of the purchase of conventional residential mortgages and participation interests in those mortgages from mortgage lending institutions and the sale of guaranteed mortgage securities backed by the mortgages so purchased. Freddie Mac generally matches and finances its purchases of mortgages with sales of guaranteed securities. Mortgages retained by Freddie Mac are financed with short- and long-term debt, cash temporarily held pending disbursement to security holders, and equity capital.

The Resolution Funding Corporation

REFCO is a mixed-ownership government corporation established by Title V of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”). The sole purpose of REFCO is to provide financing for the Resolution Trust Corporation (the “RTC”). REFCO is to be dissolved, as soon as practicable, after the maturity and full payment of all obligations issued by it. REFCO is subject to the general oversight and direction of the Oversight Board, which is comprised of the Secretary of the Treasury, the Chairman of the Board of Governors of the Federal Reserve System, the Secretary of Housing and Urban Development and two independent members to be appointed by the President with the advice and consent of the Senate. The day-to-day operations of REFCO are under the management of a three-member Directorate comprised of the Director of the Office of Finance of the FHLB and two members se lected by the Oversight Board from among the presidents of the twelve FHLB.

The RTC was established by FIRREA to manage and resolve cases involving failed savings and loan institutions pursuant to policies established by the Oversight Board. The RTC was granted authority to issue nonvoting capital certificates to REFCO in exchange for the funds transferred from REFCO to the RTC. Pursuant to FIRREA, the net proceeds of these obligations are used to purchase nonvoting capital certificates issued by the RTC or to retire previously issued REFCO obligations.

The Federal Home Loan Banks

The Federal Home Loan Banks constitute a system of twelve federally chartered corporations (collectively, the “FHLB”), each wholly owned by its member institutions. The mission of the FHLB is to enhance the availability of residential mortgage credit by providing a readily available, low-cost source of funds to their member institutions. A primary source of funds for the FHLB is the proceeds from the sale to the public of debt instruments issued as consolidated obligations, which are the joint and several obligations of all the FHLB. The FHLB are supervised and regulated by the Federal Housing Finance Board, which is an independent federal agency in the executive branch of the United States government, but obligations of the FHLB are not obligations of the United States government.

Tennessee Valley Authority

TVA is a wholly owned corporate agency and instrumentality of the United States of America established pursuant to the Tennessee Valley Authority Act of 1933, as amended (the “TVA Act”). TVA’s objective is to develop the resources of the Tennessee Valley region in order to strengthen the regional and national economy and the national defense. The programs of TVA consist of power and nonpower programs. For the fiscal year ending September 30, 1995, TVA received $139 million in congressional appropriations from the federal government for the nonpower programs. The power program is required to be self-supporting from revenues it produces. The TVA Act authorizes TVA to issue evidences of indebtedness that may be serviced only from proceeds of its power program. TVA bonds are not obligations of or guaranteed by the United States government.

Federal Farm Credit Banks

The Farm Credit System is a nationwide system of lending institutions and affiliated service and other entities (the “System”). Through its Banks (“FCBs”) and related associations, the System provides credit and related services to farmers, ranchers, producers and harvesters of aquatic products, rural homeowners, some farm-related businesses, agricultural and aquatic cooperatives and rural utilities. System institutions are federally chartered under the Farm Credit Act of 1971, as amended (the “Farm Credit Act”), and are subject to regulation by a Federal agency, the Farm Credit Administration (the “FCA”). The FCBs and associations are not commonly owned or controlled. They are cooperatively owned, directly or indirectly, by their respective borrowers. Unlike commercial banks and other financial institutions that lend to the agricultural sector in addition to other sectors of the economy, under the Farm Credit Act the System institutions are restricted solely to making loans to qualified borrowers in the agricultural sector, to some related businesses and to rural homeowners. Moreover, the System is required to make credit and other services available in all areas of the nation. In order to fulfill its broad statutory mandate, the System maintains lending units in all 50 states and the Commonwealth of Puerto Rico.

The System obtains funds for its lending operations primarily from the sale of debt securities issued under Section 4.2(d) of the Farm Credit Act (“Systemwide Debt Securities”). The FCBs are jointly and severally liable on all Systemwide Debt Securities. Systemwide Debt Securities are issued by the FCBs through the Federal Farm Credit Banks Funding Corporation, as agent for the FCBs (the “Funding Corporation”).

Private Label Custody Receipt Securities

If so specified in the applicable prospectus supplement, the issuing entity for a series may include, but will not consist entirely of, any combination of (1) receipts or other instruments, other than Treasury Strips, evidencing ownership of specific interest and/or principal payments to be made on particular Treasury Bonds held by a custodian (“Private Label Custody Strips”) and (2) receipts or other instruments evidencing ownership of specific interest and/or principal payments to be made on specific Resolution Funding Corporation (“REFCO”) bonds (“REFCO Strips”; and together with Private Label Custody Strips, “Private Label Custody Receipt Securities”). The Private Label Custody Receipt Securities, if any, included in an issuing entity are intended to assure investors that funds are available to make specified payments of principal and/or interest due on the related sec urities. Accordingly, the Private Label Custody Receipt Securities, if any, included in an issuing entity are intended both to (1) support the ratings assigned to the securities, and (2) perform a function similar to that described in this prospectus under “Description of the Transfer and Servicing Agreements—Credit and Cash Flow Enhancement”. A description of the respective general features of Private Label Custody Strips and REFCO Strips is set forth below.

The prospectus supplement for each series of securities the issuing entity with respect to which contains Private Label Custody Receipt Securities will contain information as to:

(1)

the title and series of each Private Label Custody Receipt Security, the aggregate principal amount, denomination and form of each Private Label Custody Receipt Security;

(2)

the limit, if any, upon the aggregate principal amount of each Private Label Custody Receipt Security;

(3)

the dates on which, or the range of dates within which, the principal of, and premium, if any, on, each Private Label Custody Receipt Security will be payable;

(4)

the rate or rates, or the method of determination of the rate or rates, at which each Private Label Custody Receipt Security will bear interest, if any, the date or dates from which the interest will accrue, and the dates on which the interest will be payable;

(5)

whether each Private Label Custody Receipt Security was issued at a price lower than the principal amount of that Private Label Custody Receipt Security;

(6)

material events of default or restrictive covenants provided for with respect to each Private Label Custody Receipt Security;

(7)

the rating of each Private Label Custody Receipt Security, if any;

(8)

the issuer of each Private Label Custody Receipt Security;

(9)

the material risks, if any, posed by each Private Label Custody Receipt Security and the issuer of each Private Label Custody Receipt Security, which risks, if appropriate, will be described in the “Risk Factors” section of the related prospectus supplement; and

(10)

any other material terms of each Private Label Custody Receipt Security.

With respect to an issuing entity which includes a pool of Private Label Custody Receipt Securities, the related prospectus supplement will, to the extent applicable, describe the composition of the Private Label Custody Receipt Securities’ pool, particular material events of default or restrictive covenants common to the Private Label Custody Receipt Securities, and, on an aggregate, percentage or weighted average basis, as applicable, the characteristics of the pool with respect to the terms set forth in (3), (4) and (5) of the preceding sentence and any other material terms regarding the pool.

The Private Label Custody Receipt Securities included in an issuing entity will be senior, unsecured, nonredeemable obligations of the issuers of the Private Label Custody Receipt Securities, will be denominated in United States dollars and, if rated, will be rated at least investment grade by at least one nationally recognized rating agency. In addition, the inclusion of Private Label Custody Receipt Securities in an issuing entity with respect to a series of securities is conditioned upon their characteristics being in form and substance satisfactory to the Rating Agency rating the related series of securities. Each issuing entity will be provided with an opinion of counsel to the issuing entity to the effect that the Private Label Custody Receipt Securities included in the issuing entity are exempt from the registration requirements of the securities Act. A copy of the opinion will be filed with the SEC in a Current Report on Form 8-K or in a post-effective amendment to the Registration Statement.

Private Label Custody Strips

The first “stripping” of Treasury Bonds occurred in the 1970s when government securities dealers physically separated coupons from definitive certificates and offered them to investors as tax-deferred investments. Investors were able to purchase the “strip” at a deep discount and pay no federal income tax until resale or maturity. This tax treatment was limited in 1982 by the Tax Equity and Fiscal Responsibility Act (“TEFRA”) which required holders of strips to accrue a portion of the discount toward par annually and report this accrual, even though unrealized, as taxable income. TEFRA also required that all new Treasury issues be made available only in book-entry form.

The shift to “book-entry only” Treasury Bonds created a shortage of the physical certificates needed for stripping. In response, various dealers created custodial receipt programs in which Treasury Bonds in book-entry form were deposited with custodians who would then issue certificates evidencing rights in principal and interest payments. Some of the better known programs first came to market in 1982 and 1983. Although available eventually in denominations as small as $1,000, these custodial receipts lacked the liquidity of the physical strips. While physical strips had multiple market-makers, custodial receipts were proprietary and, as such, the sole market-maker would usually be an affiliate of the program’s sponsor. As a result, the market that developed for the receipts was segmented.

In early 1984, a group of dealers sought to enhance the liquidity of custodial receipts by developing a generic, multiple market-maker security known as a TR (Treasury Receipt). A large secondary market quickly developed in these generic Treasury Strips.

Treasury Receipts, physical strips and the proprietary receipts trade at varying discounts from STRIPS which reflect, among other things, lower levels of liquidity and the structuring difference discussed above.

A holder of a Private Label Custody Strip, as opposed to a STRIP, cannot enforce payment on a Treasury Strip against the Treasury, instead, the holder must look to the custodian for payment. The custodian, and the holder of a Private Label Custody Strip that obtains ownership of the underlying Treasury Bond, can enforce payment of the underlying Treasury Bond against the Treasury. If any Private Label Custody Strips are included in an issuing entity with respect to any series of securities, the prospectus supplement for the series will include the identity and a brief description of each custodian that issued the Private Label Custody Strips. If the depositor knows that the depositor of the Treasury Bonds underlying the Private Label Custody Strips is the depositor or any of its affiliates, the depositor will disclose this fact in the related prospectus supplement.

REFCO Strips

A REFCO Bond may be divided into its separate components, consisting of: (1) each future semiannual interest distribution (an “Interest Component”); and (2) the principal payment (the “Principal Component”) (each component individually referred to in this prospectus as a “REFCO Strip”). REFCO Strips are not created by REFCO. Instead, third parties such as investment banking firms create them. Each REFCO Strip has an identifying designation and CUSIP number. REFCO Strips generally trade in the market for Treasury Strips at yields of a few basis points over Treasury Strips of similar maturities. REFCO Strips are viewed generally by the market as liquid investments.

For a REFCO Bond to be separated into its components, the par amount of the REFCO Bond must be in an amount which, based on the stated interest rate of the REFCO Bond, will produce a semiannual interest payment of $1,000 or an integral multiple of $1,000. REFCO Bonds may be separated into their components at any time from the issue date until maturity. Once created, REFCO Strips are maintained and transferred in integral multiples of $1,000.

A holder of a REFCO Strip cannot enforce payment on the REFCO Strip against REFCO. Instead, the holder must look to the custodian for payment. The custodian, and the holder of a REFCO Strip that obtains ownership of the underlying REFCO Bond, can enforce payment of the underlying REFCO Bond against REFCO. The identity and a brief description of each custodian that has issued any REFCO Strip included in a Trust will be set forth in the related prospectus supplement. If the depositor knows that the depositor of the REFCO Bonds underlying the REFCO Strips included in the Trust is the depositor or any of its affiliates, the depositor will disclose this fact in the related prospectus supplement.

Weighted Average Life of the Securities

The weighted average life of the notes, if any, and the certificates of any series generally will be influenced by the rate at which the principal balances of the related Primary Assets are paid, which payment may be in the form of scheduled amortization or prepayments. With respect to securities backed by Receivables and to receivables underlying Collateral Certificates, the term “prepayments” includes prepayments in full, partial prepayments, including those related to rebates of extended warranty contract costs and insurance premiums, liquidations due to defaults, as well as receipts of proceeds from physical damage, credit life and disability insurance policies, or the Repurchase Amount of Receivables and/or Collateral Certificates repurchased by the depositor or a seller or purchased by a servicer for administrative reasons. With respect to securities backed by Government Securities and/or Private Label Custody Receipt Securities, as applicable, the term “prepayments” means the Repurchase Amount of Government Securities and/or Private Label Custody Receipt Securities repurchased by the depositor or purchased by a servicer for administrative reasons. Substantially all of the Receivables and receivables underlying Collateral Certificates are prepayable at any time without penalty to the obligor. The rate of prepayment of boat receivables is influenced by a variety of economic, social and other factors, including the fact that an obligor generally may not sell or transfer the Financed Boat securing a receivable without the consent of the related seller. The rate of prepayment on receivables may also be influenced by the structure of the loan. In addition, under some circumstances, the related seller will be obligated to repurchase Receivables from a given issuing entity pursuant to the related Receivables Purchase Agreement as a result of breaches of representations and warranties, and the ser vicer will be obligated to purchase Receivables from the issuing entity pursuant to the Sale and Servicing Agreement or Pooling and Servicing Agreement as a result of breaches of specific covenants. See “Description of the Transfer and Servicing Agreements—Sale and Assignment of Primary Assets” and “Servicing Procedures”. See also “Certain Matters Regarding the Servicer—Termination” regarding the servicer’s option to purchase Primary Assets from a given Trust.

In light of the above considerations, there can be no assurance as to the amount of principal payments to be made on the notes and/or certificates of a series on each Distribution Date since the amount will depend, in part, on the amount of principal collected on the related Primary Assets during the applicable Collection Period. Any reinvestment risks resulting from a faster or slower incidence of payment of Primary Assets will be borne entirely by the noteholders and certificateholders. The related prospectus supplement may set forth some additional information with respect to the maturity and prepayment considerations applicable to particular Primary Assets and the related series of securities.

Pool Factors and Trading Information

The “Note Pool Factor” for each class of notes will be a seven-digit decimal which the servicer or trustee will compute prior to each distribution with respect to the class of notes indicating the remaining outstanding principal balance of that class of notes, as of the applicable Distribution Date, after giving effect to payments to be made on the applicable Distribution Date, as a fraction of the initial outstanding principal balance of the class of notes. The “Certificate Pool Factor” for each class of certificates will be a seven-digit decimal which the servicer or trustee will compute prior to each distribution with respect to the class of certificates indicating the remaining certificate balance of the class of certificates, as of the applicable Distribution Date, after giving effect to distributions to be made on the applicable Distribution Date, as a fraction of the initial certificat e balance of the class of certificates. Each Note Pool Factor and each Certificate Pool Factor will be 1.0000000 as of the related closing date, and after will decline to reflect reductions in the outstanding principal balance of the applicable class of notes or the reduction of the certificate balance of the applicable class of certificates. A noteholder’s portion of the aggregate outstanding principal balance of the related class of notes will be the product of (1) the original denomination of the noteholder’s note and (2) the applicable Note Pool Factor at the time of determination. A certificateholder’s portion of the aggregate outstanding certificate balance for the related class of certificates will be the product of (a) the original denomination of the certificateholder’s certificate and (b) the applicable Certificate Pool Factor at the time of determination.

As provided in the related prospectus supplement, the noteholders, if any, and the certificateholders will receive reports on or about each Distribution Date concerning payments received on the Receivables, the Pool Balance and each Note Pool Factor or Certificate Pool Factor, as applicable. In addition, Securityholders of record during any calendar year will be furnished information for tax reporting purposes not later than the latest date permitted by law. See “Certain Information Regarding the Securities— Statements to Securityholders”.

The Seller and the Servicer

Information with respect to the seller and the servicer will be set forth in the related prospectus supplement.

Use of Proceeds

If so provided in the related prospectus supplement, the net proceeds from the sale of the securities of a series will be applied by the applicable issuing entity to the purchase of the Primary Assets from the depositor or the seller, as applicable and any other use specified in the prospectus supplement. The depositor will use the portion of the net proceeds paid to it to purchase the Primary Assets and any other use specified in the prospectus supplement.

Description of the Notes

Each issuing entity that is an owner trust will issue one or more classes of notes pursuant to an indenture (an “Indenture”) between the related owner trust and the indenture trustee, a form of which has been filed as an exhibit to the Registration Statement of which this prospectus forms a part. The following summary describes the material provisions of each Indenture which are anticipated to be common to any notes included in a series of securities. The following summary does not purport to be a complete description of all terms of the related notes or Indenture and therefore is subject to, and is qualified in its entirely by reference to, the provisions of the related notes and Indenture.

If so specified in the related prospectus supplement, each class of notes will initially be represented by one or more certificates registered in the name of the nominee of DTC (together with any successor depositor selected by the Trust, the “Depository”). The notes will be available for purchase in minimum denominations of $1,000 or any other minimum denomination as shall be specified in the related prospectus supplement and integral multiples of $1,000 or any other minimum denomination so specified in the related prospectus supplement in book-entry form or any other form as shall be specified in the related prospectus supplement. If the notes are available in book-entry form only, the depositor has been informed by DTC that DTC’s nominee will be Cede unless another nominee is specified in the related prospectus supplement. Accordingly, the nominee is expected to be the holder of record of the n otes of each class. If the notes are available in book-entry form only, unless and until Definitive notes are issued under the limited circumstances described in this prospectus or in the related prospectus supplement, no noteholder will be entitled to receive a physical certificate representing a note. If the notes are available in book-entry form only, all references in this prospectus and in the related prospectus supplement to actions by noteholders refer to action taken by DTC upon instructions from it participating organizations, and all references in this prospectus and in the related prospectus supplement to distributions, notices, reports and statements to noteholders refer to distributions, notices, reports and statements to DTC or its nominee, as registered holder of the notes, for distribution to noteholders in accordance with DTC’s procedures with respect to distributions. See “Certain Information Regarding the Securities—Book-Entry Registration” and “—Definitive Se curities”.

Distribution of Principal and Interest

The timing and priority of payment, seniority, allocations of losses, interest rate and amount of or method of determining payments of principal and interest on each class of notes of a series will be described in the related prospectus supplement. The right of holders of any class of notes to receive payments of principal and interest may be senior or subordinate to the rights of holders of one or more other class or classes of notes of the series, as described in the related prospectus supplement. The related prospectus supplement may provide that payments of interest on the notes will be made prior to payments of principal on the notes. If so provided in the related prospectus supplement, a series of notes may include one or more classes of strip notes entitled to (1) principal payments with disproportionate, nominal or no interest payments or (2) interest payments with disproportionate, nominal or no princip al payments. Each class of notes may have a different interest rate, which may be a fixed, variable or adjustable interest rate, and which may be zero for some classes of strip notes, or any combination of the foregoing. The related prospectus supplement will specify the interest rate for each class of notes of a series or the method for determining the interest rate. One or more classes of notes of a series may be redeemable in whole or in part under the circumstances specified in the related prospectus supplement, including as a result of the exercise by the servicer of its option to purchase the related Receivable Pool. See “Certain Matters Regarding the Servicer—Termination”.

To the extent specified in any prospectus supplement, one or more classes of notes of a given series may have fixed principal payment schedules, as set forth in the prospectus supplement. Holders of any notes will be entitled to receive payments of principal on any given Distribution Date in the applicable amount set forth on the schedule with respect to the notes, in the manner and to the extent set forth in the related prospectus supplement.

The related prospectus supplement may also provide that payment of interest to noteholders of all classes within a series will have the same priority. Under some circumstances, the amount available for payments could be less than the amount of interest payable on the notes on a Distribution Date, in which case each class of notes will receive its ratable share, based upon the aggregate amount of interest due to the class of notes, of the aggregate amount available to be distributed on the date as interest on the notes of the series. See “Description of the Transfer and Servicing Agreements—Distributions” and “—Credit and Cash Flow Enhancement”.

In the case of a series of securities issued by an issuing entity that includes two or more classes of notes, the sequential order and priority of payment in respect of principal and interest, and any schedule or formula or other provisions applicable to the determination of the sequential order and priority of payment in respect of principal and interest, of each class will be set forth in the related prospectus supplement. Payments in respect of principal of and interest on any class of notes will be made on a pro rata basis among all the noteholders of the class or by any other method as is specified in the prospectus supplement.

If specified in the related prospectus supplement, the issuing entity may issue securities from time to time and use the proceeds of this issuance to make principal payments with respect to a series.

Revolving Period

The applicable prospectus supplement may provide that all or a portion of the principal collections may be applied by the issuing entity to the acquisition of subsequent Receivables or Collateral Certificates during a specified period rather than used to distribute payments of principal to holders of securities during that period.  These securities would then possess an interest only period, also commonly referred to as a “revolving period”, which will be followed by an “amortization period”, during which principal will be paid.  Any interest only or revolving period may terminate prior to the end of the specified period and result in the earlier than expected principal repayment of the securities.

Provisions of the Indenture

Events of Default; Rights upon Event of Default. “Events of Default” in respect of a series of notes under the related Indenture will consist of:

(1)

a default for five days or more in the payment of any interest on any note;

(2)

a default in the payment of the principal of, or any installment of the principal of, any note when the same becomes due and payable;

(3)

a default in the observance or performance of any material covenant or agreement of the related Trust made in the related Indenture and the continuation of any default for a period of 30 days, or for a longer period, not in excess of 90 days, as may be reasonably necessary to remedy the default; provided that the default is capable of remedy within 90 days or less and servicer on behalf of the related trustee delivers an Officer’s Certificate to the related indenture trustee to the effect that the trustee has commenced, or will promptly commence and diligently pursue, all reasonable efforts to remedy the default, after notice of the default is given to the related issuing entity by the applicable indenture trustee or to the Trust and the related indenture trustee by the holders of 25% of the aggregate outstanding principal amount of the notes;

(4)

any representation or warranty made by the issuing entity in the related Indenture or in any certificate delivered pursuant to the related Indenture or in connection with the related Indenture having been incorrect in a material respect as of the time made, if the breach is not cured with 30 days, or for a longer period, not in excess of 90 days, as may be reasonably necessary to remedy the default; provided that the default is capable of remedy within 90 days or less and servicer on behalf of the related trustee delivers an Officer’s Certificate to the related indenture trustee to the effect that the trustee has commenced, or will promptly commence and diligently pursue, all reasonable efforts to remedy the default, after notice of the breach is given to the issuing entity by the applicable indenture trustee or to the Trust and the indenture trustee by the holder of 25% of the aggregate outstanding princi pal amount of the notes;

(5)

particular events of bankruptcy, insolvency, receivership or liquidation with respect to the Trust or a substantial part of the property of the issuing entity; and

(6)

any other events as may be specified in the prospectus supplement.

The amount of principal required to be paid to noteholders of each series under the related Indenture on any Distribution Date generally will be limited to amounts available to be deposited in the applicable Note Distribution Account. Therefore, the failure to pay principal on a class of notes generally will not result in the occurrence of an Event of Default until the applicable final scheduled Distribution Date for the class of notes.

If an Event of Default should occur and be continuing with respect to the notes of any series, the related indenture trustee or holders of a majority in principal amount of the notes may declare the principal of the notes to be immediately due and payable. This declaration may, under some circumstances, be rescinded by the holders of a majority in principal amount of the notes then outstanding.

If the notes of any series are declared due and payable following an Event of Default, the related indenture trustee may institute proceedings to collect amounts due on the notes, foreclose on the property of the issuing entity, exercise remedies as a secured party, sell the related Primary Assets or elect to have the applicable issuing entity maintain possession of the Primary Assets and continue to apply collections on these Primary Assets as if there had been no declaration of acceleration. Subject to particular limitations that, if applicable, will be specified in the related prospectus supplement, the indenture trustee will be prohibited from selling the Primary Assets following an Event of Default, other than a default in the payment of any principal of, or a default for five days or more in the payment of any interest on, any note of the series, unless

•

the holders of all outstanding notes consent to the sale,

•

the proceeds of the sale are sufficient to pay in full the principal of and the accrued interest on the outstanding notes at the date of sale or

•

the indenture trustee determines that the proceeds of the Primary Assets would not be sufficient on an ongoing basis to make all payments on the notes as these payments would have become due if these obligations had not been declared due and payable, and the indenture trustee obtains the consent of the holders of 66 2/3% of the aggregate outstanding principal amount of the notes.

Subject to the provisions of the applicable Indenture relating to the duties of the related indenture trustee, if an Event of Default occurs and is continuing with respect to a series of notes, the indenture trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the holders of the notes if it reasonably believes it will not be adequately indemnified against the costs, expenses and liabilities that might be incurred by it in complying with the request. Subject to the provisions for indemnification and particular limitations contained in the related Indenture, the holders of a majority of the aggregate outstanding principal amount of the notes of a series will have the right to direct the time, method and place of conducting any proceeding or exercising any remedy available to the related indenture trustee. In addition, the holders of n otes representing a majority of the aggregate outstanding principal amount of the notes may, in some cases, waive any default with respect to the notes, except a default in the payment of principal of or interest on any note or a default in respect of a covenant or provision of the Indenture that cannot be modified or amended without the waiver or consent of the holders of all the outstanding notes of the series.

Except to the extent provided in the related prospectus supplement, no holder of a note will have the right to institute any proceeding with respect to the related Indenture, unless:

•

the holder previously has given to the applicable indenture trustee written notice of a continuing Event of Default;

•

the holders of not less than 25% of the outstanding principal amount of the notes have made written request to the indenture trustee to institute a proceeding in its own name as indenture trustee;

•

the holder or holders have offered the indenture trustee reasonable indemnity;

•

the indenture trustee has for 60 days failed to institute a proceeding; and

•

no direction inconsistent with a written request has been given to the indenture trustee during the 60-day period by the holders of a majority of the outstanding principal amount of the notes of the series.

With respect to any issuing entity that issues notes, none of the related indenture trustee in its individual capacity, the related trustee in its individual capacity, any holder of a certificate representing an ownership interest in the issuing entity, or any of their respective beneficiaries, agents, officers, directors, employees, affiliates, successors or assigns will, in the absence of an express agreement to the contrary, be personally liable for the payment of the principal of or interest on the related notes or for the agreements of the Trust contained in the applicable Indenture.

No issuing entity may engage in any activity other than as described in this prospectus or in the related prospectus supplement. No issuing entity will incur, assume or guarantee any indebtedness other than indebtedness incurred pursuant to the related notes and the related Indenture, pursuant to any Advances made to it by the servicer or otherwise in accordance with the Related Documents.

Certain Covenants. Each Indenture will provide that the related issuing entity may not consolidate with or merge into any other entity, unless

•

the entity formed by or surviving the consolidation or merger is organized under the laws of the United States, any state or the District of Columbia;

•

the entity expressly assumes the issuing entity’s obligation to make due and punctual payments upon the notes of the related series and to perform or observe every agreement and covenant of the issuing entity under the Indenture;

•

no Event of Default shall have occurred and be continuing immediately after the merger or consolidation;

•

the issuing entity has been advised by each Rating Agency that the merger or consolidation will not result in the qualification, reduction or withdrawal of its then-current rating of any class of the notes or certificates of the series;

•

the issuing entity has received an opinion of counsel to the effect that the consolidation or merger would have no material adverse tax consequence to the Trust or to any related noteholder or certificateholder;

•

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

•

the issuing entity has delivered to the related indenture trustee an Officer’s Certificate and an opinion of counsel that the merger complies with the requirements and conditions precedent of the Indenture.

No issuing entity that issues notes will:

•

except as expressly permitted by the applicable Indenture, the applicable Transfer and Servicing Agreements or other documents with respect to the Trust (the “Related Documents”), sell, transfer, exchange or otherwise dispose of any of the assets of the issuing entity;

•

claim any credit on or make any deduction from the principal and interest payment in respect to the related notes, other than amounts withheld under the Code or applicable state tax laws, or assert any claim against any present or former holder of the notes because of the payment of taxes levied or assessed upon the issuing entity;

•

dissolve or liquidate in whole or in part;

•

permit the validity or effectiveness of the related Indenture to be impaired or permit any person to be released from any covenants or obligations with respect to the related notes under the Indenture except as may be expressly permitted by the related Indenture;

•

permit any lien, charge, excise, claim, security interest, mortgage or other encumbrance to be created on or extent to or otherwise arise upon or burden the assets of the issuing entity or any part of the issuing entity, or any interest in the issuing entity or the proceeds of the issuing entity; or

•

permit the lien of the related Indenture not to constitute a valid first priority security interest, other than with respect to a tax, mechanics’ or similar lien, in the asset of the issuing entity.

Each indenture trustee and the related noteholders, by accepting the related notes, will covenant that they will not at any time institute against the applicable Trust any bankruptcy, reorganization or other proceeding under any federal or state bankruptcy or similar law.

Modification of Indenture. Each owner trustee and the related indenture trustee may, with the consent of the holders of a majority of the aggregate outstanding principal amount of the notes of the related series, execute a supplemental indenture to add provisions to, change in any manner or eliminate any provisions of, the related Indenture, or modify (except as provided below) in any manner the rights of the related noteholders. Except as otherwise provided in the related Indenture, without the consent of the holder of each outstanding note affected by the related supplemental indenture, no supplemental indenture will:

•

change the due date of any installment of principal of or interest on any note or reduce the principal amount of any note, the interest rate specified on any note or the redemption price with respect to any note, change the provisions of the related Indenture relating to the application of collections on, or the proceeds of the sale of, the property of the related issuing entity to payment of principal or interest on the notes of the series, or change any place of payment where or the coin or currency in which any note or any interest on any note is payable;

•

impair the right to institute suit for the enforcement of specific provisions of the related Indenture;

•

reduce the percentage of the aggregate amount of the outstanding notes of the series, the consent of the holders of which is required for any supplemental indenture or for any waiver of compliance with specific provisions of the related Indenture or of particular defaults under the related Indenture and their consequences as provided for in the related Indenture;

•

modify or alter the provisions of the related Indenture regarding the voting of notes held by the applicable owner trust, any other obligor on the notes, the seller or an affiliate of any of them;

•

reduce the percentage of the aggregate outstanding amount of the notes, the consent of the holders of which is required to direct the related indenture trustee to sell or liquidate the Primary Assets if the proceeds of the sale would be insufficient to pay the principal amount and accrued and unpaid interest on the outstanding notes of the series;

•

decrease the percentage of the aggregate principal amount of the notes required to amend the sections of the related Indenture that specify the percentage of the aggregate principal amount of the notes of the series necessary to amend the related Indenture or other related agreements; or

•

permit the creation of any lien ranking prior to or on a parity with the lien of the related Indenture with respect to any of the collateral for the notes or, except as otherwise permitted or contemplated in the Indenture, terminate the lien of the related Indenture on any of the collateral or deprive the holder of any note of the security afforded by the lien of the related Indenture.

An issuing entity that is an owner trust and the related indenture trustee may also enter into supplemental indentures, without obtaining the consent of the noteholders of the related series,

(1)

to cure any ambiguity;

(2)

to correct or supplement any provisions in the Indenture; or

(3)

for the purpose of, among other things, adding any provisions to or changing in any manner or eliminating any of the provisions of the related Indenture;

provided that the action referred to in clause (3) above will not materially and adversely affect the interest of any noteholder.

Annual Compliance Statement. Each owner trust will be required to file annually with the related indenture trustee a written statement as to the fulfillment of its obligations under the Indenture.

Indenture Trustee’s Annual Report. If required by the Trust Indenture Act, the indenture trustee for each issuing entity that is an owner trust will mail each year to all related noteholders a brief report relating to its eligibility and qualification to continue as indenture trustee under the related Indenture, any amounts advanced by it under the Indenture, the amount, interest rate and maturity date of particular indebtedness, if any, owing by the owner trust to the applicable indenture trust in its individual capacity, the property and funds physically held by the indenture trustee as indenture trustee and any action taken by it that materially affects the related notes that has not been previously reported.

Satisfaction and Discharge of Indenture. Each Indenture will be discharged with respect to the collateral securing the related notes upon the delivery to the related indenture trustee for cancellation of all of the notes or, with limitations, upon deposit with the indenture trustee of funds sufficient for the payment in full of all the notes.

The Indenture Trustee

The indenture trustee for a series of notes will be specified in the related prospectus supplement. The indenture trustee for any series may resign at any time, in which event the related issuing entity will be obligated to appoint a successor indenture trustee for the series. Additionally, the holders of a majority of the outstanding amount of the notes of a series may remove the related indenture trustee and appoint a successor indenture trustee. An issuing entity may also remove the related indenture trustee if the indenture trustee ceases to be eligible to continue in that capacity under the related Indenture, if particular insolvency events occur with respect to the indenture trustee or if the indenture trustee otherwise becomes incapable of acting as indenture trustee. In these circumstances, the issuing entity will be obligated to appoint a successor indenture trustee for the applicable series of notes. N o resignation or removal of the indenture trustee and appointment of a successor indenture trustee for a series of notes will become effective until the acceptance of the appointment by the successor indenture trustee for the series and payment of all fees and expenses owed to the outgoing indenture trustee.

Description of the Certificates

Each issuing entity may issue one or more classes of certificates pursuant to a Trust Agreement or Pooling and Servicing Agreement, as applicable. A form of each of the Trust Agreement and the Pooling and Servicing Agreement has been filed as an exhibit to the Registration Statement of which this prospectus forms a part. The following summary describes the material provisions of the Trust Agreement and the Pooling and Servicing Agreement, in each case, which are anticipated to be common to any certificates included in a series of securities. The following summary does not purport to be a complete description of all terms of the related certificates, Trust Agreement or Pooling and Servicing Agreement and therefore is subject to, and is qualified in its entirety by reference to, the provisions of the related certificates and Trust Agreement or Pooling and Servicing Agreement, as applicable.

If so specified in the related prospectus supplement and except for the certificates, if any, of a series purchased by the depositor, a seller or any of their respective affiliates, each class of certificates will initially be represented by one or more certificates registered in the name of the Depository. The certificates will be available for purchase in minimum denominations of $10,000 or any other minimum denomination as shall be specified in the related prospectus supplement and integral multiples of $1,000 in excess of $10,000 or any other minimum denomination so specified in the related prospectus supplement in book-entry form only, or any other form as shall be specified in the related prospectus supplement. If the certificates are available in book-entry form only, the depositor has been informed by DTC that DTC’s nominee will be Cede. Accordingly, the nominee is expected to be the holder of recor d of the certificates of any series. If the certificates are available in book-entry form only, unless and until Definitive certificates are issued under the limited circumstances described in this prospectus or in the related prospectus supplement, no certificateholder, other than the depositor, a seller or any of their respective affiliates, will be entitled to receive a physical certificate representing a certificate. If the certificates are available in book-entry form only, all references in this prospectus and in the related prospectus supplement to actions by certificateholders refer to actions taken by DTC upon instructions from the Participants, and all references in this prospectus and in the related prospectus supplement to distributions, notices, reports and statements to certificateholders refer to distributions, notices, reports and statements to DTC or its nominee, as the case may be, as the registered holder of the certificates, for distribution to certificateholders in accordance with DTC
46;s procedures with respect to distributions. See “Certain Information Regarding the Securities—Book-Entry Registration” and “—Definitive Securities”. Any certificate of a series owned by the depositor, a seller or any of their respective affiliates will be entitled to equal and proportionate benefits under the applicable Trust Agreement or Pooling and Servicing Agreement, as applicable, except that, unless otherwise provided in the related Trust Agreement, the certificates will be deemed not to be outstanding for the purpose of determining whether the requisite percentage of certificateholders has given any request, demand, authorization, direction, notice, or consent or taken any other action under the Related Documents.

Distributions of Principal and Interest

The timing and priority of distributions, seniority, allocations of losses, certificate pass-through rate and amount of or method of determining distributions with respect to principal and interest on each class of certificates of a series will be described in the related prospectus supplement. Distributions of interest on these certificates will be made on the dates specified in the related prospectus supplement (the “Distribution Date”) and will be made prior to distributions with respect to principal of the certificates. To the extent provided in the related prospectus supplement, a series of certificates may include one or more classes of strip certificates entitled to (1) principal distributions with disproportionate, nominal or no interest distributions or (2) interest distributions with disproportionate, nominal or no principal distributions. Each class of certificates may have a different certi ficate pass-through rate, which may be a fixed, variable or adjustable certificate pass-through rate, and which may be zero for some classes of strip certificates, or any combination of the foregoing. The related prospectus supplement will specify the certificate pass-through rate for each class of certificates of a series or the method for determining the certificate pass-through rate.

In the case of a series of securities that includes two or more classes of certificates, the timing, sequential order, priority of payment or amount of distributions in respect of interest and principal, and any schedule or formula or other provisions applicable to the determination of the timing, sequential order, priority of payment or amount of distributions in respect of interest and principal, of each class will be as set forth in the related prospectus supplement. In the case of certificates issued by an owner trust, distributions in respect of these certificates will be subordinated to payments in respect of the notes of the related series and to the extent described in the related prospectus supplement. Distributions in respect of interest on and principal of any class of certificates will be made on a pro rata basis among all holders of certificates of the class.

Certain Information Regarding the Securities

Book-Entry Registration

If so specified in the related prospectus supplement, DTC will act as securities depositor for each class of securities offered by this prospectus. Each class of securities initially will be represented by one or more certificates registered in the name of Cede, the nominee of DTC. As the nominee of DTC, it is anticipated that the only “noteholder” and/or “certificateholder” with respect to a series of securities will be Cede. Beneficial owners of the securities (“Security Owners”) will not be recognized as “noteholders” by the related indenture trustee, as the term is used in each Indenture, or as “certificateholders” by the related trustee, as the term is used in each Trust Agreement or Pooling and Servicing Agreement, as applicable, and Security Owners will be permitted to exercise the rights of noteholders or certificateholders only indirectly through DTC and its participating members (“Participants”).

DTC is a limited purpose trust depositor organized under the laws of the State of New York, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the Uniform Commercial Code (the “UCC”) in effect in the State of New York, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for the Participants and to facilitate the clearance and settlement of securities transactions between Participants through electronic book-entries, thus eliminating the need for physical movement of certificates. Participants include securities brokers and dealers, banks, trust companies and clearing corporations. Indirect access to the DTC system also is available to banks, brokers, dealers and trust companies that cle ar through or maintain a custodial relationship with a Participant, either directly or indirectly (the “Indirect Participants”).

Security Owners that are not Participants or Indirect Participants but desire to purchase, sell or otherwise transfer ownership of, or an interest in, the securities may do so only through Participants and Indirect Participants. In addition, all Security Owners will receive all distributions of principal and interest from the related indenture trustee or the related trustee, as applicable, through Participants or Indirect Participants. Under a book-entry format, Security Owners may experience some delay in their receipt of payments, since these payments will be forwarded by the applicable trustee or indenture trustee to DTC’s nominee. DTC will then forward the payments to the Participants, which will then forward them to Indirect Participants or Security Owners.

Under the rules, regulations and procedures creating and affecting DTC and its operations (the “Rules”), DTC is required to make book-entry transfers among Participants on whose behalf it acts with respect to the securities and to receive and transmit distributions of principal of and interest on the securities. Participants and Indirect Participants with which Security Owners have accounts with respect to the securities similarly are required to make book-entry transfers and to receive and transmit the payments on behalf of their respective Security Owners. Accordingly, although Security Owners will not possess physical certificates representing the securities, the Rules provide a mechanism by which Participants and Indirect Participants will receive payments and transfer or exchange interests, directly or indirectly, on behalf of Security Owners.

Because DTC can act only on behalf of Participants, who in turn may act on behalf of Indirect Participants, the ability of a Security Owner to pledge securities to persons or entities that do not participate in the DTC system, or otherwise take actions with respect to the securities, may be limited due to the lack of a physical certificate representing the securities.

DTC has advised the depositor that it will take any action permitted to be taken by a Security Owner under the Indenture, Trust Agreement or Pooling and Servicing Agreement, as applicable, only at the direction of one or more Participants to whose account with DTC the securities are credited. DTC may take conflicting actions with respect to other undivided interests to the extent that these actions are taken on behalf of Participants whose holdings include the undivided interests.

Clearstream Banking, société anonyme, 67 Bd Grande-Duchesse Charlotte, L-2967 Luxembourg (“Clearstream, Luxembourg”), was incorporated in 1970 as “Cedel S.A.”, a depositor with limited liability under Luxembourg law (a société anonyme).  Cedel S.A. subsequently changed its name to Cedelbank.  On January 10, 2000, Cedelbank’s parent depositor, Cedel International, société anonyme (“CI”) merged its clearing, settlement and custody business with that of Deutsche Börse Clearing AG (“DBC”).  The merger involved the transfer by CI of substantially all of its assets and liabilities (including its shares in CB) to a new Luxembourg depositor, New Cedel International, société anonyme (“New CI”), which is 50% owned by CI and 50% owned by DBC’s parent depositor Deutsche Börse AG.  The shareholder s of these two entities are banks, securities dealers and financial institutions.  Cedel International currently has 92 shareholders, including U.S. financial institutions or their subsidiaries.  No single entity may own more than 5 percent of Cedel International’s stock.

Further to the merger, the Board of Directors of New Cedel International decided to rename the companies in the group in order to give them a cohesive brand name.  The new brand name that was chosen is “Clearstream”.  With effect from January 14, 2000 New CI has been renamed “Clearstream International, société anonyme”.  On January 18, 2000, Cedelbank was renamed “Clearstream Banking, société anonyme”, and Cedel Global Services was renamed “Clearstream Services, société anonyme”.

On January 17, 2000 DBC was renamed “Clearstream Banking AG”.  This means that there are now two entities in the corporate group headed by Clearstream International which share the name “Clearstream Banking”, the entity previously named “Cedelbank” and the entity previously named “Deutsche Borse Clearing AG”.

Clearstream, Luxembourg holds securities for its customers (“Clearstream, Luxembourg Participants”) and facilitates the clearance and settlement of securities transactions between Clearstream, Luxembourg customers through electronic book-entry changes in accounts of Clearstream, Luxembourg customers, thereby eliminating the need for physical movement of certificates.  Transactions may be settled by Clearstream, Luxembourg in any of 36 currencies, including United States Dollars.  Clearstream, Luxembourg provides to its customers, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing.  Clearstream, Luxembourg also deals with domestic securities markets in over 30 countries through established depository and custodial relationships.  Clearstream, Luxembourg is registered as a ban k in Luxembourg, and as such is subject to regulation by the Commission de Surveillance du Secteur Financier, “CSSF”, which supervises Luxembourg banks.  Clearstream, Luxembourg’s customers are world-wide financial institutions including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations.  Clearstream, Luxembourg’s U.S. customers are limited to securities brokers and dealers, and banks.  Currently, Clearstream, Luxembourg has approximately 2,000 customers located in over 80 countries, including all major European countries, Canada, and the United States.  Indirect access to Clearstream, Luxembourg is available to other institutions that clear through or maintain a custodial relationship with an account holder of Clearstream, Luxembourg.  Clearstream, Luxembourg has established an electronic bridge with Morgan Guaranty Trust depositor of New York as the Operator of the Euroclear System (MGT/EOC) in Brussels to facilitate settlement of trades between Clearstream, Luxembourg and MGT/EOC.

Except as required by law, none of Deutsche Bank Securities Inc., the depositor, the related seller, the related servicer, or related indenture trustee, if any, or the related trustee will have any liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of securities of any series held by DTC’s nominee, or for maintaining, supervising or reviewing any records relating to the beneficial ownership interests.

Definitive Securities

If so stated in the related prospectus supplement, the notes and/or certificates of a given series will be issued in fully registered, certificated form (“Definitive notes” and “Definitive certificates”, respectively, and, collectively, “Definitive Securities”) to noteholders or certificateholders or their respective nominees, rather than to DTC or its nominee, only if

•

the related trustee of a grantor trust or the related indenture trustee in the case of an owner trust, as applicable, determines that DTC is no longer willing or able to discharge properly its responsibilities as Depository with respect to the related securities and the indenture trustee or trustee, as applicable, is unable to locate a qualified successor,

•

the indenture trustee or trustee, as applicable, elects, at its option, to terminate the book-entry system through DTC or

•

after the occurrence of an Event of Default or Servicer Default, Security Owners representing at least a majority of the outstanding principal amount of the notes or certificates, as applicable, of the series, advise the related trustee through DTC that the continuation of a book-entry system through DTC, or a successor to DTC, is no longer in the best interests of the related Security Owners.

Upon the occurrence of any of the events described in the immediately preceding paragraph, the related trustee or indenture trustee, as applicable, will be required to notify the related Security Owners, through Participants, of the availability of Definitive Securities. Upon surrender by DTC of the certificates representing all securities of any affected class and the receipt of instructions for re-registration, the trustee will issue Definitive Securities to the related Security Owners. Distributions on the related Definitive Securities will subsequently be made by the related trustee or indenture trustee, as applicable, directly to the holders in whose name the related Definitive Securities are registered at the close of business on the applicable record date, in accordance with the procedures set forth in this prospectus and in the related Indenture or the related Trust Agreement or Pooling and Servicing Agr eement, as applicable. Distributions will be made by check mailed to the address of the holders as they appear on the register specified in the related Indenture, Trust Agreement or Pooling and Servicing Agreement, as applicable; however, the final payment on any securities, whether Definitive Securities or securities registered in the name of a Depository or its nominee, will be made only upon presentation and surrender of the securities at the office or agency as specified in the notice of final distribution to Securityholders.

Definitive Securities will be transferable and exchangeable at the offices of the related trustee or indenture trustee, or any security registrar appointed by the related trustee or the indenture trustee, as applicable. No service charge will be imposed for any registration of transfer or exchange, but the trustee or indenture trustee may require payment of a sum sufficient to cover any tax or other governmental charge imposed in connection with a registration of transfer or exchange.

Statements to Securityholders

With respect to each series of securities, on or prior to each Distribution Date, the related servicer will prepare and forward to the related indenture trustee or trustee to be included with the distribution to each Securityholder of record a statement setting forth for the related Collection Period the following information, and any other information specified in the related prospectus supplement:

(1)

the amount of the distribution allocable to principal of each class of securities of the series;

(2)

the amount of the distribution allocable to interest on each class of securities of the series;

(3)

if applicable, the amount of the Servicing Fee paid to the related servicer with respect to the related Collection Period;

(4)

the outstanding principal balance and Note Pool Factor for each class of notes, if any, and the certificate balance and Certificate Pool Factor for each class of certificates of the series as of the related record date;

(5)

the balance of any Reserve Account or other form of credit enhancement, after giving effect to any additions to the balance of the Reserve Account or withdrawals from the Reserve Account or reductions to the Reserve Account to be made on the following Distribution Date; and

(6)

the aggregate amount of realized losses, if any, in respect of Receivables and any other loss, delinquency or other ratios set forth in the related prospectus supplement for the related Collection Period.

Items (1), (2) and (4) above with respect to the notes or certificates of a series will be expressed as a dollar amount per $1,000 of initial principal balance of the notes or the initial certificate balance of the certificates, as applicable.

In addition, within the prescribed period of time for tax reporting purposes after the end of each calendar year during the term of each issuing entity, the related trustee or indenture trustee, as applicable, will mail to each person who at any time during the related calendar year shall have been a registered Securityholder a statement containing information for the purposes of the Securityholder’s preparation of federal income tax returns. See “Material Federal Income Tax Consequences”.

List of Securityholders

Three or more holders of the notes of any series or one or more holders of the notes evidencing not less than 25% of the aggregate outstanding principal balance of the notes of the series may, by written request to the related indenture trustee, obtain access to the list of all noteholders maintained by the indenture trustee for the purpose of communicating with other noteholders with respect to their rights under the related Indenture or under the notes. The indenture trustee may elect not to afford the requesting noteholders access to the list of noteholders if it agrees to mail the desired communication or proxy, on behalf of and at the expense of the requesting noteholders, to all noteholders of the series.

Three or more holders of the certificates of any series or one or more holders of the certificates evidencing not less than 25% of the certificate balance of the certificates may, by written request to the related trustee, obtain access to the list of all certificateholders maintained by the trustee for the purpose of communicating with other certificateholders with respect to their rights under the related Trust Agreement or Pooling and Servicing Agreement, as applicable, or under the certificates.

Description of the Transfer and Servicing Agreements

The following summary describes the material provisions, in each case, to the extent anticipated to be common to any series of securities, of:

•

each Receivables Purchase Agreement pursuant to which the seller will transfer Receivables to the depositor,

•

each Trust Agreement or Pooling and Servicing Agreement pursuant to which an issuing entity will be created, Collateral Certificates, Government Securities and/or Private Label Custody Receipt Securities, as applicable, may be sold or transferred to the issuing entity, certificates will be issued, and the servicer will service Receivables and the trustee will manage Government Securities, if any and Private Label Custody Receipt Securities, if any, in the case of an issuing entity that is a grantor trust,

•

each Sale and Servicing Agreement pursuant to which the depositor will transfer Receivables to an issuing entity and the servicer will service Receivables, in the case of an owner trust, or

•

in the case of securities backed by Collateral Certificates, each Trust Agreement pursuant to which an issuing entity will be created, Collateral Certificates will be sold or transferred to the issuing entity, Government Securities and Private Label Custody Receipt Securities may be sold or transferred to the issuing entity and a trustee will manage Collateral Certificates, Government Securities, if any, and Private Label Custody Receipt Securities, if any (collectively, the “Transfer and Servicing Agreements”).

Forms of the Transfer and Servicing Agreements have been filed as exhibits to the Registration Statement of which this prospectus forms a part. The following summary does not purport to be a complete description of all of the terms of the Transfer and Servicing Agreements and therefore is subject to, and is qualified in its entirety by reference to, the provisions of the related Transfer and Servicing Agreement.

Sale and Assignment of Primary Assets

In the case of Primary Assets consisting of Receivables, on or prior to the related closing date, a seller will transfer and assign to the depositor, pursuant to a Receivables Purchase Agreement, without recourse, all of its right, title and interest in and to Receivables in the outstanding principal amount specified in the related prospectus supplement, including its security interests in the related Financed Boats. Each Receivable will be identified in a schedule appearing as an exhibit to the related Receivables Purchase Agreement (the “Schedule of Receivables”).

In each Receivables Purchase Agreement the seller will represent and warrant to the depositor, among other things, that

•

the information set forth in the Schedule of Receivables is correct in all material respects as of the applicable cutoff date;

•

the obligor on each Receivable is contractually required to maintain physical damage insurance covering the related Financed Boat in accordance with the seller’s normal requirements;

•

on the closing date, the Receivables are free and clear of all security interests, liens, charges and encumbrances, and no offsets, defenses or counterclaims have been asserted or threatened;

•

at the closing date, each of the Receivables is secured by a perfected, first-priority security interest in the related Financed Boat in favor of the seller;

•

each Receivable, at the time it was originated, complied and, on the closing date complies, in all material respects with applicable federal and state laws, including, without limitation, consumer credit, truth-in-lending, equal credit opportunity and disclosure laws; and

•

any other representations and warranties that may be set forth in the related prospectus supplement.

To the extent specified in the related prospectus supplement, as of the last day of the second Collection Period, or, if the seller so elects, the last day of the first Collection Period, following the discovery by or notice to the seller of any breach of a representation and warranty of the seller that materially and adversely affects the interests of the related issuing entity in any Receivable, the seller will be obligated to repurchase the Receivable, unless the seller cures the breach in a timely fashion. The purchase price for any of these Receivables will be equal to the unpaid principal balance owed by the obligor on the Receivable, plus accrued and unpaid interest on the unpaid principal balance at the applicable APR to the last day of the month of repurchase (the “Repurchase Amount”). This repurchase obligation will constitute the sole remedy available to the Securityholders, the related trus tee and any related indenture trustee for any uncured breach.

On the related closing date, the depositor will transfer and assign to the related Trust, pursuant to a Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, without recourse, all of its right, title and interest in and to Primary Assets in the outstanding principal amount specified in the related prospectus supplement. Concurrently with the transfer and assignment of Primary Assets to the related issuing entity, the related trustee or indenture trustee, as applicable, will execute, authenticate and deliver the related securities.

Pursuant to the terms of the Sale and Servicing Agreement or the Pooling and Servicing Agreement, as applicable, the depositor will assign to the related issuing entity the representations and warranties made by the related seller under the related Receivables Purchase Agreement for the benefit of the related Securityholders and will make limited representations and warranties with respect to the other Primary Assets included in the issuing entity. To the extent that the related seller does not repurchase a Primary Asset in the event of a breach of its representations and warranties with respect to the Primary Asset, the depositor will not be required to repurchase the Primary Asset unless the breach also constitutes a breach of one of the depositor’s representations and warranties under the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, with respect to that Primary Asset, if any, and the breach materially and adversely affects the interests of the Securityholders in any Primary Asset. Neither the seller nor the depositor will have any other obligation with respect to the Primary Assets or the securities.

Trust Accounts

With respect to each owner trust, the servicer will establish and maintain with the related indenture trustee, or the trustee will establish and maintain, (a) one or more accounts, on behalf of the related Securityholders, into which all payments made on or in respect of the related Primary Assets will be deposited (the “Collection Account”) and (b) an account, in the name of the indenture trustee on behalf of the noteholders, into which amounts released from the Collection Account and any Reserve Account or other form of credit enhancement for payment to the noteholders will be deposited and from which all distributions to the noteholders will be made (the “Note Distribution Account”). With respect to each issuing entity that is an owner trust or grantor trust, the servicer or the related trustee will establish and maintain an account, in the name of the trustee on behalf of the certificateh olders, into which amounts released from the Collection Account and any Reserve Account or other form of credit enhancement for distribution to the certificateholders will be deposited and from which all distributions to the certificateholders will be made (the “Certificate Distribution Account”). With respect to any issuing entity that is a grantor trust, the servicer or the related trustee will also establish and maintain the Collection Account and any other Trust Account in the name of the related trustee on behalf of the related certificateholders.

If so provided in the related prospectus supplement, the servicer will establish for each series of securities an additional account (the “Payahead Account”), in the name of the related indenture trustee, in the case of an issuing entity that is an owner trust, or trustee, in the case of an issuing entity that is a grantor trust, into which, to the extent required in the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, early payments made by or on behalf of obligors on Precomputed Receivables will be deposited until the time these payments become due. Until the time payments are transferred from the Payahead Account to the Collection Account, they will not constitute collected interest or collected principal and will not be available for distribution to noteholders or certificateholders. Any other accounts to be established with respect to an issuing entity will b e described in the related prospectus supplement.

For each series of securities, funds in the Collection Account, Note Distribution Account, Certificate Distribution Account and any Reserve Account or other accounts identified in the related prospectus supplement (collectively, the “Trust Accounts”) will be invested as provided in the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, in Eligible Investments. “Eligible Investments” will generally be limited to investments acceptable to the Rating Agencies as being consistent with the rating of the related securities. Eligible Investments will generally be limited to obligations or securities that mature on or before the date of the next scheduled distribution to Securityholders of the series. However, to the extent permitted by the Rating Agencies, funds in any Reserve Account may be invested in securities that will not mature prior to the date of the nex t scheduled distribution with respect to the notes or certificates and will not be sold prior to maturity to meet any shortfalls. Thus, the amount of available funds on deposit in a Reserve Account at any time may be less than the balance of that Reserve Account. If the amount required to be withdrawn from a Reserve Account to cover shortfalls in collections on the related Receivables (as provided in the related prospectus supplement) exceeds the amount of available funds on deposit in the Reserve Account, a temporary shortfall in the amounts distributed to the related noteholders or certificateholders could result, which could, in turn, increase the average life of the related notes or certificates. Unless otherwise and to the extent provided in the related prospectus supplement, investment earnings on funds deposited in the Trust Accounts, net of losses and investment expenses (collectively, “Investment Earnings”), will be deposited in the applicable Collection Account on each Distribution Date a nd will be treated as collections of interest on the related Receivables.

The Trust Accounts will be maintained as Eligible Deposit Accounts. “Eligible Deposit Account” means either (a) a segregated account with an Eligible Institution or (b) a segregated trust account with the corporate trust department of a depositor institution organized under the laws of the United States of America or any one of the states of the United States of America 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 the account, so long as any of the securities of the depositor institution have a credit rating from each Rating Agency in one of its generic rating categories that signifies investment grade. “Eligible Institution” means, with respect to a Trust, (a) the corporate trust department of the related indenture trustee or trustee, as applicable, or (b) a depositor institution organized un der the laws of the United States of America or any one of the states of the United States of America or the District of Columbia, or any domestic branch of a foreign bank, (1) that has either (A) a long-term unsecured debt rating acceptable to the Rating Agencies or (B) a short-term unsecured debt rating or certificate of deposit rating acceptable to the Rating Agencies and (2) whose deposits are insured by the FDIC.

Pre-Funding

If so specified in the related prospectus supplement, a portion of the issuance proceeds of the securities of a particular series (this amount, the “Pre-Funded Amount”) will be deposited in an account (the “Pre-Funding Account”) to be established with the trustee, which will be used to acquire additional Receivables from time to time during the time period specified in the related prospectus supplement (the “Pre-Funding Period”). Prior to the investment of the Pre-Funded Amount in additional Receivables, the Pre-Funded Amount may be invested in one or more Eligible Investments. Except as otherwise provided in the applicable Agreement, an “Eligible Investment” is any of the following, in each case as determined at the time of the investment or contractual commitment to invest in the relevant Eligible Investment, to the extent these investments would not require registration of the Trust Fund as an investment depositor pursuant to the Investment depositor Act of 1940:

(a)

negotiable instruments or securities represented by instruments in bearer or registered or book-entry form which evidence

(1)

obligations which have the benefit of the full faith and credit of the United States of America, including depositor receipts issued by a bank as custodian with respect to any instrument or security held by the custodian for the benefit of the holder of the depositor receipt,

(2)

demand deposits or time deposits in, or bankers’ acceptances issued by, any depositary institution or trust depositor incorporated under the laws of the United States of America or any state of the United States of America and subject to supervision and examination by Federal or state banking or depositary institution authorities; provided that at the time of the trustee’s investment or contractual commitment to invest in the relevant Eligible Investment, the certificates of deposit or short-term deposits, if any, or long-term unsecured debt obligations, other than the obligations whose rating is based on collateral or on the credit of a Person other than the institution or trust depositor, of the depositary institution or trust depositor has a credit rating in the highest rating category from each Rating Agency,

(3)

certificates of deposit having a rating in the highest rating category from each Rating Agency or

(4)

investments in money market funds which are, or which are composed of instruments or other investments which are, rated in the highest rating category from each Rating Agency;

(b)

demand deposits in the name of the trustee in any depositary institution or trust depositor referred to in clause (a)(2) above;

(c)

commercial paper, having original or remaining maturities of no more than 270 days, having a credit rating in the highest rating category from each Rating Agency;

(d)

Eurodollar time deposits that are obligations of institutions whose time deposits carry a credit rating in the highest rating category from each Rating Agency;

(e)

repurchase agreements involving any Eligible Investment described in any of clauses (a)(1), (a)(3) or (d) above, so long as the other party to the repurchase agreement has its long-term unsecured debt obligations rated in the highest rating category from each Rating Agency; and

(f)

any other investment with respect to which each Rating Agency rating the securities indicates will not result in the reduction or withdrawal of its then existing rating of the securities. Except as otherwise provided in the applicable Agreement, any Eligible Investment must mature no later than the Business Day prior to the next Distribution Date.

During any Pre-Funding Period, the seller or any other party specified in the related prospectus supplement will be obligated, subject only to the availability of additional Receivables, to transfer to the related issuing entity additional Receivables from time to time during the related Pre-Funding Period. Additional Receivables will be required to satisfy specific eligibility criteria more fully set forth in the related prospectus supplement, which eligibility criteria will be consistent with the eligibility criteria of the Receivables included in the issuing entity as of the closing date subject to exceptions as are expressly stated in the related prospectus supplement.

Although the specific parameters of the Pre-Funding Account with respect to any issuance of securities will be specified in the related prospectus supplement, it is anticipated that:

•

the Pre-Funding Period will not exceed 90 days from the related closing date;

•

that the additional loans to be acquired during the Pre-Funding Period will be subject to the same representations and warranties as the Receivables included in the related issuing entity on the closing date, although additional criteria may also be required to be satisfied, as described in the related prospectus supplement; and

•

the Pre-Funded Amount will not exceed 25% of the principal amount of the securities issued pursuant to a particular offering.

Servicing Procedures

To assure uniform quality in servicing the Receivables and to reduce administrative costs, the depositor and each issuing entity will designate the servicer as custodian to maintain possession, as the issuing entity’s agent, of the related Receivables and any other documents relating to the Receivables. The seller’s and the servicer’s accounting records and computer systems will be marked to reflect the sale and assignment of the related Receivables to each issuing entity, and UCC financing statements reflecting the sale and assignment will be filed.

The servicer will make reasonable efforts to collect all payments due with respect to the Receivables and will, consistent with the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, follow the collection procedures as it follows with respect to comparable Receivables it services for itself and others. The prospectus supplement will specify that the servicer may, in its discretion, arrange with the obligor on a Receivable to extend or modify the payment schedule, but no arrangement will, if inconsistent with its normal procedures, for purposes of any Sale and Servicing Agreement or Pooling and Servicing Agreement, reduce the contract rate of, the amount of the scheduled payments under, or extend the final payment date of, any Receivable beyond the “Final Scheduled Maturity Date” (as the term is defined with respect to any Receivables Pool in the related prospectus s upplement). Some arrangements may result in the servicer purchasing the Receivables for the Repurchase Amount, while others may result in the servicer making Advances. The servicer may sell the related Financed Boat securing any Receivable at a public or private sale, or take any other action permitted by applicable law. See “Certain Legal Aspects of the Receivables”.

Collections

With respect to each issuing entity, the servicer or the trustee will deposit all payments on the related Primary Assets, from whatever source, and all proceeds of the related Primary Assets, collected during the period specified in the related prospectus supplement (a “Collection Period”) into the related Collection Account not later than two business days after receipt of payments and proceeds of the related Primary Assets or any other period as specified in the related prospectus supplement. However, notwithstanding the foregoing, these amounts may be remitted to the Collection Account by the servicer on a monthly basis on or prior to the applicable Distribution Date if no Servicer Default exists and each other condition to making deposits less frequently than daily as may be specified by the Rating Agencies or set forth in the related prospectus supplement is satisfied. Pending deposit into the Col lection Account, the collections may be invested by the servicer at its own risk and for its own benefit and will not be segregated from its own funds. If the servicer were unable to remit the funds to the Collection Account on any Distribution Date, Securityholders might incur a loss. To the extent set forth in the related prospectus supplement, the servicer may, in order to satisfy the requirements described above, obtain a letter of credit or other security for the benefit of the related Trust to secure timely remittances of collections on the related Primary Assets and payment of the aggregate Repurchase Amount with respect to Receivables repurchased by the servicer.

Collections on a Precomputed Receivable during any Collection Period will be applied first to the repayment of any outstanding Precomputed Advances made by the servicer with respect to the Receivable, as described below, and then to the scheduled monthly payment due on the Receivable. Any portion of the collections remaining after the scheduled monthly payment has been made (these excess amounts, the “Payaheads”) will, unless the remaining amount is sufficient to prepay the Precomputed Receivable in full, and subject to limitations which, if applicable, will be specified in the related prospectus supplement, be transferred to and kept in the Payahead Account until a later Distribution Date on which the Payaheads may be applied either to the scheduled monthly payment due during the related Collection Period or to prepay the Receivable in full.

Advances

If specified in the related prospectus supplement, to the extent the collections of interest and principal on a Precomputed Receivable for a Collection Period fall short of the related scheduled payment, the servicer generally will advance the shortfall (a “Precomputed Advance”). The servicer will be obligated to make a Precomputed Advance on a Precomputed Receivable only to the extent that the servicer, in its sole discretion, expects to recoup the Advance from subsequent collections or recoveries on the Receivable or other Precomputed Receivables in the related Receivables Pool. The servicer will deposit the Precomputed Advance in the applicable Collection Account on or before the business day preceding the applicable Distribution Date. The servicer will recoup its Precomputed Advance from subsequent payments by or on behalf of the related obligor or from insurance or liquidation proceeds with respec t to the related Receivable and will release its right to reimbursement in conjunction with its purchase of the Receivable as servicer or, upon determining that reimbursement from the preceding sources is unlikely, will recoup its Precomputed Advance from any collections made on other Precomputed Receivables in the related Receivables Pool.

If specified in the related prospectus supplement, on or before the business day prior to each Distribution Date, the servicer will deposit into the related Collection Account an amount equal to the amount of interest that would have been due on the related Simple Interest Receivables at their respective annual percentage rates for the related Collection Period, assuming that the Simple Interest Receivables are paid on their respective due dates, minus the amount of interest actually received on the Simple Interest Receivables during the applicable Collection Period (a “Simple Interest Advance”, and together with Precomputed Advances, “Advances”). If the calculation results in a negative number, an amount equal to the amount shall be paid to the servicer in reimbursement of outstanding Simple Interest Advances. In addition, if specified in the related prospectus supplement, if a Simple Intere st Receivable becomes a Liquidated Receivable (as the term is defined in the related prospectus supplement), the amount of accrued and unpaid interest on the Simple Interest Receivable that became a Liquidated Receivable, but not including interest for the then current collection Period, will be withdrawn from the Collection Account and paid to the servicer in reimbursement of outstanding Simple Interest Advances. No advances of principal will be made with respect to Simple Interest Receivables.

Net Deposits

For administrative convenience, unless the servicer or the trustee is required to remit collections to the Collection Account on a daily basis as described under “Collections” above, the servicer or the trustee will be permitted to make deposits of collections, aggregate Advances and Repurchase Amounts for any issuing entity for or in respect of each Collection Period net of distributions to be made to the servicer with respect to the Collection Period. The servicer also may cause a single, net transfer to be made from the Collection Account to the Payahead Account, or vice versa.

Servicing Compensation and Payment Of Expenses

To the extent provided in the related prospectus supplement, with respect to each issuing entity the related servicer will be entitled to receive, out of interest collected on or in respect of the related Primary Assets serviced by the servicer, a fee for each Collection Period (the “Servicing Fee”) in an amount equal to the percentage per annum specified in the related prospectus supplement (the “Servicing Fee Rate”) of the Pool Balance related to the Primary Assets as of the first day of the related Collection Period. Unless otherwise provided in the related prospectus supplement, the Servicing Fee, together with any portion of the Servicing Fee that remains unpaid from prior Distribution Dates, will be paid solely to the extent of the Interest Distribution Amount; however, the Servicing Fee will be paid prior to the distribution of any portion of the Interest Distribution Amount to the hol ders of the notes or certificates of any series.

To the extent provided in the related prospectus supplement, the servicer will also collect and retain any late fees, prepayment charges and other administrative fees or similar charges allowed by applicable law with respect to Receivables and will be entitled to reimbursement from each Trust for some liabilities. Payments by or on behalf of obligors will be allocated to scheduled payments under the related Receivable and late fees and other charges in accordance with the servicer’s normal practices and procedures.

If applicable, the Servicing Fee will compensate the servicer for performing the functions of a third party servicer of boat receivables as an agent for the related issuing entity, including collecting and posting all payments, responding to inquiries of obligors on the Receivables, investigating delinquencies, sending payment statements and reporting the collateral. The Servicing Fee will also compensate the servicer for administering the Receivables, including making Advances, accounting for collection, furnishing monthly and annual statements to the related indenture trustee and/or trustee, and generating federal income tax information for the issuing entity and for the related noteholders and/or certificateholders as well as the issuing entity’s compliance with the reporting provisions under the Exchange Act. The Servicing Fee may also reimburse the servicer for particular taxes, the fees of the related indenture trustee and/or trustee, accounting fees, outside auditor fees, date processing cost and other costs incurred in connection with administering the Primary Assets.

Distributions

With respect to each series of securities, beginning on the Distribution Date specified in the related prospectus supplement, distributions of principal and interest, or, where applicable, principal only or interest only, on each class of securities entitled to these distributions will be made by the related trustee or indenture trustee, as applicable, to the certificateholders and noteholders of the series. The timing, calculation, allocation, order, source and priorities of, and requirements for, all payments to the holders of each class of notes and/or distributions to holders of each class of certificates will be set forth in the related prospectus supplement.

With respect to each issuing entity, on each Distribution Date collections on or in respect of the related Primary Assets will be transferred from the Collection Account to the Note Distribution Account or Certificate Distribution Account, as applicable, for distribution to the noteholders and certificateholders to the extent provided in the related prospectus supplement. Credit enhancement, such as a Reserve Account, will be available to cover shortfalls in the amount available for distribution on the date to the extent specified in the related prospectus supplement. As and to the extent described in the related prospectus supplement, distributions in respect of principal of a class of securities of a series may be subordinate to distributions in respect of interests on the class, and distributions in respect of one or more classes of certificates of the series may be subordinate to payments in respect of the n otes, if any, of the series or other classes of certificates. Distributions of principal on the securities of a series may be based on the amount of principal collected or due, or the amount of realized losses incurred, in a Collection Period.

Credit and Cash Flow Enhancement

The amounts and types of any credit and cash flow enhancement arrangements and the provider of the credit and cash flow enhancement arrangements, if applicable, with respect to each class of securities of a series will be set forth in the related prospectus supplement. To the extent provided in the related prospectus supplement, credit or cash flow enhancement may only be in the form of subordination of one or more classes of securities, Reserve Accounts, spread accounts, letters of credit, surety bonds, insurance policies, over-collateralization, credit or liquidity facilities, guaranteed investment contracts, interest rate swap agreements, interest rate cap or floor agreements, currency swap agreements or similar agreements provided to reduce the effects of interest rate or currency exchange rate fluctuations on the Assets or on one or more classes of Notes or Certificates, as applicable, or other interest rate protection agree ments, repurchase obligations, cash deposits, or any combination of the foregoing. If specified in the applicable prospectus supplement, credit or cash flow enhancement for a class of securities may cover one or more other classes of securities of the same series, and credit enhancement for a series of securities may cover one or more other series of securities.

The existence of a Reserve Account or other form of credit enhancement for the benefit of any class or series of securities is intended to enhance the likelihood of receipt by the Securityholders of the class or series of the full amount of principal and interest due on the applicable class or series and to decrease the likelihood that the Securityholders will experience losses. The credit enhancement for a class or series of securities will not, as a general rule, provide protection against all types of loss and will not guarantee repayment of all principal and interest on a class or series of securities. If losses occur which exceed the amount covered by credit enhancement or which are not covered by the credit enhancement, Securityholders will bear their allocable share of these losses, as described in the prospectus supplement. In addition, if a form of credit enhancement covers more than one series of secur ities, Securityholders of any series will be subject to the risk that credit enhancement may be exhausted by the claims of Securityholders of other series.

Reserve Account. If so provided in the related prospectus supplement, pursuant to the related Transfer and Servicing Agreement, the depositor or the seller will establish for a series or class or classes of securities an account (the “Reserve Account”), which will be maintained with the related indenture trustee or trustee, as applicable. A Reserve Account will be funded by an initial deposit by the depositor or the seller, as applicable, on the closing date in the amount set forth in the related prospectus supplement. As further described in the related prospectus supplement, the amount on deposit in the Reserve Account may be increased or reinstated on each Distribution Date, to the extent described in the related prospectus supplement, by the deposit there of amounts from collections on the Primary Assets. The related prospectus supplement will describe the circumstances under which and the m anner in which distributions may be made out of the Reserve Account, either to holders of the securities covered by the Reserve Account or to the depositor, the seller or to any other entity.

Financial Guaranty Insurance Policy or Surety Bond.  Credit enhancement may be provided in the form of a financial guaranty insurance policy or a surety bond issued by an insurer named in the policy or surety bond, if specified in the prospectus supplement.

Letter of Credit.  Alternative credit support for a series of Notes, as applicable, may be provided by the issuance of a letter of credit by the bank or financial institution specified in the prospectus supplement.  The coverage, amount and frequency of any reduction in coverage provided by a letter of credit issued for a series of Notes, as applicable, will be set forth in the prospectus supplement relating to that series.

Subordinate Securities.  One or more classes of Notes, as applicable, of a series may be Subordinate Notes, as applicable, if specified in the prospectus supplement.  The rights of the holders of Subordinate Notes, as applicable, to receive distributions of principal and interest from the Collection Account on any Distribution Date will be subordinated to those rights of the holders of Senior Notes, as applicable.  The subordination of a class may apply only in the event of (or may be limited to) particular types of losses or shortfalls.  The prospectus supplement will set forth information concerning the amount of subordination of a class or classes of Subordinate Notes, as applicable, in a series, the circumstances in which that subordination will be applicable and the manner, if any, in which the amount of subordination will be effected.

Overcollateralization. If specified in the prospectus supplement, subordination provisions of an issuing entity may be used to accelerate to a limited extent the amortization of one or more classes of Notes, as applicable, relative to the amortization of the related Assets.  The accelerated amortization is achieved by the application of excess interest to the payment of principal of one or more classes of Notes, as applicable.  This acceleration feature creates, for the Assets or groups of Assets, overcollateralization, which is the excess of the total principal balance of the related Assets, or a group of related Assets, over the principal balance of the related class or classes of Notes or Certificates, as applicable.  This acceleration may continue for the life of the related Security, or may be limited.  In the case of limited acceleration, once the required level of overcollateralization is reached, and subject to the provisions specified in the prospectus supplement, the limited acceleration feature may cease, unless necessary to maintain the required level of overcollateralization.

Limited Guarantee.  If specified in the prospectus supplement for a series of Notes or Certificates, as applicable, credit enhancement may be provided in the form of a limited guarantee issued by a guarantor named in the prospectus supplement.  Any guarantee specified in the prospectus supplement, if any, will be exempt from registration under the Securities Act.

Evidence as to Compliance

Each Pooling and Servicing Agreement and Sale and Servicing Agreement will provide that on or before a specified date in each year, beginning with the first year after the year in which the cut-off date occurs, each party responsible for the servicing function will provide to the depositor and the indenture trustee and/or trustee a report on an assessment of compliance with the minimum servicing criteria established in Item 1122(a) of Regulation AB (the “AB Servicing Criteria”).  The AB Servicing Criteria include specific criteria relating to the following areas: general servicing considerations, cash collection and administration, investor remittances and reporting, and pool asset administration.  Such report will indicate that the AB Servicing Criteria were used to test compliance on a platform level basis and will set out any material instances of noncompliance.

Each Pooling and Servicing Agreement and Sale and Servicing Agreement will also provide that the each party responsible for the servicing function will deliver along with its report on assessment of compliance, an attestation report from a firm of independent public accountants on the assessment of compliance with the AB Servicing Criteria.

Each Pooling and Servicing Agreement and Sale and Servicing Agreement will also provide for delivery to the indenture trustee and/or trustee, on or before a specified date in each year, of a separate annual statement of compliance from each entity responsible for the servicing function to the effect that, to the best knowledge of the signing officer, the servicer has fulfilled in all material respects its obligations under the Pooling and Servicing Agreement or Sale and Servicing Agreement throughout the preceding year or, if there has been a material failure in the fulfillment of any obligation, the statement shall specify such failure and the nature and status thereof.  This statement may be provided as a single form making the required statements as to more than one Pooling and Servicing Agreement or Sale and Servicing Agreement.

Copies of the annual reports of assessment of compliance, attestation reports, and statements of compliance may be obtained by securityholders without charge upon written request to the indenture trustee or trustee.  These items will be filed with the issuing entity’s annual report on Form 10-K, to the extent required under Regulation AB.

Statements to trustees and the Trust

Prior to each Distribution Date with respect to each series of securities, the servicer will provide to the applicable indenture trustee, if any, and the applicable trustee as of the close of business on the last day of the preceding Collection Period a statement setting forth substantially the same information as is required to be provided in the periodic reports provided to Securityholders of the series as described under “Certain Information Regarding the Securities—Statements to Securityholders”.

Certain Matters Regarding the Servicer

Each Sale and Servicing Agreement and Pooling and Servicing Agreement will provide that the servicer may not resign from its obligations and duties as servicer under the applicable Agreement, except upon determination that the servicer’s performance of his duties is no longer permissible under applicable law or if resignation is required by regulatory authorities. No resignation will become effective until the related indenture trustee or trustee, as applicable, or a successor servicer has assumed the servicing obligations and duties under the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable.

Each Sale and Servicing Agreement and Pooling and Servicing Agreement will further provide that neither the servicer nor any of its directors, officers, employees and agents will be under any liability to the related issuing entity or Securityholders for taking any action or for refraining from taking any action pursuant to the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, or for errors in judgment; provided, that neither the servicer nor any person will be protected against any liability that would otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence in the performance of the servicer’s duties or by reason of reckless disregard of its obligations and duties under the applicable Agreement. In addition, each Sale and Servicing Agreement and Pooling and Servicing Agreement will provide that the servicer is under no obligation to appear in, prosecute or defend any legal action that is not incidental to its servicing responsibilities under the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, and that, in its opinion, may cause it to incur any expense or liability.

Under the circumstances specified in each Sale and Servicing Agreement and Pooling and Servicing Agreement, any entity into which the servicer may be merged or consolidated, or any entity resulting from any merger or consolidation to which the servicer is a party, or any entity succeeding to all or substantially all of the business of the servicer, or any corporation which assumes the obligations of the servicer, will be the successor to the servicer under the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable.

Servicer Defaults

A “Servicer Default” under each Sale and Servicing Agreement and Pooling and Servicing Agreement will consist of:

(1)

any failure by the servicer to deliver to the related trustee or indenture trustee, as applicable, for deposit in any of the Trust Accounts any required payment or to direct the related trustee or indenture trustee, as applicable, to make any required distributions from the Trust Accounts, which failure continues unremedied for five business days after discovery by an officer of the servicer or written notice of failure is given (a) to the servicer by the related trustee or indenture trustee, as applicable, or (b) to the servicer and to the related trustee or indenture trustee, as applicable, by holders of notes, if any, evidencing not less that 25% of the aggregate outstanding principal amount of the notes or, in the event a series of securities includes no notes or if the notes have been paid in full, by holders of certificates evidencing not less that 25% of the certificate balance;

(2)

any failure by the servicer duly to observe or perform in any material respect any covenant or agreement in the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, which failure materially and adversely affects the rights of the related Securityholders and which continues unremedied for 60 days after written notice of failure is given to the servicer in the same manner described in clause (1) above;

(3)

specific events of bankruptcy, insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings and particular actions by the servicer indicating its insolvency, reorganization pursuant to bankruptcy proceedings or inability to pay its obligations; and

(4)

any other events as may be set forth in the related prospectus supplement.

Rights Upon Servicer Default

Generally, in the case of an issuing entity that is an owner trust, as long as a Servicer Default under the related Sale and Servicing Agreement remains unremedied, the related indenture trustee or holders of notes of the related series evidencing not less than 50% of the aggregate principal amount of the notes then outstanding may terminate all the rights and obligations of the servicer under the related Sale and Servicing Agreement, and upon this termination the indenture trustee or a successor servicer appointed by the indenture trustee will succeed to all the responsibilities, duties and liabilities of the servicer under the related Sale and Servicing Agreement and will be entitled to similar compensation arrangements. Generally, in the case of an issuing entity that is a grantor trust, as long as a Servicer Default under the related Pooling and Servicing Agreement remains unremedied, the related trustee or holders of certificates of the related series evidencing not less than 25% of the certificate balance may terminate all the rights and obligations of the servicer under the related Pooling and Servicing Agreement, and upon this termination the trustee or a successor servicer appointed by the trustee will succeed to all the responsibilities, duties and liabilities of the servicer under the related Pooling and Servicing Agreement and will be entitled to similar compensation arrangements. If, however, a bankruptcy trustee or similar official has been appointed for the servicer, and no Servicer Default other than the appointment has occurred, the trustee or official may have the power to prevent any indenture trustee or the related noteholders or the trustee or the related certificateholders from effecting a transfer of servicing. If the related indenture trustee, if any, or the related trustee is unwilling or unable to act as successor to the servicer, the indenture trustee or trustee, as applicable, may appoin t, or may petition a court of competent jurisdiction to appoint, a successor with a net worth of at least $100,000,000 and whose regular business includes the servicing of boat receivables. The indenture trustee, if any, or the trustee may arrange for compensation to be paid to the successor servicer, which in no event may be greater than the compensation payable to the servicer under the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable.

Waiver of Past Defaults

To the extent provided in the related prospectus supplement, (1) in the case of an issuing entity that is a owner trust, holders of the related notes evidencing not less than a majority of the aggregate outstanding principal amount of the notes, or of certificates evidencing not less than a majority of the outstanding certificate balance, in the case of any default that does not adversely affect the indenture trustee or noteholders, and (2) in the case of each issuing entity that is a grantor trust, holders of certificates evidencing not less than a majority of the certificate balance, may, on behalf of all the noteholders and certificateholders, waive any default by the servicer in the performance of its obligations under the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, and its consequences, except a default in making any required deposits to or payments from any Trust Account or in respect of a covenant or provision in the Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable, that cannot be modified or amended without the consent of each Securityholder, in which event the related waiver will require the approval of holders of all of the securities of the series. No waiver will impair the Securityholders’ right with respect to any subsequent Servicer Default.

Amendment

Unless otherwise provided in the related prospectus supplement, each of the Transfer and Servicing Agreements may be amended by the parties to the Transfer and Servicing Agreements without the consent of the related noteholders or certificateholders:

(1)

to cure any ambiguity,

(2)

to correct or supplement any provisions in the related Transfer and Servicing Agreement, or

(3)

for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, the related Transfer and Servicing Agreement;

provided, that any action in this clause (3) will not, in the opinion of counsel satisfactory to the related trustee or indenture trustee, as applicable, adversely affect in any material respect the interests of the depositor or any noteholder.

The Transfer and Servicing Agreements may also be amended from time to time by the parties to the Transfer and Servicing Agreements with the consent of the holders of notes evidencing at least a majority of the aggregate principal amount of the then outstanding notes, if any, and with the consent of the holders of certificates evidencing at least a majority of the aggregate principal amount of the then outstanding certificates, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the related Transfer and Servicing Agreement or of modifying in any manner the rights of the noteholders or certificateholders, as applicable; provided that no amendment may (1) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on or in respect of the related Primary Assets or distributions that are required to be made fo r the benefit of the noteholders or certificateholders or (2) reduce the aforesaid percentage of the notes or certificates of the series the holders of which are required to consent to any amendment, without the consent of the holders of all of the outstanding notes or certificates, as the case may be, of the series.

Payment in Full of the notes

Upon the payment in full of all outstanding notes of a given series and the satisfaction and discharge of the related Indenture, the related trustee will succeed to all the rights of the indenture trustee, and the certificateholders of the series generally will succeed to the rights of the noteholders of the series under the related Sale and Servicing Agreement.

Termination

The obligations of the related servicer, the related trustee and the related indenture trustee, if any, with respect to an issuing entity pursuant to the related Transfer and Servicing Agreement will terminate upon the latest to occur of

•

the maturity or other liquidation of the last Primary Asset and the disposition of any amounts received upon liquidation of any remaining Primary Asset,

•

the payment to noteholders, if any, and certificateholders of all amounts required to be paid to them pursuant to the Transfer and Servicing Agreements and

•

the occurrence of either event described below.

In order to avoid excessive administrative expenses, the related servicer will be permitted, at its option, to purchase from an issuing entity all remaining Primary Assets as of the end of any Collection Period, if the then outstanding Pool Balance is 10%, or, if any seller is a bank, 5%, or less of the Pool Balance as of the related cutoff date, at a purchase price equal to the price specified in the related prospectus supplement.

If and to the extent provided in the related prospectus supplement, the indenture trustee or trustee, as applicable, will, within ten days following a Distribution Date as of which the Pool Balance is equal to or less than the percentage of the original Pool Balance specified in the related prospectus supplement, solicit bids for the purchase of the Primary Assets remaining in the Trust, in the manner and subject to the terms and conditions set forth in the related prospectus supplement. If the indenture trustee or trustee receives satisfactory bids as described in the related prospectus supplement, then the Primary Assets remaining in the Trust will be sold to the highest bidder.

Certain Legal Aspects of the Receivables

Security Interests in Financed Boats

Security interests in boats may be perfected in one of three ways: in certificate of title states, a security interest is perfected by obtaining the certificate of title to the financed boat or notation of the secured party’s lien on the boat’s certificate of title; in other states, a security interest may be perfected by filing a UCC-1 financing statement, however, a purchase money lien in consumer goods is perfected without any filing requirement and if a boat is required to be documented under Federal law, a preferred mortgage may be obtained under the Ship Mortgage Act by filing the mortgage with the Coast Guard, which is the exclusive method for perfecting security interests in documented boats.

The contracts will represent marine retail installment sale contracts purchased  from Dealers or direct loans to Obligors secured by the Financed Boats.  When originated, each contract will have granted a security interest in the Financed Boat financed thereby.  Each such security interest will be required to be perfected under applicable state law and, in the case of certain Financed Boats described below, under applicable federal law.  Generally, security interests in boats may be perfected in one of three ways:  (i) in “title” states, by notation of the secured party’s lien on the certificate of title issued by an applicable state boat or wildlife department or other appropriate state agency; (ii) in non-title states, by filing a UCC-1 financing statement; and (iii) in respect of a boat eligible for documentation under federal law, by filing all documents necessary to c reate a first preferred ship mortgage (a  ”Preferred  Mortgage”) under the Ship Mortgage Act of 1920 (1988 Recodification) ss. 30101 et seq. (the “Ship Mortgage  Statutes”).  Vessels that meet the federal five net ton standard (determined in a manner  prescribed by 46 CFR Part 69  (Measurement of Vessels)) qualify  for  documentation  under  federal  law  (“U.S. Documentable Boats”).  However, federal documentation of vessels used exclusively for  recreational purposes is discretionary.

In the event that the originator of a contract failed to perfect the security interest in a Financed  Boat (for example, by complying with the UCC rather than the applicable certificate of title statute, or by failing to comply with applicable state title law, or the Ship Mortgage Statutes or applicable United States Coast Guard (the “Coast  Guard”) regulations), such originator would not have a perfected first priority security interest in such Financed Boat.  In this event, if third party liens equal or exceed the value of the Financed Boat, the only recourse of the Issuing Entity would be against the Obligor on an unsecured basis, or, if applicable, against a Dealer or financial intermediary pursuant to its repurchase obligation or against the Seller.

Under the Ship Mortgage Statutes, in the absence of an assignment of record of a Preferred Mortgage, the assignment of the related contract by itself will not convey the perfected preferred mortgage lien on the Financed Boat subject to such Preferred Mortgage and neither the Seller (if not the secured party of record) nor the Issuing Entity will have a perfected security interest in such Financed Boat.  However, to the extent specified in the related Prospectus Supplement, pursuant to the Sale and Servicing Agreement, the Seller will agree to cause filings of the assignments to the Issuing Entity of certain specified Preferred Mortgages (each a “Designated Preferred Mortgage”) showing the chain of ownership of each such Preferred Mortgage from the originator of each such contract to the Issuing Entity, within the time period specified in the related Prospectus Supplement.  However, due to adm inistrative burden and expense, assignments may not be made of all Preferred Mortgages relating to the contracts.  Under the Ship Mortgage Statutes, in the absence of an assignment of a Preferred Mortgage, or in the event an assignment of a Preferred Mortgage is not effective, the Issuing Entity will not have a perfected security interest in the related Financed Boat as against third parties without knowledge of the transfer.  In such case, if third party liens equal or exceed the value of such Financed Boat, the only recourse of the Issuing Entity would be against the related Obligor on an unsecured basis.

Under the laws of many states, certain possessory liens for repairs performed on a Financed Boat and storage, as well as certain rights in favor of federal and state governmental authorities arising from the use of a boat in connection with illegal activities, may take priority over a security interest perfected under state  law.  Certain U.S. federal tax liens may also have  priority over the security interest of a secured  party.  Under the Ship Mortgage Statutes, a Preferred Mortgage supersedes a perfected state law security interest, a state or federally created lien or forfeiture rights (so long as the secured party is innocent of wrongdoing) other than preferred maritime liens such as those arising under federal statutory or common-law for captain’s or crew’s wages, tort claims (so-called “general average” claims) and salvage claims.  Maritime liens arising under federal law or state laws for repair, storage or supplies which are subordinate to a preferred ship mortgage lien typically have priority over state security interests under federal law or under applicable law of the state where the contract was originated or under  applicable law of the state to which the related  Financed  Boats may have been  relocated.  Preferred federal maritime liens are, of course, also prior to all state created security interests or liens.  The Seller will represent in the Sale and Servicing Agreement that, as of the Initial Cut-off Date or Subsequent Cut-off Date, as the case may be, it has no knowledge of any such liens with respect to any Financed Boat related to a contract.  However, such liens could arise at any time during the term of a contract.  No notice will be given to the owner trustee or the indenture trustee in the event such a lien arises.

Generally all of the Receivables name the seller as obligee or assignee and as the secured party. The seller will take all actions necessary under the laws of the state in which the Financed Boat is located to perfect the seller’s security interest in the Financed Boat, including, where applicable, having a notation of its lien recorded on the boat’s certificate of title or file a UCC-1 Financing Statement. If the seller, because of clerical error or otherwise, has failed to take action with respect to Financed Boat, it will not have a perfected security interest and its security interest may be subordinate to the interest of, among others, subsequent purchasers of the Financed Boat that give value without notice of the seller’s security interest and to whom a certificate of ownership is issued in the purchaser’s name, holders of perfected security interests in the Financed Boat and the trust ee in bankruptcy of the obligor. The seller’s security interest may also be subordinate to third parties in the event of fraud or forgery by the obligor or administrative error by state recording officials or in the circumstances noted below.

Pursuant to each Sale and Servicing Agreement and Pooling and Servicing Agreement, the seller will assign its interests in the Financed Boats securing the related Receivables to the related Trust. However, because of administrative burden and expense, neither the seller nor the related trustee will amend any certificate of title to identify the Issuing Entity as the new secured party on the certificates of title relating to the Financed Boats. Unless otherwise specified in the related prospectus supplement, the servicer will hold certificates of title relating to the Financed Boats in its possession as custodian for the Issuing Entity pursuant to the related Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable. See “Description of the Transfer and Servicing Agreements—Sale and Assignment of Primary Assets”.

In most states, assignments such as those under the related Trust Agreement or Pooling and Servicing Agreement, as applicable, are effective conveyances of a security interest in the related Financed Boat without amendment of any lien noted on the boat’s certificate of title, and the assignee succeeds by assignment to the assignor’s rights as secured party. Although re-registration of the boat is not necessary in these states to convey a perfected security interest in the Financed Boats to an Issuing Entity, because the related Issuing Entity will not be listed as legal owner on the certificates of title to the Financed Boats, an Issuing Entity’s security interest could be defeated through fraud or negligence. However, in the absence of fraud or forgery by the boat owner or the servicer or administrative error by state of local agencies, the notation of the seller’s lien on a certificate of t itle will be sufficient to protect an Issuing Entity against the rights of subsequent purchasers of a Financed Boat or subsequent creditors who take a security interest in a Financed Boat. If there are any Financed Boats as to which the seller fails to obtain a first-priority perfected security interest, the Issuing Entity’s security interest would be subordinate to, among others, subsequent purchasers of Financed Boats and holders of perfected security interests in Financed Boats.  A failure, however, would constitute a breach of the seller’s representations and warranties under the related Receivables Purchase Agreement and the seller will be required to repurchase the Receivable from the Trust unless the breach is cured in a timely manner. See “Description of the Transfer and Servicing Agreements—Sale and Assignment of Primary Assets” and “Risk Factors—Potential Lack of Security”.

Under the laws of most states in which a perfected security interest is governed by a certificate of title statute, a perfected security interest in a boat continues for four months after the boat is moved to a new state from the one in which it is initially registered and after until the owner re-registers the boat in the new state. A majority of these states require surrender of a certificate of title to re-register a boat. Accordingly, a secured party must surrender possession if it holds the certificate of title of the boat or, in the case of boats registered in states providing for the notation of a lien on the certificate of title but not possession by the secured party, the secured party would receive notice of surrender from the state of re-registration if the security interest is noted on the certificate of title. Thus, the secured party would have the opportunity to reperfect its security interest in t he boat in the state of relocation. However, these procedural safeguards will not protect the secured party if, through fraud, forgery or administrative error, an obligor somehow procures a new certificate of title that does not list the secured party’s lien. Additionally, in states that do not require a certificate of title for registration of a boat, re-registration could defeat perfection. In the ordinary course of servicing the Receivables, the servicer will take steps to effect re-perfection upon receipt of notice of re-registration or information from the obligor as to relocation. Similarly, when an obligor sells a Financed Boat and the purchaser of that Financed Boat attempts to re-register the boat, the seller must surrender possession of the certificate of title or will receive notice as a result of having its lien noted on the certificate of title and accordingly will have an opportunity to require satisfaction of the related Receivable before its lien is released. Under each Sale and Servicin g Agreement and Pooling and Servicing Agreement, the servicer will be obligated to take appropriate steps, at its own expense, to maintain perfection of security interests in the related Financed Boat is obligated to purchase the related Receivable if it fails to do so.

In states which the perfection of a security interest is governed by the filing of a UCC-1 financing statement, or the obligor moves from a title state to a non-title state, the servicer will file a UCC-1 financing statement in the new state of the obligor as soon as possible after receiving notice of the obligor’s change of residence. UCC-1 financing statements expire after five years. When the term of a loan exceeds five years, the filing must be continued in order to maintain the servicer’s perfected security interest. The servicer takes steps to effect continuation. In the event that an obligor moves to a state other than the state in which the UCC-1 financing statement is filed or in some states to a different county in the state, under the laws of most states the perfection of the security interest in the boat would continue for four months after relocation, unless the perfection in the original jurisdiction would have expired earlier. A new financing statement must be filed in the state of relocation or, if the state is a title state, a notation on the certificate of title must be made in order to continue the security interest. The servicer generally takes steps to effect re-perfection upon notification of an address change. Generally, in both title states and in non-title states, the servicer will not re-perfect a state law security interest which has expired or where the obligor has moved if the Receivable has a small balance, a short remaining term and the obligor has a good payment record.

Under the laws of most states, liens for repairs performed on a boat and liens for unpaid taxes take priority over even a perfected, first-priority security interest in the boat. The Code also grants priority to particular federal tax liens over the lien of a secured party. The laws of some states and federal law permit the confiscation of boats by governmental authorities under some circumstances if used in unlawful activities, which may result in the loss of a secured party’s perfected security interest in a confiscated boat. In each Receivables Purchase Agreement, the seller will represent and warrant that, as of the date any Receivable is sold to the Trust, the security interest in the related Financed Boat is or will be prior to all other present liens, other than tax liens and other liens that arise by operation of law, upon and security interests in the Financed Boat. However, liens for repairs or ta xes could arise, or the confiscation of a Financed Boat could occur, at any time during the term of a Receivable. No notice will be given to the related trustee, the related indenture trustee, if any, or related Securityholders in the event a lien arises or confiscation occurs. Any lien or confiscation arising or occurring after the closing date will not give rise to a repurchase obligation of the seller under the related Receivables Purchase Agreement.

Repossession

In the event of default by an obligor, the holder of the related retail installment sale contract has all the remedies of a secured party under the UCC, except where specifically limited by other state laws. The UCC remedies of a secured party include the right to repossession by self-help means, unless these means would constitute a breach of the peace. Self-help repossession is the method employed by the servicer in most cases and is accomplished simply by taking possession of the related boat. In cases where the obligor objects or raises a defense to repossession, or if otherwise required by applicable state law, a court order must be obtained from the appropriate state court, and the boat must then be recovered in accordance with that order. In some jurisdictions, the secured party is required to notify an obligor debtor of the default and the intent to repossess the collateral and to give the obligor a peri od of time within which to cure the default prior to repossession. Generally, the right to cure may only be exercised on a limited number of occasions during the term of the related contract.

Notice of Sale; Redemption Rights

The UCC and other state laws require the secured party to provide the obligor with reasonable notice of the date, time and place of any public sale and/or the date after which any private sale of the collateral may be held. The obligor has the right to redeem the collateral prior to actual sale by paying the secured party the unpaid principal balance of the obligation, accrued interest on the unpaid principal balance of the obligation, plus reasonable expenses for repossessing, holding and preparing the collateral for disposition and arranging for its sale, plus, in some jurisdictions, reasonable attorneys’ fees or, in some states, by payment of delinquent installments or the unpaid principal balance of the related obligation.

Deficiency Judgments and Excess Proceeds

The proceeds of the resale of any Financed Boat generally will be applied first to the expenses of resale and repossession and then to the satisfaction of the related indebtedness. While some states impose prohibitions or limitations on deficiency judgments if the net proceeds from any resale do not cover the full amount of the indebtedness, a deficiency judgment can be sought in other states that do not prohibit or limit deficiency judgments. However, the deficiency judgment would be a personal judgment against the obligor for the shortfall, and a defaulting obligor can be expected to have very little capital or sources of income available following repossession; in many cases, therefore, it may not be useful to seek a deficiency judgment or, if one is obtained, it may be settled at a significant discount or be uncollectible. In addition to the notice requirement, the UCC requires that every aspect of the sale or other disposition, including the method, manner, time, place and terms, be “commercially reasonable”. Generally, courts have held that when a sale is not “commercially reasonable”, the secured party loses its right to a deficiency judgment. In addition, the UCC permits the debtor or other interested party to recover for any loss caused by noncompliance with the provisions of the UCC. Also, prior to a sale, the UCC permits the debtor or other interested person to restrain the secured party from disposing of the collateral if it is established that the secured party is not proceeding in accordance with the “default” provisions under the UCC.

Occasionally, after the resale of a boat and payment of all related expenses and indebtedness, there is a surplus of funds. In that case, the UCC requires the creditor to remit the surplus to any holder of a subordinate lien with respect to the related boat or, if no subordinate lienholder exists, to the former owner of the boat.

Consumer Protection Laws

Numerous federal and state consumer protection laws and related regulations impose substantial requirements upon creditors and servicers involved in consumer finance. These laws include the Truth-in-Lending Act, the Equal Credit Opportunity Act, the Federal Trade Commission Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board’s Regulations B and Z, the Soldiers’ and Sailors’ Relief Act, state adaptations of the National Consumer Act and of the Uniform Consumer Credit Code, and state boat retail installment sales acts, retail installment sales acts and other similar laws. Also, the laws of some states impose finance charge ceilings and other restrictions on consumer transactions and require contract disclosures in addition to those required under other restrictions on consumer transactions and require contract disclosures in addition to those required under federal law. These requirements impose specific statutory liabilities upon creditors who fail to comply with their provisions. In some cases, this liability could affect the ability of an assignee, such as an issuing entity, to enforce consumer finance contracts such as Receivables.

The so-called “Holder-in-Due-Course” rule of the Federal Trade Commission (the “FTC Rule”), the provisions of which are generally duplicated by the Uniform Consumer Credit Code, other statutes or the common law, has the effect of subjecting a seller in a consumer credit transaction, and some related creditors and their assignees, to all claims and defenses that the obligor in the transaction could assert against the seller of the goods. Liability under the FTC Rule is limited to the amounts paid by the obligor under the contract, and the holder of the contract may also be unable to collect any balance remaining due under the contract from the obligor. Most of the Receivables will be subject to the requirements of the FTC Rule. Accordingly, each issuing entity, as holder of the related Receivables, will be subject to any claims or defenses that the purchasers of the related Financed Boats may assert against the sellers of those Financed Boats. If an obligor were successful in asserting any claims or defenses, the claim or defense would constitute a breach of the seller’s warranties under the related Receivables Purchase Agreement and would create an obligation of the seller to repurchase the Receivable unless the breach is cured in a timely manner. See “Description of the Transfer and Servicing Agreements—Sale and Assignment of Primary Assets”.

Courts have applied general equitable principles to secured parties pursuing repossession and litigation involving deficiency balances. These equitable principles may have the effect of relieving an obligor from some or all of the legal consequences of a default.

In several cases, consumers have asserted that the self-help remedies of secured parties under the UCC and related laws violate the due process protections of the Fourteenth Amendment to the Constitution of the United States. Courts have generally either upheld the notice provisions of the UCC and related laws as reasonable or have found that the creditors’ repossession and resale do not involve sufficient state action to afford constitutional protection to borrowers.

Under each Receivables Purchase Agreement the seller will represent and warrant that each Receivable complies in all material respects with all applicable federal and state laws. Accordingly, if an obligor has a claim against an issuing entity for a violation of any law and that claim materially and adversely affects the interests of the issuing entity in a Receivable, the violation would constitute a breach of the seller’s representation and warranty and would create an obligation of the seller to repurchase the Receivable unless the breach is cured. See “Description of the Transfer and Servicing Agreements—Sale and Assignment of Primary Assets”.

Other Limitations

In addition to the laws limiting or prohibiting deficiency judgments, numerous other statutory provisions, including federal bankruptcy laws and related state laws, may interfere with or affect the ability of a creditor to realize upon collateral or enforce a deficiency judgment. For example, in a Chapter 13 proceeding under the federal bankruptcy law, a court may prevent a creditor from repossessing a boat and, as part of the rehabilitation plan, may reduce the amount of the secured indebtedness to the market value of the boat at the time of bankruptcy, as determined by the court, leaving the party providing financing as a general unsecured creditor for the remainder of the indebtedness. A bankruptcy court may also reduce the monthly payments due under the related contract or change the rate of interest and time of repayment of the indebtedness.

Material Federal Income Tax Consequences

The following is a general discussion of the anticipated material United States federal income tax consequences of the purchase, ownership and disposition of securities.  The summary does not purport to deal with federal income tax consequences applicable to all categories of holders, some of which may be subject to special rules.  For example, it does not discuss the tax treatment of beneficial owners of notes (“Note Owners”) or certificates (“Certificate Owners”) that are insurance companies, regulated investment companies or dealers in securities.  Moreover, there are no cases or Internal Revenue Service (“IRS”) rulings on similar transactions involving both debt and equity interests issued by a trust with terms similar to those of the notes and the certificates.  As a result, the IRS might disagree with all or part of the discussion below.  Prospective i nvestors are urged to consult their own tax advisors in determining the federal, state, local, foreign and any other tax consequences to them of the purchase, ownership and disposition of the notes and the certificates.

The following summary is based upon current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), the Treasury regulations promulgated under the Code and judicial or ruling authority, all of which are subject to change, which change may be retroactive.  Each Trust will be provided with an opinion of tax counsel specified in the related prospectus supplement (“Federal Tax Counsel”) regarding some related federal income tax matters discussed below.  An opinion of Federal Tax Counsel, however, is not binding on the IRS or the courts.  No ruling on any of the issues discussed below will be sought from the IRS.  The opinion of Federal Tax Counsel specifically addresses only those issues specifically identified below as being covered by that opinion; however, the opinion also states that the additional discussion set forth below accurately sets forth the advi ce of Federal Tax Counsel with respect to material federal income tax issues.  For purposes of the following summary, references to the Trust, the notes, the certificates and related terms, parties and documents shall be deemed to refer, unless otherwise specified in this prospectus, to each Trust and the notes, certificates and related terms, parties and documents applicable to the issuing entity.

Trusts That Issue Notes

Tax Characterization of the Trusts.

In the case of an issuing entity that issues one or more classes of notes, Federal Tax Counsel will deliver its opinion that the an issuing entity will not be an association, or publicly traded partnership, taxable as a corporation for federal income tax purposes.  The opinion of Federal Tax Counsel will be based on the assumption that the terms of the Trust Agreement and related documents will be complied with, and on counsel’s conclusions that the nature of the income of the issuing entity, or restrictions, if any, on transfers of the certificates, will exempt the issuing entity from the rule that some publicly traded partnerships are taxable as corporations.

If an issuing entity were taxable as a corporation for federal income tax purposes, the issuing entity would be subject to corporate income tax on its taxable income.  The issuing entity’s taxable income would include all of its income on the related Primary Assets, which might be reduced by its interest expense on the notes.  Any corporate income tax could materially reduce cash available to make payments on the notes and distributions on the certificates, and Certificate Owners, and possibly Note Owners, could be liable for any resulting corporate income tax that is unpaid by the issuing entity.

Tax Consequences to Note Owners.

Treatment of the Notes as Indebtedness.  The issuing entity will agree, and the Note Owners will agree by their purchase of notes, to treat the notes as debt for federal tax purposes.  Federal Tax Counsel will, subject to exceptions which, if applicable, will be specified in the related prospectus supplement, advise the owner trust that the notes will be classified as debt for federal income tax purposes, or classified in any other manner as shall be provided in the related prospectus supplement.  If, contrary to the opinion of Federal Tax Counsel, the IRS successfully asserted that one or more of the classes of notes did not represent debt for federal income tax purposes, the notes would be treated as equity interests in the issuing entity.  If so treated, the issuing entity might be treated as a publicly traded partnership that would be taxable as a corporation unless it met particul ar qualifying income tests, and the resulting taxable corporation would not be able to reduce its taxable income by deductions for interest expense on notes recharacterized as equity.  Treatment of the notes as equity interests in a partnership could have adverse tax consequences to some holders, even if the issuing entity were not treated as a publicly traded partnership taxable as a corporation.  For example, income allocable to foreign holders on such recharacterized notes might be subject to United States tax and United States tax return filing and withholding requirements, income allocable to tax-exempt holders on a recharacterized note would constitute “unrelated business taxable income” if some, but not all, of the notes were recharacterized as equity in a partnership, individual holders might be subject to limitations on their ability to deduct their share of issuing entity expenses, and income from the issuing entity’s assets would be taxable to Note Owners without regard to whether cash distributions are made to such Note Owners and without regard to the Note Owners’ method of tax accounting.  The discussion below assumes that the notes will be characterized as debt for federal income tax purposes.

Interest Income on the Notes-General.  Except as discussed below, interest on a note generally is includable in a Note Owner’s income as ordinary interest income when actually or constructively received, if the Note Owner uses the cash method of accounting for federal income tax purposes, or when accrued, if the Note Owner uses an accrual method of accounting for federal income tax purposes.

Original Issue Discount.  Notes of certain series may be issued with “original issue discount” within the meaning of Section 1273(a) of the Code.  Holders of notes issued with original issue discount generally must include original issue discount in gross income for federal income tax purposes as it accrues, in advance of receipt of the cash attributable to such income, under a method that takes account of the compounding of interest.  The Code requires that information with respect to the original issue discount accruing on any note be reported periodically to the IRS and to certain categories of Note Owners.

Each issuing entity will report original issue discount, if any, to the Note Owners based on the Treasury regulations relating to original issue discount (the “OID Regulations”).  The OID Regulations concerning contingent payment debt instruments do not apply to prepayable debt instruments, such as the notes, and other provisions of the OID Regulations either do not apply as to prepayable securities such as the notes or do not address the unique issues prepayable securities present.

The OID Regulations provide that, in the case of debt instruments such as the notes, (i) the amount and rate of accrual of original issue discount will be calculated based on a reasonable assumed prepayment rate (the “Prepayment Assumption”), and (ii) adjustments will be made in the amount and rate of accrual of such discount to reflect differences between the actual prepayment rate and the Prepayment Assumption.  The method for determining the appropriate assumed prepayment rate will eventually be set forth in Treasury regulations, but those regulations have not yet been issued.  The applicable legislative history indicates, however, that such regulations will provide that the assumed prepayment rate for securities such as the notes will be the rate used in pricing the initial offering of those securities.  If the notes of a series are issued with original issue discount, the Prospectus Supplement for that series of notes will specify the Prepayment Assumption.  However, no representation is made that the notes of that series will, in fact, prepay at a rate based on the Prepayment Assumption or at any other rate.

In general, a note will be considered to be issued with original issue discount if its stated redemption price at maturity exceeds its issue price.  Except as discussed below under”—Payment Lag Notes; Initial Period Considerations,” and”—Qualified Stated Interest,” and in the case of certain Variable Rate Notes (as defined below) and accrual notes, the stated redemption price at maturity of a note is its principal amount.  The issue price of a note is the initial offering price to the public (excluding bond houses and brokers) at which a substantial amount of the class of notes is sold.  Notwithstanding the general definition of original issue discount, such discount will be considered to be zero for any note on which such discount is less than 0.25% of its stated redemption price at maturity multiplied by its weighted average life.  For purposes of this rule, we will compute the weighted average life of a note as the sum, for all distributions included in the stated redemption price at maturity of the note (that is, all payments except payments of qualified stated interest), of the amounts determined by multiplying (i) the number of complete years (rounding down for partial years) from the applicable closing date to the date on which each such distribution is expected to be made, determined under the Prepayment Assumption, by (ii) a fraction, the numerator of which is the amount of such distribution and the denominator of which is the note’s stated redemption price at maturity.  The OID Regulations provide that holders will include any de minimis original issue discount ratably as payments of stated principal are made on the notes.

The Note Owner of a note issued with original issue discount must include in gross income the sum of the “daily portions” of such original issue discount for each day during its taxable year on which it held such note.  In the case of an original Note Owner, the daily portions of original issue discount are determined first by calculating the portion of the original issue discount that accrued during each period (an “accrual period”) that begins on the day following a Distribution Date (or in the case of the first such period, begins on the applicable closing date) and ends on the next succeeding Distribution Date.  The original issue discount accruing during each accrual period is then allocated ratably to each day during such period to determine the daily portion of original issue discount for that day.

The portion of the original issue discount that accrues in any accrual period will equal the excess, if any, of (i) the sum of (A) the present value, as of the end of the accrual period, of all of the distributions to be made on the note, if any, in future periods (taking into account events that have occurred during the accrual period such as prepayments or actual losses) and (B) the distributions made on the note during the accrual period that are included in such note’s stated redemption price at maturity, over (ii) the adjusted issue price of such note at the beginning of the accrual period.  The present value of the remaining distributions referred to in the preceding sentence will be calculated (i) assuming that the notes will be prepaid in future periods at a rate computed in accordance with the Prepayment Assumption and (ii) using a discount rate equal to the original yield to maturity of the n otes.  For these purposes, the original yield to maturity of the notes will be calculated based on their issue price and assuming that the notes will be prepaid in accordance with the Prepayment Assumption.  The adjusted issue price of a note at the beginning of any accrual period will equal the issue price of such note, increased by the portion of the original issue discount that has accrued during prior accrual periods, and reduced by the amount of any distributions made on such note in prior accrual periods that were included in such note’s stated redemption price at maturity.

The daily portions of original issue discount may increase or decrease depending on the extent to which the actual rate of prepayments diverges from the Prepayment Assumption.  If original issue discount accruing during any accrual period computed as described above is negative, a Note Owner may only be entitled to offset such amount against positive original issue discount accruing on such note in future accrual periods.

A subsequent Note Owner that purchases a note issued with original issue discount at a cost that is less than its remaining stated redemption price at maturity will also generally be required to include in gross income, for each day on which it holds such note, the daily portions of original issue discount with respect to the note, calculated as described above.  However, if (i) the excess of the remaining stated redemption price at maturity over such cost is less than (ii) the aggregate amount of such daily portions for all days after the date of purchase until final retirement of such note, then such daily portions will be reduced proportionately in determining the income of such Note Owner.

Qualified Stated Interest.  Interest payable on a note which qualifies as “qualified stated interest” for purposes of the OID Regulations will not be includable in the stated redemption price at maturity of the note.  Conversely, if the interest on a note does not constitute “qualified stated interest,” such interest will be includable in the stated redemption price at maturity of the note and the note, consequently, will have original issue discount.  Interest payments will not qualify as qualified stated interest unless the interest payments are “unconditionally payable.” The OID Regulations state that interest is unconditionally payable if reasonable legal remedies exist to compel timely payment, or the debt instrument otherwise provides terms and conditions that make the likelihood of late payment (other than a late payment that occurs within a reasonable g race period) or nonpayment of interest a remote contingency, as defined in the OID Regulations.   Any terms or conditions that do not reflect arm’s length dealing or that the Note Owner does not intend to enforce are not considered.  Subordinate classes of notes may lack the right to enforce payment until they are the Senior Class.  However, absent guidance to the contrary and unless disclosed in the related prospectus supplement, the Trustee will, for information reporting purposes, treat all stated interest on all classes of notes as qualified stated interest.

Premium.  A purchaser of a note that purchases such note at a cost greater than its remaining stated redemption price at maturity will be considered to have purchased such note at a premium, and may, under Section 171 of the Code, elect to amortize such premium under a constant yield method over the life of the note.  The Prepayment Assumption is probably taken into account in determining the life of the note for this purpose.  Except as provided in regulations, amortizable premium will be treated as an offset to interest income on the note.

Payment Lag Notes; Initial Period Considerations.  Certain notes may provide for distributions of interest based on a period that is the same length as the interval between Distribution Dates but ends prior to each Distribution Date.  Any interest that accrues prior to the applicable closing date may be treated under the OID Regulations either (i) as part of the issue price and the stated redemption price at maturity of the notes or (ii) as not included in the issue price or the stated redemption price.  The OID Regulations provide a special application of the de minimis rule for debt instruments with long first accrual periods where the interest payable for the first period is at a rate which is effectively less than that which applies in all other periods.  In such cases, for the sole purpose of determining whether original issue discount is de minimis, the OID Regulations provide th at the stated redemption price is equal to the instrument’s issue price plus the greater of the amount of foregone interest or the excess (if any) of the instrument’s stated principal amount over its issue price.

Variable Rate Notes.  Under the OID Regulations, notes paying interest at a variable rate (each, a “Variable Rate Note”) are subject to special rules.  A Variable Rate Note will qualify as a “variable rate debt instrument” if (i) its issue price does not exceed the total noncontingent principal payments due under the Variable Rate Note by more than a specified de minimis amount; (ii) it provides for stated interest, paid or compounded at least annually, at a current value of (a) one or more qualified floating rates, (b) a single fixed rate and one or more qualified floating rates, (c) a single objective rate or (d) a single fixed rate and a single objective rate that is a qualified inverse floating rate; and (iii) it does not provide for any principal payments that are contingent, as defined in the OID Regulations, except as provided in (i), above.  The OID Regulations r elating to contingent payment debt instruments do not apply to prepayable debt instruments, such as the notes.  In general, the regulations addressing the treatment of contingent payment obligations require accruing income as a yield comparable to what the issuer would pay on non-contingent debt and then making appropriate adjustments as the contingencies become fixed.  In addition, losses on sale are ordinary to the extent of prior accruals and all gains on sale are ordinary.  As similar approach may ultimately be applied to prepayable obligations such as the notes.

A “qualified floating rate” is any variable rate where variations in the value of such rate can reasonably be expected to measure contemporaneous variations in the cost of newly borrowed funds in the currency in which the Variable Rate Note is denominated.  A multiple of a qualified floating rate will generally not itself constitute a qualified floating rate for purposes of the OID Regulations.  However, a variable rate equal to (i) the product of a qualified floating rate and a fixed multiple that is greater than 0.65 but not more than 1.35 or (ii) the product of a qualified floating rate and a fixed multiple that is greater than 0.65 but not more than 1.35, increased or decreased by a fixed rate will constitute a qualified floating rate for purposes of the OID Regulations.  In addition, under the OID Regulations, two or more qualified floating rates that can reasonably be expected to h ave approximately the same values throughout the term of the Variable Rate Note will be treated as a single qualified floating rate (a “Presumed Single Qualified Floating Rate”).  Two or more qualified floating rates with values within 25 basis points of each other as determined on the Variable Rate Note’s issue date will be conclusively presumed to be a Presumed Single Qualified Floating Rate.  Notwithstanding the foregoing, a variable rate that would otherwise constitute a qualified floating rate, but which is subject to one or more restrictions such as a cap or floor, will not be a qualified floating rate for purposes of the OID Regulations unless the restriction is fixed throughout the term of the Variable Rate Note or the restriction is not reasonably expected as of the issue date to significantly affect the yield of the Variable Rate Note.

An “objective rate” is a rate that is not itself a qualified floating rate but which is determined using a single fixed formula and which is based upon objective financial or economic information.  The OID Regulations also provide that other variable rates may be treated as objective rates if so designated by the IRS in the future.  Despite the foregoing, a variable rate of interest on a Variable Rate Note will not constitute an objective rate if it is reasonably expected that the average value of such rate during the first half of the Variable Rate Note’s term will be either significantly less than or significantly greater than the average value of the rate during the final half of the Variable Rate Note’s term.  Further, an objective rate does not include a rate that is based on information that is within the control of the issuer (or a party related to the issuer) or that is unique to the circumstances of the issuer (or a party related to the issuer).  An objective rate will qualify as a “qualified inverse floating rate” if such rate is equal to a fixed rate minus a qualified floating rate and variations in the rate can reasonably be expected to inversely reflect contemporaneous variations in the qualified floating rate.  The OID Regulations also provide that if a Variable Rate Note provides for stated interest at a fixed rate for an initial period of less than one year followed by a variable rate that is either a qualified floating rate or an objective rate and if the variable rate on the Variable Rate Note’s issue date is intended to approximate the fixed rate, then the fixed rate and the variable rate together will constitute either a single qualified floating rate or objective rate, as the case may be (a “Presumed Single Variable Rate”).  If the value of the variable rate and the initial fixed rate are within 25 basis points of each o ther as determined on the Variable Rate Note’s issue date, the variable rate will be conclusively presumed to approximate the fixed rate.

For Variable Rate Notes that qualify as “variable rate debt instruments” under the OID Regulations and provide for interest at either a single qualified floating rate, a single objective rate, a Presumed Single Qualified Floating Rate or a Presumed Single Variable Rate throughout the term (a “Single Variable Rate Note”), original issue discount is computed as described above in”—Interest Income on the Notes—Original Issue Discount” based on the following: (i) stated interest on the Single Variable Rate Note which is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually will constitute qualified stated interest; (ii) by assuming that the variable rate on the Single Variable Rate Note is a fixed rate equal to: (a) in the case of a Single Variable Rate Note with a qualified floating rate or a qualified inverse floating rate, the value, as of the issue date, of the qualified floating rate or the qualified inverse floating rate or (b) in the case of a Single Variable Rate Note with an objective rate (other than a qualified inverse floating rate), a fixed rate which reflects the reasonably expected yield for such Single Variable Rate Note; and (iii) the qualified stated interest allocable to an accrual period is increased (or decreased) if the interest actually paid during an accrual period exceeds (or is less than) the interest assumed to be paid under the assumed fixed rate described in (ii), above.

In general, any Variable Rate Note other than a Single Variable Rate Note (a “Multiple Variable Rate Note”) that qualifies as a “variable rate debt instrument” will be converted into an “equivalent” fixed rate debt instrument for purposes of determining the amount and accrual of original issue discount and qualified stated interest on the Multiple Variable Rate Note.  The OID Regulations generally require that such a Multiple Variable Rate Note be converted into an “equivalent” fixed rate debt instrument by substituting any qualified floating rate or qualified inverse floating rate provided for under the terms of the Multiple Variable Rate Note with a fixed rate equal to the value of the qualified floating rate or qualified inverse floating rate, as the case may be, as of the Multiple Variable Rate Note’s issue date.  Any objective rate (other than a qualifi ed inverse floating rate) provided for under the terms of the Multiple Variable Rate Note is converted into a fixed rate that reflects the yield that is reasonably expected for the Multiple Variable Rate Note.  (A Multiple Variable Rate Note may not bear more than one objective rate.) In the case of a Multiple Variable Rate Note that qualifies as a “variable rate debt instrument” and provides for stated interest at a fixed rate in addition to either one or more qualified floating rates or a qualified inverse floating rate, the fixed rate is initially converted into a qualified floating rate (or a qualified inverse floating rate, if the Multiple Variable Rate Note provides for a qualified inverse floating rate).  Under such circumstances, the qualified floating rate or qualified inverse floating rate that replaces the fixed rate must be such that the fair market value of the Multiple Variable Rate Note as of the Multiple Variable Rate Note’s issue date is approximately the same as the fair market value of an otherwise identical debt instrument that provides for either the qualified floating rate or qualified inverse floating rate rather than the fixed rate.  Subsequent to converting the fixed rate into either a qualified floating rate or a qualified inverse floating rate, the Multiple Variable Rate Note is then converted into an “equivalent” fixed rate debt instrument in the manner described above.

Once the Multiple Variable Rate Note is converted into an “equivalent” fixed rate debt instrument pursuant to the foregoing rules, the amounts of original issue discount and qualified stated interest, if any, are determined for the “equivalent” fixed rate debt instrument by applying the original issue discount rules to the “equivalent” fixed rate debt instrument in the manner described above in”—Interest Income on the Notes—Original Issue Discount.” A holder of the Multiple Variable Rate Note will account for such original issue discount and qualified stated interest as if the holder held the “equivalent” fixed rate debt instrument.  In each accrual period, appropriate adjustments will be made to the amount of qualified stated interest or original issue discount assumed to have been accrued or paid with respect to the “equivalent” fixed r ate debt instrument in the event that such amounts differ from the actual amount of interest accrued or paid on the Multiple Variable Rate Note during the accrual period.

If a Variable Rate Note does not qualify as a “variable rate debt instrument” under the OID Regulations, then the Variable Rate Note would be treated as a contingent payment debt obligation.  The manner in which a Variable Rate Note would be taxed if such note were treated as a contingent payment debt obligation is not governed by the OID Regulations relating to contingent payment debt obligations which do not apply to prepayable debt instruments, such as the notes, and Treasury regulations do not otherwise address this point and it is unclear how such instruments should be treated.

Market Discount.  A Note Owner that acquires a note at a market discount (that is, a discount that exceeds any unaccrued original issue discount) will recognize gain upon receipt of a principal distribution, regardless of whether the distribution is scheduled or is a prepayment.  In particular, the Note Owner will be required to allocate that principal distribution first to the portion of the market discount on such note that has accrued but has not previously been includable in income, and will recognize ordinary income to that extent.  In general terms, unless Treasury regulations when issued provide otherwise, market discount on a note may be treated, at the election of the holder of the note, as accruing either (i) under a constant yield method, taking into account the Prepayment Assumption, or (ii) in proportion to accruals of original issue discount (or, if there is no original issue discount, in proportion to stated interest on the note).

In addition, a Note Owner may be required to defer deductions for a portion of the Note Owner’s interest expense on any debt incurred or continued to purchase or carry a note purchased with market discount.  The deferred portion of any interest deduction would not exceed the portion of the market discount on the note that accrues during the taxable year in which such interest would otherwise be deductible and, in general, would be deductible when such market discount is included in income upon receipt of a principal distribution on, or upon the sale of, the note.  The Code requires that information necessary to compute accruals of market discount be reported periodically to the IRS and to certain categories of Note Owners.

Notwithstanding the above rules, market discount on a note will be considered to be zero if such discount is less than 0.25% of the remaining stated redemption price at maturity of such note multiplied by its weighted average remaining life.  Weighted average remaining life presumably is calculated in a manner similar to weighted average life (described above under”—Interest Income on the Notes—Original Issue Discount”), taking into account distributions (including prepayments) prior to the date of acquisition of such note by the subsequent purchaser.  If market discount on a note is treated as zero under this rule, the actual amount of such discount must be allocated to the remaining principal distributions on such note in proportion to the amounts of such principal distributions, and when each such distribution is made, gain equal to the discount, if any, allocated to the distribu tion will be recognized.

Election to Treat All Interest Under the Constant Yield Rules.  The OID Regulations allow a holder of a Note to elect to include in gross income all interest that accrues on such debt instrument using the constant yield method.  For purposes of this election, interest includes stated interest, original issue discount, and market discount, as adjusted to account for any premium.  If an election were to be made with respect to a Note with market discount, the Note Owner would be deemed to have made an election to include in income currently market discount with respect to all other debt instruments having market discount that the grantor trust certificateholder acquires during the year of the election or afterward.  See”—Market Discount” above.  Similarly, a Note Owner that makes this election for a Note that is acquired at a premium will be deemed to have made an ele ction to amortize bond premium with respect to all debt instruments having amortizable bond premium that the grantor trust Note Owner owns at the beginning of the first taxable year to which the election applies or acquires afterward.  See “—Premium” above.  The election to accrue interest, discount and premium on a constant yield method with respect to a Note is irrevocable.  Note Owners should consult their own tax advisors regarding the availability or advisability of such an election.

Sales of Notes.  If a note is sold, the seller will recognize gain or loss equal to the difference between the amount realized on the sale and its adjusted basis in the note.  A holder’s adjusted basis in a note generally equals the cost of the note to the holder, increased by income reported by the holder with respect to the note and reduced (but not below zero) by distributions on the note (other than qualified stated interest) received by the holder and by amortized premium.  Subject to the discussion of the rules applicable to contingent payment debt obligations above, any such gain or loss generally will be capital gain or loss provided the note is held as a capital asset, except for gain recognized on the sale of a note by a seller who purchased the note at a market discount would be taxable as ordinary income in an amount not exceeding the portion of such discount that accrued d uring the period the note was held by such seller, reduced by any market discount includable in income under the rules described above under”—Interest Income on the Notes—Market Discount.”  Further, the notes will be “evidences of indebtedness” within the meaning of Section 582(c)(1) of the Code, so that gain or loss recognized from a sale of a note by a bank or other financial institution to which such section applies would be ordinary income or loss.

Allocations of Realized Losses.  The manner losses are claimed on the notes as a result of defaults by the underlying obligors is complex and differs depending on the characterization of the person considered the issuer of the notes for federal tax purposes.  Whether the notes are governed by the loss rules for bad debts under Code Section 166 or for worthless securities under Code Section 165 depends on whether the notes are considered issued by a corporation.  If there is a single corporate holder of the Certificates constituting all of the equity interests in the issuing Trust Fund, then the issuing Trust will be a disregarded entity and the notes will be considered issued by a corporation subject to the loss rules of Code Section 165 (which affects both timing and character of loss for corporate taxpayers, and character and possibly timing for other taxpayers).  If the notes are co nsidered issued by a grantor trust, then the notes may be treated as issued in proportion to the nature of the Certificateholders (e.g, if some Certificateholders are natural persons or partnerships and some are corporations, losses on the notes would be governed in part by Code Section 166 and in part by Code Section 165).  If the notes are considered issued by a partnership then they would be governed by the rules under Code Section 166.  Investors should consult their tax advisors as to the character and timing of any loss that can be claimed with respect to a note.

Short-Term Notes.  In the case of a note with a maturity of one year or less from its issue date (a “Short-Term Note”), no interest is treated as qualified stated interest, and therefore all interest is included in original issue discount.  Note Owners that report income for federal income tax purposes on an accrual method and some other Note Owners, including banks and certain dealers in securities, (collectively, “Short-Term Accruers”) are required to include original issue discount in income on Short-Term Notes on a straight-line basis, unless an election is made to accrue the original issue discount according to a constant yield method based on daily compounding.

Any other Note Owner of a Short-Term Note is not required to accrue original issue discount for federal income tax purposes, unless it elects to do so.  In the case of a Note Owner that is not required, and does not elect, to include original issue discount in income currently, any gain realized on the sale, exchange or retirement of a Short-Term Note is ordinary income to the extent of the original issue discount accrued on a straight-line basis, or, if elected, according to a constant yield method based on daily compounding, through the date of sale, exchange or retirement.  In addition, Note Owners that are not required, and do not elect, to include original issue discount in income currently are required to defer deductions for any interest paid on indebtedness incurred or continued to purchase or carry a Short-Term Note in an amount not exceeding the deferred interest income with respect to the Sh ort-Term Note, which includes both the accrued original issue discount and accrued interest that are payable but that have not been included in gross income, until the deferred interest income is realized.  A Note Owner may elect to apply the foregoing rules, except for the rule characterizing gain on sale, exchange or retirement as ordinary, with respect to “acquisition discount” rather than original issue discount.  Acquisition discount is the excess of the stated redemption price at maturity of the Short-Term Note over the Note Owner’s basis in the Short-Term Note.  This election applies to all obligations acquired by the taxpayer on or after the first day of the first taxable year to which the election applies, unless revoked with the consent of the IRS.  A Note Owner’s tax basis in a Short-Term Note is increased by the amount included in the Note Owner’s income with respect to the note.

Foreign Investors in Notes.  Except as discussed below, a Note Owner that is not a “United States person” (as defined below) generally will not be subject to United States income or withholding tax in respect of a distribution on a note provided that (i) the holder complies to the extent necessary with certain certification requirements, which generally relate to the identity of the beneficial owner and the status of the beneficial owner as a person that is not a United States person (as defined below), (ii) the holder is not a “10-percent shareholder” within the meaning of Section 871(h)(3)(B) of the Code, which could be interpreted to include a person that directly or indirectly owns 10% or more of the certificates in the issuing entity, (iii) the holder is not a “controlled foreign corporation” (as defined in the Code) related to the issuing entity or related to a 10 percent holder of certificates in the issuing entity, and (iv) the holder is not engaged in a United States trade or business, or otherwise subject to federal income tax as a result of any direct or indirect connection to the United States other than through its ownership of a note.  For these purposes, the term “United States person” means (i) a citizen or resident of the United States, (ii) a corporation or partnership (or other entity properly treated as a corporation or partnership for federal income tax purposes) created or organized in or under the laws of the United States or any State thereof or the District of Columbia, (iii) an estate whose income is includable in gross income for United States federal income taxation regardless of its source, and (iv) a trust for which one or more United States persons have the authority to control all substantial decisions and for which a court of the United States can exercise primary supervision over the trust’s administration and certain el igible trusts that have elected to be treated as United States persons.  A “Foreign Person” is any person that is not a United States person.  Each Note Owner should consult its tax advisors regarding the tax documentation and certifications that must be provided to secure the exemption from United States withholding taxes.

Any capital gain realized on the sale, redemption, retirement or other taxable disposition of a note by a Foreign Person generally will be exempt from United States federal income and withholding tax, provided that (i) such gain is not effectively connected with the conduct of a trade or business in the United States by the Foreign Person and (ii) in the case of an individual Foreign Person, the Foreign Person is not present in the United States for 183 days or more in the taxable year.

If the interest, gain or income on a note held by a Foreign Person is effectively connected with the conduct of a trade or business in the United States by the Foreign Person (although exempt from the withholding tax previously discussed if the holder provides an appropriate statement establishing that such income is so effectively connected), the holder generally will be subject to United States federal income tax on the interest, gain or income at regular federal income tax rates.  In addition, if the Foreign Person is a foreign corporation, it may be subject to a branch profits tax equal to 30% of its “effectively connected earnings and profits,” within the meaning of the Code, for the taxable year, as adjusted for certain items, unless it qualifies for a lower rate under an applicable tax treaty (as modified by the branch profits tax rules).

Backup Withholding on Notes.  Distributions made on the notes and proceeds from the sale of notes to or through certain brokers may be subject to a “backup” withholding tax on “reportable payments” (including interest accruals, original issue discount, and, under certain circumstances, distributions in reduction of principal amount) if the holder of the notes fails to comply with certain identification procedures, unless the Note Owner is an exempt recipient under applicable provisions of the Code and, if necessary, demonstrates such status.  Any amounts so withheld from distributions on the notes would be refunded by the IRS or allowable as a credit against the Note Owner’s federal income tax.

Reportable Transactions. Pursuant to recently enacted legislation, a penalty in the amount of $10,000 in the case of a natural person and $50,000 in any other case is imposed on any taxpayer that fails to timely file an information return with the IRS with respect to a “reportable transaction” (as defined in Section 6011 of the Code). The rules defining “reportable transactions” are complex, and include transactions that result in certain losses that exceed threshold amounts. Prospective investors are advised to consult their own tax advisers regarding any possible disclosure obligations in light of their particular circumstances.

Tax Consequences to Certificate Owners of Owner Trust

Treatment of the Issuing Entity as a Partnership.  The correct characterization of a Trust that has issued debt and is not otherwise taxed as a corporation is uncertain.  If the Trust has only a single class of equity and the trustee does not have the authority to accept any additional assets after the initial acquisition of receivables (except within a certain prescribed pre-funding period not exceeding three months) and has very limited powers of investment (for example does not hold any reserve fund that could ultimately flow to the Certificateholders if not needed to pay the noteholders) the Trust could qualify as a grantor trust with interest expense.  As a consequence, each Certificateholder would be treated as owning a pro rata share of the Trust assets, earning income thereon and incurring the expenses of the Trust (including the interest expense on the notes).  See  7;Grantor Trusts.”  If a Trust that issues notes intends to take the position that Certificateholders hold interests in a grantor trust it will be disclosed in the related prospectus supplement.  In addition, it is possible that a Trust that issued notes could qualify as a partnership eligible to make an election under Section 761 to not be taxed under the main partnership provisions of the Code (although certain ancillary provisions, including the rules relating to audits of partnerships, would continue to apply).  Such an election would cause Certificateholders to be treated as essentially the same as holding an interest in a grantor trust.  However, the IRS has recently taken a narrow interpretation of the type of entities that qualify for this election, which may not include a Trust.  If a Trust that is treated as a partnership intends to report in accordance with having made an election under Section 761 to be excluded from the main partnership provisions of the Code the co nsequences of such reporting will be disclosed in the related prospectus supplement along with a description of the consequences of making such an election.  If there is only one Certificateholder in a Trust that represents all of the equity of the Trust for federal income tax purposes, the separate existence of the Trust is disregarded, and the Certificateholder is treated as the owner of all of the assets of the Trust and as the issuer of the notes of the Trust for federal income tax purposes.  For all other Trust that issue notes.  The Trust will agree, and the related Certificate Owners will agree by their purchase of certificates, if there is more than one Certificate Owner, to treat the Trust as a partnership for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, with the assets of the partnership being the assets held by the Trust, the partners of the partnership being the Certificate Owners, including, to the extent relevan t, the seller in its capacity as recipient of distributions from any reserve fund, and the notes being debt of the partnership, and if there is one Certificate Owner, to treat the Certificate Owner as the owner of the assets of the Trust and to treat the Trust as a disregarded entity.  However, the proper characterization of the arrangement involving the Trust, the certificates, the notes, the seller, the depositor and the servicer is not certain because there is no authority on transactions closely comparable to that contemplated in this prospectus.

A variety of alternative characterizations are possible.  For example, because the certificates have certain features characteristic of debt, the certificates might be considered debt of the Trust.  Generally, provided such certificates are issued at or close to face value, any such characterization would not result in materially adverse tax consequences to holders of Certificates as compared to the consequences from treatment of the certificates as equity in a partnership, described below.  The following discussion assumes that the certificates represent equity interests in a partnership.

Partnership Taxation.  As a partnership, the Trust will not be subject to federal income tax.  Rather, each Certificate Owner will be required to take into account separately the Certificate Owner’s allocable share of income, gains, losses, deductions and credits of the Trust, whether or not there is a corresponding cash distribution.  The Trust will generally be required to use an accrual method of accounting and a tax year based on the tax year of its certificateholders.  Thus, cash basis holders will in effect be required to report income from the certificates on the accrual basis and Certificate Owners may become liable for taxes on Trust income even if they have not received cash from the Trust to pay the taxes.  The Trust’s income will consist primarily of interest and finance charges earned on the related Primary Assets, including appropriate adjustments for marke t discount, original issue discount and bond premium, and any gain upon collection or disposition of the Primary Assets.

The Trust’s deductions will consist primarily of interest accruing with respect to the notes, servicing and other fees, and losses or deductions upon collection or disposition of Primary Assets.

The federal income tax treatment of any Collateral Certificates held by the Trust will depend on the terms of the Collateral Certificates and their characterization (for example, as indebtedness) for federal income tax purposes.

The tax items of a partnership are allocable to the partners in accordance with the Code, Treasury regulations and the partnership agreement (i.e., the Trust Agreement and related documents).  To the extent that there is more than one class of equity (or potentially more than one class of equity) the related prospectus supplement will describe the manner in which income from the assets of the Trust Fund will be allocated.

Assuming notes are also issued, all or substantially all of the taxable income allocated to a Certificate Owner that is a pension, profit sharing or employee benefit plan or other tax-exempt entity, including an individual retirement account, will constitute “unrelated business taxable income” generally taxable to the holder under the Code.

An individual taxpayer’s share of expenses of the Trust, including fees to the servicer, but not interest expense, would be miscellaneous itemized deductions and thus deductible only to the extent such expenses plus all other miscellaneous itemized deductions exceeds two percent of the individual’s adjusted gross income.  An individual taxpayer will be allowed no deduction for his share of expenses of the Trust, other than interest, in determining his liability for alternative minimum tax.  In addition, Section 68 of the Code, provides that the amount of itemized deductions otherwise allowable for the taxable year for an individual whose adjusted gross income exceeds a prescribed threshold amount (which is adjusted annually for inflation) will be reduced by the lesser of (1) 3% of the excess of adjusted gross income over the specified threshold amount or (2) 80% of the amount of itemized dedu ctions otherwise allowable for the applicable taxable year.  The reduction under Code Section 68 is itself reduced by one-third for taxable years beginning in 2006 and 2007, two-thirds for taxable years beginning in 2008 and 2009, and fully reduced for taxable years beginning in 2010 with no reduction thereafter.  Accordingly, deductions might be disallowed to the individual in whole or in part and might result in the Certificate Owner being taxed on an amount of income that exceeds the amount of cash actually distributed to the holder over the life of the Trust.  In the case of a partnership that has 100 or more partners and elects to be treated as an “electing large partnership,” 70% of that partnership’s miscellaneous itemized deductions will be disallowed, although the remaining deductions will generally be allowed at the partnership level and will not be subject to the 2% floor that would otherwise be applicable to individual partners.

The Trust intends to make all tax calculations relating to income and allocations to Certificate Owners on an aggregate basis to the extent relevant.  If the IRS were to require that the calculations be made separately for each Primary Asset, the calculations may result in some timing and character differences under some circumstances.

Discount and Premium.  The purchase price paid by the Trust for the related Primary Assets may be greater or less than the remaining principal balance of the Primary Assets at the time of purchase.  If so, the Primary Assets will have been acquired at a premium or market discount, as the case may be.  See “Tax Consequences to Note Owners—Premium” and”— Market Discount” above.  If the Primary Assets are debt instruments, the yield on which may be affected by prepayments, the trust will be required to use a prepayment assumption for purposes of calculating accruals of original issue discount and market discount and amortization of premium.  As indicated above, the Trust will make this calculation on an aggregate basis, but it is possible that the IRS might require that it be recomputed on a Primary Asset-by-Primary Asset basis.  Further, to the ext ent a Primary Asset is a Treasury Strip, Private Label Custody Strip, REFCO Strip or other instrument evidencing ownership of specific interest and/or principal of a particular bond, it will be subject to the rules relating to original issue discount (in lieu of the rules relating to market discount).  See “ Tax Consequences to Note Owners—Original Issue Discount” above.

If the Trust acquires the Primary Assets at a market discount or premium, the Trust will elect to include any market discount in income currently as it accrues over the life of the Primary Assets or to offset any premium against interest income on the Primary Assets.  As indicated above, a portion of the market discount income or premium deduction may be allocated to Certificate Owners.

Section 708 Termination.  Under Section 708 of the Code, the Trust will be deemed to terminate for federal income tax purposes if 50% or more of the capital and profits interests in the Trust are sold or exchanged within a 12-month period.  If a termination occurs under Section 708 of the Code, the Trust will be considered to contribute its assets to a new Trust, which would be treated as a new partnership, in exchange for certificates in the new Trust.  The original Trust will then be deemed to distribute the certificates in the new Trust to each of the owners of certificates in the original Trust in liquidation of the original Trust.  The Trust will not comply with particular technical requirements that might apply when a constructive termination occurs.  As a result, the Trust may be subject to some tax penalties and may incur additional expenses if it is required to comply wit h those requirements.  Furthermore, the Trust might not be able to comply with these requirements due to lack of data.

Disposition of Certificates.  Generally, capital gain or loss will be recognized on a sale of certificates in an amount equal to the difference between the amount realized and the seller’s tax basis in the certificates sold.  Any gain or loss would be long-term capital gain or loss if the Certificate Owner’s holding period exceeded one year.  A Certificate Owner’s tax basis in a Certificate will generally equal its cost, increased by its share of Trust income allocable to the Certificate Owner and decreased by any distributions received or losses allocated with respect to the certificate.  In addition, both the tax basis in the certificates and the amount realized on a sale of a certificate would include the Certificate Owner’s share, determined under Treasury Regulations, of the notes and other liabilities of the Trust.  A Certificate Owner acquiring certifica tes at different prices will generally be required to maintain a single aggregate adjusted tax basis in the certificates and, upon a sale or other disposition of some of the certificates, allocate a portion of the aggregate tax basis to the certificates sold, rather than maintaining a separate tax basis in each certificate for purposes of computing gain or loss on a sale of that certificate.  A portion holding rule is applied, however, if a Certificateholder has held some of its interest in the Partnership Trust Fund for one year or less and some of its interest for more than one year and a “by lot” identification is not permitted.

If a Certificate Owner is required to recognize an aggregate amount of income (not including income attributable to disallowed itemized deductions described above) over the life of the certificates that exceeds the aggregate cash distributions with respect to the certificates, the excess will generally give rise to a capital loss upon the retirement of the certificates.

Allocations Between Transferors and Transferees.  In general, the Trust’s taxable income and losses will be determined monthly and the tax items for a particular calendar month will be apportioned among the Certificate Owners in proportion to the principal amount of certificates owned by them as of the close of the last day of the applicable month.  As a result, a Certificate Owner purchasing certificates may be allocated tax items, which will affect the purchaser’s tax liability and tax basis, attributable to periods before the actual transaction.

The use of a monthly convention may not be permitted by existing Treasury regulations.  If a monthly convention is not allowed, or only applies to transfers of less than all of the partner’s interest, taxable income or losses of the Trust might be reallocated among the Certificate Owners.  The Trust’s method of allocation between transferors and transferees may be revised to conform to a method permitted by future laws, regulations or other IRS guidance.

Section 731 Distributions.  In the case of any distribution to a Certificate Owner, no gain will be recognized to that Certificate Owner to the extent that the amount of any money distributed for that Certificate does not exceed the adjusted basis of that Certificate Owner’s interest in the Certificate.  To the extent that the amount of money distributed exceeds that Certificate Owner’s adjusted basis, gain will be currently recognized.  In the case of any distribution to a Certificate Owner, no loss will be recognized except upon a distribution in liquidation of a Certificate Owner’s interest.  Any gain or loss recognized by a Certificate Owner generally will be capital gain or loss.

Section 754 Election.  In the event that a Certificate Owner sells its certificates at a profit (or loss), the purchasing Certificate Owner will have a higher (or lower) basis in the certificates than the selling Certificate Owner had.  The tax basis of the Trust’s assets will not be adjusted to reflect that higher (or lower) basis unless there is a “substantial basis reduction” within the meaning of Section 734 of the Code or unless the Trust were to file an election under Section 754 of the Code.  Because the trust will most likely qualify as a “securitization partnership” within the meaning of Section 743(f) of the Code, there will not be a substantial basis reduction with respect to the sale of the certificates.  With respect to the election under Section 754 of the Code, in order to avoid the administrative complexities that would be involved in keeping ac curate accounting records, as well as potentially onerous information reporting requirements, the Trust current does not intend to make an election under Section 754 of the Code.  As a result, Certificate Owners might be allocated a greater or lesser amount of Trust income than would be appropriate based on their own purchase price for certificates.

Administrative Matters.  The trustee is required to keep or cause to be kept complete and accurate books of the Trust.  For each trust which is not a fixed pool of assets or that has multiple classes of equity ownership, the trustee will file a partnership information return (IRS Form 1065) with the IRS for each taxable year of the Trust and will report each Certificate Owner’s allocable share of items of Trust income and expense to Certificate Owners and the IRS on Schedule K-1.  The Trust will provide the Schedule K-1 information to nominees that fail to provide the Trust with the information statement described below and the nominees will be required to forward this information to the beneficial owners of the certificates.  Generally, holders must timely file tax returns that are consistent with the information return filed by the Trust or be subject to penalties unless the hol der notifies the IRS of all the inconsistencies.

Under Section 6031 of the Code, any person that holds certificates as a nominee at any time during a calendar year is required to furnish the Trust with a statement containing specific information on the nominee, the beneficial owners and the certificates so held.  The information includes (1) the name, address and taxpayer identification number of the nominee and (2) as to each beneficial owner:  (a) the name, address and identification number of such person, (b) whether such person is a United States person, a tax-exempt entity or a foreign government, an international organization, or any wholly owned agency or instrumentality of either of the foregoing, and (c) particular information on certificates that were held, bought or sold on behalf of the person throughout the year.

In addition, brokers and financial institutions that hold certificates through a nominee are required to furnish directly to the Trust information as to themselves and their ownership of certificates.  A clearing agency registered under Section 17A of the Exchange Act is not required to furnish any information statement to the Trust.  The information referred to above for any calendar year must be furnished to the Trust on or before the following January 31.  Nominees, brokers and financial institutions that fail to provide the Trust with the information described above may be subject to penalties.

The depositor ordinarily will be designated as the tax matters partner for each Trust in the related Trust Agreement and, as the tax matters partner, will be responsible for representing the Certificate Owners in some specific disputes with the IRS.  The Code provides for administrative examination of a partnership as if the partnership were a separate and distinct taxpayer.  Generally, the statute of limitations for partnership items does not expire before the later of three years after the date on which the partnership information return is filed or the last day for filing the return for the applicable year, determined without regard to extensions.  Any adverse determination following an audit of the return of the Trust by the appropriate taxing authorities could result in an adjustment of the returns of the Certificate Owners, and, under some circumstances, a Certificate Owner may be precluded from separately litigating a proposed adjustment to the items of the Trust.  An adjustment could also result in an audit of a Certificate Owner’s returns and adjustments of items not related to the income and losses of the Trust.

A special audit system exists for qualifying large partnerships that have elected to apply a simplified flow-through reporting system under Sections 771 through 777 of the Code.  Unless otherwise specified in the applicable Prospectus Supplement, a Trust will not elect to apply the simplified flow-through reporting system.

Taxation of Tax Exempt Owners.  Certificate Owners that are tax-exempt will be subject to the tax on unrelated business taxable income (also known as UBTI), if the trust has issued other securities that are debt, or treated as debt, for federal income tax purposes.

Taxation of Certain Foreign Certificate Owners.  As used below, the term “Non-United States Owner” means a Certificate Owner that is not a United States person, as defined under “Tax Consequences to Note Owners—Foreign Investors in Notes,” above.

It is not clear whether the Trust would be considered to be engaged in a trade or business in the United States for purposes of federal withholding taxes with respect to Non-United States Owners because there is no clear authority dealing with that issue under facts substantially similar to those described in this Prospectus.  Although it is not expected that the Trust would be engaged in a trade or business in the United States for these purposes, the Trust will withhold as if it were so engaged in order to protect the Trust from possible adverse consequences of a failure to withhold.  The Trust expects to withhold on the portion of its taxable income that is allocable to Non-United States Owners pursuant to Section 1446 of the Code, as if the income were effectively connected to a U.S. trade or business, at a rate equal to the highest income tax rate applicable to corporations for Non-United States O wners that are taxable as corporations and at a rate equal to the highest income tax rate applicable to individuals for all other Non-United States Owners.

Subsequent adoption of Treasury regulations or the issuance of other administrative pronouncements may require the Trust to change its withholding procedures.

Each Non-United States Owner might be required to file a U.S. individual or corporate income tax return on its share of the Trust’s income including, in the case of a corporation, a return in respect of the branch profits tax.  Assuming the Trust is not engaged in a U.S. trade or business, a Non-United States Owner would be entitled to a refund with respect to all or a portion of taxes withheld by the Trust if, in particular, the Owner’s allocable share of interest from the Trust constituted “portfolio interest” under the Code.

The interest, however, may not constitute “portfolio interest” if, among other reasons, the underlying obligation is not in registered form or if the interest is determined without regard to the income of the Trust, in the later case, the interest being properly characterized as a guaranteed payment under Section 707(c) of the Code.  If this were the case, Non-United States Owners would be subject to a United States federal income and withholding tax at a rate of 30 percent on the Trust’s gross income, without any deductions or other allowances for costs and expenses incurred in producing the income, unless reduced or eliminated pursuant to an applicable treaty.  In this case, a Non-United States Owner would only be entitled to a refund for that portion of the taxes, if any, in excess of the taxes that should have been withheld with respect to the interest.

Backup Withholding.  Distributions made on the certificates and proceeds from the sale of the certificates will be subject to a “backup” withholding tax if, in general, the Certificate Owner fails to comply with particular identification procedures, unless the holder is an exempt recipient under applicable provisions of the Code and, if necessary, demonstrates such status.  Any amounts so withheld would be refunded by the IRS or allowable as a credit against the Certificate Owner’s federal income tax.

Reportable Transactions. Pursuant to recently enacted legislation, a penalty in the amount of $10,000 in the case of a natural person and $50,000 in any other case is imposed on any taxpayer that fails to timely file an information return with the IRS with respect to a “reportable transaction” (as defined in Section 6011 of the Code). The rules defining “reportable transactions” are complex, and include transactions that result in certain losses that exceed threshold amounts. Prospective investors are advised to consult their own tax advisers regarding any possible disclosure obligations in light of their particular circumstances.

Grantor Trusts

Characterization.  In the case of a grantor trust, Federal Tax Counsel will deliver its opinion that the Trust will not be classified as an association taxable as a corporation and that the Trust will be classified as a grantor trust under subpart E, Part I of subchapter J of chapter 1 of subtitle A of the Code.  In this case, beneficial owners of certificates (referred to in this Prospectus as “grantor trust certificateholders”) will be treated for federal income tax purposes as owners of a portion of the Trust’s assets as described below.  The certificates issued by a Trust that is treated as a grantor trust are referred to in this Prospectus as “grantor trust certificates”.

Taxation of Grantor Trust Certificateholders.  Subject to the discussion below under “Stripped Certificates” and “Subordinated Certificates,” each grantor trust certificateholder will be treated as the owner of a pro rata undivided interest in the Primary Assets and other assets of the Trust.  Accordingly, and subject to the discussion below of the recharacterization of the Servicing Fee, each grantor trust certificateholder must include in income its pro rata share of the interest and other income from the Primary Assets, including any interest, original issue discount, market discount, prepayment fees, assumption fees, and late payment charges with respect to the assets, and, subject to limitations discussed below, may deduct its pro rata share of the fees and other deductible expenses paid by the Trust, at the same time and to the same extent as these items would be includ ed or deducted by the grantor trust certificateholder if the grantor trust certificateholder held directly a pro rata interest in the assets of the Trust and received and paid directly the amounts received and paid by the Trust.  Any amounts received by a grantor trust certificateholder in lieu of amounts due with respect to any Primary Asset because of a default or delinquency in payment will be treated for federal income tax purposes as having the same character as the payments they replace.

Each grantor trust certificateholder will be entitled to deduct its pro rata share of servicing fees, prepayment fees, assumption fees, any loss recognized upon an assumption and late payment charges retained by the servicer, provided that these amounts are reasonable compensation for services rendered to the Trust.  Grantor trust certificateholders that are individuals, estates or trusts will be entitled to deduct their share of expenses only to the extent these expenses plus all other miscellaneous itemized deductions exceed two percent of the grantor trust certificateholder’s adjusted gross income, and will be allowed no deduction for these expenses in determining their liabilities for alternative minimum tax.  In addition, Section 68 of the Code provides that the amount of itemized deductions otherwise allowable for the taxable year for an individual whose adjusted gross income exceeds a presc ribed threshold amount will be reduced by the lesser of (1) 3% of the excess of adjusted gross income over the specified threshold amount (adjusted annually for inflation) or (2) 80% of the amount of itemized deductions otherwise allowable for the applicable taxable year.  The reduction under Code Section 68 is itself reduced by one-third for taxable years beginning in 2006 and 2007, two-thirds for taxable years beginning in 2008 and 2009, and fully reduced for taxable years beginning in 2010 with no reduction thereafter.  In the case of a partnership that has 100 or more partners and elects to be treated as an “electing large partnership,” 70% of the partnership’s miscellaneous itemized deductions will be disallowed, although the remaining deductions will generally be allowed at the partnership level and will not be subject to the 2% floor that would otherwise be applicable to individual partners.

The servicing compensation to be received by the servicer may be questioned by the IRS as exceeding a reasonable fee for the services being performed in exchange for the servicing compensation, and a portion of the servicing compensation could be recharacterized as an ownership interest retained by the servicer or other party in a portion of the interest payments to be made with respect to the Trust’s assets.  In this event, a certificate might be treated as a Stripped Certificate subject to the stripped bond rules of Section 1286 of the Code and the original issue discount provisions rather than to the market discount and premium rules.  See the discussion below under “—Stripped Certificates”.  Except as discussed below under “Stripped Certificates” or “—Subordinated Certificates,” this discussion assumes that the servicing fees paid to the servicer do not exceed reasonable servicing compensation.

A purchaser of a grantor trust certificate will be treated as purchasing an interest in each Primary Asset in the Trust at a price determined by allocating the purchase price paid for the certificate among all Primary Assets in proportion to their fair market values at the time of the purchase of the certificate.  To the extent that the portion of the purchase price of a grantor trust certificate allocated to a Primary Asset is less than or greater than the portion of the stated redemption price at maturity of the Primary Asset, the interest in the Primary Asset will have been acquired at a discount or premium.  See “—Market Discount” and “—Premium,” below.

The treatment of any discount on a Primary Asset will depend on whether the discount represents original issue discount or market discount.  Except as indicated otherwise in the applicable Prospectus Supplement, it is not expected that any Primary Asset (other than a Primary Asset that is a Treasury Strip, Private Label Custody Strip, REFCO Strip or other instrument evidencing ownership of specific interest and/or principal of a particular bond) will have original issue discount (except as discussed below under “Stripped Certificates” or “Subordinated Certificates”).  For the rules governing original issue discount, see “Trusts That Issue Notes—Tax Consequences to Note Owners—Original Issue Discount” above.  However, in the case of Primary Assets that constitute short-term Government Securities the rules set out above dealing with short-term obligations (see “Trusts That Issue Notes—Tax Consequences to Note Owners— Short-Term Notes” above) are applied with reference to acquisition discount rather than original issue discount, if the obligations constitute “short-term Government obligations” within the meaning of Section 1271(a)(3)(B) of the Code.  Further, if 20 percent or more of the grantor trust certificateholders are Short-Term Accruers, all holders of grantor trust certificates may be required to accrue acquisition discount or original issue discount, as the case may be, with respect to short-term obligations held by the Trust in the same manner as a Short-Term Accruer would accrue such discount.  See “Trusts That Issue Notes—Tax Consequences to Note Owners— Short-Term Notes” above.

The information provided to grantor trust certificateholders will not include information necessary to compute the amount of discount or premium, if any, at which an interest in each Primary Asset is acquired.

Market Discount.  A grantor trust certificateholder that acquires an undivided interest in Primary Assets may be subject to the market discount rules of Sections 1276 through 1278 to the extent an undivided interest in a Primary Asset is considered to have been purchased at a “market discount”.  For a discussion of the market discount rules under the Code, see “Trusts That Issue Notes—Tax Consequences to Note Owners—Market Discount” above.  As discussed above, to the extent a Primary Asset is a Treasury Strip, Private Label Custody Strip, REFCO Strip or other instrument evidencing ownership of specific interest and/or principal of a particular bond, it will be subject to the rules relating to original issue discount (in lieu of the rules relating to market discount).  See “ Tax Consequences to Note Owners—Original Issue Discount” above.

Premium.  To the extent a grantor trust certificateholder is considered to have purchased an undivided interest in a Primary Asset for an amount that is greater than the stated redemption price at maturity of the interest, the grantor trust certificateholder will be considered to have purchased the interest in the Primary Asset with “amortizable bond premium” equal in amount to the excess.  For a discussion of the rules applicable to amortizable bond premium, see “Trusts That Issue Notes—Tax Consequences to Note Owners—Premium” above.

Stripped Certificates.  Some classes of certificates may be subject to the stripped bond rules of Section 1286 of the Code and for purposes of this discussion will be referred to as “Stripped Certificates.” In general, a Stripped Certificate will be subject to the stripped bond rules where there has been a separation of ownership of the right to receive some or all of the principal payments on a Primary Asset from ownership of the right to receive some or all of the related interest payments.  In general, where a separation has occurred, under the stripped bond rules of Section 1286 of the Code, the holder of a right to receive a principal or interest payment on the bond is required to accrue into income, on a constant yield basis under rules governing original issue discount (see “Trusts That Issue Notes—Tax Consequences to Note Owners—Original Issue Discount”), th e difference between the holder’s initial purchase price for the right to receive and the principal or interest payment to be received with respect to that right.

Certificates will constitute Stripped Certificates and will be subject to these rules under various circumstances, including the following:

•

if any servicing compensation is deemed to exceed a reasonable amount (see “Taxation of Grantor Trust Certificateholders,” above);

•

if the depositor or any other party retains a retained yield with respect to the Primary Assets held by the Trust;

•

if two or more classes of certificates are issued representing the right to non-pro rata percentages of the interest or principal payments on the Trust’s assets; or

•

if certificates are issued which represent the right to interest-only payments or principal-only payments.

The tax treatment of the Stripped Certificates with respect to the application of the original issue discount provisions of the Code is currently unclear.  However, the trustee intends to treat each Stripped Certificate as a single debt instrument issued on the day it is purchased for purposes of calculating any original issue discount.  Original issue discount with respect to a Stripped Certificate must be included in ordinary gross income for federal income tax purposes as it accrues in accordance with the constant yield method that takes into account the compounding of interest and this accrual of income may be in advance of the receipt of any cash attributable to that income.  See “Trusts That Issue Notes—Tax Consequences to Note Owners—Original Issue Discount” above.  For purposes of applying the original issue discount provisions of the Code, the issue price of a Str ipped Certificate will be the purchase price paid by each holder of the Stripped Certificate and the stated redemption price at maturity may include the aggregate amount of all payments to be made with respect to the Stripped Certificate whether or not denominated as interest.  The amount of original issue discount with respect to a Stripped Certificate may be treated as zero under the original issue discount de minimis rules described above.

The precise tax treatment of Stripped Coupon Certificates is substantially uncertain.  The Code could read literally to require that OID computations be made for each payment from each receivable.  However, based on IRS guidance, it appears that all payments from a receivable underlying a Stripped Coupon Certificate should be treated as a single installment obligation subject to the OID rules of the Code, in which case, all payments from the receivable would be included in the receivable’s stated redemption price at maturity for purposes of calculating income on the Stripped Coupon Certificate under the OID rules of the Code.

Based on current authority it is unclear under what circumstances, if any, the prepayment of receivables will give rise to a loss to the holder of a Stripped Bond Certificate purchased at a premium or a Stripped Coupon Certificate.  The Code provides that a prepayment assumption must be used to accrue income on any pool of debt instruments the yield on which can be affected by prepayments.  There is no guidance as to whether a Stripped Coupon Certificate or Stripped Bond Certificate would represent an interest in a pool of debt instruments for purposes of this Code provision.  In addition, the manner in which to take prepayments into account is uncertain.  It is possible that no loss may be available as a result of any particular prepayment, except perhaps to the extent that even if no further prepayments were received a Certificateholder would be unable to recover its basis.  In additio n, amounts received in redemption for debt instruments issued by natural persons purchased or issued after June 8, 1997 are treated as received in exchange therefor (that is treated the same as obligations issued by corporations).  This change could affect the character of any loss.

Holders of Stripped Bond Certificates and Stripped Coupon Certificates are encouraged to consult with their own tax advisors regarding the proper treatment of these certificates for federal income tax purposes.

Subordinated Certificates.  In the event the Trust issues two classes of grantor trust certificates that are identical except that one class is a subordinate class, with a relatively high certificate pass-through rate, and the other is a senior class, with a relatively low certificate pass-through rate (referred to in this Prospectus as the “Subordinate Certificates” and “Senior Certificates”, respectively), the grantor trust certificateholders in the aggregate will be deemed to have acquired the following assets: (1) the principal portion of each Primary Asset plus a portion of the interest due on each Primary Asset (the “Trust Stripped Bond”), and (2) a portion of the interest due on each Primary Asset equal to the difference between the certificate pass-through rate on the Subordinate Certificates and the certificate pass-through rate on the Senior Certificates, if an y, which difference is then multiplied by the Subordinate Class Percentage (the “Trust Stripped Coupon”).  The “Subordinate Class Percentage” equals the initial aggregate principal amount of the Subordinate Certificates divided by the sum of the initial aggregate principal amount of the Subordinate Certificates and the Senior Certificates.  The “Senior Class Percentage” equals the initial aggregate principal amount of the Senior Certificates divided by the sum of the initial aggregate principal amount of the Subordinate Certificates and the Senior Certificates.

The Senior Certificateholders in the aggregate will own the Senior Class Percentage of the Trust Stripped Bond and accordingly each Senior Certificateholder will be treated as owning its pro rata share of such asset.  The Senior Certificateholders will not own any portion of the Trust Stripped Coupon.  The Subordinate Certificateholders in the aggregate own both the Subordinate Class Percentage of the Trust Stripped Bond plus 100% of the Trust Stripped Coupon, if any, and accordingly each Subordinate Certificateholder will be treated as owning its pro rata share in both assets.  The Trust Stripped Bond will be treated as a “stripped bond” and the Trust Stripped Coupon will be treated as “stripped coupons” within the meaning of Section 1286 of the Code.

Although not entirely clear, the interest income on the Subordinate Certificates and the portion of the Servicing Fee allocable to such certificates that does not constitute excess servicing will be treated by the Trust as qualified stated interest, assuming the interest with respect to the Primary Assets would otherwise qualify as qualified stated interest.  Accordingly, except to the extent modified below, the income of the Subordinate Certificates will be reported in the same manner as described generally above for holders of Senior Certificates.

If the Subordinate Certificateholders receive distribution of less than their share of the Trust’s receipts of principal or interest (the “Shortfall Amount”) because of the subordination of the Subordinate Certificates, holders of Subordinate Certificates would probably be treated for federal income tax purposes as if they had

received as distributions their full share of receipts;

paid over to the Senior Certificateholders an amount equal to the Shortfall Amount; and

retained the right to reimbursement of the relevant amounts to the extent these amounts are otherwise available as a result of collections on the Primary Assets or amounts available from a reserve account or other form of credit enhancement, if any.

Under this analysis,

Subordinate Certificateholders would be required to accrue as current income any interest income, original issue discount, or (to the extent paid on assets of the Trust) accrued market discount of the Trust that was a component of the Shortfall Amount, even though that amount was in fact paid to the Senior Certificateholders;

a loss would only be allowed to the Subordinate Certificateholders when their right to receive reimbursement of the Shortfall Amount became worthless (i.e., when it becomes clear that amount will not be available from any source to reimburse the loss); and

reimbursement of the Shortfall Amount prior to a claim of worthlessness would not be taxable income to Subordinate Certificateholders because the amount was previously included in income.

Those results should not significantly affect the inclusion of income for Subordinate Certificateholders on the accrual method of accounting, but could accelerate inclusion of income to Subordinate Certificateholders on the cash method of accounting by, in effect, placing them on the accrual method.  Moreover, the character and timing of loss deductions are unclear.  Subordinate Certificateholders are strongly urged to consult their own tax advisors regarding the appropriate timing, amount and character of any losses sustained with respect to the Subordinate Certificates including any loss resulting from the failure to recover previously accrued interest or discount income.

Election to Treat All Interest as Original Issue Discount.  The Treasury Regulations relating to original issue discount permit a grantor trust certificateholder to elect to accrue all interest, discount, including de minimis market or original issue discount, reduced by any premium, in income as interest, based on a constant yield method.  If an election were to be made with respect to an interest in a Primary Asset with market discount, the Certificate Owner would be deemed to have made an election to include in income currently market discount with respect to all other debt instruments having market discount that the grantor trust certificateholder acquires during the year of the election or afterward.  See”—Market Discount” above.  Similarly, a grantor trust certificateholder that makes this election for an interest in a Primary Asset that is acquired at a premium wi ll be deemed to have made an election to amortize bond premium with respect to all debt instruments having amortizable bond premium that the grantor trust certificateholder owns at the beginning of the first taxable year to which the election applies or acquires afterward.  See “—Premium” above.  The election to accrue interest, discount and premium on a constant yield method with respect to a grantor trust certificate is irrevocable.

Sale or Exchange of a Grantor Trust Certificate.  Sale or exchange of a grantor trust certificate prior to its maturity will result in gain or loss equal to the difference, if any, between the amount realized, exclusive of amounts attributable to accrued and unpaid interest, which will be treated as ordinary income, allocable to the Primary Asset and the owner’s adjusted basis in the grantor trust certificate.  The adjusted basis generally will equal the seller’s cost for the grantor trust certificate, increased by the original issue discount and any market discount included in the seller’s gross income with respect to the grantor trust certificate, and reduced, but not below zero, by any premium amortized by the seller and by principal payments on the grantor trust certificate previously received by the seller.  The gain or loss will, except as discussed below, be capital ga in or loss to an owner for which the Primary Assets represented by a grantor trust certificate are “capital assets” within the meaning of Section 1221.  A capital gain or loss will be long-term or short-term depending on whether or not the grantor trust certificate has been owned for the long-term capital gain holding period, currently more than one year.

Notwithstanding the foregoing, any gain realized on the sale or exchange of a grantor trust certificate will be ordinary income to the extent of the seller’s interest in accrued market discount on Primary Assets not previously taken into income.  See “—Market Discount,” above.  Further, grantor trust certificates will represent “evidences of indebtedness” within the meaning of Section 582(c)(1) to the extent these assets of the grantor trust would be so treated.  Accordingly, gain or loss recognized from the sale of a grantor trust certificate by a bank or thrift institution to which such section applied will be treated as ordinary gain or loss to the extent selling the assets of the grantor trust directly would be so treated.

Foreign Investors in Grantor Trust Certificates.  A holder of grantor trust certificate who is not a “United States person” (as defined above at “Trusts That Issue Notes—Tax Consequences to Note Owners—Foreign Investors in Notes”) and is not subject to federal income tax as a result of any direct or indirect connection to the United States other than its ownership of a grantor trust certificate generally will not be subject to United States income or withholding tax in respect of payments of interest or original issue discount on its grantor trust certificate to the extent attributable to debt obligations held by the Trust that were originated after July 18, 1984, provided that the grantor trust certificateholder complies to the extent necessary with certain certification requirements which generally relate to the identity of the beneficial owner and the status of the be neficial owner as a person that is not a United States person.  Interest or original issue discount on a grantor trust certificate attributable to debt obligations held by the Trust that were originated prior to July 19, 1984 will be subject to a 30% withholding tax (unless such tax is reduced or eliminated by an applicable tax treaty).  All holders of grantor trust certificates should consult their tax advisors regarding the tax documentation and certifications that must be provided to secure any applicable exemptions from United States withholding taxes.

Any capital gain realized on the sale or other taxable disposition of a grantor trust certificate by a Foreign Person (as defined above at “Trusts That Issue Notes—Tax Consequences to Note Owners—Foreign Investors in Notes”) generally will be exempt from United States federal income and withholding tax, provided that (i) such gain is not effectively connected with the conduct of a trade or business in the United States by the Foreign Person and (ii) in the case of an individual Foreign Person, the Foreign Person is not present in the United States for 183 days or more in the taxable year.

If the interest, gain or income with respect to a grantor trust certificate held by a Foreign Person is effectively connected with the conduct of a trade or business in the United States by the Foreign Person (although exempt from the withholding tax previously discussed if the holder provides an appropriate statement establishing that such income is so effectively connected), the holder generally will be subject to United States federal income tax on the interest, gain or income at regular federal income tax rates.  In addition, if the Foreign Person is a foreign corporation, it may be subject to a branch profits tax equal to 30% of its “effectively connected earnings and profits,” within the meaning of the Code, for the taxable year, as adjusted for certain items, unless it qualifies for a lower rate under an applicable tax treaty (as modified by the branch profits tax rules).

Backup Withholding.  Distributions made on the grantor trust certificates and proceeds from the sale of the grantor trust certificates will be subject to a “backup” withholding tax if, in general, the grantor trust certificateholder fails to comply with particular identification procedures, unless the holder is an exempt recipient under applicable provisions of the Code and, if necessary, demonstrates such status.  Any amounts so withheld would be refunded by the IRS or allowable as a credit against the grantor trust certificateholder’s federal income tax.

Reportable Transactions. Pursuant to recently enacted legislation, a penalty in the amount of $10,000 in the case of a natural person and $50,000 in any other case is imposed on any taxpayer that fails to timely file an information return with the IRS with respect to a “reportable transaction” (as defined in Section 6011 of the Code). The rules defining “reportable transactions” are complex, and include transactions that result in certain losses that exceed threshold amounts. Prospective investors are advised to consult their own tax advisers regarding any possible disclosure obligations in light of their particular circumstances.

Penalty Avoidance

The summary of tax considerations contained herein was written to support the promotion and marketing of the securities, and was not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding United States federal income tax penalties that may be imposed. Each taxpayer is encouraged to seek advice based on the taxpayer's particular circumstances from an independent tax advisor.

State and Local Tax Considerations

The discussion above does not address the tax consequences of purchase, ownership or disposition of certificates or notes under any state or local tax laws.  We recommend that investors consult their own tax advisors regarding state and local tax consequences.  In particular, individuals should consider the deductibility of the expenses (including interest expense) of the partnership.

* * *

THE TAX DISCUSSIONS SET FORTH ABOVE ARE INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A NOTE OWNER’S OR CERTIFICATE OWNER’S PARTICULAR TAX SITUATION.  PROSPECTIVE PURCHASERS OF NOTES OR CERTIFICATES SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF NOTES AND CERTIFICATES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL AND FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.

ERISA Considerations

General

A fiduciary of a pension, profit-sharing, retirement or other employee benefit plan subject to Title I of ERISA should consider the fiduciary standards under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) in the context of the plan’s particular circumstances before authorizing an investment of a portion of such plan’s assets in the Securities.  Accordingly, pursuant to Section 404 of ERISA, such fiduciary should consider among other factors (i) whether the investment is for the exclusive benefit of plan participants and their beneficiaries; (ii) whether the investment satisfies the applicable diversification requirements; (iii) whether the investment is in accordance with the documents and instruments governing the plan; and (iv) whether the investment is prudent, considering the nature of the investment.  Fiduciaries of plans also should consider ERISA
46;s prohibition on improper delegation of control over, or responsibility for, plan assets.

In addition, employee benefit plans or other retirement arrangements subject to ERISA, as well as individual retirement accounts, certain types of Keogh plans not subject to ERISA but subject to Section 4975 of the Code, or any entity (including insurance depositor separate or general accounts) whose underlying assets include plan assets by reason of such plans, arrangements or accounts investing in the entity (each, a “Plan”) are prohibited from engaging in a broad range of transactions involving Plan assets and persons having certain specified relationships to a Plan (“parties in interest” and “disqualified persons”).  Such transactions are treated as “prohibited transactions” under Sections 406 of ERISA and excise taxes and/or other penalties are imposed upon such persons under ERISA and/or Section 4975 of the Code unless an exemption applies.  The depositor, underwriter of the Securities, the servicer, the trustee, the indenture trustee and certain of their affiliates might be considered “parties in interest” or “disqualified persons” with respect to a Plan.  If so, the acquisition, holding or disposition of Securities by or on behalf of such Plan could be considered to give rise to a “prohibited transaction” within the meaning of ERISA and the Code unless a statutory, regulatory or administrative exception or exemption is available.

ERISA Considerations Relating to Certificates

Plan Assets.  In 29 C.F.R §2510.3-101 (the “Plan Asset Regulations”), the U.S. Department of Labor (“DOL”) has defined what constitutes “plan assets” for purposes of ERISA and Section 4975 of the Code.  The Plan Asset Regulations provide that if a Plan makes an investment in an “equity interest” in an entity, an undivided portion of the assets of the entity will be considered the assets of such Plan unless certain exceptions set forth in such Regulations apply.  The Certificates will be deemed an equity interest for purposes of the Plan Asset Regulations, and the depositor can give no assurance that the Certificates will qualify for any of the exceptions under the Plan Asset Regulations.  As a result, (i) a Plan may be deemed to have acquired an interest in the assets of the Trust and not merely an interest in the Certificates, (ii) the fidu ciary investment standards of ERISA could apply to such assets and (iii) transactions occurring in the course of managing, operating and servicing the Trust and its assets might constitute prohibited transactions, unless a statutory, regulatory or administrative exemption applies.

Underwriter Exemption

General Discussion.  The DOL has granted to Deutsche Bank Securities Inc. an individual exemption, Prohibited Transaction Exemption 94-84, and to Deutsche Morgan Grenfell/C.J. Lawrence Inc., similar approval (FAN 97-03E), which were both amended and restated pursuant to Prohibited Transaction Exemption 2002-41 (“PTE 2002-41”) (collectively, the “Exemption”) which is applicable to Certificates which meet its requirements whenever Deutsche Bank Securities Inc. or its affiliate is the sole underwriter, manager or co-manager of an underwriting syndicate or is the selling or placement agent.  The Exemption generally exempts certain transactions from the application of certain of the prohibited transaction provisions of ERISA and the Code provided that the conditions set forth in the Exemption are satisfied.  These transactions include the servicing, managing and operation of investment trusts holding fixed (generally non-revolving pools) of enumerated categories of assets which include (i) the Receivables and (ii) securities previously issued under the Exemption and the purchase, sale and holding of Certificates which represent beneficial ownership interests in the assets of such trusts.

General Conditions of Exemption.  The Exemption sets forth general conditions which must be satisfied for a transaction involving the purchase, sale and holding of the Certificates to be eligible for exemptive relief thereunder.  First, the acquisition of Certificates by Plans must be on terms that are at least as favorable to the Plan as they would be in an arm’s-length transaction with an unrelated party.  Second, the receivables held by the issuing entity must be secured.  Third, unless the Certificates are issued in “designated transactions” (as described below) and are backed by fully-secured Receivables, they may not be subordinated.  Fourth, the Certificates at the time of acquisition by the Plan must be rated in one of the three (or in the case of designated transactions, four) highest generic rating categories by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., Moody’s Investors Services, Inc. or Fitch, Inc. (each, a “Rating Agency”).  Fifth, the trustee and the indenture trustee generally cannot be affiliates of any member of the “Restricted Group” other than the underwriter.  The “Restricted Group” consists of any (i) underwriter as defined in the Exemption, (ii) the depositor, (iii) the servicer, (iv) the counterparty of any “interest swap” (as described below) held as an asset of the issuing entity and (v) any obligor with respect to Receivables constituting more than 5% of the aggregate unamortized principal balance of the Receivables held in the issuing entity as of the date of initial issuance of the Certificates.  Sixth, the sum of all payments made to, and retained by, such underwriters must represent not more than reasonable compensation for underwriting the Certificates; the sum of all payments made to, and retained by, the depositor pursuant to th e assignment of the Receivables to the related issuing entity must represent not more than the fair market value of such Receivables; and the sum of all payments made to, and retained by, the servicer must represent not more than reasonable compensation for such person’s services under the Agreement and reimbursement of such person’s reasonable expenses in connection therewith.  Seventh, (i) the investment pool must consist only of assets of the type enumerated in the Exemption and which have been included in other investment pools; (ii) Certificates evidencing interests in such other investment pools must have been rated in one of the three (or in the case of designated transactions, four) highest generic rating categories by one of the Rating Agencies for at least one year prior to a Plan’s acquisition of Certificates; and (iii) Certificates evidencing interests in such other investment pools must have been purchased by investors other than Plans for at least one year prior to a Plan
46;s acquisition of Certificates.  Finally, the investing Plan must be an accredited investor as defined in Rule 501(a)(1) of Regulation D of the Commission under the Securities Act of 1933, as amended.  The depositor assumes that only Plans which are accredited investors under the federal securities laws will be permitted to purchase the Certificates.

Types of Trusts.  The types of issuing entities permitted under the Exemption include owner-trusts, as well as grantor trusts.  Owner-trusts are subject to certain restrictions in their governing documents to ensure that their assets may not be reached by the creditors of the depositor in the event of bankruptcy or other insolvency and must provide certain legal opinions.

Designated Transactions.  In the case where the Certificates are backed by Trust assets such as the Receivables which are secured boat receivables, credit instruments or obligations that bear interest or are purchased a discount as described and defined in the Exemption as designated transactions (“Designated Transactions”), the Exemption permits the Certificates issued by the Trust in such transactions to be rated in one of the highest four generic rating categories by a Rating Agency and/or to be subordinated.  The Receivables are the type of assets which qualify for Designated Transaction treatment unless otherwise specified in the Prospectus Supplement.

Coverage of Certificates Not Exemption Eligible.  In the event that Certificates do not meet the requirements of the Exemption solely because they are Subordinate Certificates or fail to meet a minimum rating requirement under the Exemption, certain Plans may be eligible to purchase Certificates pursuant to Section III of Prohibited Transaction Class Exemption 95-60 (“PTCE 95-60”) which permits insurance depositor general accounts as defined in PTCE 95-60 to purchase such Certificates if they otherwise meet all of the other requirements of the Exemption.

Permitted Assets.  The Exemption permits an interest-rate swap to be an asset of an issuing entity which issues Certificates acquired by Plans in an initial offering or in the secondary market.  An interest-rate swap (or if purchased by or on behalf of the issuing entity) an interest-rate cap contract (collectively, a “Swap” or “Swap Agreement”) is a permitted issuing entity asset if it:  (a) is an “eligible Swap;” (b) is with an “eligible counterparty;” (c) is purchased by a “qualified plan investor;” (d) meets certain additional specific conditions which depend on whether the Swap is a “ratings dependent Swap” or a “non-ratings dependent Swap” and (e) permits the issuing entity to make termination payments to the Swap (other than currently scheduled payments) solely from excess spread or amounts otherwise payable to the servicer or depositor.

An “eligible Swap” is one which:  (a) is denominated in U.S. dollars; (b) pursuant to which the issuing entity pays or receives, on or immediately prior to the respective payment or distribution date for the class of Certificates to which the Swap relates, a fixed rate of interest or a floating rate of interest based on a publicly available index (e.g., LIBOR or the U.S. Federal Reserve’s Cost of Funds Index (COFI)), with the issuing entity receiving such payments on at least a quarterly basis and obligated to make separate payments no more frequently than the counterparty, with all simultaneous payments being netted (“Allowable Interest Rate”); (c) has a notional amount that does not exceed either:  (i) the principal balance of the class of Certificates to which the Swap relates, or (ii) the portion of the principal balance of such class represented by obligations ( 7;Allowable Notional Amount”); (d) is not leveraged (i.e., payments are based on the applicable notional amount, the day count fractions, the fixed or floating rates permitted above, and the difference between the products thereof, calculated on a one-to-one ratio and not on a multiplier of such difference) (“Leveraged”); (e) has a final termination date that is either the earlier of the date on which the issuer terminates or the related class of Certificates are fully repaid and (f) does not incorporate any provision which could cause a unilateral alteration in the requirements described in (a) to (d) above.

An “eligible counterparty” means a bank or other financial institution which has a rating at the date of issuance of the Certificates, which is in one of the three highest long-term credit rating categories or one of the two highest short-term credit rating categories, utilized by at least one of the Rating Agencies rating the Certificates; provided that, if a counterparty is relying on its short-term rating to establish eligibility hereunder, such counterparty must either have a long-term rating in one of the three highest long-term rating categories or not have a long-term rating from the applicable Rating Agency.

A “qualified plan investor” is a Plan or Plans where the decision to buy such class of Certificates is made on behalf of the Plan by an independent fiduciary qualified to understand the Swap transaction and the effect the Swap would have on the rating of the Certificates and such fiduciary is either (a) a “qualified professional asset manager” (“QPAM”) under Prohibited Transaction Class Exemption 84-14 (“PTCE 84-14”) (see below), (b) an “in-house asset manager” under Prohibited Transaction Class Exemption 96-23 (“PTCE 96-23”) (see below) or (c) has total assets (both Plan and non-Plan) under management of at least $100 million at the time the Certificates are acquired by the Plan.

In “ratings dependent Swaps” (where the rating of a class of Certificates is dependent on the terms and conditions of the Swap), the Swap Agreement must provide that if the credit rating of the counterparty is withdrawn or reduced by any Rating Agency below a level specified by the Rating Agency, the servicer must, within the period specified under the Pooling and Servicing Agreement:  (a) obtain a replacement Swap Agreement with an eligible counterparty which is acceptable to the Rating Agency and the terms of which are substantially the same as the current Swap Agreement (at which time the earlier Swap Agreement must terminate); or (b) cause the Swap counterparty to establish any collateralization or other arrangement satisfactory to the Rating Agency such that the then current rating by the Rating Agency of the particular class of Certificates will not be withdrawn or reduced (and the terms of the Swap Agreement must specifically obligate the counterparty to perform these duties for any class of Certificates with a term of more than one year).  In the event that the servicer fails to meet these obligations, Plan certificateholders must be notified in the immediately following periodic report which is provided to certificateholders but in no event later than the end of the second month beginning after the date of such failure.  Sixty days after the receipt of such report, the exemptive relief provided under the Exemption will prospectively cease to be applicable to any class of Certificates held by a Plan which involves such ratings dependent Swap.

“Non-ratings dependent Swaps” (those where the rating of the Certificates does not depend on the terms and conditions of the Swap) are subject to the following conditions. If the credit rating of the counterparty is withdrawn or reduced below the lowest level permitted above, the servicer will, within a specified period after such rating withdrawal or reduction: (a) obtain a replacement Swap Agreement with an eligible counterparty, the terms of which are substantially the same as the current Swap Agreement (at which time the earlier Swap Agreement must terminate); (b) cause the counterparty to post collateral with the issuing entity in an amount equal to all payments owed by the counterparty if the Swap transaction were terminated; or (c) terminate the Swap Agreement in accordance with its terms.

An “eligible yield supplement agreement” is any yield supplement agreement or similar arrangement (or if purchased by or on behalf of the issuing entity) an interest rate cap contract to supplement the interest rates otherwise payable on obligations held by the Trust (“EYS Agreement”).  If the EYS Agreement has a notional principal amount and/or is written on an International Swaps and Derivatives Association, Inc. (ISDA) form, the EYS Agreement may only be held as an asset of the issuing entity if it meets the following conditions:  (a) it is denominated in U.S. dollars; (b) it pays an Allowable Interest Rate; (c) it is not Leveraged; (d) it does not allow any of these three preceding requirements to be unilaterally altered without the consent of the trustee; (e) it is entered into between the issuing entity and an eligible counterparty and (f) it has an Allowable Notional Amount.< /P>

Pre-Funding Accounts.  The Exemption extends exemptive relief to Certificates issued in transactions using pre-funding accounts whereby a portion of the Receivables backing the Certificates are transferred to the issuing entity within a specified period following the Closing Date (“DOL Pre-Funding Period”) (see below) instead of requiring that all such Receivables be either identified or transferred on or before the Closing Date, provided that the following conditions are met.  First, the ratio of the amount allocated to the Pre-Funding Account to the total principal amount of the Certificates being offered (“Pre-Funding Limit”) must not exceed twenty-five percent (25%).  Second, all Receivables transferred after the Closing Date (referred to here as “Additional Receivables”) must meet the same terms and conditions for eligibility as the original Receivables us ed to create the issuing entity, which terms and conditions have been approved by the Rating Agency.  Third, the transfer of such Additional Receivables to the issuing entity during the DOL Pre-Funding Period must not result in the Certificates receiving a lower credit rating from the Rating Agency upon termination of the DOL Pre-Funding Period than the rating that was obtained at the time of the initial issuance of the Certificates by the issuing entity.  Fourth, solely as a result of the use of pre-funding, the weighted average annual percentage interest rate (the “average interest rate”) for all of the Receivables in the issuing entity at the end of the DOL Pre-Funding Period must not be more than 100 basis points lower than the average interest rate for the Receivables which were transferred to the issuing entity on the Closing Date.  Fifth, either: (i) the characteristics of the Additional Receivables must be monitored by an insurer or other credit support provider which is inde pendent of the depositor; or (ii) an independent accountant retained by the depositor must provide the depositor with a letter (with copies provided to the Rating Agency, the underwriter and the trustee) stating whether or not the characteristics of the Additional Receivables conform to the characteristics described in the Prospectus, Prospectus Supplement, Private Placement Memorandum (“Offering Documents”) and/or the Agreement.  In preparing such letter, the independent accountant must use the same type of procedures as were applicable to the Receivables which were transferred as of the Closing Date.  Sixth, the DOL Pre-Funding Period must end no later than three months or 90 days after the Closing Date or earlier, in certain circumstances, if the amount on deposit in the Pre-Funding Account is reduced below the minimum level specified in the Agreement or an event of default occurs under the Agreement.  Seventh, amounts transferred to any Pre-Funding Account and/or Capitalized Inte rest Account used in connection with the pre-funding may be invested only in investments which are permitted by the Rating Agency and (i) are direct obligations of, or obligations fully guaranteed as to timely payment of principal and interest by, the United States or any agency or instrumentality thereof (provided that such obligations are backed by the full faith and credit of the United States); or (ii) have been rated (or the obligor has been rated) in one of the three highest generic rating categories by the Rating Agency (“Acceptable Investments”).  Eighth, certain disclosure requirements must be met.

Limitations on Scope of the Exemption.  If the general conditions of the Exemption are satisfied, the Exemption may provide an exemption from the restrictions imposed by ERISA and the Code in connection with the initial acquisition, transfer or holding, and the acquisition or disposition in the secondary market, of the Certificates by Plans.  However, no exemption is provided from the restrictions of ERISA for the acquisition or holding of a Certificates on behalf of an “Excluded Plan” by any person who is a fiduciary with respect to the assets of such Excluded Plan.  For those purposes, an Excluded Plan is a Plan sponsored by any member of the Restricted Group.  Exemptive relief may also be provided for the acquisition, holding and disposition of Certificates by Plans if the fiduciary or its affiliate is the obligor with respect to 5% or less of the fair market value of the Receivables in the issuing entity provided that:  (i) the Plan is not an Excluded Plan, (ii) each Plan’s investment in each class of Certificates does not exceed 25% of the outstanding Certificates in the class, (iii) after the Plan’s acquisition of the Certificates, no more than 25% of the assets over which the fiduciary has investment authority are invested in Certificates of the issuing entity containing assets which are sold or serviced by the same entity and (iv) in the case of initial issuance (but not secondary market transactions), at least 50% of each class of Certificates and at least 50% of the aggregate interests in the issuing entity are acquired by persons independent of the Restricted Group.

ERISA Considerations Relating to Notes

Under the Plan Asset Regulations, the assets of the issuing entity would be treated as “plan assets” of a Plan for the purposes of ERISA and the Code only if the Plan acquires an “equity interest” in the issuing entity and none of the exceptions contained in the Plan Asset Regulations is applicable.  An equity interest is defined under the Plan Asset Regulations as an interest other than an instrument which is treated as indebtedness under applicable local law and which has no substantial equity features.  Assuming that the notes are treated as indebtedness without substantial equity features for purposes of the Plan Asset Regulations, then such notes will be eligible for purchase by Plans.  However, without regard to whether the notes are treated as an “equity interest” for such purposes, the acquisition or holding of notes by or on behalf of a Plan could be consider ed to give rise to a prohibited transaction if the issuing entity or any of its affiliates is or becomes a party in interest or disqualified person with respect to such Plan, or in the event that a note is purchased in the secondary market and such purchase constitutes a sale or exchange between a Plan and a party in interest or disqualified person with respect to such Plan. There can be no assurance that the issuing entity or any of its affiliates will not be or become a party in interest or a disqualified person with respect to a Plan that acquires notes.

The Exemption permits issuing entities that are grantor trusts, owner-trusts, or FASITs to issue notes, as well as Certificates, provided a legal opinion is received to the effect that the noteholders have a perfected security interest in the issuing entity’s assets.  The exemptive relief provided under the Exemption for any prohibited transactions which could be caused as a result of the operation, management or servicing of the issuing entity and its assets would not be necessary with respect to notes with no substantial equity features which are issued as obligations of the issuing entity.  However, effective for the acquisition, holding or transfer of notes between a Plan and a party in interest, the Exemption would provide prohibited transaction exemptive relief, provided that the same conditions of the Exemption described above relating to Certificates are met with respect to the notes. &nbs p;The same limitations of such exemptive relief relating to acquisitions of Certificates by fiduciaries with respect to Excluded Plans would also be applicable to the notes as described herein in “Limitations on Scope of the Exemption.”

In the event that the Exemption is not applicable to the notes, one or more other prohibited transactions exemptions may be available to Plans purchasing or transferring the notes depending in part upon the type of Plan fiduciary making the decision to acquire the notes and the circumstances under which such decision is made.  These exemptions include, but are not limited to, Prohibited Transaction Class Exemption 90-1 (regarding investments by insurance depositor pooled separate accounts), Prohibited Transaction Class Exemption 91-38 (regarding investments by bank collective investments funds), PTCE 84-14 (regarding transactions effected by “qualified professional asset managers”), PTCE 95-60 (regarding investments by insurance depositor general accounts) and PTCE 96-23 (regarding transactions effected by “in-house asset managers”) (collectively, the “Investor-Based Exemptions” ;).  However, even if the conditions specified in these Investor-Based Exemptions are met, the scope of the relief provided under such Exemptions might or might not cover all acts which might be construed as prohibited transactions.

EACH PROSPECTUS SUPPLEMENT WILL CONTAIN INFORMATION CONCERNING CONSIDERATIONS RELATING TO ERISA AND THE CODE THAT ARE APPLICABLE TO THE RELATED SECURITIES.  BEFORE PURCHASING SECURITIES IN RELIANCE ON THE EXEMPTION, THE INVESTOR-BASED EXEMPTIONS OR ANY OTHER EXEMPTION, A FIDUCIARY OF A PLAN SHOULD ITSELF CONFIRM THAT REQUIREMENTS SET FORTH IN SUCH EXEMPTION WOULD BE SATISFIED.

ANY PLAN INVESTOR WHO PROPOSES TO USE “PLAN ASSETS” OF ANY PLAN TO PURCHASE SECURITIES OF ANY SERIES OR CLASS SHOULD CONSULT WITH ITS COUNSEL WITH RESPECT TO THE POTENTIAL CONSEQUENCES UNDER ERISA AND SECTION 4975 OF THE CODE OF THE ACQUISITION AND OWNERSHIP OF SUCH SECURITIES.

Governmental plans and church plans as defined in ERISA are not subject to ERISA or Code Section 4975, although they may elect to be qualified under Section 401(a) of the Code and exempt from taxation under Section 501(a) of the Code and would then be subject to the prohibited transaction rules set forth in Section 503 of the Code.  In addition, governmental plans may be subject to federal, state and local laws which are to a material extent similar to the provisions of ERISA or a Code Section 4975 (“Similar Law”).  A fiduciary of a governmental plan should make its own determination as to the propriety of an investment in Securities under applicable fiduciary or other investment standards and the need for the availability of any exemptive relief under any Similar Law.

Plan of Distribution

On the terms and conditions set forth in an underwriting agreement with respect to the notes, if any, of a given series and an underwriting agreement with respect to the certificates of the series (collectively, the “Underwriting Agreements”), the depositor will agree to cause the related issuing entity to sell to the underwriters named in the Underwriting Agreement and in the related prospectus supplement, and each of these underwriters will severally agree to purchase, the principal amount of each class of notes and certificates, as the case may be, of the related series set forth in the related Underwriting Agreement and in the related prospectus supplement.

In the Underwriting Agreements with respect to any given series of securities, the several underwriters will agree, subject to the terms and conditions set forth in the related Underwriting Agreement, to purchase all of the notes and certificates, as the case may be, described in the related Underwriting Agreement that are offered by this prospectus and by the related prospectus supplement if any of the notes and certificates, as the case may be, are purchased.

Each prospectus supplement will either (1) set forth the price at which each class of notes and certificates, as the case may be, being offered by the related prospectus supplement will be offered to the public and any concessions that may be offered to particular dealers participating in the offering of the notes and certificates, as the case may be, or (2) specify that the related notes and certificates, as the case may be, are to be resold by the underwriters in negotiated transactions at varying prices to be determined at the time of sale. After the initial public offering of any notes and certificates, as the case may be, public offering prices and concessions may be changed.

Pursuant to the Receivables Purchase Agreement between the seller, or its affiliate, and the depositor, the seller will indemnify the depositor and the related underwriters against specific civil liabilities, including liabilities under the securities Act, or contribute to payments the depositor and the several underwriters may be required to make in respect of the Receivables Purchase Agreement.

Each issuing entity may, from time to time, invest the funds in its Trust Accounts in Eligible Investments acquired from the underwriters.

Pursuant to each of the Underwriting Agreements with respect to a given series of securities, the closing of the sale of any class of securities will be conditioned on the closing of the sale of all other classes under the related Underwriting Agreement.

The place and time of delivery for the notes and certificates, as the case may be, in respect of which this prospectus is delivered will be set forth in the related prospectus supplement.

If and to the extent required by applicable law or regulation, this prospectus and the prospectus supplement will also be used by the Underwriter after the completion of the offering in connection with offers and sales related to market-making transactions in the offered securities in which the Underwriter acts as principal. The Underwriter may also act as agent in these transactions. Sales will be made at negotiated prices determined at the time of sale.

Legal Matters

Some legal matters relating to the securities of any series will be passed upon by the law firms specified in the related prospectus supplement. Some related federal income tax and other matters will be passed upon for the Trust and the seller, by the law firms specified in the related prospectus supplement.

Prospectus Supplement

The prospectus supplement relating to a series of securities to be offered under this prospectus will, among other things, set forth with respect to each class of securities:

•

the interest rate and authorized denominations, as applicable, of each class of securities;

•

specific information concerning the Primary Assets and the related seller and servicer, as applicable;

•

the terms of any Credit or Cash Flow Enhancement applicable to any class or classes of securities;

•

information concerning any other assets in the related issuing entity;

•

the expected date or dates on which the principal amount, if any, of each class of securities will be paid to holders of the securities;

•

the extent to which any class within a series is subordinated to any other class of the same series; and

•

additional information with respect to the plan of distribution of the securities.

Reports to Securityholders

With respect to each series of securities, the servicer of the related Primary Assets will prepare for distribution to the related Securityholders monthly and annual reports concerning the securities and the related Trust. See “Certain Information Regarding the Securities--Statements to Securityholders.”

Available Information

The depositor has filed with the Securities and Exchange Commission (the “Commission”) a Registration Statement on Form S-3 (together with all amendments and exhibits to the Registration Statement, the “Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the securities being offered by this prospectus.  This prospectus, which forms a part of the Registration Statement, omits some of the information contained in the Registration Statement pursuant to the rules and regulations of the Commission.  The Registration Statement and the exhibits to the Registration Statement can be inspected and copied at the public reference facilities maintained by the Commission at 100 F Street NE, Washington, D.C. 20549, and at Regional Offices in the following locations:

•

Chicago Regional Office, 175 West Jackson Boulevard, Suite 900, Chicago, Illinois 60604; and

•

New York Regional Office, 3 World Financial Center, Room 4300, New York, New York 10281.

Copies of these materials can also be obtained from the Public Reference Section of the Commission, 100 F Street NE, Washington, D.C. 20549, at prescribed rates.

The Commission also maintains a site on the world wide web at “http://www.sec.gov” at which users can view and download copies of reports, proxy and information statements and other information filed electronically through the Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) system.  The depositor has filed the Registration Statement, including all exhibits to the Registration Statement, through the EDGAR system and therefore these materials should be available by logging onto the Commission’s web site.  The Commission maintains computer terminals providing access to the EDGAR system at each of the offices referred to above.

As to each issuing entity that is no longer required to file reports under the Exchange Act, periodic distribution reports will be posted on the depositor’s website referenced above as soon as practicable.  Annual reports of assessment of compliance with the AB Servicing Criteria, attestation reports, and statements of compliance will be provided to registered holders of the related securities upon request free of charge.  See “Description of the Transfer and Servicing Agreements — Evidence as to Compliance”.

Incorporation of Certain Documents by Reference

All documents subsequently filed by or on behalf of the issuing entity referred to in the prospectus supplement with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of this prospectus and prior to the termination of any offering of the Notes or Certificates, as applicable, issued by that issuing entity will be deemed to be incorporated by reference in this prospectus and to be a part of this prospectus from the date of the filing of those documents. Any statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus will be deemed to be modified or superseded for all purposes of this prospectus to the extent that a statement contained in this prospectus (or in the prospectus supplement) or in any other subsequently filed document that also is or is deemed to be incorporated by reference modifies or replaces that statemen t. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.  All documents subsequently filed by the depositor pursuant to Sections 13(a) or 15(d) of the Exchange Act in respect of any offering prior to the termination of the offering of the offered securities shall also be deemed incorporated by reference into this prospectus and the related prospectus supplement.  

The trustee and/or indenture trustee on behalf of any issuing entity will provide without charge to each person to whom this prospectus is delivered, upon request, a copy of any or all of the documents referred to above that have been or may be incorporated by reference in this prospectus (not including exhibits to the information that is incorporated by reference unless the exhibits are specifically incorporated by reference into the information that this prospectus incorporates).  Requests for information should be directed to the corporate trust office of the trustee and/or indenture trustee specified in the prospectus supplement.

Rating

As a condition to the issuance of any class of offered notes or offered certificates, as applicable, they must not be rated lower than investment grade; that is, they must be rated in one of the four highest rating categories, by a rating agency.

A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating organization.  Each security rating should be evaluated independently of any other security rating.

INDEX OF TERMS

Page

Actuarial Receivables

9

Advances

39

Cede

4

Certificate Distribution Account

35

Certificate Owners

50

Certificate Pool Factor

21

Code

50

Collection Account

35

Collection Period

38

Definitive certificates

32

Definitive notes

32

Definitive Securities

32

Depository

22

Distribution Date

29

DTC

4

Eligible Deposit Account

36

Eligible Institution

36

Eligible Investment

37

Eligible Investments

36

Events of Default

24

Exchange Act

78

Fannie Mae

14

Farm Credit Act

17

FCA

18

FCBs

17

Federal Tax Counsel

50

FFCB

14

FFEL

16

FHLB

14

FHLMC Act

15

Final Scheduled Maturity Date

38

Financed Boats

7

FIRREA

16

Fiscal Agent

14

Freddie Mac

14

FTC Rule

49

Funding Corporation

18

Government Securities

12

grantor trust certificateholders

64

grantor trust certificates

64

GSE Issuer

14

GSEs

12

GSEs Bonds

12

Indenture

22

Indirect Participants

30

Interest Component

20

Investment Earnings

36

IRS

50

MBS

15

Multiple Variable Rate Note

55

Non-United States Owner

63

Note Distribution Account

35

Note Owners

50

Note Pool Factor

21

Participants

30

Payahead Account

35

Payaheads

39

Pooling and Servicing Agreement

7

Precomputed Advance

39

Precomputed Receivables

9

Pre-Funded Amount

36

Pre-Funding Account

36

Pre-Funding Period

36

Prepayment Assumption

51

Presumed Single Qualified Floating Rate

54

Presumed Single Variable Rate

54

Primary Assets

10

Principal Component

20

Private Label Custody Receipt Securities

18

Private Label Custody Strips

18

Receivables

8

REFCO

18

REFCO Strip

20

Registration Statement

78

Related Documents

26

Repurchase Amount

35

Reserve Account

41

RTC

16

Rule of 78S Receivables

9

Rules

30

Sale and Servicing Agreement

7

Sallie Mae

14

Schedule of Receivables

34

Securities Act

78

Security Owners

30

Senior Certificates

67

Senior Class Percentage

67

Servicer Default

43

Servicing Fee

40

Servicing Fee Rate

40

Shortfall Amount

67

Short-Term Note

57

Simple Interest Advance

39

Simple Interest Receivables

9

Single Variable Rate Note

54

Stripped Certificates

66

Subordinate Certificates

67

Subordinate Class Percentage

67

System

17

Systemwide Debt Securities

18

TEFRA

19

Transfer and Servicing Agreements

34

Treasury Bonds

12

Treasury Strips

12

Trust

7

Trust Accounts

36

Trust Agreement

7

Trust Stripped Bond

67

Trust Stripped Coupon

67

TVA

14

TVA Act

17

UCC

30

Underlying Issuer

11

Underlying Servicer

11

Underlying Trust Agreement

11

Underlying Trustee

11

Underwriting Agreements

76

United States person

57

Variable Rate Note

53

1997 Act

69

Actuarial Receivables

7

Advances

39

Cede

1

Certificate Distribution Account

3

Certificate Owners

50

Certificate Pool Factor

20

Code

50

Collection Account

35

Collection Period

38

Definitive certificates

31

Definitive notes

31

Definitive Securities

31

Depository

21

Distribution Date

28

DTC

1

Eligible Deposit Account

36

Eligible Institution

36

Eligible Investment

36

Eligible Investments

35

Events of Default

23

Exchange Act

79

Fannie Mae

12

Farm Credit Act

16

FCA

16

FCBs

16

Federal Tax Counsel

50

FFCB

13

FFEL

14

FHLB

13

FHLMC Act

14

Final Scheduled Maturity Date

38

Financed Boats

5

FIRREA

15

Fiscal Agent

13

Freddie Mac

12

FTC Rule

49

Funding Corporation

17

Government Securities

10

grantor trust certificateholders

64

grantor trust certificates

64

GSE Issuer

13

GSEs

10

GSEs Bonds

10

Indenture

21

Indirect Participants

29

Interest Component

19

Investment Earnings

36

IRS

50

MBS

13

Multiple Variable Rate Note

55

Non-United States Owner

63

Note Distribution Account

35

Note Owners

50

Note Pool Factor

20

Participants

29

Payahead Account

35

Payaheads

39

Pooling and Servicing Agreement

5

Precomputed Advance

39

Precomputed Receivables

7

Pre-Funded Amount

36

Pre-Funding Account

36

Pre-Funding Period

36

Prepayment Assumption

52

Presumed Single Qualified Floating Rate

54

Presumed Single Variable Rate

55

Primary Assets

9

Principal Component

19

Private Label Custody Receipt Securities

17

Private Label Custody Strips

17

Receivables

6

REFCO

17

REFCO Strip

19

Registration Statement

79

Related Documents

25

Repurchase Amount

34

Reserve Account

41

RTC

5

Rule of 78S Receivables

7

Rules

29

Sale and Servicing Agreement

5

Sallie Mae

12

Schedule of Receivables

34

Securities Act

79

Security Owners

29

Senior Certificates

67

Senior Class Percentage

67

Servicer Default

43

Servicing Fee

40

Servicing Fee Rate

40

Shortfall Amount

68

Short-Term Note

57

Simple Interest Advance

39

Simple Interest Receivables

7

Single Variable Rate Note

55

Stripped Certificates

66

Subordinate Certificates

67

Subordinate Class Percentage

67

System

16

Systemwide Debt Securities

16

TEFRA

18

Transfer and Servicing Agreements

33

Treasury Bonds

10

Treasury Strips

10

Trust

5

Trust Accounts

35

Trust Agreement

5

Trust Stripped Bond

67

Trust Stripped Coupon

67

TVA

13

TVA Act

16

UCC

29

Underlying Issuer

9

Underlying Servicer

9

Underlying Trust Agreement

9

Underlying Trustee

9

Underwriting Agreements

77

United States person

58

Variable Rate Note

54

Annex I

Global Clearance, Settlement and Tax Documentation Procedures

Except in some limited circumstances, the globally offered securities (the “Global securities”) will be available only in book-entry form. Unless otherwise specified in the related prospectus supplement, investors in the Global securities may hold Global securities through any of The Depository Trust depositor (“DTC”), Clearstream, Luxembourg or Euroclear.  Unless otherwise specified in the related prospectus supplement, Global securities will be tradable as home market instruments in both the European and U.S. domestic markets.  Unless otherwise specified in the related prospectus supplement, Initial settlement and all secondary trades will settle in same-day funds.

Secondary market trading between investors holding Global securities through Clearstream, Luxembourg and Euroclear will be conducted in the ordinary way in accordance with their normal rules and operating procedures and in accordance with conventional eurobond practice (i.e., seven calendar day settlement).

Secondary market trading between investors holding Global securities through DTC will be conducted according to the rules and procedures applicable to U.S. corporate debt obligations.

Secondary cross-market trading between Clearstream, Luxembourg or Euroclear and DTC Participants holding securities will be effected on a delivery-against-payment basis through the respective Depositaries of Clearstream, Luxembourg and Euroclear, in this capacity, and as DTC Participants.

Non-U.S. holders of Global securities will be subject to U.S. withholding taxes unless the holders meet particular requirements and deliver appropriate U.S. tax documents to the securities clearing organizations or their participants.

Initial Settlement

All Global securities will be held in book-entry form by The Depository Trust depositor (“DTC”) in the name of Cede & Co. (“Cede”) as nominee of DTC. Securityholders’ interests in the Global securities will be represented through financial institutions acting on their behalf as direct and indirect Participants in DTC.  As a result, Clearstream, Luxembourg and Euroclear will hold positions on behalf of their participants through their respective Depositaries, which in turn will hold these positions in accounts as DTC Participants.

Securityholders electing to hold their Global securities through DTC will follow the settlement practices applicable to U.S. corporate debt obligations. Securityholder securities custody accounts will be credited with their holdings against payment in same-day funds on the settlement date.

Securityholders electing to hold their Global securities through Clearstream, Luxembourg or Euroclear accounts will follow the settlement procedures applicable to conventional eurobonds, except that there will be no temporary global security and no “lock-up” or restricted period.  Global securities will be credited to the securities custody accounts on the settlement date against payment in same-day funds.

Secondary Market Trading

Since the purchaser determines the place of delivery, it is important to establish at the time of the trade where both the purchaser’s and seller’s accounts are located to ensure that settlement can be made on the desired value date.

Trading between DTC Participants. Secondary market trading between DTC Participants will be settled using the procedures applicable to U.S. corporate debt obligations in same-day funds.

Trading between Clearstream, Luxembourg and/or Euroclear Participants. Secondary market trading between Clearstream, Luxembourg Participants or Euroclear Participants will be settled using the procedures applicable to conventional eurobonds in same-day funds.

Trading between DTC seller and Clearstream, Luxembourg or Euroclear purchaser.  When Global securities are to be transferred from the account of a DTC Participant to the account of a Clearstream, Luxembourg Clearstream, Luxembourg Participant or a Euroclear Participant, the purchaser will send instructions to Clearstream, Luxembourg or Euroclear through a Clearstream, Luxembourg Participant or Euroclear Participant at least one business day prior to settlement. Clearstream, Luxembourg or Euroclear will instruct the respective Depositary, as the case may be, to receive the Global securities against payment. Payment will include interest accrued on the Global securities from and including the last coupon payment date to and excluding the settlement date.  Payment will then be made by the respective Depositary to the DTC Participant’s account against delivery of the Global securities.  Af ter settlement has been completed, the Global securities will be credited to the respective clearing system and by the clearing system, in accordance with its usual procedures, to the Clearstream, Luxembourg Participant’s or Euroclear Participant’s account.  The Global securities credit will appear the next day (European time) and the cash debit will be back-valued to, and the interest on the Global securities will accrue from, the value date, which would be the preceding day when settlement occurred in New York. If settlement is not completed on the intended value date (i.e., the trade fails), the Clearstream, Luxembourg or Euroclear cash debit will be valued instead as of the actual settlement date.

Clearstream, Luxembourg Participants and Euroclear Participants will need to make available to the respective clearing systems the funds necessary to process same-day funds settlement.  The most direct means of doing so is to pre-position funds for settlement, either from cash on hand or existing lines of credit, as they would for any settlement occurring within Clearstream, Luxembourg or Euroclear. Under this approach, they may take on credit exposure to Clearstream, Luxembourg or Euroclear until the Global securities are credited to their accounts one day later.

As an alternative, if Clearstream, Luxembourg or Euroclear has extended a line of credit to them, Clearstream, Luxembourg Participants or Euroclear Participants can elect not to pre-position funds and allow that credit line to be drawn upon the finance settlement. Under this procedure, Clearstream, Luxembourg Participants or Euroclear Participants purchasing Global securities would incur overdraft charges for one day, assuming they cleared the overdraft when the Global securities were credited to their accounts.  However, interest on the Global securities would accrue from the value date.  Therefore, in many cases the investment income on the Global securities earned during that one-day period may substantially reduce or offset the amount of the overdraft charges, although this result will depend on each Clearstream, Luxembourg Participant’s or Euroclear Participant’s particular cost of funds .

Since the settlement is taking place during New York business hours, DTC Participants can employ their usual procedures for sending Global securities to the respective Depositary for the benefit of Clearstream, Luxembourg Participants or Euroclear Participants.  The sale proceeds will be available to the DTC seller on the settlement date.  Thus, to the DTC Participant a cross-market transaction will settle no differently than a trade between two DTC Participants.

Trading between Clearstream, Luxembourg or Euroclear seller and DTC purchaser.  Due to time zone differences in their favor, Clearstream, Luxembourg Participants and Euroclear Participants may employ their customary procedures for transactions in which Global securities are to be transferred by the respective clearing system, through the respective Depositary, to a DTC Participant.  The seller will send instructions to Clearstream, Luxembourg or Euroclear through a Clearstream, Luxembourg Participant or Euroclear Participant at least one business day prior to settlement.  In these cases, Clearstream, Luxembourg or Euroclear will instruct the respective Depositary, as appropriate, to deliver the bonds to the DTC Participant’s account against payment. Payment will include interest accrued on the Global securities from and including the last coupon payment date to and excluding the settle ment date. The payment will then be reflected in the account of the Clearstream, Luxembourg Participant or Euroclear Participant the following day, and receipt of the cash proceeds in the Clearstream, Luxembourg Participant’s or Euroclear Participant’s account would be back-valued to the value date, which would be the preceding day, when settlement occurred in New York. Should the Clearstream, Luxembourg Participant or Euroclear Participant have a line of credit with its respective clearing system and elect to be in debit in anticipation of receipt of the sale proceeds in its account, the back-valuation will extinguish any overdraft charges incurred over that one-day period.  If settlement is not completed on the intended value date (i.e., the trade fails), receipt of the cash proceeds in the Clearstream, Luxembourg Participant’s or Euroclear Participant’s account would instead be valued as of the actual settlement date.  Finally, day traders that use Clearstream, Luxembourg or Euroclear and that purchase Global securities from DTC Participants for delivery to Clearstream, Luxembourg Participants or Euroclear Participants should note that these trades would automatically fail on the sale side unless affirmative action were taken.  At least three techniques should be readily available to eliminate this potential problem:

(a)

borrowing through Clearstream, Luxembourg or Euroclear for one day, until the purchase side of the day trade is reflected in their Clearstream, Luxembourg or Euroclear accounts, in accordance with the clearing system’s customary procedures;

(b)

borrowing the Global securities in the U.S. from a DTC Participant no later than one day prior to settlement, which would give the Global securities sufficient time to be reflected in their Clearstream, Luxembourg or Euroclear account in order to settle the sale side of the trade; or

(c)

staggering the value dates for the buy and sell sides of the trade so that the value date for the purchase from the DTC Participant is at least one day prior to the value date for the sale to the Clearstream, Luxembourg Participant or Euroclear Participant.

Certain U.S. Federal Income Tax Documentation Requirements

A beneficial owner of Global securities holding securities through Clearstream, Luxembourg or Euroclear, or through DTC will be subject to the 30% U.S. withholding tax that generally applies to payments of interest, including original issue discount, on registered debt issued by U.S. Persons or to backup withholding, at a rate of up to 31% unless (1) each clearing system, bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business in the chain of intermediaries between the beneficial owner and the U.S. entity required to withhold tax complies with applicable certification requirements and (2) the beneficial owner takes one of the following steps to obtain an exemption or reduced tax rate:

Exemption for non-U.S. Persons (Form W-8BEN). Beneficial owners of securities that are non-U.S. Persons can obtain a complete exemption from the withholding tax by filing a signed Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. If the information shown on Form W-8 BEN changes, a new Form W-8 BEN  must be filed within 30 days of the change.

Exemption for non-U.S. Persons with effectively connected income (Form W-8ECI). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S. branch, for which the interest income is effectively connected with its conduct of a trade or business in the United States, can obtain an exemption from the withholding tax by filing Form W-8ECI (Certificate of Foreign Person’s Claim for Exemption from Withholding on Income Effectively Connected with the Conduct of a Trade or Business in the United States).

Exemption or reduced rate for non-U.S. Persons resident in treaty countries (Form W-8BEN). Non-U.S. Persons that are beneficial owners of securities residing in a country that has a tax treaty with the United States can obtain an exemption or reduced tax rate, depending on the treaty terms, by filing Form W-8BEN (including Part II thereof). If the treaty provides only for a reduced rate, the beneficial owner may still be entitled to complete exemption from withholding under the first exemption discussed above.

Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain complete exemption from the withholding tax by filing Form W-9 (Request for Taxpayer Identification Number and Certification).

U.S. Federal Income Tax Reporting Procedure. The beneficial owner of a Global Security files by submitting the appropriate form to the person through whom it holds, the clearing agency, in the case of persons holding directly on the books of the clearing agency. Form W-8BEN and Form W-8ECI are generally effective for three calendar years from the close of the calendar year in which it is collected.

The term “U.S. Person” means (1) a citizen or resident of the United States, (2) a corporation or partnership (or other entity properly classified as a corporation or partnership for U.S. Federal income tax purposes) organized in or under the laws of the United States or any state or the District of Columbia,  (3) an estate the income of which is includible in gross income for United States tax purposes, regardless of its source, or (4)  a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have authority to control all substantial decisions of the trust.  Notwithstanding the preceding sentence, to the extent provided in regulations, trusts in existence on August 20, 1996 and treated as United States persons prior to that date that elect to continue to be so treated also will be consi dered U.S. Persons. Treasury regulations provide certain presumptions regarding the entity classification and foreign or U.S. status of a holder that a payor generally must apply in the absence of appropriate documentation from the holder, and provide detailed documentation and procedures for holders claiming withholding tax exemptions through intermediaries.  Prospective investors are urged to consult their tax advisors regarding the effect of these regulations on their ability to claim and the means for claiming exemptions from or reduced rates of U.S. withholding taxes.

This summary does not deal with all aspects of U.S. Federal income tax withholding that may be relevant to foreign holders of the Global securities. Investors are advised to consult their own tax advisers for specific tax advice concerning their holding and disposing of the Global securities.

The information in this prospectus supplement is not complete and may be changed.  We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective.  This prospectus supplement is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED __________, 20__

PROSPECTUS SUPPLEMENT (to Prospectus dated [      ])

$[      ] (APPROXIMATE)

ACE SECURITIES CORP.

DEPOSITOR

[        ] EQUIPMENT TRUST SECURITIES [      ]-[  ]

RECEIVABLE-BACKED NOTES

[             ]

ISSUING ENTITY

[            ]

SERVICER

The issuing entity will issue the following classes of notes:

Credit enhancement for the notes is provided by subordination of the notes and a cash collateral account [and [describe any other credit enhancement]].

Consider carefully the risk factors beginning on page S-[      ] of this prospectus supplement and on page [   ] of the prospectus.

The notes will represent interests in the issuing entity’s trust fund consisting of equipment lease contracts only and will not represent interests in or obligations of any other entity.

This prospectus supplement may be used to offer and sell the notes only if accompanied by the prospectus.

Class of Notes	Initial Aggregate Principal Amount	Interest Rate (per annum)	First Payment Date	Stated Maturity Date	Price to Public Per Note	Underwriting Discount Per Note
A-1	$ [    ]	[     ]%	[          ]	[          ]	[     ]%	[     ]%
A-2	$ [    ]	[     ]%	[          ]	[          ]	[     ]%	[     ]%
A-3	$ [    ]	Floating	[          ]	[          ]	[     ]%	[     ]%
A-4	$ [    ]	[     ]%	[          ]	[          ]	[     ]%	[     ]%
A-5	$ [    ]	[     ]%	[          ]	[          ]	[     ]%	[     ]%
B	$ [    ]	[     ]%	[          ]	[          ]	[     ]%	[     ]%
C	$ [    ]	[     ]%	[          ]	[          ]	[     ]%	[     ]%
D	$ [    ]	[     ]%	[          ]	[          ]	[     ]%	[     ]%

The total price to the public is $[       ].

The total underwriting discount is $[       ].

The total proceeds to the issuing entity are $[       ].

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying prospectus is accurate or complete.  Any representation to the contrary is a criminal offense.

Underwriter:

Deutsche Bank Securities Inc.

The date of this Prospectus Supplement is [      ]

The information in this prospectus supplement is not complete and may be changed.  We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective.  This prospectus supplement is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Important Notice About Information Presented in this

Prospectus Supplement and the Accompanying Prospectus:

We provide information to you about the notes offered by this prospectus supplement in two separate documents that progressively provide more detail: (1) the accompanying prospectus, which provides general information, some of which may not apply to your notes, and (2) this prospectus supplement, which describes the specific terms of your notes.

If information varies between this prospectus supplement and the accompanying prospectus, you should rely on the information in this prospectus supplement.

You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus.  We have not authorized anyone to provide you with different information.

We are not offering the notes in any state where the offer is not permitted.  We do not claim that the information in this prospectus supplement and prospectus is accurate as of any date other than the dates stated on their respective covers.

___________________________________________

Dealers will deliver a prospectus supplement and prospectus when acting as underwriters of the notes and with respect to their unsold allotments or subscriptions.  In addition, all dealers selling the notes will be required to deliver a prospectus supplement and prospectus for ninety days following the date of this prospectus supplement.

___________________________________________

We include cross-references in this prospectus supplement and the accompanying prospectus to captions in these materials where you can find further related discussions.  The following table of contents and the table of contents included in the accompanying prospectus provide the pages on which these captions are located.

Table of Contents

Page

Summary of Terms

S-6

Background Information

S-13

Risk Factors

S-14

The Issuing entity

S-22

General

S-22

Capitalization of the Issuing Entity

S-22

The Owner Trustee

S-22

The Originators

S-23

General

S-23

[Originator Name]

S-23

[Originator Name]

S-23

[Originator Name]

S-24

The Servicer

S-24

The Contracts

S-24

Description of the Contracts

S-24

Statistics Relating to the Initial Cut-Off Date Contract Pool

S-24

Statistics Relating to Delinquencies and Defaults

S-29

Static Pool Information

S-31

Underwriting Guidelines

S-31

Weighted Average Life of the Notes

S-32

Description of the Notes and Indenture

S-36

Distributions

S-36

Interest

S-38

Principal

S-39

[Class A-3 Swap Agreement

S-48

Optional Purchase of Class A-5 Notes

S-49

[Cash Collateral Account

S-50

[The Insurer]

S-51

[General]

S-51

[Reinsurance]

S-52

[Financial Strength and Financial Enhancement Ratings of [_______________]]

S-53

[Capitalization of the Insurer]

S-53

[Incorporation by Reference of Financials]

S-53

[Regulation of the Insurer]

S-54

[The Policy]

S-54

[Other Credit Enhancement]

S-56

[other credit enhancement provider]

S-56

Optional Purchase of Contracts and Redemption of Notes

S-56

Reports to Noteholders

S-57

Servicing

S-57

The Indenture Trustee

S-58

Fees and Expenses of the Issuing Entity

S-59

Representation and Warranties

S-60

Indemnification

S-60

Amendments

S-61

Ratings of the Notes

S-62

Federal Income Tax Considerations

S-67

ERISA Considerations

S-70

Use of Proceeds

S-68

Legal Proceedings

S-68

Affiliations, Relationships and Related Transactions

S-68

Plan of Distribution

S-69

Legal Matters

S-70

Index of Defined Terms

S-71

SUMMARY OF TERMS

•

This summary highlights selected information from this prospectus supplement and does not contain all of the information that you need to consider in making your investment decision.  To understand all of the terms of the offering of the notes, it is necessary that you read carefully this entire prospectus supplement and accompanying prospectus.

•

While this summary contains an overview of certain calculations, cash flow priorities, and other information to aid your understanding, you should read carefully the full description of these calculations, cash flow priorities and other information in this prospectus supplement and the accompanying prospectus before making any investment decision.

Issuing Entity

[                         ], a [Delaware statutory trust], is the issuing entity.

Owner Trustee

The owner trustee is [         ], acting not in its individual capacity but solely as owner trustee  of the issuing entity under the trust agreement with the sponsor and the depositor, and its telephone number is [         ].  See “The Owner Trustee” in this prospectus supplement.

Originators

[         ] and [         ].

The address of each originator is [         ].

Depositor

ACE Securities Corp., an affiliate of Deutsche Bank Securities Inc.  Neither Deutsche Bank Securities Inc. nor any of its affiliates has guaranteed, will guarantee or is or will be otherwise obligated with respect to any notes.

Indenture and Indenture Trustee

The notes will be issued under an indenture. [         ] will serve as indenture trustee.  See “Description of the Notes and Indenture — The Indenture Trustee,” in this prospectus supplement.

Terms of the Notes

•

Payment Dates

The [__]th day of each month, beginning [        ], or if that day is not a business day, the next business day.

•

Interest

See the cover page for the rates as to all classes other than Class A-3.  [The Class A-3 interest rate will be the one-month London interbank offered rate, plus [        ]]%.  See “Description of the Notes and Indenture — Interest.”  The issuing entity will calculate interest on the Class A-1 and Class A-3 Notes on the basis of the actual number of days elapsed and a 360-day year.  The issuing entity will calculate interest on the Class A-2, Class A-4, Class A-5, Class B, Class C and Class D Notes on the basis of a 360-day year comprised of twelve 30-day months.

On each payment date and after the issuing entity repays any outstanding servicer advances and pays the servicer’s monthly servicing fee, the issuing entity will pay interest on the notes in the following order:

Class of Notes	Receives Interest Before Class
A-1, A-2, A-3, A-4 and A-5	B, C and D
B	C and D
C	D
D	None

If the available funds are insufficient to pay interest on all classes of Class A Notes, the issuing entity will apply the available funds pro rata to the classes of Class A Notes based on their respective principal balances.

See “Description of the Notes and Indenture — Distributions” in this prospectus supplement.

•

Principal

After paying interest on the notes, the issuing entity will pay principal on the notes on each payment date.  The issuing entity will pay principal in the following order:

Before an Event of Default:

1. (A) Until the Class A-1 Note principal amount becomes zero, [         ]% of the total principal payment amount to the Class A-1 Notes and [         ]% of the total principal payment amount to the Class A-5 Notes;

(B) on the payment date when the Class A-1 Note principal amount becomes zero, first, the remaining Class A-1 principal amount to the Class A-1 noteholders, second, [         ]% of the total principal payment amount, but not greater than the Class A principal payment amount, to the Class A-5 noteholders and third, the remaining Class A principal payment amount to the Class A-2, A-3, A-4 and A-5 Notes in that order, with each successive class not being entitled to principal until the prior class’ principal amount is reduced to zero;

(C) after the Class A-1 Note principal amount is reduced to zero, [         ]% of the total principal payment amount, but not greater than the Class A principal payment amount to the Class A-5 Notes and then the remaining Class A principal payment amount to the Class A-2, A-3, A-4 and A-5 Notes in that order, with each successive class not being entitled to principal until the prior class’ principal amount is reduced to zero.

If the available amount is insufficient for the full payment of the amounts called for in (A), (B), or (C) above, the allocation of the available amount will be as provided in “Description of the Notes and Indenture — Principal” in  this prospectus supplement;

2. after the Class A-1 Note principal amount is reduced to zero, the Class B principal payment amount to the Class B Notes;

3. after the Class A-1 Note principal amount is reduced to zero, the Class C principal payment amount to the Class C Notes; and

4. after the Class A-1 Note principal amount is reduced to zero, the Class D principal payment amount to the Class D Notes.

The principal payment amount on each class of the notes on each payment date will be based on the difference between the aggregate principal balance of that class of notes on that payment date and the target amount set for the class or in the case of Class B, C and D a floor amount set for the class, if greater than the target amount.

After an Event of Default:

Following an event of default with respect to the notes, the issuing entity will pay principal in the following order:

Class Of Notes	Receives Principal Before Classes
A-1	A-2, A-3, A-4, A-5, B, C and D
A-2	A-3, A-4, A-5, B, C and D
A-3	A-4, A-5, B, C and D
A-4	A-5, B, C and D
A-5	B, C and D
B	C and D
C	D
D	None

See “Description of the Notes and Indenture —Distributions” in this prospectus supplement.

•

[Class A-3 Swap Agreement

The issuing entity will enter into a swap agreement with a swap counterparty solely for the benefit of the Class A-3 noteholders.  Under the swap agreement, the swap counterparty’s payments will be calculated at the Class A-3 Note interest rate and the issuing entity’s payments will be calculated at the assumed fixed rate of [         ]%.

To the extent that interest on any payment date at the Class A-3 Note interest rate exceeds interest calculated at the assumed fixed rate:

•

the swap counterparty will be obligated to pay an amount equal to the excess to the issuing entity,

•

that payment will constitute a portion of the amount available but only in respect of the Class A-3 Notes and

•

the Class A-3 Notes will be dependent upon that payment for receipt of interest to the extent of the excess.

Likewise under the swap agreement, to the extent that interest calculated at the assumed fixed rate exceeds interest calculated at the Class A-3 Note interest rate

•

the issuing entity will be obligated to pay an amount equal to the excess to the swap counterparty, and

•

the payment will have the same priority, in terms of application of the amount available, as payment of interest on the Class A-3 Notes.

Any shortfall in the payment of interest on the Class A-3 Notes due entirely to the failure of the swap counterparty to make a required payment under the swap agreement will not constitute an event of default under the indenture.  Except to the extent the amount available on any payment date exceeds the amount needed to pay:

•

the servicing fee and servicer advances,

•

all interest and principal payable on the notes, with Class A-3 Note interest being calculated at the assumed fixed rate for this purpose, and

•

all amounts payable in connection with the cash collateral account, no amounts in addition to those available under the swap agreement will be available under the indenture to make up the shortfall.  The only remedies in these circumstances will be those available to the issuing entity under the swap agreement.  See “Description of the Notes and Indenture — The Class A-3 Swap Agreement” in this prospectus supplement.]

•

[Class A-3 Swap Counterparty

[         ] will be the counterparty to the issuing entity under the swap agreement. The swap counterparty currently has an “[        ]” long-term unsecured senior debt credit rating from [        ] and an “[         ]” long-term unsecured senior debt credit rating from [         ].  See “Description of the Notes and Indenture — The Class A-3 Swap Counterparty” in this prospectus supplement.]

•

Stated Maturity Dates

The notes will mature on the respective dates shown on the cover of this prospectus supplement.  However, if the stated maturity date is not a business day, then the stated maturity date will be the next business day.

•

Optional Purchase of Class A-5 Notes

The issuing entity will have the right to purchase all of the Class A-5 Notes, on any payment date, at a purchase price equal to the principal balance of the Class A-5 Notes plus  a premium.

Following any purchase, the Class A-5 Notes will not be retired, but will continue to be entitled to interest and principal payments. See “Description of the Notes and Indenture — Optional Purchase of Class A-5 Notes” in this prospectus supplement.]

•

Optional Redemption

When the Aggregate Note Principal Amount is Less Than [10]% of Initial Contract Pool Principal Balance

[         ], the seller of contracts to the depositor, has the option to purchase the issuing entity’s assets when the outstanding note principal balance is less than [10]% of the initial contract pool principal balance.  If the seller exercises this option, the indenture trustee will redeem all notes on the next payment date.  The redemption price for each note will be the note’s principal amount plus unpaid accrued interest to but excluding the redemption date.

The contract principal balance of any contract is the present value of the unpaid scheduled payments due on that contract discounted at the discount rate, called the “discount rate,” of [         ]%.  This prospectus supplement uses this discount rate to calculate principal balances of contracts throughout.  The “contract pool principal balance” is the aggregate of the individual discounted contract principal balances.

See “Description of the Notes and Indenture —Optional Purchase of Contracts” in this prospectus supplement.

Expected Final Distribution Dates

The expected final distribution date of each class of notes is [                 ], based on the assumption that the servicer has exercised its option to redeem all the contracts as described in “Optional Redemption” above.  Due to losses and prepayments on the contracts, the final distribution dates on each class of notes may be substantially earlier or later than such date.

Cut-off Date

__________ __, ____.

Closing Date

On or about __________ __, ____.

Servicing; Servicing Fee

The servicer will be responsible for servicing, managing and administering the contracts and related interests, and enforcing and making collections on the contracts.  The servicer may make advances for delinquent scheduled payments, to the extent it determines that advances will be recoverable in future periods.  Servicer advances are reimbursable from contract payments.

See “Description of the Pooling and Servicing Agreement — Servicing” in the accompanying prospectus.

The servicer’s monthly fee will equal the product of

•

one twelfth of [___] percent and

•

the aggregate contract pool principal balance  as of the last day of the second preceding collection period.

The servicer fee is payable out of contract payments.

The servicer will pay any sub-servicer servicing fees from its monthly servicing fee.  See “Description of the Notes and Indenture— Servicing” in this prospectus supplement.

[Regulation AB Item 1103(a)(7) compliant description of any other fees and expenses.]

Ratings

The issuing entity will not issue any class of notes unless [         ], and [         ]. assign at least the following ratings to each class of notes:

Class	[         ]	[         ]
A-1
A-2
A-3
A-4
A-5
B
C
D

See “Ratings of the Notes” in this prospectus supplement and the accompanying prospectus.

Issuing Entity Assets

A. The Contracts

The contracts will consist of the following:

•

equipment lease contracts,

•

installment payment agreements,

•

conditional sales/financing agreements,

•

promissory notes, and

•

loan and security agreements.

As of [        ], the pool of contracts for the issuing entity had the following characteristics.  Percentages are based on the contract pool principal balance:

•

Initial contract pool principal balance  $[         ]

•

Number of contracts [         ]

•

Average contract principal balance  $[         ]

•

Leases as a percentage of the contracts [         ]%

•

Loans and other financing arrangements as a percentage of the contracts [         ]%;

•

Underlying equipment type concentration:

Equipment Type	Principal Balance Concentration
[       ]	[       ]%
[       ]	[       ]%
[       ]	[       ]%
[       ]	[       ]%
[       ]	[       ]%
[       ]	[       ]%
[       ]	[       ]%

No other single type of equipment accounted for more than [__]% of the initial contract pool principal balance.

•

Geographic concentration:

Statee	Geographic Concentration
[       ]	[       ]%
[       ]	[       ]%
[       ]	[       ]%
[       ]	[       ]%
[       ]	[       ]%

No other state represented more than [__]% of the initial contract pool principal balance.

•

Remaining terms of the contracts:  [         ] month to [         ] months

The weighted average remaining term of the contracts:  [         ] months

Weighted average age of the contracts: [        ] months

See “The Contracts — Statistics Relating to the Cut-Off Date Contract Pool” in this prospectus supplement.

Removal and Substitution of a Receivable

[Regulation AB Item 1103(a)(6) compliant description of removal or substitution of contracts in connection with material document defects or breaches of representations and warranties].

[B. Cash Collateral Account.

The indenture trustee will establish a cash collateral account having an initial balance of $[         ] ([         ]% of initial contract pool principal balance) for the benefit of the noteholders, which may include proceeds of loans from third party lenders to the issuing entity under a cash collateral account loan agreement. The indenture trustee will use cash collateral account funds to pay the following amounts if payments on the contracts are insufficient:

•

interest due on the notes, [with interest on the Class A-3 Notes being calculated for this purpose at the assumed fixed rate of [        ]% in connection with the swap agreement]; the lesser of

•

losses on liquidation of defaulted contracts during the relevant collection period, and

•

the excess of the aggregate note principal amount over the contract pool principal balance, including all scheduled payments for the relevant collection period and unpaid scheduled payments from prior periods; and principal on the notes on the applicable  stated maturity date.  See “Description of the Notes and Indenture — Cash Collateral Account” in this prospectus supplement.

[Trigger Events]

[Regulation AB Item 1103(a)(3)(vii) compliant description of any events in the transaction agreements that can trigger liquidation or amortization of the contracts or other performance triggers that would alter the transaction structure or the flow of funds].

[Mandatory Auction of the Mandatory Auction Notes]

[Five business days prior to the distribution date in [______], the auction administrator will auction the Class [__] Notes and Class [__] Notes, referred to in this prospectus supplement as the mandatory auction notes, then outstanding, to third-party investors. On the distribution date in [______], the mandatory auction notes will be transferred, as described in this prospectus supplement, to third-party investors, and holders of the mandatory auction notes will be entitled to receive the current principal amount of those notes, after application of all principal distributions and realized losses on the distribution date in [______], plus accrued interest on such classes at the related pass-through rate from [______], up to but excluding the distribution date in [______].

The auction administrator will enter into a market value swap with a swap counterparty pursuant to which the swap counterparty will agree to pay the excess, if any, of the current principal amount of the mandatory auction notes, after application of all principal distributions and realized losses on such distribution date, plus, accrued interest as described above, over the amount received in the auction.

In the event that all or a portion of a class of the mandatory auction notes is not sold in the auction, the swap counterparty will make no payment with respect to such class or portion thereof, and the holders thereof will not be able to transfer those notes on the distribution date in [______] as a result of the auction. However, the auction administrator will repeat the auction procedure each month thereafter until a bid has been received for each class or portion thereof.  Upon receipt of a bid, the swap counterparty will make the payment described above if required. See “Description of the Notes-Mandatory Auction” in this prospectus supplement.]

[Other Credit Enhancement]

[Regulation AB Item 1103(a)(3)(ix) compliant description of any other credit enhancement].

Use of Proceeds

[After depositing funds from the note sale proceeds into the cash collateral account and allocating for the payment of expenses, the indenture trustee will pay the remaining proceeds of the sale of notes to the depositor.  The depositor will pay the proceeds to a warehousing trustor to [         ] in payment of the purchase price of contracts acquired from them, respectively.  See “Use of Proceeds” in this prospectus supplement.]

Federal Income Tax Considerations

McKee Nelson LLP, special federal tax counsel, will deliver an opinion of counsel that for federal income tax purposes, the notes will be treated as indebtedness and the trust will not be an association, or publicly traded partnership, taxable as a corporation.  See “Federal Income Tax Considerations” in this prospectus supplement and “Material Federal Income Tax Consequences” in the accompanying prospectus.

ERISA Considerations

Subject to particular considerations discussed in this prospectus supplement under “ERISA Considerations,” the notes are eligible for purchase by employee benefit plans.

Legal Investment

[The Class A-1 Notes will be eligible securities for purchase by money market funds under Rule 2a-7 under the Investment Company Act of 1940.]

BACKGROUND INFORMATION

The information in this section will help you understand the information in this prospectus supplement and the accompanying prospectus.

The principal balance of any contract is the present value of the unpaid scheduled payments due on the contract after a cut-off date.  The principal balance of a contract excludes all scheduled payments due on or prior to, but not received as of, that date, as well as any scheduled payments due after but received before that date. The principal balance also excludes any prepayments received on or prior to that date.  The scheduled payments are discounted monthly at the rate of [         ]% per annum.

The aggregate principal balance of the contracts expected to be held by the issuing entity as of any particular date is referred to as the contract pool principal balance. The contract pool principal balance, as of the initial cut-off date, is referred to as the initial cut-off date contract pool principal balance or the initial contract pool.  The initial cut-off date is [         ] for all contracts transferred to the issuing entity on the closing date for the sale of the notes.  It will be the first day of the month of transfer to the issuing entity for each substitute contract.

Contract balance percentages and amounts discussed below are based on the aggregate principal balance of the contracts being transferred to the issuing entity as of the initial cut-off date, unless a different date is noted.  Changes in the characteristics of the contract pool between the initial cut-off date and the closing date will not affect more than 5% of the initial cut-off date contract pool principal balance.

RISK FACTORS

The following information, which you should carefully consider, identifies certain significant sources of risk associated with an investment in the notes.

Future Contract Delinquency and Loss Experience of the Contract Pool May Vary Substantially from the Originators’ Historical Experience	The sponsor presents the historical contract delinquency and loss experience of the originators’ portfolios of contracts similar to those being transferred to the issuing entity under “The Contracts — Statistics Relating to Delinquencies and Defaults.”  However, the actual results for the issuing entity’s contracts could be substantially worse.  If so, you may not receive note interest and principal payments in the amounts and at the times you expect.
Some Note Classes Will be Entitled to Interest or Principal Payments Before Other Note Classes [and the Swap Counterparty Will be Entitled to Payment Before Some Note Classes]	The issuing entity will pay interest, principal or both on some classes of notes prior to paying interest, principal or both on other classes of notes.  The subordination of some classes of notes to others means that the subordinated classes are more likely to suffer the consequences of delinquent payments and defaults on the contracts than the classes having prior payment rights. See “Description of the Notes and Indenture — Distributions,” “— Subordination of Subordinate Notes” and “— Cash Collateral Account” in this prospectus supplement. [Similarly, if the issuing entity has to pay any amounts to the swap counterparty under the Class A-3 Notes swap agreement, that amount will have the same priority of payment as interest owed to the Class A-3 noteholders.  This means that the amount owed to the swap counterparty must be paid before the payment of interest to the Class B, C and D noteholders and before the payment of principal to any noteholders.  See “Description of the Notes and Indenture — Class A-3 Swap Agreement” in this prospectus supplement.] Moreover, the more senior classes of notes could lose the credit enhancement provided by the more subordinate classes and the cash collateral account if delinquencies and defaults on contracts increase and the collections on contracts and amounts in the cash collateral account are insufficient to pay even the more senior classes of notes.
[Any Failure by the Swap Counterparty to Pay Amounts Owed Under the Swap Agreement Would Reduce the Funds Available to Pay Interest on the Class A-3 Notes	The Class A-3 Notes will be dependent upon payments to be made by the swap counterparty under the swap agreement for receipt of the full amount of interest on the Class A-3 Notes. This will be the case if the interest due on the Class A-3 Notes at their floating rate exceeds the amount available to the issuing entity to pay the Class A-3 Note interest at the assumed fixed rate of [     ]%.  Any shortfall in the payment of interest on the Class A-3 Notes due entirely to the failure of the swap counterparty to make a required payment under the swap agreement will not constitute an event of default under the indenture.  Except to the extent the amount available on any payment date exceeds the amount necessary to pay • the servicing fee and servicer advances, • all interest and principal payable on the notes, with Class A-3 Note interest being calculated at the assumed fixed rate for this purpose and • all amounts payable in connection with the cash collateral account, no amounts [in addition to those available under the swap agreement] will be available under the indenture to make up the shortfall.  [The only remedies in these circumstances will be those available to the issuing entity under the swap agreement.] [As a general matter, the obligations of the swap counterparty under the swap agreement are unsecured.  However, in the event that the swap counterparty’s long-term unsecured senior debt ceases to be rated at a level acceptable to [     ] and [    ], the swap counterparty will be obligated either to (a) post collateral or establish other arrangements to secure its obligations under the swap agreement or (b) arrange for a substitute swap counterparty to assume the rights and obligations of the swap counterparty under the swap agreement, in either case so that the ratings of the notes are maintained or, if applicable, restored to their level immediately prior to the downgrading or withdrawal of the swap counterparty’s debt.  If the swap counterparty fails to take either of these actions, the issuing entity will be entitled to terminate the swap agreement and to claim from the s wap counterparty the cost of obtaining a replacement swap from a swap counterparty satisfactory to the note rating agencies.   The Class A-3 noteholders bear the risk of any failure by the swap counterparty to take the actions required of it and the risk of any inability of the issuing entity to obtain a replacement swap agreement.]
Adverse Events in [     ] High Concentration States May Cause Increased Defaults and Delinquencies	If adverse events or economic conditions were particularly severe in a geographic region where there is a substantial concentration of obligors, the amount of delinquent payments and defaults on the contracts may increase.  As a result, the overall timing and amount of collections on the contracts held by the issuing entity may differ from what you expect, and you may experience delays or reductions in payments. The following are the approximate percentages of the initial contract pool principal balance of the issuing entity’s contracts whose obligors are located in the following states: • [     ]% in [     ], • [     ]% in [     ], • [     ]% in [     ], • [     ]% in [     ] and • [     ]% in [     ]. The remaining states accounted for [     ]% of the initial contract pool principal balance, and none of these remaining states accounted for more than [__]% of the initial contract pool principal balance. [Although the sponsor does not know of any matters likely to increase the rate of delinquencies or defaults in these states, an example of an adverse event specific to a geographic region is the possibility of a catastrophic earthquake in California. An earthquake in California could have negative regional economic repercussions and potentially cause obligors in that region to delay or reduce their payments on contracts.  Additionally, a substantial downturn in the financial services industry, which is highly concentrated in the states of New York and New Jersey, or in the oil and gas industry, which is concentrated in the state of Texas, could reduce revenues for obligors in those states and ultimately reduce the associated obligors’ ability to make timely payments on their related contracts].
Adverse Economic Conditions in High Concentration Industries May Cause Increased Defaults and Delinquencies	If the industries in which there is a substantial concentration of contracts experience adverse events or economic conditions, the timing and amount of collections on the contracts held by the issuing entity may differ from what you expect.   This could result in delays or reduced payments to you. As of the initial cut-off date, of the contract pool principal balance, approximately [     ]% related to the manufacturing industry, [     ]% related to equipment used in the services industry, excluding medical and professional services, [     ]% related to the retail and wholesale trade industry, [     ]% related to equipment used in transportation, [     ]% related to equipment used in the medical profession, [     ]% related to equipment used in professional services, and [     ]% related to the financial services industry. While the sponsor does not know of any industry conditions, practices or other matters likely to increase the rate of delinquencies or defaults on contracts with end-users in these industries, some of them may be adversely affected by various economic conditions.  For example, a rise in interest rates may weaken the demand for construction services.  Moreover, the retail trade industry is dependent upon the level of consumer confidence and spending. Adverse developments concerning these conditions will tend to increase the rate of delinquencies and defaults by contract obligors in those industries. This, in turn, could result in reductions of or delays in the collection of funds for payment of the notes. The sponsor does not believe that any other industry accounts for more than [5.00]% of the contract pool principal balance.  However, as shown in the table below under the heading “Types of Obligor,” the depositor’s records list [     ]% of the contract pool principal balance in the category of “Other” obligor.  The depositor has not analyzed this category to determine whether or not the contracts included in it could be grouped into some other more specific type of equipment category.  Any contracts in this “Other” category that relate to any particular industry would be subject to all economic and other risks associated with that industry.  Any adverse developments in that industry will tend to increase the rate of delinquencies and defaults by contract obligors in that industry.  This, in turn, could result in reductions or delays in collection of funds for payment of the notes.
Product Defects or Obsolescence or Adverse Economic Events for [___] Vendors Accounting for High Proportions of the Contracts May Cause Increased Defaults and Delinquencies	[     ], a [     ]and [     ] a [     ] is the vendor of equipment for approximately [     ]% of the contract pool principal balance calculated as of the initial cut-off date.  Products of [     ], a leading producer of [computer systems], accounted for approximately [ [    ]% of the contract pool balance calculated as of the initial cut-off date.  Although the sponsor is unaware of conditions likely to increase the rate of defaults or delinquencies on contracts pertaining to equipment produced by these two vendors, some events concerning these vendors or their products could have that effect.  For example, if either of these vendors were to experience financial difficulties, the obligors’ payment performance with respect to the related contracts may decline as the obligors may be less inclined to make payments on contracts with respect to a vendor which is suffering financial difficulties.  Additionally, the occurrence of a substantial number of defects in products produced by either of these vendors may result in decisions by the obligors on the contracts relating to equipment that proved defective not to pay the contract amounts, to pay late or to pay smaller amounts.  This could result in reductions of or delays in payments you expect on the notes.  Moreover, obsolescence of the products of either of these vendors could result in prepayments of contracts that would cause the notes to be paid earlier than you expect.  No other single vendor originated more than [     ]% of the contract pool principal balance as of the initial cut-off date.
Product Defects or Obsolescence of Types of Equipment Accounting for High Proportions of the Contracts May Cause Increased Defaults or Delinquencies	If the types of equipment in which contracts are concentrated suffer unexpectedly high rates of defects or become obsolete, the obligors on the contracts may default, pay late or pay less than the amounts owed on the contracts.  This could result in reductions of or delays in payments you expect on the notes. As of the initial cut-off date, of the contract pool principal balance, approximately [     ]% related to contracts involving telecommunications equipment, [     ]% related to contracts involving transportation equipment, [     ]% related to contracts involving computer and point-of-sale equipment, [     ]% related to contracts involving computer software, [     ]% related to contracts involving manufacturing, [     ]% related to contracts involving construction equipment, and [     ]% related to contracts involving medical equipment. The depositor does not believe that any other type of equipment accounts for more than [     ]% of the contract pool principal balance.  However, as shown in the table below under the heading “Types of Equipment,” the depositor’s records list [     ]% of the contract pool principal balance in the category of “Other” types of equipment.  The depositor has not analyzed this category to determine whether or not the contracts included in it could be grouped into some other more specific type of equipment category.  Any contracts in this “Other” category that relate to any particular type of equipment would be subject to all defect, obsolescence and other risks associated with that type of equipment.  Any adverse developments concerning that type of equipment will tend to increase the rate of delinquencies and defaults by obligors on contracts involving that type of equipment.   ;This, in turn, could result in reductions or delays in collection of funds for payment of the notes.
The Issuing Entity’s Not Having Security Interests in Computer Software and Services and the Issuing Entity’s Not Being Named as Secured Party in Motor Vehicle Title Certificates will Leave the Issuing Entity Without Collateral For the Associated Contracts	The issuing entity will have no security interest in computer software and computer services contracts, which accounted for [     ]% of the initial contract pool balance, and the issuing entity will not be named as a secured party in the title certificates for motor vehicle contracts, which accounted for a substantial portion of the [     ]% of the initial contract pool principal balance attributable to the transportation industry.  If the obligor on this type of contract fails to pay or is late in paying, the issuing entity will have no recourse to the software, services or motor vehicles, as the case may be, underlying the contracts.  This increases the risk that the issuing entity will be unable to pay or will be late in paying the amounts you expect on the notes.
The Issuing Entity’s Assets are the Only Source of Payments on the Notes	All distributions on the notes will be made from payments by borrowers under the receivables.  The issuing entity has no other assets [other than[     ]] to make distributions on the notes.  The receivables are not insured or guaranteed by any person.  The issuing entity is the only person that is obligated to make distributions of the notes.
[The mandatory auction certificates Have Special Risks	On the mandatory auction distribution date, the auction administrator will auction the mandatory auction certificates to third party investors. If the auction is successful, proceeds from the auction will be used to pay the holders of the mandatory auction certificates 100% of the current principal amount thereof on that date, following distributions of principal and allocation of losses, to be made on the mandatory auction distribution date, plus accrued interest on such classes at the related pass through rate from the first day of the calendar month in which the mandatory auction distribution date occurs, up to but excluding the mandatory auction distribution date, on the current principal amount of such classes following distributions to such classes on the mandatory auction distribution date. The auction administrator has entered into a market value swap with the swap counterparty to cover any shortfall in the auction proceeds. The swap counterparty's obligations under the market value swap will be guaranteed by [___________], referred to in this prospectus supplement as [___]. If the swap counterparty defaults under the market value swap and its obligations are not honored by [___] as required under [___]'s guarantee, another party may succeed to the swap counterparty's obligations in accordance with the terms of the market value swap. If no successor swap counterparty is found, the mandatory auction will not occur, and the holders of the mandatory auction certificates will continue to hold their certificates after the mandatory auction date, unless they choose to sell them in the secondary market. To the extent the mandatory auction certificates are then sold in the secondary market, the holders may incur a loss. See “Description of the Certificates—The Mandatory Auction” in this prospectus supplement.]

[Additional Applicable Risk Factors]

THE ISSUING ENTITY

General

The sponsor created the issuing entity on [     ] as a Delaware statutory trust under a trust agreement, which the parties will amend and restate on the closing date for the sale of the notes, among the sponsor the depositor and the issuing entity.  The issuing entity’s address is c/o [_______________] as Owner Trustee, [_____________________].

Under a pooling and servicing agreement, dated as of [     ], among

•

the depositor,

•

the issuing entity,

•

 [     ], an originator and the seller of contracts to the depositor and

•

the servicer,

the depositor will transfer all of the contracts and the related security interests to the issuing entity.  As noted in “The Contracts — Software and Services” in the accompanying prospectus, some transferred contracts will not have associated security interests.

The issuing entity will issue an equity certificate, representing the beneficial ownership interest in the issuing entity, to the depositor.  The equity certificate will be entitled to any excess amount available on any payment date after reimbursement of servicer advances and payment of servicing fees, principal and interest on the notes[, any amount owed to the swap counterparty] [and amounts payable in connection with the cash collateral account].  See “Description of the Notes and Indenture — Distributions” in this prospectus supplement.  The sponsor is not offering and selling the equity certificate under this prospectus supplement and the accompanying prospectus.

The issuing entity’s fiscal year end is [___________].

Capitalization of the Issuing Entity

If the issuance and sale of the notes had taken place on the initial cut-off date, the capitalization of the issuing entity on that date would have consisted of notes with an aggregate principal amount of $[     ] and an equity certificate.

THE OWNER TRUSTEE

[      ], a [national banking association] is the owner trustee under the trust agreement.  [          ]’s principal offices are located at [      ], [      ].  The owner trustee will perform limited administrative functions under the trust agreement, including making distributions from the Note Distribution Account. The owner trustee’s liability in connection with the issuance and sale of the notes is limited solely to the express obligations of the owner trustee set forth in the trust agreement.

[Provide Reg AB Item 1109(b) compliant description of the extent of the owner trustee’s prior experience serving as a trustee for notes transactions involving asset pools of equipment lease contracts.]

[Provide Reg AB Item 1109(c) compliant description of the owner trustee’s duties and responsibilities regarding the notes under the governing documents and under applicable law, and of any actions required by the owner trustee, including whether notices are required to investors, rating agencies or other third parties, upon an event of default, potential event of default (and how defined) or other breach of a transaction covenant and any required percentage of a class or classes of notes that is needed to require the owner trustee to take action.]

[Provide Reg AB Item 1109(d) compliant description of any limitations on the owner trustee’s liability under the transaction agreements regarding the notes transaction.]

[Provide Reg AB Item 1109(e) compliant description of any indemnification provisions that entitle the owner trustee to be indemnified from the cash flow that otherwise would be used to pay the notes.]

[Provide Reg AB Item 1109(f) compliant description of any contractual provisions or understandings regarding the owner trustee’s removal, replacement or resignation, as well as how the expenses associated with changing from one owner trustee to another owner trustee will be paid.]

THE ORIGINATORS

General

[____], [____] and  [____] are the originators of the contracts with respect to approximately [___]%, [___]% and [___]%, respectively, of the contracts by aggregate principal balance as of the Cut-off Date, along with various other originators, none of which originated more than 10% of the contracts by aggregate principal balance as of the Cut-off Date.

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

[Originator Name]

[Regulation AB Item 1110 compliant description of Originator].

[Regulation AB Item 1110 compliant description of Originator’s underwriting standards].

THE SERVICER

[____________], a [describe form of organization of the servicer] will initially service the contracts pursuant to a pooling and servicing agreement, to be dated as of [       ], among the sponsor, the depositor, the issuing entity and the servicer.  

The servicer will perform the functions of a third-party servicer of lease contracts as an agent for their beneficial owner.  [These servicer functions will include:

•

collecting and posting all payments;

•

responding to obligor inquiries regarding the contracts;

•

investigating delinquencies;

•

reporting tax information to obligors;

•

paying equipment disposition costs with respect to defaulted accounts;

•

monitoring the collateral;

•

accounting for collections;

•

furnishing monthly and annual statements to the issuing entity with respect to distributions; and

•

generating federal income tax information. ]

[Regulation AB Item 1108 compliant description of the Servicer.]

THE CONTRACTS

Description of the Contracts

All of the contracts are commercial, rather than consumer, leases, loans or agreements.  See “The Contracts” in the accompanying prospectus.

Statistics Relating to the Initial Cut-Off Date Contract Pool

The initial contract pool principal balance is $[     ].  This amount is based upon the contract pool principal balance determined as of the initial cut-off date, but also includes an amount in respect of scheduled payments on the contracts due prior to, but not received as of, the cut-off date.  The following tables set forth the characteristics of the contracts as of the cut-off date.  Tables presented in this section may not total due to rounding.

Composition of the Initial Cut-Off Date Contract Pool

Number of Contracts	Initial Contract Pool Principal Balance	Weighted Average Original Term (Range)	Weighted Average Remaining Term (Range)	Average Contract Principal Balance (Range)
[     ]	$[     ]	[     ] months ([     ] months to [     ] months)	[     ] months ([     ] month to [     ] months)	$[     ] ($[     ] to $[     ])

Type of Contracts

Type of Contract	Aggregate Number of Contracts	% of Total Number of Contracts	Aggregate Contract Principal Balance	% of Initial Contract Pool Principal Balance
True Lease
Finance Leases
Loans/Conditional Sales
Installment Payment
Agreements
Total		100.00%	$	100.00%

Geographical Diversity

State	Aggregate Number of Contracts	% of Total Number of Contracts	Aggregate Contract Principal Balance	% of Initial Contract Pool Principal Balance
Total		100.00%	$	100.00%

Payment Status

Days Delinquent	Aggregate Number of Contracts	% of Total Number of Contracts	Aggregate Contract Principal Balance	% of Initial Contract Pool Principal Balance
Current, including 1 to 30 day delinquent contracts
31 - 60 days delinquent
Total		100.00%	$	100.00%

Types of Equipment

Type of Equipmentt	Aggregate Number of Contracts	% of Total Number of Contracts	Aggregate Contract Principal Balance	% of Initial Contract Pool Principal Balance
Telecommunications
Transportation
Computer
Computer Software
Manufacturing
Construction
Medical
Automotive Diagnostic Equipment
Printing
Resources
Office Equipment
Commercial Retail Fixtures Industrial
Other, including $[       ] as the largest and $[       ] as the average contract principal balance
Total		100.00%	$	100.00%

The depositor does not believe that any other type of equipment accounts for more than [5]% of the contract pool principal balance.  However, the depositor has not analyzed the contracts included in the category “Other” in the above table to determine whether or not the contracts included in it could be grouped into some other more specific type of equipment category.

Contract Principal Balances

Contract Principal Balance	Aggregate Number of Contracts	% of Total Number of Contracts	Aggregate Contract Principal Balance	% of Initial Contract Pool Principal Balance
$0.01 to $       5,000.00
$5,000.01 to $     25,000.00
$25,000.01 to $     50,000.00
$50,000.01 to $   100,000.00
$100,000.01 to $   500,000.00
$500,000.01 to $1,000,000.00
$1,000,000.01 to $2,000,000.00
$2,000,000.01 to $3,000,000.00
$3,000,000.01 to $4,000,000.00
$4,000,000.01 to $5,000,000.00
Over $5,000,000, the largest single contract principal balance being $[        ]
Total		100.00%	$	100.00%

Remaining Terms of Contracts

Remaining Terms of Contacts (months)	Aggregate Number of Contracts	% of Total Number of Contracts	Aggregate Contract Principal Balance	% of Initial Contract Pool Principal Balance
0 -  12
13 -  24
25 -  36
37 -  48
49 -  60
61 -  72
73 -  84
85 -  96
97 – 108
Over 108
Total		100.00%	$	100.00%

Types of Obligor

Types of Obligor	Aggregate Number of Contracts	% of Total Number of Contracts	Aggregate Contract Principal Balance	% of Initial Contract Pool Principal Balance
Manufacturing
Service Organizations
Retail & Wholesale
Transportation
Professional
Financial Services
Manufacturing & Construction
Machine tools
Medical
Resources
Government
Print Center
Other, including $[       ] as the largest and $[       ] as the average principal balance
Total		100.00%	$	100.00%

The depositor does not believe that any other industry accounts for more than 5.00% of the contract pool principal balance.  However, the depositor has not analyzed the contracts included in the category “Other” in the above table to determine whether or not the contracts could be grouped into some other more specific industry category.

Obligor Concentration

Obligors (including Contracts securing vendor loans)r	Aggregate Number of Contracts	Aggregate Contract Principal Balance	% of Initial Contract Pool Principal Balance
Top 5

Statistics Relating to Delinquencies and Defaults

The following table shows contract delinquency statistics for the originators’ portfolios of contracts similar to the contracts conveyed to the issuing entity, on an aggregate basis, as of December 31 in each of the past five years and as of [     ] and [     ].  The applicable originators used the underwriting standards described in this prospectus supplement under the section titled “Underwriting” for all of these contracts.  For these purposes, a “delinquency” means that the obligor on the contract has failed to make a required scheduled payment in an amount equal to at least 90% of the required scheduled payment within 60 days of the due date.  For these purposes, any payment made by the obligor on a contract subsequent to the required payment date is applied to the earliest payment which was unpaid.  These statistics are not necessarily indicative of the future performance of the contracts.  The following table is based on the net investment for all contracts originated by [     ]  and the gross receivable for contracts originated by the other originators.  Net investment is the sum of all payments plus any expected equipment residual value under a contract discounted to present value using the contract’s implicit interest rate.  The gross receivable is the undiscounted sum of all payments under a contract.

Contract Delinquencies

		Percent of Contract Balances Which Were Delinquent
As of	Contract Balance (In Thousands)	31 to 60 Days	61 to 90 Days	Over 90 Days	Total
12/31/[     ]	$[     ]	[     ]%	[     ]%	[     ]%	[     ]%
12/31/[     ]	$[     ]	[     ]%	[     ]%	[     ]%	[     ]%
12/31/[     ]	$[     ]	[     ]%	[     ]%	[     ]%	[     ]%
12/31/[     ]	$[     ]	[     ]%	[     ]%	[     ]%	[     ]%
12/31/[     ]	$[     ]	[     ]%	[     ]%	[     ]%	[     ]%
03/31/[     ]	$[     ]	[     ]%	[     ]%	[     ]%	[     ]%
03/31/[     ]	$[     ]	[     ]%	[     ]%	[     ]%	[     ]%

Losses and Recoveries

The following table shows statistics for gross losses and losses net of recoveries on defaulted contracts within the originators’ portfolios of contracts conveyed to the issuing entity similar to the contracts during the twelve-month period ending December 31 in each of the past five years and the three-month periods ended March 31, [     ] and [     ].  Gross losses means total losses before recoveries measured against the net investment of the contracts, gross of any allowance for losses.  Losses net of recoveries means losses after recoveries measured against the net investment of the contracts, gross of any allowance for losses.  These statistics are not necessarily indicative of the future performance of the contracts.

Twelve Months Ended	Aggregate Net Investment of Contracts (In Thousands)	Gross Losses as a Percentage of Net Investment	Net Losses as a Percentage of Net Investment
12/31/[     ]	$[     ]	[     ]%	[     ]%
12/31/[     ]	$[     ]	[     ]%	[     ]%
12/31/[     ]	$[     ]	[     ]%	[     ]%
12/31/[     ]	$[     ]	[     ]%	[     ]%
12/31/[     ]	$[     ]	[     ]%	[     ]%

Three Months Ended

03/31/[     ]	$[     ]	[     ]%	[     ]%
03/31/[     ]	$[     ]	[     ]%	[     ]%

STATIC POOL INFORMATION

The depositor will provide static pool information with respect to the sponsor’s prior securitized pools of assets of the same type as the contracts formed during the period from [_____] to [_____], presented by pool, online at http://www.[__________].  Access to this web address is unrestricted and free of charge.  The static pool information includes (i) information about the original characteristics of each prior securitized pool as of the cut-off date for that pool and (ii) delinquency, loss and prepayment information about each prior securitized pool in [quarterly] increments from the related cut-off date through [_____].  The static pool information about prior securitized pools of lease contracts of the sponsor that were established before January 1, 2006 will not be deemed to be a part of the final prospectus supplement, the accompanying prospectus or the related registration statemen t.

There can be no assurances that the rates of delinquencies, losses and prepayments experienced by the prior securitized pools will be comparable to delinquencies, losses and prepayments expected to be experienced by the contracts owned by the issuing entity.

UNDERWRITING GUIDELINES

[With respect to each originator or group of affiliated originators, apart from the sponsor and its affiliates, that originated or is expected to originate, 20% or more of the contract pool, describe the underwriting guidelines of such Originator, as follows:

[Name of Originator]

[Description of the underwriting guidelines of such Originator]

[Originator Name]

[Description of the underwriting guidelines of such Originator]

[Originator Name]

[Description of the underwriting guidelines of such Originator]]

WEIGHTED AVERAGE LIFE OF THE NOTES

•

The rate of payments on contracts will directly affect

•

the rate of note principal payments;

•

the aggregate amount of each note interest payment; and

The payments on the contracts may be in the form of payments scheduled to be made under the terms of the contracts, prepayments or liquidations due to default, casualty and other events which cannot be predicted. [     ] may purchase contracts from the issuing entity if the contracts were ineligible for transfer at the time of transfer to the issuing entity.  Any payments for these reasons, other than scheduled payments, may result in distributions to you of amounts which would otherwise have been distributed over the remaining term of the contracts.  Each prepayment, liquidation or repurchase of a contract, if the contract is not replaced by the depositor with a comparable substitute contract as described under “The Contracts — Substitution of Contracts” in the accompanying prospectus, will shorten the weighted average remaining term of the contracts and the w eighted average life of the notes.  See “Risk Factors — Contract Prepayment, Ineligibility or Default May Cause Earlier Repayment of the Notes Than You Expect and You May Not be Able to Find Investments with the Same Yield as the Notes at the Time of Repayment” in the accompanying prospectus.

The following chart sets forth the percentage of the initial principal amount of each class of notes which would be outstanding on the distribution dates set forth below assuming the conditional prepayment rates (“CPR”) indicated in the chart.  This information is hypothetical.  The conditional prepayment rate assumes that a fraction of the outstanding contracts is prepaid on each payment date, which implies that each contract in the pool of contracts is equally likely to prepay.  This fraction, expressed as a percentage, is annualized to arrive at the conditional prepayment rate for the contracts.  The conditional prepayment rate measures prepayments based on the contract pool principal balance, after the payment of all payments scheduled to be made under the terms of the contracts during each collection period.  The conditional prepayment rate further assumes that all contrac ts are the same size and amortize at the same rate.  The conditional prepayment rate also assumes that each contract will be either paid as scheduled or prepaid in full.  The amounts set forth below are based upon the timely receipt of scheduled monthly contract payments, and assume that:

•

[_________] exercises its option to cause a redemption of the notes when the aggregate note principal balance is less than 10% of the initial aggregate discounted contract balance of the contracts, and

•

the closing date for the sale of the contracts to the issuing entity is [     ].

These tables are based upon the contract pool principal balance determined using the discount rate of [     ]%.  In addition, it is assumed for the purposes of these tables only, that the issuing entity issues the notes in the following initial principal amounts and at the following fixed interest rates:

Class	Initial Principal Amount	Interest Rate
A-1	$[     ]	[     ]%
A-2	[     ]	[     ]
A-3	[     ]	[     ]
A-4	[     ]	[     ]
A-5	[     ]	[     ]
B	[     ]	[     ]
C	[     ]	[     ]
D	[     ]	[     ]

Percentage of the Initial Principal

of the Class A-1 Notes

	CPR
Payment Date	0%	6%	9%	12%	18%
Closing Date
Weighted Average Life To Call (in years)
Weighted Average Life To Maturity (in years)

Percentage of the Initial Principal

of the Class A-2 Notes

	CPR
Payment Date	0%	6%	9%	12%	18%
Closing Date
Weighted Average Life To Call (in years)

Percentage of the Initial Principal

of the Class A-3 Notes

	CPR
Payment Date	0%	6%	9%	12%	18%
Closing Date
Weighted Average Life To Call (in years)

Percentage of the Initial Principal

of the Class A-4 Notes

	CPR
Payment Date	0%	6%	9%	12%	18%
Closing Date
Weighted Average Life To Call (in years)

Percentage of the Initial Principal

of the Class A-5 Notes

	CPR
Payment Date	0%	6%	9%	12%	18%
Closing Date
Weighted Average Life To Call (in years)

Percentage of the Initial Principal

of the Class C Notes

	CPR
Payment Date	0%	6%	9%	12%	18%
Closing Date
Weighted Average Life To Call (in years)

DESCRIPTION OF THE NOTES AND INDENTURE

This section adds to the information in the accompanying prospectus under the caption “Description of the Notes and Indenture.”  However, as these statements are only summaries, you should read the pooling and servicing agreement and the indenture.  The depositor filed the forms of these documents as exhibits to the registration statement it filed with the Securities and Exchange Commission for the notes.

The notes will be issued under an indenture between the issuing entity and the indenture trustee.

The issuing entity will issue eight classes of notes, consisting of five classes of senior notes, designated as the

•

Class A-1 Notes,

•

Class A-2 Notes,

•

Class A-3 Notes,

•

Class A-4 Notes and

•

Class A-5 Notes.

These are referred to in this document as “Class A Notes.” The issuing entity will also issue three classes of subordinate notes, designated as the Class B Notes, the Class C Notes and the Class D Notes.  The Class B, Class C and Class D Notes are the “Subordinate Classes.”

Investors may purchase the notes in book-entry form in minimum denominations of $[1,000] and in integral multiples of $[1] in excess of $[1,000].  Each class will initially be represented by one or more notes registered in the name of the nominee of The Depository Trust Company.  The issuing entity will pay note interest and principal on the [   ]th day of each month, or, if not a business day, the next succeeding business day, commencing in [     ], to registered noteholders as of the related record date.  So long as the notes remain in book-entry form, the record date for any payment date will be the business day immediately preceding the payment date.  If the notes are no longer in book-entry form, the record date will be the last business day of the month immediately preceding the payment date.  However, the issuing entity will make the final payment on the notes only upon presentation and surrender of the notes to the indenture trustee.  The issuing entity will make all payments on the notes in immediately available funds.  See “Description of the Notes and Indenture — Book-Entry Registration” in the accompanying prospectus.

Distributions

The issuing entity will pay note principal and interest on each payment date from the “Available Pledged Revenues” for the payment date[, as well as amounts permitted to be withdrawn from the cash collateral account].  [See “—Cash Collateral Account” below.]  The “Available Pledged Revenues” as of any payment date are the sum of

(a)

the following amounts on deposit in the collection account which the issuing entity received during the related collection period

(1)

scheduled contract payments, except payments in respect of

•

taxes,

•

insurance premium reimbursements,

•

security deposits,

•

late charges,

•

documentation fees,

•

extension fees,

•

administrative charges or,

•

maintenance premiums,

(2)

prepayments of contracts, and

(3)

proceeds of liquidating defaulted contracts,

(b)

the purchase price paid by the seller in repurchasing ineligible contracts from the issuing entity,

(c)

the amounts that the servicer paid to purchase the contracts in exercise of its option to do so when the aggregate note principal amount is reduced to less than [10]% of the initial contract pool principal balance and that were on deposit in the collection account as of the business day before the payment date,

(d)

investment earnings on amounts held in the collection or note distribution account and

(e)

to the extent necessary to pay interest, amounts of the type described in (a) above that the issuing entity received after the end of the related collection period.

However, Available Pledged Revenues do not include any amount allocable to the depositor as representing the residual value of equipment subject to a lease, except to the extent that the end-user or a vendor guaranteed the equipment residual value.

On each payment date, the servicer will direct the indenture trustee to apply Available Pledged Revenues to the following payments in the following order of priority:

(1)

reimbursement of servicer advances;

(2)

the servicing fee;

(3)

interest on the notes in the following order of priority:

(a)

interest on the Class A-1, A-2, A-3, A-4, and A-5 Notes, including any overdue interest, allocated pro rata based on the respective principal amounts of the Class A-1, A-2, A-3, A-4 and A-5 Notes,

(b)

interest on the Class B Notes, including any overdue interest,

(c)

interest on the Class C Notes, including any overdue interest,

(d)

interest on the Class D Notes, including any overdue interest,

(4)

principal on the notes in the amounts and priority described under “Principal” below;

(5)

any amount necessary to increase the cash collateral account balance to its required level;

(6)

[amounts payable in connection with the cash collateral account;]

[(7)

any shortfall in the payment of interest on the Class A-3 Notes due to the failure of the swap counterparty to pay amounts owed to the issuing entity under the swap agreement, together with interest on the shortfall;] and

(8)

any remainder to the holder of the equity certificate.

The issuing entity is to make payments first from the Available Pledged Revenues[, and second, but only as to amounts described in clauses (3) and (4) immediately above, from amounts permitted to be withdrawn from the cash collateral account as described under “Cash Collateral Account” below.]  For purposes of the above allocation of Available Pledged Revenues in respect of interest, the Class A-3 interest rate will be assumed to be the assumed fixed rate of [     ]% determined in connection with the swap agreement.

Interest

The priorities of interest payments are set forth under “Distributions” above.

The issuing entity will pay interest on each class of notes from and including the closing date to but excluding [     ], and after that date for each successive interest period.  Interest on the Class A-1 and A-3 Notes will be computed on the basis of [the actual number of days elapsed and a 360-day year].  Interest on the other classes of notes will be computed on the basis of [a 360-day year comprised of twelve 30-day months].

The rates for classes other than Class A-3 are set forth on the cover page of this prospectus supplement.  The Class A-3 interest rate shall be the one-month London interbank offered rate, referred to as One-Month LIBOR, plus [     ]%.

One-Month LIBOR means as of any LIBOR Determination Date and with respect to the related interest period, the rate of interest per annum equal to the London interbank offered rate for deposits in U.S. dollars having a maturity of one month which appears on Telerate Page 3750 as of 11:00 a.m., London time, on the LIBOR Determination Date.  If the rate does not appear on Telerate Page 3750, One-Month LIBOR for the LIBOR Determination Date will be determined on the basis of the rates at which deposits in U.S. dollars having a maturity of one month and in a principal amount of not less than U.S. $1,000,000, are offered at approximately 11:00 a.m., London time, on the LIBOR Determination Date to prime banks in the London interbank market by the Reference Banks.  The servicer will request the principal London office of each of the Reference Banks to provide a quotation of its rate to the indenture trustee. & nbsp;If at least two quotations are provided, One-Month LIBOR will be the arithmetic mean, rounded upwards, if necessary, to the nearest 0.01%, of the offered rates.  If fewer than two quotations are provided, One-Month LIBOR will be the arithmetic mean, rounded upwards, if necessary to the nearest 0.01%, of the rates quoted at approximately 11:00 a.m., New York City time, on the LIBOR Determination Date to the indenture trustee by three major banks in New York, New York, selected by the servicer, for loans in United States dollars to leading European banks having a maturity of one month and in a principal amount of not less than U.S. $1,000,000.  However, if those banks do not quote a rate to the indenture trustee as described in this sentence, One-Month LIBOR will be the One-Month LIBOR in effect for the immediately preceding interest period.

“LIBOR Determination Date” means for the interest period from and including the closing date to but excluding [     ], the second business day preceding the closing date for the sale of the notes, and for each subsequent interest period, the second business day preceding the interest period.  For purposes of computing One-Month LIBOR, a business day is any business day on which dealings in deposits in United States dollars are transacted in the London interbank market.

Telerate Page 3750 means the display page so designated on the Dow Jones Telerate Service, or another page replacing that page on that service for the purpose of displaying comparable rates or prices.

Reference Banks means four leading banks, selected by the servicer, engaged in transactions in Eurodollar deposits in the international Eurocurrency market and having an established place of business in London.

If on any payment date, the issuing entity does not have sufficient funds, after payment of servicer advances and the servicing fee, to make a full payment of interest on any class of notes, the amount of the shortfall will be carried forward and, together with interest on the shortfall amount at the applicable interest rate for that class, added to the amount of interest the affected class of noteholders will be entitled to receive on the next payment date.

Principal

This section gives only an overview of how the issuing entity will pay principal.  The sponsor recommends that you read this section in connection with the more detailed terms set forth in the pooling and servicing agreement included as an exhibit to the registration statement filed with the Securities and Exchange Commission for the notes.

Overview of Principal Distributions

The principal required to be paid on the notes on each payment date will be the amount necessary to pay the notes down so that their aggregate principal balance equals the contract pool principal balance as of the last day of the prior month.  This amount will be allocated among the various classes of notes according to the priorities described in this section.

For so long as the Class A-1 Notes are outstanding, 100% of the principal will be allocated between the Class A-1 Notes and the Class A-5 Notes.  After the Class A-1 note principal balance has been paid to zero, the principal will be allocated:

first, among the Class A Notes as a group, between the Class A-5 Notes on one hand and the Class A-2, Class A-3 and Class A-4 Notes, on the other hand, sequentially in that order, then again to the Class A-5 Notes;

second, to the Class B Notes;

third, to the Class C Notes; and

fourth, to the Class D Notes.

Subject to the operation of the floors for each of the Subordinate Classes, after the payment date on which the Class A-1 note principal amount has been paid to zero, the issuing entity will pay principal proportionately, among the Class A Notes as a group, the Class B Notes, the Class C Notes and the Class D Notes, in the priorities listed above.  However, the principal paydown rules incorporate a concept of a floor on each class of the Subordinate Classes, which means that the Subordinate Classes, for so long as any notes senior to that class are outstanding, cannot be paid an amount of principal which would reduce that Subordinate Class below its floor principal amount.  If a Subordinate Class is at its floor level, that Subordinate Class is “locked out” from receiving further principal payments, with the additional effect of reallocating the principal that would otherwise have been paid t o that Subordinate Class to the most senior class then outstanding.  The levels of the floors are not static, but are subject to increase if the issuing entity experiences contract pool losses that cannot be funded from the current period’s Available Pledged Revenues or the cash collateral account.  This increase in the level of the floors tends to “lock out” the Subordinate Classes earlier, which accelerates the payment of the reallocated principal to the senior classes.  If unfunded losses become severe and the cash collateral account is depleted, the unfunded loss amount could be so large that the principal paydown rules result in a sequential-pay senior subordinated structure among the various note classes, with no principal being paid to a Subordinate Class unless the note principal amount of each class senior to it has been paid in full.  The floors operate both before and after an event of default.

Before an Event of Default

This chart summarizes how principal will be paid on the notes before any event of default.  The section headed “Definitions Concerning Principal Payments” below defines various terms relating to the payment of principal.

Class	Principal Payments
Class A-1	Begins receiving principal on first payment date
	Receives [     ]% of Total Principal Payment Amount until paid in full, but will receive 100% of the Total Principal Payment Amount if any of its principal is outstanding after its stated maturity date until paid in full
Class A-2	Begins receiving principal once Class A-1 is paid in full
	Receives the Class A Principal Payment Amount reduced by any amount paid to Class A-5, until Class A-2 is paid in full, but will receive 100% of the Class A Principal Payment Amount if any of its principal is outstanding after its stated maturity date, until paid in full
	May also receive principal payments reallocated away from the Subordinate Classes through the operation of the floors
Class A-3	Begins receiving principal once Class A-2 is paid in full
	Receives the Class A Principal Payment Amount reduced by any amount paid to Class A-5, until Class A-3 is paid in full, but will receive 100% of the Class A Principal Payment Amount if any of its principal is outstanding after its stated maturity date, until paid in full
	May also receive principal payments reallocated away from the Subordinate Classes through the operation of the floors
Class A-4	Begins receiving principal once Class A-3 is paid in full
	Receives the Class A Principal Payment Amount reduced by any amount paid to Class A-5, until Class A-4 is paid in full, but will receive 100% of the Class A Principal Payment Amount if any of its principal is outstanding after its stated maturity date, until paid in full
	May also receive principal payments reallocated away from the Subordinate Classes through the operation of the floors
Class A-5	Begins receiving principal on first payment date
	Receives [     ]% of the Total Principal Payment Amount until Class A-1 is paid in full and the same percentage after Class A-1 is paid in full until Class A-4 is paid in full but only to the extent of the Class A Principal Payment Amount
	Once Class A-4 is paid in full, Class A-5 receives 100% of the Class A Principal Payment Amount until paid in full
	May also receive principal payments reallocated away from the Subordinate Classes through the operation of the floors
Class B	Begins receiving principal once Class A-1 is paid in full
	Receives the Class B Principal Payment Amount until paid in full
	Through the operation of its floor, Class B’s principal payments are subject to reallocation for the benefit of Class A
	May also receive principal payments reallocated away from Class C and Class D through the operation of the floors
Class C	Begins receiving principal once Class A-1 is paid in full
	Receives the Class C Principal Payment Amount until paid in full
	Through the operation of its floor, Class C’s principal payments are subject to reallocation for the benefit of Class A and Class B
	May also receive principal payments reallocated away from Class D through the operation of the floors
Class D	Begins receiving principal once Class A-1 is paid in full
	Receives the Class D Principal Payment Amount until paid in full
	Through the operation of its floor, Class D’s principal payments are subject to re-allocation for the benefit of Class A, Class B and Class C

Detailed Principal Distribution Rules

The priority of principal payments will be in the following order:

(1)

prior to the payment date on which the Class A-1 Note principal amount has been reduced to zero, the Class A Principal Payment Amount will be equal to the Total Principal Payment Amount and will be allocated [     ]% to the Class A-1 Notes and [     ]% to the Class A-5 Notes.  However, if the Class A-1 Notes have not been paid to zero by their stated maturity date, 100% of the Class A Principal Payment Amount will be paid to the Class A-1 Notes on their stated maturity date and on each subsequent payment date until their note principal amount is zero;

(2)

on and after the payment date on which the Class A-1 principal amount has been reduced to zero, and disregarding the amount that must first be applied to reduce the Class A-1 principal amount to zero, the Total Principal Payment Amount will be allocated among the various classes in the following order of priority:

(a)

the Class A Principal Payment Amount to the Class A noteholders, allocated as follows:

(i)

[     ]% of the Total Principal Payment Amount, but in no event greater than the Class A Principal Payment Amount, to the Class A-5 noteholders, and

(ii)

the Class A Principal Payment Amount reduced by any payments to the Class A-5 noteholders under clause (2)(a)(1) to the Class A-2 noteholders until the Class A-2 principal amount equals zero, then to the Class A-3 noteholders until the Class A-3 principal amount equals zero, then to the Class A-4 noteholders until the Class A-4 principal amount equals zero and then to the Class A-5 noteholders until the Class A-5 principal amount equals zero;

However, if the Class A-2, Class A-3 or Class A-4 Notes have not been paid to zero by their respective stated maturity dates, 100% of the Class A Principal Payment Amount will be paid to that class on its stated maturity date and on each subsequent payment date until its note principal amount is zero;

(b)

the Class B Principal Payment Amount to the Class B noteholders;

(c)

the Class C Principal Payment Amount to the Class C noteholders;

(d)

the Class D Principal Payment Amount to the Class D noteholders; and

(e)

any Reallocated Principal, sequentially to the Class A-2, Class A-3, Class A-4, Class A-5, Class B, Class C and Class D Notes.

Principal Distributions After an Event of Default

After an event of default occurs, all principal distributions among the classes will be made as follows:

Class	Principal Payments
Class A-1	100% of the Class A Principal Payment Amount until paid in full
Class A-2	100% of the Class A Principal Payment Amount until paid in full
Class A-3	100% of the Class A Principal Payment Amount until paid in full
Class A-4	100% of the Class A Principal Payment Amount until paid in full
Class A-5	100% of the Class A Principal Payment Amount until paid in full
Class B	100% of the Class B Principal Payment Amount until paid in full
Class C	100% of the Class C Principal Payment Amount until paid in full
Class D	100% of the Class D Principal Payment Amount until paid in full

The principles described above in the sections labeled “Principal—Overview of Principal Distributions,” “—Before an Event of Default” and “Detailed Principal Distribution Rules” will also apply after an event of default except that the allocations between Class A-5, on the one hand, and the other classes of Class A Notes, on the other hand, as described in those sections, will not apply after an event of default.

Also, any Reallocated Principal will be allocated sequentially to the Class A-1, A-2, A-3, A-4, A-5, B, C and D noteholders in that order.

Definitions Concerning Principal Payments

The Class A Base Principal Payment Amount is:

(1)

as to any payment date until the payment date on which the Class A-1 principal amount equals zero, 100% of the Total Principal Payment Amount; and

(2)

for any subsequent payment date, and disregarding any amount first used on the payment date on which the Class A-1 principal amount is paid to zero, the excess of:

(x)

the sum of the Class A-2, A-3, A-4 and A-5 notes principal amounts over

(y)

the Class A Target Principal Amount;

However, the Class A Principal Payment Amount may not exceed the Class A principal balance.

The Class A Percentage will be approximately [     ]%.

The Class A Target Principal Amount for any payment date will be the product of (a) the Class A Percentage and (b) the contract pool principal balance as of the last day of the collection period immediately preceding the payment date.

The Class A Principal Payment Amount is the sum of the Class A Base Principal Payment Amount plus the Class A Principal Shortfall Amount.

The Class A Principal Shortfall Amount means, for any payment date that is the stated maturity date for a class of Class A Notes and any subsequent payment date until that class’ principal amount is zero, the excess of (a) sum of the principal amount of that class, plus, until the Class A-4 principal amount has been reduced to zero, [     ]% of the Total Principal Payment Amount, over (b) the Total Principal Payment Amount.

The Class B Floor for any payment date will equal:

(1)

[     ]% of the initial contract pool principal balance, plus

(2)

the Unfunded Loss Amount, if any, for that payment date, minus,

(3)

the sum of the Class C principal amount, and the Class D principal amount, prior to giving effect to any payments of principal on the Class C or D Notes on that payment date, and the amount on deposit in the cash collateral account after giving effect to withdrawals to be made on the payment date.

However, the Class B Floor may not be greater than the Class B principal amount or less than zero.

The Class B Percentage will be approximately [     ]%.

The Class B Principal Payment Amount will equal

(1)

zero until the payment date on which the Class A-1 principal amount equals zero; and

(2)

for any subsequent payment date the excess, if any, of:

(a)

the Class B principal amount over

(b)

the greater of

(x)

the Class B Target Principal Amount and

(y)

the Class B Floor.

However, the Class B Principal Payment Amount may not exceed the Class B principal amount.

The Class B Target Principal Amount for any payment date will be the product of (a) the Class B Percentage and (b) the contract pool principal balance as of the last day of the collection period immediately preceding the payment date.

The Class C Floor for any payment date will equal:

(1)

[     ]% of the initial contract pool principal balance, plus

(2)

the Unfunded Loss Amount, if any, for the payment date, minus

(3)

the sum of the Class D principal amount, prior to giving effect to any payments of principal on the Class D Notes on the payment date, [and the amount on deposit in the cash collateral account after giving effect to withdrawals to be made on the payment date].

However, the Class C Floor may not be greater than the Class C principal amount or less than zero.  Furthermore, if the Class B principal amount immediately prior to any payment date is less than or equal to the Class B Floor for that payment date, the Class C Floor for that payment date will equal the Class C principal amount immediately prior to that payment date.

The Class C Percentage will be approximately [     ]%.

The Class C Principal Payment Amount will equal:

(1)

zero until the payment date on which the Class A-1 principal amount equals zero; and

(2)

for any subsequent payment date, the excess, if any, of:

(a)

the Class C principal amount over

(b)

the greater of

(x)

the Class C Target Principal Amount and

(y)

the Class C Floor.

However, the Class C Principal Payment Amount may not exceed the Class C principal amount.

The Class C Target Principal Amount for any payment date will be the product of (a) the Class C Percentage and (b) the contract pool principal balance as of the last day of the collection period immediately preceding the payment date.

The Class D Floor for any payment date will equal:

(1)

[     ]% of the initial contract pool principal balance, plus

(2)

the Unfunded Loss Amount, if any, for the payment date, minus,

[(3)

the amount on deposit in the cash collateral account after giving effect to withdrawals to be made on the payment date.]

However, the Class D Floor may not be greater than the Class D principal amount or less than zero.  Furthermore, if the Class C principal amount on any payment date is less than or equal to the Class C Floor on that payment date, the Class D Floor for that payment date will equal the Class D principal amount immediately prior to that payment date.

The Class D Percentage will be approximately [     ]%.

The Class D Principal Payment Amount will equal:

(1)

zero until the payment date on which the Class A-1 principal amount equals zero; and

(2)

for any subsequent payment date, the excess, if any, of:

(a)

the Class D principal amount minus

(b)

the greater of

(x)

the Class D Target Principal Amount and

(y)

the Class D Floor.

However, the Class D Principal Payment Amount may not exceed the Class D principal balance.

The Class D Target Principal Amount for any payment date will be the product of (a) the Class D Percentage and (b) the contract pool principal balance as of the last day of the collection period immediately preceding the payment date.

The collection period for any payment date is the calendar month preceding the month in which the payment date occurs.

A Defaulted Contract as to any collection period is any contract

(a) which the servicer has determined is uncollectible in accordance with its credit and collection policies and procedures,

(b) as to which during the collection period 10% or more of a scheduled payment shall have become delinquent 180 days or more, or

(c) as to which the end-user has suffered an insolvency event.

Pledged Revenues means the sum of

•

all scheduled payments on the contracts received on or after the cut-off date;

•

any prepayment received on the contracts on or after the cut-off date;

•

the purchase amount of any contracts purchased by the seller;

•

the amount paid by the depositor to purchase the contracts under its option to purchase all contracts when the aggregate principal amount of the notes is less than [10]% of the initial contract pool principal balance;

•

the liquidation proceeds received in respect of any contracts; and

•

any earnings on the investment of amounts credited to the collection account or the note distribution account.

However, Pledged Revenues shall not include any amounts received with respect to any residual value of leased equipment except to the extent guaranteed by a vendor or end-user.

Principal amount means, when used with respect to a class of notes, the initial principal balance of the class set forth on the cover page of this prospectus supplement, less the sum of all distributions previously made to the class and all amounts held on deposit for payment to that class in respect of principal.

The Reallocated Principal for any payment date will equal the excess, if any, of (1) the Total Principal Payment Amount, over (2) the sum of the Class A Principal Payment Amount, the Class B Principal Payment Amount, the Class C Principal Payment Amount and the Class D Principal Payment Amount.

The Related Collection Period Pledged Revenue means as to any payment date, the amount of Pledged Revenues in the collection account as of the business day preceding the payment date which were received by the depositor during the related collection period, including all liquidation proceeds as to Defaulted Contracts, but not including the residual value of leased equipment except to the extent guaranteed by a vendor or end-user.

The Required Payoff Amount as to a collection period for any contract is the sum of

(1)

the scheduled payment due in that collection period plus any scheduled payments not received that were due in prior collection periods and

(2)

the contract principal balance determined as if the scheduled payment due in that collection period had been received.

The Total Principal Payment Amount for any payment date is the excess of (x) the aggregate note principal amount immediately prior to that payment date over (y) the contract pool principal balance as of the last day of the collection period immediately preceding the payment date.  For this purpose, the contract pool principal balance will be deemed to be zero on any payment date on which the contract pool principal balance is less than $10,000,000.  The contract principal balance of any contract which became a defaulted contract during a given collection period or which was a contract subject to a warranty claim which the depositor was obligated to purchase as of the end of a given collection period will, for purposes of computing the Total Principal Payment Amount [and the requisite amount for the cash collateral account], be deemed to be zero on and after the last day of the collection period.

The Unfunded Loss Amount for any payment date will equal any excess of:

(a)

the remainder of

(1)

the aggregate note principal amount, prior to giving effect to the payment of principal on the notes on the payment date, minus

(2)

the lesser of

(A)

the contract pool principal balance as of the last day of the collection period immediately preceding the preceding payment date, minus the contract pool principal balance as of the last day of the collection period immediately preceding the payment date, or

(B)

the Related Collection Period Pledged Revenue remaining after payment of amounts owing to the servicer and note interest on the payment date [plus any withdrawal from the cash collateral account for payment of note principal on the payment date],

over

(b)

the Required Payoff Amount for all contracts as of the end of the related collection period.

[Class A-3 Swap Agreement

The issuing entity will enter into a swap agreement with [     ] as swap counterparty for the sole benefit of the Class A-3 Notes.  Under the swap agreement, the swap counterparty’s payments will be calculated at the Class A-3 Note interest rate and the issuing entity’s payments will be calculated at an assumed fixed rate of [     ]%.  To the extent that on any payment date interest calculated at the Class A-3 Note interest rate exceeds interest calculated at the assumed fixed rate:

•

The swap counterparty will be obligated to pay an amount equal to the excess to the issuing entity.

•

The payment will constitute a portion of the Available Pledged Revenues, but only in respect of the Class A-3 Notes.

•

The Class A-3 Notes will be dependent upon the payment for receipt of the interest to the extent of the excess.

Likewise, under the swap agreement, to the extent that interest calculated at the assumed fixed rate exceeds interest calculated at the Class A-3 Note interest rate,

•

the issuing entity will be obligated to pay an amount equal to the excess to the swap counterparty, and

•

the payment will have the same priority, in terms of application of the Available Pledged Revenues, as payment of interest on the Class A-3 Notes.

Any shortfall in the payment of interest on the Class A-3 Notes due entirely to the failure of the swap counterparty to make a required payment under the swap agreement will not constitute an event of default under the indenture.  Except to the extent the amount available on any payment date exceeds the amount necessary to pay the servicing fee, all interest and principal payable on the notes, with Class A-3 Note interest being calculated at the assumed fixed rate for this purpose, and all amounts payable in connection with the cash collateral account, no amounts in addition to those available under the swap agreement will be available under the indenture to make up the shortfall.  The only remedies in these circumstances will be those available to the issuing entity under the swap agreement.

As a general matter, the obligations of the swap counterparty under the swap agreement are unsecured.  However, if the swap counterparty’s long-term unsecured senior debt ceases to be rated at a level acceptable to [     ] and [     ], the swap counterparty will be obligated either to (a) post collateral or establish other arrangements to secure its obligations under the swap agreement or (b) arrange for a substitute swap counterparty to assume the rights and obligations of the swap counterparty under the swap agreement, in either case so that the ratings of the notes are maintained or, if applicable, restored to their level immediately prior to the downgrading or withdrawal of the swap counterparty’s debt.  If the swap counterparty fails to take either of these actions, the issuing entity will be entitled to terminate the swap agreement and to claim fr om the swap counterparty the cost of obtaining a replacement swap agreement from a swap counterparty satisfactory to the note rating agencies.  The Class A-3 noteholders bear the risk of any failure by the swap counterparty to take the actions required of it and the risk of any inability of the issuing entity to obtain a replacement swap agreement.

The swap counterparty currently has an “[     ]” long-term unsecured senior debt credit rating from [     ] and an “[     ]” long-term unsecured senior debt credit rating from [     ].]

Optional Purchase of Class A-5 Notes

The depositor may purchase all of the Class A-5 Notes, on any payment date.  The purchase price shall be equal to the Class A-5 principal amount plus a premium equal to the excess, discounted as described below, of (1) the scheduled future interest payments on the Class A-5 Notes, over (2) the interest that would have accrued on the Class A-5 Notes over the same period at a per annum rate of interest equal to [     ]% plus the bond equivalent yield to maturity on the fifth business day preceding that payment date on a United States Treasury security maturing on a date closest to the end of the remaining weighted average life of the Class A-5 Notes.  That excess shall be discounted to present value to the payment date at the yield described in clause (2) above.  For purposes of this paragraph only, the depositor will determine (1) the Class A-5 principal amount upon which intere st will be deemed to accrue, and (2) the weighted average remaining life of the Class A-5 Notes, based upon the amortization of the contract pool principal balance remaining at the payment date at a conditional prepayment rate of [     ]%.  The depositor will pay the holders of record on the related record date interest payable on the Class A-5 Notes on the payment date in the ordinary manner.  Following purchase, the issuing entity will not retire the Class A-5 Notes, but will, after the authentication and issuance of replacement notes to the depositor, continue to treat them as being entitled to interest and principal payments on each payment date in the manner described above.  Following the giving of proper notice of purchase, all holders of Class A-5 Notes must surrender them for purchase on the relevant purchase date.  Effective on the purchase date, the issuing entity will not treat the former holders of the Class A-5 Notes as the holders of the notes except for purposes of their right to be paid the purchase price.

[Cash Collateral Account

The indenture trustee will establish the cash collateral account on or prior to the closing date.  It will be available to the indenture trustee for the benefit of the noteholders.  The depositor will initially fund the cash collateral account in the amount of $[     ] ([     ]% of initial contract pool principal balance), which may include proceeds of loans from third party lenders to the issuing entity under a cash collateral account loan agreement.  Available amounts on deposit from time to time in the cash collateral account shall be used to fund the amounts specified below in the following order of priority to the extent that amounts on deposit in the collection account, after payment of servicer fees and advances, as of any deposit date are insufficient:

(1)

to pay interest on the notes in the order of priority described under “Distributions” above;

(2)

to pay any principal deficiency amount, which is equal to the lesser of:

(a)

the aggregate Liquidation Losses on all contracts that became Defaulted Contracts during the related collection period, or

(b)

the excess, if any, of

(i)

the aggregate principal amount of the notes, after giving effect to all distributions of principal from Available Pledged Revenues on the payment date, over

(ii)

the aggregate of the Required Payoff Amounts for all contracts as of the last day of the related collection period; and

(3)

to pay principal on the notes at the applicable stated maturity dates and on the first payment date on which the contract pool principal balance is less than $10,000,000.

“Liquidation Loss” means, as to any Defaulted Contract, the excess, if any, of

(1)

the required payoff amount of the contract for the collection period during which the contract became a Defaulted Contract, over

(2)

that portion of the liquidation proceeds for the Defaulted Contract allocated to the issuing entity, as described under “Description of the Notes and Indenture—Liquidation Proceeds” in the accompanying prospectus.

To the extent that the amount on deposit in the cash collateral account as of any payment date is less than the required amount, the servicer is to restore this deficiency from the remaining amount available in the collection account, after payment of any servicer advances, the servicing fee, interest and principal on the notes and amounts due to the swap counterparty under the swap agreement, as described under “Distributions” above.

The required amount of the cash collateral account will be

(1)

for any payment date on or prior to the payment date occurring in [     ], $[     ] ([     ]% of the initial contract pool principal balance), and

(2)

for any payment date after that, the greater of

(a)

the sum of

(i)

[     ]% of the contract pool principal balance for the payment date, plus

(ii)

the excess, if any, of

(A)

the sum of the principal amounts of the notes, after giving effect to all distributions of principal on the payment date, over

(B)

the contract pool principal balance for the payment date, and

(b)

$[     ] ([     ]% of the initial contract pool principal balance).

However, in no event will the requisite amount exceed the sum of the principal amounts of the notes.

The servicer or the indenture trustee acting at the direction of the servicer will release any amount on deposit in the cash collateral account in excess of the required amount and all investment earnings on funds in the cash collateral account.  The indenture trustee will pay these amounts to or upon the servicer’s order, and they will not be available to make payments on the notes.

The cash collateral account must be maintained with a qualified institution.  Funds on deposit in the cash collateral account will be invested in eligible investments, as defined under “Description of the Notes and Indenture—Trust Accounts” in the accompanying prospectus.]

[MANDATORY AUCTION]

[Except as provided below, five Business Days prior to the Distribution Date occurring in [_____], such Distribution Date, referred to in this prospectus supplement as the “Mandatory Auction Distribution Date”, [________________], in its capacity as Auction Administrator, shall obtain bids for the Mandatory Auction Notes from third parties in the secondary market as specified in the Auction Administration Agreement. There will be no minimum bid price. If no bids for the Mandatory Auction Notes or for a portion of the Mandatory Auction Notes are received on such date (or it is deemed that no bids for a mandatory auction certificate or for a portion of a mandatory auction certificate are so received), the holders of such class or portion thereof will not be able to transfer their Notes in such auction, and the Auction Administrator will repeat the auction procedure in each subsequent month, prior to the Distribution Date in such month, until at least one bid ha s been received for each class or portion thereof. If only one bid for the Mandatory Auction Notes (or portion thereof) being auctioned is received, then the auction price for the Mandatory Auction Notes shall be the amount of such bid. In the event that two or more bids of equal price (“Tie Bids”) are determined to be the highest bids for an aggregate amount greater than the aggregate Certificate Principal Balance of a mandatory auction certificate, then the bidders of the Tie Bids will each take a pro rata share in such Notes (based on the aggregate Certificate Principal Balance for the Mandatory Auction Notes for which each such bidder submitted a bid). In the event that a winning bid is for an aggregate amount that is less than the aggregate Certificate Principal Balance of the Mandatory Auction Notes, then (i) the winning bidder will take a pro rata portion of each outstanding Certificate of such Class (based on the aggregate Certificate Principal Balance for the Mandatory Auction Notes for wh ich such bidder submitted a

bid) and (ii) it shall be deemed that no bid was received with respect to the remaining portion of each outstanding Certificate of such Class and such remaining portion of each outstanding Certificate of such Class shall be subject to auction in subsequent months as described above. The Auction Administrator will notify the winning bidder that (i) its bid was the highest bid and shall give it wiring instructions for payment of the purchase price for such Notes into an auction proceeds account and (ii) unless such purchase price is received by a specified time on the related deposit date, such bidder’s bid will be rejected and the bid of the next highest bidder(s) will be accepted. Neither the underwriter nor any affiliate will be able to bid in any auction.

The Auction Administrator shall use the Auction Proceeds, if any, together with any amounts payable to the Auction Administrator under the Market Value Swap described below, to pay to the holders of the Mandatory Auction Notes on the Mandatory Auction Distribution Date an amount equal to 100% of the outstanding Certificate Principal Balance thereof after application of all principal distributions and realized losses on the Mandatory Auction Distribution Date, plus accrued interest on such classes at the related Pass-Through Rate from the first day of the calendar month in which the Mandatory Auction Distribution Date occurs up to but excluding the Mandatory Auction Distribution Date, on the Certificate Principal Balance of such classes following application of principal distributions and realized losses on such classes on the Mandatory Auction Distribution Date, such price referred to herein as the Par Price.

The Auction Administrator will be entitled to be reimbursed from and indemnified by the trust for certain losses and expenses (other than ordinary expenses) incurred by it in connection with its responsibilities under the Auction Administration Agreement.

EXCEPT AS PROVIDED BELOW, HOLDERS OF THE MANDATORY AUCTION NOTES WILL BE OBLIGATED TO TENDER THEIR NOTES TO THE AUCTION ADMINISTRATOR ON THE MANDATORY AUCTION DISTRIBUTION DATE IN EXCHANGE FOR THE PAR PRICE.

If [___________], as Auction Administrator, ceases to be eligible to continue as such under the Agreement, any successor auction administrator will also be required to assume the duties of the Auction Administrator under the Auction Administration Agreement and the Market Value Swap.]

[THE MARKET VALUE SWAP AND THE SWAP COUNTERPARTY]

[The Auction Proceeds may be less than or greater than the Par Price. In order to cover the shortfall if the Auction Proceeds are less than the Par Price on the Mandatory Auction Date, the Auction Administrator has entered into a Market Value Swap with [___________], referred to herein as the Swap Counterparty, under which the Auction Administrator will notify the Swap Counterparty of the shortfall amount to be paid by the Swap Counterparty to the Auction Administrator under the Market Value Swap on the related deposit date. If the Auction Proceeds are greater than the Par Price, the Auction Administrator will notify the Swap Counterparty of the amount to be paid from Auction Proceeds by the Auction Administrator to the Swap Counterparty, or its designee, under the Market Value Swap.

In the event that no bids are received for all or a portion of a class of Mandatory Auction Notes in the manner set forth in the Auction Administration Agreement, the Swap Counterparty will not be obligated to make any payment with respect to such class or portion thereof.  If the Swap Counterparty defaults under the Market Value Swap and its obligations are not honored by [___] as required under [____]'s guarantee, another party may succeed to the Swap Counterparty's obligations in accordance with the terms of the Market Value Swap. If no successor Swap Counterparty is found, the Mandatory Auction will not occur, and the holders of the Mandatory Auction Notes will continue to retain their notes and their rights under the Auction Administration Agreement and the Market Value Swap after the Mandatory Auction Date, unless they choose to sell them in the secondary market. If bids are received for some, but not all, Notes of a Class, and the Swap Counterparty defaults , then each Certificateholder shall be deemed to have sold a pro rata portion of its Notes (based on the aggregate Certificate Principal Balance of the Mandatory Auction Notes), subject to any rounding or allocation the Auction Administrator deems necessary in order to comply with the minimum or authorized denomination requirements of the Pooling and Servicing Agreement, and shall retain the remaining Current Principal Amount, if any, of such Class of Notes held by it and its rights under the Auction Administration Agreement and the Market Value Swap.

The Swap Counterparty is a company organized under the laws of [_________]. The Swap Counterparty's obligations under the Market Value Swap will be guaranteed by [____]. The long-term debt obligations of [____] are rated “[__]” by S&P, “[__]” by Moody's and “[__]” by Fitch, Inc. [___] will provide upon request, without charge, to each person to whom this Prospectus Supplement is delivered, a copy of (i) the ratings analysis from each of S&P, Moody's and Fitch, Inc. evidencing those respective ratings or (ii) the most recent audited annual financial statements of [___]. Requests for such information should be directed in writing to [______] at [____________________]. The Swap Counterparty and [____] are affiliates of the sponsor, the depositor and the underwriter.

The aggregate significance percentage (as calculated in accordance with Regulation AB Item 1115) of the Market Value Swap is less than 10%.]

[THE INSURER]

[General]

[[_______________] (the “Insurer” or “[_______________]”) is a monoline financial guaranty insurance company incorporated under the laws of the State of New York.  The Insurer is currently licensed to do insurance business in, and is subject to the insurance regulation and supervision by, all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Singapore.]

[The Insurer is an indirect wholly owned subsidiary of [_______________], a [___________] (“[_______________]”).  Through its subsidiaries, [_______________] is a leading provider of insurance and reinsurance coverages and financial products and services to industrial, commercial and professional service firms, insurance companies and other enterprises on a worldwide basis.  The ordinary shares of [_______________] are publicly traded in the United States and listed on the New York Stock Exchange (NYSE: [_________]).  [_______________] is not obligated to pay the debts of or claims against the Insurer.]

[Reinsurance]

[The Insurer has entered into a facultative quota share reinsurance agreement with [____________] (“[_______________]”), an insurance company organized under the laws of [______________], and an affiliate of the Insurer.  Pursuant to this reinsurance agreement, the Insurer expects to cede up to 90% of its business to [_______________].  The Insurer may also cede reinsurance to third parties on a transaction-specific basis, which cessions may be any or a combination of quota share, first loss or excess of loss.  Such reinsurance is used by the Insurer as a risk management device and to comply with statutory and rating agency requirements and does not alter or limit the Insurer's obligations under any financial guaranty insurance policy.  With respect to any transaction insured by [_______________], the percentage of risk ceded to [_______________] may be less than 90% depending on ce rtain factors including, without limitation, whether [_______________] has obtained third party reinsurance covering the risk.  As a result, there can be no assurance as to the percentage reinsured by [_______________] of any given financial guaranty insurance policy issued by [_______________], including the Policy.]

[Based on the audited financials of [_______________], as of December 31, 2004, [_______________] had total assets, liabilities, redeemable preferred shares and shareholders’ equity of $[___________], $[___________], $[___________] and $[___________], respectively, determined in accordance with generally accepted accounting principles in the United States (“US GAAP”). [_______________]’s insurance financial strength is rated “Aaa” by Moody’s and “AAA” by S&P and Fitch Inc. In addition, [_______________] has obtained a financial enhancement rating of “AAA” from S&P.]  

[The obligations of [_______________] to the Insurer under the reinsurance agreement described above are unconditionally guaranteed by [___________] ("[_______________]"), a Bermuda exempted company and one of the world's leading excess commercial insurers.  [_______________] is a wholly owned indirect subsidiary of [_______________].  In addition to A.M. Best’s financial strength rating of “A+” and issuer credit rating of “aa-”, [_______________]’s insurance financial strength rating is “Aa2” (as of September 13, 2005, [_______________] is on review for downgrade) by Moody’s, “AA-” by Standard & Poor’s (on September 20, 2005, Standard & Poor’s placed [_______________] on CreditWatch with negative implications) and “AA-” (Outlook Stable) by Fitch.]  

 [The ratings of [_______________], [_______________] or any other member of the [_______________] group of companies are not recommendations to buy, sell or hold securities, including the notes and are subject to revision or withdrawal at any time by Moody’s, Standard & Poor’s or Fitch.]

[Notwithstanding the capital support provided to the Insurer described in this section, the noteholders will have direct recourse against the Insurer only, and neither [_______________] nor [_______________] will be directly liable to the noteholders.]

[Financial Strength and Financial Enhancement Ratings of [_______________]]

[The Insurer's insurance financial strength is rated “Aaa” by Moody’s and “AAA” by Standard & Poor’s and Fitch, Inc. (“Fitch”).  In addition, [_______________] has obtained a financial enhancement rating of “AAA” from Standard & Poor’s.  These ratings reflect Moody’s, Standard & Poor’s and Fitch's current assessment of the Insurer's creditworthiness and claims-paying ability as well as the reinsurance arrangement with [_______________] described under "Reinsurance" above.]

[The above ratings are not recommendations to buy, sell or hold securities, including the notes and are subject to revision or withdrawal at any time by Moody’s, Standard & Poor’s or Fitch.  Any downward revision or withdrawal of these ratings may have an adverse effect on the market price of the notes.  The Insurer does not guaranty the market price of the notes nor does it guaranty that the ratings on the notes will not be revised or withdrawn.]

[Capitalization of the Insurer]

[Based on the audited financials of [_______________], as of December 31, 2004, [_______________] had total assets, liabilities, and shareholder’s equity of $[______________], $[______________], and $[______________], respectively, determined in accordance with U.S. GAAP.]

Based on the audited statutory financial statements for [_______________] as of December 31, 2004 filed with the State of New York Insurance Department, [_______________] has total admitted assets of $[______________], total liabilities of $[______________] and total capital and surplus of $[______________] determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities (“SAP”).  

[Incorporation by Reference of Financials]

For further information concerning [_______________] and [_______________], see the financial statements of [_______________] and [_______________], and the notes thereto, incorporated by reference in this prospectus supplement.  The financial statements of [_______________] and [_______________] are included as exhibits to the periodic reports filed with the Securities and Exchange Commission (the “Commission”) by [_______________] and may be reviewed at the EDGAR website maintained by the Commission.  All financial statements of  [_______________] and [_______________] included in, or as exhibits to, documents filed by [_______________] pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 on or prior to the date of this prospectus supplement, or after the date of this prospectus supplement but prior to termination of the offering of the notes, shall be d eemed incorporated by reference in this prospectus supplement.  Except for the financial statements of [_______________] and [_______________], no other information contained in [_______________]'s reports filed with the Commission is incorporated by reference. Copies of the statutory quarterly and annual statements filed with the State of New York Insurance Department by [_______________] are available upon request to the State of New York Insurance Department.]

[Regulation of the Insurer]

[The Insurer is regulated by the Superintendent of Insurance of the State of New York.  In addition, the Insurer is subject to regulation by the insurance laws and regulations of the other jurisdictions in which it is licensed.  As a financial guaranty insurance company licensed in the State of New York, the Insurer is subject to Article 69 of the New York Insurance Law, which, among other things, limits the business of each insurer to financial guaranty insurance and related lines, prescribes minimum standards of solvency, including minimum capital requirements, establishes contingency, loss and unearned premium reserve requirements, requires the maintenance of minimum surplus to policyholders and limits the aggregate amount of insurance which may be written and the maximum size of any single risk exposure which may be assumed.  The Insurer is also required to file detailed annual financial state ments with the New York Insurance Department and similar supervisory agencies in each of the other jurisdictions in which it is licensed.]

[The extent of state insurance regulation and supervision varies by jurisdiction, but New York and most other jurisdictions have laws and regulations prescribing permitted investments and governing the payment of dividends, transactions with affiliates, mergers, consolidations, acquisitions or sales of assets and incurrence of liabilities for borrowings.]

[THE FINANCIAL GUARANTY INSURANCE POLICIES ISSUED BY THE INSURER, INCLUDING THE INSURANCE POLICY, ARE NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.]

[The principal executive offices of the Insurer are located at [____________] and its telephone number at this address is [____________].]

[THE POLICY]

[[__________], in consideration of the payment of a premium and subject to the terms of the insurance policy, thereby unconditionally and irrevocably guarantees to any securityholder that an amount equal to each full and complete Insured Amount will be received from [__________] by the indenture trustee or its successors, as indenture trustee for the securityholders, on behalf of the securityholders, for distribution by the indenture trustee to each securityholder of that securityholder’s proportionate share of the Insured Amount.]

[[__________]’s obligations under the insurance policy, with respect to a particular Insured Amount, will be discharged to the extent funds equal to the applicable Insured Amount are deposited in the account specified by the indenture trustee, whether or not those funds are properly applied by the indenture trustee. Insured Amounts will be paid only at the time set forth in the insurance policy, and no accelerated Insured Amounts will be paid regardless of any acceleration of the notes, unless the acceleration is at the sole option of [__________]. ]

[Notwithstanding the foregoing paragraph, the insurance policy does not cover shortfalls, if any, attributable to the liability of the issuer or the indenture trustee for withholding taxes, if any (including interest and penalties in respect of any liability for withholding taxes).]

[[__________] will pay any Insured Amount that is an Avoided Payment on the business day following receipt on a business day by [__________] of the following:

•

a certified copy of the order requiring the return of an avoided payment, with respect to which order the appeal period has expired without an appeal having been filed;  

•

an assignment in a form attached to the insurance policy, irrevocably assigning to [__________] all rights and claims of the securityholder relating to or arising under the notes against the debtor which made the avoided payment or otherwise with respect to the avoided payment; and  

•

an appropriately completed and executed demand for payment in the form attached to the insurance policy;  

provided that if these documents are received after 10:00 a.m., New York time, on that business day, they will be deemed to be received on the following business day. Payments by [__________] will be disbursed to the receiver or the trustee in bankruptcy named in the final order of the court exercising jurisdiction on behalf of the securityholder and not to any securityholder directly unless the securityholder has returned principal or interest paid on the notes to the receiver or trustee in bankruptcy, in which case that payment will be disbursed to the Indenture Trustee for distribution to the securityholder upon proof of such payment reasonably satisfactory to [__________].]

[[__________] will pay any other amount payable under the insurance policy no later than 2:00 p.m., New York time, on the later of the distribution date on which the related Scheduled Payment is due or the business day following receipt in New York, New York by [__________] of a notice from the Indenture Trustee specifying the Insured Amount which is due and owing on the applicable distribution date, provided that if the notice is received after 10:00 a.m., New York time, on that business day, it will be deemed to be received on the following business day.]

[Subject to the terms of the Indenture and the Sale and Servicing Agreement, [__________] will be subrogated to the rights of each securityholder to receive payments under the notes to the extent of any payment by [__________] under the insurance policy.]

[As used in the insurance policy, the following terms shall have the following meanings:

“Avoided Payment” means any amount previously distributed to a securityholder on the notes that is recoverable and sought to be recovered as a voidable payment in an insolvency proceeding, in accordance with a final nonappealable order of a court having competent jurisdiction.

“Insured Amount” means, that portion of Scheduled Payments that shall become due for payment but shall be unpaid by reason of nonpayment.

“Insured Payment” means (a) as of any distribution date, any Scheduled Payment and (b) any Avoided Payment.

“Scheduled Payment” for any distribution date, an amount equal to the excess, if any, of: (a) the sum, without duplication, of (i) the accrued and unpaid interest on the notes and (ii) the Noteholders’ Total Principal PaymentAmount (other than the amount specified in clause (2)(b) of the definition thereof) for the related distribution date over (b) the amount actually deposited into the note distribution account on the related distribution date.]

[Capitalized terms used in the insurance policy and not otherwise defined in the insurance policy shall have the meanings set forth in the indenture and the pooling and servicing agreement as of the date of execution of the insurance policy, without giving effect to any subsequent amendment or modification to the Indenture or the pooling and servicing agreement unless such amendment or modification has been approved in writing by [__________].]

[The insurance policy is not cancelable for any reason. The premium on the insurance policy is not refundable for any reason including payment, or provision being made for payment, prior to the maturity of the notes.]

[The insurance policy is being issued under and pursuant to, and will be construed under, the laws of the State of New York, without giving effect to the conflict of laws principles thereof.]

[The insurance provided by the insurance policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law.]

[OTHER CREDIT ENHANCEMENT]

[Regulation AB Item 1114 Compliant description of any other credit enhancement.]

[OTHER CREDIT ENHANCEMENT PROVIDER]

[Regulation AB Item 1114 compliant description of any other credit enhancement provider.]

Optional Purchase of Contracts and Redemption of Notes

The [servicer] may purchase all of the contracts on any payment date following the date on which the aggregate note principal amount at the time is less than [10]% of the initial contract pool principal balance.  The purchase price that the seller would pay in connection with a purchase shall be the sum of the

•

unpaid servicer fees and advances,

•

remaining principal amount of the notes, together with accrued interest calculated at the swap agreement assumed fixed rate in the case of the Class A-3 Notes,

•

unreimbursed servicer advances and unpaid servicer fees, and

•

any other amounts payable at the time from Available Pledged Revenues, minus

•

available amounts on deposit in the collection account.

If the seller does purchase the contracts, the notes shall be redeemed on the payment date on which the purchase occurs.  The redemption price will be the principal amount of the notes redeemed plus accrued and unpaid interest on the principal amount of each class of notes to but excluding the redemption date.

Reports to Noteholders

The servicer will furnish to the indenture trustee, and the indenture trustee will include with each distribution, a statement in respect of the related payment date.  The statement shall set forth, among other things, all information necessary to enable the indenture trustee to make the distribution required for the notes and to reconcile all deposits to and withdrawals from accounts.  See “Description of the Notes and Indenture—Reports to Noteholders” in the accompanying prospectus.  You will not receive reports directly from the indenture trustee.  The servicer will file the reports with the Securities and Exchange Commission.  However, in accordance with the Securities Exchange Act of 1934 and the rules and regulations of the Securities and Exchange Commission, the issuing entity expects that its obligation to file these reports will be terminated at the end of [     ].

Servicing

The servicer will be responsible for

•

managing,

•

administering,

•

servicing and

•

making collections on the contracts.  

Compensation to the servicer will include:

(1)

a monthly servicing fee, which will be payable to the servicer from the amount available on each payment date, in an amount equal to the product of one-twelfth of [    ] percent per annum multiplied by the contract pool principal balance determined as of the first day of the related collection period;

(2)

any late fees, late payment interest, documentation fees, insurance administration charges, extension fees and other administrative charges, collectively, the administrative fees, collected with respect to the contracts during the related collection period; and

(3)

any investment earnings on collections prior to their deposit in the collection account.

The indenture trustee may terminate the servicer as servicer under some circumstances, in which event the indenture trustee would appoint a successor servicer to service the contracts.  See “Description of the Pooling and Servicing Agreement—Servicing—Events of Termination” in the accompanying prospectus.

The Indenture Trustee

[     ], a [national banking association,] will serve as the indenture trustee under the indenture.  The indenture trustee may resign at any time, in which event the issuing entity will be obligated to appoint a successor trustee.  The depositor maintains normal commercial banking relations with the indenture trustee.

[Provide Regulation AB Item 1109(b) compliant description of the extent of the indenture trustee’s prior experience serving as an indenture trustee for notes transactions involving asset pools of lease contracts.]

[Provide Regulation AB Item 1109(c) compliant description of the indenture trustee’s duties and responsibilities regarding the notes under the governing documents and under applicable law, and of any actions required by the indenture trustee, including whether notices are required to investors, rating agencies or other third parties, upon an event of default, potential event of default (and how defined) or other breach of a transaction covenant and any required percentage of a class or classes of notes that is needed to require the indenture trustee to take action.]

[Provide Regulation AB Item 1109(d) compliant description of any limitations on the indenture trustee’s liability under the transaction agreements regarding the notes transaction.]

[Provide Regulation AB Item 1109(e) compliant description of any indemnification provisions that entitle the indenture trustee to be indemnified from the cash flow that otherwise would be used to pay the notes.]

[Provide Regulation AB Item 1109(f) compliant description of any additional contractual provisions or understandings regarding the indenture trustee’s removal, replacement or resignation, as well as how the expenses associated with changing from one indenture trustee to another indenture trustee will be paid.]

The issuing entity may also remove the indenture trustee if

(1)

the indenture trustee ceases to be eligible to continue as indenture trustee under the indenture,

(2)

a bankruptcy proceeding results in the event of relief or appointment of a receiver as to the indenture trustee,

(3)

the indenture trustee commences bankruptcy or similar proceedings or

(4)

the indenture trustee becomes incapable of acting.

Any resignation or removal of the indenture trustee and appointment of a successor trustee will not become effective until acceptance of the appointment by a successor trustee.

Fees and Expenses of the Issuing Entity

In consideration of their duties on behalf of the issuing entity, the servicer, the owner trustee and the indenture trustee will receive from the assets of the issuing entity certain fees as set forth in the following table:

Fee Payable to:	Frequency of Payment:	Amount of Fee:	How and When Fee Is Paid:
Servicer	[monthly]	[(a) A monthly fee paid to the servicer out of interest collections received from the contracts in an amount equal to the product of one-twelfth of [    ]% per annum for so long as [              ] or an affiliate thereof is the servicer, and [    ]% per annum if [               ] or an affiliate thereof is no longer the servicer and the balance of the contract pool as of the first day of the collection period.] [(b) Any late fees, late payment interest, documentation fees, insurance administration charges, extension fees and other administrative charges, collectively, the administrative fees, collected with respect to the contracts during the related collection period; any investment earnings on collections prior to their deposit in the collection account.; and  amounts for reimbursement from the issuing entity for various expenses.]	[Deducted by the servicer from interest collections in respect of each contract serviced by the servicer, before payment of any amounts to securityholders.]
Owner Trustee	[monthly]	[A monthly fee paid to the owner trustee by the servicer out of the servicer’s fee.]	[Paid by the servicer before payment of any amounts to securityholders.]
Indenture Trustee	[monthly]	[A monthly fee paid to the indenture trustee by the servicer out of the servicer’s fee.]	[Paid by the servicer before payment of any amounts to securityholders.]
[Other Applicable Party]	[_____]	[_____]	[_____]

The servicing fee, together with any portion of the servicing fee that remains unpaid from prior distribution dates, will be paid from Available Pledged Revenues prior to payments of interest to the noteholders.

[[None of the fees set forth in table above may be changed without amendment of the pooling and servicing agreement as described under “The Pooling and Servicing Agreement—Amendment” in the prospectus.]]

[[Expenses of the servicer, the owner trustee and the indenture trustee will be reimbursed before payments are made on the securities.]]

Representation and Warranties

The seller will make representations and warranties with respect to the contracts as described in the accompanying prospectus under “The Contracts—Representations and Warranties Made by the Seller.”

On the date that the depositor adds a substitute contract to the contract pool, the seller and the depositor will make the same representations and warranties as if the transfer occurred on the closing date.  However, for these purposes (a) the contract pool on the closing date shall be deemed to include the substitute contract in lieu of the contract being replaced or substituted and (b) the contract principal balance of the substitute contract shall be equal to or greater than the contract principal balance of the contract being replaced or substituted as of the related cut-off date.

The issuing entity shall reassign to the depositor, and the seller will be obligated to purchase from the depositor, any contract transferred by the issuing entity at any time there is a breach of any of these representations or warranties.  However, the cure of the breach in all material respects, or the waiver of the breach, will be an adequate remedy.  This purchase shall occur no later than the second deposit date after the servicer becomes aware, or receives written notice, of the breach.  The “deposit date” means the business day preceding a payment date.  This purchase obligation will constitute the sole remedy against the depositor and the seller available to the issuing entity, the indenture trustee and the noteholders or equity certificateholder for a breach of these representations or warranties.

Under the pooling and servicing agreement, a contract transferred by the issuing entity shall be reassigned to the seller and the seller shall make a deposit in the collection account in immediately available funds in an amount equal to the contract principal balance of the contract.  Any amount the seller deposits into the collection account in connection with the reassignment of a contract transferred by the issuing entity shall be considered payment in full of the ineligible contract.  This amount shall be treated as Available Pledged Revenues.  In the alternative, the seller may cause the depositor to convey to the issuing entity a substitute contract satisfying the terms and conditions applicable to substitute contracts in replacement for the affected contract.  The affected contract shall be deemed released by the issuing entity and indenture trustee and reconveyed to the depositor and by the depositor to the seller.

Indemnification

The pooling and servicing agreement provides that the servicer will indemnify

•

the depositor,

•

the sponsor,

•

the issuing entity,

•

the issuing entity,

•

the indenture trustee,

•

the holder of the equity certificate and

•

the noteholders

from and against any loss or injury sustained from third party claims resulting from acts or omissions of the servicer with respect to trust assets or any duty or obligations of the servicer under the agreement, except where the claims result from willful misconduct, gross negligence or bad faith of the indemnified person.

Amendments

The pooling and servicing agreement and the indenture may be amended only with the consent of the required majority of the noteholders, see “Description of the Notes and Indenture—Modification of Indenture with Noteholder Consent” and “Description of the Pooling and Servicing Agreements—Amendment.” The “required majority of noteholders” means 66 2/3% of the principal amount of the Class A Notes until paid in full, then of the Class B Notes until paid in full, then of the Class C Notes until paid in full and then of the Class D Notes.

[The parties may amend the cash collateral account loan agreement without noteholder consent to cure any ambiguity or inconsistency or to address any other matter but only if the amendment will not adversely affect the noteholders.  The parties may also amend the cash collateral account loan agreement in any other manner with the consent of the required majority of noteholders determined as provided above.  However, without the consent of all noteholders, no amendment may reduce the amount available in the cash collateral account for the payment of interest or principal on notes or reduce the noteholder consent required for any amendment.]

[The parties may amend the swap agreement without noteholder consent to cure any ambiguity or inconsistency or to address any other matter but only if the amendment will not adversely affect the Class A-3 noteholders.  The parties may also amend the swap agreement in any other manner with the consent of at least 66 2/3% of the principal amount of the Class A-3 Notes.  However, without the consent of all Class A-3 noteholders, no amendment may reduce the amount available under the swap agreement for paying Class A-3 Note interest or reduce the Class A-3 noteholder consent required for any amendment.  Also, without the consent of the swap counterparty, the parties may not amend the pooling and servicing agreement so as to adversely affect the priority of payments from the issuing entity to the swap counterparty under the swap agreement.]

Also, any amendment of [the cash collateral account loan agreement] [or the swap agreement] requiring noteholder approval will not be effective unless each rating agency confirms that the amendment will not result in a reduction, qualification or withdrawal of the ratings on the relevant notes.

RATINGS OF THE NOTES

It is a condition of issuance that each of [     ] and [     ]

•

rate the Class A-1 Notes [in its highest short-term rating category],

•

rate the Class A-2, Class A-3, Class A-4 and Class A-5 Notes in its highest long-term rating category,

•

rate the Class B Notes at least [     ] and [     ], respectively,

•

rate the Class C Notes at least [     ], [     ] and [     ], respectively, and

•

rate the Class D Notes at least [     ], [     ] and [     ], respectively.

The ratings address the likelihood of the timely receipt of interest and payment of principal on each class of notes on or before the stated maturity date for the class.  The ratings will be based primarily upon the Available Pledged Revenues[, the cash collateral account] and the subordination provided by

•

the Subordinate Classes, in the case of the Class A Notes,

•

the Class C and Class D Notes, in the case of the Class B Notes and

•

the Class D Notes, in the case of the Class C Notes.

There is no assurance that any rating will not be lowered or withdrawn by the assigning rating agency.  In the event that ratings with respect to the notes are qualified, reduced or withdrawn, no person or entity will be obligated to provide any additional credit enhancement with respect to the notes.

The ratings should be evaluated independently from similar ratings on other types of securities.  A rating is not a recommendation to buy, sell or hold notes, inasmuch as these ratings do not comment as to market price or suitability for a particular investor.  The ratings do not address the likelihood of payment of principal on any class of notes prior to the stated maturity date or the possibility of the imposition of United States withholding tax with respect to non-United States Persons.

The term “United States Person” means

(1)

a citizen or resident of the United States,

(2)

a corporation or partnership organized in or under the laws of the United States or any political subdivision of the United States,

(3)

an estate the income of which is includable in gross income for United States federal income tax purposes, regardless of its source, or

(4)

a trust, (A) with respect to which a court within the United States is able to exercise primary supervision over its administration, and (B) one or more United States persons have the authority to control all of its substantial decisions.

The rating agencies have stated that it is their standard policy to monitor ratings on publicly offered securities for which a rating has been provided, as to each rating agency rating each class of securities in accordance with the rating agencies’ particular surveillance policies, unless the issuer requests a rating without surveillance.  A rating agency will monitor the rating it issues on an ongoing basis and may update the rating after conducting its regular review of the issuer’s creditworthiness or after conducting a review of the status of the rating upon becoming aware of any information that might reasonably be expected to result in a change of rating.  The depositor has not requested that any rating agency not monitor their ratings of the securities, and the depositor has not requested that any rating agency use any monitoring procedures other than their standard monitoring procedu res.

[The ratings of [_______]’s and [______] also do not address whether a class of Mandatory Auction Certificates will receive its Par Price on any Mandatory Auction Distribution Date.]

FEDERAL INCOME TAX CONSEQUENCES

The following is a general summary of some of the related Federal income tax consequences of the purchase, ownership and disposition of the Class A Notes. This discussion does not address every aspect of the Federal income tax laws that may be relevant to holders of Class A Notes in light of their personal investment circumstances or to particular types of Class A Noteholders subject to special treatment under the Federal income tax laws, including, without limitation, banks and thrifts, insurance companies, dealers in securities, foreign investors, regulated investment companies, individuals, trusts and estates and pass-through entities, the equity holders of which are any of the foregoing. This discussion is directed to prospective purchasers who purchase Class A Notes in the initial distribution of the Class A Notes and who hold the Class A Notes as “capital assets” within the meaning of Section 122 1 of the Internal Revenue Code of 1986, as amended (the “Code”). Prospective purchasers are urged to consult their own tax advisors in determining the Federal, state, local, foreign and any other tax consequences to them of the purchase, ownership and disposition of the Class A Notes.

The following summary is based upon current provisions of the Code, the Treasury regulations promulgated under the Code, judicial authority, and ruling authority, all of which are subject to change, which change may be retroactive. The Issuing Entity will be provided with an opinion of Federal Tax Counsel regarding some of the related Federal income tax matters discussed below. An opinion of Federal Tax Counsel, however, is not binding on the Internal Revenue Service (the “IRS”) or the courts. Moreover, there are no cases or IRS rulings on similar transactions with terms similar to those of the Class A Notes. As a result, the IRS may disagree with all or a part of the discussion below. No ruling on any of the issues discussed below will be sought from the IRS.

Tax Characterization of the Issuing Entity

McKee Nelson LLP will deliver its opinion that the Issuing Entity will not be classified as an association, or publicly traded partnership taxable as a corporation for Federal income tax purposes. This opinion will be based on the assumption of compliance by all parties with the terms of the Trust Agreement and related documents.

If the Issuing Entity were taxable as a corporation for Federal income tax purposes, the Issuing Entity would be subject to corporate income tax on its taxable income. The Issuing Entity’s taxable income would include all its income on the Receivables, possibly reduced by its interest expense on the Class A Notes. Any corporate income tax could materially reduce cash available to make payments on the Class A Notes and distributions on the Notes, and Certificateholders, could be liable for any tax that is not paid by the Issuing Entity.

Tax Consequences to Holders of the Class A Notes

Treatment of the Class A Notes as Indebtedness.  The Issuing Entity will agree, and the Class A Noteholders will agree by their purchase of Class A Notes, to treat the Class A Notes as debt for Federal, state and local income and franchise tax purposes. Federal Tax Counsel will advise the Issuing Entity that in its opinion the Class A Notes will be classified as debt for Federal income tax purposes.

The prepayment assumption that is used in determining the accrual of original issue discount, market discount or premium with respect to the Notes is [100% Prepayment Assumption], as defined below.  However, no representation is made that the loans will prepay in accordance with this assumption or in accordance with any other assumption.  The [100% Prepayment Assumption] assumes a [constant prepayment rate of ___%].

Alternatively, if, contrary to the opinion of Federal Tax Counsel, the Class A Notes were not properly classified as debt and Issuing Entity were treated as a publicly traded partnership taxable as a corporation, it would be subject to Federal income tax, and any similar state or local taxes, at corporate tax rates on its taxable income generated by ownership of the Receivables.  This tax could result in reduced distributions to Class A Noteholders. Distributions to Class A Noteholders generally would not be deductible in computing the taxable income of the publicly traded partnership. In addition, all or a portion of any distributions would, to the extent of the current and accumulated earnings and profits of the corporation, be treated as dividend income to the Class A Noteholders, and in the case of Class A Noteholders that are foreign persons would be subject to withholding tax.

Interest Income and OID on the Class A Notes.

It is not anticipated that the Class A Notes will be issued with original issue discount (“OID”) within the meaning of Section 1273 of the Code. The stated interest on the Class A Notes will be taxable to a Class A Noteholder as ordinary interest income when received or accrued in accordance with the Class A Noteholder’s method of tax accounting. If the Class A Notes were treated as being issued with OID, the excess of the “stated redemption price at maturity” of the Class A Notes over their issue price would constitute OID. Under the OID Regulations, a holder of a Class A Note issued with a de minimis amount of OID must include this OID in income, on a pro rata basis, as principal payments are made on the Class A Note. A subsequent purchaser who buys a Class A Note for more or less than its principal amount will generally be subject, respectively, to the premium amortization or market d iscount rules of the Code.

Sale or Other Disposition.

If a Class A Noteholder sells a Class A Note, the holder will recognize gain or loss in an amount equal to the difference between the amount realized on the sale and the holder’s adjusted tax basis in the Class A Note. The adjusted tax basis of a Class A Note to a particular Class A Noteholder will equal the holder’s cost for the Class A Note, increased by any market discount, and gain previously included by the Class A Noteholder in income with respect to the Class A Note and decreased by the amount of premium, if any, previously amortized and by the amount of principal payments previously received by the Class A Noteholder with respect to the related Class A Note. Any gain or loss will be capital gain or loss, except for gain representing accrued interest, including OID, and accrued market discount not previously included in income. Capital losses generally may be used by a corporate taxpayer only to offset capital gains, and by an individual taxpayer only to the extent of capital gains plus $3,000 of other income.

Foreign Holders.

Except as discussed below, a Class A Noteholder that is not a “United States person” (as defined below) generally will not be subject to United States income or withholding tax in respect of a distribution on a Class A Note provided that (i) the holder complies to the extent necessary with certain certification requirements, which generally relate to the identity of the beneficial owner and the status of the beneficial owner as a person that is not a United States person (as defined below), (ii) the holder is not a “10-percent shareholder” within the meaning of Section 871(h)(3)(B) of the Code, which could be interpreted to include a person that directly or indirectly owns 10% or more of the certificates in the Issuing Entity or the equity in the Sponsor or the Depositor, (iii) the holder is not a “controlled foreign corporation” (as defined in the Code) related to the Issuing Entit y or related to a 10 percent holder of certificates in the Issuing Entity or equity in the Sponsor or the Depositor, and (iv) the holder is not engaged in a United States trade or business, or otherwise subject to Federal income tax as a result of any direct or indirect connection to the United States other than through its ownership of a Class A Note.  For these purposes, the term “United States person” means (i) a citizen or resident of the United States, (ii) a corporation or partnership (or other entity properly treated as a corporation or partnership for Federal income tax purposes) created or organized in or under the laws of the United States or any State thereof or the District of Columbia, (iii) an estate whose income is includable in gross income for United States Federal income taxation regardless of its source, and (iv) a trust for which one or more United States persons have the authority to control all substantial decisions and for which a court of the United States can exercise primary supervision over the trust’s administration and certain eligible trusts that elect to be treated as United States persons.  A “Foreign Person” is any person that is not a United States person.  Each Class A Noteholder should consult its tax advisors regarding the tax documentation and certifications that must be provided to secure the exemption from United States withholding taxes.

Any capital gain realized on the sale, redemption, retirement or other taxable disposition of a Class A Note by a Foreign Person generally will be exempt from United States Federal income and withholding tax, provided that (i) such gain is not effectively connected with the conduct of a trade or business in the United States by the Foreign Person and (ii) in the case of an individual Foreign Person, the Foreign Person is not present in the United States for 183 days or more in the taxable year.

If the interest, gain or income on a Class A Note held by a Foreign Person is effectively connected with the conduct of a trade or business in the United States by the Foreign Person (although exempt from the withholding tax previously discussed if the holder provides an appropriate statement establishing that such income is so effectively connected), the holder generally will be subject to United States Federal income tax on the interest, gain or income at regular Federal income tax rates.  In addition, if the Foreign Person is a foreign corporation, it may be subject to a branch profits tax equal to 30% of its effectively connected earnings and profits,” within the meaning of the Code, for the taxable year, as adjusted for certain items, unless it qualifies for a lower rate under an applicable tax treaty (as modified by the branch profits tax rules).

If the IRS were to contend successfully that the Class A Notes are interests in a partnership, not taxable as a corporation, a Class A Noteholder that is a foreign person might be required to file a United States. Federal income tax return and pay tax on its share of partnership income at regular United States tax rates, including the branch profits tax, and could be subject to withholding tax on its share of partnership income. If the Class A Notes were recharacterized as interests in a “publicly traded partnership” taxable as a corporation, distributions on the Class A Notes treated as dividends would generally be subject to withholding tax on the gross amount of the dividends at the rate of 30% unless the rate were reduced by an applicable treaty. If the Class A Notes are recharacterized as equity interests in a partnership, or, contrary to the opinion of Federal Tax Counsel, in a publicly traded pa rtnership taxable as a corporation, any taxes required to be so withheld will be treated for all purposes of the Class A Notes as having been paid to the related Class A Noteholder.

Backup Withholding. Distributions made on the Class A Notes and proceeds from the sale of Class A Notes to or through certain brokers may be subject to a “backup” withholding tax on “reportable payments” (including interest accruals, original issue discount, and, under certain circumstances, distributions in reduction of principal amount) if the holder of the Class A Notes fails to comply with certain identification procedures, unless the Class A Noteholder is an exempt recipient under applicable provisions of the Code and, if necessary, demonstrates such status.  Any amounts so withheld from distributions on the Class A Notes would be refunded by the IRS or allowable as a credit against the Class A Noteholder’s Federal income tax.

ERISA CONSIDERATIONS

General

Section 406 of ERISA prohibits, and Section 4975 of the Code imposes adverse tax consequences on, certain transactions between any benefit plan which is subject to Title I of ERISA and/or Section 4975 of the Code or is an entity which is deemed to hold the assets of the foregoing (the “Plan”) and persons that are “parties in interest” under ERISA or “disqualified persons” under the Code with respect to such Plan.  A violation of these “prohibited transaction” rules may result in excise taxes and other penalties and liabilities under ERISA and the Code for such persons.

Certain transactions involving the assets of an issuing entity might be deemed to constitute prohibited transactions under Section 406 ERISA and Section 4975 of the Code with respect to a Plan that purchased notes issued by that issuing entity if assets of the issuing entity were deemed to be assets of the Plan.  Under the regulation issued by the United States Department of Labor set forth at 29 C.F.R. Section 2510.3-101 governing the definition of “plan assets” for purposes of the fiduciary responsibility and prohibited transaction provisions of ERISA and Section 4975 of the Code (the “Plan Asset Regulations”), the assets of an issuing entity would be treated as plan assets of the Plan for the purposes of ERISA and the Code only if the Plan acquired an “equity interest” in the issuing entity and none of the exceptions contained in the Plan Asset Regulations was applicable. &n bsp;An equity interest is defined under the Plan Asset Regulations as an interest other than an instrument which is treated as indebtedness under applicable local law and which has no substantial equity features.

Purchases of the Notes

Although there is little guidance on the subject, the notes should be treated as indebtedness without substantial equity features for purposes of the Plan Asset Regulations.  This determination is based in part upon (i) tax counsel’s opinion that notes transferred on the closing date to parties unrelated to the holder of the Residual Certificates will be classified as debt for U. S. federal income tax purposes and that retained notes, if later sold to a party unrelated to the holder of the Residual Certificates for cash, will be classified as debt instruments for U.S. federal income tax purposes as of the date of such sale, based on certain assumptions (including that the rating of the notes as of the closing date has not declined below investment grade) and (ii) the traditional debt features of the notes, including the reasonable expectation of purchasers of the notes that they will be repaid when due, as well as the absence of conversion rights, warrants and other typical equity features.  Based upon the foregoing and other considerations, subject to the considerations described below, the notes may be purchased by a Plan.

Without regard to whether the notes are considered an “equity interest” in the issuing entity under the Plan Asset Regulations, the acquisition or holding of notes by or on behalf of a Plan could be considered to give rise to a prohibited transaction if the underwriters, the issuing entity, the owner trustee or the indenture trustee, or any of their respective affiliates is or becomes a party in interest or a disqualified person with respect to such Plan.  In that case, PTE 84-14 (relating to transactions effected by a “qualified professional asset manager”); PTE 90-1 (relating to transactions involving insurance company pooled separate accounts); PTE 91-38 (relating to transactions involving bank collective investment funds); PTE 95-60 (relating to transactions involving insurance company general accounts); PTE 96-23 (relating to transactions effected by an “in-house asset manager”); and any other ap plicable exemption granted by the U.S. Department of Labor (the “Investor Based Exemptions) could be applicable, depending on the type of Plan involved and the circumstances of the plan fiduciary’s decision to acquire a note.  Even if the conditions specified in one or more of the Investor-Based Exemptions are met, the scope of the relief provided by these exemptions might or might not cover all acts that might be construed as prohibited transactions.  There can be no assurance that any of the Investor-Based Exemptions, or any other exemption, will be available with respect to any particular transaction involving the notes.

Certain employee benefit plans, including governmental plans (as defined in Section 3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and foreign plans are not subject to the ERISA requirements but may be subject to federal, state, local or foreign laws that are substantially similar to ERISA or the Code (“Similar Law”), such plans, together with Plans are referred to herein as “Benefit Plans.”

The notes should not be purchased with the assets of a Plan, if the depositor, the servicer, the master servicer, the indenture trustee, the owner trustee, the underwriters or any of their affiliates is a fiduciary or gives investment advice with respect to such Plan or is an employer maintaining or contributing to such Plan, unless such purchase and holding of the notes would be covered by an applicable prohibited transaction exemption.

Each purchaser and transferee of a note will be deemed to represent and warrant to the issuing entity that either (i) it is not a Benefit Plan or (ii) it is a Benefit Plan and its acquisition and holding of such notes will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code which is not covered under an Investor-Based Exemption or some other applicable exemption, and will not cause a non-exempt violation of any substantially Similar Law.

Prospective Benefit Plan investors in notes should consult with their legal advisors concerning the impact of ERISA and the Code, the availability of other exemptions from the prohibited transaction rules that may apply to them, and the potential consequences in their specific circumstances, prior to making an investment in the notes.  Each Benefit Plan fiduciary should also determine whether under the general fiduciary standards of investment prudence and diversification, an investment in the notes is appropriate for the Benefit Plan, taking into account the overall investment policy of the Plan and the composition of the Benefit Plan’s investment portfolio.

USE OF PROCEEDS

The issuing entity will use the proceeds from the sale of notes, after [depositing funds into the cash collateral account and] paying expenses, to pay the purchase price for the contracts to the depositor.  [The depositor will use the proceeds to pay amounts owed to another trust for the acquisition of contracts from the trust.]  [The trust from which the issuing entity acquired contracts will use the proceeds it receives to pay down a warehouse receivables securitization facility.]

LEGAL PROCEEDINGS

[There are no material legal proceedings pending against the sponsor, the depositor, the owner trustee, the indenture trustee, the issuing entity, [any affiliated servicer, any 20% concentration unaffiliated servicer, any 20% concentration originator], or with respect to which the property of any of the foregoing transaction parties is subject, that are material to the noteholders.  No legal proceedings against any of the foregoing transaction parties is known to be contemplated by governmental authorities that are material to the noteholders.]

AFFILIATIONS, RELATIONSHIPS AND RELATED TRANSACTIONS

[There are no affiliations between the sponsor, the depositor or the issuing entity and any of [any affiliated servicer, any 20% concentration unaffiliated servicer], the owner trustee, the indenture trustee, [any 10% concentration originator] or [any credit enhancement provider or derivatives counterparty].  There are no affiliations among [any affiliated servicer, any 20% concentration unaffiliated servicer], the owner trustee, the indenture trustee, [any 10% concentration originator] or [any credit enhancement provider or derivatives counterparty].  There are currently no business relationships, agreements, arrangements, transactions or understandings between (a) the sponsor, the depositor or the issuing entity and (b) any of the parties referred to in the preceding sentence, or any of their respective affiliates, that were entered into outside the normal course of business or that contain terms oth er than would be obtained in an arm’s length transaction with an unrelated third party and that are material to the investor's understanding of the securities, or that relate to the securities or the pooled assets.  No such business relationship, agreement, arrangement, transaction or understanding has existed during the past two years.]

PLAN OF DISTRIBUTION

Under the terms of an underwriting agreement dated [     ], the underwriters have severally agreed to purchase the following respective initial principal amounts of notes at the respective public offering prices less the respective underwriting discounts shown on the cover page of this prospectus supplement:

	Initial Principal Amount of Class A-1 Notes	Initial Principal Amount of Class A-2 Notes	Initial Principal Amount of Class A-3 Notes	Initial Principal Amount of Class A-4 Notes	Initial Principal Amount of Class A-5 Notes	Initial Principal Amount of Class B Notes	Initial Principal Amount of Class C Notes	Initial Principal Amount of Class D Notes
UNDERWRITER
Deutsche Bank Securities Inc.
[     ]

In the underwriting agreement, the underwriters have agreed to purchase all of the notes being offered, if any of the notes are purchased.  The underwriters have advised the depositor that they propose initially to offer the notes to the public at the respective public offering prices shown on the cover page of this prospectus supplement, and to dealers at that price, less a concession not in excess of the amount noted in the table below.  The underwriters may allow and the dealers may reallow to other dealers a discount not in excess of the amount noted in the table below.

Class of Note	Dealer Concession Not to Exceed	Dealer Discount Not to Exceed
A-1
A-2
A-3
A-4
A-5
B
C
D

After the notes are released for sale to the public, the offering prices and other selling terms may be varied by the underwriters.

In connection with the offering of the notes, Deutsche Bank Securities Inc., on behalf of the underwriters, may engage in overallotment, stabilizing transactions and syndicate covering transactions in accordance with Regulation M under the Securities Exchange Act of 1934.  Overallotment involves sales in excess of the offering size, which creates a short position for the underwriters.  Stabilizing transactions involve bids to purchase the notes in the open markets for the purpose of pegging, fixing or maintaining the price of the notes.  Syndicate covering transactions involve purchases of notes in the open market after the distribution has been completed in order to cover short positions.  Stabilizing and syndicate covering transactions may cause the price of the notes to be higher than it would otherwise be in the absence of those transactions.  If Deutsche Bank Securities Inc., on beh alf of the Underwriters, engages in stabilizing or syndicate covering transactions, it may discontinue them at any time.

The sponsor, the depositor and some of its affiliates have agreed to indemnify the underwriters against some liabilities in connection with the sale of notes, including liabilities under the Securities Act of 1933, as amended.

The notes are new issues of securities with no established trading market.  The underwriters have advised the depositor that the underwriters intend to make a market in the notes but are not obligated to do so and may discontinue market making at any time without notice.  No assurance can be given as to the liquidity of the trading market for the notes.

The sponsor has estimated that it will spend approximately $[     ] for printing, rating agency, trustee and legal fees and other expenses related to the offering.

LEGAL MATTERS

McKee Nelson LLP, has provided a legal opinion relating to the notes in its capacity as special counsel to the issuing entity, the Underwriters and the sponsor.  Other legal matters for the underwriters will be passed upon by [     ].  The indenture, the pooling and servicing agreement, the trust agreement and the notes will be governed by the laws of the State of New York.

INDEX OF DEFINED TERMS

Available Pledged Revenues

S-36

Class A Base Principal Payment Amount

S-43

Class A Notes

S-36

Class A Percentage

S-44

Class A Principal Payment Amount

S-44

Class A Principal Shortfall Amount

S-44

Class A Target Principal Amount

S-44

Class B Floor

S-44

Class B Percentage

S-44

Class B Principal Payment Amount

S-44

Class B Target Principal Amount

S-45

Class C Floor

S-45

Class C Percentage

S-45

Class C Principal Payment

S-45

Class C Target Principal Amount

S-45

Class D Floor

S-45

Class D Percentage

S-46

Class D Principal Payment Amount

S-46

Class D Target Principal Amount

S-46

collection period

S-46

contract pool principal balance

S-9

CPR

S-32

delinquency

S-30

deposit date

S-60

LIBOR Determination Date

S-38

Liquidation Loss

S-50

One-Month LIBOR

S-38

Pledged Revenues

S-46

principal deficiency amount

S-50

Reallocated Principal

S-43

Reference Banks

S-39

Related Collection Period Pledged Revenue

S-47

Required Payoff Amount

S-47

Subordinate Classes

S-36

Telerate Page 3750

S-38

Total Principal Payment Amount

S-40

Unfunded Loss Amount

S-44

United States Person

S-62

$[__________] (Approximate)


ACE Securities Corp.

Depositor

[  ] EQUIPMENT TRUST SECURITIES [  ] – [  ]
RECEIVABLE-BACKED NOTES

Prospectus Supplement
Dated [______ __, ____]

[_______]

Servicer

[             ]

Issuing Entity

[Deutsche Bank Securities]

Underwriter

You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus. We have not authorized anyone to provide you with different information.

We are not offering the certificates offered by this prospectus supplement in any state where the offer is not permitted.

Dealers will be required to deliver a prospectus supplement and prospectus when acting as underwriters of the certificates and with respect to their unsold allotments or subscriptions. In addition, all dealers selling the Offered Certificates, whether or not participating in this offering, may be required to deliver a prospectus supplement and prospectus until 90 days after the date of this prospectus supplement.

[_______ __, _____]

PROSPECTUS

Equipment Receivable-Backed Notes

(Issuable In Series)

ACE SECURITIES CORP.

Depositor

The Issuing Entities:

The depositor will form the issuing entity for each series of notes, which will be an owner trust. Each issuing entity will offer equipment receivable-backed notes under this prospectus and a prospectus supplement. Each issuing entity will use the note sale proceeds to acquire a pool of contracts or private equipment contract-backed securities from the depositor specified in your prospectus supplement.

The assets in your issuing entity are specified in the prospectus supplement for that particular issuing entity, while the types of assets that may be included in an issuing entity, whether or not in your issuing entity, are described in greater detail in this prospectus.

The Securities:

ACE Securities Corp. will sell the securities pursuant to a prospectus supplement and this prospectus.  The securities will be grouped into one or more series, each having its own distinct designation.  Each series will be issued in one or more classes and will evidence beneficial ownership of, or be secured by, the assets in the issuing entity that the series relates to.  A prospectus supplement for a series will specify the terms of the series and of each of the classes in the series.  The securities represent obligations of the issuing entity only and do not represent an interest or obligation of the depositor, the sponsor or any of their affiliates.

Consider carefully the risk factors beginning on page 5 of this prospectus.

Neither the SEC nor any state securities commission has approved or disapproved the offered securities or determined if this prospectus is accurate or complete. Making any contrary representation is a criminal offense.

<R>The date of this prospectus is February 22, 2007.</R>

Deutsche Bank Securities

IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT

We provide information to you about the securities in two separate documents that progressively provide varying levels of detail:

·

This prospectus, which provides general information, some of which may not apply to a particular series of securities including your series; and

·

The accompanying prospectus supplement, which will describe the specific terms of the offered securities.

Whenever we use words like “intends,” “anticipates” or “expects” or similar words in this prospectus, we are making a forward-looking statement, or a projection of what we think will happen in the future.  Forward-looking statements are inherently subject to a variety of circumstances, many of which are beyond our control and could cause actual results to differ materially from what we anticipate.  Any forward-looking statements in this prospectus speak only as of the date of this prospectus.  We do not assume any responsibility to update or review any forward-looking statement contained in this prospectus to reflect any change in our expectation about the subject of that forward-looking statement or to reflect any change in events, conditions or circumstances on which we have based any forward-looking statement.

Table of Contents

Risk Factors

5

The Issuing Entities

19

The Originators, the Seller and the Servicer

20

The Contracts

21

Description of the Contracts

21

Equipment

26

Software and Services

28

Vendor Loans

29

Program Agreements With Vendors

29

Residual Investments

32

Contract Files

33

Collection on Contracts

33

Payments Generally

33

Expenses Relating to Equipment

34

Insurance; Repair and Replacement

34

Assignment of Contracts

35

Events of Default and Remedies

35

Prepayments and Early Termination

36

Disclaimer of Warranties

37

Additional Equipment

37

Representations and Warranties Made by the Seller

37

Representations and Warranties Made by the Seller

40

Substitution of Contracts

43

Delinquency and Net Loss Experience

44

Static Pool Data

44

Description of the Notes and Indenture

45

Distributions

45

Credit Enhancement

46

Liquidation and Insurance Proceeds

47

Optional Purchase of Contracts and Redemption of Notes

48

Trust Accounts

49

Reports to Noteholders

50

Book-Entry Registration

50

Issuance of Certified Notes at a Later Date

55

Modification of Indenture Without Noteholder Consent

56

Modification of Indenture

With Noteholder Consent

57

Events of Default; Rights Upon Event of Default

57

Issuing Entity Covenants

60

Annual Compliance Statement

61

Satisfaction and Discharge of Indenture

61

The Indenture Trustee

61

Description of the Pooling and Servicing Agreement

62

Transfer of Contracts and Equipment

62

Collections on Contracts

64

Servicing

64

Amendment

68

Certain Legal Matters Affecting the Contracts

69

The Security Interest in the Equipment

69

Material Federal Income Tax Consequences

71

Tax Characterization of the Issuing Entities

72

Tax Consequences to Note Owners

72

State and Local Tax Considerations

82

ERISA CONSIDERATIONS

83

General

83

ERISA Considerations Relating to Plan Assets

84

Ratings of the Notes

89

Use of Proceeds

89

Plan of Distribution

89

Legal Matters

90

Incorporation of Certain Documents by Reference

91

Risk Factors

The following information, which you should carefully consider, identifies certain significant sources of risk associated with an investment in the notes.  You should also carefully consider any information set forth under “Risk Factors” in the prospectus supplement.

The Absence of an Existing Market for the Notes May Limit Your Ability to Resell the Notes	There is currently no public market for the notes and the sponsor cannot assure you that one will develop. Thus, you may not be able to resell your notes at all, or may be able to do so only at a substantial discount. The underwriters may assist in resales of the notes but they are not obligated to do so.  The sponsor does not intend to apply for listing of the notes on any securities exchange or for the inclusion of the notes on any automated quotation system. Even if a secondary market does develop, it may not continue.
Contract Prepayment, Ineligibility or Default May Cause Earlier Repayment of the Notes than You Expect and You May Not Be Able To Find Investments with the Same Yield as the Notes at the Time of Repayment	A higher than anticipated level of prepayments or liquidation of contracts that become defaulted may cause an issuing entity to pay principal on the notes sooner than you expected.  Also, an issuing entity may pay principal sooner than you expected if the depositor or a seller repurchases ineligible contracts.  Similarly, upon the occurrence of an event of default under the indenture, you may receive principal of the notes sooner than you expected.  See “Description of the Notes and Indenture — Events of Default; Rights Upon Event of Default.”  You may not be able to reinvest those distributions of principal at yields equivalent to the yield on the notes; therefore, the ultimate return you receive on your investment in the notes may be less than the return you expected on the notes. The rate of early terminations or repurchases of contracts due to prepayments ineligibility, or defaults is influenced by various factors including: • technological change; • changes in customer requirements; • the level of interest rates; • the level of casualty losses; and • the overall economic environment. Unless otherwise set forth in your prospectus supplement, under the pooling and servicing agreement, the servicer may allow an obligor to prepay a contract at any time if the payment, alone, or together with the contract’s remaining contract principal balance and any scheduled payment owed and not yet received, is equal to the entire contract principal balance of the contract.  The principal balance of a contract is the present value of the future scheduled payments under the contract, discounted at a discount rate that will be specified in the prospectus supplement for your notes. The sponsor cannot predict the actual rate of prepayments which will be experienced on the contracts.  However, your prospectus supplement will present information as to the principal balances of the notes remaining at various times under several hypothetical prepayment rates.  See “Weighted Average Life of the Notes” in your prospectus supplement.
You May Be Unable To Reinvest Distributions In Comparable Investments	Asset backed securities, like the securities, usually produce more returns of principal to investors when market interest rates fall below the interest rates on the receivables and produce less returns of principal when market interest rates are above the interest rates on the receivables. As a result, you are likely to receive more money to reinvest at a time when other investments generally are producing a lower yield than that on the securities, and are likely to receive less money to reinvest when other investments generally are producing a higher yield than that on the securities.  You will bear the risk that the timing and amount of distributions on your securities will prevent you from attaining your desired yield.
The Price at Which You Can Resell Your Notes May Decrease if the Ratings of Your Notes Change	At any time, the rating agencies may lower their respective ratings of the notes or withdraw their ratings entirely.  In the event that a rating assigned to any note is subsequently lowered or withdrawn for any reason, you may not be able to resell your notes or to resell them without a substantial discount.  For more detailed information regarding the ratings assigned to any class of the notes, see “Ratings of the Notes” in this prospectus and the prospectus supplement.
The Securities Are Not Suitable Investments For All Investors	The securities are not a suitable investment for any investor that requires a regular or predictable schedule of payments or payment on any specific date.  The securities are complex investments that should be considered only by investors who, either alone or with their financial, tax and legal advisors, have the expertise to analyze the prepayment, reinvestment, default and market risk, the tax consequences of an investment, and the interaction of these factors.
The Subordination of Some Classes of Notes is Only a Limited Form of Credit Enhancement and Does Not Ensure Payment of the More Senior Classes	An issuing entity will pay interest and principal on some classes of notes prior to paying interest and principal on other classes of notes.  The subordination of some classes of notes to others means that the subordinated classes of notes are more likely to suffer the consequences of delinquent payments and defaults on the contracts than the more senior classes of notes. The more senior classes of notes could lose the credit enhancement provided by the more subordinate classes if delinquencies and defaults on the contracts increase and if the collections on the contracts and any credit enhancement described in your prospectus supplement are insufficient to pay even the more senior classes of notes. Your prospectus supplement will describe any subordination provisions applicable to your notes.
Limited Assets are Available for Payment of the Notes; Noteholders Will Have No Recourse to the Originators, Sponsor, Depositor, Servicer or their Affiliates in the Event Delinquencies and Losses Reduce the Trust’s Assets	Each issuing entity will be a limited purpose owner with limited assets.  Moreover, you have no recourse to the general credit of the servicer, sponsor, depositor, originator or their affiliates.  Therefore, you must rely solely upon the contracts and any credit enhancement described in your prospectus supplement for payment of principal and interest on the notes. An increase in delinquent or defaulted payments on contracts could result in your being paid less than you expect on the notes or in delays in payment. If a contract is a vendor loan, you must rely solely upon the end-user contracts securing the vendor loan for payments in respect of that contract.  Most vendor loans are non-recourse to the vendors.  In non-recourse loans you are limited to recovering amounts due solely from the end-user contracts and related security.
Even if an Owner Trust Repossesses and Sells the Equipment Relating to a Contract After an Obligor Defaults, Shortfalls in Amounts Available To Pay the Notes May Occur if the Market Value of the Equipment Has Declined	If a contract held by the issuing entity becomes a defaulted contract, the only sources of payment for amounts owed on that contract will be the income and proceeds from the sale of any related equipment and a deficiency judgment, if any, against the obligor under the defaulted contract.  Since the market value of the equipment may decline faster than the discounted contract balance, the issuing entity may not recover the entire amount due on the contract and might not receive any recoveries on the equipment.  The prospectus supplement for your notes may describe some forms of credit enhancement which are intended to make up for deficiencies in the proceeds and recoveries on the contracts.  However, this protection is limited and could be depleted if those deficiencies are larger than the sponsor anticipates.
Not Having Possession of Contract Files May Hinder an Issuing Entity’s Ability to Realize the Value of Equipment Securing the Contracts	To facilitate servicing and reduce administrative costs, the servicer or a sub-servicer, unless otherwise specified in your prospectus supplement, will retain possession of the documents evidencing the contracts held by the issuing entity.  As a result, a subsequent purchaser of contracts could take physical possession of the documents without knowledge of their assignment.  That subsequent purchaser could then have a security interest in the contracts senior to the issuing entity’s security interest. In the event that the issuing entity must rely upon repossession and sale of the equipment securing defaulted contracts to recover amounts due on the defaulted contracts, the issuing entity’s ability to realize upon the equipment would be limited by the existence of the third party’s senior security interest in those contracts.  In this event, there may be a delay or reduct ion in distributions to you. Similarly, with respect to contracts securing vendor loans, the vendor will retain the original documents associated with some contracts.  The applicable originator will file Uniform Commercial Code financing statements reflecting the pledge of those contracts to the applicable originator as security for the vendor loans.  However, the related documents will remain in the vendor’s possession.  If a subsequent purchaser were able to take physical possession of the related documents without knowledge of the pledge to the originator, the issuing entity’s security interest in those contracts could be defeated. In this event, there may be a delay or reduction in distributions to you.
Failure to Take all Steps Necessary to Perfect Security Interests in Equipment, to Record Assignment of Security Interests to the Issuing Entity or to Record Security Interests in Titled Equipment May Hinder the Issuing Entity’s Ability to Realize the Value of Equipment Securing the Contracts	The depositor will receive security interests in financed equipment securing contracts from the seller of such financed equipment, which will obtain security interests in financed equipment from other originator or through its own origination activities.  The depositor will assign the security interests to the issuing entity. However, in some instances, the originators may not file financing statements for equipment relating to a single obligor in a single jurisdiction when the value of the equipment is less than a minimum amount which will be specified in the related prospectus supplement. As a result, the originator will not acquire, and the depositor and issuing entity will not have, a perfected security interest in the equipment.  As a result, creditors of the end-user may acquire superior interests in the equipment. Additionally, regardless of equipment value, the sponsor will require the originators to annotate their records to note the depositor’s security interest but may not require the filing of assignments of financing statements for the equipment to reflect the depositor’s, the issuing entity’s or the indenture trustee’s interests. Because of this, an originator or the servicer could inadvertently release the security interest in the equipment securing a contract.  The issuing entity would then not have a security interest in the equipment. Also, any transfer to the depositor of an originator’s security interest in motor vehicles securing the contracts is subject to state vehicle registration laws.  The depositor’s transfer of a security interest in motor vehicles to the issuing entity is also subject to these registration laws. These registration laws require that the secured party’s name appear on the certificate of title or similar registration of title to a motor vehicle in order for the secured party’s security interest to be perfected.  The applicable originator will be identified on the certificates or similar registrations of title.  However, the certificates of title or similar registrations of title will not identify the depositor or issuing entity as secured party.  In addition, some equipment related to the contracts may constitute fixtures under the real estate or Uniform Commercial Code provisions of the state in which the equipment is located.  The relevant originator will not file assignments of fixture filings in favor of the depositor or issuing entities.  Therefore, a third party could acquire an interest in the motor vehicles or real estate fixtures superior to that of the issuing entities.
Repurchase Obligation of the Seller Provides You Only Limited Protection Against Prior Liens on the Contracts or Equipment	Federal or state law may grant liens on contracts or equipment that have priority over the issuing entity’s interest. If the creditor associated with any prior lien exercises its remedies it is unlikely that sufficient cash proceeds from the contract and related equipment will be available to pay the contract balance to the issuing entity.  In that event, there may be a delay or reduction in distributions to you.  An example of a lien arising under federal or state law is a tax lien on property of the originator or the depositor arising prior to the time a contract is conveyed to the issuing entity.  The tax lien has priority over the interest of the issuing entity in the contracts. In most cases where vendors have assigned contracts to originators, the vendors have warranted to the originators that there are no prior liens on the contracts.  Additionally, where vendors have assigned contracts to originators, the vendors have agreed not to grant any lien on any contracts transferred to the originators.  In all cases, the seller will warrant to the depositor and the issuing entity that there are no prior liens on the contracts. The seller also will warrant to the depositor and the issuing entity that it will not grant any lien on the contracts. In the event that those warranties are not true as to any contract, the seller will be required under the pooling and servicing agreement to repurchase the contract.  There can be no assurance that the seller will be able to repurchase a contract at the time when it is asked to do so.
Special Risks Associated with Underlying Securities	If specified in the related prospectus supplement, the trust fund may include other publicly- or privately-offered securities, representing beneficial ownership interests in separate trust funds.  As described in the prospectus supplement, these underlying securities may be senior securities or subordinate securities, and may not have the benefit of credit enhancement.   Losses on the underlying securities will not be transferred to, allocated to or shared by any other underlying trust fund.  Each allocation of a realized loss to a class of underlying securities will reduce both the amount of interest that will accrue on that class and the amount of principal that will be distributable on that class.  Therefore, the aggregate amount of payments on your securities, the yield to maturity of your securities and the rate of payments of principal on your securities may be affected by the rate and the timing of realized losses on the assets of the trust funds represented by the underlying securities.  To the extent that the amount of realized losses experienced on the assets of the trust funds represented by the underlying securities reduces distributions in respect of the underlying securities, the yield on your securities may be lower than anticipated. Certain parties may have the option to purchase the contractss and other property in the related underlying trust funds once the underlying contracts decline to a fixed percentage of the initial principal balance.  As specified in the prospectus supplement, some or all of the underlying securities (by principal balance) may be issued from underlying trust funds that have paid down or are approaching the level necessary to exercise of these optional termination rights.  In the event that any such party exercises its right to purchase the related contracts, the related underlying securities will be retired.  This retirement of underlying securities will have the same effect as a prepayment of all of the related contracts in the related underlying trust fund.
If a Bankruptcy Court Rules that the Transfer of Contracts from a Vendor to an Originator was not a True Sale then Payments on the Contracts may be Reduced or Delayed	Vendors sell contracts to the originators, which contracts will be transferred directly or indirectly to the depositor and then the issuing entity.  If a bankruptcy court decides that the acquisition of a contract by an originator is not a sale of the contract from the vendor to the originator, the contract would be part of the vendor’s bankruptcy estate.  Accordingly, the contract would be available to the vendor’s creditors.  In that case, it is unlikely the issuing entity will receive all of the scheduled payments on the contracts, and there may be a delay or reduction in distributions to you.  In order to treat the transfer of contracts to the issuing entity as not being a true sale, the bankruptcy court would recharacterize the transfer as a pledge of the contracts to secure borrowings by the vendor. Additionally, if the transfer of contracts to an originator from a vendor is recharacterized as a pledge, then a tax or government lien on the property of the pledging vendor arising before the contracts came into existence may have priority over the issuing entity’s interest in the contracts.
A Bankruptcy Court Determination that the Transfer of Contracts from Originators to the Seller, from the Seller to the Depositor or from the Depositor to the Issuing Entity was not a True Sale then Payments on the Contracts Could be Reduced or Delayed	If an originator, the seller or the depositor became a debtor in a bankruptcy case, creditors of that party, or that party acting as a debtor-in-possession, may assert that the transfer of the contracts was ineffective to remove the contracts from that party’s estate.  In that case, the distribution of contract payments to the issuing entity might be subject to the automatic stay provisions of the United States Bankruptcy Code.  This would delay the distribution of those payments to the noteholders for an uncertain period of time.  Furthermore, if the bankruptcy court rules in favor of the creditors or the debtor in possession, the result may be reductions in payments under the contracts to the issuing entity. In either case, you may experience delays or reduction in distributions to you.  In addition, a bankruptcy trustee would have the power to sell the contracts if the pro ceeds of the sale could satisfy the amount of the debt deemed owed by the originator, the seller or the depositor, as the case may be.  The bankruptcy trustee could also substitute other collateral in lieu of the contracts to secure the debt. Additionally, the bankruptcy court could adjust the debt if the originator, the seller or the depositor were to file for reorganization under Chapter 11 of the Bankruptcy Code.  Each of these parties will represent and warrant that the conveyance of the contracts by it is in each case a valid sale and transfer of the contracts.  In addition, in agreements conveying the contracts, the originators, the seller and the depositor have agreed that they will each treat the transactions described in this prospectus as a sale of the contracts.
Insolvency of the Vendors Could Delay or Reduce Payments to You	In the event a vendor under a vendor loan becomes subject to insolvency proceedings, the end-user contracts and equipment securing the vendor loan as well as the vendor’s obligation to make payments would also become subject to the insolvency proceedings.  In that event, payments to the issuing entity in respect of those vendor contracts may be reduced or delayed. Payments to you may be reduced if collections from the remaining unaffected contracts are insufficient to cover losses to the issuing entity. In those cases in which transfers of end-user contracts by vendors to originator provide that the originator have recourse to the vendor for all or a portion of the losses the originator may incur as a result of a default under those end-user contracts, the vendor’s bankruptcy, may similarly result in reductions or payment delays in amounts due from the vendor.
End-User Bankruptcy May Reduce or Delay Collections on the Contracts, and Disposition of Equipment Relating to These or Other Defaulting End-Users May be Delayed or May not Result in Complete Recovery of Amounts Due	Bankruptcy and insolvency laws could affect your interests in contracts with end-user obligors who become subject to bankruptcy proceedings.  Those laws could result in contracts of a bankrupt end-user being written off as uncollectible or result in delay in payments due on the contracts.  As a result, you may be subject to delays in receiving payments, and you may also suffer losses if collections from the remaining unaffected contracts are insufficient to cover losses to the trust. Foreclosure sales of equipment and obtaining deficiency judgments following foreclosure sales may not yield sufficient proceeds to pay off the balance owed on a contract.  If you must rely on repossession and disposition of equipment to recover amounts due on defaulted contracts, those amounts may be insufficient. Factors that may affect whether you receive the full amount due on a contract include the fai lure to file financing statements to perfect the originator’s or issuing entity’s security interest in the equipment securing the contract. The depreciation, obsolescence, damage, or loss of any item of equipment will also affect whether you receive the full amount due on a contract.
Commingling of Collections Could Result in Reduced Payments to You	Cash held by the servicer may be commingled and used for the benefit of the servicer prior to the date on which the collections are required to be deposited in a collection account as described under “Description of the Pooling and Servicing Agreement — Collections on Contracts.”  In the event of the insolvency or receivership of the servicer, an issuing entity may not have a perfected ownership or security interest in these collections.  In that case, you may suffer losses on your investment as a result.
Bankruptcy of Depositor or the Issuing Entity May Cause Delays in or Reduce Collections Under the Contracts	If an issuing entity or the depositor becomes insolvent under any federal bankruptcy or similar state laws, the right of an indenture trustee to foreclose upon and sell the assets of an issuing entity is likely to be significantly impaired by applicable bankruptcy laws.  This would be the case before or possibly even after an indenture trustee has foreclosed upon and sold the assets of an issuing entity.  Under the bankruptcy laws, payments on debts are not made, and secured creditors are prohibited from repossessing their security from a debtor in a bankruptcy case or from disposing of security repossessed from the debtor, without bankruptcy court approval.  Moreover, the bankruptcy laws may permit the debtor to continue to retain and to use collateral even though the debtor is in default under the applicable debt instruments, if the secured creditor is provided adequate protection. & nbsp;The meaning of the term adequate protection may vary according to circumstances, but it is intended in general to protect the value of the security from any diminution in the value of the collateral as a result of its use by the debtor during the pendency of the bankruptcy case. Because there is no precise definition of the term adequate protection and because the bankruptcy court has broad discretionary powers, it is impossible to predict if or how you would be compensated for any diminution in value of the issuing entity assets.
The Seller’s Obligation to Repurchase Contacts Could be Impaired by Bankruptcy	The seller of contracts to the depositor, will make representations and warranties regarding the contracts, the equipment and other matters. See “The Contracts and the Underlying Securities — Representations and Warranties Made by the Seller.”  If any representation or warranty with regard to a specific contract is breached, is not cured within a specified period of time, and the value of the contract is materially and adversely affected by the breach, the seller must purchase the contract from the applicable issuing entity at a price equal to the amount required to pay off the contract.  If the seller becomes bankrupt or insolvent, each indenture trustee’s right to compel a purchase would both be impaired and have to be satisfied out of any available “assets” of the seller’s bankruptcy estate.  In that case, you may suffer a loss on your inves tment in a note as a result.
Contracts Relating to Software or Related Support and Consulting Services are not Secured by the Software or Related Services	Some of the contracts held by the issuing entity may relate to software that is not owned by an originator or related support and consulting services.  In these cases, the vendor or a licensor traditionally owns the software, and the software and related support and consulting services do not serve as collateral for the contracts.  Thus, the issuing entity will not have an interest in the software or related support and consulting services.  The issuing entity will own solely the associated contracts’ cash flow. Accordingly, if any of these contracts becomes a defaulted contract, the issuing entity will not be able to foreclose on the software or related support and consulting services.  Because there will be no proceeds from the software or related support and consulting services which could be used to make payments to you, the issuing entity must look solely to the obligor to collect amounts due on the contract.  There can be no assurance that the obligor will be able to pay in full amounts due under the contract.
Limitations on Enforceability of Security Interests in the Equipment May Hinder the Issuing Entity’s Ability to Realize the Value of Equipment Securing the Contracts	State law limitations on the enforceability of security interests and the manner in which a secured party may dispose of collateral may limit the issuing entity’s ability to obtain or dispose of collateral in a timely fashion.  This could reduce or delay the availability of funds to pay the notes.  Under these state law limitations: • if the obligor becomes bankrupt or insolvent, the issuing entity may need the permission of a bankruptcy court to obtain and sell its collateral; • some jurisdictions require that the obligor be notified of the default and be given a time period within which it may cure the default prior to repossession; and • the obligor may have the right to redeem collateral for its obligations prior to actual sale by paying the lessor or secured party the unpaid balance of the obligation plus the secured party’s expenses for repossessing, holding and preparing the collateral for disposition.
Bankruptcy Court Rejection of True Leases” May Reduce Funds Available to Pay Notes	A bankruptcy trustee or debtor-in-possession under federal bankruptcy or similar state laws has the right to assume or reject any executory contract or unexpired lease which is considered to be a “true lease” under applicable law.  A “true lease” is a contract under which the applicable originator or vendor holds a residual interest in equipment of more than a nominal amount.  Some contracts will be true leases and thus subject to rejection by the lessor under federal bankruptcy or similar state laws.  For this reason, the originator, as debtor-in-possession or the originator’s bankruptcy trustee may reject the leases of which that originator is the lessor.  Upon any rejection, payments to the applicable originator under the rejected contract may terminate and your investment may be subject to losses.  In addition, any contract which is a true lease t hat a vendor originated and transferred to an originator in a transaction in which the vendor continues to be the lessor, will be subject to rejection by the vendor, as debtor in possession, or by the vendor’s bankruptcy trustee.  An example of this transaction is a transfer by a vendor to an originator of a security interest in the lease contract or a transfer by a vendor to an originator of an interest in the right to payments only under the lease contract.  Upon any rejection, payments to the applicable originator under the rejected contract may terminate and your investment may be subject to losses.

The Sponsor

The sponsor will be DB Structured Products, Inc., a Delaware corporation, referred to herein as the Sponsor, for each series of securities unless otherwise indicated in the related prospectus supplement.  The Sponsor maintains its principal office at 60 Wall Street, New York, New York  10005.  Its telephone number is (212) 250-2500.

With respect to any series of securities, if so specified in the related prospectus supplement, the Sponsor will also act as servicer or master servicer for the mortgage pool.  If so, the Sponsor will service the Designated Mortgage Assets in accordance with the description of the applicable servicing procedures contained in this prospectus under “Description of the Securities.”

The Depositor

ACE Securities Corp., the depositor, is a special purpose corporation incorporated in the State of Delaware on June 3, 1998.  The principal executive offices of the depositor are located at 6525 Morrison Boulevard, Suite 318, Charlotte, North Carolina 28211.  Its telephone number is (704) 365-0569.  The depositor does not have, nor is it expected in the future to have, any significant assets.

The limited purposes of the depositor are, in general, to acquire, own and sell mortgage loans and financial assets; to issue, acquire, own, hold and sell securities and notes secured by or representing ownership interests in mortgage loans and other financial assets, collections on the mortgage loans and related assets; and to engage in any acts that are incidental to, or necessary, suitable or convenient to accomplish, these purposes.

All of the shares of capital stock of the depositor are held by Altamont Holdings Corp., a Delaware corporation.

The Issuing Entities

The sponsor will form each issuing entity as an owner trust under a trust agreement among the sponsor, the depositor and the owner trustee, as described in your prospectus supplement.  Each issuing entity may issue one or more classes of securities, representing debt of or beneficial ownership interests in the issuing entity.  The issuing entity will not offer the beneficial ownership interests under this prospectus.

The assets of each issuing entity, as further specified in your prospectus supplement, will consist of:

(1)

a pool including some or all of the following types of contracts:

•

equipment lease contracts,

•

conditional sale/financing agreements,

•

installment payment agreements,

•

promissory notes, and

•

loan and security agreements;

(2)

amounts on deposit in, and any eligible investments allocated to, accounts established under the related indenture and the pooling and servicing agreement;

(3)

the sponsor’s rights under the related purchase and sale agreement or other instrument by which it acquired contracts, if any; and

(4)

the sponsor’s rights with respect to any cash collateral account or other form of credit enhancement for the notes.

The issuing entity will have the right, as set forth in your prospectus supplement, to:

•

all funds payable under the contracts after the cut-off date, the date on which the issuing entity’s right to contract payments commences.  This includes all scheduled but unpaid amounts due prior to the cut-off date, but excludes any scheduled payments due on or after, but received prior to, the date the depositor transfers the contracts to an issuing entity.  This does not include contract payments in respect of taxes, insurance premiums, security deposits, late charges, administrative fees or charges;

•

prepayments, except for any portion allocated to the sponsor in respect of equipment leases;

•

liquidation proceeds received with respect to defaulted contracts, except for any portion allocable to the sponsor under an equipment lease;

•

earnings from the investment of funds in the collection account and note distribution account maintained by the servicer; and

•

security interests in the equipment related to the contracts, but excluding ownership rights.

No issuing entity will engage in any business activity unless otherwise specified in your prospectus supplement, other than

•

issuing notes and ownership interests in the issuing entity;

•

purchasing contracts and related assets;

•

holding and dealing with the assets of the issuing entity;

•

making payments on the notes and other securities it issued;

•

entering into and performing the duties, responsibilities and functions required under any of the related pooling and servicing agreement, indenture, contracts, and related documents; and

•

matters incidental to the above.

The assets of an issuing entity will be separate from the assets of all other issuing entities, the sponsor or depositor creates.  Accordingly, the assets of one issuing entity will not be available to make payments on the securities issued by any other issuing entity.

The sponsor will specify the owner trustee of the issuing entity for notes being offered to you in your prospectus supplement.  The owner trustee’s liability in connection with the sale of notes will be limited to the express obligations of the owner trustee in the related trust agreement and indenture.  An owner trustee may resign at any time, in which event the depositor or the sponsor, as specified in your prospectus supplement or any designee, must appoint a successor owner trustee.  The depositor or the sponsor, as specified in your prospectus supplement or any designee, may also remove an owner trustee if the owner trustee ceases to be eligible to continue as such under the related trust agreement or if the owner trustee becomes insolvent.  Any resignation or removal of an owner trustee will not become effective until acceptance of the appointment of a successor owner trustee.

The Originators, the Seller and the Servicer

Your prospectus supplement will provide information on the originators, the seller and the servicer.

The Contracts and the Underlying Securities

With respect to any series of notes, this prospectus and any prospectus supplement refer to the aggregate of the contracts or the Private Contract-Backed Securities in an issuing entity, as of any particular date, as the contract pool.  This prospectus and any prospectus supplement refer to the contract pool, as of the cut-off date specified in the prospectus supplement for your notes, as the cut-off date or initial contract pool.  This prospectus and any prospectus supplement refer to equipment, software and services collectively as financed items.

The contracts and Private Contract-Backed Securities to be sold to each issuing entity will be selected from a seller’s portfolio for inclusion in a contract pool based on rating agency criteria, compliance with representations and warranties, and conformity to criteria relating to the characterization of the notes for tax, ERISA, Form S-3 eligibility and any other criteria specified in the related prospectus supplement.  

Description of the Contracts

The following description of the contracts describes the material terms of the contracts to be included in each contract pool, although an immaterial number of contracts in a contract pool may differ in one or more provisions from the description below.

End-User Contracts

Each issuing entity will include contracts to which the end-user of the equipment is a party.  The sponsor lists the types of contracts under “The Issuing Entities” above.

There will be no limit on the number of contracts in a particular contract pool which may consist of any of those types.  Each contract is required, however, to be an “eligible contract,” as of the date the depositor transfers the contracts to the respective owner trusts.  An eligible contract is a contract as to which the representations and warranties listed below under “—Representations and Warranties Made by the Seller” are true as of the transfer date.

Conditional Sale Agreements

Each originator may offer financing for equipment under conditional sale agreements assigned to the applicable originator by the vendor of the equipment.  Each originator will either use its standard pre-printed form or a vendor’s standard, pre-printed form to document the conditional sale agreements in a contract pool.  The conditional sale agreement sets forth the description of each financed item and the schedule of installment payments.  Typically, loans under conditional sale agreements are fixed rate and are for a term of one to seven years.  Payments under conditional sale agreements typically are due monthly.  Conditional sale agreements typically:

•

provide for a grant by the end-user of the equipment of a security interest in the equipment, which security interest is assigned by the vendor to the originator;

•

may allow prepayment of the obligation upon payment, where allowed by applicable state law, of an additional prepayment fee;

•

require the end-user to maintain the equipment, keep it free and clear of liens and encumbrances and pay all taxes related to the equipment;

•

restrict the modification or disposal of the equipment without the vendor’s, or its assignee’s, consent;

•

include a disclaimer of warranties;

•

include the end-user’s indemnity against liabilities arising from the use, possession or ownership of the equipment;

•

include the end-user’s absolute and unconditional obligation to pay the
installment payments on the loan; and

•

include specific events of default and remedies for default.

A conditional sale agreement typically requires each end-user to maintain insurance, the terms of which may vary.  The terms of a conditional sale agreement often may be modified at its inception at the end-user’s request.

Leases

The originators, either directly or by assignment from vendors, may offer financing of equipment, software and services under leases.  Leases may consist of individual lease agreements relating to a single, separate transaction and financed item.  Alternatively, the individual leases may be governed by a master lease agreement which contains the general terms and conditions of the transaction.  Specific terms and conditions, such as descriptions of the specific equipment, software and services being leased or financed and the schedule of related rental payments, are typically contained in a supplement or schedule to the master lease agreement, which is signed by the end-user as lessee, and either the vendor or the originator, as lessor.  The supplement to the master lease agreement incorporates the master lease agreement by reference, and is treated by the originator as a separate lease. &nbs p;The originator or the vendor originates each lease in the ordinary course of business.  Vendors who originate leases assign them to the originator.  An originator also may purchase leases on a portfolio basis.

The initial terms of the leases in the contract pool typically range from one to seven years.  Each lease provides for the periodic payment by the end-user of rent in advance or arrears, generally monthly or quarterly.  The periodic payments represent the amortization, generally on a level basis, of the total amount that an end-user is required to pay throughout the term of a lease.

A contract pool will include “net leases” under which the end-user assumes responsibility for

•

the financed items, including operation, maintenance, repair, and insurance or self-insurance,

•

return of the equipment at the expiration or termination of the lease, and

•

the payment of all sales, use and property taxes relating to the financed items during the lease term.

The end-user further agrees to indemnify the lessor for any liabilities arising out of the use or operation of the financed items.  In most cases, the end-user also authorized the lessor to perform the end-user’s obligations under the lease at the end-user’s expense, if it so elects, in cases where the end-user has failed to perform.  In addition, the leases often contain “hell or high water” clauses unconditionally obligating the end-user to make periodic payments, without setoff, at the times and in the amounts specified in the lease.  If an originator is the lessor, the lease will often contain no express or implied warranties with respect to the financed items other than a warranty of quiet enjoyment.  If a vendor is the lessor, the lease or a related agreement may contain representations and warranties with respect to the financed items in addition to a warrant y of quiet enjoyment.  However, the end-user typically agrees not to assert any warranty claims against any assignee, including the originator, of the vendor by way of setoff, counterclaim or otherwise, and further agrees that it may only bring that type of claim against the vendor.  Leases of equipment often require the end-user to maintain, at its expense, casualty insurance covering damage to or loss of the equipment during the lease term or to self-insure against these risks, if approved in advance by the originator or vendor, as applicable.

The leases may include both “true leases” and leases intended for security as defined in Section 1-201(37) of the Uniform Commercial Code.  Under a “true lease”, the lessor bears the risk of ownership, except for the risk of loss of the equipment, which is passed to the end-user under the leases.  The lessor also takes any tax benefits associated with the ownership of depreciable property under applicable law.  No title is conferred upon the lessee.  The lessee under a “true lease” has the right to the temporary use of property for a term shorter than the economic life of the property in exchange for payments at scheduled intervals during the lease term.  Additionally, the lessor retains a significant “residual” economic interest in the leased property.  End of lease options for “true leases” includ e purchase or renewal at fair market value.

Under leases intended for security, the lessor in effect finances the “purchase” of the leased property by the lessee and retains a security interest in the leased property.  The lessee retains the leased property for substantially all its economic life and the lessor retains no significant residual interest.  Such leases are considered conditional sales type leases for federal income tax purposes and, accordingly, the lessor does not take any federal tax benefits associated with the ownership of depreciable property.  End of lease options for these leases depend on the terms of the related individual lease agreement or master lease agreement supplement, but often these terms provide for the purchase of the equipment at a prestated price, which may be nominal.  The inclusion of “true leases” in a contract pool should have no federal income tax impact on holde rs of notes since the notes are treated as debt for federal income tax purposes.  However, the inclusion of “true leases” may result in the imposition of state and local taxes which would reduce cash available for payment on the notes.

A lease will either prohibit the end-user from altering or modifying the equipment or permit the end-user to alter or modify the equipment only to the extent the alterations or modifications are readily removable without damage to the equipment.  Under some master lease agreements, the end-user may assign its rights and obligations under the lease, but only upon receiving the prior written consent of the lessor.  Under some leases, the lessee may relocate the equipment upon giving the lessor prompt written notice of the relocation.  The right to grant or deny consent or to receive written notice will be exercised by the servicer under the authority delegated to it in the related pooling and servicing agreement.  Some leases will permit the end-user to substitute substantially identical leased equipment for leased equipment scheduled to be returned to the lessor under the lease.

While the terms and conditions of the leases will not usually permit cancellation by the end-user, the lessor and the end-user may modify or terminate some leases before the end of the lease term.  The originator, or a vendor, with the consent of the originator, may permit the modifications to a lease term or early lease terminations.  The modifications typically arise in connection with additional financing opportunities from the same end-user.  End-users may also negotiate with the originator, at the originator’s discretion, an early termination arrangement allowing the end-user to purchase the equipment during the term of a lease.  The early-termination purchase price is often equal to or in excess of the present value of the remaining rental payments under the lease plus the anticipated market value of the related equipment as of the end of the lease term.  The originator may pe rmit early termination of a lease in connection with the acquisition of new technology requiring replacement of the equipment.  In these cases, the end-user returns the related equipment to the vendor or originator and pays an amount generally equal to the present value of the remaining rental payments under the lease plus an early termination fee to the originator.  Modifications usually involve repricing a lease or modification of the lease term.  Occasionally the lessor and the end-user may modify a lease in connection with an increase in the capacity or performance of equipment by adding additional equipment that includes new technology.  Coincident with the financing of an upgrade to the equipment, the originator may reprice and extend the related base lease term to be coterminous with the desired term of the lease relating to the upgrade.  In some cases, subject to conditions described under “Description of the Pooling and Servicing Agreements — Servicing,” ; base lease extensions may remain in a contract pool.  The sponsor expects that the servicer will continue to permit these modifications and terminations with respect to leases included in a contract pool under the authority delegated to it in the related pooling and servicing agreement.  The servicer’s ability to modify leases is limited by the conditions and covenants of the servicer described under “Description of the Pooling and Servicing Agreements — Servicing.”

The originator may modify the standard terms and conditions of the lease agreement at the inception of a lease at the request of the end-user.  Common permitted modifications include, but are not limited to:

•

prearranged mid-lease purchase options, early termination options and lease extension options as described above;

•

modifications to the lessor’s equipment inspection rights;

•

modifications to the end-user’s insurance requirements permitting the end-user to self-insure against casualty to the equipment;

•

the end-user’s right to assign the lease or sub-lease the financed items to an affiliated entity, so long as the end-user remains liable under the lease and promptly notifies the lessor or its assignee of the assignment or sublease; and

•

extended grace periods for late payments of rent.

In some cases, after a lease term expires the originator may permit the end-user to continue to use the related equipment for so long as the end-user continues to make lease payments.  After the expiration of the term of a lease, any continued lease payments will belong to the depositor, not the owner trust.

Secured Notes

Each originator may also provide direct initial financing or refinancing of equipment and software under secured promissory notes, which consist of an installment note and a separate security agreement.  In an initial financing transaction, the originator pays to the vendor the purchase price for the equipment or software.  In a refinancing transaction, the originator pays off an end-user’s existing financing source, and the initial financing or refinancing is documented as a direct loan by the originator to the end-user of the equipment or software using a secured note.  In the case of a refinancing transaction, upon payment to the existing financing source, the originator obtains a release of the original financing party’s lien on the financed equipment.  In either case, the originator records its own lien against the financed equipment or software and takes possession of the secu red note.  Except for the lack of references to “sale” or “purchase” of equipment, a secured note contains terms and conditions substantially similar to those contained in conditional sale agreements.

Installment Payment/Financing Agreements

Each originator may provide financing for software license fees and related support and consulting services under

•

installment payment supplements to software license agreements,

•

separate installment payment agreements, and

•

other forms of financing agreements assigned to the originator by vendors of software.

Each financing agreement of this type:

•

generally is an unsecured obligation of the end-user;

•

generally provides for a fixed schedule of payments with no end-user right of prepayment;

•

generally is noncancellable for its term;

•

generally contains a “hell or high water” clause unconditionally obligating the end-user to make periodic payments, without setoff, at the times and in the amounts specified.  If a financing agreement does not provide for noncancellability or a “hell or high water” clause, the financing agreement will typically have the benefit of a vendor guarantee;

•

generally permits the assignment of the payment agreement to a third party, including the originator, and includes the end-user’s agreement not to assert against assignee any claims or defenses the end-user may have against the vendor; and

•

generally contains default and remedy provisions that usually include acceleration of amounts due and to become due and, in some cases, the right of the vendor, or the originator by assignment, to terminate the underlying software license and all related support and consulting activities.

Equipment

The end-user contracts may consist of some or all of the following types of new and used equipment:

1) information technology equipment, including:

•

computer work stations,

•

mainframe, mid-range and personal computers,

•

data storage devices,

•

media and video production/post production equipment,

•

servers and

•

computer related peripheral equipment,

2) communications equipment, such as telephone switching and networking systems,

3) commercial business and industrial equipment, such as:

•

printing presses,

•

machine tools and other manufacturing equipment,

•

photocopiers, facsimile machines and other office equipment,

•

energy savings and control equipment,

•

corrugated boards,

•

plastic injections,

•

folding cartons

•

silk screening equipment,

•

automotive diagnostic and

•

automated testing equipment,

4) retail equipment, such as

•

petroleum retail equipment,

•

fuel dispensers,

•

ATM units,

•

convenience store operating equipment,

•

embroidery machines,

•

coin operated, vending, amusement and coffee service equipment and

•

restaurant equipment,

5) medical and dental equipment, such as diagnostic and therapeutic examination equipment for radiology, nuclear medicine and ultrasound and laboratory analysis equipment,

6) resources equipment, such as feller-bunchers and grapplers,

7) transportation and construction equipment, such as:

•

heavy and medium duty trucks, highway trailers and other title vehicles,

•

school buses,

•

bulldozers,

•

loaders,

•

graders,

•

excavators,

•

machine tools,

•

forklifts,

•

other materials handling equipment,

•

golf carts,

•

aircraft engines,

•

other road and off-road machinery and

•

electronics manufacturing and testing equipment,

8) other equipment

•

forestry,

•

pollution control,

•

mining and steel mill equipment,

•

laundry, janitorial, and cleaning equipment,

•

photographic equipment,

•

refuse equipment and

•

furniture and fixtures equipment.

In each case, the depositor will transfer the security interests of the originator in the equipment subject to each related end-user contract, but not ownership interests in the case of leased equipment, to the relevant owner trust.

Software and Services

Some end-user contracts may cover license fees and other fees owed by the end-user under either perpetual or term software license agreements and other related agreements in connection with the end-user’s use of computer software programs.  The end-user contracts may also cover related support and consulting services which are provided by the vendor, an affiliate of the vendor or a third party contract party and which facilitate the obligor’s use of the software.  Neither the vendors or licensors of the software nor the end-users under the related end-user contracts will convey to the originator any interest in the software or the software license agreement, other than the right to collect the payment of software license fees.  However, in some cases, the vendors may convey to the originator the right to exercise rights and remedies under the relevant software license agreement or relate d agreements.  Consequently, unless otherwise specified in your prospectus supplement, an issuing entity will not have title to or a security interest in the software, nor will it own the related services, and would not be able to realize any value from the software or related servicer under a related end-user contract upon a default by the end-user.

Vendor Loans

The contracts may include limited recourse loan or repayment obligations of a vendor.  These may take the form of promissory notes with related security interests documented by security agreements or specific provisions in related program agreements.  Each of the obligations is secured by all of the vendor’s interest in an individual end-user contract originated by the vendor and by the equipment related to the end-user contract.

The originator may originate vendor loans through, and the vendor loans may incorporate terms and conditions of, a program agreement.  See “Program Agreements with Vendors.” Vendor loans generally are non-recourse to the vendor, meaning that the originator may obtain repayment solely from the proceeds of the end-user contracts and related equipment securing the vendor loan.  However, the originator may have recourse to a vendor for nonpayment of a vendor loan through a limited recourse arrangement in the related program agreement or other related agreement.  The repayment terms under a vendor loan, including periodic amounts payable and schedule of payments, will correspond to the payment terms of the end-user under the end-user contract collaterally assigned under the vendor loan.  Each vendor loan will either include most, if not all, of the representations and warranties r egarding the end-user contract and related equipment typically included in a vendor agreement, or incorporate these representations and warranties included in any related program agreement by reference.

Program Agreements With Vendors

An originator’s program agreement is typically an agreement with equipment manufacturers, dealers and distributors, or software licensors or distributors, located in the United States.  The program agreement provides an originator with the opportunity to finance transactions relating to the acquisition or use by an end-user of a vendor’s equipment, software, services or other products.  Vendor program arrangements provide an originator with a steady, sustainable flow of new business, often with lower costs of origination than asset-based financings marketed directly to end-users.  Some of the program agreements take the form of a referral relationship, which is less formal, and may or may not include credit or remarketing support to the originator from the vendor.

Each program agreement under which vendors or another party originate and document contracts and assign them to the originator typically includes vendor representations, warranties and covenants regarding each contract assigned to an originator, including that:

•

the obligations of the end-user under the assigned contract are absolute, unconditional, noncancellable, enforceable in accordance with their terms and free from any rights of offset, counterclaim or defense;

•

the originator holds the sole original of the contract and has either title to or a first priority perfected security interest in the equipment, except with respect to situations where no financing statement is filed due to the minimum value involved;

•

the equipment and the contract are free and clear of all liens, claims or encumbrances except for permitted liens;

•

the end-user has irrevocably accepted the equipment or the software; and

•

the end-user duly authorized and signed the assigned contract;

Each program agreement under which the originators document and originate contracts typically include vendor representations, warranties and covenants regarding each contract, including that

•

the equipment has been delivered to and accepted by the end-user;

•

the vendor has not received any advance payments;

•

the vendor has good title to the equipment; and

•

the vendor has not made any misrepresentations to the end-user.

In each of the two above described program structures, relevant agreements also typically provide for

•

remedies for misrepresentations or breaches of warranties or covenants by the vendor regarding an assigned contract.  These remedies usually require the vendor to repurchase the affected end-user contract for the originator’s investment balance in the contract plus costs incurred by the originator in breaking any underlying funding arrangement; and

•

the right of an originator to further assign its interests in assigned contracts, all related payments and any related interest in equipment.

In addition, the originators may enter into profit sharing arrangements with some vendors.  These arrangements typically will provide for sharing of revenues generated under the program and for joint participation in management.  Under the terms of these arrangements, the originators typically maintain direct or indirect control over all credit decision-making activities.

Also, a program agreement or profit sharing arrangement may include recourse against a vendor with respect to end-user defaults under some end-user contracts,

•

by specifying that the assignment of the contract from the vendor to the originator is with full recourse against the vendor;

•

by specifying that the vendor will absorb a limited fixed dollar or percentage amount of “first losses” on the contract;

•

by inclusion of the contract in an ultimate net loss pool created under the program agreement as well as guarantees by the applicable vendor with respect to certain contracts which are cancelable or which do not contain “hell or high water” provisions; or

•

by providing for vendor repurchase of the contract or vendor indemnification payments for breaches of certain representations and warranties made by the vendor with respect to the contract.

If an end-user defaults under a contract subject to a net loss pool, the originator may be permitted to draw against the net loss pool up to the amount of the originator’s remaining unpaid investment balance in the defaulted contract.  The originator may also be permitted to draw against the net loss pool with respect to contracts that are not included in the pool of contracts in a particular owner trust and, accordingly, there can be no assurance that any amounts contributed by a vendor to a net loss pool will be available with respect to a defaulted contract included in the pool of contracts owned by a particular owner trust.

The manner in which the vendor assigns contracts to the originator varies from one program agreement to another, depending upon

•

the nature of the items financed,

•

the form of the contract,

•

the accounting treatment sought by the vendor and the end-user, and

•

tax considerations.

For example, an originator might:

•

accept a vendor loan and collateral assignment of the contract and related equipment or security interest in the equipment from the vendor; or

•

accept a full assignment of the contract and a collateral assignment of the related equipment or security interest from the vendor, which collateral assignment secures the end-user’s obligations under the contract or lease.

The originator also may receive, from a vendor with respect to software, a full assignment of leases, installment payment agreements, installment payment supplements to license agreements, and other types of financing agreements used in financing software license payments and related support and consulting services.  These assignments may include an assignment of the software vendor’s or licensor’s right, or the agreement of the vendor or licensor, at the originator’s instructions, to terminate the software license covered by the contract and suspend related support in the event of an end-user default under the contract.  In some cases, the software vendor also agrees not to relicense the same or similar software to a defaulted end-user for some period of time, e.g., one year, unless the end-user cures its default.

Some portion of the contracts included in the pool of contracts, especially in the case of conditional sale agreements, may consist of contracts originated by vendors and assigned to the originator in vendor assignments, each of which relates to an individual contract, rather than under a program agreement.  Each vendor assignment will either be with or without recourse against the vendor for end-user defaults.  Each vendor assignment will typically contain many, if not all, of the representations, warranties and covenants typically contained in program agreements, as well as a vendor repurchase requirement in the event of a breach by the vendor of the representations, warranties or covenants.  Vendor assignments may or may not provide for any vendor remarketing support in the event of an end-user default.

Residual Investments

Any of the originators may finance all or a portion of the residual interest in the equipment under program agreements and under direct transactions between an obligor and the applicable originator.  Any investment by the originator in a residual interest shall be referred to as a residual investment.  Program agreements may provide that the originator may, at its sole discretion and in connection with the funding of a lease of equipment, make a residual investment in that equipment by advancing additional funds against a portion of the anticipated residual value of the equipment, and not just against the discounted present value of the rental payments due under the contract.  Residual investments may take the form of an advance of the present value of some specified percentage of the anticipated residual value of the equipment or a specified percentage, typically not greater than 10%, of the amou nt to be paid by the originator in funding the present value of the rental payments due under the contract.

With respect to vendor assignments, the originator may advance the entire purchase price of the equipment subject to a true lease, take title to the equipment, and accept an assignment of the true lease contract from a vendor.  With respect to the leases originated by the originator the originator may advance the entire purchase price of the equipment to the vendor, take title to the equipment from the vendor, and enter into a true lease contract with an obligor.  In either of the two foregoing types of transactions, the originator will have advanced more than the discounted present value of the rents payable under the true lease contracts by paying the purchase price for the equipment, and so will have made a residual investment in the equipment.

In some program agreements, the originator may make the residual investment in the form of a full recourse loan of additional funds to the vendor.  That loan is repayable by the vendor at the expiration or termination of the contract with interest and is secured by a security interest in the financed equipment.  In some transactions involving vendor assignments or direct transactions with obligors under true lease contracts, the originator may obtain the obligation of either the vendor or the obligor to purchase the equipment at the end of the lease term for the full amount of the originator’s residual investment in the equipment with accrued interest.  Any transaction in which the originator may look to either the vendor or the obligor, and not just the value of equipment itself, to recover its residual investment with interest shall be referred to as a “guaranteed residual investment&# 148;.  Other than guaranteed residual investments, a residual investment will not be included in the discounted contract balance of any contract and, therefore, would not be financed with the proceeds of the notes.  This type residual investment is referred to in this prospectus as the “excluded residual investment.”

The seller or an affiliate of the seller will transfer the excluded residual investment associated with any contract included in a pool of contracts to the depositor or another affiliate under the terms of a purchase and sale agreement or other transfer agreement.  Unless otherwise specified in your prospectus supplement, the depositor will not transfer the excluded residual investment to an issuing entity under the related pooling and servicing agreement.  The related issuing entity’s interest in contracts with associated residual investments, other than with guaranteed residual investments, will typically be limited to the discounted present value of the rental payments due under the contract and a security interest in the related equipment.  The originator may assign its excluded residual investment to a third party, including the security interest in the equipment in respect of the residu al investment.

Contract Files

Each originator will indicate in the appropriate computer files relating to the contracts being transferred to an owner trust that the originator has transferred the contracts for the benefit of the holders of the notes.  Each originator will also deliver to the indenture trustee a computer file, microfiche or written list containing a true and complete list of all contracts which it has transferred, identified by account number and by the discounted contract balance of the contracts as of the transfer date.

Collection on Contracts

Your prospectus supplement will describe how all collections received with respect to the contracts will be allocated.

Payments Generally

The contracts usually require that an obligor make periodic payments on a monthly basis.  Some contracts, however, provide for quarterly, semi-annual or annual payments.  Obligors typically must make the payments under all of the contracts in United States dollars.  Payment requirements usually are fixed and specified, rather than being tied to a formula or are otherwise at a floating rate.  Payments under the contracts are ordinarily payable in advance, although a small percentage provide for payments in arrears.

Expenses Relating to Equipment

The contracts require the obligors to assume the responsibility for payment of all expenses of the related equipment including, without limitation,

•

any expenses in connection with the maintenance and repair of the related equipment,

•

the payment of any and all premiums for casualty and liability insurance, and

•

the payment of all taxes relating to the equipment.

Insurance; Repair and Replacement

Unless otherwise set forth in your prospectus supplement, lease contracts require that the obligors will maintain liability insurance and which must name the lessor as additional insured.

•

leases, or

•

loan and security agreements

An originator may waive this requirement from time to time.  For some lease contracts, the obligor’s already existing self-insurance program permits the obligor to self-insure the equipment.  The originators may not track or verify insurance coverage as to the equipment related to a contract after the commencement of the contract.

Often, the failure to maintain this insurance constitutes an event of default under the applicable contract.  Usually, the obligor also agrees to indemnify the originator for all liability and expenses arising from the use, condition or ownership of the equipment.

If the equipment is damaged or destroyed, each lease contract, unless otherwise set forth in your prospectus supplement, requires that the obligor:

•

repair the equipment;

•

make a termination payment to the lessor in an amount not less than the amount required to pay off the contract; or

•

in some cases, replace the damaged or destroyed equipment with other equipment of comparable use and value.

The related pooling and servicing agreement, unless otherwise set forth in your prospectus supplement, permits the servicer, in the case of the destruction of the equipment related to a particular lease contract, either to:

•

allow the lessee to replace this equipment, provided that the replacement equipment is, in the judgment of the servicer, of comparable use and at least equivalent value to the value of the equipment which was destroyed, or

•

accept the termination payment referred to above.

Assignment of Contracts

Typically the contracts will permit the assignment of the contract by the lessor or secured party without the consent of the obligor.  However, occasionally, contracts require notification of the assignment to, or the consent of, the obligor.  The seller will represent and warrant in the purchase and sale agreement that these notices have been given, or approvals will have been received, not more than ten days following the date of the transfer of the contract to the depositor.  Typically, the contracts do not permit assignment of the contracts, or the related equipment, by the obligor without the prior consent of the lessor or secured party, except the contracts often may permit:

•

assignments to a parent, subsidiary or affiliate;

•

the assignment to a third party, provided the obligor remains liable under the contract; or

•

assignment to a third party with a credit standing, which the originator determines in accordance with its underwriting policy and practice at the time for an equivalent contract type, term and amount, to be equal to or better than the original obligor.

Under the related pooling and servicing agreement, the servicer may permit an assignment of a particular contract from an obligor to a third party only if the servicer, utilizing the current underwriting criteria for its contract origination activities, determines that the third party is of sufficient credit quality that the servicer would permit the third party to become an obligor with respect to a contract that the servicer originates.

Events of Default and Remedies

Events of default under the contracts ordinarily include:

•

the failure to pay all amounts required by the contract when due;

•

the failure of the obligor to perform its agreements and covenants under the applicable contract;

•

material misrepresentations made by the obligor;

•

the bankruptcy or insolvency of the obligor or the appointment of a receiver for the obligor; and

•

in some cases, default by the obligor under other contracts or agreements.

Some of these default provisions are, in some instances, subject to notice provisions and cure periods.  Remedies available to the lessor or secured party upon the occurrence of an event of default by the obligor typically include the right

•

to cancel or terminate in the case of a contract subject to a true lease,

•

to accelerate payments in the case of a contract subject to financing,

•

to recover possession of the related equipment and

•

to receive an amount intended to make the lessor or secured party, as the case may be, whole plus costs and expenses, including legal fees, which the lessor or secured party incurs as a result of the default.

Notwithstanding these events of default and remedies, unless otherwise set forth in your prospectus supplement, the pooling and servicing agreement, permits the servicer to take the actions, with respect to delinquent and defaulted contracts, a reasonably prudent creditor would take under similar circumstances.  See “Description of the Pooling and Servicing Agreement — Servicing”.  The originators may occasionally provide payment extensions, typically of three months or less.  Longer extensions are occasionally granted to customers experiencing delays in payment due to cash flow shortages or other reasons.  However, originators do not intend extensions to be used to provide a temporary solution for a delinquent account.  Rather, extensions are intended to be used when, in the judgment of the relevant credit authority, the extension is necessary to avoid a termination and liquidation of the contract and will maximize the amount to be received by the related issuing entity with respect to the contract.

Prepayments and Early Termination

Any contract may either:

•

not permit the obligor to prepay the amounts due under the contract or otherwise terminate the contract prior to its scheduled expiration date;

•

allow for a prepayment or early termination upon payment of an amount that is at least equal to the contract principal balance, determined using a discount rate specified in your prospectus supplement; or

•

allow for a prepayment or early termination without the payment of the contract principal balance.

Some contracts, often written as installment sales contracts, promissory notes or loan and security agreements, permit the obligor to prepay the contract, in whole or in part, at any time at par plus accrued interest.

Under each pooling and servicing agreement, the servicer may allow the prepayment of any contract, but only if the amount paid, or, in the case of a partial prepayment, the sum of that amount and the remaining principal balance of the contract after application of that amount, is at least equal to the amount required to pay off the contract.  The required payoff amount, with respect to any collection period for any contract, is equal to the sum of:

•

the scheduled payment due in that collection period and not yet received, together with any scheduled payments due in prior collection periods and not yet received; plus

•

the discounted contract principal balance of the contract as of the last day of that collection period, after taking into account the scheduled payment due in that collection period.

In no event will revenues pledged for a series of notes include, nor will the notes otherwise be payable from, any portion of a prepayment on a contract that exceeds the required payoff amount for that contract.

Under the pooling and servicing agreement, the depositor may replace any prepaid contract with a substitute contract.  See “ — Substitution of Contracts” below.

Disclaimer of Warranties

The contracts which are subject to a true lease contain provisions by which the lessor, or the originator, as assignee of the lessor, disclaims all warranties with respect to the equipment. The lessor often assigns the manufacturer’s warranties to the obligor for the term of the lease.  Under true leases, the obligor accepts the equipment under the applicable contract following delivery and an opportunity to inspect the related equipment.

Additional Equipment

If specified in your prospectus supplement, some of the contracts which are subject to a true lease constitute leases of additional equipment, generally costing $25,000 or less, with existing obligors.  Pursuant to the terms of the original contract between the lessor and the obligor, the parties document leases for additional equipment on a written form that the lessor prepares and delivers to the obligor, but the obligor does not execute, which written form describes all of the terms of the lease.  Under the terms of the contract, the obligor agrees that unless it objects in writing within a specified period of time, it is deemed to have accepted the lease of this additional equipment.

Description of the Underlying Securities

The issuing entity for a series may consist of private equipment contract-backed securities (“Private Contract-Backed Securities”), which include:

·

equipment contract-backed certificates, evidencing an undivided interest in a pool of contracts; or

·

equipment contract-backed notes secured and backed by a pool of contracts.

The depositor will register the offering of the relevant Private Contract-Backed Securities as a primary offering of such securities, unless the Private Contract-Backed Securities are themselves exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”).  The offering of Private Contract-Backed Securities included in an issuing entity will not be separately registered if all of the following are true:

(1) neither the issuer of the Private Contract-Backed Securities nor any of its affiliates has a direct or indirect agreement, arrangement, relationship or understanding, written or otherwise, relating to the Private Contract-Backed Securities and the related issuing entity;

(2) neither the issuer of the Private Contract-Backed Securities nor any of its affiliates is an affiliate of the depositor, the sponsor, the issuing entity or any underwriter relating to such issuing entity and series of Securities; and

(3) the depositor would be free to publicly resell the Private Contract-Backed Securities without registration under the Securities Act.  

If all the conditions for the Private Contract-Backed Securities described above are not met, the offering of the relevant Private Contract-Backed Securities itself will be registered as a primary offering of such securities under the Securities Act.

Private Contract-Backed Securities are issued pursuant to a pooling and servicing agreement, a trust agreement, an indenture or similar agreement (an “Underlying Agreement”). The seller/servicer of the underlying equipment contracts, or the issuer of the Private Contract-Backed Securities, as the case may be, enters into the Underlying Agreement with the trustee under the Underlying Agreement (the “Underlying Trustee”). The Underlying Trustee or its agent, or a custodian, possesses the contracts underlying the Private Contract-Backed Security. Loans underlying a Private Contract-Backed Security are serviced by a servicer (the “Underlying Servicer”) directly or by one or more sub-servicers who may be subject to the supervision of the Underlying Servicer.

The issuer of the Private Contract-Backed Securities (the “Underlying Issuer”) will be a financial institution or other entity engaged generally in the business of equipment leasing/lending; a limited purpose corporation or other entity organized for the purpose of, among other things, establishing trusts and acquiring and selling equipment contracts to the trusts, and selling beneficial interests in the trusts; or one of the trusts. If specified in the prospectus supplement, the Underlying Issuer may be an affiliate of the depositor. The obligations of the Underlying Issuer will generally be limited to certain representations and warranties with respect to the assets conveyed by it to the related trust. Unless otherwise specified in the prospectus supplement, the Underlying Issuer will not have guaranteed any of the assets conveyed to the related trust or any of the Private Contract-Backed Securities issued under the Underlying Agreement.

Distributions of principal and interest will be made on the Private Contract-Backed Securities on the dates specified in the prospectus supplement. The Private Contract-Backed Securities may be entitled to receive nominal or no principal distributions or nominal or no interest distributions. Principal and interest distributions will be made on the Private Contract-Backed Securities by the Underlying Trustee or the Underlying Servicer. The Underlying Issuer or the Underlying Servicer may have the right to repurchase assets underlying the Private Contract-Backed Securities after a certain date or under other circumstances specified in the prospectus supplement.  

Underlying Contracts

The contracts underlying the Private Contract-Backed Securities may consist of various types, similar to the contracts as described above under “—Description of The Contracts”.  Contracts underlying the Private Contract-Backed Securities will be of a type and have the characteristics described in the prospectus supplement.

Credit Support Relating to Private Contract-Backed Securities

Credit support may only be in the form of a reserve account, subordination of other private equipment-backed securities issued under the Underlying Agreement, letters of credit,  insurance policies required to be maintained with respect to securities, contracts, or Private Contract-Backed Securities. The type, characteristics and amount of credit support will depend on certain characteristics of the contracts and other factors and will have been established for the Private Contract-Backed Securities on the basis of requirements of the relevant rating agencies.

Additional Information

The prospectus supplement for a series of notes for which the trust fund includes Private Contract-Backed Securities will specify, to the extent material:

·

the aggregate approximate principal amount and type of the Private Contract-Backed Securities to be included in the issuing entity;

·

certain characteristics of the contracts that comprise the underlying assets for the Private Contract-Backed Securities including, (1) the payment features of contracts, (2) the servicing fee or range of servicing fees with respect to the contracts, and (3) the minimum and maximum stated maturities of the underlying contracts at origination;

·

the interest rate or range of interest rates of the Private Contract-Backed Securities;

·

the weighted average interest rate of the Private Contract-Backed Securities;

·

the Underlying Issuer, the Underlying Servicer and the Underlying Trustee for the Private Contract-Backed Securities;

·

certain characteristics of credit support, if any, such as reserve funds, insurance policies, letters of credit or guarantees relating to the contracts underlying the Private Contract-Backed Securities or to the Private Contract-Backed Securities themselves;

·

the terms on which the underlying contracts for the Private Contract-Backed Securities may, or are required to, be purchased prior to their stated maturity or the stated maturity of the Private Contract-Backed Securities; and

·

the terms on which contracts may be substituted for those originally underlying the Private Contract-Backed Securities.

If information of the type described above regarding the Private Contract-Backed Securities is not known to the depositor at the time the notes are initially offered, approximate or more general information of the nature described above will be provided in the prospectus supplement and any additional information will be set forth in a Current Report on Form 8-K to be available to investors on the date of issuance of the related series and to be filed with the Commission within 15 days after the initial issuance of the notes.

Representations and Warranties Made by the Seller

Unless otherwise set forth in your prospectus supplement, the seller of contracts to the depositor, will make the representations and warranties set forth below regarding the contracts and the related equipment included in each pool of contracts transferred to an issuing entity as of the related transfer date.  The representations and warranties will also apply to contracts that the depositor reacquires from an issuing entity to which the depositor previously transferred the contracts in connection with a warehouse receivables securitization facility.

(1)

the information with respect to the contracts is true and correct in all material respects;

(2)

immediately prior to the transfer of a contract, the contract was owned by the transferring party free and clear of any adverse claim except for permitted claims;

(3)

the contract is not a defaulted or delinquent contract;

(4)

no provision of the contract has been waived, altered or modified in any material respect, except by instruments or documents contained in the files relating to the contract;

(5)

the contract is a valid and binding payment obligation of the obligor and its terms are enforceable, except as may be limited by insolvency, bankruptcy, moratorium, reorganization, or other similar laws affecting enforceability of creditors’ rights and the availability of equitable remedies;

(6)

the contract is not and will not be subject to rights of rescission, setoff, counterclaim or defense;

(7)

the contract, at the time it was made, did not violate the laws of the United States or any state in any material respect;

(8)

(A)

the contract and any related equipment have not been sold, transferred, assigned or pledged by the originator to any person other than the end-user, the seller, the depositor or any related financing trust; and

(B)

either

(x)

the contract is secured by a perfected lien, subject to permitted liens and subject to minimum filing value exceptions, on the related equipment or, in the case of any vendor loan, related end-user contract or equipment or

(y)

in the case of a contract secured by a vehicle, within 90 calendar days of the origination or a acquisition of the contract by the originator all required state registration or recording procedures were initiated, and the originator’s interest will be so noted or recorded within 180 days of the acquisition or origination;

(9)

if the contract constitutes either an “instrument” or “chattel paper” for purposes of the Uniform Commercial Code, there is not more than one “secured party’s original” counterpart of the contract;

(10)

all filings necessary to evidence the conveyance or transfer of the contract to the depositor have been made or provided for in all appropriate jurisdictions, except that the parties have not made filings to note the seller;

(11)

the obligor is not, to the seller’s knowledge, subject to bankruptcy or other insolvency proceedings;

(12)

the contract is a U.S.  dollar-denominated obligation and the obligor’s billing address is located in the United States or Puerto Rico;

(13)

the contract does not require the prior written notifications to a consent of an obligor or contain any other restriction on the transfer or assignment of the contract other than notifications that will have been given and consents or waivers of restrictions that will have been obtained within ten days after the date the contract was sold to the trust;

(14)

the obligations of the related obligor under the contract are irrevocable and unconditional and non-cancelable or, if not irrevocable and unconditional, are guaranteed by the vendor; or in the case of leases with governments, upon a cancellation of the lease, either the vendor is obligated to repurchase the lease or the seller will indemnify the depositor in respect of the cancellation;

(15)

no adverse selection procedure was used in selecting the contract for transfer;

(16)

the obligor under the contract is required to maintain casualty insurance with respect to the related equipment or to self-insure against casualty with respect to the related equipment in an amount that is consistent with servicer’s normal servicing requirements;

(17)

the contract constitutes chattel paper, an account, an instrument or a general intangible as defined under the Uniform Commercial Code;

(18)

no lease is a “consumer lease” as defined in Section 2A-103(1)(e) of the Uniform Commercial Code;

(19)

to the best knowledge of the relevant originator each lessee has accepted the related equipment and has had a reasonable opportunity to inspect the equipment;

(20)

except as provided in (14) above, the contract is not guaranteed by any originator nor has the originator established any specific credit reserve with respect to the related obligor;

(21)

each lease is a “triple net lease” under which the obligor is responsible for the maintenance of the related equipment in a manner that conforms with general industry standards;

(22)

each vendor loan is secured by an eligible end-user contract(s) having an aggregate contract principal balance(s) equal to the outstanding principal amount of the vendor loan.  In this context, an eligible end-user contract is one that:

A.

satisfies all of these representations and warranties except number (2) above and number (8) above, in respect of ownership by the applicable originator;

B.

in which the relevant originator or financing trust has a perfected lien; and

C.

in which the transfer of the relevant originator’s or financing trust’s security interest in the contract to the owner trust creates a duly perfected lien;

(23)

the obligor is not the United States of America or any agency, department, subdivision or instrumentality of the United States of America;

(24)

the contract contains customary provisions for this type of financing, and the provisions are sufficient and enforceable, except as listed as noted in (5) above, to enable the relevant originator or its assignees to realize against the financed items securing the contract; and

(25)

if the obligor is a state or local government entity, the transfer of the contract does not violate any applicable state or local laws restricting or prohibiting transfer.

The issuing entity may modify the above representations and warranties and will describe any modification in the relevant prospectus supplement.

In the event of a breach of any representation or warranty with respect to a contract that materially and adversely affects the issuing entity’s or any noteholder’s or equity certificateholder’s interest in the contract or the collectibility of the contract, the issuing entity will have a warranty claim against the seller.  The seller will then be obligated to repurchase the contract.  However, the seller need not do so if the seller cures the breach by the second deposit date after the date on which the servicer becomes aware and gives notice to the seller of the breach.  Any purchase shall be made on the deposit date immediately following the end of the second collection period at a price equal to the required payoff amount of the contract.  The purchase price will be allocated to the related owner trust plus, if applicable, the book value of the related equipment which will be allocated to the depositor.  The related indenture trustee may enforce this purchase obligation on your behalf, and this will constitute your sole remedy available against the seller, the depositor, the issuing entity or the originators for any uncured breach, except that the seller will indemnify

•

the related indenture trustee,

•

the related owner trustee, and

•

the related issuing entity

against losses, damages, liabilities and claims which may be asserted against any of them as a result of third-party claims arising out of the facts giving rise to that breach.  The seller may, in lieu of repurchasing the contract, cause the depositor to deliver a substitute contract as provided in the next-following section of this prospectus.

Upon the purchase by the seller of a contract, the depositor will release the contract and related equipment to the seller.

Substitution of Contracts

The depositor will have the option to substitute one or more contracts having similar characteristics for contracts which are in default or have been prepaid or which have undergone material modification.  In addition, in the case of a contract subject to a warranty claim, as described in “ — Representations and Warranties Made by the Seller” above, the seller may choose to replace the contract with a substitute contract.

Some contracts may permit the obligor to prepay the amounts due under the contract or otherwise to terminate the contract prior to its scheduled expiration date.  The depositor may replace any prepaid contract with a substitute contract in lieu of applying the proceeds of the prepaid contract to the pledged revenues as described in this section.

Material modification of a contract means a termination, release, amendment, modification or waiver of a contract that is not otherwise permitted under the pooling and servicing agreement.  The depositor may provide substitute contracts for any that have been so materially modified.  The depositor may also replace any defaulted contract with a substitute contract.  The aggregate contract principal balances of the defaulted contracts for which the depositor may cause substitution is limited to 10% of the cut-off contract pool principal balance.  The depositor may replace a prepaid contract with a substitute contract and the seller may choose to replace contracts subject to a warranty claim or a material modification with substitute contracts, in either case without regard to the 10% limitation described above.

The same credit criteria and eligibility standards for the contracts in the contract pool on the closing date will also apply to substitute contracts added to the assets of the owner trust.  The servicer will include information with respect to these substitute contracts, to the extent the servicer deems them material, in required periodic reports under the Securities Exchange Act of 1934 filed with the Securities and Exchange Commission on behalf of the issuing entity.  The substitute contracts will have contract principal balances equal to or greater than the contracts being replaced. The representations and warranties the seller makes with respect to the contracts in “ — Representations and Warranties Made by the Seller” above will be equally applicable to substitute contracts.

Delinquency and Net Loss Experience

Your prospectus supplement will set forth statistics relating to the delinquency and net loss experience on contracts within the originators’ owned and/or managed portfolios of receivables similar to the contracts in a contract pool.

Static Pool Data

If specified in the related prospectus supplement, static pool data with respect to the delinquency, cumulative loss and prepayment data for each issuing entity will be made available through a website.  The prospectus supplement related to each series for which the static pool data is provided through a website will contain the website address to obtain this information.  Except as stated below, the static pool data provided through any website will be deemed part of this prospectus and the registration statement of which this prospectus is a part from the date of the related prospectus supplement.  

Notwithstanding the foregoing, the following information shall not be deemed part of the prospectus or the registration statement of which this prospectus is a part:

•

with respect to information regarding prior securitized pools of the depositor that do not include the currently offered pool, information regarding prior securitized pools that were established before January 1, 2006; and

•

with respect to information regarding the pool described in the related prospectus supplement, information about the pool for periods before January 1, 2006.

Copies of the static pool data presented on a website and deemed part of this prospectus may be obtained upon written request by the securityholders of the related series at the address specified in the related prospectus supplement.  Copies of information related to the period prior to January 1, 2006 may also be obtained upon written request.

Description of the Notes and Indenture

The issuance of each series of notes will be under an indenture, a form of which was filed with the Securities and Exchange Commission as an exhibit to the registration statement of which this prospectus is a part.  In addition, a copy of the indenture for a series of notes will be filed with the Securities and Exchange Commission following the issuance of each series to the extent required by applicable law.  The following summary describes certain material terms which may be common to each indenture and the related notes, but does not purport to be complete and is subject to all of the provisions of the indenture, the related notes and the description set forth in your prospectus supplement.

The notes of each series will be issued in fully registered form only and will represent the obligations of a separate issuing entity.

Payments on the notes will be made by the indenture trustee on each payment date to persons in whose names the notes are registered as of the related record date.  Unless otherwise specified in your prospectus supplement, the payment date for the notes will be the 20th day of each month, or if the 20th is not a business day, the next succeeding business day.  Unless otherwise specified in your prospectus supplement, for so long as the notes are in book-entry form, the record date for any payment date will be the business day immediately preceding the payment date.  Unless otherwise specified in your prospectus supplement, if the issuing entity issues certificated notes, the record date will be the last business day of the month immediately preceding the payment date.

A business day is any day other than a Saturday, Sunday or legal holiday on which commercial banks in New York City or such other jurisdictions specified in your prospectus supplement are open for regular business.

Distributions

Your prospectus supplement will describe as to your series of notes

•

the timing and priority of distributions,

•

the amount or method of determining distributions,

•

allocations of loss and

•

the interest rates.

If specified in the related prospectus supplement, the issuing entity may issue securities from time to time and use the proceeds of this issuance to make principal payments with respect to the notes of your series.

Credit Enhancement

The amounts and types of any credit enhancement arrangements and the provider of the credit enhancement arrangements, if applicable, with respect to each class of securities of a series will be set forth in the related prospectus supplement. To the extent provided in the related prospectus supplement, credit enhancement may only be in the form of one or more of the following:

•

a financial guaranty insurance policy,

•

subordination of one or more classes of notes,

•

overcollateralization,

•

letters of credit or liquidity facilities,

•

repurchase obligations,

•

cash deposits or

•

a reserve account

may be established on or prior to the date the contracts are transferred.  The credit enhancement would be available to the related indenture trustee to pay interest and principal on the notes in the manner and to the extent specified in your prospectus supplement.

Reserve Account. If so provided in the related prospectus supplement, pursuant to the related Transfer and Servicing Agreement, the depositor or the seller will establish for a series or class or classes of securities an account (the “Reserve Account”), which will be maintained with the related indenture trustee or trustee, as applicable. A Reserve Account will be funded by an initial deposit by the depositor or the seller, as applicable, on the closing date in the amount set forth in the related prospectus supplement. As further described in the related prospectus supplement, the amount on deposit in the Reserve Account may be increased or reinstated on each Distribution Date, to the extent described in the related prospectus supplement, by the deposit there of amounts from collections on the Primary Assets. The related prospectus supplement will describe the circumstances under which and the manner in which distributions may b e made out of the Reserve Account, either to holders of the securities covered by the Reserve Account or to the depositor, the seller or to any other entity.

Financial Guaranty Insurance Policy or Surety Bond.  Credit enhancement may be provided in the form of a financial guaranty insurance policy or a surety bond issued by an insurer named in the policy or surety bond, if specified in the prospectus supplement.

Letter of Credit.  Alternative credit support for a series of Notes, as applicable, may be provided by the issuance of a letter of credit by the bank or financial institution specified in the prospectus supplement.  The coverage, amount and frequency of any reduction in coverage provided by a letter of credit issued for a series of Notes, as applicable, will be set forth in the prospectus supplement relating to that series.

Subordinate Securities.  One or more classes of Notes, as applicable, of a series may be Subordinate Notes, as applicable, if specified in the prospectus supplement.  The rights of the holders of Subordinate Notes, as applicable, to receive distributions of principal and interest from the Collection Account on any Distribution Date will be subordinated to those rights of the holders of Senior Notes, as applicable.  The subordination of a class may apply only in the event of (or may be limited to) particular types of losses or shortfalls.  The prospectus supplement will set forth information concerning the amount of subordination of a class or classes of Subordinate Notes, as applicable, in a series, the circumstances in which that subordination will be applicable and the manner, if any, in which the amount of subordination will be effected.

Overcollateralization. If specified in the prospectus supplement, subordination provisions of an issuing entity may be used to accelerate to a limited extent the amortization of one or more classes of Notes, as applicable, relative to the amortization of the related Assets.  The accelerated amortization is achieved by the application of excess interest to the payment of principal of one or more classes of Notes, as applicable.  This acceleration feature creates, for the Assets or groups of Assets, overcollateralization, which is the excess of the total principal balance of the related Assets, or a group of related Assets, over the principal balance of the related class or classes of Notes or Certificates, as applicable.  This acceleration may continue for the life of the related Security, or may be limited.  In the case of limited acceleration, once the required level of overcollateralization is reached, and subject to the provisions specified in the prospectus supplement, the limited acceleration feature may cease, unless necessary to maintain the required level of overcollateralization.

Limited Guarantee.  If specified in the prospectus supplement for a series of Notes or Certificates, as applicable, credit enhancement may be provided in the form of a limited guarantee issued by a guarantor named in the prospectus supplement.  Any guarantee specified in the prospectus supplement, if any, will be exempt from registration under the Securities Act.

Derivatives

If specified in the related prospectus supplement, the issuing entity may include one or more derivative instruments, as described in this section.  Derivative instruments included in any trust fund will be used only in a manner that reduces or alters risk resulting from the Contracts  or other assets in the pool, and only in a manner such that the return on the Notes will be based primarily on the performance of the Contracts or other assets in the pool.  Derivative instruments may include (1) interest rate swaps (or caps, floors or collars) or yield supplement agreements, (2) currency swaps or currency options and (3) market value swaps that are referenced to the value of one or more of the Contracts or other assets included in the issuing entity or to a class of Securities, as described below.

The owner trustee on behalf of an issuing entity may enter into interest rate swaps, caps, floors and collars, or yield supplement agreements, to minimize the risk to noteholders from adverse changes in interest rates, or to provide supplemental credit support.  Cap agreements and yield supplement agreements may be entered into in order to supplement the sources available to make interest payments on one or more classes of Notes of any series.

Any currency swap or currency option entered into by or on behalf of an issuing entity will provide that it is terminable by the issuing entity or the counterparty following the occurrence of certain specified events described in the related prospectus supplement. If an event of default or termination event that would require the issuing entity to make a termination payment to the counterparty occurs, the issuing entity may not have sufficient funds remaining after making such payment to make timely payment of interest due on the Notes.

In the event of the withdrawal of the credit rating of a derivative counterparty or the downgrade of such credit rating below levels specified in the derivative contract (where the derivative contract is relevant to the ratings of the Notes, such levels generally are set by the rating agencies rating the Notes) the derivative counterparty may be required to post collateral for the performance of its obligations under the derivative contract, or take certain other measures intended to assure performance of those obligations.

Derivative contracts will generally be documented based upon the standard forms provided by International Swaps and Derivatives Association, Inc. (“ISDA”). These forms generally consist of an ISDA master agreement, a schedule to the master agreement and a confirmation, although in some cases the schedule and the confirmation will be combined in a single document and the standard ISDA master agreement will be incorporated therein by reference.

There can be no assurance that the issuing entity will be able to enter into derivative instruments at any specific time or at prices or on other terms that are advantageous. In addition, although the terms of the derivative instruments may provide for termination under various circumstances, there can be no assurance that the issuing entity will be able to terminate a derivative instrument when it would be economically advantageous to the issuing entity to do so.

If an issuing entity includes derivative instruments, the instruments may be structured to be exempt from the registration requirements of the Securities Act. If described in the prospectus supplement, such derivative instruments may be held for tax or ERISA purposes by a separate trust and any amounts payable from such derivative instruments may be paid by the derivatives counterparty into a separate reserve fund (which shall be a trust account in the name of the trustee) before payment to holders of Notes. A provider of a derivative instrument may, if specified in the related prospectus supplement, be an affiliate of an underwriter.

Liquidation and Insurance Proceeds

The allocation of liquidation proceeds which will consist generally of all amounts the servicer receives in connection with the liquidation of a contract and disposition of the related equipment, net of any related out-of-pocket liquidation expenses, and the allocation of insurance proceeds for physical damage to or loss of equipment covered by contracts, will be as follows unless otherwise specified in your prospectus supplement:

1)  with respect to any contract subject to financing, the proceeds will be allocated to the issuing entity; and

2)  with respect to any contract subject to a lease, the proceeds will, unless otherwise specified in your prospectus supplement, be allocated on a pro rata basis between the depositor, on the one hand, and the issuing entity, on the other, based respectively on

(a)

the book value of the related equipment and

(b)

the required payoff amount for the contract.

However, if the proceeds in respect of any contract subject to a lease and the related equipment exceed the sum of the required payoff amount for the contract and the book value of the equipment, the excess shall be allocated solely to the depositor.  For example, if the servicer, in connection with a defaulted contract subject to a lease, derived liquidation proceeds in the amount of $100 from the liquidation of the contract and disposition of the related equipment, and if the required payoff amount of the contract was, as of the collection period during which the contract became a liquidated contract, $120 and the book value of the equipment was $30, the liquidation proceeds would be allocated to the owner trust in the amount of $80 and to the depositor in the amount of $20.  All liquidation proceeds which are so allocable to the issuing entity will be deposited in a collection account and constitute pledged revenues to be applied to the payment of interest and principal on the notes in accordance with the priorities described under “ — Distributions” above.

Optional Purchase of Contracts and Redemption of Notes

The seller or other entity specified in your prospectus supplement may purchase all of the contracts owned by an issuing entity on any payment date following the date on which the unpaid principal balance of the related notes is less than 10%, or such other percentage specified in your prospectus supplement, of the initial contract pool principal balance.  Except as otherwise described in the prospectus supplement for your notes, the purchase price to be paid in connection with the purchase shall be at least equal to the sum of

•

the unpaid principal balance of the related notes as of that payment date,

•

accrued but unpaid interest,

•

unreimbursed servicer advances, and

•

accrued but unpaid servicer fees.

If the seller or another entity does purchase the contracts, the related notes shall be redeemed on the payment date on which the purchase occurs.  The redemption price will be the principal amount of the notes plus accrued and unpaid interest to but excluding the redemption date.

Trust Accounts

Except as otherwise specified in your prospectus supplement, the applicable indenture trustee will establish and maintain under each indenture segregated trust accounts which need not be deposit accounts, but which must be with a qualified institution.  These accounts will include, among others, the “Collection Account” and the “Distribution Account.”  The accounts may, as described in the prospectus supplement for your notes, also include a cash collateral or reserve fund account as credit enhancement.  All of these accounts are referred to collectively as the “Trust Accounts.”

“Qualified institution” means the corporate trust department of the indenture trustee or any other depository institution

•

organized under the laws of the United States or any state or any domestic branch of a foreign bank,

•

the deposits of which are insured by the Federal Deposit Insurance Corporation and

•

which has, or whose parent corporation has, short-term or long-term debt ratings acceptable to Moody’s Investors Service, Inc., and Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

The servicer, as agent for the indenture trustee of any series, may designate, or otherwise arrange for the purchase by the indenture trustee of, investments to be made with funds in the trust accounts.  All investments shall be eligible investments as defined in the related indenture that will mature not later than the business day preceding the applicable monthly payment date or any other date approved by the rating agencies.  Eligible investments include, among other investments:

•

obligations of the United States or of any agency of the United States backed by the full faith and credit of the United States;

•

demand deposits, certificates of deposit, time deposits demand notes or bankers acceptance of eligible financial institutions;

•

highly rated commercial paper or money market funds;

•

repurchase agreements in respect of United States government securities or securities guaranteed or otherwise backed by the full faith and credit of the United States Government with eligible institutions; and

•

other investments which have been approved by each rating agency.

Reports to Noteholders

With respect to each series of notes, the servicer will furnish to the applicable indenture trustee, and the indenture trustee will include with each distribution to you, a statement, as specified in your prospectus supplement, in respect of the related payment date.

If you purchase a note, you may receive these reports by making a written request to The Depository Trust Company.  These reports do not constitute financial statements prepared in accordance with generally accepted accounting principles.  None of the depositor, the sponsor, nor the servicer intends to send any of their respective financial reports to owners of notes.  The servicer, on behalf of an issuing entity, will file with the Securities and Exchange Commission legally required periodic reports concerning the issuing entity.

With respect to any series, the notes will be registered in the name of a nominee of The Depository Trust Company and will not be registered in the names of the beneficial owners or their nominees.  As a result, unless and until definitive notes are issued in the limited circumstances described under “ — Issuance of Certificated Notes at a Later Date” below, the indenture trustee will not recognize you as a noteholder, as that term is used in the related indenture.  Hence, until that time, you will receive reports and other information provided for under the related indenture only if, when and to the extent The Depository Trust Company and its participating organizations provide this information.  The servicer will file a copy of each report with the Securities and Exchange Commission on Form 8-K to the extent the Securities Exchange Act of 1934 and the rules and regulations of the Securities and Exchange Commission under the Exchange Act require it.

Book-Entry Registration

Unless your prospectus supplement states otherwise, you may hold your notes through The Depository Trust Company, referred to as “DTC,” in the United States, or Clearstream, Luxembourg or Euroclear System in Europe, if you are a participant of those systems, or indirectly through organizations that are participants in those systems.

DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered under to Section 17A of the Exchange Act.  DTC was created to hold securities for its direct participants and to facilitate the clearance and settlement of securities transactions between its direct participants through electronic book-entries, thus eliminating the need for physical movement of certificates.  DTC’s direct participants include

•

the underwriters offering the notes to you,

•

securities brokers and dealers,

•

banks,

•

trust companies and

•

clearing corporations, and may include other organizations.

Indirect access to the DTC system is also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a direct participant, either directly or indirectly.

To facilitate subsequent transfers, DTC will register all deposited notes in the name of DTC’s nominee, Cede & Co.  You will maintain beneficial ownership of the notes despite the deposit of notes with DTC and their registration in the name of Cede.  DTC has no knowledge of the actual noteholders; DTC’s records reflect only the identity of its direct participants to whose accounts the notes are credited, which may or may not be the noteholders.  DTC’s direct and indirect participants will remain responsible for keeping account of their holdings on behalf of their customers.

You have no entitlement to receive a certificate representing your interest in a class of notes.  As long as the notes are registered in the name of Cede & Co., any action to be taken by you or any other noteholders will be taken by DTC upon instructions from DTC’s participants.  All distributions, notices, reports and statements to noteholders will be delivered to Cede, as the registered holder of the notes, for distribution to noteholders in compliance with DTC procedures.

You will receive all payments of principal and interest on the notes through direct participants or indirect participants.  DTC will forward the payments to its direct participants which will forward them to indirect participants or noteholders.  Under a book-entry format, you may experience some delay in their receipt of payments, since payments will be forwarded to Cede as nominee of DTC.  The indenture trustee will not recognize you as a noteholder, as that term is used in the indenture.  You may exercise the rights of noteholders only indirectly through DTC and its direct participants and indirect participants.  Because DTC can act only on behalf of direct participants, who in turn act on behalf of indirect participants, and on behalf of banks, trust companies and other persons approved by it, there may be limits on your ability to pledge the notes to persons or entities that do not participate in the DTC system, or to otherwise act with respect to notes, due to the absence of physical notes for the notes.

Arrangements among the various parties govern conveyance of notices and other communications by

•

DTC to direct participants,

•

by direct participants to indirect participants and

•

by direct participants and indirect participants to noteholders, subject to any statutory or regulatory requirements as may be in effect from time to time.

Standing instructions and customary practices govern payments by DTC participants to noteholders, as is the case with securities held for the accounts of customers in bearer form or registered in “street name” and will be the responsibility of the DTC participant and not of DTC, the indenture trustee, the owner trustee, the originators or the originator, subject to any statutory or regulatory requirements as may be in effect from time to time.  Payment of principal and interest to DTC is the responsibility of the indenture trustee, disbursement of the payments to direct participants shall be the responsibility of DTC and disbursement of payments to noteholders shall be the responsibility of direct participants and indirect participants.

Purchases of notes under the DTC system must be made by or through direct participants, which will receive a credit for the notes on DTC’s records.  The ownership interest of each actual noteholder is in turn to be recorded on the direct participants’ and indirect participants’ records.  Noteholders will not receive written confirmation from DTC of their purchase, but noteholders are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holders, from the direct participant or indirect participant through which the noteholder entered into the transaction.  Entries made on the books of DTC’s participants acting on behalf of noteholders evidence transfers of ownership interests in the notes.

DTC will not comment or vote with respect to the notes.  DTC has advised that it will take any action permitted to be taken by a noteholder under the indenture only at the direction of one or more direct participants to whose accounts with DTC the notes are credited.  Additionally, DTC has advised that to the extent that the indenture requires that any action may be taken only by noteholders representing a specified percentage of the aggregate outstanding principal amount of the notes, DTC will take the action only at the direction of and on behalf of direct participants, whose holdings include undivided interests that satisfy the specified percentage.

DTC may discontinue providing its services as securities depositary with respect to the notes at any time by giving reasonable notice to the indenture trustee.  Under these circumstances, in the event that a successor securities depositary is not obtained, fully registered, certificated notes are required to be printed and delivered.  The originator may decide to discontinue use of the system of book-entry transfers through DTC or a successor securities depositary.  In that event, fully registered, certificated notes will be delivered to noteholders.  See “ — Issuance of Definitive Notes at a Later Date.”

The information in this section concerning DTC and DTC’s book-entry system are from sources that the sponsor believes to be reliable, but neither the sponsor nor the owner trustee take any responsibility for the accuracy of this information.

Clearstream Banking, société anonyme, 67 Bd Grande-Duchesse Charlotte, L-2967 Luxembourg (“Clearstream, Luxembourg”), was incorporated in 1970 as “Cedel S.A.”, a company with limited liability under Luxembourg law (a société anonyme).  Cedel S.A. subsequently changed its name to Cedelbank.  On January 10, 2000, Cedelbank’s parent company, Cedel International, société anonyme (“CI”) merged its clearing, settlement and custody business with that of Deutsche Börse Clearing AG (“DBC”).  The merger involved the transfer by CI of substantially all of its assets and liabilities (including its shares in CB) to a new Luxembourg company, New Cedel International, société anonyme (“New CI”), which is 50% owned by CI and 50% owned by DBC’s parent company Deutsche Börse AG.  The shareholders of the se two entities are banks, securities dealers and financial institutions.  Cedel International currently has 92 shareholders, including U.S. financial institutions or their subsidiaries.  No single entity may own more than 5 percent of Cedel International’s stock.

Further to the merger, the Board of Directors of New Cedel International decided to rename the companies in the group in order to give them a cohesive brand name.  The new brand name that was chosen is “Clearstream”.  With effect from January 14, 2000 New CI has been renamed “Clearstream International, société anonyme”.  On January 18, 2000, Cedelbank was renamed “Clearstream Banking, société anonyme”, and Cedel Global Services was renamed “Clearstream Services, société anonyme”.

On January 17, 2000 DBC was renamed “Clearstream Banking AG”.  This means that there are now two entities in the corporate group headed by Clearstream International which share the name “Clearstream Banking”, the entity previously named “Cedelbank” and the entity previously named “Deutsche Borse Clearing AG”.

Clearstream, Luxembourg holds securities for its customers (“Clearstream, Luxembourg Participants”) and facilitates the clearance and settlement of securities transactions between Clearstream, Luxembourg customers through electronic book-entry changes in accounts of Clearstream, Luxembourg customers, thereby eliminating the need for physical movement of certificates.  Transactions may be settled by Clearstream, Luxembourg in any of 36 currencies, including United States Dollars.  Clearstream, Luxembourg provides to its customers, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing.  Clearstream, Luxembourg also deals with domestic securities markets in over 30 countries through established depository and custodial relationships.  Clearstream, Luxembourg is registered as a ban k in Luxembourg, and as such is subject to regulation by the Commission de Surveillance du Secteur Financier, “CSSF”, which supervises Luxembourg banks.  Clearstream, Luxembourg’s customers are world-wide financial institutions including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations.  Clearstream, Luxembourg’s U.S. customers are limited to securities brokers and dealers, and banks.  Currently, Clearstream, Luxembourg has approximately 2,000 customers located in over 80 countries, including all major European countries, Canada, and the United States.  Indirect access to Clearstream, Luxembourg is available to other institutions that clear through or maintain a custodial relationship with an account holder of Clearstream, Luxembourg.  Clearstream, Luxembourg has established an electronic bridge with Morgan Guaranty Trust Company of New York as the Operator of the Euroclear System (MGT/EOC) in Brussels to facilitate se ttlement of trades between Clearstream, Luxembourg and MGT/EOC.

Clearstream, Luxembourg and Euroclear will hold omnibus positions on behalf of the participants in the Clearstream, Luxembourg and Euroclear systems, respectively, through customers’ securities accounts in Clearstream, Luxembourg ‘s and Euroclear’s names on the books of their respective depositaries which in turn will hold these positions in customers’ securities accounts in the depositaries’ names on the books of DTC.

Clearstream, Luxembourg is incorporated under the laws of Luxembourg as a professional depositary. Clearstream, Luxembourg holds securities for its participants and facilitates the clearance and settlement of securities transactions between its participants through electronic book-entry changes in accounts of its participants, thus eliminating the need for physical movement of certificates.

Indirect access to Clearstream, Luxembourg is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Clearstream, Luxembourg participant, either directly or indirectly.

Euroclear was created in 1968 to hold securities for participants of Euroclear and to clear and settle transactions between Euroclear’s participants through simultaneous electronic book-entry delivery against payment, thus eliminating the need for physical movement of certificates and any risk from lack of simultaneous transfers of securities and cash.  The Brussels, Belgium office of Morgan Guaranty Trust Company of New York operates Euroclear, under contract with Euroclear Clearance Systems S.C., a Belgian cooperative corporation.  Euroclear’s operator conducts all operations and all Euroclear securities clearance accounts and Euroclear cash accounts are accounts with Euroclear’s operator.  Euroclear Clearance Systems S.C. establishes policy for Euroclear on behalf of Euroclear’s participants, including banks, securities brokers and dealers, and other professional financial i ntermediaries.

Indirect access to Euroclear is also available to other firms that clear through or maintain a custodial relationship with a Euroclear participant, either directly or indirectly.

Morgan Guaranty Trust Company of New York is the Belgian branch of a New York banking corporation which is a member bank of the Federal Reserve System.  As such, the Board of Governors of the Federal Reserve System and the New York Banking Department, as well as the Belgian Banking Commission, regulates and examines it.

Euroclear holds all securities on a fungible basis without attribution of specific certificates to specific securities clearance accounts.  The Euroclear operator acts under the Euroclear Terms and Conditions only on behalf of Euroclear’s participants, and has no record of or relationship with persons holding through Euroclear’s participants.

Transfers between direct participants will comply with DTC rules.  Transfers between Clearstream, Luxembourg ‘s participants and Euroclear’s participants will comply with their rules and operating procedures.

DTC will effect, under DTC rules, cross-market transfers between persons holding directly or indirectly through DTC in the United States, on the one hand, and directly or indirectly through Clearstream, Luxembourg or Euroclear, on the other, through the relevant European international clearing system through its Depositary; however, these cross-market transactions will require delivery of instructions to the relevant European international clearing system by the counterparty in this system as required by its rules and procedures and within its established deadlines, European time.  The relevant European international clearing system will, if the transaction meets its settlement requirements, deliver instructions to its depositary to take action to effect final settlement on its behalf by delivering or receiving securities in DTC, and making or receiving payment using its normal procedures for same-day funds settlement applicable to DTC. Clearstream, Luxembourg participants and Euroclear participants may not deliver instructions directly to the depositaries.

Because of time-zone differences, credits of securities in Clearstream, Luxembourg or Euroclear as a result of a transaction with a DTC participant will be made during the subsequent securities settlement processing day, dated the business day following the DTC settlement date, and the credits or any transactions in the securities settled during the processing day will be reported to the relevant Clearstream, Luxembourg participant or Euroclear participant on that business day.  Cash received in Clearstream, Luxembourg or Euroclear as a result of sales of securities by or through a Clearstream, Luxembourg participant or a Euroclear participant to a DTC participant will be received with value on the DTC settlement date but will be available in the relevant Clearstream, Luxembourg or Euroclear cash account only as of the business day following settlement in DTC.

Although DTC, Clearstream, Luxembourg and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of notes among participants of DTC, Clearstream, Luxembourg and Euroclear, they are under no obligation to perform or continue to perform these procedures and these procedures may be discontinued at any time.

Except as required by law, none of the seller, the depositor, any originator, the owner trustee, the sponsor or the indenture trustee will have any liability for any aspect of the records relating to, actions taken or implemented by, or payments made on account of, beneficial ownership interests in the notes held through DTC, or for maintaining, supervising or reviewing any records or actions relating to beneficial ownership interests.

Issuance of Certificated Notes at a Later Date

The issuing entity will issue notes in fully registered, certificated form to beneficial owners or their nominees rather than to DTC or its nominee, only if:

(1)

the issuing entity advises the indenture trustee in writing that DTC is no longer willing or able to discharge properly its responsibilities as depository with respect to the notes, and the owner trustee or the indenture trustee is unable to locate a qualified successor,

(2)

the issuing entity elects to terminate the book-entry system, or

(3)

after the occurrence of an event of default under the indenture, the holder of at least 66 2/3% of the principal amount of its outstanding notes advises the indenture trustee that the continuation of the book-entry system is met in their best interests.

Upon the occurrence of any of the events described in the immediately preceding paragraph, the indenture trustee must notify all beneficial owners for each class of notes held through DTC of the availability of notes in fully registered, certificated form.  Upon surrender by DTC of the global note representing the notes and instructions for reregistration, the indenture trustee will issue these fully registered, certificated notes, and the indenture trustee will recognize the holders of fully registered, certificated notes as noteholders under the indenture.

Additionally, upon the occurrence of any event described above, the indenture trustee will distribute principal of and interest on the notes directly to you as required by the indenture.  Distributions will be made by check, mailed to your address as it appears on the note register.  Upon at least five days’ notice to noteholders for the class, however, the indenture trustee will make the final payment on any note only upon presentation and surrender of the note at the office or agency specified in the notice of final distribution to noteholders.  The indenture trustee will make the final payment in this manner whether the notes are fully registered, certificated notes or the note for the class registered in the name of Cede & Co. representing the notes of the class.

You may transfer any fully registered, certificated notes of any class at the offices of the indenture trustee or its agent in New York, New York, which the indenture trustee shall designate on or prior to the issuance of any fully registered, certificated notes with respect to that class.  There is no service charge for any registration of transfer or exchange, but the indenture trustee may require payment of a sum sufficient to cover any tax or other governmental charge imposed in connection with the transfer or exchange.

Modification of Indenture Without Noteholder Consent

Unless your prospectus supplement states otherwise, the issuing entity and the indenture trustee for a note series may, without your consent, enter into one or more supplemental indentures for any of the following purposes:

•

to change the collateral description;

•

to provide for a successor to the issuing entity to assume the notes and the indenture obligations;

•

to add additional covenants for your benefit, or to surrender any rights or power of the issuing entity;

•

to transfer or pledge any property to the indenture trustee;

•

if not adverse to the interests of noteholders, to correct or supplement any provision in the indenture that is ambiguous or inconsistent with any other provision of the indenture or to make any other provision in respect of matters under the indenture;

•

to accept a successor indenture trustee or to change the provisions of the indenture to facilitate the administration by more than one trustee; or

•

to comply with the Trust Indenture Act of 1939, as amended.

Modification of Indenture With Noteholder Consent

Unless your prospectus supplement states otherwise, with the consent of the required majority of the noteholders determined as described in the prospectus supplement for your notes, prior notice to each rating agency and an opinion of counsel, the owner trustee and the indenture trustee may modify the indenture and your rights under it.

Without the consent of the holder of each outstanding note affected, however, no modification of the indenture may:

•

reduce the note principal amount, interest rate or redemption price or change the timing of payments;

•

modify the manner of application of payments in respect to contracts to the notes;

•

impair your right to sue to enforce payment provisions of the indenture;

•

reduce the percentage needed for consents of noteholders;

•

permit the creation of any lien on collateral under the indenture ranking prior to or on a parity with the lien of the indenture;

•

adversely affect the manner of determining notes outstanding or the requisite note for liquidating the trust estate; or

•

modify the provisions of the indenture relating to these types of indenture modification without the consent of all noteholders.

Events of Default; Rights Upon Event of Default

Except as otherwise provided in the prospectus supplement for your notes, events of default under each indenture will consist of:

•

a default for five calendar days or more in the payment of interest due on any note;

•

failure to pay the unpaid principal amount of any class of notes on the maturity date for the notes;

•

failure of the issuing entity or the depositor to observe any provisions set forth in the pooling and servicing agreement or the indenture, which failure has a material adverse effect on the noteholders and continues for 60 calendar days after written notice;

•

any representation or warranty made by the issuing entity or the depositor in the pooling and servicing agreement or indenture was incorrect as of the time made, and continues to be incorrect for a period of 60 calendar days after notice is given and as a result of which the noteholders are materially and adversely affected.  A breach of a representation or warranty as to a contract will be considered not to have occurred if the seller purchases the contract or effects a substitution for it, as provided in “The Contracts and the Underlying Securities — Representations and Warranties Made by the Seller” and “ — Substitution of Contracts” above;

•

events of bankruptcy, insolvency, receivership or liquidation of the issuing entity or the depositor; or

•

the issuing entity becomes an investment company.

If an event of default should occur and be continuing with respect to the notes of a series, the required holders may, except as to a bankruptcy or insolvency event of default, deem the event not to have occurred.

If the indenture trustee declares the notes of a series due and payable following an event of default, the indenture trustee may:

•

institute proceedings to collect amounts due or foreclose on the indenture collateral,

•

exercise remedies as a secured party, or

•

sell the indenture collateral, or elect to have the issuing entity maintain possession of the pledged revenues.

Unless otherwise provided in your prospectus supplement, the indenture trustee, however, may not sell the indenture collateral following an event of default, except an event arising from the issuing entity’s failure to pay interest or principal, unless:

•

the holders of all the outstanding notes consent to the sale;

•

the proceeds of the sale distributable to holders of the notes are sufficient to pay in full the principal and accrued interest on all the outstanding notes at the date of the sale; or

•

the indenture trustee determines, in complete reliance on investment banking or accounting firm certifications, that the trust estate would not be sufficient on an ongoing basis to make all payments on the notes as the payments would have become due if the obligations had not been declared due and payable, and the indenture trustee obtains the consent of the required holders.

Following a declaration upon an event of default that the notes are immediately due and payable, the application of any proceeds of liquidation of the pledged revenues will be in the order of priority described in the prospectus supplement for your class of notes.

If an event of default occurs and is continuing, the indenture trustee will be under no obligation to exercise any of the rights or powers under the indenture at the request or direction of any of the holders of the notes, if the indenture trustee reasonably believes it will not be adequately indemnified against the costs, expenses and liabilities which it may incur in complying with that request.  A majority of the noteholders will have the right to direct the time, method and place of conducting any proceeding or any remedy available to the indenture trustee.  Additionally, a majority of the noteholders may, in some cases, waive any default, except a default in the payment of principal or interest or a default in respect of a covenant or provision of the indenture that cannot be modified without the waiver or consent of all of the holders of the outstanding notes.

Unless otherwise provided in your prospectus supplement, no holder of a note will have the right to institute any proceeding with respect to the indenture, unless:

•

the holder previously has given to the indenture trustee written notice of a continuing event of default;

•

the holders of not less than 25% in principal amount of the outstanding notes make written request of the indenture trustee to institute the proceeding in its own name as indenture trustee;

•

the holder or holders offer the indenture trustee reasonable indemnity;

•

the indenture trustee has for 60 days failed to institute the proceeding; and

•

no direction inconsistent with that written request has been given to the indenture trustee during the 60-day period by the holders of a majority in principal amount of the outstanding notes.

In addition, the indenture trustee and you, by accepting the notes, will covenant that they will not at any time institute against the sponsor, the seller, the depositor or the issuing entity any bankruptcy, reorganization or other proceeding under any federal or state bankruptcy or similar law.

Neither the indenture trustee nor the owner trustee in its individual capacity, nor the sponsor, the seller, the depositor, nor any of their respective owners, beneficiaries, agents, officers, directors, employees, affiliates, successors or assigns will be personally liable for the payment of the notes or for any agreement or covenant of the owner trust contained in the indenture.

Issuing Entity Covenants

Each indenture will provide that the related issuing entity may not consolidate with or merge into any other entity, unless:

•

the entity formed by or surviving the consolidation or merger is organized under the laws of the United States or any state;

•

the entity formed by or surviving the consolidation or merger expressly assumes the issuing entity’s obligation to make due and punctual payments upon the notes and the performance or observance of every agreement and covenant of the owner trust under the indenture;

•

no event of default shall have occurred and be continuing immediately after the merger or consolidation;

•

the rating agencies advise the owner trustee that the rating of the notes then in effect would not be reduced or withdrawn as a result of the merger or consolidation;

•

the owner trustee has received an opinion of counsel to the effect that the consolidation or merger would have no material adverse tax consequence to the issuing entity or to any noteholder or equity certificate holder; and

•

the issuing entity or the person, if other than the issuing entity, formed by or surviving the consolidation or merger has a net worth, immediately after the consolidation or merger, that is (a) greater than zero and (b) not less than the net worth of the owner trust immediately prior to giving effect to the consolidation or merger.

Each issuing entity will not, among other things:

•

except as expressly permitted by the related indenture or trust agreement, transfer any of the assets of the issuing entity;

•

claim any credit on or make any deduction from, the principal and interest payable in respect of the related notes, other than amounts withheld under the bankruptcy code or applicable state law, or assert any claim against any present or former holder of notes because of the payment of taxes levied or assessed upon the issuing entity;

•

dissolve or liquidate in whole or in part;

•

permit the validity or effectiveness of the indenture to be impaired or permit the release of any person from any covenants or obligations relating to the notes under the indenture except as expressly permitted in the indenture; or

•

except as expressly permitted in the indenture, the pooling and servicing agreement or the trust agreement, permit any lien or claim to burden any assets of the issuing entity.

No issuing entity may engage in any activity other than as specified above under “The Owner Trusts.”  Each issuing entity will not incur, assume or guarantee any indebtedness other than indebtedness incurred under the related notes and the related indenture or otherwise in accordance with the related indenture, trust agreement and pooling and servicing agreement.

Annual Compliance Statement

Each issuing entity will be required to file annually with the applicable indenture trustee a written statement as to the fulfillment of its obligations under the indenture.

Indenture Trustee’s Annual Report

Each indenture trustee will be required to mail each year to all noteholders of the related series a brief report relating to:

•

its eligibility and qualification to continue as indenture trustee under the related indenture,

•

any amounts advanced by it under the indenture,

•

the amount, interest rate and maturity date of certain indebtedness owing by the issuing entity to the indenture trustee in its individual capacity,

•

the property and funds physically held by the indenture trustee and

•

any action taken by it that materially affects the notes and that has not been previously reported.

Satisfaction and Discharge of Indenture

The discharge of an indenture will occur with respect to the collateral securing the notes of a series upon the delivery to the related indenture trustee for cancellation of all the notes or, with certain limitations, upon deposit with the indenture trustee of funds sufficient for the payment in full of all of the notes.

The Indenture Trustee

The indenture trustee for any series will be specified in your prospectus supplement.  An indenture trustee may resign at any time, in which event the depositor or the sponsor will be obligated to appoint a successor trustee.  The owner trust may also remove an indenture trustee

•

if the indenture trustee ceases to be eligible to continue to serve under the indenture,

•

if the indenture trustee becomes subject to bankruptcy proceedings, or

•

if the indenture trustee becomes incapable of acting.

In these circumstances, the issuing entity will be obligated to appoint a successor trustee.  Any resignation or removal of an indenture trustee and appointment of a successor trustee will not become effective until acceptance of the appointment by a successor trustee.

Description of the Pooling and Servicing Agreement

The following summarizes the material terms of each pooling and servicing agreement, a form of which was filed with the registration statement of which this prospectus is a part.  In addition, a copy of the pooling and servicing agreement relating to a series of notes will be filed with the Securities and Exchange Commission following the sale of those notes.  This summary describes terms expected to be common to each pooling and servicing agreement, but the sponsor does not intend this summary to be complete.  This summary is subject to the provisions of the pooling and servicing agreement relating to a particular series and the description set forth in your prospectus supplement.  You should read the form of the pooling and servicing agreement filed as noted above.

Transfer of Contracts and Equipment

Prior to the offering of a series of notes, the seller may have sold contracts to the depositor for deposit into a trust used in connection with temporary financing arrangements.  The depositor may reacquire some or all of these contracts for deposit into the issuing entity in connection with the offering and sale of a particular series of notes.  On or before the applicable closing date, the seller will transfer to the depositor under one or more purchase agreements all of its interest in the following:

•

the contracts, its security interest in the related equipment and the related equipment,

•

the right to receive all scheduled payments and prepayments received on the contracts on or after the date of transfer, but excluding any scheduled payments due on or after, but received prior to, the transfer date,

•

all rights under insurance policies maintained on the equipment under the contracts,

•

all documents contained in the files,

•

the Private Contract-Backed Securities, if applicable, and

•

all proceeds derived from any of the above.

Under the pooling and servicing agreement, on the applicable closing date, the depositor will transfer to the issuing entity:

•

all of its rights in the contracts, Private Contract-Backed Securities, if  applicable, and rights in the equipment and other rights listed above, except that in the case of leased equipment, the depositor will typically retain ownership of the equipment, any rights to payments made or attributable to the leased equipment upon expiration of the related lease contract, of contract prepayments and liquidation proceeds allocable to the depositor under the pooling and servicing agreement and of any portion of the purchase amount attributable to the book value of the leased equipment, other than any guaranteed residual investment;

•

all funds on deposit from time to time in the trust accounts; and

•

all its rights under the purchase and sale agreement.

Each pooling and servicing agreement will designate the servicer as custodian to maintain possession, as the owner trust’s agent, of the contracts and all related documents.  To facilitate servicing and save administrative costs, the documents often will not be physically segregated from other similar documents that are in the servicer’s possession.  Financing statements will be filed on the transfer date in the applicable jurisdictions reflecting:

•

the transfer of the contracts and the equipment by the originators, other than the seller, and the Private Contract-Backed Securities, if applicable, to the seller,

•

the transfer of the contracts and the equipment by the seller to the depositor and, as applicable, by any temporary financing trust to the depositor, and the transfer to the depositor of the Private Contract-Backed Securities, if applicable,

•

the transfer by the depositor to the issuing entity, and

•

the pledge by the issuing entity to the indenture trustee.

The originators’ accounting records and computer systems will also reflect these assignments and this pledge.

Collections on Contracts

The applicable indenture trustee will maintain a collection account, into which the servicer will deposit the following amounts no later than, unless otherwise set forth in your prospectus supplement, the second business day after their processing:

•

all scheduled payments made under the contracts;

•

all prepayments, excluding any portion which your prospectus supplement states is allocable to the depositor;

•

amounts constituting liquidation proceeds on liquidated contracts, to the extent specified in your prospectus supplement;

•

all payments made by the seller under the pooling and servicing agreement to repurchase any contract as a result of a breach of a representation or warranty, as described under “The Contracts and the Underlying Securities — Representations and Warranties Made by the Seller,” excluding, in the case of a lease contract, any portion which your prospectus supplement states is allocable to the depositor; and

•

the amount paid by the depositor to purchase the contracts, as described under “Description of the Notes and Indenture.”

So long as no event of termination shall have occurred and be continuing with respect to the servicer, the servicer may make the required remittances to the collection account net of its servicing fees.

The servicer may withdraw from the collection account any amounts deposited in error or required to be repaid to an obligor, based on the servicer’s good-faith determination that the amount was deposited in error or must be returned to the obligor.

The servicer will pay to the depositor all proceeds from the disposition of equipment subject to a true lease, to the extent allocable to the depositor.

Servicing

Your prospectus supplement will identify the servicer for your issuing entity.  The servicer will be obligated under each pooling and servicing agreement to service the contracts typically with reasonable care, using that degree of skill and attention that the servicer generally exercises with respect to all comparable contracts and related assets that it services for itself or others in accordance with its credit and collections policy and applicable law.  The servicer may delegate servicing responsibilities to third parties or affiliates, provided that the servicer will remain obligated to the related issuing entity and the depositor for the proper performance of the servicing responsibilities.

The servicer is obligated to act in a commercially reasonable manner with respect to the repossession and disposition of equipment following a contract default with a view to realizing proceeds at least equal to the equipment’s fair market value.  The servicer may choose to dispose of equipment through a new lease or in some other manner which provides for payment for the equipment over time.  In these cases, the servicer will be required to pay from its own funds an amount which, in its reasonable judgment, is equal to the fair market value of the equipment, less liquidation expenses, and the servicer will be entitled to all subsequent payments in respect of the equipment.  Any amounts the servicer pays will constitute additional liquidation proceeds with respect to the related contract and equipment and will be allocated as described under “Description of the Notes and Indenture
51; Liquidation and Insurance Proceeds.”

The servicer is, unless otherwise set forth in your prospectus supplement, responsible for:

•

reviewing and certifying that the contract files are complete;

•

monitoring and tracking any property and sales taxes to be paid by obligors;

•

billing, collecting, and recording payments from obligors;

•

communicating with and providing billing records to obligors;

•

depositing funds into the collection account;

•

receiving payments as the issuing entity’s agent on the insurance policies maintained by the obligors and communicating with insurers;

•

issuing reports to the indenture trustee specified in the indenture and in the pooling and servicing agreement;

•

repossessing and remarketing of equipment following obligor defaults; and

•

paying the fees and ordinary expenses of the indenture trustee and the owner trustee.

The servicer shall be entitled to recover all reasonable out-of-pocket expenses incurred by it in liquidating a contract and disposing of the related equipment.  The servicer is entitled to retain, from liquidation proceeds, a reserve for out-of-pocket liquidation expenses in an amount equal to the expenses, in addition to those previously incurred, as it reasonably estimates will be incurred.  The servicer is permitted to grant payment extensions on a contract in accordance with its credit and collection policies and procedures if the servicer believes in good faith that an extension is necessary to avoid a termination and liquidation of the contract and will maximize the amount to be received by the owner trust under the contract.  The servicer is permitted to agree to modifications or amendments to a contract in accordance with its credit and collection policies and procedures.

Prepayments

The servicer may allow a prepayment of any lease contract, but only if the amount paid or, in the case of a partial prepayment, the sum of its prepayment and the remaining contract principal balance, is at least equal to the required payoff amount of the contract.

Evidence as to Compliance

Each Pooling and Servicing Agreement will provide that on or before a specified date in each year, beginning with the first year after the year in which the cut-off date occurs, each party responsible for the servicing function will provide to the depositor and the indenture trustee and/or owner trustee a report on an assessment of compliance with the minimum servicing criteria established in Item 1122(a) of Regulation AB (the “AB Servicing Criteria”).  The AB Servicing Criteria include specific criteria relating to the following areas: general servicing considerations, cash collection and administration, investor remittances and reporting, and pool asset administration.  Such report will indicate that the AB Servicing Criteria were used to test compliance on a platform level basis and will set out any material instances of noncompliance.

Each Pooling and Servicing Agreement will also provide that each party responsible for the servicing function will deliver along with its report on assessment of compliance, an attestation report from a firm of independent public accountants on the assessment of compliance with the AB Servicing Criteria.

Each Pooling and Servicing Agreement will also provide for delivery to the indenture trustee and/or owner trustee, on or before a specified date in each year, of a separate annual statement of compliance from each entity responsible for the servicing function to the effect that, to the best knowledge of the signing officer, the servicer has fulfilled in all material respects its obligations under the Pooling and Servicing Agreement throughout the preceding year or, if there has been a material failure in the fulfillment of any obligation, the statement shall specify such failure and the nature and status thereof.  This statement may be provided as a single form making the required statements as to more than one Pooling and Servicing Agreement.

Copies of the annual reports of assessment of compliance, attestation reports, and statements of compliance may be obtained by securityholders without charge upon written request to the indenture trustee or owner trustee.  These items will be filed with the issuing entity’s annual report on Form 10-K, to the extent required under Regulation AB.

Matters Regarding the Servicer

The servicer may not resign from its obligations under a pooling and servicing agreement except if its duties are no longer permissible under applicable law.  No resignation will become effective until a successor servicer has assumed the servicer’s obligations and duties under the pooling and servicing agreement.  Removal of the servicer is permissible only upon the occurrence of an event of termination as discussed below.

The servicer typically must maintain an insurance policy or financial guarantee bond in customary form covering errors and omissions by the servicer.

Servicing Compensation and Payment of Expenses

Compensation to the servicer will include a monthly fee equal:

•

to the product of one-twelfth of a percentage per annum specified in your prospectus supplement multiplied by the contract pool principal balance as of the last day of the second preceding collection period, or

•

in the case of the servicing fee with respect to the collection period commencing on the date of transfer of the contracts, the contract pool principal balance as of the cut-off date,

plus any

•

late fees,

•

late payment interest,

•

documentation fees,

•

insurance administration charges, other administrative fees and any extension fees collected with respect to the contracts during the prior collection period and investment earnings on collections prior to deposit of these amounts in the collection account.

The servicer will pay all expenses incurred by it in connection with its activities under the pooling and servicing agreement and, unless otherwise set forth in your prospectus supplement, the annual fees and expenses of the owner trustee and indenture trustee in connection with the notes.  The servicer is authorized to waive any administrative fees or extension fees that may be collected in the ordinary course of servicing any contract.

Events of Termination

An event of termination under a pooling and servicing agreement will occur if:

•

the servicer fails to make any required payment or deposit and the failure continues for five business days after notice from the indenture trustee or discovery by the servicer;

•

the servicer fails to observe in any material respect any agreements of the servicer set forth in the pooling and servicing agreement and the failure (1) materially and adversely affects the rights of the issuing entity, the equity certificate holder or you, and (2) continues unremedied for 30 days after written notice to the servicer;

•

events of bankruptcy or insolvency occur with respect to the servicer; or

•

any representation, warranty or statement of the servicer made under the pooling and servicing agreement is incorrect in any material respect, and (1) has a material adverse effect on the issuing entity or holders of the notes, and (2) continues uncured for 30 days after the acquiring of written notice.

Rights upon Event of Termination

If an event of termination remains unremedied, the indenture trustee may, and at the written direction of the required majority of the noteholders, which shall be the same as that required for amendment of the pooling and servicing agreement as discussed under “Amendment” below, shall, terminate all of the rights and obligations of the servicer under the pooling and servicing agreement.  A successor servicer will succeed to all the responsibilities, duties and liabilities of the servicer under the pooling and servicing agreement.  The successor servicer will be entitled to similar compensation arrangements, except that any successor servicer will not be liable for any acts or omissions of the prior servicer occurring prior to a transfer of the servicer’s servicing and related functions or for any breach by the prior servicer of any of its obligations.  A majority of the noteh olders may waive any default by the servicer under the pooling and servicing agreement and its consequences.

Amendment

The parties may amend any pooling and servicing agreement:

•

to cure any ambiguity,

•

to correct or supplement any provision in the pooling and servicing agreement that may be inconsistent with any other provision, or

•

to make any other provisions with respect to matters or questions arising under the pooling and servicing agreement but only if the amendment will not adversely affect in any material respect the interests of the noteholders.

Any pooling and servicing agreement may also be amended in any respect by the parties with the consent of the required majority of the noteholders determined as described in the prospectus supplement for your notes, except that no amendment

•

that reduces the amount or changes the timing of any contract collections on any contracts or payments required to be distributed on any note,

•

that changes the interest rate on any note, that adversely affects the priority of payment of principal or interest to noteholders or

•

that reduces the noteholder percentage required to consent to these amendments or any waiver under the pooling and servicing agreement,

may be effective without the consent of the holder of each note.  Also, an amendment under the foregoing sentence will not be effective unless each rating agency confirms that the amendment will not result in a reduction, qualification or withdrawal of the ratings on the notes.

Certain Legal Matters Affecting the Contracts

To the extent provided in your prospectus supplement, certain of the contracts are “chattel paper”, “general intangibles” and “accounts” as defined in the Uniform Commercial Code, or the UCC, in effect in the applicable state. Pursuant to the UCC for most purposes, a sale of chattel paper is treated in a manner similar to a transaction creating a security interest in chattel paper. To the extent provided in your prospectus supplement, the depositor will cause the filing of appropriate UCC-1 financing statements to be made with the appropriate governmental authorities.  The servicer will be obligated from time to time to take such actions as are necessary to protect and perfect the issuing entity’s interests in such contracts and their proceeds.

The Security Interest in the Equipment

The sponsor or seller will convey the sponsor or seller’s interest in the equipment to the depositor. The depositor will convey such security interest in the equipment to the issuing entity. UCC financing statements will not be filed to perfect any security interest in the equipment unless otherwise specified in your prospectus supplement. Moreover, in the event of the repossession and resale of equipment, it may be subject to a superior lien. In such case, the senior lienholder may be entitled to be paid the full amount of the indebtedness owed to it out of the sale proceeds before such proceeds could be applied to the payment of claims of the servicer on behalf of the issuing entity.

In the event of a default by the lessee, the servicer on behalf of the issuing entity may take action to enforce such defaulted contract by repossession and resale of the leased equipment. Under the UCC in most states, a creditor can, without prior notice to the debtor, repossess assets securing a defaulted contract by the lessee’s voluntary surrender of such assets or by “self-help” repossession that does not involve a breach of the peace and by judicial process.

In the event of a default by the lessee, some jurisdictions require that the lessee be notified of the default and be given a time period within which it may cure the default prior to repossession. Generally, this right of reinstatement may be exercised on a limited number of occasions in any one-year period.

The UCC and other state laws place restrictions on repossession sales, including requirements that the secured party provide the lessee with reasonable notice of the date, time and place of any public sale and/or the date after which any private sale of the collateral may be held and that any such sale be conducted in a commercially reasonable manner. Each pooling and servicing agreement may require the servicer to sell promptly any repossessed item of equipment, reacquire such equipment, re-lease such equipment for the benefit of the noteholders or take such other action as specified in your prospectus supplement.

Under most state laws, a lessee has the right to redeem collateral for its obligations prior to actual sale by paying the secured party the unpaid balance of the obligation plus reasonable expenses for repossession, holding and preparing the collateral for disposition and arranging for its sale, plus, to the extent provided for in the written agreement of the parties, reasonable attorneys’ fees.

In addition, because the market value of the equipment of the type financed pursuant to the contracts generally declines with age and because of obsolescence, the net disposition proceeds of leased equipment at any time during the term of the lease may be less than the outstanding balance on the contract principal balance which it secures. Because of this, and because other creditors may have rights in the related leased equipment superior to those of the issuing entity, the servicer may not be able to recover the entire amount due on a defaulted contract in the event that the servicer elects to repossess and sell such leased equipment at any time.

Under the UCC and laws applicable in most states, a creditor is entitled to obtain a deficiency judgment from a lessee for any deficiency on repossession and resale of the asset securing the unpaid balance of such lessee’s contract. However, some states impose prohibitions or limitations on deficiency judgments. In most jurisdictions the courts, in interpreting the UCC, would impose upon a creditor an obligation to repossess the equipment in a commercially reasonable manner and to “mitigate damages” in the event of a lessee’s failure to cure a default. The creditor would be required to exercise reasonable judgment and follow acceptable commercial practice in seizing and disposing of the equipment and to offset the net proceeds of such disposition against its claim. In addition, a lessee may successfully invoke an election of remedies defense to a deficiency claim in the event that the service r’s repossession and sale of the leased equipment is found to be a retention discharging the lessee from all further obligations under UCC Section 9-505(2). If a deficiency judgment were granted, the judgment would be a personal judgment against the lessee for the shortfall, but a defaulting lessee may have very little capital or sources of income available following repossession. Therefore, in many cases, it may not be useful to seek a deficiency judgment or, if one is obtained, it may be settled at a significant discount.

Certain statutory provisions, including federal and state bankruptcy and insolvency laws, may also limit the ability of the servicer to repossess and resell collateral or obtain a deficiency judgment. In the event of the bankruptcy or reorganization of a lessee, various provisions of the Bankruptcy Code of 1978 and related laws may interfere with or eliminate the ability of the servicer or the trustee to enforce its rights under the contracts. If bankruptcy proceedings were instituted in respect of a lessee, the trustee could be prevented from continuing to collect payments due from or on behalf of such lessee or exercising any remedies assigned to such trustee without the approval of the bankruptcy court, and the bankruptcy court could permit the lessee to use or dispose of the leased equipment and provide the trustee with a lien on substitute collateral, so long as such substitute collateral constituted “ adequate protection” as defined under the Bankruptcy Code.

In addition, certain of the contracts may be leased by the seller to governmental entities. Payment by governmental authorities of amounts due under such contracts may be contingent upon legislative approval.  Accordingly, payment delays and collection difficulties as described in your prospectus supplement may limit collections with respect to certain governmental contracts.

These UCC and bankruptcy provisions, in addition to the possible decrease in value of a repossessed item of equipment, may limit the amount realized on the sale of the collateral to less than the amount due on the related contract.

Material Federal Income Tax Consequences

The following is a general discussion of the anticipated material United States federal income tax consequences of the purchase, ownership and disposition of the notes.  The summary does not purport to deal with federal income tax consequences applicable to all categories of holders, some of which may be subject to special rules.  For example, it does not discuss the tax treatment of beneficial owners of notes (“Note Owners”) that are insurance companies, regulated investment companies or dealers in securities.  Moreover, there are no cases or Internal Revenue Service (“IRS”) rulings on similar transactions involving both debt and equity interests issued by a trust with terms similar to those of the notes.  As a result, the IRS might disagree with all or part of the discussion below.  Prospective investors are urged to consult their own tax advisors in determining the federal, state, local, foreign and any other tax consequences to them of the purchase, ownership and disposition of the notes.

The following summary is based upon current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), the Treasury regulations promulgated under the Code and judicial or ruling authority, all of which are subject to change, which change may be retroactive.  Each issuing entity will be provided with an opinion of tax counsel specified in the related prospectus supplement (“Federal Tax Counsel”) regarding some related federal income tax matters discussed below.  An opinion of Federal Tax Counsel, however, is not binding on the IRS or the courts.  No ruling on any of the issues discussed below will be sought from the IRS.  The opinion of Federal Tax Counsel specifically addresses only those issues specifically identified below as being covered by that opinion; however, the opinion also states that the additional discussion set forth below accurately sets forth the advice of Federal Tax Counsel with respect to material federal income tax issues.  For purposes of the following summary, references to the issuing entity, the notes, and related terms, parties and documents shall be deemed to refer, unless otherwise specified in this prospectus, to each issuing entity and the notes, and related terms, parties and documents applicable to the trust.

Tax Characterization of the Issuing Entities

In the case of an issuing entity that issues one or more classes of notes, Federal Tax Counsel will deliver its opinion that the issuing entity will not be an association, or publicly traded partnership taxable as a corporation for federal income tax purposes.  The opinion of Federal Tax Counsel will be based on the assumption that the terms of the Trust Agreement and related documents will be complied with and restrictions on transfers of the equity interests in the issuing entity will exempt the issuing entity from the rule that some publicly traded partnerships are taxable as corporations.

If an issuing entity were taxable as a corporation for federal income tax purposes, the issuing entity would be subject to corporate income tax on its taxable income.  The issuing entity’s taxable income would include all of its income on the contracts and other assets held by the issuing entity, which might be reduced by its interest expense on the notes.  Any corporate income tax could materially reduce cash available to make payments on the notes and Note Owners could be liable for any resulting corporate income tax that is unpaid by the issuing entity.

Tax Consequences to Note Owners

Treatment of the Notes as Indebtedness.  The issuing entity will agree, and the Note Owners will agree by their purchase of notes, to treat the notes as debt for federal tax purposes.  Federal Tax Counsel will, subject to exceptions which, if applicable, will be specified in the related prospectus supplement, advise the issuing entity that the notes will be classified as debt for federal income tax purposes, or classified in any other manner as shall be provided in the related prospectus supplement.  If, contrary to the opinion of Federal Tax Counsel, the IRS successfully asserted that one or more of the classes of notes did not represent debt for federal income tax purposes, the notes would be treated as equity interests in the issuing entity.  If so treated, the issuing entity might be treated as a publicly traded partnership that would be taxable as a corporation unless it met parti cular qualifying income tests, and the resulting taxable corporation would not be able to reduce its taxable income by deductions for interest expense on notes recharacterized as equity.  Treatment of the notes as equity interests in a partnership could have adverse tax consequences to some holders, even if the issuing entity were not treated as a publicly traded partnership taxable as a corporation.  For example, income allocable to foreign holders on such recharacterized notes might be subject to United States tax and United States tax return filing and withholding requirements, income allocable to tax-exempt holders on a recharacterized note would constitute “unrelated business taxable income” if some, but not all, of the notes were recharacterized as equity in a partnership, individual holders might be subject to limitations on their ability to deduct their share of trust expenses, and income from the issuing entity’s assets would be taxable to Note Owners without regard to wheth er cash distributions are made to such Note Owners and without regard to the Note Owners’ method of tax accounting.  The discussion below assumes that the notes will be characterized as debt for federal income tax purposes.

Interest Income on the Notes—General.  Except as discussed below, interest on a note generally is includable in a Note Owner’s income as ordinary interest income when actually or constructively received, if the Note Owner uses the cash method of accounting for federal income tax purposes, or when accrued, if the Note Owner uses an accrual method of accounting for federal income tax purposes.

Original Issue Discount.  Notes of certain series may be issued with “original issue discount” within the meaning of Section 1273(a) of the Code.  Holders of notes issued with original issue discount generally must include original issue discount in gross income for federal income tax purposes as it accrues, in advance of receipt of the cash attributable to such income, under a method that takes account of the compounding of interest.  The Code requires that information with respect to the original issue discount accruing on any note be reported periodically to the IRS and to certain categories of Note Owners.

Each issuing entity will report original issue discount, if any, to the Note Owners based on the Treasury regulations relating to original issue discount (the “OID Regulations”).  The OID Regulations concerning contingent payment debt instruments and other provisions of the OID Regulations either do not apply to prepayable securities such as the notes or do not address the unique issues presented by prepayable securities.

The OID Regulations provide that, in the case of debt instruments such as the notes, (i) the amount and rate of accrual of original issue discount will be calculated based on a reasonable assumed prepayment rate (the “Prepayment Assumption”), and (ii) adjustments will be made in the amount and rate of accrual of such discount to reflect differences between the actual prepayment rate and the Prepayment Assumption.  The method for determining the appropriate assumed prepayment rate will eventually be set forth in Treasury regulations, but those regulations have not yet been issued.  The applicable legislative history indicates, however, that such regulations will provide that the assumed prepayment rate for securities such as the notes will be the rate used in pricing the initial offering of those securities.  If the notes of a series are issued with original issue discount, the Prospectus Supplement for that series of notes will specify the Prepayment Assumption.  However, no representation is made that the notes of that series will, in fact, prepay at a rate based on the Prepayment Assumption or at any other rate.

In general, a note will be considered to be issued with original issue discount if its stated redemption price at maturity exceeds its issue price.  Except as discussed below under”—Payment Lag Notes; Initial Period Considerations,” and “—Qualified Stated Interest,” and in the case of certain Variable Rate Notes (as defined below) and accrual notes, the stated redemption price at maturity of a note is its principal amount.  The issue price of a note is the initial offering price to the public (excluding bond houses and brokers) at which a substantial amount of the class of notes is sold.  Notwithstanding the general definition of original issue discount, such discount will be considered to be zero for any note on which such discount is less than 0.25% of its stated redemption price at maturity multiplied by its weighted average life.  For purposes o f this rule, we will compute the weighted average life of a note as the sum, for all distributions included in the stated redemption price at maturity of the note (that is, all payments except payments of qualified stated interest), of the amounts determined by multiplying (i) the number of complete years (rounding down for partial years) from the applicable closing date to the date on which each such distribution is expected to be made, determined under the Prepayment Assumption, by (ii) a fraction, the numerator of which is the amount of such distribution and the denominator of which is the note’s stated redemption price at maturity.  The OID Regulations provide that holders will include any de minimis original issue discount ratably as payments of stated principal are made on the notes.

The Note Owner of a note issued with original issue discount must include in gross income the sum of the “daily portions” of such original issue discount for each day during its taxable year on which it held such note.  In the case of an original Note Owner, the daily portions of original issue discount are determined first by calculating the portion of the original issue discount that accrued during each period (an “accrual period”) that begins on the day following a payment date (or in the case of the first such period, begins on the applicable closing date) and ends on the next succeeding payment date.  The original issue discount accruing during each accrual period is then allocated ratably to each day during such period to determine the daily portion of original issue discount for that day.

The portion of the original issue discount that accrues in any accrual period will equal the excess, if any, of (i) the sum of (A) the present value, as of the end of the accrual period, of all of the distributions to be made on the note, if any, in future periods (taking into account events that have occurred during the accrual period such as prepayments or actual losses) and (B) the distributions made on the note during the accrual period that are included in such note’s stated redemption price at maturity, over (ii) the adjusted issue price of such note at the beginning of the accrual period.  The present value of the remaining distributions referred to in the preceding sentence will be calculated (i) assuming that the notes will be prepaid in future periods at a rate computed in accordance with the Prepayment Assumption and (ii) using a discount rate equal to the original yield to maturity of the n otes.  For these purposes, the original yield to maturity of the notes will be calculated based on their issue price and assuming that the notes will be prepaid in accordance with the Prepayment Assumption.  The adjusted issue price of a note at the beginning of any accrual period will equal the issue price of such note, increased by the portion of the original issue discount that has accrued during prior accrual periods, and reduced by the amount of any distributions made on such note in prior accrual periods that were included in such note’s stated redemption price at maturity.

The daily portions of original issue discount may increase or decrease depending on the extent to which the actual rate of prepayments diverges from the Prepayment Assumption.  If original issue discount accruing during any accrual period computed as described above is negative, a Note Owner may only be entitled to offset such amount against positive original issue discount accruing on such note in future accrual periods.

A subsequent Note Owner that purchases a note issued with original issue discount at a cost that is less than its remaining stated redemption price at maturity will also generally be required to include in gross income, for each day on which it holds such note, the daily portions of original issue discount with respect to the note, calculated as described above.  However, if (i) the excess of the remaining stated redemption price at maturity over such cost is less than (ii) the aggregate amount of such daily portions for all days after the date of purchase until final retirement of such note, then such daily portions will be reduced proportionately in determining the income of such Note Owner.

Qualified Stated Interest.  Interest payable on a note which qualifies as “qualified stated interest” for purposes of the OID Regulations will not be includable in the stated redemption price at maturity of the note.  Conversely, if the interest on a note does not constitute “qualified stated interest,” such interest will be includable in the stated redemption price at maturity of the note and the note, consequently, will have original issue discount.  Interest payments will not qualify as qualified stated interest unless the interest payments are “unconditionally payable.” The OID Regulations state that interest is unconditionally payable if reasonable legal remedies exist to compel timely payment, or the debt instrument otherwise provides terms and conditions that make the likelihood of late payment (other than a late payment that occurs within a reasonable g race period) or nonpayment of interest a remote contingency, as defined in the OID Regulations.     Any terms or conditions that do not reflect arm’s length dealing or that the Note Owner does not intend to enforce are not considered.  Subordinate classes of notes may lack the right to enforce payment until they are the Senior Class.  However, absent guidance to the contrary and unless disclosed in the related prospectus supplement, the Trustee will, for information reporting purposes, treat all stated interest on all classes of notes as qualified stated interest.

Premium.  A purchaser of a note that purchases such note at a cost greater than its remaining stated redemption price at maturity will be considered to have purchased such note at a premium, and may, under Section 171 of the Code, elect to amortize such premium under a constant yield method over the life of the note.  The Prepayment Assumption is probably taken into account in determining the life of the note for this purpose.  Except as provided in regulations, amortizable premium will be treated as an offset to interest income on the note.

Payment Lag Notes; Initial Period Considerations.  Certain notes may provide for distributions of interest based on a period that is the same length as the interval between payment dates but ends prior to each payment date.  Any interest that accrues prior to the applicable closing date may be treated under the OID Regulations either (i) as part of the issue price and the stated redemption price at maturity of the notes or (ii) as not included in the issue price or the stated redemption price.  The OID Regulations provide a special application of the de minimis rule for debt instruments with long first accrual periods where the interest payable for the first period is at a rate which is effectively less than that which applies in all other periods.  In such cases, for the sole purpose of determining whether original issue discount is de minimis, the OID Regulations provide that the sta ted redemption price is equal to the instrument’s issue price plus the greater of the amount of foregone interest or the excess (if any) of the instrument’s stated principal amount over its issue price.

Variable Rate Notes.  Under the OID Regulations, notes paying interest at a variable rate (each, a “Variable Rate Note”) are subject to special rules.  A Variable Rate Note will qualify as a “variable rate debt instrument” if (i) its issue price does not exceed the total noncontingent principal payments due under the Variable Rate Note by more than a specified de minimis amount; (ii) it provides for stated interest, paid or compounded at least annually, at a current value of (a) one or more qualified floating rates, (b) a single fixed rate and one or more qualified floating rates, (c) a single objective rate or (d) a single fixed rate and a single objective rate that is a qualified inverse floating rate; and (iii) it does not provide for any principal payments that are contingent, as defined in the OID Regulations, except as provided in (i), above.  The OID Regula tions relating to contingent payment debt instruments do not apply to prepayable debt instruments, such as the notes.  In general, the regulations addressing the treatment of contingent payment obligations require accruing income as a yield comparable to what the issuer would pay on non-contingent debt and then making appropriate adjustments as the contingencies become fixed.  In addition, losses on sale are ordinary to the extent of prior accruals and all gains on sale are ordinary.  As similar approach may ultimately be applied to prepayable obligations such as the notes.

A “qualified floating rate” is any variable rate where variations in the value of such rate can reasonably be expected to measure contemporaneous variations in the cost of newly borrowed funds in the currency in which the Variable Rate Note is denominated.  A multiple of a qualified floating rate will generally not itself constitute a qualified floating rate for purposes of the OID Regulations.  However, a variable rate equal to (i) the product of a qualified floating rate and a fixed multiple that is greater than 0.65 but not more than 1.35 or (ii) the product of a qualified floating rate and a fixed multiple that is greater than 0.65 but not more than 1.35, increased or decreased by a fixed rate will constitute a qualified floating rate for purposes of the OID Regulations.  In addition, under the OID Regulations, two or more qualified floating rates that can reasonably be expected to h ave approximately the same values throughout the term of the Variable Rate Note will be treated as a single qualified floating rate (a “Presumed Single Qualified Floating Rate”).  Two or more qualified floating rates with values within 25 basis points of each other as determined on the Variable Rate Note’s issue date will be conclusively presumed to be a Presumed Single Qualified Floating Rate.  Notwithstanding the foregoing, a variable rate that would otherwise constitute a qualified floating rate, but which is subject to one or more restrictions such as a cap or floor, will not be a qualified floating rate for purposes of the OID Regulations unless the restriction is fixed throughout the term of the Variable Rate Note or the restriction is not reasonably expected as of the issue date to significantly affect the yield of the Variable Rate Note.

An “objective rate” is a rate that is not itself a qualified floating rate but which is determined using a single fixed formula and which is based upon objective financial or economic information.  The OID Regulations also provide that other variable rates may be treated as objective rates if so designated by the IRS in the future.  Despite the foregoing, a variable rate of interest on a Variable Rate Note will not constitute an objective rate if it is reasonably expected that the average value of such rate during the first half of the Variable Rate Note’s term will be either significantly less than or significantly greater than the average value of the rate during the final half of the Variable Rate Note’s term.  Further, an objective rate does not include a rate that is based on information that is within the control of the issuer (or a party related to the issuer) or that is unique to the circumstances of the issuer (or a party related to the issuer).  An objective rate will qualify as a “qualified inverse floating rate” if such rate is equal to a fixed rate minus a qualified floating rate and variations in the rate can reasonably be expected to inversely reflect contemporaneous variations in the qualified floating rate.  The OID Regulations also provide that if a Variable Rate Note provides for stated interest at a fixed rate for an initial period of less than one year followed by a variable rate that is either a qualified floating rate or an objective rate and if the variable rate on the Variable Rate Note’s issue date is intended to approximate the fixed rate, then the fixed rate and the variable rate together will constitute either a single qualified floating rate or objective rate, as the case may be (a “Presumed Single Variable Rate”).  If the value of the variable rate and the initial fixed rate are within 25 basis points of each o ther as determined on the Variable Rate Note’s issue date, the variable rate will be conclusively presumed to approximate the fixed rate.

For Variable Rate Notes that qualify as “variable rate debt instruments” under the OID Regulations and provide for interest at either a single qualified floating rate, a single objective rate, a Presumed Single Qualified Floating Rate or a Presumed Single Variable Rate throughout the term (a “Single Variable Rate Note”), original issue discount is computed as described above in”—Interest Income on the Notes—Original Issue Discount” based on the following: (i) stated interest on the Single Variable Rate Note which is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually will constitute qualified stated interest; (ii) by assuming that the variable rate on the Single Variable Rate Note is a fixed rate equal to: (a) in the case of a Single Variable Rate Note with a qualified floating rate or a qualified inverse floating rate, the value, as of the issue date, of the qualified floating rate or the qualified inverse floating rate or (b) in the case of a Single Variable Rate Note with an objective rate (other than a qualified inverse floating rate), a fixed rate which reflects the reasonably expected yield for such Single Variable Rate Note; and (iii) the qualified stated interest allocable to an accrual period is increased (or decreased) if the interest actually paid during an accrual period exceeds (or is less than) the interest assumed to be paid under the assumed fixed rate described in (ii), above.

In general, any Variable Rate Note other than a Single Variable Rate Note (a “Multiple Variable Rate Note”) that qualifies as a “variable rate debt instrument” will be converted into an “equivalent” fixed rate debt instrument for purposes of determining the amount and accrual of original issue discount and qualified stated interest on the Multiple Variable Rate Note.  The OID Regulations generally require that such a Multiple Variable Rate Note be converted into an “equivalent” fixed rate debt instrument by substituting any qualified floating rate or qualified inverse floating rate provided for under the terms of the Multiple Variable Rate Note with a fixed rate equal to the value of the qualified floating rate or qualified inverse floating rate, as the case may be, as of the Multiple Variable Rate Note’s issue date.  Any objective rate (other than a qualifi ed inverse floating rate) provided for under the terms of the Multiple Variable Rate Note is converted into a fixed rate that reflects the yield that is reasonably expected for the Multiple Variable Rate Note.  (A Multiple Variable Rate Note may not bear more than one objective rate.) In the case of a Multiple Variable Rate Note that qualifies as a “variable rate debt instrument” and provides for stated interest at a fixed rate in addition to either one or more qualified floating rates or a qualified inverse floating rate, the fixed rate is initially converted into a qualified floating rate (or a qualified inverse floating rate, if the Multiple Variable Rate Note provides for a qualified inverse floating rate).  Under such circumstances, the qualified floating rate or qualified inverse floating rate that replaces the fixed rate must be such that the fair market value of the Multiple Variable Rate Note as of the Multiple Variable Rate Note’s issue date is approximately the same as the fair market value of an otherwise identical debt instrument that provides for either the qualified floating rate or qualified inverse floating rate rather than the fixed rate.  Subsequent to converting the fixed rate into either a qualified floating rate or a qualified inverse floating rate, the Multiple Variable Rate Note is then converted into an “equivalent” fixed rate debt instrument in the manner described above.

Once the Multiple Variable Rate Note is converted into an “equivalent” fixed rate debt instrument pursuant to the foregoing rules, the amounts of original issue discount and qualified stated interest, if any, are determined for the “equivalent” fixed rate debt instrument by applying the original issue discount rules to the “equivalent” fixed rate debt instrument in the manner described above in”—Interest Income on the Notes—Original Issue Discount.” A holder of the Multiple Variable Rate Note will account for such original issue discount and qualified stated interest as if the holder held the “equivalent” fixed rate debt instrument.  In each accrual period, appropriate adjustments will be made to the amount of qualified stated interest or original issue discount assumed to have been accrued or paid with respect to the “equivalent” fixed r ate debt instrument in the event that such amounts differ from the actual amount of interest accrued or paid on the Multiple Variable Rate Note during the accrual period.

If a Variable Rate Note does not qualify as a “variable rate debt instrument” under the OID Regulations, then the Variable Rate Note would be treated as a contingent payment debt obligation.  The manner in which a Variable Rate Note would be taxed if such note were treated as a contingent payment debt obligation is not governed by the OID Regulations relating to contingent payment debt obligations which do not apply to prepayable debt instruments, such as the notes, and Treasury regulations do not otherwise address this point and it is unclear how such instruments should be treated.

Market Discount.  A Note Owner that acquires a note at a market discount (that is, a discount that exceeds any unaccrued original issue discount) will recognize gain upon receipt of a principal distribution, regardless of whether the distribution is scheduled or is a prepayment.  In particular, the Note Owner will be required to allocate that principal distribution first to the portion of the market discount on such note that has accrued but has not previously been includable in income, and will recognize ordinary income to that extent.  In general terms, unless Treasury regulations when issued provide otherwise, market discount on a note may be treated, at the election of the holder of the note, as accruing either (i) under a constant yield method, taking into account the Prepayment Assumption, or (ii) in proportion to accruals of original issue discount (or, if there is no original issue discount, in proportion to stated interest on the note).

In addition, a Note Owner may be required to defer deductions for a portion of the Note Owner’s interest expense on any debt incurred or continued to purchase or carry a note purchased with market discount.  The deferred portion of any interest deduction would not exceed the portion of the market discount on the note that accrues during the taxable year in which such interest would otherwise be deductible and, in general, would be deductible when such market discount is included in income upon receipt of a principal distribution on, or upon the sale of, the note.  The Code requires that information necessary to compute accruals of market discount be reported periodically to the IRS and to certain categories of Note Owners.

Notwithstanding the above rules, market discount on a note will be considered to be zero if such discount is less than 0.25% of the remaining stated redemption price at maturity of such note multiplied by its weighted average remaining life.  Weighted average remaining life presumably is calculated in a manner similar to weighted average life (described above under”—Interest Income on the Notes—Original Issue Discount”), taking into account distributions (including prepayments) prior to the date of acquisition of such note by the subsequent purchaser.  If market discount on a note is treated as zero under this rule, the actual amount of such discount must be allocated to the remaining principal distributions on such note in proportion to the amounts of such principal distributions, and when each such distribution is made, gain equal to the discount, if any, allocated to the distribu tion will be recognized.

Election to Treat All Interest Under the Constant Yield Rules.  The OID Regulations allow a holder of a Note to elect to include in gross income all interest that accrues on such debt instrument using the constant yield method.  For purposes of this election, interest includes stated interest, original issue discount, and market discount, as adjusted to account for any premium.  If an election were to be made with respect to a Note with market discount, the Note Owner would be deemed to have made an election to include in income currently market discount with respect to all other debt instruments having market discount that the grantor trust certificateholder acquires during the year of the election or afterward.  See”—Market Discount” above.  Similarly, a Note Owner that makes this election for a Note that is acquired at a premium will be deemed to have made an ele ction to amortize bond premium with respect to all debt instruments having amortizable bond premium that the grantor trust Note Owner owns at the beginning of the first taxable year to which the election applies or acquires afterward.  See “—Premium” above.  The election to accrue interest, discount and premium on a constant yield method with respect to a Note is irrevocable.  Note Owners should consult their own tax advisors regarding the availability or advisability of such an election.

Sales of Notes.  If a note is sold, the seller of the note will recognize gain or loss equal to the difference between the amount realized on the sale and its adjusted basis in the note.  A holder’s adjusted basis in a note generally equals the cost of the note to the holder, increased by income reported by the holder with respect to the note and reduced (but not below zero) by distributions on the note (other than qualified stated interest) received by the holder and by amortized premium.  Subject to the discussion of the rules applicable to contingent payment debt obligations above, any such gain or loss generally will be capital gain or loss provided the note is held as a capital asset, except for gain recognized on the sale of a note by a seller who purchased the note at a market discount would be taxable as ordinary income in an amount not exceeding the portion of such discount th at accrued during the period the note was held by such seller, reduced by any market discount includable in income under the rules described above under”—Interest Income on the Notes—Market Discount.”  Further, the notes will be “evidences of indebtedness” within the meaning of Section 582(c)(1) of the Code, so that gain or loss recognized from a sale of a note by a bank or other financial institution to which such section applies would be ordinary income or loss.

Allocations of Realized Losses.  The manner losses are claimed on the notes as a result of defaults by the underlying obligors is complex and differs depending on the characterization of the person considered the issuer of the notes for federal tax purposes.  Whether the notes are governed by the loss rules for bad debts under Code Section 166 or for worthless securities under Code Section 165 depends on whether the notes are considered issued by a corporation.  If there is a single corporate holder of the certificates constituting all of the equity interests in the issuing Trust Fund, then the issuing entity will be a disregarded entity and the notes will be considered issued by a corporation subject to the loss rules of Code Section 165 (which affects both timing and character of loss for corporate taxpayers, and character and possibly timing for other taxpayers).  If the notes are c onsidered issued by a grantor trust, then the notes may be treated as issued in proportion to the nature of the certificateholders (e.g, if some certificateholders are natural persons or partnerships and some are corporations, losses on the notes would be governed in part by Code Section 166 and in part by Code Section 165).  If the notes are considered issued by a partnership then they would be governed by the rules under Code Section 166.  Investors should consult their tax advisors as to the character and timing of any loss that can be claimed with respect to a note.

Short-Term Notes.  In the case of a note with a maturity of one year or less from its issue date (a “Short-Term Note”), no interest is treated as qualified stated interest, and therefore all interest is included in original issue discount.  Note Owners that report income for federal income tax purposes on an accrual method and some other Note Owners, including banks and certain dealers in securities, (collectively, “Short-Term Accruers”) are required to include original issue discount in income on Short-Term Notes on a straight-line basis, unless an election is made to accrue the original issue discount according to a constant yield method based on daily compounding.

Any other Note Owner of a Short-Term Note is not required to accrue original issue discount for federal income tax purposes, unless it elects to do so.  In the case of a Note Owner that is not required, and does not elect, to include original issue discount in income currently, any gain realized on the sale, exchange or retirement of a Short-Term Note is ordinary income to the extent of the original issue discount accrued on a straight-line basis, or, if elected, according to a constant yield method based on daily compounding, through the date of sale, exchange or retirement.  In addition, Note Owners that are not required, and do not elect, to include original issue discount in income currently are required to defer deductions for any interest paid on indebtedness incurred or continued to purchase or carry a Short-Term Note in an amount not exceeding the deferred interest income with respect to the Sh ort-Term Note, which includes both the accrued original issue discount and accrued interest that are payable but that have not been included in gross income, until the deferred interest income is realized.  A Note Owner may elect to apply the foregoing rules, except for the rule characterizing gain on sale, exchange or retirement as ordinary, with respect to “acquisition discount” rather than original issue discount.  Acquisition discount is the excess of the stated redemption price at maturity of the Short-Term Note over the Note Owner’s basis in the Short-Term Note.  This election applies to all obligations acquired by the taxpayer on or after the first day of the first taxable year to which the election applies, unless revoked with the consent of the IRS.  A Note Owner’s tax basis in a Short-Term Note is increased by the amount included in the Note Owner’s income with respect to the note.

Foreign Investors in Notes.  Except as discussed below, a Note Owner that is not a “United States person” (as defined below) generally will not be subject to United States income or withholding tax in respect of a distribution on a note provided that (i) the holder complies to the extent necessary with certain certification requirements, which generally relate to the identity of the beneficial owner and the status of the beneficial owner as a person that is not a United States person (as defined below), (ii) the holder is not a “10-percent shareholder” within the meaning of Section 871(h)(3)(B) of the Code, which could be interpreted to include a person that directly or indirectly owns 10% or more of the equity interests in the trust, (iii) the holder is not a “controlled foreign corporation” (as defined in the Code) related to the issuing entity or related to a 10 perce nt holder of equity interests in the issuing entity, and (iv) the holder is not engaged in a United States trade or business, or otherwise subject to federal income tax as a result of any direct or indirect connection to the United States other than through its ownership of a note.  For these purposes, the term “United States person” means (i) a citizen or resident of the United States, (ii) a corporation or partnership (or other entity properly treated as a corporation or partnership for federal income tax purposes) created or organized in or under the laws of the United States or any State thereof or the District of Columbia, (iii) an estate whose income is includable in gross income for United States federal income taxation regardless of its source, and (iv) a trust for which one or more United States persons have the authority to control all substantial decisions and for which a court of the United States can exercise primary supervision over the trust’s administration and certain eli gible trusts that have elected to be treated as United States persons.  A “Foreign Person” is any person that is not a United States person.  Each Note Owner should consult its tax advisors regarding the tax documentation and certifications that must be provided to secure the exemption from United States withholding taxes.

Any capital gain realized on the sale, redemption, retirement or other taxable disposition of a note by a Foreign Person generally will be exempt from United States federal income and withholding tax, provided that (i) such gain is not effectively connected with the conduct of a trade or business in the United States by the Foreign Person and (ii) in the case of an individual Foreign Person, the Foreign Person is not present in the United States for 183 days or more in the taxable year.

If the interest, gain or income on a note held by a Foreign Person is effectively connected with the conduct of a trade or business in the United States by the Foreign Person (although exempt from the withholding tax previously discussed if the holder provides an appropriate statement establishing that such income is so effectively connected), the holder generally will be subject to United States federal income tax on the interest, gain or income at regular federal income tax rates.  In addition, if the Foreign Person is a foreign corporation, it may be subject to a branch profits tax equal to 30% of its “effectively connected earnings and profits,” within the meaning of the Code, for the taxable year, as adjusted for certain items, unless it qualifies for a lower rate under an applicable tax treaty (as modified by the branch profits tax rules).

Backup Withholding on Notes.  Distributions made on the notes and proceeds from the sale of notes to or through certain brokers may be subject to a “backup” withholding tax on “reportable payments” (including interest accruals, original issue discount, and, under certain circumstances, distributions in reduction of principal amount) if the holder of the notes fails to comply with certain identification procedures, unless the Note Owner is an exempt recipient under applicable provisions of the Code and, if necessary, demonstrates such status.  Any amounts so withheld from distributions on the notes would be refunded by the IRS or allowable as a credit against the Note Owner’s federal income tax.

Reportable Transactions.  Pursuant to recently enacted legislation, a penalty in the amount of $10,000 in the case of a natural person and $50,000 in any other case is imposed on any taxpayer that fails to timely file an information return with the IRS with respect to a “reportable transaction” (as defined in Section 6011 of the Code). The rules defining “reportable transactions” are complex, and include transactions that result in certain losses that exceed threshold amounts. Prospective investors are advised to consult their own tax advisers regarding any possible disclosure obligations in light of their particular circumstances.

State and Local Tax Considerations

The discussion above does not address the tax consequences of purchase, ownership or disposition of notes under any state or local tax laws.  We recommend that investors consult their own tax advisors regarding state and local tax consequences.  In particular, individuals should consider the deductibility of the expenses (including interest expense) of the partnership.

* * *

THE TAX DISCUSSIONS SET FORTH ABOVE ARE INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A NOTE OWNER’S PARTICULAR TAX SITUATION.  PROSPECTIVE PURCHASERS OF NOTES SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF NOTES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL AND FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.

ERISA CONSIDERATIONS

General

A fiduciary of a pension, profit-sharing, retirement or other employee benefit plan subject to Title I of ERISA should consider the fiduciary standards under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) in the context of the plan’s particular circumstances before authorizing an investment of a portion of such plan’s assets in the notes.  Accordingly, pursuant to Section 404 of ERISA, such fiduciary should consider among other factors (i) whether the investment is for the exclusive benefit of plan participants and their beneficiaries; (ii) whether the investment satisfies the applicable diversification requirements; (iii) whether the investment is in accordance with the documents and instruments governing the plan; and (iv) whether the investment is prudent, considering the nature of the investment.  Fiduciaries of plans also should consider ERISA’s prohibition on improper delegation of control over, or responsibility for, plan assets.

In addition, employee benefit plans or other retirement arrangements subject to ERISA, as well as individual retirement accounts, certain types of Keogh plans not subject to ERISA but subject to Section 4975 of the Code, or any entity (including insurance company separate or general accounts) whose underlying assets include plan assets by reason of such plans, arrangements or accounts investing in the entity (each, a “Plan”) are prohibited from engaging in a broad range of transactions involving Plan assets and persons having certain specified relationships to a Plan (“parties in interest” and “disqualified persons”).  Such transactions are treated as “prohibited transactions” under Sections 406 of ERISA and excise taxes and/or other penalties are imposed upon such persons under ERISA and/or Section 4975 of the Code unless an exemption applies.  The depositor, un derwriter of the notes, the servicer, the trustee, the indenture trustee and certain of their affiliates might be considered “parties in interest” or “disqualified persons” with respect to a Plan.  If so, the acquisition, holding or disposition of notes by or on behalf of such Plan could be considered to give rise to a “prohibited transaction” within the meaning of ERISA and the Code unless a statutory, regulatory or administrative exception or exemption is available.

ERISA Considerations Relating to Plan Assets

Plan Assets.  In 29 C.R.F §2510.3-101 (the “Plan Asset Regulations”), the U.S. Department of Labor (“DOL”) has defined what constitutes “plan assets” for purposes of ERISA and Section 4975 of the Code.  The Plan Asset Regulations provide that if a Plan makes an investment in an “equity interest” in an entity, an undivided portion of the assets of the entity will be considered the assets of such Plan unless certain exceptions set forth in such Regulations apply.  As a result, (i) if a Plan is deemed to have acquired an interest in the assets of the owner trust and not merely an interest in the notes, (ii) the fiduciary investment standards of ERISA could apply to such assets and (iii) transactions occurring in the course of managing, operating and servicing the owner trust and its assets might constitute prohibited transactions, unless a statutory, regul atory or administrative exemption applies.

Under the Plan Asset Regulations, the assets of the issuing entity would be treated as “plan assets” of a Plan for the purposes of ERISA and the Code only if the Plan acquires an “equity interest” in the issuing entity and none of the exceptions contained in the Plan Asset Regulations is applicable.  An equity interest is defined under the Plan Asset Regulations as an interest other than an instrument which is treated as indebtedness under applicable local law and which has no substantial equity features.  Assuming that the notes are treated as indebtedness without substantial equity features for purposes of the Plan Asset Regulations, then such notes will be eligible for purchase by Plans.  However, without regard to whether the notes are treated as an “equity interest” for such purposes, the acquisition or holding of notes by or on behalf of a Plan could be consider ed to give rise to a prohibited transaction if the owner trust or any of its affiliates is or becomes a party in interest or disqualified person with respect to such Plan, or in the event that a note is purchased in the secondary market and such purchase constitutes a sale or exchange between a Plan and a party in interest or disqualified person with respect to such Plan.  There can be no assurance that the issuing entity or any of its affiliates will not be or become a party in interest or a disqualified person with respect to a Plan that acquires notes.

Underwriter Exemption

General Discussion.  The DOL has granted to Deutsche Bank Securities Inc. (f/k/a Deutsche Banc Alex. Brown Inc.) an individual exemption, Prohibited Transaction Exemption 94-84, and to Deutsche Morgan Grenfell/C.J. Lawrence Inc., similar approval (FAN 97-03E), which were both amended and restated pursuant to Prohibited Transaction Exemption 2002-41 (“PTE 2002-41”) (collectively, the “Exemption”) which is applicable to asset-backed securities which meet its requirements whenever the Deutsche Bank Securities Inc. or its affiliate is the sole underwriter, manager or co-manager of an underwriting syndicate or is the selling or placement agent.  The Exemption generally exempts certain transactions from the application of certain of the prohibited transaction provisions of ERISA and the Code provided that the conditions set forth in the Exemption are satisfied.  These transactions in clude the servicing, managing and operation of investment trusts holding fixed (generally non-revolving pools) of enumerated categories of assets which include those Contracts which are installment obligations and the purchase, sale and holding of securities which represent beneficial ownership interests in the assets of, or obligations of, such trusts.  The Exemption does not apply to investment trusts whose assets include contracts which are leases, as opposed to installment obligations, although the rights to receive the lease payments may serve as collateral in addition to the equipment.

General Conditions of Exemption.  The Exemption sets forth general conditions which must be satisfied for a transaction relating to assets such as the contracts involving the purchase, sale and holding of asset-backed securities to be eligible for exemptive relief thereunder.  First, the acquisition of such securities by Plans must be on terms that are at least as favorable to the Plan as they would be in an arm’s-length transaction with an unrelated party.  Second, the assets held by the investment trust must be secured.  Third, the securities may not be subordinated.  Fourth, the securities at the time of acquisition by the Plan must be rated in one of the three highest generic rating categories by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., Moody’s Investors Services, Inc. or Fitch, Inc. (each, a “Rating Agency”). &nb sp;Fifth, the owner trustee and the indenture trustee generally cannot be affiliates of any member of the “Restricted Group” other than the underwriter.  The “Restricted Group” consists of any (i) underwriter as defined in the Exemption, (ii) the depositor, (iii) the servicer, (iv) the counterparty of any “interest swap” (as described below) held as an asset of the investment trust and (v) any obligor with respect to contracts constituting more than 5% of the aggregate unamortized principal balance of the contracts held in the investment trust as of the date of initial issuance of the securities.  Sixth, the sum of all payments made to, and retained by, such underwriters must represent not more than reasonable compensation for underwriting the securities; the sum of all payments made to, and retained by, the depositor pursuant to the assignment of the contracts to the related investment trust must represent not more than the fair market value of such contracts; and the sum of all payments made to, and retained by, the servicer must represent not more than reasonable compensation for such person’s services under the Agreement and reimbursement of such person’s reasonable expenses in connection therewith.  Seventh, (i) the investment pool must consist only of assets of the type enumerated in the Exemption and which have been included in other investment pools; (ii) securities evidencing interests in such other investment pools must have been rated in one of the three highest generic rating categories by one of the Rating Agencies for at least one year prior to a Plan’s acquisition of securities; and (iii) securities evidencing interests in such other investment pools must have been purchased by investors other than Plans for at least one year prior to a Plan’s acquisition of securities.  Finally, the investing Plan must be an accredited investor as defined in Rule 501(a)(1) of Regulation D of the Commission under the Securities Act of 1933, as amended.  The depositor assumes that only Plans which are accredited investors under the federal securities laws will be permitted to purchase the securities.

Types of Trusts.  The types of Trusts, permitted under the Exemption include owner-trusts and grantor trusts.  Owner trusts are subject to certain restrictions in their governing documents to ensure that their assets may not be reached by the creditors of the depositor in the event of bankruptcy or other insolvency and must provide certain legal opinions.

Permitted Assets.  The Exemption permits an interest-rate swap agreement and a yield supplement agreement to be assets of an investment trust which issues securities acquired by Plans in an initial offering or in the secondary market.  An interest-rate swap (or if purchased by or on behalf of the investment trust) an interest-rate cap contract (collectively, a “Swap” or “Swap Agreement”) is a permitted trust asset if it:  (a) is an “eligible Swap;” (b) is with an “eligible counterparty;” (c) is purchased by a “qualified plan investor;” (d) meets certain additional specific conditions which depend on whether the Swap is a “ratings dependent Swap” or a “non-ratings dependent Swap” and (e) permits the investment trust to make termination payments to the Swap (other than currently scheduled payments) solely from excess spread or amo unts otherwise payable to the servicer or depositor.

An “eligible Swap” is one which:  (a) is denominated in U.S. dollars; (b) pursuant to which the investment trust pays or receives, on or immediately prior to the respective payment or distribution date for the class of securities to which the Swap relates, a fixed rate of interest or a floating rate of interest based on a publicly available index (e.g., LIBOR or the U.S. Federal Reserve’s Cost of Funds Index (COFI)), with the investment trust receiving such payments on at least a quarterly basis and obligated to make separate payments no more frequently than the counterparty, with all simultaneous payments being netted (“Allowable Interest Rate”); (c) has a notional amount that does not exceed either:  (i) the principal balance of the class of securities to which the Swap relates, or (ii) the portion of the principal balance of such class represented by obligations ( 7;Allowable Notional Amount”); (d) is not leveraged (i.e., payments are based on the applicable notional amount, the day count fractions, the fixed or floating rates permitted above, and the difference between the products thereof, calculated on a one-to-one ratio and not on a multiplier of such difference) (“Leveraged”); (e) has a final termination date that is either the earlier of the date on which the issuer terminates or the related class of securities are fully repaid and (f) does not incorporate any provision which could cause a unilateral alteration in the requirements described in (a) to (d) above.

An “eligible counterparty” means a bank or other financial institution which has a rating at the date of issuance of the securities, which is in one of the three highest long-term credit rating categories or one of the two highest short-term credit rating categories, utilized by at least one of the Rating Agencies rating the securities; provided that, if a counterparty is relying on its short-term rating to establish eligibility hereunder, such counterparty must either have a long-term rating in one of the three highest long-term rating categories or not have a long-term rating from the applicable Rating Agency.

A “qualified plan investor” is a Plan or Plans where the decision to buy such class of securities is made on behalf of the Plan by an independent fiduciary qualified to understand the Swap transaction and the effect the Swap would have on the rating of the securities and such fiduciary is either (a) a “qualified professional asset manager” (“QPAM”) under Prohibited Transaction Class Exemption 84-14 (“PTCE 84-14”) (see below), (b) an “in-house asset manager” under Prohibited Transaction Class Exemption 96-23 (“PTCE 96-23”) (see below) or (c) has total assets (both Plan and non-Plan) under management of at least $100 million at the time the securities are acquired by the Plan.

In “ratings dependent Swaps” (where the rating of a class of securities is dependent on the terms and conditions of the Swap), the Swap Agreement must provide that if the credit rating of the counterparty is withdrawn or reduced by any Rating Agency below a level specified by the Rating Agency, the servicer must, within the period specified under the Pooling and Servicing Agreement:  (a) obtain a replacement Swap Agreement with an eligible counterparty which is acceptable to the Rating Agency and the terms of which are substantially the same as the current Swap Agreement (at which time the earlier Swap Agreement must terminate); or (b) cause the Swap counterparty to establish any collateralization or other arrangement satisfactory to the Rating Agency such that the then current rating by the Rating Agency of the particular class of securities will not be withdrawn or reduced (and the terms of the Swap Agreement must specifically obligate the counterparty to perform these duties for any class of securities with a term of more than one year).  In the event that the servicer fails to meet these obligations, Plan securityholders must be notified in the immediately following periodic report which is provided to certificateholders but in no event later than the end of the second month beginning after the date of such failure.  Sixty days after the receipt of such report, the exemptive relief provided under the Exemption will prospectively cease to be applicable to any class of securities held by a Plan which involves such ratings dependent Swap.

“Non-ratings dependent Swaps” (those where the rating of the securities does not depend on the terms and conditions of the Swap) are subject to the following conditions. If the credit rating of the counterparty is withdrawn or reduced below the lowest level permitted above, the servicer will, within a specified period after such rating withdrawal or reduction: (a) obtain a replacement Swap Agreement with an eligible counterparty, the terms of which are substantially the same as the current Swap Agreement (at which time the earlier Swap Agreement must terminate); (b) cause the counterparty to post collateral with the investment trust in an amount equal to all payments owed by the counterparty if the Swap transaction were terminated; or (c) terminate the Swap Agreement in accordance with its terms.

An “eligible yield supplement agreement” is any yield supplement agreement or similar arrangement (or if purchased by or on behalf of the investment trust) an interest rate cap contract to supplement the interest rates otherwise payable on obligations held by the investment trust (“EYS Agreement”).  If the EYS Agreement has a notional principal amount and/or is written on an International Swaps and Derivatives Association, Inc. (ISDA) form, the EYS Agreement may only be held as an asset of the investment trust if it meets the following conditions:  (a) it is denominated in U.S. dollars; (b) it pays an Allowable Interest Rate; (c) it is not Leveraged; (d) it does not allow any of these three preceding requirements to be unilaterally altered without the consent of the owner and indenture trustee; (e) it is entered into between the investment trust and an eligible counterparty and (f) it has an Allowable Notional Amount.

Limitations on Scope of the Exemption.  If the general conditions of the Exemption are satisfied, the Exemption may provide an exemption from the restrictions imposed by ERISA and the Code in connection with the initial acquisition, transfer or holding, and the acquisition or disposition in the secondary market, of the notes by Plans.  However, no exemption is provided from the restrictions of ERISA for the acquisition or holding of a note on behalf of an “Excluded Plan” by any person who is a fiduciary with respect to the assets of such Excluded Plan.  For those purposes, an Excluded Plan is a Plan sponsored by any member of the Restricted Group.  Exemptive relief may also be provided for the acquisition, holding and disposition of notes by Plans if the fiduciary or its affiliate is the obligor with respect to 5% or less of the fair market value of the contracts in the owner trust provided that:  (i) the Plan is not an Excluded Plan, (ii) each Plan’s investment in each class of notes does not exceed 25% of the outstanding notes in the class, (iii) after the Plan’s acquisition of the notes, no more than 25% of the assets over which the fiduciary has investment authority are invested in securities of a trust containing assets which are sold or serviced by the same entity and (iv) in the case of initial issuance (but not secondary market transactions), at least 50% of each class of securities issued by the owner trust and at least 50% of the aggregate interests in the owner trust are acquired by persons independent of the Restricted Group.

In the event that the Exemption is not applicable to the notes, one or more other prohibited transactions exemptions may be available to Plans purchasing or transferring the notes depending in part upon the type of Plan fiduciary making the decision to acquire the notes and the circumstances under which such decision is made.  These exemptions include, but are not limited to, Prohibited Transaction Class Exemption 90-1 (regarding investments by insurance company pooled separate accounts), Prohibited Transaction Class Exemption 91-38 (regarding investments by bank collective investments funds), PTCE 84-14 (regarding transactions effected by “qualified professional asset managers”), PTCE 95-60 (regarding investments by insurance company general accounts) and PTCE 96-23 (regarding transactions effected by “in-house asset managers”) (collectively, the “Investor-Based Exemptions”).  However, even if the conditions specified in these Investor-Based Exemptions are met, the scope of the relief provided under such Exemptions might or might not cover all acts which might be construed as prohibited transactions.

EACH PROSPECTUS SUPPLEMENT WILL CONTAIN INFORMATION CONCERNING CONSIDERATIONS RELATING TO ERISA AND THE CODE THAT ARE APPLICABLE TO THE RELATED NOTES.  BEFORE PURCHASING NOTES IN RELIANCE ON THE EXEMPTION, THE INVESTOR-BASED EXEMPTIONS OR ANY OTHER EXEMPTION, A FIDUCIARY OF A PLAN SHOULD ITSELF CONFIRM THAT REQUIREMENTS SET FORTH IN SUCH EXEMPTION WOULD BE SATISFIED.

ANY PLAN INVESTOR WHO PROPOSES TO USE “PLAN ASSETS” OF ANY PLAN TO PURCHASE NOTES OF ANY SERIES OR CLASS SHOULD CONSULT WITH ITS COUNSEL WITH RESPECT TO THE POTENTIAL CONSEQUENCES UNDER ERISA AND SECTION 4975 OF THE CODE OF THE ACQUISITION AND OWNERSHIP OF SUCH NOTES.

Governmental plans and church plans as defined in ERISA are not subject to ERISA or Code Section 4975, although they may elect to be qualified under Section 401(a) of the Code and exempt from taxation under Section 501(a) of the Code and would then be subject to the prohibited transaction rules set forth in Section 503 of the Code.  In addition, governmental plans may be subject to federal, state and local laws which are to a material extent similar to the provisions of ERISA or a Code Section 4975 (“Similar Law”).  A fiduciary of a governmental plan should make its own determination as to the propriety of an investment in notes under applicable fiduciary or other investment standards and the need for the availability of any exemptive relief under any Similar Law.

Ratings of the Notes

The issuing entity will not sell notes of a series unless one or more nationally recognized rating agencies rate the notes of that series in a rating category that signifies investment grade.  Any rating that is made may be lowered or withdrawn by the assigning rating agency at any time if, in its judgment, circumstances so warrant.  If a rating or ratings of notes is qualified, reduced or withdrawn, no person or entity will be obligated to provide any additional credit enhancement with respect to the notes so qualified, reduced or withdrawn.

The rating of the notes should be evaluated independently from similar ratings on other types of securities.  A rating is not a recommendation to buy, sell or hold notes, inasmuch as a rating does not comment as to market price or suitability for a particular investor.  The ratings of the notes do not address the likelihood of payment of principal on any class of notes prior to the stated maturity date of the notes, or the possibility of the imposition of United States withholding tax with respect to non-United States persons.

Use of Proceeds

The proceeds from the sale of the notes of each series, after funding a portion of the cash collateral account or other form of credit enhancement for the series and paying the expenses of the sponsor, will be used to pay the purchase price due to the depositor, and any other use specified in the prospectus supplement.

Plan of Distribution

The depositor or the issuing entity may sell notes to or through underwriters at the prices set forth in your prospectus supplement or in negotiated transactions at varying prices, and also may sell notes directly to other purchasers or through agents.  Any series of notes or class within a series offered hereby and by means of the prospectus supplements may be included as Private Contract-Backed Securities in another series of notes offered hereby or as underlying securities in another series of asset-backed securities issued by an affiliate of the depositor or Deutsche Bank Securities Inc. The depositor intends to offer the notes through these various methods from time to time and that offerings may be made concurrently through more than one of these methods or that an offering of a particular series of notes may be made through a combination of these methods.

The underwriters will be obligated to purchase all of the notes described in your prospectus supplement if any such notes are purchased.  The place and time of delivery for your notes will be set forth in your prospectus supplement.

The sponsor, the originators, the depositor and certain of its affiliates may agree to indemnify the underwriters and agents who participate in the distribution of the notes against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or contribute to payments the underwriters may be required to make.

Funds in cash collateral accounts and the trust accounts may, from time to time, be invested in certain investments acquired from the underwriters.

If and to the extent required by applicable law or regulation, this prospectus and your prospectus supplement will also be used by the underwriters after the completion of the offering for market-making transactions in the notes.  Sales will be made at negotiated prices determined at the time of sales.

If and to the extent required by applicable law or regulation, this prospectus and the prospectus supplement will also be used by the underwriter after the completion of the offering in connection with offers and sales related to market-making transactions in the notes in which the underwriter acts as principal. The underwriter may also act as agent in these transactions. Sales will be made at negotiated prices determined at the time of sale.

If any series of notes includes another series or class of notes offered hereby as Private Contract-Backed Securities, the prospectus supplement for such series will identify the underwriters of those Private Contract-Backed Securities as underwriters of such series and will describe the plan of distribution for those Private Contract-Backed Securities.  The prospectus for those Private Contract-Backed Securities will be delivered simultaneously with the delivery of the prospectus relating to the series in which they are included.

Legal Matters

McKee Nelson LLP or other counsel specified in your prospectus supplement will provide a legal opinion relating to the notes in its capacity as special counsel to the sponsor and the underwriters.  Other legal matters for underwriters will be passed upon by counsel to underwriters.

Where You Can Find More Information

The depositor has filed with the Securities and Exchange Commission (the “Commission”) a Registration Statement on Form S-3 (together with all amendments and exhibits to the Registration Statement, the “Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the securities being offered by this prospectus.  This prospectus, which forms a part of the Registration Statement, omits some of the information contained in the Registration Statement pursuant to the rules and regulations of the Commission.  The Registration Statement and the exhibits to the Registration Statement can be inspected and copied at the public reference facilities maintained by the Commission at 100 F Street NE, Washington, D.C. 20549, and at Regional Offices in the following locations:

•

Chicago Regional Office, 175 West Jackson Boulevard, Suite 900, Chicago, Illinois 60604; and

•

New York Regional Office, 3 World Financial Center, Room 4300, New York, New York 10281.

Copies of these materials can also be obtained from the Public Reference Section of the Commission, 100 F Street NE, Washington, D.C. 20549, at prescribed rates.

The Commission also maintains a site on the world wide web at “http://www.sec.gov” at which users can view and download copies of reports, proxy and information statements and other information filed electronically through the Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) system.  The depositor has filed the Registration Statement, including all exhibits to the Registration Statement, through the EDGAR system and therefore these materials should be available by logging onto the Commission’s web site.  The Commission maintains computer terminals providing access to the EDGAR system at each of the offices referred to above.

As to each issuing entity that is no longer required to file reports under the Exchange Act, periodic distribution reports will be posted on the depositor’s website referenced above as soon as practicable.  Annual reports of assessment of compliance with the AB Servicing Criteria, attestation reports, and statements of compliance will be provided to registered holders of the related securities upon request free of charge.  See “Description of the Pooling and Servicing Agreements—Evidence as to Compliance”.

Incorporation of Certain Documents by Reference

All documents subsequently filed by or on behalf of the issuing entity referred to in the prospectus supplement with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of this prospectus and prior to the termination of any offering of the notes issued by that issuing entity will be deemed to be incorporated by reference in this prospectus and to be a part of this prospectus from the date of the filing of those documents. Any statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus will be deemed to be modified or superseded for all purposes of this prospectus to the extent that a statement contained in this prospectus (or in the prospectus supplement) or in any other subsequently filed document that also is or is deemed to be incorporated by reference modifies or replaces that statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.  All documents subsequently filed by the depositor pursuant to Sections 13(a) or 15(d) of the Exchange Act in respect of any offering prior to the termination of the offering of the offered securities shall also be deemed incorporated by reference into this prospectus and the related prospectus supplement.  

The owner trustee and/or indenture trustee on behalf of any issuing entity will provide without charge to each person to whom this prospectus is delivered, upon request, a copy of any or all of the documents referred to above that have been or may be incorporated by reference in this prospectus (not including exhibits to the information that is incorporated by reference unless the exhibits are specifically incorporated by reference into the information that this prospectus incorporates).  Requests for information should be directed to the corporate trust office of the owner trustee and/or indenture trustee specified in the prospectus supplement.

Index of Terms

Collection Account

35

Distribution Account

35

DTC

36

ERISA

64

excluded residual investment

24

guaranteed residual investment

24

Material modification

32

PTCE

65

Qualified institution

35

true lease

9

Trust Account

35

<R>PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14.  Other Expenses of Issuance and Distribution.

The estimated expenses expected to be incurred by the Registrant in connection with the issuance and distribution of the securities being registered, other than underwriting compensation, are as follows:

SEC Registration Fee	$   61,400
Trustee’s Fees and Expenses (including counsel fees)	90,000
Printing and Engraving Costs	250,000
Rating Agency Fees	400,000
Legal Fees and Expenses	350,000
Blue Sky Fees and Expenses	60,000
Accounting Fees and Expenses	200,000
Miscellaneous	40,000
Total	$1,451,400

Item 15. Indemnification of Directors and Officers.

Section 145 of the Delaware General Corporation Law provides that a Delaware corporation may indemnify any persons, including officers and directors, who are made, or are threatened to be made, parties to any threatened, pending or completed legal action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person is or was an officer or director of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise.  The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such officer or director acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation’s best interests and, for criminal proceedings, had no reasonable cause to believe that his conduct was illegal.  A Delaware corporation may indemnify officers and directors in an action by or in the right of the corporation under the same conditions, except that no indemnification is permitted without judicial approval if the officer or director is adjudged to be liable to the corporation.  Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses which such officer or director actually and reasonably incurred.

The By-laws of the Registrant provide for indemnification of officers and directors to the full extent permitted by the Delaware General Corporation Law.

The transaction documents for each series of Securities will provide either that the Registrant and the partners, directors, officers, employees and agents of the Registrant, or that the Servicer or Master Servicer and the partners, directors, officers, employees and agents of the Servicer or Master Servicer, will be entitled to indemnification by the applicable Trust and will be held harmless against any loss, liability or expense incurred in connection with any legal action relating to the transaction documents, other than any loss, liability or expense incurred by reason of willful misfeasance, bad faith or gross negligence in the performance of his or its duties thereunder or by reason of reckless disregard of his or its obligations and duties thereunder.

The Underwriting Agreement for each series of Securities will generally provide that each underwriter will indemnify the Registrant, each of its directors, each of its officers who signs the Registration Statement, and each person who controls the Registrant within the meaning of either the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, against claims, damages, or liability, to which the Registrant may become subject, under the Securities Act or the Exchange Act, or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of material fact furnished by the underwriter for the preparation of a prospectus, or included in any computational materials, term sheets or similar documents delivered to prospective investors by the underwriter (other than any such untrue statement that is based on material s previously provided to the underwriter by the Registrant).

Item 16. Exhibits.

1.1

Form of Underwriting Agreement. †

3.1.1

Certificate of Incorporation of ACE Securities Corp. **

3.1.2

By-Laws of ACE Securities Corp. **

4.1.1

Form of Indenture (Owner Trust, Auto Receivables, Boat Receivables and Auto/Boat Receivables). ††

4.1.2

Form of Indenture between the Trust and the Indenture Trustee (Owner Trust).††

4.2.1

Form of Pooling and Servicing Agreement (Equipment).

4.3.1

Form of Trust Agreement (Owner Trust, Auto Receivables, Boat Receivables and Auto/Boat Receivables) ††

4.3.2

Form of Trust Agreement among the Depositor, the Seller and the Trustee (Owner Trust, Equipment Securities). ††

5.1.1

Opinion of McKee Nelson LLP as to securities offered.

8.1.1

Opinion of McKee Nelson LLP with respect to tax matters.

10.1.1

Form of Loan Contribution Agreement (Auto Receivables, Boat Receivables and Auto/Boat Receivables). ††

10.1.2

Form of Sale and Servicing Agreement (Owner Trust, Auto Receivables, Boat

Receivables and Auto/Boat Receivables).

23.1.1

Consent of McKee Nelson LLP (included in Exhibits 5.1.1 and 8.1.1).

24.1

Powers of Attorney of directors and officers of ACE Securities Corp. (included in the signature pages to this Registration Statement). *

25.1

Statement of Eligibility and Qualification of Indenture Trustee.***

________________________

†

Incorporated herein by reference to the Registrant’s Registration Statement on Form S-3 (Reg. No. 333-56213).

††

Incorporated herein by reference to the Registrant’s Registration Statement on Form S-3 (Reg. No. 333-45458).

*

Previously filed.

**

Incorporated herein by reference to the Registrant’s Registration Statement on Form S-3 (Reg. No. 333-100164).

***

To be filed following the effectiveness of the Registration Statement.

Item 17. Undertakings

A.  Undertaking in respect of Rule 415 offering.

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

(i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement.  Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change of such information in the Registration Statement;

provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply if the information required to be included in the post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, that are incorporated by reference in the Registration Statement or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of this Registration Statement;

provided further, however, that that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply if the information required to be included in a post-effective amendment is provided pursuant to Item 1100(c) of Regulation AB.

(2)  That, for the purpose of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)  To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4)  That for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

If the registrant is relying on Rule 430B:

(A)

Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of this Registration Statement as of the date the filed prospectus was deemed part of and included in this Registration Statement; and

(B)

Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a Registration Statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in this Registration Statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of this Registration Statement relating to the securities in this Registration Statement to which that prospectus relates, and the offering of such securiti es at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a Registration Statement or prospectus that is part of this Registration Statement or made in a document incorporated or deemed incorporated by reference into this Registration Statement or prospectus that is part of this Registration Statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in this Registration Statement or prospectus that was part of this Registration Statement or made in any such document immediately prior to such effective date.

(5)

That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this Registration Statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i)

Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii)

Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii)

The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv)

Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

B.  Undertaking in respect of filings incorporating subsequent Exchange Act documents by reference.

The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

The undersigned Registrant hereby undertakes to provide to the Underwriter at the closing specified in the Underwriting Agreements Notes and Certificates in the denominations and registered in the names as required by the Underwriter to permit prompt delivery to each purchaser.

C.  Undertaking in respect of indemnification.

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is, therefore, unenforceable.  In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933, as amended, and will be governed by the final adjudication of such issue.

D.  Undertakings for registration statement permitted by Rule 430A.

The undersigned Registrant hereby undertakes that:

(1)  For purposes of determining any liability under the Securities Act of 1933, as amended, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in the form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933, as amended, shall be deemed to be part of this Registration Statement as of the time it was declared effective; and

(2)  For the purpose of determining any liability under the Securities Act of 1933, as amended, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

E.  Undertaking in respect of qualification of Indentures under the Trust Indenture Act of 1939.

The Registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act of 1939 in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Trust Indenture Act of 1939.

F.  Undertaking in respect of filings regarding asset-backed securities incorporating by reference subsequent Exchange Act documents by third parties.

The Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 of a third party that is incorporated by reference in the registration statement in accordance with Item 1100(c)(1) of Regulation AB shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

G.  Undertaking in respect of filings regarding asset-backed securities that provide certain information through an Internet web site.

The Registrant hereby undertakes that, except as otherwise provided by Item 1105 of Regulation AB, information provided in response to that Item pursuant to Rule 312 of Regulation S-T through the specified Internet address in the prospectus is deemed to be a part of the prospectus included in the registration statement.  In addition, the Registrant hereby undertakes to provide to any person without charge, upon request, a copy of the information provided in response to Item 1105 of Regulation AB pursuant to Rule 312 of Regulation S-T through the specified Internet address as of the date of the prospectus included in this Registration Statement if a subsequent update or change is made to the information.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3/A and has duly caused this Amendment No. 2 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Charlotte, North Carolina on the 22nd day of February 2007.

ACE SECURITIES CORP.

By: /s/ Evelyn Echevarria

Name:  Evelyn Echevarria

Title:  Director

Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment No. 2 to the Registration Statement has been signed by the following persons in the capacities indicated.

Signature	Title	Date
_______*_________ Douglas K. Johnson	President and Director (Principal Executive Officer)	February 22, 2007
_______*_________ Evelyn Echevarria	Director and Secretary	February 22, 2007
_______*_________ Juliana C. Johnson	Treasurer and Director (Principal Financial and Accounting Officer)	February 22, 2007

By: /s/ Evelyn Echevarria

Name:  Evelyn Echevarria

Title:  Director

*

Evelyn Echevarria by signing her name hereto, does sign this document on behalf of each of the persons identified above for whom she is attorney-in-fact pursuant to power of attorney duly executed by such person and previously filed.

EXHIBIT INDEX

1.1

Form of Underwriting Agreement. †

3.1.1

Certificate of Incorporation of ACE Securities Corp. **

3.1.2

By-Laws of ACE Securities Corp. **

4.1.1

Form of Indenture (Owner Trust, Auto Receivables, Boat Receivables and Auto/Boat Receivables). ††

4.1.2

Form of Indenture between the Trust and the Indenture Trustee (Owner Trust).††

4.2.1

Form of Pooling and Servicing Agreement (Equipment).

4.3.1

Form of Trust Agreement (Owner Trust, Auto Receivables, Boat Receivables and Auto/Boat Receivables) ††

4.3.2

Form of Trust Agreement among the Depositor, the Seller and the Trustee (Owner Trust, Equipment Securities). ††

5.1.1

Opinion of McKee Nelson LLP as to securities offered.

8.1.1

Opinion of McKee Nelson LLP with respect to tax matters.

10.1.1

Form of Loan Contribution Agreement (Auto Receivables, Boat Receivables and Auto/Boat Receivables). ††

10.1.2

Form of Sale and Servicing Agreement (Owner Trust, Auto Receivables, Boat

Receivables and Auto/Boat Receivables).

23.1.1

Consent of McKee Nelson LLP (included in Exhibits 5.1.1 and 8.1.1).

24.1

Powers of Attorney of directors and officers of ACE Securities Corp. (included in the signature pages to this Registration Statement). *

25.1

Statement of Eligibility and Qualification of Indenture Trustee.***

________________________

†

Incorporated herein by reference to the Registrant’s Registration Statement on Form S-3 (Reg. No. 333-56213).

††

Incorporated herein by reference to the Registrant’s Registration Statement on Form S-3 (Reg. No. 333-45458).

*

Previously filed.

**

Incorporated herein by reference to the Registrant’s Registration Statement on Form S-3 (Reg. No. 333-100164).

***

To be filed following the effectiveness of the Registration Statement.</R>

EX-4.2.1

Exhibit 4.2.1

FORM OF POOLING AND SERVICING AGREEMENT

among

ACE Securities Corp. [                            ]

Issuing Enity,

[                            ],

as Depositor, and

[                            ],

in its individual capacity, and as Servicer

Dated as of [       ], 200[  ]

TABLE OF CONTENTS

Page

ARTICLE I

DEFINITIONS

1

Section 1.01

Definitions

1

Section 1.02

Usage of Terms

36

Section 1.03

Section References

36

Section 1.04

Accounting Terms

37

ARTICLE II

FUNDINGS OF TRUST; TRANSFERS OF CONTRACTS

37

Section 2.01

Creation and Funding of Trust; Transfer of Transferred Assets

to Trust

37

Section 2.02

Acceptance by Trust

38

Section 2.03

Conveyance of Substitute Contracts

38

Section 2.04

Release of Excluded Amounts

40

Section 2.05

Waiver

40

ARTICLE III

REPRESENTATIONS AND WARRANTIES

41

Section 3.01

Representations and Warranties of [_________]

41

Section 3.02

Representations and Warranties of the Depositor

41

Section 3.03

Representations and Warranties of the Servicer

44

ARTICLE IV

PERFECTION OF TRANSFERS AND PROTECTION OF

SECURITY INTERESTS

46

Section 4.01

Custody of Contracts

46

Section 4.02

Filings

47

Section 4.03

Name Change or Relocation

47

ARTICLE V

SERVICING OF CONTRACTS

48

Section 5.01

Initial Servicer’s Appointment and Acceptance; Responsibility

for Contract Administration

48

Section 5.02

General Duties

48

Section 5.03

Assignment or Replacement

49

Section 5.04

Disposition Upon Termination of Contract

49

Section 5.05

Subservicers

49

Section 5.06

Further Assurance

49

Section 5.07

Notice to Obligors

49

Section 5.08

Collection Efforts; Modification of Contracts

50

Section 5.09

Prepayments of Certain Contracts

51

Section 5.10

Certain Extensions; Acceleration

51

Section 5.11

Taxes and Other Amounts

51

Section 5.12

Suits by Servicer

51

Section 5.13

Remittances

52

Section 5.14

Servicer Advances

52

Section 5.15

Realization Upon Liquidated Contract

52

Section 5.16

Maintenance of Insurance Policies

52

Section 5.17

Certain Other Duties With Respect to Trust

52

Section 5.18

Servicing Compensation

53

Section 5.19

Payment of Certain Expenses by Servicer

53

Section 5.20

Records

53

Section 5.21

Inspection

53

Section 5.22

Trust To Cooperate in Releases

54

Section 5.23

Separate Entity Existence

54

Section 5.24

Assignment of Servicing

54

Section 5.25

Optional Repurchase of Defaulted Contracts

54

ARTICLE VI

COVENANTS OF THE DEPOSITOR

55

Section 6.01

LLC Existence

55

Section 6.02

Contracts Not to be Evidenced by Promissory Notes

55

Section 6.03

Security Interests

55

Section 6.04

Delivery of Collections

55

Section 6.05

Regulatory Filings

55

Section 6.06

Compliance With Law

55

Section 6.07

Activities

55

Section 6.08

Indebtedness

56

Section 6.09

Guarantees

56

Section 6.10

Investments

56

Section 6.11

Merger; Transfers

56

Section 6.12

Payments

56

Section 6.13

Other Agreements

56

Section 6.14

Separate Entity Existence

57

Section 6.15

Location; Records

58

Section 6.16

Liability of Depositor; Indemnities

58

Section 6.17

Bankruptcy Limitations

60

Section 6.18

Limitation on Liability of Depositor and Others

60

ARTICLE VII

ESTABLISHMENT OF ACCOUNTS; PAYMENTS

60

Section 7.01

Trust Accounts; Collections

60

Section 7.02

Reserve Account

62

Section 7.03

Trust Account Procedures

63

Section 7.04

Securityholder Payments

63

Section 7.05

Allocations and Payments

63

Section 7.06

Repurchases of, or Substitution for, Contracts for Breach of

Representations and Warranties

66

Section 7.07

Reassignment of Repurchased or Substituted Contracts

66

Section 7.08

The Servicer’s Purchase Option

67

ARTICLE VIII

SERVICER DEFAULTS; SERVICING TRANSFER

67

Section 8.01

Servicer Default

67

Section 8.02

Servicing Transfer

68

Section 8.03

Appointment of Successor Servicer; Reconveyance; Successor

Servicer to Act

69

Section 8.04

Notifications to Noteholders and the Equity Certificateholders

70

Section 8.05

Effect of Transfer

70

Section 8.06

Database File

71

Section 8.07

Successor Servicer Indemnification

71

Section 8.08

Responsibilities of the Successor Servicer

71

Section 8.09

Servicer Not to Resign

72

ARTICLE IX

SERVICER REPORTING

72

Section 9.01

Monthly Servicer’s Reports

72

Section 9.02

Officer’s Certificate

72

Section 9.03

Other Data

72

Section 9.04

Annual Reporting; Evidence as to Compliance

73

Section 9.05

Annual Statement of Compliance from Servicer

73

Section 9.06

Reports to the Commission

73

ARTICLE X

TERMINATION

74

Section 10.01

  Sale of Trust Assets

74

ARTICLE XI

MISCELLANEOUS

74

Section 11.01

Amendments

74

Section 11.02

Governing Law

76

Section 11.03

Notices

76

Section 11.04

Severability of Provisions

78

Section 11.05

Third Party Beneficiaries

78

Section 11.06

Counterparts

78

Section 11.07

Headings

78

Section 11.08

No Bankruptcy Petition; Disclaimer and Subordination

78

Section 11.09

Jurisdiction

80

Section 11.10

Servicer Indemnity

80

Section 11.11

Limitation of Liability of Owner Trustee

80

Section 11.12

WAIVER OF JURY TRIAL

80

EXHIBITS

Exhibit A

Form of [__] Assignment

Exhibit B

Initial Schedule of Contracts

Exhibit C

Form of Monthly Servicer’s Report

Exhibit D

Form of Substitution Transfer Agreement

Exhibit E

Schedule of Representations and Warranties

Exhibit F

Minimum Value Filing Exceptions

[Exhibit [C-1]

Form of Initial Certification of Custodian]

[Exhibit [C-2]

Form of Final Certification of Custodian]

Exhibit [D]

Form of Power of Attorney

Exhibit [E-1]

Form of Assessment of Compliance

[Exhibit [E-2]

Form of Custodian’s Assessment of Compliance]

Exhibit [F]

Form 10-D Disclosure

Exhibit [G]

Form 10-K Disclosure

Exhibit [H]

Form 8-K Disclosure

Exhibit [I]

Additional Disclosure Notification

Exhibit [J]

Form of Annual Notification

Exhibit [K]

Relevant Servicing Criteria

Schedule 1

Mortgage Loan Schedule

Schedule 2

[Prepayment Charge Schedule]

Schedule 3

[Reserved.]

This Pooling and Servicing Agreement, is dated and effective as of [_____________], 200[__], among ACE SECURITIES CORP., as Depositor, [_________________], as Servicer, [_________________], as Master Servicer and Securities Administrator and [_________________], as Trustee.

WHEREAS the Depositor desires to fund the Trust by selling, conveying and assigning from time to time, pursuant hereto or pursuant to Substitution Transfer Agreements hereunder, designated Contracts or pools of Contracts together with certain related security therefor and other related rights and property as further described herein, which Contracts were originated by one or more Financing Originators, or acquired by purchase and assignment by a Financing Originator from the prior owner thereof, and subsequently conveyed (i) by the Financing Originators to [_____________]; (ii) by [_____________] to the Depositor, with respect to Contracts and related assets acquired by [_____________] from Financing Originators as described in clause (i) above; (iii) in the case of the [_____________], by the Depositor to the [_____________] (as defined herein); and (iv) in the case of the [_____________] warehoused i n the [_____________], by the [_____________] back to the Depositor;

WHEREAS the Trust is willing to purchase and accept assignment of such Contracts and related assets; and

WHEREAS the Servicer is willing to service such Contracts and related assets for the benefit and account of the Trust and the Holders pursuant to the terms hereof.

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

ARTICLE I

DEFINITIONS

Section 1.01

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

“Accounting Date” means, with respect to a Payment Date, the last day of the preceding calendar month.

“Accountant’s Report” has the meaning specified in Section 9.04.

“Accrual Period” means, with respect to any Payment Date, with respect to the Class [__] Notes, the period from and including the immediately preceding Payment Date to but excluding such Payment Date (or, in the case of the initial Accrual Period, from and including the Closing Date to but excluding the first Payment Date following the Closing Date), and with respect to each other Class of Notes, the period from and including the 20th day of the immediately preceding calendar month to but excluding the 20th day of the related calendar month, provided, that in each case, the initial Accrual Period following the Closing Date shall be the period from and including the Closing Date to but excluding [___________] 20[  ].

“ACE Assignment” means the Release and Assignment instrument dated the Closing Date, substantially in the form attached hereto as Exhibit A, executed by the ACE Trust conveying, assigning and releasing the ACE Contract Assets to the Depositor.

“ACE Contract Assets” means the Contract Assets pertaining to the ACE Contracts.

“ACE Contracts” means Contracts conveyed by the ACE Trust to the Depositor pursuant to the ACE Assignment, as listed in the Schedule of Contracts attached to the ACE Assignment.

“ACE Conveyancing Agreement” means the Amended and Restated Conveyancing Agreement dated as of [_________] 20[  ], among the [__________] and [_________], as the same has been or may be amended, supplemented, restated or otherwise modified from time to time.

“ACE Pooling Agreement” means the Amended and Restated Pooling and Servicing Agreement dated as of [_________] 20[  ], by and among the ACE Trust, the Depositor and [_________], as the same has been or may be amended, supplemented, restated or otherwise modified from time to time.

“ACE Purchase Agreement” means the Amended and Restated Sale and Contribution Agreement dated as of [________] 200[  ], by and among [_________], [_________], and the Depositor, as the same has been or may be amended, supplemented, restated or otherwise modified from time to time.

“ACE Trust” means the ACE Equipment Trust – ACE Series created and existing pursuant to the Trust Agreement dated as of [________] 200[  ], by and between the Depositor and [_________], as owner trustee, as the same has been or may be amended, supplemented, restated or otherwise modified from time to time.

 “Addition Notice” means, with respect to any transfer of Subsequent Contracts to the Trust pursuant to Section 2.03 (and the Depositor’s corresponding prior purchase of such Contracts from [_________]), a notice, which shall be given at least five days prior to the related Subsequent Transfer Date, identifying the Subsequent Contracts to be transferred, the Contract Principal Balance of such Subsequent Contracts and the related Substitution Event (with respect to an identified Contract or Contracts then in the Contract Pool) to which such Subsequent Contract relates, with such notice to be signed both by the Depositor and [_____________].

“Administration Agreement” means the Administration Agreement dated as of [_____________], 20[  ] (as amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms thereof) by and among the Trust, [_____________], the Depositor and the Indenture Trustee.

“Administrator” shall be the party named as such under the Administration Agreement.

“Affiliate” of any specified Person means 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” or “controlled” have meanings correlative to the foregoing.

“Aggregate Principal Amount” means, with respect to any group of Notes of any Class, at any date of determination, the sum of the Principal Amounts of such Notes on such date of determination.

“Agreement” means this Pooling and Servicing Agreement, as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms hereof.

“Allocation Criteria” means, with respect to the allocation of Insurance Proceeds or Liquidation Proceeds between the Trust (for inclusion as Collections) and the Depositor, as contemplated in the definition of Available Funds, that Insurance Proceeds or Liquidation Proceeds with respect to the Contracts consisting of Leases are allocable pro rata between inclusion as Available Funds in respect of the Contract Pool, on the one hand, and directly to the Depositor, on the other, based upon (i) for allocation to Available Funds, the Required Payoff Amount for such Lease (determined as of the last day of the Collection Period during which such Lease became a Liquidated Contract), and (ii) for allocation to the Depositor, the Book Value of the related Equipment; provided, that in the event the Insurance Proceeds or Liquidation Proceeds in respect of a particular Lease exceed the sum of such Required Payoff Amount for such Lease plus the Book Value of the related Equipment, any such excess shall be allocated solely to the Depositor.

“Applicable Security” means, with respect to a Vendor Loan, any (i) Secondary Contract securing such Vendor Loan and (ii) Equipment securing such Vendor Loan or a related Secondary Contract.

“Available Funds” means, as to any Payment Date, the sum of (i) the Related Collection Period Collections for such Payment Date, (ii) any Servicer Advances on deposit in the Collection Account as of the immediately preceding Deposit Date and (iii) to the extent necessary to pay interest, amounts of the type described in clause (i) above that the Trust received after the end of the related Collection Period; provided, however, that Available Funds shall not include any amount allocable to the Depositor as representing Excluded Residual Investments.

“Available Reserve Amount” means, with respect to a Payment Date, the amount of funds equal to the lesser of (i) the amount on deposit in the Reserve Account (determined (a) exclusive of any Investment Earnings thereon and (b) before giving effect to any deposit to be made or withdrawals from the Reserve Account with respect to such Payment Date), and (ii) the Specified Reserve Account Balance.

“Bankruptcy Code” means The United States Bankruptcy Code, Title 11 et seq., of the United States Code, as amended from time to time.

“Book Value” means, with respect to any Equipment subject to a Lease, the value of such Equipment as shown on the accounting books and records of the applicable Financing Originator (or the Depositor, in the case of Equipment relating to Contracts being transferred pursuant to the ACE Assignment), as of the Cut-Off Date for the related Lease (it being understood that Book Value constitutes a measure of the lessor’s residual interest in the Equipment as shown on its books and records as of such date, net of the financial asset shown on such books and records represented by the discounted Scheduled Payments owing on the Lease).

“Business Day” means any day which is neither a Saturday or a Sunday, nor another day on which banking institutions in the states of New Jersey, New York or Texas are authorized or obligated by law, executive order, or governmental decree to be closed.

“Casualty Loss” means, with respect to any item of Equipment, the loss, theft, damage beyond repair or governmental condemnation or seizure of such item of Equipment.

“Certificate of Formation” means the limited liability company Certificate of Formation of the Depositor.

“Certificate of Trust” has the meaning given such term in the Trust Agreement.  

“Certificate Register” has the meaning specified in the Trust Agreement.

“Class” means any of the group of Notes, or the Equity Certificate identified herein as the Class [__] Notes, the Class [__] Notes, the Class [__] Notes, the Class [__] Notes, the Class [__] Notes, the Class C Notes and the Class D Notes or the Equity Certificate, as applicable.

“Class [__] Notes” means the Class [__] Notes, the Class [__] Notes, the Class [__] Notes and the Class [__] Notes.

“Class [__] Percentage” means [__]%.

“Class [__] Principal Payment Amount” means: (a) with respect to any Payment Date on or prior to the Payment Date on which the Principal Amount of the Class [__] Notes has been reduced to zero, the greater of (i) the excess, if any, of (1) the Principal Amount of the Class [__] Notes over (2) the Class [__] Scheduled Principal Balance and (ii) the excess, of (1) the sum of the Principal Amount of the Class [__], Class [__], Class [__] and Class [__] Notes over (2) the Class [__] Target Principal Amount; and (b) with respect to any Payment Date thereafter, the excess of (i) the sum of the Principal Amount of the Class [__], Class [__] and Class [__] Notes over (ii) the Class [__] Target Principal Amount.

“Class [__] Target Principal Amount” means, with respect to any Payment Date, the product of (i) the Class [__] Percentage and (ii) the Contract Pool Principal Balance as of the related Accounting Date.

“Class [__] Interest Carryover Shortfall” means, with respect to any Payment Date, the excess, if any, of the Class [__] Interest Payment Amount for the preceding Payment Date over the amount that was actually paid in respect of interest on the Class [__] Notes on such preceding Payment Date, plus, to the extent permitted by law, an amount equal to the product of (i) the Class [__] Interest Rate, (ii) such excess, and (iii) a fraction equal to the number of days in the related Accrual Period divided by 360.

“Class [__] Interest Payment Amount” means, with respect to any Payment Date, the sum of the Class [__] Monthly Interest Payment Amount and the Class [__] Interest Carryover Shortfall for such Payment Date.

“Class [__] Interest Rate” means [__]% per annum.

“Class [__] Maturity Date” means [________], 20[  ] (or, if such day is not a Business Day, the next succeeding Business Day).

“Class [__] Monthly Interest Payment Amount” means (a) with respect to the first Accrual Period and the related Payment Date, an amount equal to the product of (i) the Class [__] Interest Rate, (ii) the Initial Class [__] Principal Amount, and (iii) a fraction equal to the number of days in such Accrual Period divided by 360, and (b) with respect to each subsequent Accrual Period and the related Payment Date, an amount equal to the product of (i) the Class [__] Interest Rate, (ii) the Principal Amount of the Class [__] Notes on the immediately preceding Payment Date, after giving effect to all payments of principal to Class [__] Noteholders on or prior to such immediately preceding Payment Date, and (iii) a fraction equal to the number of days in such Accrual Period divided by 360.

“Class [__] Notes” means the [__]% Class [__] Receivable-Backed Notes in the Aggregate Principal Amount of $[__], issued pursuant to the Indenture.

“Class [__] Scheduled Principal Balance” means, with respect to each Payment Date, the balance for such Payment Date as set forth in the following table.

Payment Date	Class [__] Scheduled Principal Balance
[__]	[__]
[__]	[__]
[__]	[__]
[__]	[__]
[__]	[__]
[__]	[__]
[__]	[__]
[__]	[__]
[__]	[__]
[__]	[__]
[__]	[__]

“Class [__] Interest Carryover Shortfall” means, with respect to any Payment Date, the excess, if any, of the Class [__] Interest Payment Amount for the preceding Payment Date over the amount that was actually paid in respect of interest on the Class [__] Notes on such preceding Payment Date, plus, to the extent permitted by law, an amount equal to the product of (i) the Class [__] Interest Rate, (ii) such excess, and (iii) a fraction equal to one-twelfth.

“Class [__] Interest Payment Amount” means, with respect to any Payment Date, the sum of the Class [__] Monthly Interest Payment Amount and the Class [__] Interest Carryover Shortfall for such Payment Date.

“Class [__] Interest Rate” means [__]% per annum.

“Class [__] Maturity Date” means, [_________], 20[  ] (or, if such day is not a Business Day, the next succeeding Business Day thereafter).

“Class [__] Monthly Interest Payment Amount” means (a) with respect to the first Accrual Period and the related Payment Date, an amount equal to the product of (i) the Class [__] Interest Rate, (ii) the Initial Class [__] Principal Amount, and (iii) a fraction equal to the number of days in such Accrual Period divided by 360, and (b) with respect to each subsequent Accrual Period and the related Payment Date, an amount equal to the product of (i) the Class [__] Interest Rate, (ii) the Principal Amount of the Class [__] Notes on the immediately preceding Payment Date, after giving effect to all payments of principal to Class [__] Noteholders on or prior to such immediately preceding Payment Date, and (iii) a fraction equal to the number of days in such accrual period divided by 360.

“Class [__] Notes” means the [__]% Class [__] Receivable-Backed Notes in the Aggregate Principal Amount of $[__], issued pursuant to the Indenture.

“Class [__] Interest Carryover Shortfall” means, with respect to any Payment Date, the excess, if any, of the Class [__] Interest Payment Amount for the preceding Payment Date over the amount that was actually paid in respect of interest on the Class [__] Notes on such preceding Payment Date, plus, to the extent permitted by law, an amount equal to the product of (i) the Class [__] Interest Rate, (ii) such excess, and (iii) a fraction equal to one-twelfth.

“Class [__] Interest Payment Amount” means, with respect to any Payment Date, the sum of the Class [__] Monthly Interest Payment Amount and the Class [__] Interest Carryover Shortfall for such Payment Date.

“Class [__] Interest Rate” means [__]% per annum.

“Class [__] Maturity Date” means [_________], 200[  ] (or, if such day is not a Business Day, the next succeeding Business Day thereafter).

“Class [__] Monthly Interest Payment Amount” means (a) with respect to the first Accrual Period and the related Payment Date, an amount equal to the product of (i) the Class [__] Interest Rate, (ii) the Initial Class [__] Principal Amount, and (iii) a fraction equal to the number of days in such Accrual Period divided by 360, and (b) with respect to each subsequent Accrual Period and the related Payment Date, an amount equal to the product of (i) the Class [__] Interest Rate, (ii) the Principal Amount of the Class [__] Notes on the immediately preceding Payment Date, after giving effect to all payments of principal to Class [__] Noteholders on or prior to such immediately preceding Payment Date, and (iii) a fraction equal to [the number of days in such Accrual Period divided by 360].

“Class [__] Notes” means the [__]% Class [__] Receivable-Backed Notes in the Aggregate Principal Amount of $[__], issued pursuant to the Indenture.

“Class [__] Interest Carryover Shortfall” means, with respect to any Payment Date, the excess, if any, of the Class [__] Interest Payment Amount for the preceding Payment Date over the amount that was actually paid in respect of interest on the Class [__] Notes on such preceding Payment Date, plus, to the extent permitted by law, an amount equal to the product of (i) the Class [__] Interest Rate, (ii) such excess, and (iii) a fraction equal to one-twelfth.

“Class [__] Interest Payment Amount” means, with respect to any Payment Date, the sum of the Class [__] Monthly Interest Payment Amount and the Class [__] Interest Carryover Shortfall for such Payment Date.

“Class [__] Interest Rate” means [__]% per annum.

“Class [__] Maturity Date” means [__________], 20[ ] or, if such day is not a Business Day, the next succeeding Business Day thereafter).

“Class [__] Monthly Interest Payment Amount” means (a) with respect to the first Accrual Period and the related Payment Date, an amount equal to the product of (i) the Class [__] Interest Rate, (ii) the Initial Class [__] Principal Amount, and (iii) a fraction equal to the number of days in such Accrual Period divided by 360, (b) with respect to each subsequent Accrual Period and the related Payment Date, an amount equal to the product of (i) the Class [__] Interest Rate, (ii) the Principal Amount of the Class [__] Notes on the immediately preceding Payment Date, after giving effect to all payments of principal to Class [__] Noteholders on or prior to such immediately preceding Payment Date.

“Class [__] Notes” means the [__]% Class [__] Receivable-Backed Notes in the Aggregate Principal Amount of $[__], issued pursuant to the Indenture.

“Class [__] Floor” means, with respect to any Payment Date, an amount equal to (i) [__]% of the Initial Contract Pool Principal Balance, plus (ii) the Unfunded Loss Amount, if any, for such Payment Date, minus (iii) the sum of the Principal Amount of the Class C Notes and the Principal Amount of the Class D Notes (prior to giving effect to any payments of principal on the Class C Notes or the Class D Notes on such Payment Date) and the amount on deposit in the Reserve Account (after giving effect to withdrawals and releases to be made on such Payment Date); provided, however, that in no event will the Class [__] Floor be greater than the Principal Amount of the Class [__] Notes immediately prior to such Payment Date or less than zero.

“Class [__] Interest Carryover Shortfall” means, with respect to any Payment Date, the excess, if any, of the Class [__] Interest Payment Amount for the preceding Payment Date over the amount that was actually paid in respect of interest on the Class [__] Notes on such preceding Payment Date, plus, to the extent permitted by law, an amount equal to the product of (i) the Class [__] Interest Rate, (ii) such excess, and (iii) a fraction equal to one-twelfth.

“Class [__] Interest Payment Amount” means, with respect to any Payment Date, the sum of the Class [__] Monthly Interest Payment Amount and the Class [__] Interest Carryover Shortfall for such Payment Date.

“Class [__] Interest Rate” means [__]% per annum.

“Class [__] Maturity Date” means [_________], 20[  ] or, if such day is not a Business Day, the next succeeding Business Day thereafter).

“Class [__] Monthly Interest Payment Amount” means (a) with respect to the first Accrual Period and the related Payment Date, an amount equal to the product of (i) the Class [__] Interest Rate, (ii) the Initial Class [__] Principal Amount, and (iii) a fraction equal to the number of days in such Accrual Period divided by 360, and (b) with respect to each subsequent Accrual Period and the related Payment Date, an amount equal to the product of (i) the Class [__] Interest Rate, (ii) the Principal Amount of the Class [__] Notes on the immediately preceding Payment Date, after giving effect to all payments of principal to Class [__] Noteholders on or prior to such immediately preceding Payment Date, and (iii) a fraction equal to one-twelfth.

“Class [__] Notes” means the [__]% Class [__] Receivable-Backed Notes in the Aggregate Principal Amount of $[__], issued pursuant to the Indenture.

“Class [__] Percentage” means [__]%.

“Class [__] Principal Payment Amount” means the lesser of (a) the excess, if any, of (i) the Total Principal Payment Amount over (ii) the Class [__] Principal Payment Amount and (b) the excess, if any, of (i) the Principal Amount of the Class [__] Notes over (ii) the Class [__] Target Principal Amount; provided, however, that in no event will the Class [__] Principal Payment Amount exceed the Principal Amount of the Class [__] Notes.

“Class [__] Target Principal Amount” means, with respect to any Payment Date, the product of (i) the Class [__] Percentage and (ii) the Contract Pool Principal Balance as of the related Accounting Date.

“Closing Date” means [____________] 20[  ].

“Code” means the Internal Revenue Code of 1986, as amended.

“Collection Account” means the account so designated established pursuant to Section 7.01.

“Collection Account Property” means the Collection Account, all amounts and investments held from time to time in the Collection Account (whether in the form of deposit accounts, physical property, book-entry securities, uncertificated securities or otherwise), and all proceeds of the foregoing.

“Collection Period” means a period beginning on the first day of a calendar month and ending on, but not including, the first day of the next calendar month, provided that the first Collection Period shall be the two calendar months preceding the month in which the first Payment Date occurs.

“Collections” means the sum of (i) all Scheduled Payments on the Contracts, including (without duplication) Scheduled Payments on Defaulted Contracts, received on or after the Cut-Off Date (excluding the Excluded Amounts); (ii) any Prepayments received on the Contracts on or after the Cut-Off Date (other than (a) in the case of a Lease, any Excluded Residual Investment which shall be allocated to the Depositor, or (b) in the case of a Prepaid Contract for which a substitution has been made in accordance with Section 2.03 of this Agreement, that portion thereof to which the Depositor is entitled pursuant to Section 2.03); (iii) the Purchase Amount of any Contracts purchased by [_________] in accordance with Section 7.06 of this Agreement (other than any portion thereof attributable in the case of a Lease to the Excluded Residual Investments); (iv) the amount paid by [_________] or the Depositor to purchase the Contracts pursuant to Section 7.08 of this Agreement; (v) that portion of the Liquidation Proceeds received in respect of any Contracts and the disposition of the related Equipment on or after the Cut-Off Date allocated to the Trust; and any earnings on the investment of amounts credited to amounts of deposit in the Collection Account; provided that, Collections shall not include any amounts received with respect to any Excluded Residual Investment.

“Commission” means the United States of America Securities and Exchange Commission.

“Computer Disk” means the computer disk generated by the Servicer (or any subservicer under Section 5.05), which provides information relating to Contracts in the Contract Pool and which was used by such party in selecting the related Contracts for conveyance and inclusion in such Contract Pool, and includes the master file and the history file as well as servicing information with respect to such Contracts.

“Contract” means each End-User Contract and each Vendor Loan listed on any Schedule of Contracts but, unless otherwise specified herein, shall not refer to any Secondary Contract.

“Contract Assets” means, with respect to any Contracts (including Substitute Contracts) and related assets conveyed or being conveyed to the Depositor pursuant to a Substitution Assignment Agreement, the ACE Assignment or the Non-ACE Purchase Agreement, and concurrently conveyed or being conveyed by the Depositor to the Trust pursuant to this Agreement or a Substitution Transfer Agreement, all right, title and interest of [_________] or the ACE Trust, as the case may be, in, to and under:

(i)

such Contracts, and all monies due or to become due in payment of such Contracts on and after the relevant Cut-Off Date, and including Scheduled Payments due but not yet received prior to the relevant Cut-Off Date and all other Scheduled Payments (including in respect of any Guaranteed Residual Investment) due or becoming due on or after the relevant Cut-Off Date, any Prepayments, any payments in respect of a casualty or early termination, any Liquidation Proceeds received with respect thereto, but excluding any Scheduled Payments both due and actually received and processed prior to the related Cut-Off Date and any Excluded Amounts;

(ii)

the Financed Items related to such Contracts and, in the case of any Vendor Loan, related Applicable Security, including all proceeds from any sale or other disposition of such Financed Items (but subject to the exclusion and release herein of Excluded Amounts) and any Guaranteed Residual Investment;

(iii)

the related Contract Files;

(iv)

all payments made or to be made in the future with respect to such Contracts or the Obligor thereunder under any Vendor Agreements with the relevant Financing Originator and under any guarantee or similar credit enhancement with respect to such Contracts;

(v)

all Insurance Proceeds with respect to each such Contract; and

(vi)

all income from and proceeds of the foregoing.

“Contract File” means, with respect to each Contract, the fully executed original counterpart (for UCC purposes) of the Contract, the original certificate of title or other title document with respect to the related Equipment (if applicable) or, in each case, if (but only if) such original documents are intangible documents, the electronic files of such originals, and otherwise such documents or electronic entries, if any, that the Servicer (or applicable Financing Originator) keeps on file in accordance with Customary Policies and Procedures evidencing ownership of such Equipment (if applicable), and all other documents originally delivered to the Financing Originator or held by the Servicer (or subservicer under Section 5.05) with respect to any Contract.

“Contract Pool” means, as of any date of determination, the aggregate of the Contracts which have been conveyed to the Trust and which constitute as of such date Trust Assets under the terms and provisions hereof.

“Contract Pool Principal Balance” means with respect to any Payment Date, the sum of the Contract Principal Balances (computed as of the related Accounting Date) for all Contracts; provided that, on any Payment Date on which the Contract Pool Principal Balance is determined to be less than or equal to $[__], then the Contract Pool Principal Balance will be deemed equal to $0.

“Contract Principal Balance” means as of any Accounting Date, with respect to any Contract, the present value of the unpaid Scheduled Payments due on such Contract after such Accounting Date (excluding all Scheduled Payments due on or prior to, but not received as of, such Accounting Date, as well as any Scheduled Payments due after, but received as of, such Accounting Date), after giving effect to any Prepayments received on or prior to such Accounting Date, discounted monthly at the Discount Rate (assuming, for purposes of such calculation, that each Scheduled Payment is due on the last day of the applicable Collection Period); provided that, for purposes of computing the Total Principal Payment Amount, or the Specified Reserve Account Balance for a given Payment Date (as well as all Payment Dates thereafter), the Contract Principal Balance of any Contract, which became a Defaulted Contract during th e related Collection Period or was required to be purchased by [_________] as of the last day of the related Collection Period in accordance with Section 5.01 of the Purchase and Sale Agreement, will be deemed to be zero on and after the last day of such Collection Period.

“Corporate Trust Office” means the corporate trust office of the Owner Trustee, which office initially shall be located at 500 Stanton Christiana Road, 3/OPS 4, Newark, Delaware 19713, or such other office at such other address as the Owner Trustee may designate from time to time by notice to the Equity Certificateholder, the Servicer, the Administrator and the Depositor.

“Cumulative Net Loss Event” means, with respect to any Collection Period, the Cumulative Net Loss Ratio for such Collection Period exceeds the Cumulative Net Loss Trigger for such Collection Period.

“Cumulative Net Loss Ratio” means the ratio of (a) the Cumulative Reported Net Losses recognized with respect to the Contracts in the Contract Pool since the Initial Cut-Off Date over (b) the Initial Contract Pool Principal Balance.

“Cumulative Net Loss Trigger” means, for each of the Collection Periods set forth below, the Cumulative Net Loss Ratio percentage opposite such Collection Period (and measured on each of the Payment Dates following the Collection Periods specified below):

Collection Period	Cumulative Net Loss Ratio
[__]	[__]
[__]	[__]
[__]	[__]
[__]	[__]
[__]	[__]
[__]	[__]
[__]	[__]
[__]	[__]
[__]	[__]
[__]	[__]
[__]	[__]
[__]	[__]
[__]	[__]

“Cumulative Reported Net Losses” means, with respect to any Collection Period, the aggregate Contract Principal Balances of Defaulted Contracts (immediately prior to the applicable default) minus the sum of any subsequent cash collections on Defaulted Contracts, including Liquidation Proceeds.

“CSA” means each conditional sales agreement, including, as applicable, schedules, subschedules, supplements and amendments to a master conditional sales agreement, pursuant to which specified assets were conditionally sold to an Obligor at specified monthly, quarterly, semi-annual or annual payments.

“Customary Policies and Procedures” means, with respect to any Contract Assets, the customary standards, policies and procedures of the relevant Financing Originator with respect to such Contract Assets in effect at the time of the Cut-Off Date with respect thereto, as the same may be changed from time to time (provided that any such change does not materially impair (i) the collectibility of the related Contract, or (ii) the Servicer’s ability to perform its obligations under this Agreement with respect thereto).

“Cut-Off Date” means [___________] 20[  ], and with respect to any Substitute Contract, the Substitution Cut-Off Date (as the context may require).

“Date of Processing” means, with respect to any transaction or Collection, the date on which such transaction or Collection is first recorded (and, in the case of a transaction or Collection related to a particular Contract, identified as to such particular Contract as part of Available Funds) on the related Financing Originator’s or the Servicer’s computer master file of Contracts (without regard to the effective date of such recordation).

“Defaulted Contract” means as to any Collection Period, any Contract (a) (i) which the Servicer has determined in its sole discretion, in accordance with Customary Policies and Procedures (and taking into account any available Vendor recourse), that such Contract is not collectible; or, (ii) the End-User under such Contract (or applicable Vendor, if such Contract is a Vendor Loan) becomes the subject of an Insolvency Event or, (b) as to which during the Collection Period [__]% or more of a Scheduled Payment shall have become delinquent 180 days or more, or (c) as to which the End-User has suffered an insolvency event.

“Delaware Statutory Trust Act” has the meaning specified in the Trust Agreement.

“Delinquent Contract” means any Contract as to which all or a portion of a Scheduled Payment (constituting at least $25 of such Scheduled Payment due) is more than 60 days delinquent from its original due date.

“Deposit Date” means the Business Day immediately preceding each Payment Date.

“Depositor” means the “Depositor” as defined in the preamble hereto, or any successor entity thereto.

“Determination Date” means, with respect to any Payment Date, the second Business Day prior to such Payment Date.

“Discount Rate” means [__]%.

“Dollar” and “$” means lawful currency of the United States of America.

“Eligible Contract” means each Contract owned (prior to its conveyance by a Financing Originator to [_________] under the ACE Conveyancing Agreement or the Non-ACE Conveyancing Agreement, as the case may be; prior to its conveyance by [_________] to the Depositor under the ACE Purchase Agreement or the Non-ACE Purchase Agreement, as the case may be, and prior to its conveyance by the ACE Trust to the Depositor pursuant to the ACE Assignment, if a ACE Contract) by a Financing Originator, [_________] or the ACE Trust, as the case may be, and with respect to which each of the following is true (to the extent applicable to such type of Contract) at the time of its conveyance to the Trust on the Closing Date (or Substitution Transfer Date, as applicable):

(a)

the information with respect to the Contract, any Secondary Contract securing the obligations under such Contract, and the Financed Items related to the Contract, delivered to the Servicer by or at the direction of [_________] under the Series 20[  ]-[__] Purchase Agreement or the Non-ACE Purchase Agreement, as the case may be, or by or at the direction of the ACE Trust pursuant to the ACE Assignment is true and correct in all material respects;

(b)

immediately prior to the transfer of such Contract and any related Equipment (or security interest therein) or Applicable Security to the Depositor (and the Depositor’s concurrent transfer thereof to the Trust), [_________] or the ACE Trust owned and had good and marketable title to (and following the transfer by [_________] or the ACE Trust, the Depositor owns and has good and marketable title to) the Contracts, free and clear of any Liens, other than Permitted Liens; and immediately prior to the transfer of such Contract and any related Equipment (or security interest therein) or Applicable Security by the applicable Financing Originator to [_________], such Contract was owned by the applicable Financing Originator free and clear of any Liens, other than with respect to Permitted Liens;

(c)

the Contract is neither a Defaulted Contract nor a Delinquent Contract;

(d)

no provision of the Contract has been waived, altered or modified in any material respect, except as indicated in the Contract File;

(e)

the Contract is a valid and binding payment obligation of the Obligor and is enforceable in accordance with its terms (except as may be limited by applicable Insolvency Laws and the availability of equitable remedies);

(f)

the Contract is not subject to litigation, or to rights of rescission, setoff, counterclaim or defense and, to [_________]’s or the Servicer’s knowledge, no such rights have been asserted or threatened with respect to the Contract;

(g)

the Contract, at the time it was made, had been originated in compliance (in all material respects) with applicable law, and did not violate the laws of the United States of America or any state in any material respect;

(h)

(i) the Contract and any related Financed Item or interest therein (other than Excluded Residual Investments) have not been sold, transferred, assigned or pledged by the Financing Originator or, [_________] or the ACE Trust to any other Person (other than (a) the sale of Contracts and any Financed Item financed or interest therein to [_________] or to the Depositor and then the ACE Trust and (b) the financed sale of Equipment to an End-User effected through an End-User Contract), or (ii) if such Contract finances Equipment, such Contract is secured by a fully perfected lien or ownership interest in favor of the Financing Originator or, in the case of Equipment relating to the ACE Contracts, the Depositor, on or in respect of the related Equipment (other than as contemplated by the Minimum Value Filing Exception), or, if the Contract is a Vendor Loan, the Vendor Loan is secured by a fully perfected lien or owner ship interest in favor of the Financing Originator or the ACE Trust in the related Applicable Security;

(i)

if the Contract constitutes an “instrument” or “tangible chattel paper” for purposes of the UCC, there is not more than one “secured party’s original” counterpart of the Contract and such original counterpart is in the Contract File;

(j)

all filings (including filings of UCC financing statements) necessary (i) in respect of all Contracts, to evidence or perfect the conveyance or transfer of the relevant Financing Originator’s ownership interest in the Contract, and the Financing Originator’s corresponding interest in the related Equipment or Applicable Security, as applicable, to [_________], and (ii) in respect of all Contracts, to evidence or perfect the conveyance or transfer of [_________]’s or the ACE Trust’s ownership interest in the Contract, and [_________]’s or ACE Trust’s corresponding interest in the related Equipment or Applicable Security, as applicable, to the Depositor (as well as the concurrent conveyance of such property hereunder, other than ownership interests in Equipment, from the Depositor to the Trust), have been made or provided for in all appropriate jurisdictions; provided, that UCC f inancing statement filings with respect to Equipment or Applicable Security which name the Financing Originator as secured party have not been amended to indicate either [_________], the Depositor or the Trust as an assignee (although separate UCC filings were made against the relevant Financing Originator’s interest in Applicable Security in each jurisdiction where a related Vendor is located); and provided further, that only filings in the State of Delaware have been made in favor of the Trust as secured party against the Depositor as debtor describing as collateral (among other things) the Depositor’s ownership interest in Equipment, in respect of the security interest in Equipment owned by the Depositor which has been granted to the Trust pursuant to Section 2.01 hereof.

(k)

the Obligor is not, to [_________]’s knowledge, subject to bankruptcy or other insolvency proceedings;

(l)

the Obligor’s billing address is in the United States of America or Puerto Rico, and the Contract is a U.S.  dollar-denominated obligation;

(m)

the Contract does not require the prior written notification to or consent of an Obligor or contain any other restriction on the transfer or assignment of the Contract, or all consents and approvals required by the terms of the Contract for the sale of the Contract hereunder have been received;

(n)

either (x) the obligations of the related Obligor under such Contract are irrevocable and unconditional and non-cancelable (it being understood that Contracts which are prepayable in accordance with their terms shall not, by virtue of that fact alone, be deemed revocable, conditional or cancelable) or, if not irrevocable and unconditional, have the benefit of a Vendor Guarantee or (y) with respect to Leases with Lessees that are governmental entities or municipalities, if such Lease is canceled in accordance with its terms, either (1) the Vendor that assigned such Lease to the applicable Financing Originator is unconditionally obligated to repurchase such lease from the Financing Originator for a purchase price not less than the Contract Principal Balance of such Lease (as of the date of cancellation), or (2) pursuant to the Purchase and Sale Agreements, [_________] has indemnified the Depositor against such ca ncellation in an amount at least equal to the Contract Principal Balance of such Lease (as of the date of cancellation), less any amounts paid by the Vendor pursuant to clause (1);

(o)

no selection procedure adverse to the interests of the Trust or the Equity Certificateholder was used in selecting the Contract for the Contract Pool;

(p)

the Obligor under the Contract is required to maintain casualty insurance or to self-insure with respect to the related Equipment in accordance with the Customary Policies and Procedures;

(q)

the Contract constitutes tangible chattel paper, an account, an instrument or a general intangible, in each case as defined under the UCC;

(r)

the Contract is not a “consumer lease” as defined in Section 2A-103(1)(e) of the UCC;

(s)

if such Contract is a Lease, to the best knowledge of the relevant Financing Originator, the Lessee thereunder has accepted and has had reasonable opportunity to inspect the related Equipment;

(t)

except as provided in clause (n) above, the Contract is not subject to any guarantee by the relevant Financing Originator, nor has the relevant Financing Originator established any specific credit reserve with respect to the related Obligor;

(u)

if such Contract is a Lease, such Lease is a “triple net lease” under which the Obligor is responsible for the maintenance, taxes and insurance with respect to the related Equipment in accordance with general industry standards applicable to such item of Equipment;

(v)

if such Contract is a Vendor Loan, such Vendor Loan is secured by an Eligible Secondary Contract having an aggregate Contract Principal Balance for such Eligible Secondary Contract (determined as of the relevant Cut-Off Date for such Vendor Loan) not less than the outstanding principal amount of such Vendor Loan;

(w)

such Contract is not an obligation of the United States of America or an agency, department, or instrumentality of the United States of America;

(x)

such Contract contains provisions customary to similar financing agreements for Financed Items, which provisions are sufficient and enforceable (except as may be limited by applicable Insolvency Laws and the availability of equitable remedies) to enable the relevant Financing Originator (or its assignees, including [_________], the ACE Trust, the Depositor and the Trust) to realize against the Financed Items related thereto (to the extent such Financed Items secure or support the payment of the Contract);

(y)

if the Obligor in respect of such Contract is a state or local governmental entity or municipality, the conveyance of such a Contract under and pursuant to the Transaction Documents does not violate applicable state or municipal laws or regulations (if any) restricting or prohibiting the assignment of claims against or obligations of such Obligor; and

(z)

such Contract was originated or acquired by the applicable Financing Originator in accordance with its Customary Policies and Procedures as in effect at the time of such origination or acquisition.

“Eligible Investments” means any of the following:

(i)

direct obligations of, and obligations fully guaranteed by, the United States of America, the Federal Home Loan Mortgage Corporation (if then rated “Aaa” by Moody’s), the Federal National Mortgage Association, or any agency or instrumentality of the United States of America the obligations of which are backed by the full faith and credit of the United States of America and which are non-callable;

(ii)

demand and time deposits in, certificates of deposit of, bankers’ acceptances issued by, or federal funds sold by any depository institution or trust company (including the Trustees or any Affiliate of the Trustees, acting in their commercial capacity) incorporated under the laws of the United States of America or any state thereof or the District of Columbia (or any domestic branch or agency of a foreign bank) and subject to supervision and examination by federal and/or state authorities, so long as, at the time of such investment or contractual commitment providing for such investment, the commercial paper or other short-term debt obligations of such depository institution or trust company have been rated at least “P-1” or higher from Moody’s, “A-1+” from Standard & Poor’s and, if rated by Fitch, “F1+” from Fitch; or any other demand or time deposit or certific ate of deposit which is fully insured by the Federal Deposit Insurance Corporation and which is rated at least “P-1” by Moody’s or A-1+ from Standard & Poor’s.

(iii)

repurchase obligations with respect to any security described in either clause (i) or (ii) above and entered into with any institution whose commercial paper is at least rated “P-1” from Moody’s, at least “A-1+” by Standard & Poor’s and, if rated by Fitch, at least “F1+” by Fitch;

(iv)

securities bearing interest or sold at a discount issued by any corporation incorporated under the laws of the United States of America or any state thereof which have a credit rating of at least “A2” or “P-1” from Moody’s, at least “AAA” from Standard & Poor’s and, if rated by Fitch, at least “AAA” from Fitch, at the time of such investment;

(v)

commercial paper (which may be issued by Ace Securities Corp) having a rating of at least “P-1” from Moody’s, at least “A-1+” from Standard & Poor’s and, if rated by Fitch, at least “F1+” from Fitch, at the time of such investment;

(vi)

money market funds which are rated “Aaa” by Moody’s, at least “AAAm” or “AAAm-G” by Standard & Poor’s and, if rated by Fitch, at least “AAA” by Fitch, including funds which meet such rating requirements for which the Trustees or an affiliate of the Trustees serves as an investment advisor, administrator, shareholder servicing agent and/or custodian or subcustodian, notwithstanding that (i) such Trustee or an affiliate of such Trustee charges and collects fees and expenses from such funds for services rendered, (ii) such Trustee charges and collects fees and expenses for services rendered pursuant to this instrument, and (iii) services performed for such funds and pursuant to this instrument may converge at any time.  (The Depositor and the Servicer specifically authorize such Trustee or an affiliate of such Trustee to charge and collect all fe es and expenses from such funds for services rendered to such funds, in addition to any fees and expenses such Trustee may charge and collect for services rendered pursuant to this instrument); and

(vii)

any other investments that satisfy the Rating Agency Condition.

“Eligible Secondary Contract” shall mean each Secondary Contract

(i)

that satisfies all the criteria set forth in the definition of “Eligible Contract” except clauses (b) and (h) (in each case, with respect to ownership by the Financing Originator, [_________], the Depositor, or ACE Trust of the Contract) and (w) thereof, and except that the term “Obligor” shall mean “End-User” in all such criteria;

(ii)

with respect to which Secondary Contract and the proceeds thereof the Financing Originator (or, in the case of ACE Contracts, the ACE Trust, as assignee) has a duly perfected first priority lien; and

(iii)

with respect to which if such Secondary Contract secures a Vendor Loan constituting a Contract, the transfer of the applicable Financing Originator’s security interest in such Secondary Contract and the proceeds thereof to [_________], the transfer of [_________]’s interest so acquired to the Depositor, and, if applicable, the Depositor’s transfer of its interest therein to the ACE Trust and the ACE Trust’s transfer of such interest back to the Depositor, is effective to create in favor of the Depositor a lien therein and such lien has been duly perfected.

“Eligible Servicer” means [_________] or any of its Affiliates, the Trustees or any other Person qualified to act as Servicer of the Contracts under applicable federal and state laws and regulations, which Person services not less than $[__] in outstanding principal amount of equipment financing contracts.

“End-User” shall mean any party that uses the Financed Items pursuant to an End-User Contract.

“End-User Contract” shall mean any CSA, Secured Note, Lease, IPA, or other Financing Agreement covering Financed Items originated or acquired by an Originator.

“Equipment” means with respect to any Contract, the tangible assets constituting “goods” within the meaning of the UCC, in each case financed or leased by an Obligor pursuant to a Contract, or which otherwise provide security for the payment of amounts payable thereunder.

“Equity Certificate” has the meaning specified in the Trust Agreement.

“Equity Certificateholder” means the Person in whose name the Equity Certificate is registered in the Certificate Register, which initially shall be the Depositor.

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

“Event of Default” has the meaning specified in the Indenture.

“Exchange Act” means the Securities Exchange Act of 1934, as amended or supplemented from time to time.

“Excluded Amounts” means (i) any collections on deposit in the Collection Account or otherwise received by the Servicer on or with respect to the Contract Pool or related Equipment, which collections are attributable to any taxes, fees or other charges imposed by any Governmental Authority, (ii) any collections representing reimbursements of insurance premiums or payments for services that were not financed by the applicable Originator, (iii) collections relating to security deposits, and (iv) collections representing Late Charges, documentation fees, administrative charges or extension fees on any Contract, or maintenance premiums in respect of related Equipment.

“Excluded Residual Investments” means Residual Investments, other than Guaranteed Residual Investments.

“FDIC” shall mean the Federal Deposit Insurance Corporation, or any successor thereto.

“Financed Items” means Equipment and other property and services that are permitted to be financed under Contracts in accordance with Customary Policies and Procedures of the applicable Financing Originator.

“Financing Agreement” means each financing agreement covering Financed Items, other than a CSA, a Secured Note, a Lease or an IPA.

“Financing Originator” means [_______], [________] and [________].

“Fitch” means Fitch, Inc., or any successor thereto.

“Governmental Authority” means the United States of America, any state or other political subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, government.

“Guaranteed Residual Investment” means each Residual Investment with respect to which the applicable Financing Originator has an agreement with either the Vendor or the related Obligor on an End-User Contract for payment of such Residual Investment.

“Holder” has the meaning specified in the Indenture.

“Indebtedness” means, with respect to any Person at any date, without duplication, (a) all indebtedness of such person for borrowed money or for the deferred purchase price of property or services (other than current liabilities incurred in the ordinary course of business and payable in accordance with customary trade practices) or which is evidenced by a note, bond, debenture or similar instrument, (b) all obligations of such Person under capital leases, (c) all obligations of such Person in respect of acceptances or letters of credit issued or created for the account of such Person, (d) all liabilities secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof, and (e) obligations of such Person under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise a cquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (a) through (d) above.

“Indenture” means the Indenture, dated as of the date hereof, between the Trust and the Indenture Trustee, as amended, supplemented or otherwise modified from time to time.

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

“Independent”, when used with respect to any specified Person, means such a Person who (i) is in fact independent of the Trust, the Depositor or the Servicer, (ii) is not a director, officer or employee of any Affiliate of the Trust, the Depositor or the Servicer, (iii) is not a person related to any officer or director of the Trust, the Depositor or the Servicer or any of their respective Affiliates, (iv) is not a holder (directly or indirectly) of more than [__]% of any voting securities of the Trust, the Depositor or the Servicer or any of their respective Affiliates, and (v) is not connected with the Trust, the Depositor or the Servicer as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.

“Independent Accountants” has the meaning specified in Section 9.04.

“Ineligible Contract” has the meaning specified in Section 7.06.

“Initial Class [__] Principal Amount” means $[__].

“Initial Class [__] Principal Amount” means $[__].

“Initial Class [__] Principal Amount” means $[__].

“Initial Class [__] Principal Amount” means $[__].

“Initial Class [__] Principal Amount” means $[__].

“Initial Contract Assets” means those Contract Assets conveyed to the Trust on the Closing Date.

“Initial Contract Pool Principal Balance” means $[__].

“Initial Contracts” means those Contracts conveyed to the Trust on the Closing Date.

“Initial Principal Amount” means, when used in the context of a reference to an individual Class of Notes, the initial principal amount applicable to such Class [__]s defined above.

“Insolvency Event” means, with respect to a specified Person, (a) the filing of a decree or the entry of an 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 Insolvency 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 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 Insolvency 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 such law, taking possession by a r eceiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property; or (c) the making by such Person of any general assignment for the benefit of creditors; or (d) the failure by such Person generally to pay its debts as such debts become due; or (e) the admission by such Person in writing of its inability generally to pay its debts when the same become due; or (f) the taking of action by such Person in furtherance of any of the foregoing.

“Insolvency Laws” means the Bankruptcy Code and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments, or similar debtor relief laws from time to time in effect affecting the rights of creditors generally.

“Insolvency Proceeds” has the meaning specified in Section 10.01.

“Insurance Policy” means, with respect to any Contract, an insurance policy covering physical damage to or loss of the related Equipment.

“Insurance Proceeds” means, depending on the context, any amounts payable or any payments made, to the Servicer (or applicable Financing Originator) under any Insurance Policy.

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Investment Earnings” means, the investment earnings (net of losses and investment expenses) on amounts on deposit in the Collection Account and the Reserve Account.

“IPA” means each installment payment agreement, including as applicable, schedules, subschedules, supplements and amendments, pursuant to which the relevant Originator financed the purchase or acquisition of specified assets by an Obligor for specified monthly, quarterly, semiannual or annual payments.

“Late Charges” means any late payment fees paid by Obligors on Contracts.

“Lease” means each lease agreement granting the use of equipment or other assets for a specified time in exchange for payments and including, as applicable, schedules, subschedules, supplements and amendments to a master lease, pursuant to which the Originator, as lessor, leased specified assets to a Lessee at a specified monthly, quarterly, semiannual or annual rental.

“Lessee” means, with respect to any Lease, the Obligor with respect to such Lease.

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), equity interest, participation interest, preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including, without limitation, any conditional transfer or other title retention agreement, and any financing lease having substantially the same economic effect as any of the foregoing.

“Liquidated Contract” means, as to any Collection Period, any Contract or Defaulted Contract (a) which the Servicer has determined is uncollectible in accordance with the Customary Policies and Procedures, (b) for which the Equipment securing such Contract has been disposed of or any Applicable Security has been disposed or (c) has been repurchased by the Servicer pursuant to Section 5.25.

“Liquidation Expenses” means, with respect to any Liquidated Contract, the aggregate amount of all out-of-pocket expenses reasonably incurred by the Servicer (including amounts paid to or expenses incurred by any subservicer, other than subservicing fees, if any) in accordance with Customary Policies and Procedures in connection with the repossession, refurbishing and disposition of any related Equipment or any other Applicable Security, and other out-of-pocket costs related to the liquidation of any such Equipment or such other Applicable Security, including reasonable attorneys’ fees incurred in the attempted collection of any amount owing pursuant to such Liquidated Contract, and including amounts determined by the Servicer in its reasonable discretion as payable in respect of any sales, use, personal property or other taxes assessed or to be assessed on repossessed or liquidated Equipment or a ny other Applicable Security.

“Liquidation Proceeds” means, with respect to a Liquidated Contract, proceeds from the transfer, lease or re-lease of the related Financed Items or other Applicable Security, Insurance Proceeds, and any other recoveries with respect to such Liquidated Contract and the related Financed Items or other Applicable Security (including, without limitation, amounts received pursuant to a Program Agreement and Scheduled Payments received on such Defaulted Contracts), but net of Liquidation Expenses, Late Charges, amounts payable to a Vendor in respect of (and in amounts not exceeding) amounts previously paid by such Vendor in respect of such Contract under Vendor recourse provisions, and amounts, if any, so received that are required to be refunded to the Obligor on such Contract.

“Material Adverse Effect” means, with respect to any event or circumstance, a material adverse effect on:

(i)

the ability of [_________], any Financing Originator, the ACE Trust, the Depositor, the Trust or the Servicer to perform in all material respects its obligations under this Agreement or any other Transaction Document;

(ii)

the validity or enforceability of this Agreement, any other Transaction Document, or the Contracts, or the collectibility of the Contracts; or

(iii)

the status, existence, perfection, priority or enforceability of the Trust’s interest in the Contracts and the other Trust Assets.

“Material Modification” means a termination or release (including pursuant to prepayment), or an amendment, modification or waiver, or equivalent similar undertaking or agreement, by the Servicer with respect to a Contract which would not otherwise be permitted under the standards and criteria set forth in Sections 5.08, 5.09 and/or 5.10 hereof.

“Maturity Date” means, as applicable, the Class [__] Maturity Date, Class [__] Maturity Date, Class [__] Maturity Date, Class [__] Maturity Date or Class [__] Maturity Date.

“Minimum Value Filing Exception” means the variation from the relevant Financing Originator’s normal policies and practices with respect to filing UCC financing statements against an Obligor describing Equipment which is the subject of a Contract, in each case as set forth in Exhibit F hereto.

“Monthly Servicer’s Report” has the meaning specified in Section 9.01.

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

“Nonrecoverable Advance” means with respect to any Determination Date and any Contract, the amount, if any, advanced by the Servicer pursuant to Section 5.14 which the Servicer has as of such Determination Date determined in good faith will not be ultimately recoverable by the Servicer.

“Non-ACE Contract Assets” means the Contract Assets pertaining to the Non-ACE Contracts.

“Non-ACE Contracts” means Contracts conveyed by [_________] to the Depositor pursuant to the Non-ACE Purchase Agreement, as listed in Schedule A to the Non-ACE Purchase Agreement.

“Non-ACE Conveyancing Agreement” means the Non-ACE Conveyancing Agreement, dated as of [___________] 20[  ], by and among [_________], [_________]  and [_________], as the same may be amended, supplemented, restated or otherwise modified from time to time.

“Non-ACE Purchase Agreement” means the Non-ACE Purchase and Sale Agreement, dated [___________] 20[  ], by and among [_________], as the seller, and the Depositor, as purchaser, as the same may be amended, supplemented, restated or otherwise modified from time to time.

“Note” means any one of the notes of the Trust of any Class executed and authenticated in accordance with the Indenture.

“Noteholder” means any registered holder of a Note.

“Note Register” has the meaning specified in the Indenture.

“Notes” means the Class [__] Notes, Class [__] Notes, Class [__] Notes, Class [__] Notes or Class [__] Notes.

“Obligor” means, with respect to any Contract, the Person or Persons obligated to make payments with respect to such Contract, including any guarantor thereof (and including, with respect to a Contract consisting of a Vendor Loan, the Vendor obligated in respect of such Vendor Loan).

“Officer’s Certificate” means, with respect to any Person, a certificate signed by an authorized officer of such Person and delivered to the party entitled to receipt thereof under any applicable Transaction Document.

“Opinion of Counsel” means a written opinion of counsel, who may be counsel (including internal counsel) for the Depositor or the Servicer and who shall be reasonably acceptable to the Trust and the Indenture Trustee.

“Originator” means, with respect to each Contract, the party that is the original lessor or financing party thereunder.

“Outstanding” has the meaning specified in the Indenture.

“Owner Trustee” means Chase Bank USA, National Association, not in its individual capacity, but solely as Owner Trustee under the Trust Agreement, its successors in interest and any successor owner trustee under the Trust Agreement.

“Payment Date” shall mean the twentieth (20th) day of each calendar month or, if such twentieth (20th) day is not a Business Day, the next succeeding Business Day, with the first such Payment Date being [_______] 20[  ].

“Paying Agent” means any Person described as such in Section 7.04(b).

[“Permitted Liens” means

(a)

with respect to Contracts in the Contract Pool:

(i)

Liens for state, municipal or other local taxes if such taxes shall not at the time be due and payable or if the Depositor shall currently be contesting the validity thereof in good faith by appropriate proceedings and shall have set aside on its books adequate reserves with respect thereto;

(ii)

Liens in favor of [_________] created by a Financing Originator, or Liens in favor of the Depositor created pursuant to the Purchase and Sale Agreements or Liens in favor of the ACE Trust created pursuant to the ACE Pooling Agreement, in each case transferred to the Trust pursuant hereto;

(iii)

Liens in favor of a Financing Originator in respect of Contracts which have been transferred to such Financing Originator and pursuant to the Purchase and Sale Agreements by such Financing Originator to the Depositor (through [_________] and the ACE Conveyancing Agreement or the Non-ACE Conveyancing Agreement, as the case may be, in the case of [_________] Contracts, and through [_________], the Depositor and the ACE Trust and the ACE Assignment in the case of the ACE Contracts) and in each case transferred to the Trust pursuant hereto;

(iv)

Liens created pursuant to this Agreement in favor of the Trust; and

(v)

Liens in favor of the Indenture Trustee created pursuant to the Indenture and/or this Agreement; and

(b)

with respect to the related Equipment or to any other Applicable Security (to the extent applicable):

(i)

materialmen’s, warehousemen’s, mechanics’ and other liens arising by operation of law in the ordinary course of business for sums not due;

(ii)

Liens for state, municipal or other local taxes if such taxes shall not at the time be due and payable or if the Depositor shall currently be contesting the validity thereof in good faith by appropriate proceedings and shall have set aside on its books adequate reserves with respect thereto;

(iii)

Liens in favor of [_________] created by a Financing Originator pursuant to the ACE Conveyancing Agreement or the Non-ACE Conveyancing Agreement, as the case may be, or Liens in favor of the Depositor created pursuant to the Purchase and Sale Agreements, in each case transferred to the Trust pursuant hereto or Liens in favor of the Depositor created pursuant to the ACE Purchase Agreement;

(iv)

Liens created pursuant to this Agreement in favor of the Trust;

(v)

Liens in favor of an Originator which have been transferred to the applicable Financing Originator and pursuant to the Purchase and Sale Agreements by such Financing Originator to the Depositor (through [_________] and the ACE Conveyancing Agreement or the Non-ACE Conveyancing Agreement, as the case may be, in the case of [_________] Contracts, and through [_________], the Depositor and the ACE Trust and the ACE Assignment in the case of the ACE Contracts) and in each case transferred to the Trust pursuant hereto;

(vi)

Liens in favor of the Indenture Trustee created pursuant to the Indenture and/or this Agreement;

(vii)

[Liens created pursuant to the underlying loan documents relative to Contracts, transferred by the Depositor or other depositor, as applicable to:

(A)

[___________] created pursuant to the Amended and Restated Trust Agreement, dated as of [___________] 20 [  ], by and between [___________] and [___________];

(viii)

interests in favor of (A) [___________] and which have been transferred by [___________] along with the related Contract to its limited purpose affiliate, [___________], (B) S[___________]; and (C) a Vendor, which, in each case,  are subject to the prior payment of all Obligor obligations in respect of Scheduled Payments on the related Contract; and

(ix)

Liens granted by the End-Users which are subordinated to the interest of the Trust in such Equipment.]

[Topic of Permitted Liens subject to reformulation after conversations with CIT]

“Person” means any individual, corporation, estate, partnership, limited liability company, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization or government or any agency or political subdivision thereof.

“Prepaid Contract” means any Contract that has terminated or been prepaid in full prior to its scheduled expiration date (including because of a Casualty Loss), other than a Defaulted Contract.

“Prepayment” means with respect to any Collection Period for any Contract, a partial or full prepayment of amounts due and owing under such Contract.

“Principal Amount” means, with respect to a Class of Notes, the aggregate Initial Principal Amount thereof reduced by the aggregate amount of any payments applied in reduction of such principal amount.

“Program Agreement” means each vendor finance program agreement pursuant to which End-User Contracts originated by a Vendor are assigned to the applicable Financing Originator.

“Purchase Amount” means, with respect to Ineligible Contracts, on any date of determination, the aggregate Required Payoff Amount for such Ineligible Contracts as of the related Accounting Date.

“Purchase and Sale Agreements” means, collectively, the Non-ACE Purchase Agreement, the ACE Purchase Agreement, and the Series 20[  ]-[__] Purchase Agreement.

“Purchase Price” means, with respect to any Contract conveyed on the Closing Date (or any Subsequent Transfer Date, as applicable), an amount equal to the Contract Principal Balance of such Contract as of the applicable Cut-Off Date.

“Qualified Institution” means (a) the corporate trust department of the Indenture Trustee 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), (i) (A) which has (or the parent corporation of which has) either (1) a long-term unsecured debt rating acceptable to the Rating Agencies or (2) a short-term unsecured debt rating or certificate of deposit rating acceptable to the Rating Agencies or (B) which is otherwise acceptable to the Rating Agencies and (ii) whose deposits are insured by the FDIC.

“Rating Agency” as of any date means each of the nationally recognized statistical rating organizations requested by the Depositor to provide ratings on the Notes which is rating the Notes on such date.

“Rating Agency Condition” means, with respect to any action or series of related actions or proposed transaction or series of related proposed transactions, that each Rating Agency, after being notified in writing of such action or series of related actions or series of related transactions, shall have notified the Depositor, the Owner Trustee and the Indenture Trustee in writing that such action or series of related actions or the consummation of such proposed transaction or series of related transactions will not result in a Ratings Effect.

“Ratings Effect” means, with respect to any action or series of related actions or proposed transaction or series of related proposed transactions, a reduction or withdrawal of the rating of any outstanding Class with respect to which a Rating Agency has previously issued a rating as a result of such action or series of related actions or the consummation of such proposed transaction or series of related transactions.

“Reallocated Principal” means, with respect to any Payment Date, an amount equal to (a) the Total Principal Payment Amount, less (b) the sum of the Class [__] Principal Payment Amount and the Class [__] Principal Payment Amount.

“Receivables System” means the accounting system administered and utilized by the Servicer, including all accounting data inputs therein, including those relating to the accounting for the Contracts.

“Record Date” means, with respect to any Payment Date, the Business Day immediately preceding such Payment Date (so long as the Notes are in book-entry form) or the last day of the prior calendar month (if certificated Notes have been issued).

“Redemption Date” has the meaning specified in Section 7.08 hereof.

“Redemption Price” has the meaning specified in Section 7.08 hereof.

“Regulation AB” means the rule codified at 17 CFR § 229.110 et seq., promulgated by the Commission for the registration, disclosure and reporting of asset-backed securities under the Securities Act and the Exchange Act.

“Related Collection Period Collections” means, as of any Payment Date, the amount of Collections on deposit in the Collection Account as of the Deposit Date which were received and processed by the Servicer during the related Collection Period, including all Liquidation Proceeds as to Defaulted or Liquidated Contracts (other than in respect of an Excluded Residual Investment) so received but excluding any Purchase Amounts.

“Replaced Assets” has the meaning assigned such term in Section 2.03.

“Replaced Contracts” has the meaning assigned such term in Section 2.03.

“Required Holders” means (i) prior to the payment in full of the Class [__]-Notes, Class [__] Noteholders, Class [__] Noteholders, Class [__] Noteholders and/or Class [__] Noteholders, holding Class [__] Notes, Class [__] Notes, Class [__] Notes and/or Class [__] Notes, respectively, evidencing more than 66 2/3% of the Aggregate Principal Amount of all Class [__]-Notes Outstanding, (ii) from and after the payment in full of the Class [__]-Notes, Holders of Class [__] Notes holding Class [__] Notes evidencing more than 66 2/3% of the Aggregate Principal Amount of all Class [__] Notes Outstanding and (iii) from and after the payment in full of the Class [__] Notes.

“Required Payoff Amount” means (a) with respect to any Collection Period for a Contract (other than a Defaulted Contract), the sum of (i) the Scheduled Payment due in such Collection Period, together with any Scheduled Payments due in prior Collection Periods but not yet received, plus (ii) the Contract Principal Balance of such Contract (after taking into account the Scheduled Payment due in such Collection Period and any Scheduled Payments due in prior Collection Periods whether or not actually received) and, (b) with respect to Contracts that are Defaulted Contracts, zero.

“Requirements of Law” for any Person means the certificate of incorporation or articles of association and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation, or order or determination of an arbitrator or Governmental Authority, in each case applicable to or binding upon such Person or to which such Person is subject, whether Federal, state or local (including, without limitation, usury laws, the Federal Truth in Lending Act and Regulation Z and Regulation B of the Board of Governors of the Federal Reserve System).

“Reserve Account” means the Reserve Account established and maintained pursuant to Section 7.01 hereof.

“Reserve Account Amount” means, as of any Payment Date, the then current amount then on deposit in the Reserve Account.

“Reserve Account Floor” means [__]% of the Initial Contract Pool Principal Balance, provided that, the Reserve Account Floor shall be reduced by an amount equal to [__]% of the Initial Contract Pool Principal Balance on each of the Payment Dates following the Collection Periods below if the Cumulative Net Loss Ratio is less than the percentage set forth opposite such Collection Period below:

Collection Period	Reserve Account Cumulative Net Loss Trigger
[__]	[__]
[__]	[__]
[__]	[__]

“Residual Investment” means, with respect to certain Leases, any funds that the applicable Financing Originator shall have advanced against all or any portion of the anticipated residual value of the leased Equipment upon the expiration of such Lease in accordance with its terms in excess of the Contract Principal Balance of such Lease.

“Responsible Officer” means, with respect to the Owner Trustee, any officer in its Corporate Trust Administration Department (or any similar group of a successor Owner Trustee) who has primary responsibility for administering the Trust or the Trust Agreement, or to whom a corporate trust matter is referred because of knowledge of, familiarity with, and authority to act with respect to a particular matter.

“Scheduled Payment” means, with respect to any Contract, the monthly or quarterly or semi-annual or annual rent or financing (whether principal or principal and interest) payment or other payment scheduled to be made by the related Obligor under the terms of such Contract; it being understood that Scheduled Payments do not include any Excluded Amount or Excluded Residual Investment.

“Schedule of Contracts” means the schedule of Contracts which are conveyed to the Trust pursuant to this Agreement, executed and delivered on the Closing Date, which schedule shall identify by any reasonable means or designation the applicable Financing Originator with respect to each Contract identified in such Schedule, and which includes the Contracts listed on Exhibit B hereto (which may be in electronic form rather than as an exhibit hereto).  Such Schedule shall be supplemented from time to time (a) by each subsequent Substitution Schedule of Contracts with respect to each Substitution Transfer Agreement and related Substitute Contracts, which Schedules of Contracts shall be deemed incorporated and made a part of the original Schedule of Contracts on Exhibit B hereto; and (b) by the Servicer from time to time to reflect the release by and removal from the Trust Assets of (i) Cont racts released in connection with (A) in respect of a Contract becoming a Prepaid Contract in accordance herewith or having its final Scheduled Payment paid in full in accordance with the Contract, or (B) in respect of a repurchase from the Trust through payment of a Purchase Amount, and (ii) Replaced Contracts.  The Schedule of Contracts is to be maintained by the Servicer (with copies thereof, as the same shall be supplemented or amended as described above, to be provided promptly to the Trust).  

“Schedule of Representations” means the Schedule of Representations and Warranties set forth on Exhibit E hereto.

“Secondary Contract” shall mean, with respect to a Vendor Loan, each End-User Contract securing such Vendor Loan.

“Secured Note” means each promissory note with a related security interest evidenced by written agreement, pursuant to which the purchase of specified assets by an Obligor or End-User is financed for specified monthly, quarterly, semiannual or annual payments.

“Securities” means the Notes and the Equity Certificate, or any of them.

“Securities Act” means the Securities Act of 1933, as amended from time to time.

“Securityholders” means the Holders of the Notes or the Equity Certificate.

“Series 20[  ]-[__] Purchase Agreement” means the Series 20[  ]-[__] Purchase and Sale Agreement, dated as of [___________] 20[  ], among [_________] and the Depositor, as the same may be amended, supplemented, restated or otherwise modified from time to time.

“Servicer” means initially [__], until any Successor Servicer is appointed pursuant to Article VIII hereof, and thereafter, means the Successor Servicer so appointed.

“Servicer Advance” means, with respect to any Payment Date, the amounts, if any, deposited by the Servicer in the Collection Account for such Payment Date in respect of Scheduled Payments pursuant to Section 5.14 hereof.

“Servicer Default” has the meaning given such term in Section 8.01.

“Servicer Letter of Credit” has the meaning given such term in Section 7.01(b)(ii)(B) hereof.  

“Services ” means, in connection with the financing of Software by an Originator, the support and consulting services related to such Software, the procurement of which was also financed by such Originator pursuant to a Contract.

“Servicing Fee” has the meaning specified in Section 5.18 hereof.

“Servicing Fee Percentage” means [__]%.

“Servicing Officer” means any officer of the Servicer involved in, or responsible for, the administration and servicing of Contracts.

“Servicing Standard” means, with respect to the servicing and collection activities of the Servicer concerning the Contract Assets, the conduct of such activities with reasonable care, using that degree of skill and attention that the relevant Financing Originator for such Contract Assets exercises with respect to all comparable contracts and related assets that it services for itself or others, and in accordance with Customary Policies and Procedures and applicable law.

“Servicing Transfer” is defined in Section 8.02(b).  

“Software” means the telephone switching or networking systems operating software financed or leased by an Obligor pursuant to a Contract.

“Solvent” means, as to any Person at any time, that (a) the fair value of the Property of such Person is greater than the amount of such Person’s liabilities (including disputed, contingent and unliquidated liabilities) as such value is established or such liabilities evaluated for purposes of Section 101(31) of the Bankruptcy Code; (b) the present fair saleable value of the Property of such Person in an orderly liquidation of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (c) such Person is able to realize upon its Property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Per son’s ability to pay as such debts and liabilities mature; and (e) such Person is not engaged in business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s property would constitute unreasonably small capital.

“Specified Reserve Account Balance” means with respect to any Payment Date, an amount equal to the greater of (a) the sum of (i) an amount equal to [__]% of the Contract Pool Principal Balance as of the related Accounting Date plus (ii) the excess, if any, of (A) the sum of the Principal Amounts of the Notes, after giving effect to all payments of principal on such Payment Date, over (B) the Contract Pool Principal Balance as of the related Accounting Date, and (b) the Reserve Account Floor.

“Standard & Poor’s” means Standard & Poor’s Ratings Service, a division of The McGraw-Hill Companies, or any successor thereto.

“Subsidiary” means with respect to a Person, any corporation or other entity of which securities or other ownership interests (whether directly or indirectly in connection with contract rights) having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person.

“Substitute Contract” means any Contract conveyed, assigned and transferred by the Depositor or [_________] to the Trust pursuant to Section 2.03.

“Substitute Contract Assets” means Contract Assets relating to Substitute Contracts.

“Substitute Contract Qualification Conditions” means, with respect to any Substitute Contract being transferred to the Trust pursuant to Section 2.03, the accuracy of each of the following statements as of the related Cut-Off Date for such Contract:  (a) the Contract Principal Balance of such Substitute Contract is not less than that of the related Replaced Contract(s); (b) no adverse selection procedure shall have been employed in the selection of such Substitute Contract from the applicable Financing Originator’s portfolio; and (c) each such Substitute Contract satisfied the criteria set forth in the definition of Eligible Contract herein.

(2)

with respect to any such Substitute Contract which is replacing a Replaced Contract of the type described in clause (a) of the definition of Substitution Event, the condition that after giving effect to such transfer, the Contract Pool Principal Balance of all Substitute Contracts transferred to the Trust since the Closing Date in respect of Replaced Contracts of the same type shall not exceed [__]% of the Initial Contract Pool Principal Balance.

“Substitute Transferred Assets” has the meaning assigned such term in Section 2.03.

“Substitution Assignment Agreement” means, with respect to any Substitute Contracts, the agreement between the Servicer and the Depositor pursuant to which the Servicer transfers the identified Substitute Contracts to the Depositor pursuant to the Series 20[  ]-[__] Purchase Agreement.

“Substitution Cut-Off Date” means the date specified as such for the relevant Substitute Contracts, in the related Substitution Transfer Agreement.

“Substitution Event” means, with respect to any transfer of a related Substitute Contract to the Trust under Section 2.03, the occurrence of any of the following: (a) one or more Contracts identified in the related Substitution Notice as being an intended Replaced Contract with respect to such Substitute Contract, has become a Defaulted Contract, (b) one or more Contracts identified in the related Substitution Notice as being an intended Replaced Contract with respect to such Substitute Contract, has been subjected to a Material Modification, (c) one or more Contracts identified in the related Substitution Notice as being an intended Replaced Contract with respect to such Substitute Contract, has become an Ineligible Contract, or (d) one or more Contracts identified in the related Substitution Notice as being an intended Replaced Contract with respect to such Substitute Contract, has become a Prep aid Contract and the Trust has not yet received the related Prepayment.

“Substitution Notice” means, with respect to any transfer of Substitute Contracts to the Trust pursuant to Section 2.03 (and the applicable Financing Originator’s corresponding conveyance and assignment of such Substitute Contracts), a notice, which shall be given at least five days prior to the related Substitution Transfer Date, identifying the Substitute Contracts to be transferred, the Contract Principal Balance of such Substitute Contracts and the related Substitution Event (with respect to an identified Contract or Contracts then in the Contract Pool, which will upon such substitution become a Replaced Contract) to which such Substitute Contract relates, with such notice to be signed both by the Depositor and the applicable Financing Originator(s).

“Substitution Schedule of Contracts” means a schedule or list, substantially in the form of the initial Schedule of Contracts delivered on the Closing Date, but listing each Substitute Contract being transferred to the Trust pursuant to a related Substitution Transfer Agreement, as well as the related Replaced Contracts being removed from the existing Contract Pool by virtue of such substitution.

“Substitution Transfer Agreement” means the agreement identified as such in Section 2.03(b)(iv) hereof.

“Substitution Transfer Date” means any date on which Substitute Contracts are transferred to the Trust.

“Successor Servicer” has the meaning given such term in Section 8.02(b).

“Tax Opinion” means, with respect to any action, an Opinion of Counsel to the effect that, for federal income tax purposes, (i) following such action the Trust will not be deemed to be an association (or publicly traded partnership) taxable as a corporation, (ii) following such action the Trust will be disregarded as a separate entity from the Depositor, and (iii) such action will not affect the tax characterization as debt of Notes of any outstanding Class issued by the Trust for which an Opinion of Counsel has been provided that such Notes are debt.

“Third Party Source” means any affiliate of [_________], Vendor or other manufacturer, dealer, lender or intermediary from which [_________] purchased a Contract.

“Total Principal Payment Amount” means, with respect to any Payment Date, the difference between (a) the aggregate Principal Amount of all Classes of Notes immediately prior to that Payment Date and (b) the Contract Pool Principal Balance as of the related Accounting Date.

“Transaction Documents” means this Agreement, any Substitution Transfer Agreement, the ACE Conveyancing Agreement, the ACE Purchase Agreement, the ACE Assignment, the ACE Pooling Agreement, the Non-ACE Conveyancing Agreement, the Non-ACE Purchase Agreement, the Series 20[  ]-[__] Purchase Agreement, the Trust Agreement, the Administration Agreement, the Indenture and any other agreements contemplated herein or therein.

“Transferred Assets” means with respect to any Contracts (including Substitute Contracts) conveyed or being conveyed to the Trust pursuant to this Agreement, all right and interest of the Depositor in, to and under the following:

(i)

such Contracts and other related Contract Assets (subject to the proviso below);

(ii)

related rights of the Depositor under the Purchase and Sale Agreements and Substitution Assignment Agreement (if any) and the ACE Assignment, including, without limitation, in respect of the obligation of the Servicer to repurchase or substitute for such Contracts under certain circumstances as specified therein;

(iii)

rights under this Agreement and each Substitution Transfer Agreement; and

(iv)

all income from and proceeds of the foregoing;

provided, that Transferred Assets shall not include any title to or ownership interest (other than any Guaranteed Residual Investment) in the Equipment related to such Contracts (although security interests in such Equipment established pursuant to the related Contract, and proceeds thereof, shall constitute Transferred Assets), and provided further, that the security interest granted by the Depositor pursuant to Section 2.01 hereof in related Equipment owned by it, shall constitute part of Transferred Assets.

“Trust” means the trust governed by the Trust Agreement, the assets and property of which consists of the Trust Assets.

“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” means, collectively, the Collection Account and the Reserve Account, or either of them.

“Trust Agreement” means the Amended and Restated Trust Agreement, dated as of the date hereof, between the Depositor and the Owner Trustee, as amended, restated, supplemented or otherwise modified from time to time.

“Trust Assets” has the meaning given to such term in the Trust Agreement.

“Trust Estate” shall have the meaning specified in the Trust Agreement.

“Trustees” means the Owner Trustee and the Indenture Trustee, or any of them individually as the context may require.

“UCC” means the Uniform Commercial Code as enacted from time to time in the State of New York.

“Unfunded Loss Amount” means, for any Payment Date, an amount equal to any excess of:  (a) the Aggregate Principal Amount of the Notes, prior to giving effect to the payment of principal on the Notes on that Payment Date, minus (b) the lesser of (i) the Contract Pool Principal Balance as of the last day of the Collection Period immediately preceding the preceding Payment Date, minus the Contract Pool Principal Balance as of the last day of the Collection Period immediately preceding the current Payment Date; or (ii) the Available Funds remaining after payment of amounts owing to the Servicer and interest due on the Notes on the Payment Date plus any withdrawal from the Reserve Account for payment of principal on the Notes on the Payment Date, minus (c) the Contract Pool Principal Balance as of the last day of the related Collection Period.

“Unreimbursed Servicer Advances” means, at any time, the amount of all previous Servicer Advances (or portions thereof) as to which the Servicer has not been reimbursed as of such time pursuant to Section 7.05 and which the Servicer has determined in its sole discretion are Nonrecoverable Advances, and with respect to which the Servicer has given a written certification to such effect to the Trust (which certification may take the form of an entry on a Monthly Servicer’s Report identifying Unreimbursed Servicer Advances).

“Vendor” means, with respect to a Contract, the equipment manufacturer, dealer or distributor, or software licensor or distributor, or other Person that provided financing under such Contract in connection with the acquisition or use by an End-User of such party’s Equipment, Software, Services or other products.

“Vendor Agreements” means, collectively, Vendor Assignments and Program Agreements.

“Vendor Assignment” means each assignment agreement pursuant to which an individual End-User Contract originated by a Vendor is assigned by such Vendor to a Financing Originator.

“Vendor Guarantee” means the irrevocable obligation of a Vendor to pay to a Financing Originator the aggregate outstanding principal amount of a Contract which has been canceled by the related Obligor pursuant to the terms of such Contract.

“Vendor Loan” means a limited recourse loan agreement payable by a Vendor and secured by the Vendor’s interest in Secondary Contracts and by the Equipment, if any, related thereto.

“Vice President” of any Person means any vice president of such Person, whether or not designated by a number or words before or after the title “Vice President,” who is a duly elected officer of such Person.

“Voting Power” means, with respect to any outstanding membership interest of the Depositor, the power (expressed as a percentage) represented by such membership interest of the aggregate voting power of all outstanding membership interests of the Depositor having ordinary voting power, including the power to vote for election of members of the Board of Directors (and, if any class thereof has power to designate members of the Board of Directors or any special committee thereof, the power so to designate).

Section 1.02

Usage of Terms.  With respect to all terms in this Agreement, the singular includes the plural and the plural the singular; words importing any gender include the other gender; references to “writing” include printing, typing, lithography and other means of reproducing words in a visible form; references to agreements and other contractual instruments include all amendments, modifications and supplements thereto or any changes therein entered into in accordance with their respective terms and not prohibited by this Agreement; references to Persons include their permitted successors and assigns; and the term “including” means “including without limitation.”

Section 1.03

Section References.  All section references, unless otherwise indicated, shall be to Sections in this Agreement.

Section 1.04

Accounting Terms.  All accounting terms used but not specifically defined herein shall be construed in accordance with generally accepted accounting principles in the United States of America.

ARTICLE II

FUNDINGS OF TRUST; TRANSFERS OF CONTRACTS

Section 2.01

Creation and Funding of Trust; Transfer of Transferred Assets to Trust.  (a) The Trust has been created (i) pursuant to an initial trust agreement as amended and restated by the Trust Agreement, and (ii) by the filing by the Owner Trustee of an appropriately completed Certificate of Trust under the Delaware Statutory Trust Act.  The Depositor, as settlor of the Trust, shall fund and convey assets to the Trust pursuant to the terms and provisions hereof.  The Trust shall be administered pursuant to the provisions of this Agreement, the Administration Agreement and the Trust Agreement for the benefit of the Noteholders and the Equity Certificateholder.  Each of the Owner Trustee and the Administrator (as defined in the Administration Agreement) is hereby specifically recognized by the parties hereto as empowered to conduct business dealings on behalf of the Trust in accordance with the terms hereof and of the Trust Agreement and Administration Agreement.

(b)

Subject to the terms and conditions set forth herein, the Depositor, in consideration of the purchase price of the Contracts and the related Transferred Assets and the retention of the Equity Certificate, does hereby transfer, assign, set over and otherwise convey to the Trust, on the Closing Date, by execution of this Agreement, without recourse (other than as expressly provided herein), (i) all the right, title and interest of the Depositor in and to the Contracts and the related Transferred Assets identified in this Agreement, and (ii) all income from and proceeds of the foregoing.  The “purchase price” for the Contracts and the related Transferred Assets shall be an amount equal to $[___________].  Such purchase price shall be payable in immediately available funds on the Closing Date.

(c)

The parties hereto hereby agree and acknowledge that title to or ownership of any related Equipment shall not be transferred to the Trust upon such conveyance and that the Depositor shall retain its ownership interest (to the extent the same has been so conveyed to the Depositor pursuant to the ACE Purchase Agreement, the Non-ACE Purchase Agreement, the Series 20[  ]-[__] Purchase Agreement and the ACE Assignment) in such Equipment (provided, that the parties agree and intend that any mere security interest, as opposed to title or ownership interest, in the related Equipment which secures the Contract pursuant to the terms thereof, is being assigned and conveyed as part of the Transferred Assets in accordance with the definition thereof).  The Depositor and the Trust further intend and agree that, except as described in the preceding sentence with respect to ownership interests in related Equipment, a ny such transfer is intended to be a conveyance and transfer of ownership of the Contracts and the related Transferred Assets (or Substitute Transferred Assets conveyed as described in Section 2.03 below) and that such Contracts and the related Transferred Assets 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, however, that notwithstanding such intent and agreement, a transfer and assignment contemplated hereby (or Substitution Transfer Agreement, as applicable) is determined not to be a conveyance of ownership, the Depositor hereby grants to the Trust a first priority perfected security interest in (i) the right, title, and interest of the Depositor in and to such Contracts and the related Transferred Assets identified herein (or Substitution Transfer Agreement, as applicable), and (ii) all income from and proceeds of the foregoing, and this Agreement (or Substit ution Transfer Agreement, as applicable), collectively, shall constitute a security agreement under applicable law, securing the related obligations of the Trust to the Noteholder and the Equity Certificateholder, in the order and priorities, and subject to the other terms and conditions of, this Agreement and the other Transaction Documents, together with such other obligations or interests as may arise hereunder and thereunder with respect to such Contracts and the related Transferred Assets in favor of the parties hereto and thereto.

(d)

In furtherance of and not in limitation of any of the foregoing, the Depositor with respect to each item of Equipment owned by it as described above, by execution and delivery of this Agreement (or Substitution Transfer Agreement, as applicable), hereby on and as of the Closing Date (or Substitution Transfer Date, as applicable) grants to the Trust and the Indenture Trustee a first priority perfected security interest in the right, title, and interest of the Depositor in and to such item of owned Equipment, securing in each case an amount payable by the Trust in respect of the Notes corresponding to the Contract Principal Balance from time to time of the related Contract; it being understood, however, that (i) recourse to such Equipment in realization of the benefits of such security interest shall only occur if the related Contract has become a Liquidated Contract, and (ii) the application of Liquidation Proceeds realized therefrom shall be governed in accordance with the provisions hereof generally applicable to such Collections and allocation in accordance with the Allocation Criteria.

(e)

The Depositor, by execution and delivery of this Agreement (or Substitution Transfer Agreement, as applicable) authorizes the Trust to file UCC financing statements naming the Depositor as Debtor, the Trust as Secured Party and the Indenture Trustee as Assignee in each jurisdiction that the Depositor deems necessary in order to protect its security interests in the Contracts and Equipment.

Section 2.02

Acceptance by Trust.  On the Closing Date the Trust shall issue, and the Owner Trustee, or the Indenture Trustee as its authenticating agent under the Trust Agreement, shall authenticate, to, or upon the order of, the Depositor and in accordance with the Trust Agreement, the Equity Certificate representing ownership of a beneficial interest in 100% of the Trust and the Trust shall issue, and the Indenture Trustee shall authenticate, to, or upon the order of, the Depositor in accordance with the terms of the Indenture the Notes secured by the Collateral.  The Trust hereby acknowledges its acceptance of the Trust Assets, and declares that it shall maintain such right and interest in the Trust Assets in accordance with the terms of this Agreement and the Trust Agreement upon the trust herein and therein set forth.

Section 2.03

Conveyance of Substitute Contracts.  (a) Subject to the limitations set forth in (and the other terms and conditions of) this Section 2.03, the Depositor may substitute other Contracts and related assets for Contracts and related Transferred Assets previously conveyed to the Trust and in the Contract Pool, by conveying such other Contracts and related assets to the Trust pursuant to all procedures and documentation specified below.  Upon the effectiveness of such substitution, such other Contracts and related Transferred Assets (such Contracts, “Substitute Contracts”, and collectively, “Substitute Transferred Assets”) shall, for all purposes of this Agreement and the Trust Agreement, constitute and be considered as part of the Trust Assets, and the Contracts already in the Contract Pool and related Transferred Assets for which the Substitute Contract Assets have been su bstituted (such Contracts, “Replaced Contracts”, and collectively, “Replaced Assets”) shall no longer constitute Trust Assets.  Upon consummation of such substitution, the Trust shall be deemed to have assigned to the Depositor all of the Trust’s right, title and interest in and to the Replaced Assets, without recourse, representation or warranty.

In addition, the parties hereto intend and agree that any conveyance described in this Section 2.03 is made with the intent and effect described in subsection (c) of Section 2.01 above.

(b)

Subject to the conditions set forth in this subsection (b) below, and pursuant to one or more related Substitution Transfer Agreements, the Depositor shall transfer, assign, set over and otherwise convey to the Trust, without recourse (other than as expressly provided herein), (i) all the right and interest of the Depositor in and to the Substitute Contracts listed on the related Substitution Schedule of Contracts, and (ii) all other rights and property interests consisting of Transferred Assets related to such Substitute Contracts, provided, that the Depositor may not (x) make substitutions for Prepaid Contracts until the Class [__] Notes have been paid in full, (y) make substitution for Prepaid Contracts or Defaulted Contracts in excess of 10% of the Initial Contract Pool Principal Balance and (z) make substitutions for Prepaid Contracts or Defaulted Contracts after [________], 20[  ].  The Deposito r shall effect such transfers only upon the satisfaction of each of the following conditions on or prior to the related Substitution Transfer Date (and the delivery of a related Substitution Notice by the Depositor shall be deemed a representation and warranty by the Depositor that such conditions have been or will be, as of the related Substitution Transfer Date, satisfied):

(i)

at least five days prior to the related Substitution Transfer Date, the Depositor shall have provided the Owner Trustee on behalf of the Trust and the Indenture Trustee with a Substitution Notice complying with the definition thereof contained herein;

(ii)

there shall have occurred, with respect to each such Substitute Contract, a corresponding Substitution Event with respect to one or more intended Replaced Contracts then constituting Contracts in the Contract Pool;

(iii)

the Substitute Contract(s) being conveyed to the Trust, satisfy the Substitute Contract Qualification Conditions;

(iv)

the Depositor shall have delivered to the Owner Trustee on behalf of the Trust a duly executed written assignment agreement in substantially the form of Exhibit D hereto (a “Substitution Transfer Agreement”), which shall include a Substitution Schedule of Contracts identifying the Substitute Contracts and the related Replaced Contracts;

(v)

[_________] shall have delivered to the Depositor and the Owner Trustee on behalf of the Trust a duly executed Substitution Assignment Agreement with respect to such conveyance;

(vi)

no selection procedures adverse to the interests of either the Trust, the Noteholders or the Equity Certificateholder shall have been utilized in selecting the Substitute Contracts;

(vii)

each of the representations and warranties made by [_________] pursuant to Article III of the Series 20[  ]-[__] Purchase Agreement or Non-ACE Purchase Agreement, as the case may be, shall be true and correct as of the related Substitution Transfer Date (including the representation made as to compliance with the UCC filing criteria set forth in clause (j) of the definition of Eligible Contract), and [_________] shall have performed in all material respects all obligations to be performed by it under the Series 20[  ]-[__] Purchase Agreement or Non-ACE Purchase Agreement, as the case may be, on or prior to such Substitution Transfer Date; and

(viii)

the Servicer and [_________] and the applicable Financing Originator shall, at their own expense, on or prior to the Substitution Transfer Date, have indicated in their respective computer files that the Substitute Contracts identified on the Substitution Schedule of Contracts attached to the related Substitution Transfer Agreement have been assigned and conveyed to the Trust through the Depositor pursuant to this Agreement and the Series 20[  ]-[__] Purchase Agreement or Non-ACE Purchase Agreement, as the case may be.

The failure to satisfy any of the foregoing conditions to transfer or to obtain a waiver thereof shall not be deemed to adversely affect the validity of any such transfer.

Section 2.04

Release of Excluded Amounts.  The Trust hereby agrees to release to the Servicer, an amount equal to the Excluded Amounts immediately upon identification thereof, which release shall be automatic and shall require no further act by the Trust, provided that the Trust shall execute and deliver such instruments of release and assignment, or otherwise confirm the foregoing release, as may reasonably be requested in writing by the Servicer.  Upon such release, such Excluded Amounts shall not constitute and shall not be included in the Trust Assets.

Section 2.05

Waiver.  The Trust hereby waives, releases and terminates (i) any rights it may have in any equipment (other than the Equipment financed by any Contract) as security for any obligations owing to it under the Contracts, (ii) any rights it may have in any property as security for any Contract other than the rights relating to the related Equipment which secures such Contract and the proceeds thereof and (iii) any rights it may have to apply moneys received under a receivable that was not sold to the Trust pursuant to Section 2.01.  Notwithstanding anything to the contrary contained herein, the foregoing in no way constitutes a waiver, release or termination of any of the rights of the Trust with respect to the Equipment financed by any Contract and the rights related to such Equipment.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Section 3.01

Representations and Warranties of [_________].  Under the Purchase and Sale Agreements, [_________] has made, and upon execution of each Substitution Assignment Agreement is deemed to remake with respect to the relevant Contract Assets conveyed by the Non-ACE Purchase Agreement, or the Series 20[  ]-[__] Purchase Agreement, as the case may be, each of the representations and warranties set forth in the Schedule of Representations, and has consented (in consideration of the Depositor’s purchase of the Contracts) to the assignment by the Depositor to the Trust of the Depositor’s rights with respect thereto.  Such representations speak as of the Closing Date in the case of the Initial Contracts, and as of the applicable Substitution Transfer Date in the case of the Substitute Contracts, but shall survive the transfer and assignment of the related Contracts to the Trust.  Pursua nt to Section 2.01 of this Agreement, the Depositor has sold, assigned, transferred and conveyed to the Trust as part of the Transferred Assets its rights under the Purchase and Sale Agreements, including without limitation, the representations and warranties of [_________] therein as set forth in the Schedule of Representations, together with all rights of the Depositor with respect to any breach thereof including any right to require [_________] to repurchase or substitute for any Contract in accordance with the Purchase and Sale Agreements.  It is understood and agreed that the representations and warranties set forth or referred to in this Section shall survive delivery of the Contract Files to the Trust or any custodian.

The Depositor hereby confirms to the Trust that it has entered into the Purchase and Sale Agreements with [_________], that [_________] has made the representations and warranties in the Schedule of Representations, that such representations and warranties run to and are for the benefit of the Trust, and that pursuant to Section 2.01 of this Agreement the Depositor has transferred and assigned to the Trust all rights of the Depositor to cause [_________] under the Purchase and Sale Agreements to repurchase or substitute for Contracts conveyed thereunder in the event of a breach of such representations and warranties applicable to such Contract.

Section 3.02

Representations and Warranties of the Depositor.  By its execution of this Agreement, and each Substitution Transfer Agreement, the Depositor represents and warrants to the Trust, the Owner Trustee, the Indenture Trustee, the Noteholders and the Equity Certificateholder that, as of the Closing Date and Substitution Transfer Date (and, with respect to the representation set forth in subsection (k) of this Section 3.02 below, as of the date the certificate, written report or written statement referred to in such subsection is furnished):

(a)

Organization and Good Standing.  The Depositor is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite power to own its assets and to transact the business in which it is currently engaged.  The Depositor is duly qualified to do business and is in good standing in each jurisdiction in which the character of the business transacted by it, or properties owned or leased by it, requires such qualification and in which the failure so to qualify would have a material adverse effect on the business, properties, assets, or condition (financial or otherwise) of the Depositor or the Trust.

(b)

Authorization; Valid Transfer; Binding Obligations.  The Depositor has the power and authority to make, execute, deliver and perform this Agreement and the other Transaction Documents to which it is a party and all of the transactions contemplated under this Agreement and the other Transaction Documents to which it is a party, and to create the Trust and cause it to make, execute, deliver and perform its obligations under this Agreement and the other Transaction Documents to which it is a party and has taken all necessary action to authorize the due execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party and to cause the Trust to be created.  This Agreement and any Substitution Transfer Agreement shall effect a valid transfer and assignment of the right, title, and interest of the Depositor in and to relevant Transferred Assets, enforceab le against the Depositor and creditors of and purchasers from the Depositor.  This Agreement and the other Transaction Documents to which the Depositor is a party have been duly executed and delivered by the Depositor and constitute the legal, valid and binding obligation of the Depositor enforceable against the Depositor in accordance with their terms, except as enforcement of such terms may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally, any applicable law imposing limitations upon, or otherwise affecting, the availability or enforcement of rights to indemnification hereunder and by the availability of equitable remedies.  The Depositor is selling the Transferred Assets to the Trust with the intention of removing the Transferred Assets from the estate of the Depositor pursuant to the applicable provisions of the Bankruptcy Code.

(c)

No Consent Required.  The Depositor is not required to obtain the consent of any other Person or any consent, license, approval or authorization from, or registration or declaration with, any Governmental Authority in connection with the execution, delivery, performance, validity or enforceability of this Agreement or the other Transaction Documents to which it is a party.

(d)

No Violations.  The execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party by the Depositor, and the consummation of the transactions contemplated hereby and thereby, will not violate any Requirements of Law applicable to the Depositor, or constitute a material breach of any mortgage, indenture, contract or other agreement to which the Depositor is a party or by which the Depositor or any of the Depositor’s properties may be bound, or result in the creation or imposition of any security interest, lien, charge, pledge, preference, equity or encumbrance of any kind upon any of its properties pursuant to the terms of any such mortgage, indenture, contract or other agreement, other than as contemplated by the Transaction Documents.

(e)

Litigation.  No litigation or administrative proceeding of or before any court, tribunal or governmental body is currently pending, or to the knowledge of the Depositor threatened, against the Depositor or any of its properties or with respect to this Agreement or the other Transaction Documents to which it is a party (1) which, if adversely determined, would in the reasonable judgment of the Depositor have a material adverse effect on the business, properties, assets or condition (financial or otherwise) of the Depositor or the Trust or the transactions contemplated by this Agreement or the other Transaction Documents to which the Depositor is a party or (2) seeking to adversely affect the federal income tax or other federal, state or local tax attributes of the Notes.

(f)

Taxes.  The Depositor has filed or caused to be filed all material tax returns which, to its knowledge, are required to be filed and has paid all taxes shown to be due and payable on such returns or on any material assessments made against it or any of its property and all other material taxes, fees or other charges imposed on it or any of its property by any Governmental Authority (other than any amount of tax due, the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in accordance with generally accepted accounting principles have been provided on the books of the Depositor); no tax lien has been filed and, to the Depositor’s knowledge, no claim is being asserted, with respect to any such tax, fee or other charge.

(g)

Schedule of Representations.  The representations and warranties set forth on the Schedule of Representations are true and correct as of the Closing Date (or Substitution Transfer Date, as applicable) with respect to the Transferred Assets being conveyed to the Trust on such date.

(h)

Solvency.  The Depositor, at the time of and after giving effect to each conveyance made hereunder, is Solvent on and as of the date thereof.

(i)

Domicile; Name Changes.  The Depositor’s state of organization has not been changed within the four months preceding the Closing Date and any Substitution Transfer Date (or if so changed, all necessary actions in connection with such change have been or are being timely taken in accordance with Section 4.03 hereof).  The Depositor has not changed its name, whether by amendment of its certificate of formation, by reorganization or otherwise, within the four months preceding such date (or if so changed, all necessary actions in connection with such change have been or are being timely taken in accordance with Section 4.03 hereof).

(j)

Not an Investment Company.  The Depositor is not an “investment company” (and does not control, and is not under the control of, an investment company) within the meaning of the Investment Company Act of 1940, as amended (or the Depositor is exempt from all provisions of such Act).

(k)

Accuracy of Information.  No certificate, written report or written statement furnished by the Depositor to the Servicer, the Trust, the Owner Trustee, any Securityholder or the Administrator in connection with this Agreement or any other Transaction Document was inaccurate in any material respect as of the date it was dated or (except as otherwise disclosed to the Servicer, the Trust, the Owner Trustee, such Securityholder or the Administrator, as the case may be, at such time) as of the date so furnished.

(l)

Security Interest.  This Agreement creates a valid and continuing security interest (as defined in the UCC) in the Contracts in favor of the Trust, which security interest is prior to all other Liens (other than Permitted Liens), and is enforceable as such as against creditors of and purchasers from the Depositor.  The Depositor has caused, or will have caused within ten days after the date hereof, the filing of all appropriate UCC financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Contracts granted to the Trust hereunder.  All UCC financing statements filed or to be filed against the Depositor in favor of the Trust in connection herewith describing the Contracts contain or will contain a statement to the effect that a purchase of or security interest in any Contracts described in such fina ncing statement will violate the rights of the Trust.

(m)

Priority.  Other than the security interest granted to the Trust pursuant to this Agreement, the Depositor has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Contracts (other than to the ACE Trust, which Contracts were reconveyed to the Depositor pursuant to the ACE Assignment).  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 Contracts other than any financing statement relating to the security interest granted to the Trust hereunder or that has been terminated (other than to the ACE Trust, which security interests were reconveyed to the Depositor pursuant to UCC-1 or UCC-3 Assignments).  The Depositor is not aware of any judgment or tax lien filings against it.

(n)

The Depositor, or the Servicer, on behalf of the Depositor, will at its own expense on or shortly after the Closing Date, indicate in its computer records that the Transferred Assets have been conveyed to the Trust pursuant to the Agreement.

(o)

The Depositor or the Servicer, on behalf of the Depositor, will provide the Owner Trustee on behalf of the Trust, a statement or computer disk listing the Contract Pool Principal Balance on the Closing Date of the Contracts being transferred on the Closing Date.

Such representations (except to the extent expressly stated by their terms to speak as of a different date or time) speak as of the Closing Date and each Substitution Transfer Date, if any, but shall survive the transfer and assignment of the Contracts to the Trust.

Section 3.03

Representations and Warranties of the Servicer.  The Servicer represents and warrants to the Trust, the Owner Trustee, the Indenture Trustee, the Noteholders and the Equity Certificateholder that, as of the date of the execution and delivery of this Agreement and as of the Closing Date and each Substitution Transfer Date:

(a)

Organization and Good Standing.  The Servicer is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has the corporate power to own its assets and to transact the business in which it is currently engaged.  The Servicer is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the character of the business transacted by it or properties owned or leased by it requires such qualification and in which the failure so to qualify would have a material adverse effect on the business, properties, assets, or condition (financial or otherwise) of the Servicer or the Trust.  The Servicer (or any permitted subservicer hereunder with respect to affected Contracts, if the Servicer is not so licensed) is properly licensed in each jurisdiction to the extent required by the laws of such jurisdiction to service the Contracts in accordance with the terms hereof.

(b)

Authorization; Binding Obligations.  The Servicer has the power and authority to make, execute, deliver and perform this Agreement and the other Transaction Documents to which the Servicer is a party and all of the transactions contemplated under this Agreement and the other Transaction Documents to which the Servicer is a party, and has taken all necessary corporate action to authorize the due execution, delivery and performance of this Agreement and the other Transaction Documents to which the Servicer is a party.  This Agreement and the other Transaction Documents to which the Servicer is a party have been duly executed and delivered by the Servicer and constitute the legal, valid and binding obligation of the Servicer enforceable against the Servicer in accordance with their terms, except as enforcement of such terms may be limited by bankruptcy, insolvency or similar laws affecting the enf orcement of creditors’ rights generally, any applicable law imposing limitations upon, or otherwise affecting, the availability or enforcement of rights to indemnification hereunder and by the availability of equitable remedies.

(c)

No Consent Required.  The Servicer is not required to obtain the consent of any other Person or any consent, license, approval or authorization from, or registration or declaration with, any Governmental Authority in connection with the execution, delivery, performance, validity or enforceability of this Agreement and the other Transaction Documents to which the Servicer is a party.

(d)

No Violations.  The execution, delivery and performance of this Agreement and the other Transaction Documents to which the Servicer is a party by the Servicer will not violate any Requirements of Law applicable to the Servicer, or constitute a material breach of any mortgage, indenture, contract or other agreement to which the Servicer is a party or by which the Servicer or any of the Servicer’s properties may be bound, or result in the creation of or imposition of any security interest, lien, pledge, preference, equity or encumbrance of any kind upon any of its properties pursuant to the terms of any such mortgage, indenture, contract or other agreement, other than as contemplated by the Transaction Documents.

(e)

Litigation.  No litigation or administrative proceeding of or before any court, tribunal or governmental body is currently pending, or to the knowledge of the Servicer threatened, against the Servicer or any of its properties or with respect to this Agreement, or any other Transaction Document to which the Servicer is a party which, if adversely determined, would in the reasonable judgment of the Servicer have a material adverse effect on the business, properties, assets or condition (financial or otherwise) of the Servicer or the Trust or the transactions contemplated by this Agreement or any other Transaction Document to which the Servicer is a party.

(f)

Accuracy of Information.  No certificate, written report or written statement, furnished by the Servicer to the Depositor, the Trust, the Owner Trustee, any Securityholder or the Administrator in connection with this Agreement or any other Transaction Document was inaccurate in any material respect as of the date it was dated or (except as otherwise disclosed to the Depositor, the Trust, the Owner Trustee, such Securityholder or the Administrator, as the case may be, at such time) as of the date so furnished.  Each financial statement furnished pursuant to clause (i) of Section 9.04 is complete and correct in all material respects and fairly presents the financial condition of the Servicer (or its parent entity, if the Servicer is a wholly-owned subsidiary of another entity), as of the reporting date specified therein, and the results of operations of the Servicer (or such parent entity, a s applicable) for the period then ended, all in accordance with generally accepted accounting principles as in effect in the jurisdiction of the entity for which such financial statement is furnished.

(g)

No Servicer Default.  No event has occurred and is continuing and no condition exists which constitutes a Servicer Default.

ARTICLE IV

PERFECTION OF TRANSFERS AND PROTECTION OF SECURITY INTERESTS

Section 4.01

Custody of Contracts.  (a) Subject to the terms and conditions of this Section 4.01, the contents of each Contract File shall be held in the custody of the Servicer (including through any subservicer contemplated under Section 5.05), for the benefit of, and as agent for, the Noteholders, the Equity Certificateholder, the Indenture Trustee and the Trust, as the owner thereof.

(b)

The Servicer agrees to maintain the Contract Files at its offices where they are currently maintained, or at such other offices of the Servicer (or a subservicer contemplated under Section 5.05) as shall from time to time be established by the Servicer or such subservicer (or in certain instances at offsite storage facilities in the same general geographic area as an office of the Servicer or subservicer, pursuant to contractual agreement between the Servicer or subservicer and the Person owning or maintaining such offsite facility).  The Servicer may temporarily move individual Contract Files or any portion thereof without notice or other such compliance, as necessary to conduct collection and other servicing activities in accordance with the Servicing Standard; provided, however, that the Servicer will take all action necessary to maintain the perfection of the Trust’s interest in the Trust Ass ets and the proceeds thereof.  It is intended that by the Servicer’s agreement pursuant to Section 4.01(a) above and this Section 4.01(b), the Trust and the Owner Trustee for the benefit of the Trust shall be deemed to have possession of the Contract Files for purposes of Section 9-301 of the Uniform Commercial Code of the State in which the Contract Files are located.

(c)

As custodian, the Servicer shall have and perform the following powers and duties:

(i)

hold the Contract Files on behalf of the Noteholders and the Equity Certificateholder and the Trust; maintain accurate records pertaining to each Contract to enable it to comply with the terms and conditions of this Agreement; and maintain a current inventory thereof,

(ii)

maintain and comply with Customary Policies and Procedures with respect to Persons authorized to have access to the Contract Files;

(iii)

attend to all details in connection with maintaining custody of the Contract Files on behalf of the Noteholder and the Equity Certificateholder and the Trust; and

(iv)

indicate in the appropriate computer records that the Contracts as of the Closing Date (or Substitution Transfer Date, as the case may be) have been conveyed to the Trust.

(d)

In performing its duties under this Section 4.01, the Servicer agrees to act in accordance with the applicable Servicing Standard.  In acting as custodian of the Contract Files, the Servicer further agrees not to assert any legal or beneficial ownership interest in the Contracts or the Contract Files, except as provided in Section 5.02.

(e)

The Servicer agrees to indemnify the Noteholders and the Equity Certificateholder, the Owner Trustee, the Indenture Trustee and the Trust for any and all liabilities, obligations, losses, damages, payments, costs, or expenses of any kind whatsoever which may be imposed on, incurred by or asserted against any of such parties as the result of any act or omission by the Servicer relating to the maintenance and custody of the Contract Files or any other breach or noncompliance of the Servicer in the performance of its duties and obligations as Servicer hereunder; provided, however, that the Servicer will not be liable to any such party for any portion of any such amount resulting from the gross negligence, willful misconduct or bad faith of such party.

Section 4.02

Filings.  On or prior to the Closing Date, the Servicer shall cause UCC financing statement(s) to be filed or provided for, and from time to time the Servicer shall take and cause to be taken such other actions and execute such other documents as are necessary to perfect or further perfect and protect the Trust’s first priority interest (subject to Permitted Liens) in the Trust Assets against all other Persons.  Such additional actions may include without limitation, the filing of financing statements, amendments thereto and continuation statements, the execution of transfer instruments and the making of notations on or taking possession of records or documents of title.

Section 4.03

Name Change or Relocation.  (a) During the term of this Agreement, neither the Servicer nor the Depositor shall change, nor shall the Servicer permit any Financing Originator which is an Affiliate of the Servicer to change, (x) its state of organization, name, identity or structure or location within the meaning of the applicable UCC or (y) the location of the Contract Files, without first giving at least 30 days’ prior written notice to the Servicer, the Owner Trustee, and the Indenture Trustee.

(b)

If any change in either the Servicer’s, a Financing Originator’s (in the case of an Affiliate of the Servicer or, if the Servicer has actual knowledge of such change, in the case of a Financing Originator which is not an Affiliate of the Servicer) or the Depositor’s name, identity or structure or other action would make any financing or continuation statement or notice of lien seriously misleading within the meaning of applicable provisions of the UCC or any title statute, the Servicer, no later than four months after the effective date of such change, shall file such amendments as may be required to preserve and protect the Trust’s interests in the Trust Assets and the proceeds thereof.  In addition, neither any Financing Originator which is an Affiliate of the Servicer, the Servicer nor the Depositor shall change its state of organization or the location of the Contract Files unl ess it has first taken such action as is necessary to preserve and protect the Trust’s interest in the Trust Assets.

Promptly after taking any of the foregoing actions (but not later than 20 calendar days), the Servicer shall deliver to the Owner Trustee, the Indenture Trustee and the Rating Agencies an Opinion of Counsel reasonably acceptable to the Owner Trustee, the Indenture Trustee and the Rating Agencies stating that, in the opinion of such counsel, all financing statements or amendments necessary to preserve and protect the interests of the Trust and Indenture Trustee in the Trust Assets have been filed, and reciting the details of such filing.

ARTICLE V

SERVICING OF CONTRACTS

Section 5.01

Initial Servicer’s Appointment and Acceptance; Responsibility for Contract Administration.  [_________] shall be and is hereby appointed as the Servicer and custodian (as contemplated in Article IV hereof) pursuant to this Agreement with respect to the Contract Assets in the Contract Pool.  [_________] accepts the appointment and agrees to act as the Servicer and custodian pursuant to this Agreement.

Except to the extent otherwise specified herein or as contemplated in Section 5.05, the Servicer will have the sole obligation to manage, administer, service and make collections on the Contracts and perform or cause to be performed all contractual and customary undertakings of the Originator of the Contracts to the Obligor.  The Trust, at the written request of a Servicing Officer, shall furnish the Servicer with any powers of attorney or other documents necessary or appropriate in the opinion of the Servicer to enable the Servicer to carry out its servicing and administrative duties hereunder.  The Servicer is hereby appointed the Servicer hereunder until such time as any Servicing Transfer may be effected pursuant to Article VIII hereof.

Section 5.02

General Duties.  The Servicer will service, administer and enforce the Contracts in the Contract Pool on behalf of the Trust and will have full power and authority to do any and all things in connection with such servicing and administration which it deems necessary or desirable and as shall not contravene the provisions of this Agreement or any other Transaction Document.  The Servicer will manage, service, administer, and make collections on the Contracts in the Contract Pool in accordance with the Servicing Standard.  The Servicer’s duties will include collection and posting of all payments, responding to inquiries of Obligors regarding the Contracts in the Contract Pool, investigating delinquencies, accounting for collections, furnishing reports with respect to collections and payments as contemplated in Article IX hereof, making Servicer Advances in accordance with Section 5 .14 hereof, and using its best efforts to maintain the perfected first priority interest of the Trust in the Trust Assets (subject to Permitted Liens).  The Servicer will have full power and authority, acting alone, to do any and all things in connection with such managing, servicing, administration, and collection that it deems necessary or desirable.  If the Servicer commences a legal proceeding to enforce a Defaulted Contract pursuant to Section 5.15 or commences or participates in a legal proceeding (including a bankruptcy proceeding) relating to or involving a Contract in the Contract Pool, the Trust will be deemed to have automatically assigned such Contract to the Servicer solely for purposes of, and to the extent necessary for, commencing or participating in any such proceeding as a party or claimant (but in all cases subject to the continuing interest of the Trust and its assignees in the proceeds and recoveries from such proceedings, as and to the extent provided in the Transaction D ocuments), and the Servicer is authorized and empowered by the Trust, pursuant to this Section 5.02, to execute and deliver, on behalf of itself and the Trust, any and all instruments of satisfaction or cancellation, or partial or full release or discharge, and all other notices, demands, claims, complaints, responses, affidavits or other documents or instruments in connection with any such proceedings.  If in any enforcement suit or legal proceeding it is held that the Servicer may not enforce a Contract on the grounds that it is not a real party in interest or a holder entitled to enforce the Contract, then the Trust will, at the Servicer’s expense and written direction, take steps to enforce the Contract, including bringing suit in the Trust’s name.

Section 5.03

Assignment or Replacement.  At the request of an Obligor, the Servicer may in its sole discretion consent to the assignment by such Obligor of its rights under a Contract in the Contract Pool or the sublease of a unit of the Equipment relating to such a Contract, so long as such Obligor remains liable for all of its obligations under such Contract; provided, that the Servicer may release such Obligor from its obligations if the Obligor’s assignee is determined by the Servicer to be of at least equivalent credit risk, all in accordance with Customary Policies and Procedures.  Upon the request of any Obligor, the Servicer may, in its sole discretion, provide for the substitution or replacement of any unit of Equipment for a substantially similar unit of Equipment, so long as such Obligor remains liable for all of its obligations under such Contract.

Section 5.04

Disposition Upon Termination of Contract.  Upon the termination of a Contract included in the Contract Pool as a result of a default by the Obligor thereunder, and upon any such Contract becoming a Defaulted Contract, the Servicer will use commercially reasonable efforts to dispose of any related Equipment.  Without limiting the generality of the foregoing, if the Servicer disposes of any such Equipment by purchasing such Equipment or by selling such Equipment to any of its Affiliates, such disposition shall be for a purchase price equal to the fair market value thereof (as determined by the Servicer in its reasonable discretion).  The Servicer will deposit any Prepayments and any Liquidation Proceeds derived from any such disposition in accordance with Article VII hereof.

Section 5.05

Subservicers.  The Servicer may enter into servicing agreements with one or more subservicers (including any Affiliate of the Servicer) to perform all or a portion of the servicing functions on behalf of the Servicer; provided that the Servicer shall remain obligated and be liable to the Trust for servicing and administering the Contracts in the Contract Pool in accordance with the provisions of this Agreement without diminution of such obligation and liability by virtue of the appointment of such subservicer, to the same extent and under the same terms and conditions as if the Servicer alone were servicing and administering such Contracts.  The fees and expenses of the subservicer (if any) will be as agreed between the Servicer and its subservicer and neither the Owner Trustee, the Trust, the Indenture Trustee nor any Noteholder or Equity Certificateholder will have any responsibility therefor .  All actions of a subservicer taken pursuant to such a sub-servicing agreement will be taken as an agent of the Servicer with the same force and effect as though performed by the Servicer.

Section 5.06

Further Assurance.  The Trust will execute and deliver to the Servicer, and the Servicer will prepare and furnish any subservicer with, any powers of attorney and other documents necessary or appropriate to enable the Servicer or a subservicer, as applicable, to carry out its servicing and administrative duties under this Agreement and the other Transaction Documents.

Section 5.07

Notice to Obligors.  In the event that the Servicer resigns or is replaced, then if the place for payment pursuant to any Contract is changed, the Successor Servicer must give each related Obligor prompt written notice of the appointment of the Successor Servicer and the place to which such Obligor should make payments pursuant to each such Contract.

Section 5.08

Collection Efforts; Modification of Contracts.  (a) The Servicer will make reasonable efforts to collect all payments called for under the terms and provisions of the Contracts in the Contract Pool as and when the same become due, in accordance with the Servicing Standard.  The Servicer is authorized in its discretion to waive any Late Charges, or other administrative fees, expenses and charges collectible in respect of a Contract in the Contract Pool, including late payment interest, documentation fees, insurance administration charges, and extension fees.

(b)

The Servicer also may, subject to Sections 5.09 and 5.10, at the request of an Obligor and at the Servicer’s option, waive, amend, modify or otherwise vary any other provision of a Contract in accordance with Customary Policies and Procedures (it being understood that any modification or amendment of a Contract resulting from an Insolvency Event with respect to the related Obligor will not be deemed to have been granted by the Servicer hereunder), including without limitation:

(i)

in order to (A) change the Obligor’s regular due date to a date within the same Collection Period in which such due date occurs, or (B) re-amortize (over the remainder of the original Contract term) the Scheduled Payments on a Contract following a partial Prepayment (provided, that the sum of such partial Prepayment and the Contract Principal Balance of the affected Contract after re-amortization is at least equal to the Contract Principal Balance for such Contract prior to giving effect to the partial Prepayment), or

(ii)

for any other purpose; provided, that no such modification or amendment shall:

(A)

change the amount or the due date of any Scheduled Payment (except as provided in clauses (i)(A) and (B) above, Section 5.09 and Section 5.10 below);

(B)

release the related Equipment from the Contract, unless (1) the release complies with Section 5.03 above, or (2) the release is pursuant to a partial Prepayment (which, in the case of a partial Prepayment on a Lease, meets the requirements of Section 5.09 below) and the ratio of the fair market value (determined by the Servicer in its reasonable discretion) of the related Equipment to the Contract Principal Balance of the affected Contract after giving effect to such Prepayment and release, is at least equal to such ratio existing prior to such event;

(C)

except as provided in clause (ii)(A) above, result in the Contract Principal Balance of the Contract being less than it would have been absent such modification or amendment; or

(D)

if such modification or amendment had been in effect on the Closing Date or the relevant Substitution Transfer Date with respect to the Contract, cause or have caused the Contract not to constitute an Eligible Contract.

Section 5.09

Prepayments of Certain Contracts.  The Servicer may, at its option and in accordance with Customary Policies and Procedures, agree to permit a Contract in the Contract Pool that is not otherwise contractually prepayable by its terms and is not a Defaulted Contract, to become a Prepaid Contract through a voluntary Prepayment by the Obligor (which shall not be deemed to include prepayment due to a Casualty Loss); provided, that the Servicer will not permit the voluntary full or partial Prepayment of such a Contract unless the amount of such Prepayment (or, in the case of a partial Prepayment, the sum of such Prepayment and the remaining Contract Principal Balance of the Contract after application of such Prepayment), together with such additional amounts as are (i) otherwise available to or supplied by the Servicer for the purpose of prepaying such Contract, and (ii) deposited in the Collection Accoun t contemporaneously with the deposit therein of such Prepayment, is at least equal to the Required Payoff Amount for such Contract determined as of the beginning of the current Collection Period.

Section 5.10

Certain Extensions; Acceleration.  (a) The Servicer may (subject to subsection (b) below) grant payment extensions on a Contract in the Contract Pool, consistent with Customary Policies and Procedures (it being understood that any extensions on a Contract resulting from an Insolvency Event with respect to the related Obligor will not be deemed to have been granted by the Servicer hereunder) if the Servicer believes in good faith that such extension is necessary to avoid a termination and liquidation of such Contract and will maximize the amount to be received by the Trust with respect to such Contract; provided, however, that the aggregate period of all extensions granted on a Contract shall not exceed six months.  Nothing in this Section 5.10 shall be deemed to prevent the Servicer from extending or renewing, or otherwise accepting the continued performance by the Obligor under, a Contrac t after expiration of its stated term.

(b)

The Servicer also, consistent with Customary Policies and Procedures, may accelerate (or elect not to accelerate) the maturity of all or any Scheduled Payments under any Contract in the Contract Pool under which a default under the terms thereof has occurred and is continuing (after the lapse of any applicable grace period); provided that the Servicer may accelerate the Scheduled Payments due under any Contract in the Contract Pool (and take other action in accordance with applicable Customary Policies and Procedures, including repossessing or otherwise converting the related Equipment, to realize upon the value of such Contract and the related Equipment) to the fullest extent permitted by the terms of such Contract, promptly after such Contract becomes a Defaulted Contract.

Section 5.11

Taxes and Other Amounts.  To the extent provided for in any Contract in the Contract Pool, the Servicer will make reasonable efforts consistent with the Servicing Standard to collect (or cause to be collected) all payments with respect to amounts due for taxes, assessments and insurance premiums relating to such Contract or the related Equipment and remit such amounts to the appropriate Governmental Authority or insurer on or prior to the date such payments are due.

Section 5.12

Suits by Servicer.  Notwithstanding anything herein to the contrary, the Servicer does not have any obligation pursuant to this Agreement to appear in, prosecute or defend any legal action which is not incidental to its servicing duties under this Agreement.

Section 5.13

Remittances.  The Servicer will remit and service all Collections in accordance with Article VII hereof.

Section 5.14

Servicer Advances.  For any Collection Period, if the Servicer determines that any Scheduled Payment (or portion thereof) which was due and payable pursuant to a Contract in the Contract Pool during such Collection Period was not received prior to the end of such Collection Period, the Servicer shall make a Servicer Advance in an amount up to the amount of such delinquent Scheduled Payment (or portion thereof), to the extent that in its sole discretion it determines that it can recover such amount from subsequent Collections under the related Contract; provided, however, if a Person other than an affiliate of [_________] becomes the Servicer hereunder, such Person shall not be required to make a Servicer Advance.  The Servicer will deposit any Servicer Advances into the Collection Account on or prior to 11:00 a.m. (New York time) on the Deposit Date, in immediately available funds. &n bsp;The Servicer will be entitled to be reimbursed for Servicer Advances pursuant to Article VII hereof.

Section 5.15

Realization Upon Liquidated Contract.  The Servicer will use its reasonable best efforts consistent with the Servicing Standard to repossess or otherwise comparably convert the ownership of any Equipment relating to a Liquidated Contract and will act as transfer and processing agent for Equipment or Applicable Security which it repossesses.  The Servicer will follow such other practices and procedures, consistent with the Servicing Standard, in order to realize upon such Equipment or Applicable Security, which practices and procedures may include reasonable efforts to enforce all obligations of Obligors and repossessing and selling such Equipment or Applicable Security at public or private sale in circumstances other than those described in the preceding sentence.  In any case in which any such Equipment or Applicable Security has suffered damage, the Servicer will not expend funds in conn ection with any repair or toward the repossession of such Equipment or Applicable Security unless it determines in its discretion that such repair and/or repossession will increase the Liquidation Proceeds by an amount greater than the amount of such expenses.  The Servicer will remit to the Collection Account the Liquidation Proceeds received in connection with the transfer or disposition of Equipment or Applicable Security relating to a Liquidated Contract in accordance with Article VII hereof.

Section 5.16

Maintenance of Insurance Policies.  The Servicer will use reasonable efforts, consistent with the Servicing Standard, to ensure that each Obligor complies with applicable insurance requirements set forth in the related Contract; provided that the Servicer, in accordance with Customary Policies and Procedures, may allow Obligors to self-insure.  If an Obligor fails to maintain property damage insurance to the extent required under its Contract, the Servicer may, consistent with Customary Policies and Procedures, purchase and maintain such insurance on behalf of, and at the expense of (if the applicable Contract so provides), the Obligor.  In connection with its activities as Servicer of Contracts in the Contract Pool, the Servicer agrees to present, on behalf of itself, the Trust and the Noteholders or Equity Certificateholders, claims to the insurer under each Insurance Policy and any such liability policy, and to settle, adjust and compromise such claims, in each case, consistent with the terms of each Contract.

Section 5.17

Certain Other Duties With Respect to Trust.  The Servicer shall, and hereby agrees that it will, monitor the Trust’s compliance with all applicable provisions of state and federal securities laws, notify the Trust and the Administrator of any actions to be taken by the Trust necessary for compliance with such laws and prepare on behalf of the Trust and the Administrator all notices, filings or other documents or instruments required to be filed under such laws.

Section 5.18

Servicing Compensation.  As compensation for its servicing activities with respect to the Contract Pool, and also in consideration of its expenses as set forth in Section 5.19, the Servicer shall be entitled to receive a servicing fee in respect of any Collection Period (or portion thereof) (with respect to each Collection Period, the “Servicing Fee”), equal to the sum of (i) the product of one-twelfth of the Servicing Fee Percentage per annum multiplied by the Contract Pool Principal Balance as of the first day of such Collection Period (except that for the first Collection Period the Servicing Fee will be the sum of (A) the product of one-twelfth of the Servicing Fee Percentage per annum multiplied by the Contract Pool Principal Balance as of [___________] 20[  ], plus (B) the product of one-twelfth of the Servicing Fee Percentage per annum multiplied by the Contrac t Pool Principal Balance as of [__________] 20[  ]) and (ii) collections representing Late Charges, documentation fees, administrative charges or extension fees on any Contract, or maintenance premiums in respect of the related Equipment.

Section 5.19

Payment of Certain Expenses by Servicer.  The Servicer will be required to pay all expenses incurred by it in connection with its activities under this Agreement, including fees and disbursements of independent accountants, counsel, the Trustees, taxes imposed on the Servicer, expenses incurred in connection with payments and reports pursuant to this Agreement and the Administration Agreement, and all other fees and expenses not expressly stated under this Agreement (including ongoing fees and expenses of the Owner Trustee) to be for the account of the Trust or the Depositor, but excluding Liquidation Expenses incurred as a result of activities contemplated by Section 5.15 (which may be netted from Liquidation Proceeds).  The Servicer will be required to pay all reasonable fees and expenses owing to the Owner Trustee or the Indenture Trustee in connection with the maintenance of the Collec tion Account.  The Servicer shall be required to pay such expenses for its own account and shall not be entitled to any payment or reimbursement therefor other than the Servicing Fee, payable from Collections as provided herein.

Section 5.20

Records.  The Servicer shall, during the period it is Servicer hereunder, maintain such books of account and other records as will enable the Trust or the Administrator to determine the status of each Contract in the Contract Pool.

Section 5.21

Inspection.  (a) The Servicer shall afford the Trust and the Indenture Trustee and their respective authorized agents not more frequently than once during each calendar year at the Servicer’s expense, not to exceed $1,000 in expenses and upon reasonable prior written request, reasonable access during normal business hours to the Servicer’s records relating to the Contracts in the Contract Pool, and will cause its personnel to assist in any examination of such records by any such Person, and allow copies of the same to be made.  The examination referred to in this Section will be conducted in a manner which does not unreasonably interfere with the Servicer’s normal operations or customer or employee relations.  Without otherwise limiting the scope of the examination, such examining party may, using generally accepted audit procedures, verify the status of each such Contr act and review the Computer Disk and records relating thereto for conformity to reports prepared by the Servicer pursuant to Article IX hereof, and compliance with the standards represented to exist as to each such Contract in this Agreement and the other Transaction Documents.

(b)

At all times during the term hereof, the Servicer shall keep available a copy of the Schedule of Contracts at its principal executive office for inspection by any such party referred to in subsection (a) of this Section 5.21.

Section 5.22

Trust To Cooperate in Releases.  At the same time as (i) any Lease in the Contract Pool terminates and the Equipment related to such Lease is sold, (ii) any Contract in the Contract Pool becomes a Prepaid Contract and in connection therewith the Equipment related to such Prepaid Contract is sold, (iii) the final Scheduled Payment is made in full on a Contract in the Contract Pool, (iv) a Contract previously in the Contract Pool becomes a Replaced Contract in accordance with Section 2.03, or is repurchased by deposit of a Purchase Amount as provided herein, or (v) the Servicer substitutes or replaces any unit of Equipment as contemplated in Section 5.03, the Trust shall to the extent requested by the Servicer release the Trust’s interest in the Equipment relating to such affected Contract or such substituted or replaced Equipment, as the case may be; provided that such release will not constitute a release of the Trust’s interest in the proceeds of Equipment the subject of a Contract still in the Contract Pool (other than with respect to Equipment that is replaced pursuant to Section 5.03).  In connection with any transfer of such Equipment, the Trust and the Indenture Trustee shall execute and deliver to the Servicer any assignments, bills of sale, authorizations to file termination statements and any other releases and instruments as the Servicer may request and prepare at its expense in order to effect such release and transfer; provided that neither the Trust nor the Indenture Trustee shall be deemed to make any representation or warranty, express or implied, with respect to any such Equipment in connection with such transfer and assignment.  Nothing in this Section 5.22 shall diminish the Servicer’s obligations pursuant to Article VII with respect to the proceeds of any such transfer.

Section 5.23

Separate Entity Existence.  The Servicer is and at all times since its incorporation has been operated in such a manner that it would not be substantively consolidated with either the Depositor or the Trust and such that the separate existence of any of the Servicer, the Depositor or the Trust would not be disregarded in the event of a bankruptcy or insolvency of the Servicer.

Section 5.24

Assignment of Servicing.  The Servicer may sell, transfer, assign or convey its rights as Servicer to any Eligible Servicer, upon written notice to the Trustees and the Rating Agencies, without the consent of the Securityholders or the Trustees, provided that the Rating Agency Condition is satisfied.  No such sale, transfer, assignment or conveyance shall become effective until such Eligible Servicer shall have assumed all of the responsibilities and obligations of the Servicer under the Transaction Documents.

Section 5.25

Optional Repurchase of Defaulted Contracts.  The Servicer may, but shall have no obligation to, repurchase a Defaulted Contract, at any time, at a price equal to the Contract Principal Balance for such Defaulted Contract; provided that the aggregate amount of repurchases made under this section shall not exceed an amount equal to [__]% of the Initial Contract Pool Principal Balance.

ARTICLE VI

COVENANTS OF THE DEPOSITOR

Section 6.01

LLC Existence.  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 other Transaction Documents and each other instrument or agreement necessary or appropriate to the proper administration of this Agreement and the transactions contemplated hereby.  In addition, all transactions and dealings between the Depositor and its Affiliates will be conducted on an arm’s-length basis.

Section 6.02

Contracts Not to be Evidenced by Promissory Notes.  The Depositor will take no action to cause any Contract not originally consisting of or evidenced by an instrument (except to the extent part of tangible chattel paper) (as such terms are defined in the UCC), to be evidenced by an instrument, except in connection with the enforcement or collection of such Contract.

Section 6.03

Security Interests.  The Depositor will not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien on any Contract in the Contract Pool or on any other Trust Asset or on any related Equipment, whether now existing or hereafter transferred to the Trust, or any interest therein (except for Permitted Liens).  The Depositor will immediately notify the Trust and the Indenture Trustee of the existence of any Lien (other than Permitted Liens) on any Contract in the Contract Pool or on any other Trust Assets or on any related Equipment; and the Depositor shall defend the right and interest of the Trust in, to and under the Contracts in the Contract Pool and the related Equipment, against all claims of third parties; provided, however, that nothing in this Section 6.03 shall prevent or be deemed to prohibit (i) the Depositor from suffe ring to exist Permitted Liens upon any of the Contracts in the Contract Pool or any related Equipment, or (ii) repurchases or substitutions by [_________] pursuant to the Purchase and Sale Agreements.

Section 6.04

Delivery of Collections.  The Depositor agrees to pay to the Servicer promptly any misdirected Collections received by the Depositor in respect of the Contracts in the Contract Pool, for application in accordance with Article VII.

Section 6.05

Regulatory Filings.  The Depositor shall make any filings, reports, notices, applications and registrations with, and seek any consents or authorizations from, the Commission and any state securities authority on behalf of the Trust as may be necessary or that the Depositor deems advisable to comply with any federal or state securities or reporting requirements or laws.

Section 6.06

Compliance With Law.  The Depositor hereby agrees to comply in all material respects with all Requirements of Law applicable to the Depositor.

Section 6.07

Activities.  The Depositor shall not engage in any business or activity of any kind, or enter into any transaction or indenture, mortgage, instrument, agreement, contract, lease or other undertaking, which is not directly related to the transactions contemplated and authorized by this Agreement or the other Transaction Documents; provided, however, that the Depositor may purchase and sell (or grant Liens in respect of) contracts and/or other related assets similar to the Contracts to other Persons in securitization or other non-recourse financing transactions involving [_________] or any of its Affiliates.

Section 6.08

Indebtedness.  The Depositor shall not create, incur, assume or suffer to exist any Indebtedness or other liability whatsoever, except (i) obligations incurred under this Agreement or other Transaction Documents, or incidental thereto, (ii) liabilities incidental to the maintenance of its corporate existence in good standing, or (iii) obligations in connection with transactions described in the proviso to Section 6.07.

Section 6.09

Guarantees.  The Depositor shall not become or remain liable, directly or contingently, in connection with any Indebtedness or other liability of any other Person, whether by guarantee, endorsement (other than endorsements of negotiable instruments for deposit or collection in the ordinary course of business), agreement to purchase or repurchase, agreement to supply or advance funds, or otherwise, except as contemplated hereby and in connection with transactions described in the proviso to Section 6.07.

Section 6.10

Investments.  The Depositor shall not make or suffer to exist any loans or advances to, or extend any credit to, or make any investments (by way of transfer of property, contributions to capital, purchase of stock or securities or evidences of indebtedness, acquisition of the business or assets, or otherwise) in, any Person except (i) for purchases or other acquisitions of Contracts and related Contract Assets pursuant to the Purchase and Sale Agreements or purchases or other acquisitions of similar contracts and related assets permitted by the proviso to Section 6.07, (ii) the holding of ownership interests in Equipment contemplated herein or in transactions permitted by the proviso to Section 6.07, or (iii) for investments in Eligible Investments in accordance with the terms of this Agreement or investments in connection with the transactions permitted by the proviso to Section 6.07.

Section 6.11

Merger; Transfers.  The Depositor shall not enter into any transaction of merger or consolidation, or liquidate or dissolve itself (or suffer any liquidation or dissolution) or acquire or be acquired by any Person, or convey, sell, lease or otherwise dispose of all or substantially all of its property or business, except as provided for in this Agreement or in transactions permitted by the proviso to Section 6.07.

Section 6.12

Payments.  The Depositor shall not declare or pay, directly or indirectly, any dividend or make any other payment (whether in cash or other property) with respect to the profits, assets or capital of the Depositor or any Person’s interest therein, or purchase, redeem or otherwise acquire for value any of its equity ownership interests now or hereafter outstanding, except that the Depositor may effect payments of its earnings in respect of Trust Assets to its members in each case so long as it would continue to be Solvent after giving effect thereto, and otherwise in accordance with the Transaction Documents.

Section 6.13

Other Agreements.  The Depositor shall not become a party to, or permit any of its properties to be bound by, any indenture, mortgage, instrument, contract, agreement, lease or other undertaking, except this Agreement and the other Transaction Documents to which it is a party and any agreement relating to another transaction permitted by the proviso to Section 6.07; nor shall it amend or modify the provisions of its Certificate of Formation or Limited Liability Company Agreement except in accordance with the Transaction Documents and with the consent of the Required Holders, or issue any power of attorney except to the Owner Trustee, the Indenture Trustee or the Servicer pursuant to the Transaction Documents (or other similar powers of attorney in connection with transactions permitted by the proviso to Section 6.07).

Section 6.14

Separate Entity Existence.  

(i)

The Depositor shall:

(A)

Maintain its own deposit account or accounts, separate from those of any Affiliate, with commercial banking institutions.  The funds of the Depositor will not be diverted to any other Person or for other than authorized uses of the Depositor.

(B)

Ensure that, to the extent that it shares the same officers or other employees as any of its members or Affiliates, the salaries of and the expenses related to providing benefits to such officers and other employees shall be fairly allocated among such entities, and each such entity shall bear its fair share of the salary and benefit costs associated with all such common officers and employees.

(C)

Ensure that, to the extent that it jointly contracts with any of its members or Affiliates to do business with vendors or service providers or to share overhead expenses, the costs incurred in so doing shall be allocated fairly among such entities, and each such entity shall bear its fair share of such costs.  To the extent that the Depositor contracts or does business with vendors or service providers when the goods and services provided are partially for the benefit of any other Person, the costs incurred in so doing shall be fairly allocated to or among such entities for whose benefit the goods and services are provided, and each such entity shall bear its fair share of such costs.  All material transactions between Depositor and any of its Affiliates shall be only on an arm’s-length basis.

(D)

To the extent that the Depositor and any of its members or Affiliates have offices in the same location, there shall be a fair and appropriate allocation of overhead costs among them, and each such entity shall bear its fair share of such expenses.

(E)

Conduct its affairs strictly in accordance with its Limited Liability Company Agreement and its Certificate of Formation, and observe all necessary, appropriate and customary limited liability company formalities, including, but not limited to, holding all regular and special members’ and manager/directors’ meetings appropriate to authorize all entity action, keeping separate and accurate records of such meetings and its actions, passing all resolutions or consents necessary to authorize actions taken or to be taken, and maintaining accurate and separate books, records and accounts, including, but not limited to, payroll and intercompany transaction accounts.

(ii)

The Depositor, is and at all times since its organization has been operated in such a manner that it would not be substantively consolidated with [_________] or the Trust and such that the separate existence of any of the Depositor, [_________] or the Trust would not be disregarded in the event of a bankruptcy or insolvency of the Depositor, [_________] or the Trust, and in such regard:

(A)

the Depositor shall not (1) dissolve or liquidate, in whole or in part or (2) merge or consolidate with or into any other entity, or convey or transfer all or substantially all of its properties and assets to any other entity except in compliance with this Agreement and the Indenture.

(B)

the Depositor is not involved in the day-to-day management of [_________] or the Trust:

(C)

the Depositor maintains separate records and books of account from [_________] and the Trust and otherwise observes formalities under its charter and as required by law;

(D)

the financial statements and books and records of the Depositor will reflect the separate existence of [_________] and the Trust except to the extent that the Depositor’s financial and operating results are consolidated with those of its ultimate parent company in consolidated financial statements;

(E)

the Depositor maintains its assets separately from the assets of [_________] and the Trust (including through the maintenance of a separate bank account), the Depositor’s funds and assets, and records relating thereto, have not been and are not commingled with those of [_________] and the Trust (except temporarily as otherwise permitted hereby), transactions between [_________] and the Depositor are generally reflective of arm’s length transactions;

(F)

all business correspondence of the Depositor and other communications are conducted in the Depositor’s own name and on its own stationery; and

(G)

neither [_________] nor the Trust acts as an agent of the Depositor in any capacity and the Depositor does not act as agent for the Servicer or the Trust, but instead presents itself to the public as an entity separate from the Servicer and the Trust.

Section 6.15

Location; Records.  The Depositor shall not change its state of organization nor move outside the State of New Jersey, the location of its chief executive office, without thirty (30) days’ prior written notice to the Trust, the Indenture Trustee and the Servicer, and will promptly take all actions reasonably required (including, but not limited to, all filings and other acts necessary or advisable under the UCC of each relevant jurisdiction) in order to continue the first priority perfected security interest of the Indenture Trustee in Trust Assets (subject to Permitted Liens).  The Depositor will give the Indenture Trustee, the Trust and the Servicer prompt notice of a change within the State of New Jersey of the location of its chief executive office.

Section 6.16

Liability of Depositor; Indemnities.  The Depositor shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Depositor under this Agreement.

The Depositor shall indemnify, defend and hold harmless the Trust, the Trustees (including in their individual capacities) and the Servicer (and any of their respective officers, directors, employees or agents) from and against any taxes that may at any time be asserted against any such Person with respect to the transactions contemplated herein and in the other Transaction Documents, including any sales, gross receipts, general corporation, tangible personal property, personal property replacement privilege or license taxes (but, in the case of the Trust, not including any taxes asserted with respect to, and as of the date of, the transfer of Contracts to the Trust or the issuance and original sale of the Notes, or asserted with respect to ownership of Contract Assets, or federal or other income taxes arising out of payments from Collections on the Trust Assets) and costs and expenses in defending against the s ame.

The Depositor shall indemnify, defend and hold harmless the Trust, the Trustees (including in their individual capacities), the Servicer (and any of their respective officers, directors, employees or agents) and the Securityholders from and against any loss, liability or expense incurred by reason of the Depositor’s willful misfeasance, bad faith or negligence (other than errors in judgment) in the performance of its duties under this Agreement, or by reason of reckless disregard of its obligations and duties under this Agreement.

The Depositor shall indemnify, defend and hold harmless the Trust, the Trustees (including in their individual capacities), and the Servicer (and any of their respective officers, directors, employees or agents) from and against all costs, expenses, losses, claims, damages and liabilities arising out of or incurred in connection with the acceptance or performance (or failure of performance) of the trusts and duties herein and, in the case of the Owner Trustee, in the Trust Agreement and, in the case of the Indenture Trustee, in the Indenture, except to the extent that  such cost, expense, loss, claim, damage or liability in the case of (i) the Owner Trustee shall be due to the willful misfeasance, bad faith or negligence of the Owner Trustee, or shall arise from the breach by the Owner Trustee of any of its representations or warranties set forth in Section 7.03 of the Trust Agreement, or (ii) the Inde nture Trustee shall be due to the willful misfeasance, bad faith or negligence of the Indenture Trustee.

The Depositor shall indemnify, defend and hold harmless the Trustees (including in their individual capacities) from and against any loss, liability or expense incurred by reason of the Depositor’s or Trust’s violation of federal or state securities laws in connection with the offering and sale of the Notes and the Certificate.

Indemnification under this Section shall include, without limitation, reasonable fees and expenses of counsel and expenses of litigation; provided, however, that the indemnification under this Section, notwithstanding anything to the contrary, is limited to the assets of the Depositor (including its rights under Article VI of the Series 20[  ]-[__] Purchase Agreement or Article VI of the Non-ACE Purchase Agreement); provided, further, any indemnity payments to be made pursuant to this Section shall not be made from the Trust Assets (except to the extent any of the same have been distributed to the Depositor free and clear of any interest of the Trust therein and except to the extent [_________] as co-obligor is obligated to make such payment pursuant to Article VI of the Series 20[  ]-[__] Purchase Agreement, or Article VI of the Non-ACE Purchase Agreement), and such indemnity payments, if un paid, shall not constitute a claim against the Trust or the Trust Assets (except in respect of rights against [_________] in respect of the aforementioned Articles of the Purchase and Sale Agreements).  If the Depositor (or [_________] pursuant to the aforementioned Articles of the Purchase and Sale Agreements) 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 (or [_________], as applicable), without interest.

Indemnification under this Section shall survive the resignation or removal of any of the Trustees, as the case may be, and the termination of the Trust Agreement or this Agreement.

Section 6.17

Bankruptcy Limitations.  The Depositor shall not, without the affirmative vote of each of the manager/directors of the Depositor (which must include the affirmative vote of at least one duly appointed Independent Director as defined in the Certificate of Formation and the Limited Liability Company Agreement of the Depositor) (A) dissolve or liquidate, in whole or in part, or institute proceedings to be adjudicated bankrupt or insolvent, (B) consent to the institution of bankruptcy or insolvency proceedings against it, (C) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy, (D) consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Depositor or a substantial part of its property, (E) make a general assignment for the benefit of creditors, (F) admit i n writing its inability to pay its debts generally as they become due, or (G) take any entity action in furtherance of the actions set forth in clauses (A) through (F) above; provided, however, that no manager/director may be required by any member of the Depositor to consent to the institution of bankruptcy or insolvency proceedings against the Depositor so long as it is Solvent.

Section 6.18

Limitation on Liability of Depositor and Others.  The Depositor and any director or officer or employee or agent of the Depositor may rely in good faith on any document of any kind, prima facie properly executed and submitted by any Person respecting any matters arising hereunder.  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.

ARTICLE VII

ESTABLISHMENT OF ACCOUNTS; PAYMENTS

Section 7.01

Trust Accounts; Collections.  (a) On or before the Closing Date, the Depositor (or the Servicer on its behalf) shall cause the Indenture Trustee to establish the Collection Account (the “Collection Account”) and the Reserve Account (the “Reserve Account”), each in the name of the Indenture Trustee for the benefit of the Noteholders and the Equity Certificateholder.  The Servicer is hereby required to ensure that each of the Trust Accounts is established and maintained as a segregated corporate trust account with a Qualified Institution.  If any institution with which any of the accounts established pursuant to this Section 7.01(a) ceases to be a Qualified Institution, the Servicer shall within 30 days after notice of such event establish a replacement account at a Qualified Institution, and effect (or cause to be effected) a concurrent transfer of all amounts in the current non-qualifying account to the replacement account.

(b)

(i)

Subject to subsection 7.01(b)(ii) hereof, the Servicer shall deposit or cause to be deposited, without deposit into any intervening account, into the Collection Account as promptly as practical after the Date of Processing (but in any case not later than the second Business Day following the Date of Processing thereof), all Collections on deposit with the Servicer in the form of available funds, and all Collections otherwise received by the Servicer (and all Investment Earnings from investments of the Collection Account).  

(i)

Notwithstanding anything in this Agreement to the contrary, for so long as, and only so long as,

(A)

the Servicer or the direct or indirect parent of the Servicer shall have and maintain a short-term debt rating of at least “A-1” by Standard & Poor’s and either a short-term debt rating of “P -1 “ or a long-term debt rating of at least “A2” by Moody’s, or

(B)

the Servicer obtains a letter of credit, surety bond or insurance policy (the “Servicer Letter of Credit”) under which demands for payment may be made to secure timely remittance of monthly collections to the Collection Account and the Trustees are provided with a letter from each Rating Agency to the effect that the utilization of such alternative remittance schedule and any amendment required to be made to this Agreement in connection therewith will not result in a qualification, reduction or withdrawal of its then current rating of the Notes,

the Servicer may make the deposits to the Collection Account specified in subsection 7.01(b)(i) hereof on a monthly basis, but not later than the Deposit Date following the last day of the Collection Period within which such payments were processed by the Servicer, in an amount equal to the net amount of such deposits and payments which would have been made to the Collection Account during such Collection Period but for the provisions of this subsection 7.01(b)(ii).  In the event that the Servicer is permitted to make remittances of collections to the Collection Account pursuant to Section 7.01(b)(ii)(B) hereof, this Agreement may be modified, to the extent necessary to provide for the Servicer Letter of Credit, without the consent of any Securityholder.  The Servicer shall notify the Trustees if the Servicer no longer complies with the requirements set forth in clause (A) or (B) above.

(c)

Subject to Section 7.01(b)(ii), the Servicer shall deposit or cause to be deposited, on the Closing Date and on each Substitution Transfer Date, in immediately available funds into the Collection Account, all Collections received after the applicable Cut-Off Date and through and including the date which is two Business Days preceding the Closing Date or Substitution Transfer Date, as the case may be, in respect of Contracts being transferred to the Trust on such date.

(d)

Notwithstanding Sections 7.01(b) and (c), if (i) the Servicer makes a deposit into the Collection Account in respect of Collections of a Contract in the Contract Pool and such Collections were received by the Servicer in the form of a check which is not honored for any reason, or (ii) the Servicer makes a mistake with respect to the amount of any Collections and deposits an amount that is less than or more than the actual amount of such Collection, the Servicer shall appropriately adjust the amount subsequently deposited into the Collection Account to reflect such dishonored check or mistake.  Any Scheduled Payment in respect of which a dishonored check is received shall be deemed not to have been paid.

Section 7.02

Reserve Account.  (a) On the Closing Date, the Depositor shall deposit the sum of $[________] into the Reserve Account from the net proceeds of the sale of the Notes.  

(b)

The Indenture Trustee shall use the amounts then outstanding in the Reserve Account to (i) make payments that shall become due and payable under Section 7.05(a)(i) through Section 7.05(a)(xiv) hereof and (ii) make payments, on any given Payment Date, in amounts equal to the amounts then outstanding on any Class of the Notes on the respective Maturity Date of such Class of Notes to the extent that the amount of Available Funds on such Payment Date, is not sufficient to pay such amounts in accordance with the priority of payments set forth in Section 7.05.  

(c)

Subject to Section 7.05, the balance required to be on deposit in the Reserve Account on any Payment Date (after giving effect to all deposits thereto or withdrawals therefrom on such Payment Date) shall be an amount equal to the Specified Reserve Account Balance.

(d)

On each Deposit Date, the Indenture Trustee, as directed by the Servicer, shall transfer any amounts required to be transferred from the Reserve Account to the Collection Account pursuant to Section 7.05(e).  Prior to each Payment Date, the Indenture Trustee, as directed by the Servicer, shall transfer from the Reserve Account to the Depositor the amount specified by the Servicer in the related Monthly Servicer’s Report representing Investment Earnings on amounts held in the Reserve Account as of the related Determination Date.  On each Payment Date following the payments made pursuant to Section 7.05, the Indenture Trustee, as directed by the Servicer, shall transfer to the Depositor any amount in excess of the Specified Reserve Account Balance.

(e)

Pursuant to Section 7.05(e), on the Payment Date following the occurrence and continuation of an Event of Default, the Indenture Trustee upon receipt of written instructions from the Servicer shall pay all amounts on deposit in the Reserve Account into the Collection Account for application toward payment on the Notes in the priority as set forth in Section 7.05.

(f)

Upon the satisfaction and discharge of this Indenture, any balance remaining in the Reserve Account, after all obligations to the Noteholders hereunder have been fully satisfied, shall be paid to reimburse the Indenture Trustee and the Owner Trustee for any amounts owing to them arising from the performance of their obligations under this Indenture and, then, to the Depositor.

(g)

The Depositor may, from time to time, borrow funds for the purpose of making additional deposits in the Reserve Account.  In the event of any such deposit, amounts in excess of the Specified Reserve Account Balance shall be transferred to the Depositor in accordance with Section 7.02(d).  The lender under any such borrowing arrangement shall be subordinated to the rights of the Noteholders hereunder and shall have no rights to repayment from amounts on deposit in the Reserve Account except to the extent they are distributed to the Depositor under Section 7.02(e).

Section 7.03

Trust Account Procedures.  If the Servicer so directs, in writing (with a copy to the Owner Trustee and the Indenture Trustee), the Qualified Institution maintaining any Trust Account, shall invest the amounts therein in Eligible Investments of the type specified in such written direction that mature not later than one Business Day prior to the next succeeding Payment Date (or that mature on such earlier Business Day as the Rating Agencies shall approve, with a copy of such approval provided to the Indenture Trustee).  Once such funds of any Trust Account are invested, the Servicer shall not change or permit a change in the investment of such funds.  Subject to the other provisions hereof, the Indenture Trustee shall have sole control over each such investment and the income thereon, and any certificate or other instrument evidencing any such investment, if any, shall be delivered directly to the Indenture Trustee or its agent, together with each document of transfer, if any, necessary to transfer title to such investment to the Indenture Trustee in a manner which complies with this Section 7.03.  All Investment Earnings, if any, on investments of funds in the Collection Account shall be deposited in or maintained within the Collection Account pursuant to Section 7.01 and paid on the next Payment Date pursuant to Section 7.05.  All Investment Earnings in the Reserve Account shall be distributed in accordance with Section 7.02(d) of this Agreement.  The Servicer, the Depositor and the Trust agree and acknowledge that the Indenture Trustee is to have “control” (within the meaning of Section 9-106 of the UCC as enacted in New York) of collateral consisting of “Investment Property” (within the meaning of Section 9-102 of the UCC as enacted in New York) for all purposes of this Agreement.  In the absence of timely written direct ion from the Servicer, the Indenture Trustee shall invest or cause to be invested amounts in the Trust Accounts in Eligible Investments of the type specified in clause (vi) of the definition of Eligible Investments herein.  The Indenture Trustee shall not be liable for investment losses in Eligible Investments as directed by the Servicer.

Section 7.04

Securityholder Payments.  (a) On each Payment Date, each Noteholder and the Equity Certificateholder as of the related Record Date shall be paid amounts payable on such date pursuant to Section 7.05 below by check mailed to such Noteholder or the Equity Certificateholder at the address for such Noteholder or the Equity Certificateholder appearing on the Note Register or the Certificate Register, or by wire transfer if such Noteholder or the Equity Certificateholder has provided written instructions for such payment method to the Indenture Trustee and Owner Trustee, respectively, at least ten days prior to such Payment Date.

(b)

The Indenture Trustee shall serve as the paying agent (“Paying Agent”) hereunder and shall make the payments to the Noteholders and the Equity Certificateholder required hereunder.  The Indenture Trustee hereby agrees that all amounts held by it for payment hereunder will be held in trust for the benefit of the Noteholders and the Equity Certificateholder, as their interests may appear.

Section 7.05

Allocations and Payments.

(a)

Allocations and Payments Prior to an Event of Default or the Cumulative Net Loss Trigger is Exceeded.  On each Determination Date prior to an Event of Default which is continuing or the Cumulative Loss Trigger is exceeded, the Servicer, pursuant to written monthly payment instructions and notification (which shall accompany the Monthly Servicer’s Report delivered on such Determination Date), shall instruct the Indenture Trustee to withdraw, and on the succeeding Payment Date the Indenture Trustee acting in accordance with such written instructions shall withdraw, the amounts required to be withdrawn from the Collection Account and shall make the following payments or allocations from Available Funds plus deposits made from the Reserve Account pursuant to Section 7.05(e) for the related Payment Date, in the order of priority specified below:

(i)

pay to the Servicer, the reimbursement for Unreimbursed Servicer Advances and any amounts specified in Section 2.04 hereof, to the extent the Servicer has not reimbursed itself in respect of such amounts;

(ii)

pay to the Servicer, the Servicing Fee for the related Collection Period;

(iii)

pay the Class [__] Interest Payment Amount, the Class [__] Interest Payment Amount, the Class [__] Interest Payment Amount, the Class [__] Interest Payment Amount, to each respective Holder of Class [__] Notes; provided, that if the amount of Available Funds remaining to be allocated pursuant to this clause is less than the full amount required to be so paid, such Available Funds shall be paid to the Holders of Class [__] Notes pro rata based on their respective entitlement pursuant to this clause;

(iv)

pay to the Holders of Class [__] Notes, the Class [__] Interest Payment Amount, including any overdue interest; provided, that if the amount of Available Funds remaining to be allocated pursuant to this clause is less than the full amount required to be so paid, such Available Funds shall be paid to the Holders of Class [__] Notes pro rata based on their respective entitlement pursuant to this clause;

(v)

pay to the Holders of Class C Notes, the Class C Interest Payment Amount, including any overdue interest; provided, that if the amount of Available Funds remaining to be allocated pursuant to this clause is less than the full amount required to be so paid, such Available Funds shall be paid to the Holders of Class C Notes pro rata based on their respective entitlement pursuant to this clause;

(vi)

pay to the Holders of Class D Notes, the Class D Interest Payment Amount; provided, that if the amount of Available Funds remaining to be allocated pursuant to this clause is less than the full amount required to be so paid, such Available Funds shall be paid to the Holders of Class D Notes pro rata based on their respective entitlement pursuant to this clause;

(vii)

pay to the Class [__] Noteholders, the Class [__] Principal Payment Amount in the following priority;

(A)

to the Class [__] Noteholders, until the Principal Amount of the Class [__] Notes has been reduced to zero;

(B)

to the Class [__] Noteholders, until the Principal Amount of the Class [__] Notes has been reduced to zero

(C)

to the Class [__] Noteholders, until the Principal Amount of the Class [__] Notes has been reduced to zero; and

(D)

to the Class [__] Noteholders, until the Principal Amount of the Class [__] Notes has been reduced to zero;

(E)

pay to the Class [__] Noteholders, the Class [__] Principal Payment Amount;

(F)

pay to the Class C Noteholders, the Class C Principal Payment Amount;

(G)

pay to the Class D Noteholders, the Class D Principal Payment Amount;

(H)

pay to the Class [__] Noteholders, Reallocated Principal in the following priority;

(I)

to the Class [__] Noteholders, until the Principal Amount of the Class [__] Notes has been reduced to zero;

(J)

to the Class [__] Noteholders, until the Principal Amount of the Class [__] Notes has been reduced to zero;

(K)

to the Class [__] Noteholders, until the Principal Amount of the Class [__] Notes has been reduced to zero; and

(L)

to the Class [__] Noteholders, until the Principal Amount of the Class [__] Notes has been reduced to zero;

(viii)

pay to the Class [__] Noteholders, any remaining Reallocated Principal until the Principal Amount of the Class [__] Notes has been reduced to zero;

(ix)

pay to the Class C Noteholders, any remaining Reallocated Principal until the Principal Amount of the Class C Notes has been reduced to zero;

(x)

pay to the Class D Noteholders, any remaining Reallocated Principal until the Principal Amount of the Class D Notes has been reduced to zero;

(xi)

transfer to the Reserve Account any amount necessary to increase the Reserve Account Amount to the Specified Reserve Account Balance;

(xii)

pay to the Trustees, concurrently and pro rata, any amounts owing thereto under the Transaction Documents; and

(xiii)

pay any remaining amounts to the Equity Certificateholder.

(b)

Allocations and Payments After an Event of Default or After the Cumulative Net Loss Trigger is Exceeded.  On each Determination Date after the occurrence and during the continuance of an Event of Default or on any Determination Date when the Cumulative Net Loss Trigger is exceeded, the Servicer, pursuant to written monthly payment instructions and notification (which shall accompany the Monthly Servicer’s Report delivered on such Determination Date), shall instruct the Indenture Trustee to withdraw, and on the succeeding Payment Date the Indenture Trustee acting in accordance with such written instructions shall withdraw, the amounts required to be withdrawn from the Collection Account and shall make the following payments or allocations from Available Funds plus deposits made from the Reserve Account pursuant to Section 7.05(e) for the related Payment Date, in the order of priority spec ified below:

(i)

pay to the Servicer, the reimbursement for Unreimbursed Servicer Advances and any amounts specified in Section 2.04 hereof, to the extent the Servicer has not reimbursed itself in respect of such amounts;

(ii)

pay to the Servicer, the Servicing Fee for the related Collection Period;

(iii)

pay the Class [__] Interest Payment Amount, the Class [__] Interest Payment Amount, the Class [__] Interest Payment Amount, the Class [__] Interest Payment Amount, to each respective Holder of Class [__] Notes; provided, that if the amount of Available Funds remaining to be allocated pursuant to this clause is less than the full amount required to be so paid, such Available Funds shall be paid to the Holders of Class [__] Notes pro rata based on their respective entitlement pursuant to this clause;

(iv)

pay to the Holders of Class [__] Notes, the Class [__] Interest Payment Amount, including any overdue interest; provided, that if the amount of Available Funds remaining to be allocated pursuant to this clause is less than the full amount required to be so paid, such Available Funds shall be paid to the Holders of Class [__] Notes pro rata based on their respective entitlement pursuant to this clause;

(v)

pay to the Holders of Class C Notes, the Class C Interest Payment Amount, including any overdue interest; provided, that if the amount of Available Funds remaining to be allocated pursuant to this clause is less than the full amount required to be so paid, such Available Funds shall be paid to the Holders of Class C Notes pro rata based on their respective entitlement pursuant to this clause;

(vi)

pay to the Holders of Class D Notes, the Class D Interest Payment Amount; provided, that if the amount of Available Funds remaining to be allocated pursuant to this clause is less than the full amount required to be so paid, such Available Funds shall be paid to the Holders of Class D Notes pro rata based on their respective entitlement pursuant to this clause;

(vii)

to the Class [__] Notes, until the Principal Amount of the Class [__] Notes has been reduced to zero;

(viii)

to the Class [__] Notes, until the Principal Amount of the Class [__] Notes has been reduced to zero;

(ix)

to the Class [__] Notes, until the Principal Amount of the Class [__] Notes has been reduced to zero;

(x)

to the Class [__] Notes, until the Principal Amount of the Class [__] Notes has been reduced to zero;

(xi)

to the Class [__] Notes, until the Principal Amount of the Class [__] Notes has been reduced to zero;

(xii)

to the Class C Notes, until the Principal Amount of the Class C Notes has been reduced to zero;

(xiii)

to the Class D Notes, until the Principal Amount of the Class D Notes has been reduced to zero;

(xiv)

pay to the Trustees, concurrently and pro rata, any amounts owing thereto under the Transaction Documents; and

(xv)

pay any remaining amounts to the Equity Certificateholder.

If either (a) the Event of Default is cured or (b) the Cumulative Net Loss Ratio does not exceed the Cumulative Net Loss Trigger as of the next Collection Period, payments on the following Payment Date and on subsequent Payment Dates shall be made in the priority set forth in Section 7.05(a).  

(c)

Payments at Stated Maturity.  Notwithstanding Section 7.05(a) or Section 7.05(b), to the extent that following the payments set forth above, any amounts would remain outstanding on any Class of Notes on the Maturity Date of such Class of Notes, the Indenture Trustee shall apply all remaining Available Funds to payment of principal on such Class of Notes prior to making any payment or allocation set forth above to any Class of Notes which is lower in priority than payment of interest on such Class of Notes.

(d)

Payments of Outstanding Interest.  Following the payment of Available Funds on any Payment Date in accordance with the priority of payment set forth above, if any Class [__] Interest Payment Amount, Class [__] Interest Payment Amount, Class [__] Interest Payment Amount, Class [__] Interest Payment Amount, Class [__] Interest Payment Amount, Class C Interest Payment Amount, or Class D Interest Payment Amount remains outstanding, the Indenture Trustee shall apply any other amounts of cash available on deposit in the Collection Account to satisfy any such interest payment obligations in accordance with the priority set forth above in Section 7.05(a) or 7.05(b)

(e)

On the Business Day preceding each Payment Date, the Indenture Trustee shall, in accordance with written directions from the Servicer, withdraw from amounts on deposit in the Reserve Account, and deposit into the Collection Account, an amount equal to the lesser of the Available Reserve Amount for such Payment Date and the sum of the following amounts, if any:

(i)

the amount, if any, by which the Available Funds with respect to such Payment Date, is less than the amount required to make the payments or allocations set forth in clauses (iii)-(x) of Section 7.05(a); plus

(ii)

on the first Payment Date following an Event of Default, the entirety of the Available Reserve Amount shall be deposited in the Collection Account.

(f)

All instructions required to be provided by the Servicer are deemed given if included in the Monthly Servicer’s Report or in a separate writing.

(g)

In the event the Monthly Servicer’s Report shows that, as of any Determination Date, there are amounts on deposit in the Collection Account which do not constitute Collections and to which the Depositor is entitled hereunder, the Servicer shall direct the Indenture Trustee to forthwith pay such amount to or upon its written order.

Section 7.06

Repurchases of, or Substitution for, Contracts for Breach of Representations and Warranties.  Upon a discovery by the Servicer of an inaccuracy or breach of a representation or warranty set forth in the Schedule of Representations which has been made or deemed made with respect to a Contract in the Contract Pool, which inaccuracy or breach materially adversely affects the Trust’s or any Noteholder’s or the Equity Certificateholder’s interest in such Contract (without regard to the benefits of the Reserve Account, any reserve fund, over collateralization or other similar enhancement) or the collectibility thereof (an “Ineligible Contract”), the Servicer shall promptly notify [_________] thereof.  As provided in the Series 20[  ]-[__] Purchase Agreement and the Non-ACE Purchase Agreement and in accordance with this Section 7.06, [_________] is obligated to repurchase each such Ineligible Contract, at a repurchase price equal to the Purchase Amount (determined as of the date such repurchase is to be funded), not later than the second Deposit Date following the date the Servicer becomes aware of any such breach or inaccuracy and which breach or inaccuracy has not otherwise been cured; provided, however, that if [_________] is able to effect a substitution for any such Ineligible Contract in compliance with Section 2.03, [_________] may, in lieu of repurchasing such Ineligible Contract, effect a substitution for such Ineligible Contract with a Substitute Contract not later than the date a repurchase of such Ineligible Contract would be required hereunder; and provided further, that with respect to a breach or inaccuracy of any such representations or warranties relating to the Contract Pool (or all Contracts conveyed on the Closing Date or Substitution Transfer Date, as the case may be) in the aggregate and not to any particular Contract, [_________] (or the Servicer acting on its behalf) may select Contracts (without adverse selection) to repurchase (or substitute for) such that had such Contracts not been included as part of the related Transferred Assets (and, in the case of a substitution, had such Substitute Contract been included as part of the related Transferred Assets instead of the selected Ineligible Contract) there would have been no breach or inaccuracy of such representation or warranty.  Notwithstanding any other provision of this Agreement, the obligation of [_________] under the Purchase and Sale Agreements and described in this Section 7.06 shall not terminate or be deemed released by any party hereto upon a Servicing Transfer pursuant to Article VIII.  The right to enforce the repurchase or substitution obligation described in this Section shall constitute the sole remedy of the Trust, the Indenture Trustee, the Depositor, the Noteholders and the Equity Certificateholder with respect to the inaccuracy or breach r elated to such Ineligible Contract.  The Purchase Amount shall be allocated in accordance with the Allocation Criteria.

Section 7.07

Reassignment of Repurchased or Substituted Contracts.  Upon deposit into the Collection Account of the Purchase Amount with respect to an Ineligible Contract as described in Section 7.06 (or upon the Substitution Transfer Date related to a Substitute Contract described in Section 7.06), or of the repurchase price set forth in Section 7.08, the Indenture Trustee shall release and reassign to [_________] all of the Trust’s right and interest in the repurchased or substituted Contract and related Transferred Assets upon receipt of written instruction from the Servicer without recourse, representation or warranty, and such reassigned Contract shall no longer thereafter be included in any calculations of Contract Principal Balances required to be made hereunder or otherwise be deemed a part of the Trust Assets.

Section 7.08

The Servicer’s Purchase Option.  On written notice to the Indenture Trustee at least twenty (20) days prior to a Payment Date, and provided that the aggregate Principal Amount of Notes outstanding on such Payment Date is less than [__]% of the Initial Contract Pool Principal Balance, the Servicer may (but is not required to) repurchase from the Trust on that Payment Date all outstanding Contracts in the Contract Pool at a price equal to the sum of (a) the aggregate outstanding Principal Amount of the Notes plus accrued unpaid interest thereon as of such Payment Date, plus (b) the amount of unreimbursed Servicer Advances (if any) as well as accrued and unpaid monthly Servicing Fees to the date of such repurchase, plus (c) fees, expenses and indemnities owed to the Trustees, as applicable, minus (d) Collections and other Available Funds on deposit in the Collectio n Account and available to make such payments on such Payment Date (collectively the “Redemption Price”).  If the Servicer elects to purchase the outstanding Contracts, the then outstanding Notes shall be redeemed on the Payment Date on which the purchase by the Servicer occurs (the “Redemption Date”).

ARTICLE VIII

SERVICER DEFAULTS; SERVICING TRANSFER

Section 8.01

Servicer Default.  “Servicer Default” means the occurrence of any of the following:

(a)

any failure by the Servicer to make any payment, transfer or deposit or to give instructions or notice to the Owner Trustee or the Indenture Trustee to make any payment, transfer or deposit, or to deliver the Monthly Servicer’s Report pursuant to this Agreement, which failure continues unremedied for a period of five (5) Business Days after the first to occur of (i) written notice from the Owner Trustee (with a copy to the Indenture Trustee) or the Indenture Trustee (with a copy to the Owner Trustee) of such failure shall have been given to the Servicer, or (ii) the date the Servicer becomes aware thereof; or

(b)

failure on the part of the Servicer duly to observe or perform any other covenants or agreements of the Servicer set forth in this Agreement which has a material adverse effect on the Noteholders or the Equity Certificateholder, which continues unremedied for a period of thirty (30) days after the first to occur of (i) the date on which written notice of such failure requiring the same to be remedied shall have been given to the Servicer and the Owner Trustee by the Indenture Trustee or to the Servicer, the Owner Trustee and the Indenture Trustee by the Noteholders or the Equity Certificateholder or the Indenture Trustee on behalf of such Noteholders of Notes aggregating not less than [__]% of the Principal Amount of any Class adversely affected thereby, and (ii) the date on which the Servicer becomes aware thereof, and such failure continues to materially adversely affect the Noteholders or the Equity Certific ateholders for such period; or

(c)

any representation, warranty or certification made by the Servicer in this Agreement or in any certificate delivered pursuant hereto shall prove to have been incorrect when made, which has a material adverse effect on the Noteholders or the Equity Certificateholder and which continues to be incorrect in any material respect for a period of thirty (30) days after the first to occur of (i) the date on which written notice of such incorrectness requiring the same to be remedied shall have been given to the Servicer and the Owner Trustee by the Indenture Trustee, or to the Servicer, the Owner Trustee and the Indenture Trustee by Noteholders or the Equity Certificateholders or by the Indenture Trustee on behalf of Noteholders of Notes aggregating not less than [__]% of the Principal Amount of any Class adversely affected thereby, and (ii) the date on which the Servicer becomes aware thereof, and such incorrectness c ontinues to materially adversely affect the Noteholders or the Equity Certificateholders for such period; or

(d)

an Insolvency Event shall occur with respect to the Servicer.

Notwithstanding the foregoing, a delay in or failure of performance referred to under clause (a) above for a period of five (5) Business Days or referred to under clause (b) or (c) for a period of sixty (60) days (in addition to any period provided in (a), (b) or (c)) shall not constitute a Servicer Default until the expiration of such additional five (5) Business Days or sixty (60) days, respectively, if such delay or failure could not be prevented by the exercise of reasonable diligence by the Servicer and such delay or failure was caused by an act of God or other similar occurrences.  Upon the occurrence of any such event the Servicer shall not be relieved from using its best efforts to perform its obligations in a timely manner in accordance with the terms of this Agreement and the Servicer shall provide the Owner Trustee, the Indenture Trustee and the Depositor prompt notice of such failure or delay by it, together with a description of its efforts to so perform its obligations.  The Servicer shall promptly notify the Indenture Trustee in writing of any Servicer Default of which it is aware.

Section 8.02

Servicing Transfer.  (a) If a Servicer Default has occurred and is continuing, the Required Holders or the Indenture Trustee (subject to the right of the Indenture Trustee to indemnification pursuant to Section 6.02(g) or 6.07 of the Indenture) may and shall at the direction of the Required Holders, by written notice (a “Termination Notice”) delivered to the parties hereto, terminate all (but not less than all) of the Servicer’s rights and obligations under this Agreement with respect to the Trust Assets.

(b)

Upon delivery of the Termination Notice (or, if later, on a date designated therein), and on the date that a successor Servicer shall have been appointed pursuant to Section 8.03 (such appointment being herein called a “Servicing Transfer”), all rights, benefits, fees, indemnities, authority and power of the Servicer under this Agreement, whether with respect to the Contracts in the Contract Pool, the Contract Files or otherwise, shall pass to and be vested in such successor (the “Successor Servicer”) pursuant to and under this Section 8.02; and, without limitation, the Successor Servicer is authorized and empowered to execute and deliver on behalf of the Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do any and all acts or things necessary or appropriate to effect the purposes of such notice of termination.  The Servicer a grees to reasonably cooperate with the Successor Servicer in effecting the termination of the responsibilities and rights of the Servicer under this Agreement, including, without limitation, the transfer to the Successor Servicer for administration by it of all cash amounts which shall at the time be held by the Servicer for deposit, or have been deposited by the Servicer, in the Collection Account, or for its own account in connection with its services hereafter or thereafter received with respect to the Contracts in the Contract Pool.  The Servicer shall transfer to the Successor Servicer (i) all records held by the Servicer relating to such Contracts in such electronic form as the Successor Servicer may reasonably request and (ii) any related Contract Files in the Servicer’s possession.  In addition, the Servicer shall permit access to its premises and employees (including all computer records and programs) to the Successor Servicer or its designee, and shall pay the reasonable transition e xpenses of the Successor Servicer.  Upon a Servicing Transfer, the Successor Servicer shall thereafter also be entitled to receive the Servicing Fee for performing the obligations of the Servicer.

Section 8.03

Appointment of Successor Servicer; Reconveyance; Successor Servicer to Act.  Upon delivery of the Termination Notice (or, if later, on a date designated therein), the Servicer shall continue to perform all servicing functions under this Agreement until the date specified in the Termination Notice or, if no such date is specified, until a date mutually agreed by the Servicer and the Indenture Trustee.  The Indenture Trustee shall as promptly as possible after the giving of or receipt of a Termination Notice, appoint a Successor Servicer, and such Successor Servicer shall accept its appointment by a written assumption and by delivery of an opinion of counsel (which shall not be at the expense of the Indenture Trustee) to the Successor Servicer relating to corporate matters and enforceability, in each case in a form acceptable to the Indenture Trustee and the Owner Trustee.  Any Successor Ser vicer shall be a financial institution having a net worth of at least $[__] and whose regular business includes the servicing of contracts similar to the Contracts in the Contract Pool.

In the event that a Successor Servicer has not been appointed and has not accepted its appointment within 60 days of the delivery of a Termination Notice, then the Indenture Trustee shall offer the Depositor, and the Depositor shall offer [_________], the right to accept retransfer of all the Trust Assets, and such party may accept retransfer of such Trust Assets in consideration of the Depositor’s delivery to the Collection Account on or prior to the next upcoming Payment Date of a sum equal to the Aggregate Principal Amount of all Notes then outstanding, together with accrued and unpaid interest thereon through such date of deposit; provided, that the Indenture Trustee, if so directed by the Required Holders, need not accept and effect such reconveyance in the absence of evidence (which may include valuations of an investment bank or similar entity, which shall not be at the expense of the Indenture Trust ee) reasonably acceptable to such Indenture Trustee or Required Holders that such retransfer would not constitute a fraudulent conveyance of the Depositor or [_________]; provided, further, [_________] may not accept such retransfer unless it shall have delivered to each Rating Agency, with a copy to the Indenture Trustee, an Opinion of Counsel (which shall not be an employee of the Trust) that such retransfer would not constitute a fraudulent conveyance of the Depositor or [_________] or that such retransfer would not constitute a preferential payment by the Depositor or [_________].

In the event that a Successor Servicer has not been appointed and has not accepted its appointment at the time when the then Servicer has ceased to act as Servicer, the Indenture Trustee without further action shall automatically be appointed the Successor Servicer.  The Indenture Trustee shall be entitled to receive the Servicing Fee while assuming such duties and shall be entitled to all rights and benefits of the Servicer (or Successor Servicer) including the indemnity rights under Section 8.07 hereof.  Notwithstanding the foregoing, if the Indenture Trustee is legally unable or prohibited from so acting or is unwilling to so act, it shall petition a court of competent jurisdiction to appoint any established financial institution having a net worth of at least $[__] and whose regular business includes the servicing of contracts similar to the Contracts in the Contract Pool as the Successor Serv icer hereunder.  On or after a Servicing Transfer, the Successor Servicer shall be the successor in all respects to the Servicer in its capacity as servicer under this Agreement, and the transactions set forth or provided for in this Agreement, and shall be subject to all the responsibilities, duties and liabilities relating thereto placed on the Servicer by the terms and provisions hereof, and the terminated Servicer shall be relieved of such responsibilities, duties and liabilities arising after such Servicing Transfer; provided, however, that the Successor Servicer shall not be liable for any acts or omissions of the departing Servicer occurring prior to such Servicing Transfer or for any breach by the departing Servicer of any of its representations and warranties contained in this Agreement or in any related Transaction Document or other agreement.  As compensation therefor, the Successor Servicer shall be entitled to receive the Servicing Fee from and after the Servicing Transfer.  The&n bsp;Trust, the Noteholders and the Equity Certificateholders, the Indenture Trustee and such successor shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such succession.  To the extent the terminated Servicer has made Servicer Advances, it shall be entitled to reimbursement of the same (and any unpaid Servicing Fees accrued prior to the Servicing Transfer) notwithstanding its termination hereunder, to the same extent as if it had continued to service the Trust Assets hereunder.  In addition, it is understood and agreed that if an Event of Default has occurred and a Servicer Transfer is being effected by action of the Indenture Trustee hereunder, any documented expenses reasonably incurred by the Indenture Trustee in connection with effecting such Servicer Transfer shall be deemed expenses reimbursable from Available Funds.

Section 8.04

Notifications to Noteholders and the Equity Certificateholders.  (a) Promptly following the occurrence of any Servicer Default of which it is aware, the Servicer shall give written notice thereof to the Trustees, the Depositor and each Rating Agency at the addresses described in Section 11.03 and to the Noteholders and Equity Certificateholder at their respective addresses appearing on the Note Register and the Certificate Register, respectively.

(b)

Within ten (10) days following any termination or appointment of a Successor Servicer pursuant to this Article VIII, the Indenture Trustee shall give written notice thereof to each Rating Agency and the Depositor at the addresses described in Section 11.03, and to the Noteholders, at their respective addresses appearing on the Note Register, and to the Owner Trustee.

Section 8.05

Effect of Transfer.  (a) Except as otherwise set forth in this Agreement, after a Servicing Transfer, the terminated Servicer shall have no further rights or obligations under this Agreement, including, without limitation, with respect to the management, administration, servicing, custody or collection of the Trust Assets, and the Successor Servicer appointed pursuant to Section 8.03 shall have all of such obligations, except that the terminated Servicer will transmit or cause to be transmitted directly to the Successor Servicer for its own account, promptly on receipt and in the same form in which received, any amounts or items (properly endorsed where required for the Successor Servicer to collect them) received as payments upon or otherwise in connection with the Contracts in the Contract Pool.

(b)

A Servicing Transfer shall not affect the rights and duties of the parties to this Agreement (including but not limited to the indemnities of the departing Servicer) other than those relating to the management, administration, servicing, custody or collection of the Contracts in the Contract Pool and related Transferred Assets.

Section 8.06

Database File.  The Servicer will provide the Successor Servicer with a magnetic tape containing the database file for each Contract in the Contract Pool on and as of the Business Day before the actual commencement of servicing functions by the Successor Servicer following the occurrence of a Servicer Default.

Section 8.07

Successor Servicer Indemnification.  The departing Servicer shall defend, indemnify and hold the Successor Servicer and any officers, directors, employees or agents of the Successor Servicer harmless against any and all claims, losses, penalties, fines, forfeitures, reasonable legal fees and related costs, judgments and any other costs, fees, and expenses that the Successor Servicer may sustain in connection with the claims asserted at any time by third parties against the Successor Servicer which result from (i) any willful or grossly negligent act taken or omission by the departing Servicer or (ii) a breach of any representations of the departing Servicer in Section 3.02.  The indemnification provided by this Section 8.07 shall survive (a) a Servicing Transfer and/or (b) the termination of this Agreement.

Section 8.08

Responsibilities of the Successor Servicer.  The Successor Servicer will not be responsible for delays attributable to the departing Servicer’s failure to deliver information, defects in the information supplied by the departing Servicer or other circumstances beyond the control of the Successor Servicer.

The Successor Servicer will make arrangements with the departing Servicer for the prompt and safe transfer of, and the departing Servicer shall provide to the Successor Servicer, all necessary servicing files and records, including (as deemed necessary by the Successor Servicer at such time): (i) microfiche loan documentation, (ii) servicing system tapes, (iii) Contract payment history, (iv) collections history and (v) the trial balances, as of the close of business on the day immediately preceding conversion to the Successor Servicer, reflecting all applicable Contract Pool information.  The departing Servicer shall be obligated to pay the costs associated with the transfer of the servicing files and records to the Successor Servicer.

The Successor Servicer shall have no responsibility and shall not be in default hereunder nor incur any liability for any failure, error, malfunction or any delay in carrying out any of its duties under this Agreement if any such failure or delay results from the Successor Servicer acting in accordance with information prepared or supplied by a Person other than the Successor Servicer or the failure of any such Person to prepare or provide such information.  The Successor Servicer shall have no responsibility, shall not be in default and shall incur no liability (i) for any act or failure to act by any third party, including the departing Servicer, the Depositor or the Trustees or for any inaccuracy or omission in a notice or communication received by the Successor Servicer from any third party or (ii) which is due to or results from the invalidity or unenforceability of any Contract under applicable law or the breach or the inaccuracy of any representation or warranty made with respect to any Contract.

Any Successor Servicer which assumes the role of Successor Servicer hereunder shall be entitled to the benefits of (and subject to the provisions of) Section 5.05 concerning delegation of duties to subservicers.

None of the provisions contained in this Agreement shall in any event require the Indenture Trustee to perform, or be responsible for the manner of performance of, any of the obligations of the Servicer under this Agreement except during such time, if any, as the Indenture Trustee shall be the successor to, and be vested with the rights, duties, powers and privileges of, the Servicer in accordance with the terms of this Agreement.

Section 8.09

Servicer Not to Resign.  The Servicer shall not resign from its obligations and duties under this Agreement except upon determination that the performance of its duties shall no longer be permissible under applicable law, compliance with which could not be realized without material adverse impact on the Servicer’s financial condition.  No such resignation shall become effective until the Indenture Trustee or a successor Servicer shall have assumed the responsibilities and obligations of the Servicer in accordance with Section 8.03 hereof.

ARTICLE IX

SERVICER REPORTING

Section 9.01

Monthly Servicer’s Reports.  With respect to each Payment Date and the related Collection Period, the Servicer will provide to each Trustee, Paying Agent and each Rating Agency, on the related Determination Date, a monthly statement (a “Monthly Servicer’s Report”) substantially in the form of Exhibit C hereto.  The Indenture Trustee will make the Monthly Servicer’s Report available each month to Noteholders and the Rating Agencies via the investor relations section at http://www.cit.com.  Parties that are unable to use http://www.cit.com are entitled to have a paper copy of the Monthly Servicer’s Report mailed to them via first class mail by requesting such in writing.  The Indenture Trustee shall have the right to change the way the Monthly Servicer’s Report is distributed in order to make such distribution more convenient and/or more ac cessible to the above parties and the Indenture Trustee shall provide timely and adequate notification (which notice shall not be less than 30 days) to all above parties regarding any such changes.  The parties hereto acknowledge that the Indenture Trustee has no obligation to verify the accuracy of the Monthly Servicer’s Report.  The Servicer will file the Monthly Servicer’s Reports with the Commission to the extent required by the Exchange Act.

Section 9.02

Officer’s Certificate.  Each Monthly Servicer’s Report delivered pursuant to Section 9.01 shall be accompanied by a certificate of a Servicing Officer certifying the accuracy of the Monthly Servicer’s Report.

Section 9.03

Other Data.  The Servicer shall, upon the request of any Trustee, or any Rating Agency, furnish such Trustee or Rating Agency, as the case may be, such underlying data used to generate a Monthly Servicer’s Report as may be reasonably requested.  

Section 9.04

Annual Reporting; Evidence as to Compliance.  The Servicer shall cause a firm of nationally recognized independent accountants (the “Independent Accountants”), who may also render other services to the Servicer or its Affiliates, to deliver to the Trustees, the Depositor and each Rating Agency, on or before March 31 of each year, beginning on March 31, 20[  ], with respect to the twelve months ended the immediately preceding December 31 or other applicable date), a report addressed to the Board of Directors of the Servicer and to the Trustees (the “Accountant’s Report”) to the effect that such Independent Accountants have, at the request of the Servicer, (i) audited the financial statements of the Servicer (or, if the Servicer is a wholly owned subsidiary of another entity, the financial statements of such parent entity) and issued an opinion thereon and that such audit was made in accordance with generally accepted auditing standards as in effect in the jurisdiction of the entity being audited, which require that such Independent Accountants plan and perform the audit to obtain reasonable assurance as to whether the financial statements of the Servicer (or its parent, as applicable) are free of material misstatement, and (ii) examined management’s assertion that the Servicer maintained effective control over the servicing of its assets based on the servicing activities that the Servicer performs in accordance with this Agreement, and providing an attestation report on assessments of compliance with the servicing criteria with respect to the Servicer during the related fiscal year in compliance with United States of America securities laws, including Rule 13(a)-18 or Rule 15(d)-18 of the Exchange Act and Item 1122 of Regulation AB, as well as confirming that such examination was performed in accordance with standards established by the American Institute of Certi fied Public Accountants.  A copy of the Accountant’s Report may be obtained by any Securityholder by a request in writing to the Indenture Trustee, in the case of a Noteholder, or in the case of the Equity Certificateholder, by a request in writing to the Owner Trustee addressed to its Corporate Trust Office.

Section 9.05

Annual Statement of Compliance from Servicer.  On or before March 31 of each year, beginning on March 31, 20[  ], the Servicer will deliver to the Trustees, the Depositor and each of the Rating Agencies, an officer’s certification and assessment of its compliance with the servicing criteria, as required by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation, to the effect that: (i) such party is responsible for assessing compliance with the servicing criteria (as set forth in Item 1122 of Regulation AB) with regard to the Servicer during the related fiscal year Relevant Year; (ii) based on such party’s knowledge, the Servicer was in compliance with such servicing criteria during the related fiscal year, based on the activities the Servicer performs with respect to asset-backed securities transactions taken as a whole involving the Servicer, that are backed by the s ame asset type as the related Contracts serviced by it; and (iii) a registered public accounting firm has issued an attestation report on the Servicer’s assessment of compliance for the period consisting of related fiscal year.  Such assessment of compliance will also indicate which servicing criteria, if any, were not applicable to the Servicer, based on the activities the Servicer performs with respect to asset-backed securities transactions taken as a whole involving the Servicer, that are backed by the same asset type as the related Contracts serviced by it and shall state any material instance of noncompliance with respect to the servicing criteria during the related fiscal year.

A copy of such certificate may be obtained by any Noteholder or the Equity Certificateholder by a request in writing to the Indenture Trustee, with respect to any Noteholder, or to the Owner Trustee, with respect to the Equity Certificateholder.

By [    ] (with a 5 calendar day cure period) of each year, commencing in [    ], the Master Servicer, the Securities Administrator, any Additional Servicer, and the Custodian, each at its own expense, shall furnish, and each such party shall cause any Servicing Function Participant engaged by it to furnish, each at its own expense, to the Securities Administrator and the Depositor, a report on an assessment of compliance with the Relevant Servicing Criteria (an “Assessment of Compliance”) that contains (A) a statement by such party of its responsibility for assessing compliance with the Relevant Servicing Criteria, (B) a statement that such party used the Servicing Criteria to assess compliance with the Relevant Servicing Criteria, (C) such party’s assessment of compliance with the Relevant Servicing Criteria as of and for the fiscal year covered by the Form 10-K req uired to be filed pursuant to Section 9.05, including, if there has been any material instance of noncompliance with the Relevant Servicing Criteria, a discussion of each such failure and the nature and status thereof, and (D) a statement that a registered public accounting firm has issued an attestation report on such party’s assessment of compliance with the Relevant Servicing Criteria as of and for such period.

No later than the end of each fiscal year for the Trust Fund for which a Form 10-K is required to be filed, the Master Servicer and the Custodian shall each forward to the Securities Administrator the name of each Servicing Function Participant engaged by it and what Relevant Servicing Criteria will be addressed in the Assessment of Compliance prepared by such Servicing Function Participant.  When the Master Servicer, the Custodian and the Securities Administrator (or any Servicing Function Participant engaged by them) submit their Assessments of Compliance to the Securities Administrator, such parties will also at such time include the Assessment of Compliance (and Accountant’s Attestation pursuant to Section 9.05 of each Servicing Function Participant engaged by it.

Promptly after receipt of each Assessment of Compliance, (A) the Depositor shall review each such report and, if applicable, consult with the Master Servicer, the Securities Administrator, the Custodian, any Additional Servicer and any Servicing Function Participant engaged by such parties as to the nature of any material instance of noncompliance with the Relevant Servicing Criteria by each such party, and (B) the Securities Administrator shall confirm that the Assessments of Compliance, taken as a whole, address all of the Servicing Criteria and taken individually address the Relevant Servicing Criteria for each party as set forth on Exhibit W and on any similar exhibit set forth in each Servicing Agreement in respect of each Servicer and notify the Depositor of any exceptions.

The Master Servicer shall enforce any obligation of the Servicer, to the extent set forth in the Servicing Agreement, to deliver to the Master Servicer an annual Assessment of Compliance within the time frame set forth in, and in such form and substance as may be required pursuant to, the Servicing Agreement.  The Master Servicer shall include such Assessment of Compliance with its own Assessment of Compliance to be submitted to the Securities Administrator pursuant to this Section.

By [    ] (with a 5 calendar day cure period) of each year, commencing in [    ], the Master Servicer, the Securities Administrator, each Additional Servicer, and the Custodian, each at its own expense, shall cause, and each such party shall cause any Servicing Function Participant engaged by it to cause, each at its own expense, a registered public accounting firm (which may also render other services to the Master Servicer, each Additional Servicer, the Custodian, the Securities Administrator, or such other Servicing Function Participants, as the case may be) and that is a member of the American Institute of Certified Public Accountants to furnish a report to the Securities Administrator and the Depositor (an “Accountant’s Attestation”), to the effect that (A) it has obtained a representation regarding certain matters from the management of such party, which include s an assertion that such party has complied with the Relevant Servicing Criteria, and (B) on the basis of an examination conducted by such firm in accordance with standards for attestation engagements issued or adopted by the PCAOB, it is expressing an opinion as to whether such party’s compliance with the Relevant Servicing Criteria was fairly stated in all material respects, or it cannot express an overall opinion regarding such party’s assessment of compliance with the Relevant Servicing Criteria.  In the event that an overall opinion cannot be expressed, such registered public accounting firm shall state in such report why it was unable to express such an opinion.  Such report must be available for general use and not contain restricted use language.

Promptly after receipt of such report from the Master Servicer, the Custodian, the Securities Administrator or any Servicing Function Participant engaged by such parties, (A) the Depositor shall review the report and, if applicable, consult with such parties as to the nature of any defaults by such parties, in the fulfillment of any of each such party’s obligations hereunder or under any other applicable agreement, and (B) the Securities Administrator shall confirm that each assessment submitted pursuant to Section 9.05 is coupled with an attestation meeting the requirements of this Section and notify the Depositor of any exceptions.

The Master Servicer shall enforce any obligation of the Servicer, to the extent set forth in the Servicing Agreement, to deliver to the Master Servicer an attestation within the time frame set forth in, and in such form and substance as may be required pursuant to, the Servicing Agreement.  The Master Servicer shall include each such attestation with its own attestation to be submitted to the Securities Administrator pursuant to this Section.

The Master Servicer agrees to indemnify and hold harmless each of the Depositor and each Person, if any, who “controls” the Depositor or the Securities Administrator within the meaning of the Securities Act and their respective officers, directors and affiliates from and against any losses, damages, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments and other costs and expenses that such Person may sustain arising out of third party claims based on (i) the failure of the Master Servicer (or any Servicing Function Participant engaged by it) to deliver or cause to be delivered when required any Assessment of Compliance or Accountant’s Attestation required pursuant to Section 9.05, or (ii) any material misstatement or omission contained in any Assessment of Compliance provided.

The Securities Administrator agrees to indemnify and hold harmless the Depositor and each Person, if any, who “controls” the Depositor within the meaning of the Securities Act and its officers, directors and affiliates from and against any losses, damages, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments and other costs and expenses that such Person may sustain arising out of third party claims based on (i) the failure of the Securities Administrator (or any Servicing Function Participant engaged by it) to deliver when required any Assessment of Compliance or Accountant’s Attestation required pursuant to Section 9.05 any material misstatement or omission contained in any Assessment of Compliance provided.

The Custodian agrees to indemnify and hold harmless the Depositor and each Person, if any, who “controls” the Depositor within the meaning of the Securities Act and their respective officers, directors and affiliates from and against any losses, damages, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments and other costs and expenses that such Person may sustain arising out of third party claims based on (i) the failure of such Custodian (or any Servicing Function Participant engaged by it) to deliver or cause to be delivered when required any Assessment of Compliance or Accountant’s Attestation required pursuant to Section 9.05 any material misstatement or omission contained in any Assessment of Compliance provided.

Each of the parties hereto acknowledges and agrees that the purpose of this Section 9.05 is to facilitate compliance by the Seller and the Depositor with the provisions of Regulation AB, as such may be amended or clarified from time to time.  Therefore, each of the parties agrees that the parties’ obligations hereunder will be supplemented and modified as necessary to be consistent with any such amendments, interpretive advice or guidance, convention or consensus among active participants in the asset-backed securities markets, advice of counsel, or otherwise in respect of the requirements of Regulation AB and the parties shall comply, to the extent practicable from a timing and information systems perspective (and to the extent the requesting party will pay any increased cost of the Trustee by such request provided that such request results in extraordinary expenses), with requests made by the Seller or the Depositor for delivery of additional or different information as the Seller or the Depositor may determine in good faith is necessary to comply with the provisions of Regulation AB.

Section 9.06

Reports to the Commission.  (a) The Servicer is hereby authorized and empowered, at the expense of the Depositor, to make any filings, reports, notices, applications and registrations with, and to seek any consents or authorizations from, the Commission and any state securities authority on behalf of the Trust as may be necessary or advisable to comply with any Federal or state securities laws or reporting requirements.  The Trustees shall furnish, within a reasonable period of time, the Servicer with any powers of attorney or other documents necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties hereunder.

(b)

The Servicer shall, on behalf of the Trust and the expense of the Depositor, cause to be filed with the Commission any periodic reports required to be filed under the provisions of the Exchange Act and the rules and regulations of the Commission thereunder.  The Depositor shall, at the expense of the Servicer, cooperate in any reasonable request of the Servicer in connection with such filings.

ARTICLE X

TERMINATION

Section 10.01

  Sale of Trust Assets.  (a) Upon any transfer of Trust Assets pursuant to Section 9.02 of the Trust Agreement, the Servicer shall instruct the Indenture Trustee in writing to deposit the proceeds from such transfer after all payments and reserves therefrom have been made (the “Insolvency Proceeds”) into the Collection Account.  On the Payment Date on which the Insolvency Proceeds are deposited in such Collection Account (or, if such proceeds are not so deposited on a Payment Date, on the Payment Date immediately following such deposit), the Servicer shall instruct the Indenture Trustee to allocate and apply the Insolvency Proceeds as if (and in the same order of priority as) the Insolvency Proceeds were Collections being allocated and paid on such date pursuant to this Agreement.

(b)

Notice of any termination of the Trust shall be given by the Servicer to the Owner Trustee and the Indenture Trustee as soon as practicable after the Servicer has received notice thereof.

(c)

Following the satisfaction and discharge of the Indenture and the payment in full of the principal of and interest on the Notes, the Equity Certificateholder will succeed to the rights of the Noteholders hereunder.

ARTICLE XI

MISCELLANEOUS

Section 11.01

  Amendments.  (a) This Agreement may be amended in writing by [_________], the Servicer and the Trust and the Indenture Trustee without prior notice to or the consent of any of the Holders, and in the case of clauses (iv), (v) and (vi), upon satisfaction of the Rating Agency Condition, (i) to correct manifest error or cure any ambiguity; (ii) to correct or supplement any provisions herein which may be inconsistent with any other provisions herein; (iii) to add or amend any provisions as requested by the Rating Agencies in order to maintain or improve any rating of the Notes (it being understood that, after the Closing Date, neither the Trust, the Owner Trustee, the Indenture Trustee, nor [_________] is obligated to maintain or improve such rating); (iv) to add to the covenants, restrictions or obligations of [_________], the Servicer, the Trust or the Indenture Trustee or to provide for the delivery of or substitution of a Servicer Letter of Credit; (v) to evidence and provide for the acceptance of the appointment of a successor trustee with respect to the Trust Estate and add to or change any provisions as shall be necessary to facilitate the administration of the trusts under the Trust Agreement by more than one trustee pursuant to Article X of the Trust Agreement; (vi) to add, change or amend any provision to maintain the trust as an entity not subject to federal income tax; or (vii) to add, change or eliminate any other provisions, provided that an amendment pursuant to this clause (vii), shall not, as evidenced by an Officer’s Certificate for the Servicer or [_________], adversely affect in any material respect the interests of the Trust, any Noteholder or the Equity Certificateholder.

(b)

This Agreement may also be amended from time to time by the parties signatory hereto, with the consent of the Required Holders, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions thereof or of modifying in any manner the rights of the Noteholders or the Equity Certificateholder; provided, however, that no such amendment shall (i) increase or reduce in any manner the amount of, or accelerate or delay the timing of, Collections, payments on the Trust Assets or payments that shall be required to be made on any Note or the Equity Certificate (including by way of amendment of related definitions); (ii) change the manner in which the Reserve Account is applied; or (iii) change in any manner (including through amendment of related definitions), the Noteholders and the Equity Certificateholder which are required to consent to any such amendment; or (iv) make any N ote or the Equity Certificate payable in money other than Dollars, without the consent of the Noteholders of all Notes of the relevant affected Class then outstanding and the Equity Certificateholder, if affected; or (v) change in any manner the duties of the Indenture Trustee under this Agreement without its written consent (in any such case).

(c)

Prior to the execution of any such amendment or consent, the Indenture Trustee shall furnish written notification of the substance of such amendment or consent, together with a copy thereof, to each Rating Agency.

(d)

Promptly after the execution of any such amendment or consent, the Indenture Trustee shall furnish written notification of the substance of such amendment or consent to each Noteholder and the Equity Certificateholder, respectively.  It shall not be necessary for the consent of Noteholders and the Equity Certificateholder pursuant to Section 11.01(b) 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 of evidencing the authorization by Noteholders and the Equity Certificateholder of the execution thereof shall be subject to such reasonable requirements as the Indenture Trustee may prescribe.

(e)

Each Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment on behalf of the Trust is authorized or permitted by this Agreement, and that all conditions precedent to such execution as set forth herein have been satisfied.  A Trustee may, but shall not be obligated to, enter into any such amendment which affects such Trustee’s own rights, duties or immunities under this Agreement or otherwise.

(f)

Notwithstanding anything to the contrary in the foregoing provisions of this Section 11.01, the Depositor or the Servicer, acting on behalf of the Depositor, may request each Rating Agency to approve a formula for determining the Specified Reserve Account Balance that is different from the formula or result determined from the current definition thereof contained herein so as to result in a decrease in the amount of the Specified Reserve Account Balance or the manner by which such Reserve Account is funded.  If each Rating Agency delivers to the Indenture Trustee and Owner Trustee a written notice or letter satisfying the Rating Agency Condition in connection with such change, then the Specified Reserve Account Balance will be theretofore determined in accordance with such changed formula or manner of funding, and an amendment to this Agreement effecting such change may be executed without the consent of any Noteholder and the Equity Certificateholder.

Section 11.02

  Governing Law.  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, WITHOUT REGARD TO CONFLICTS OF LAWS PROVISIONS.

Section 11.03

  Notices.  All notices, demands, certificates, directions, requests and communications hereunder (“notices”) shall be in writing and shall be effective (a) upon receipt when sent through the U.S.  mails, registered or certified mail, return receipt requested, postage prepaid, with such receipt to be effective the date of delivery indicated on the return receipt, or (b) one (1) Business Day after delivery to an overnight courier (specifying one (1) Business Day delivery), or (c) on the date personally delivered to an authorized officer of the party to which sent, or (d) on the date transmitted by legible telefax transmission with a confirmation of receipt, in all cases addressed to the recipient as follows:

(i)	If to the Servicer:
	[____________]
	Fax No.:  [____________] Telephone No.:  [____________]
	with a copy to:
	Ace Securities Corp [____________]
	Fax No.:  [____________] Telephone No.:  [____________]
(ii)	If to the Depositor:
	[____________]
	Fax No.:  [____________] Telephone No.:  [____________]
(iii)	If to the Indenture Trustee:
	[____________]
	Fax No.:  [____________] Telephone No.:  [____________]
(iv)	If to [_________]:
	[____________]
	Fax No.:  [____________] Telephone No.:  [____________]
(v)	If to the Trust or the Owner Trustee:
	[____________]
	Fax No.:  [_____________] Telephone No.:  [_____________]
(vi)	if to Standard and Poor’s:
	[____________]
	Fax No.:  [____________] Telephone No.:  [____________]
(vii)	if to Moody’s:
	[____________]
	Fax No:  [____________] Telephone No.:  [____________]
(viii)	if to Fitch:
	[____________]

Each party hereto may, by notice given in accordance herewith to each of the other parties hereto, designate any further or different address to which subsequent notices shall be sent.

Section 11.04

  Severability of Provisions.  If one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid or unenforceable, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of the Securities or the rights of the holders thereof.

Section 11.05

  Third Party Beneficiaries.  Except as otherwise specifically provided herein, the parties hereto hereby manifest their intent that no third party shall be deemed a third party beneficiary of this Agreement, and specifically that Obligors are not third party beneficiaries of this Agreement; provided, that (i) the Owner Trustee shall be a third party beneficiary of this Agreement for purposes of Sections 3.01 and 3.02 and 11.11, and the fee and indemnification provisions hereof and (ii) the Indenture Trustee shall be a third party beneficiary of this Agreement for purposes of Section 3.01, 3.02 and 8.03 and the fee indemnification provisions hereof.

Section 11.06

  Counterparts.  This Agreement may be executed in several counterparts including by telefax transmission thereof (any by different parties on separate counterparts), each of which shall be an original and all of which shall together constitute but one and the same instrument.

Section 11.07

  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 11.08

  No Bankruptcy Petition; Disclaimer and Subordination.

(a)

Each of the Servicer, the Owner Trustee and each Noteholder and the Equity Certificateholder (by acceptance of the applicable Notes or the Equity Certificate) covenants and agrees that it will not institute against the Depositor, or the Trust, or solicit or join in or cooperate with or encourage any other Person in instituting against the Depositor or the Trust, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceedings under the laws of the United States of America or any state of the United States of America.  The parties hereto agree that the obligations of this Section 11.08 shall survive termination of this Agreement.

(b)

Consistent with the provisions in Section 2.07 of the Trust Agreement and Section 6.17 hereof, the Trust, as well as each Noteholder and the Equity Certificateholder by accepting a Note or the Equity Certificate, acknowledges and agrees that such Note or the Equity Certificate represents a debt instrument secured by, or a beneficial interest in, the Trust and Trust Assets only and does not represent an interest in any assets (other than the Trust Assets) of the Depositor (including by virtue of any deficiency claim in respect of obligations not paid or otherwise satisfied from the Trust Assets and proceeds thereof).  In furtherance of and not in derogation of the foregoing, to the extent the Depositor enters into other securitization transactions as contemplated in Section 6.07, the Trust as well as each Noteholder and the Equity Certificateholder by accepting a Note or Certificate acknowledges and agrees that it shall have no right, title or interest in or to any assets (or interests therein) (other than Trust Assets) conveyed or purported to be conveyed by the Depositor to another securitization trust (i.e., other than the Trust) or other Person or Persons in connection therewith (whether by way of a sale, capital contribution or by virtue of the granting of a Lien) (“Other Assets”).  To the extent that, notwithstanding the agreements and provisions contained in the preceding sentences of this subsection, the Trust, or any Noteholder and the Equity Certificateholder, either (i) asserts an interest in or claim to, or benefit from, Other Assets, whether asserted against or through the Depositor or any other Person owned by the Depositor, or (ii) is deemed to have any such interest, claim or benefit in or from Other Assets, whether by operation of law, legal process, pursuant to applicable provisions of Insolvency Laws or otherwise (including without limitation by virtue of Section 1111(b) of the federal Bankruptcy Code or any successor provision having similar effect under the Bankruptcy Code), and whether deemed asserted against or through the Depositor or any other Person owned by the Depositor, then the Trust and each Noteholder and the Equity Certificateholder by accepting a Note or the Equity Certificate further acknowledges and agrees that (y) any such interest, claim or benefit in or from Other Assets is and shall be expressly subordinated to the indefeasible payment in full of all obligations and liabilities of the Depositor which, under the terms of the relevant documents relating to the securitization of such Other Assets, are entitled to be paid from, entitled to the benefits of, or otherwise secured by such Other Assets (whether or not any such entitlement or security interest is legally perfected or otherwise entitled to a priority of payment or application under applicable law, including Insolvency Laws, and whether asserted against t he Depositor or any other Person owned by the Depositor), including, without limitation, the payment of post-petition interest on such other obligations and liabilities; and (z) it shall not enforce or collect, or seek or cause the enforcement or collection of, any rights or remedies with respect to any such interest, claim or benefit in or from Other Assets at any time prior to the indefeasible payment in full of all obligations and liabilities of the Depositor which, under the terms of the relevant documents relating to the securitization of such Other Assets, are entitled to be paid from, entitled to the benefits of, or otherwise secured by such Other Assets.  This subordination agreement shall be deemed a subordination agreement within the meaning of Section 510(a) of the Bankruptcy Code.  Each Noteholder and the Equity Certificateholder further acknowledges and agrees that no adequate remedy at law exists for a breach of this Section 11.08 and that the terms and provisions of this Se ction 11.08 may be enforced by an action for specific performance.

(c)

The provisions of this Section 11.08 shall be for the third party benefit of those entitled to rely thereon and shall survive the termination of this Agreement.

Section 11.09

  Jurisdiction.  Any legal action or proceeding with respect to this Agreement may be brought in the courts of the United States of America for the Southern District of New York, and by execution and delivery of this Agreement, each party hereto consents, for itself and in respect of its property, to the non-exclusive jurisdiction of those courts.  Each such party irrevocably waives any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, which it may now or hereafter have to the bringing of any action or proceeding in such jurisdiction in respect of this Agreement or any document related hereto.

Section 11.10

  Servicer Indemnity.  The Servicer will indemnify the Depositor, the Trust, the Noteholders, the Equity Certificateholder and the Trustees (including in their respective individual capacities), and any of their officers, directors, employees or agents (each an “Indemnified Party”) from and against any and all claims, losses, penalties, fines, forfeitures, legal fees and related costs, judgments and any other costs, fees and expenses that any Indemnified Party may sustain in connection with claims asserted by third parties against such Indemnified Party which result from any act or omission on the part of the Servicer with respect to the Trust Assets or its duties and obligations under this Agreement, except where such claims arise out of any willful misconduct, gross negligence or bad faith on the part of such Indemnified Party.  Indemnification under this Section  ;shall survive the resignation or removal of the Owner Trustee or Indenture Trustee, as the case may be, and the termination of the Trust Agreement or this Agreement.

Section 11.11

  Limitation of Liability of Owner Trustee.  Notwithstanding anything contained herein to the contrary, this Agreement has been executed on behalf of the Trust by [_________], not in its individual capacity but solely in its capacity as Owner Trustee of the Trust and in no event shall [_________], in its individual capacity or any beneficial owner of the Trust have any liability for the representations, warranties, covenants, agreements or other obligations of the Trust hereunder, as to all of which recourse shall be had solely to the assets of the Trust.  For all purposes of this Agreement, in the performance of any duties or obligations of the Trust hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of the Trust Agreement which apply to or extend to the benefit of the Owner Trustee.

Section 11.12

  WAIVER OF JURY TRIAL.  EACH PARTY TO THIS AGREEMENT WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.  THE PARTIES HERETO EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY.  WITHOUT LIMITING THE FOREGOING, EACH OF THE PARTIES HERETO FURTHER AGREES THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OF THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR ANY PROVISION HEREOF OR THEREOF.  THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, AMENDMENTS AND RESTATEMENTS, OR MODIFICATIONS TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT.

[signature page follows]

IN WITNESS WHEREOF, the Depositor, the Servicer, the Master Servicer, the Securities Administrator and the Trustee have caused their names to be signed hereto by their respective officers thereunto duly authorized, in each case as of the day and year first above written.

ACE SECURITIES CORP.,

as Depositor

By:

Name:

Title:

By:

Name:

Title:

[_________________]

as Servicer

By:

Name:

Title:

[_________________]

not in its individual capacity but solely as Trustee

By:

Name:

Title:

Exhibit A

Form of ACE Assignment

RELEASE AND ASSIGNMENT AGREEMENT

FROM

[___________]

This RELEASE AND ASSIGNMENT AGREEMENT, dated [                 ],  , is by and between [_________], as transferor (the “ACE Trust”), and [_________],, as Trust Depositor and transferee with respect to the conveyances provided for herein.

WHEREAS, the parties named above are parties, together with [_________], as servicer, to the Amended and Restated Pooling and Servicing Agreement dated as of [_________] 20[  ].

WHEREAS, the Depositor wishes to engage in a Take-Out Securitization (as defined in the ACE PSA); and

WHEREAS, pursuant to Section 5.22 and Section 7.09 of the ACE PSA, the ACE Trust wishes to release and convey the Contract Assets which are being conveyed by the Trust Depositor under and pursuant to, and which are identified on the Schedule of Contracts attached to the Pooling and Servicing Agreement (the “New PSA”) dated as of ____________________, 20[  ], by and among [________], as the Issuing Entity (the “New Trust”), the Trust Depositor and [________], in its individual capacity and as servicer;

NOW, THEREFORE, in consideration of the premises and the mutual agreements set forth herein and in the ACE PSA, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:

1.

Definitions.  All terms defined in the New PSA (whether directly or by reference to other documents) shall have such defined meanings when used herein, unless such terms are otherwise defined herein.

2.

Specification of Cut-off Date.  The “Cut-off Date” applicable to the Contracts conveyed hereby is [___________] 20[  ].

3.

Release and Conveyance.  The ACE Trust hereby releases and sells, transfers, assigns, sets over and otherwise conveys to the Depositor, without recourse, the Contracts and related Contract Assets identified on the list contained in the computer disk or printout attached hereto as Schedule A.

4.

Counterparts.  This Assignment Agreement may be executed in two or more counterparts including by telefax transmission thereof (and by different parties on separate counterparts), each of which shall be an original, but all of which together shall constitute one and the same instrument.

5.

Governing Law.  This Assignment Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of New York.

6.

Receipt.   The ACE Trust, on behalf of itself and all Certificateholders (as defined in the ACE PSA) hereby acknowledges (a) receipt by each of the Managing Agents (as defined in the ACE PSA) of the Securitization Transfer Price (as defined in the ACE PSA) pertaining to the release and transfer of Contracts and Related Contract Assets as provided above, and (b) the satisfaction of all conditions to such release and transfer specified in Section 7.09 of the ACE PSA.

7.

Further Assurances.  The ACE Trust will, at any time and from time to time, at the expense of the Depositor, promptly execute and deliver all further instruments and documents and take all further action that may be necessary or desirable or that the Depositor may reasonably request in order to effect the purposes of this Agreement, including, without limitation, executing and filing financing statements, release and termination statements, or amendments thereto.

<R>

8.

Limitation of Liability.  It is expressly understood and agreed by the parties hereto that (a) this Release and Assignment Agreement is executed and delivered by The [________], not individually or personally but solely as Owner Trustee of the ACE Trust, in the exercise of the powers and authority conferred upon and vested in it, (b) each of the representations, undertakings and agreements herein made on the part of the ACE Trust is made and intended not as personal representations, undertakings and agreements by [________] but is made and intended for the purpose for binding only the ACE Trust, (c) nothing herein contained shall be construed as creating any liability on [________], individually or personally, to perform any covenant, either expressed or implied, contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties heret o, and (d) under no circumstances shall [________] to be personally liable for the payment of any indebtedness or expenses of the ACE Trust or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the ACE Trust under this Release and Assignment Agreement.</R>

[signatures follow]

IN WITNESS WHEREOF, the parties hereto have caused this Release and Assignment Agreement to be executed by their respective officers thereunto duly authorized as of the date first written above.

[________], as Depositor	[________]
	By: [________], not in its individual capacity but solely as Trustee
By:  _______________________________	By:  _______________________________
Name:______________________________	Name:______________________________
Title:_______________________________	Title:_______________________________

Exhibit B

Initial Schedule of Contracts

(On File with McDermott Will & Emery LLP)

Exhibit C

Form of Monthly Servicer’s Report

[Subject to Further Review]

ACE Equipment Collateral
Monthly Servicing Report

	Determination Date:
	Collection Period:
	Payment Date:
I.        AVAILABLE FUNDS
A.  Available Pledged Revenue
a. Scheduled Payments Received
b. Liquidation Proceeds A1located to Owner Trust
c. Required Payoff Amounts of Prepaid Contracts
d. Required Payoff Amounts of Purchased Contracts
e. Proceeds of Clean-up Call
f. Investment Earnings on Collection Account
Total Available Pledged Revenues =
B.  Determination of Available Funds
a. Total Available Pledged Revenue
b. Servicer Advances
c. Recoveries of prior Servicer Advances
d. Withdrawal from Reserve Account
Total Available Funds =
II.         DISTRIBUTION AMOUNTS
A.  Collection Account Distribution
1. Servicing Fee
2. Class [__] Note Interest Distribution
Class [__] Note Principal Distribution
Aggregate Class [__] distribution
3. Class [__] Note Interest Distribution
Class [__] Note Principal Distribution
Aggregate Class [__] distribution
4. Class [__] Note Interest Distribution
Class [__] Note Principal Distribution
Aggregate Class [__] distribution
5. Class [__] Note Interest Distribution
Class [__] Note Principal Distribution
Aggregate Class [__] distribution
6. Class [__] Note Interest Distribution
Class [__] Note Principal Distribution
Aggregate Class [__] distribution
7. Class C Note Interest Distribution
Class C Note Principal Distribution
Aggregate Class C distribution
8. Class D Note Interest Distribution
Class D Note Principal Distribution
Aggregate Class D distribution
9. Deposit to the Reserve Account
10. Amounts in accordance with the [CCA Loan Agreement]
11. Remainder to the holder of the equity certificate
Collection Account Distribution =

B.  Reserve Account Distribution

1.

Payment due on the Senior Loan

2.

Payment due on the Holdback

3.

Payment due on the Depositor

Reserve Account Distribution =

C.  Incorrect Deposits to be Returned to CIT

Collection Account Distribution =

III.      INFORMATION REGARDING DISTRIBUTIONS ON THE SECURITIES
	Distribution Amounts	Class [__] Notes	Class [__] Notes	Class [__] Notes	Class [__] Notes
1.	Interest Due
2.	Interest Paid
3.	Interest Shortfall ((1) minus (2))
4.	Principal Paid
5.	Total Distribution Amount ((2) plus (4))
	Distribution Amounts	Class [__] Notes	Class C Notes	Class D Notes	Total Offered Notes
1.	Interest Due
2.	Interest Paid
3.	Interest Shortfall ((1) minus (2))
4.	Principal Paid
5.	Total Distribution Amount ((2) plus (4))

IV.         INFORMATION REGARDING THE SECURITIES
A.  Summary of Balance Information
	Class	Applicable Coupon Rate	Principal Balance Jan-00 Payment Date	Class Factor Jan-00 Payment Date	Principal Balance Jun-00 Payment Date	Class Factor Jan-00 Payment Date
a.	Class [__] Notes
b.	Class [__] Notes
c.	Class [__] Notes
d.	Class [__] Notes
e.	Class [__] Notes
f.	Class C Notes
g.	Class D Notes
h.	Total Offered Notes

B.  Other Information
	Class	Scheduled Principal Balance Jan-00 Payment Date	Scheduled Principal Balance Jan-00 Payment Date
	Class [__] Notes

Class	Class Percentage	Target Principal Amount Jan-00 Payment Date	Class Floor Jan-00 Payment Date	Target Principal Amount Jan-00 Payment Date	Class Floor Jan-00 Payment Date
Class [__]
Class [__]
Class C
Class D

V.          PRINCIPAL

A.  Monthly Principal Amount

1.

Principal Balance of Notes and Equity Certificates

(End of Prior Collection Period)

2.

Contract Pool Principal Balance (End of Collection Period)

Total monthly principal amount

B.  Principal Breakdown	No. of Accounts
1. Schedule Principal
2. Prepaid Contracts
3. Default Contracts
4. Contracts purchased by [______]
Total Principal Breakdown

VI.         CONTRACT POOL DATA
A.  Contract Pool Characteristics
		Original Pool	Mar-04 Payment Date	Feb-04 Payment Date
1.	a.  Contract Pool Balance
	b.  No. of Contracts
	c.  Pool Factor
2.	Weighted Average Remaining Term
3.	Weighted Average Original Term

B.  Delinquency Information
		% of Contracts	% of Aggregate Required Payoff Amount	No. of Accounts	Aggregate Required Payoff Amounts
1.	Current
	31–60 days
	61–90 days
	91–120 days
	120+ days
	Total Delinquency
2.	Delinquent Schedule Payments:
	Beginning of Collection Period
	End of Collection Period
	Change in Delinquent Scheduled Payments

C.  Defaulted Contract Information

1.

Required Payoff Amount on Defaulted Contracts

2.

Liquidation Proceeds received

3.

Current Liquidation Net Loss Amount

4.

Cumulative Reported Net Losses

Cumulative Net Loss Ratio

VII.        MISCELLANEOUS INFORMATION

A.  Servicer Advance Balance

1.

Opening Servicer Advance Balance

2.

Current Period Servicer Advance

3.

Recoveries of prior Servicer Advances

4.

Ending Servicer Advance Balance

B.  Reserve Account
1.	Applicable Rates for the Interest Period
	a.  Libor Rate for Interest Period
	b.  Senior Loan Interest Rate
	c.  Holdback Amount Interest Rate
2.	Opening Reserve Account
3.	Deposit from the Collection Account
4.	Withdrawals from the Reserve Account
5.	Investment Earnings
6.	Investment Earnings Distributions:
	a.  Senior Loan Interest
	b.  Senior Loan Principal
	c.  Holdback Amount Interest
	d.  Holdback Amount Principal
	Total Investment Earnings distributions
7.	Remaining available amount
8.	Required Reserve Account Amount
9.	Reserve Account Surplus/ (Shortfall)
10.	Distribution of Reserve Account Surplus:
	a.  Senior Loan Principal
	b.  Holdback Amount Principal
	Total Distribution of Surplus
11.	Ending Reserve Account
12.	Reserve Account deficiency

C.  Other Related Information
1.	Discount Rate
2.	Life to Date Prepayment (CPR)
3.	Life to Date Substitutions:
	a.  Prepayments
	b.  Defaults

	Item	Jan-00 Payment Date	Jan-00 Payment Date
4.	a.  Senior Loan
	b.  Holdback Amount

5.  Delinquency, Net Losses and CPR History
	Collection Periods	% of Aggregate Required Payoff Amounts 31-60 Days Past Due	% of Aggregate Required Payoff Amounts 61-90 Days Past Due	% of Aggregate Required Payoff Amounts 91-120 Days Past Due	% of Aggregate Required Payoff Amounts 120+ Days Past Due

[__] [__] [__] [__] [__]

Collection Month Net Loss Percentage Net Losses LTD CPR

[__] [__] [__] [__]

Exhibit D

Form of Substitution Transfer Agreement

SUBSTITUTION TRANSFER AGREEMENT

This SUBSTITUTION TRANSFER AGREEMENT, dated _____________ __, ____, is by and between [__________], as Depositor and transferor, and [___________], as transferee with respect to the conveyances evidenced hereby.

WHEREAS, the parties named above are each parties to the Pooling and Servicing Agreement dated as of [___________] 20[  ] (as from time to time amended, supplemented or otherwise modified, the “PSA”); and

WHEREAS, pursuant to the PSA, the Depositor wishes to effect conveyances of the Substitute Contracts (together with related Substitute Transferred Assets), identified on the Substitution Schedule of Contracts attached hereto, in each case in the manner and to the effect described in Article II of the PSA; and

WHEREAS, the Servicer has delivered or caused to be delivered a Substitution Notice with respect to such conveyance as required in the PSA;

NOW, THEREFORE, in consideration of the premises and the mutual agreements set forth herein and in the PSA, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:

1.

Definitions.  All terms defined in the PSA (whether directly or by reference to other documents) shall have such defined meanings when used herein, unless such terms are otherwise defined herein.

2.

Specification of Cut-Off Date.  The “Substitution Cut-Off Date” applicable to the Substitute Contracts conveyed hereby is _______________ __, ____.

3.

Conveyances.  Subject to the terms and conditions provided for in the PSA, the Depositor hereby makes the assignments and conveyances specified in Article II of the PSA as being effected by execution and delivery of this Substitution Transfer Agreement, in each case (i) with respect to the Substitute Contracts (together with related Substitute Transferred Assets) identified on the Substitution Schedule of Contracts attached hereto, and (ii) in the manner and to the effect described in Article II of the PSA.

4.

Incorporation of PSA.  This Substitution Transfer Agreement is made pursuant to and upon the representations, warranties and agreements on the part of the parties hereto contained in the PSA and shall be governed in all respects by the PSA.

5.

Ratification of PSA.  As supplemented by this Substitution Transfer Agreement, the PSA is in all respects ratified and confirmed by the parties hereto.

6.

Counterparts.  This Substitution Transfer Agreement may be executed in two or more counterparts including by telefax transmission thereof (and by different parties on separate counterparts), each of which shall be an original, but all of which together shall constitute one and the same instrument.

7.

Governing Law.  This Substitution Transfer Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of New York.

8.

Reaffirmation.  As provided in Section 2.03 of the PSA, by delivery of this Substitution Transfer Agreement, the Depositor confirms that the conditions to transfer set forth in Section 2.03(b) have been satisfied or otherwise waived as described therein.

[signatures follow]

IN WITNESS WHEREOF, the Depositor, the Servicer, the Master Servicer, the Securities Administrator and the Trustee have caused their names to be signed hereto by their respective officers thereunto duly authorized, in each case as of the day and year first above written.

ACE SECURITIES CORP.,

as Depositor

By:

Name:

Title:

By:

Name:

Title:

[_________________]

as Servicer

By:

Name:

Title:

[_________________]

not in its individual capacity but solely as Trustee

By:

Name:

Title:

Exhibit E

Schedule of Representations and Warranties

(a)

List of Contracts.  The information set forth in the Schedule of Contracts (as the same may be amended or deemed amended in respect of a conveyance of Substitute Contracts on a Substitution Transfer Date) is true, complete and correct in all material respects as of the Closing Date (or Substitution Transfer Date, as applicable).

(b)

Eligible Contract.  As of its applicable Cut-Off Date, each Contract satisfied the criteria for the definition of Eligible Contract set forth in this Agreement, and each Secondary Contract securing a Vendor Loan constituting a Contract satisfied, as of its applicable Cut-Off Date, the definition of Eligible Secondary Contract set forth in this Agreement.

(c)

Contract Files.  As of the Closing Date (or as of the Substitution Transfer Date, with respect to Substitute Contracts), (i) immediately prior to such date, [_________] (or the applicable Financing Originator as custodian for [_________]) had possession of each original Contract and the related complete Contract File, and there were no other custodial agreements relating to the same in effect (other than offsite storage arrangements described in Section 4.01(b)); (ii) each of such documents which is required to be signed by the Obligor has been signed by the Obligor in the appropriate spaces; and (iii) to the Depositor’s knowledge, the complete Contract File for each Contract is in the possession of the Servicer.  If the Contract is “tangible chattel paper” as defined in the UCC, the End-User Contract that constitutes or evidences the Contract does not have any marks or nota tions indicating that it has been pledged, assigned or otherwise conveyed to any other Person besides [_________] (prior to its conveyance to the Depositor under the Non-ACE Purchase Agreement), the ACE Trust (prior to its conveyance to the Depositor under the ACE Assignment) and the Depositor.

(d)

No Material Obligation.  No Financing Originator has a material performance obligation in respect of any Contract in favor of an Obligor or End-User (it being understood that covenants of quiet enjoyment, purchase options, obligations to accept return of the property at end of lease term, and like obligations of a lessor typical of a “triple net” lease, shall not be deemed “material performance obligations” for purposes of this representation).

(e)

Vendor Agreements.  The Receivables Purchase Agreement, dated as of [_________] 20 [  ], by and between [_________] and [_________].  

(f)

Intent to Transfer.  [_________] is selling the Contracts, and on each Substitution Transfer Date is conveying the Substitute Contracts, to the Depositor with the intention of removing the Contracts, or the Substitute Contracts as the case may be, from the estate of [_________] pursuant to the applicable provisions of the Bankruptcy Code.

Exhibit F

Minimum Value Filing Exceptions

No financing statements are filed against an Obligor located in a particular State describing Equipment which is the subject of a particular Contract of any Financing Originator, unless the fair market value of the Equipment (determined in accordance with its Customary Policies and Procedures) related to such particular Contract is at least $25,000.

EX-5.1.1

Exhibits 5.1.1 and 23.1.1

February 22, 2007

ACE Securities Corp.

6525 Morrison Boulevard

Suite 318

Charlotte, North Carolina 28211

Re:

ACE Securities Corp

Registration Statement on Form S-3

File No. 333-131866

Gentlemen:

We have acted as special counsel to ACE Securities Corp. (the "Company") in connection with the preparation of a registration statement on Form S-3 (the "Registration Statement") relating to the proposed offering from time to time in one or more series (each, a "Series") by one or more trusts of Asset-Backed Certificates (the "Certificates") and Asset-Backed Notes (the "Notes" and together with the Certificates, the "Securities"). The Registration Statement has been filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"). As set forth in the Registration Statement, each Series of Securities is to be issued under and pursuant to the terms of a separate pooling and servicing agreement, or sale and servicing agreement, trust agreement and indenture (each, an "Agreement") among the Company, as depositor, the servicer and an independent trustee (the "Trustee") to be identified in the prospectus supplement for each Series of Securities.  

As such counsel, we have examined copies of the Certificate of Incorporation and By-Laws of the Company, the Registration Statement, each base Prospectus and forms of Prospectus Supplement included therein, the form of each Agreement, and originals or copies of such other corporate minutes, records, agreements and other instruments of the Company, certificates of public officials and other documents and have made such examinations of law, as we have deemed necessary to form the basis for the opinions hereinafter expressed. In our examination of such materials, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to original documents of all copies submitted to us. As to various questions of fact material to such opinions, we have relied, to the extent we deemed appropriate, upon representations, statements and certificates of officers and representatives of the Company and others.  

Attorneys involved in the preparation of this opinion are admitted to practice law in the State of New York and we do not express any opinion herein concerning any law other than the federal laws of the United States of America, the laws of the State of New York and the General Corporation Law of the State of Delaware.  

Based upon and subject to the foregoing, we are of the opinion that:  

1. When the issuance, execution and delivery of each Series of Notes has been authorized by all necessary corporate action of the Company in accordance with the provisions of the related Agreement or Agreements, and when such Notes have been duly executed and delivered, authenticated by the Trustee and sold as described in the Registration Statement, assuming that the terms of such Notes are otherwise in compliance with applicable law at such time, such Notes will constitute binding obligations of the issuer thereof in accordance with their terms and the terms of such Agreement or Agreements. This opinion is subject to the effect of bankruptcy, insolvency, moratorium, fraudulent conveyance and similar laws relating to or affecting creditors' rights generally and court decisions with respect thereto and we express no opinion with respect to the application of equitable principles or remedies in any proceeding, whether at law or in equit y.  

2. When the issuance, execution and delivery of each Series of Certificates has been authorized by all necessary corporate action of the Company in accordance with the provisions of the related Agreement or Agreements, and when such Certificates have been duly executed and delivered, authenticated by the Trustee and sold as described in the Registration Statement, assuming that the terms of such Certificates are otherwise in compliance with applicable law at such time, such Certificates will be legally issued, fully paid and non-assessable.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement, to the references to this firm in the Prospectus and the related Prospectus Supplement which forms a part of the Registration Statement and to the filing of this opinion as an exhibit to any application made by or on behalf of the Company or any dealer in connection with the registration of the Securities under the securities or blue sky laws of any state or jurisdiction. In giving such consent, we do not admit hereby that we come within the category of persons whose consent is required under Section 7 of the Act or the Rules and Regulations of the Commission thereunder.

Very truly yours,  

/s/ McKee Nelson LLP

McKee Nelson LLP

EX-8.1.1

Exhibits 8.1.1 and 23.1.1

February 22, 2007

ACE Securities Corp.

6525 Morrison Boulevard

Suite 318

Charlotte, North Carolina 28211

Re:

ACE Securities Corp

Registration Statement on Form S-3

File No. 333-131866

Gentlemen:

We have acted as special counsel to ACE Securities Corp. (the "Company") in connection with the preparation of a registration statement on Form S-3 (the "Registration Statement") relating to the proposed offering from time to time in one or more series (each, a "Series") by one or more trusts of Asset-Backed Certificates (the "Certificates") and Asset-Backed Notes (the "Notes" and together with the Certificates, the "Securities"). The Registration Statement has been filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"). As set forth in the Registration Statement, each Series of Securities is to be issued under and pursuant to the terms of a separate pooling and servicing agreement, or sale and servicing agreement, trust agreement and indenture (each, an "Agreement") among the Company, as depositor, the servicer and an independent trustee (the "Trustee") to be identified in the prospectus supplement for each Series of Securities.  

As such counsel, we have examined copies of the Certificate of Incorporation and By-Laws of the Company, the Registration Statement, each base Prospectus and forms of Prospectus Supplement included therein, the form of each Agreement, and originals or copies of such other corporate minutes, records, agreements and other instruments of the Company, certificates of public officials and other documents and have made such examinations of law, as we have deemed necessary to form the basis for the opinions hereinafter expressed. In our examination of such materials, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to original documents of all copies submitted to us. As to various questions of fact material to such opinions, we have relied, to the extent we deemed appropriate, upon representations, statements and certificates of officers and representatives of the Company and others.  

Attorneys involved in the preparation of this opinion are admitted to practice law in the State of New York and we do not express any opinion herein concerning any law other than the federal laws of the United States of America, the laws of the State of New York and the General Corporation Law of the State of Delaware.  

Based upon and subject to the foregoing, we are of the opinion that the statements set forth in each base Prospectus under the heading "Material Federal Income Tax Considerations," and in each form of Prospectus Supplement under the heading “Federal Income Tax Consequences” to the extent they constitute matters of law or legal conclusions with respect thereto, are correct in all material respects.  

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement, to the references to this firm in the Prospectus and the related Prospectus Supplement which forms a part of the Registration Statement and to the filing of this opinion as an exhibit to any application made by or on behalf of the Company or any dealer in connection with the registration of the Securities under the securities or blue sky laws of any state or jurisdiction. In giving such consent, we do not admit hereby that we come within the category of persons whose consent is required under Section 7 of the Act or the Rules and Regulations of the Commission thereunder.

Very truly yours,  

/s/ McKee Nelson LLP

McKee Nelson LLP

EX-10.1.2

EXHIBIT 10.1.2

SALE AND SERVICING

AGREEMENT

among

[   ]

as Issuing Entity,

[   ]

as Servicer and Sponsor,

and

ACE SECURITIES CORP.

as Depositor

Dated as of [   ]

ARTICLE I

DEFINITIONS

SECTION 1.01

Definitions

1

SECTION 1.02

Other Definitional Provisions

16

ARTICLE II

CONVEYANCE OF RECEIVABLES

SECTION 2.01

Conveyance of Receivables

17

ARTICLE III

THE RECEIVABLES

SECTION 3.01

Representations and Warranties of Depositor and Sponsor.

18

SECTION 3.02

Repurchase Upon Breach

22

SECTION 3.03

Custody of Receivable Files

23

SECTION 3.04

Duties of Servicer as Custodian

23

SECTION 3.05

Instructions; Authority to Act

24

SECTION 3.06

Custodian’s Indemnification

24

SECTION 3.07

Effective Period and Termination

24

ARTICLE IV

ADMINISTRATION AND SERVICING OF RECEIVABLES

SECTION 4.01

Duties of Servicer

25

SECTION 4.02

Collection and Allocation of Receivable Payments

26

SECTION 4.03

Realization Upon Receivables

26

SECTION 4.04

Physical Damage Insurance; Other Insurance

26

SECTION 4.05

Maintenance of Security Interests in Financed Vehicles

27

SECTION 4.06

Covenants of Servicer

27

SECTION 4.07

Purchase of Receivables Upon Breach

28

SECTION 4.08

Servicing Fee

28

SECTION 4.09

Servicer’s Certificate

28

SECTION 4.10

Annual Statement as to Compliance: Notice of Default

32

SECTION 4.11

Assessments of Compliance and Attestation Reports

33

SECTION 4.12

Access to Certain Documentation and Information Regarding

Receivables

34

SECTION 4.13

Servicer Expenses

34

SECTION 4.14

Appointment of Subservicer or Subcontractor.

34

SECTION 4.15

Information to be Provided by the Servicer.

35

SECTION 4.16

Remedies.

35

SECTION 4.17

Intention of the Parties and Interpretation

36

ARTICLE V

DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO CERTIFICATEHOLDERS

AND NOTEHOLDERS

SECTION 5.01

Establishment of Trust Accounts

36

SECTION 5.02

Collections

38

SECTION 5.03

Application of Collections

39

SECTION 5.04

Additional Deposits

39

SECTION 5.05

Distributions

39

SECTION 5.06

Reserve Account

41

SECTION 5.07

Advances

41

SECTION 5.08

Statements to Certificateholders and Noteholders

42

SECTION 5.09

Net Deposits

43

SECTION 5.10

Reserved.

43

ARTICLE VI

THE DEPOSITOR

SECTION 6.01

Representations of Depositor

43

SECTION 6.02

Corporate Existence

45

SECTION 6.03

Liability of Depositor; Indemnities

45

SECTION 6.04

Merger or Consolidation of, or Assumption of The Obligations of,

Depositor

47

SECTION 6.05

Limitation on Liability of Depositor and Others

47

SECTION 6.06

Depositor May Own Certificates or Notes

47

SECTION 6.07

Security Interest

48

ARTICLE VII

THE SERVICER AND THE SPONSOR

SECTION 7.01

Representations of [   ]

48

SECTION 7.02

Indemnities of Servicer

49

SECTION 7.03

Merger or Consolidation of, or Assumption of The Obligations of, [   ]

51

SECTION 7.04

Limitation on Liability of [   ] and Others

51

SECTION 7.05

[   ] Not to Resign as Servicer

51

SECTION 7.06

Corporate Existence

52

ARTICLE VIII

DEFAULT

SECTION 8.01

Servicer Default

52

SECTION 8.02

Appointment of Successor

54

SECTION 8.03

Payment of Servicing Fee; Repayment of Advances

55

SECTION 8.04

Notification to Noteholders and Certificateholders

55

SECTION 8.05

Waiver of Past Defaults

55

ARTICLE IX

TERMINATION

SECTION 9.01

Optional Purchase of All Receivables

55

SECTION 9.02

Mandatory Sale of All Contracts

55

ARTICLE X

ADMINISTRATIVE DUTIES OF THE SERVICER

SECTION 10.01

Administrative Duties

57

SECTION 10.02

Records

59

SECTION 10.03

Additional Information to be Furnished to the Issuing Entity

59

ARTICLE XI

MISCELLANEOUS PROVISIONS

SECTION 11.01

Amendment

59

SECTION 11.02

Protection of Title to Trust

60

SECTION 11.03

Notices

62

SECTION 11.04

Assignment

62

SECTION 11.05

Limitations On Rights Of Others

63

SECTION 11.06

Severability

63

SECTION 11.07

Separate Counterparts

63

SECTION 11.08

Headings

63

SECTION 11.09

Governing Law

63

SECTION 11.10

Assignment To Trustee

63

SECTION 11.11

Nonpetition Covenant

63

SECTION 11.12

Limitation of Liability of Owner Trustee and Trustee

63

SECTION 11.13

Independence of the Servicer

64

SECTION 11.14

No Joint Venture

64

SECTION 11.15

Intent of the Parties; Reasonableness.

64

SCHEDULES

Schedule A - Schedule of Receivables

Schedule B - Location of Receivables

EXHIBITS

Exhibit A - Form of Monthly Securityholder Statement

Exhibit B - Form of Servicer’s Certificate

Exhibit C - Auction Procedures

Exhibit D – Form of Annual Certification

Exhibit E – Mortgage Loan Schedule

Exhibit F – Power of Attorney

Exhibit G – Form of Request of Release

Exhibit H – Servicing Criteria to be Addressed in Assessment of Compliance

SALE AND SERVICING AGREEMENT dated as of [  ], among [  ], a Delaware business trust, as Issuing Entity (the “Issuing Entity”), ACE SECURITIES CORP., as depositor (the “Depositor”) and [  ], (“[  ]”) as servicer (the “Servicer”) and sponsor (the “Sponsor”).

WHEREAS the Issuing Entity desires to purchase a portfolio of receivables arising in connection with motor vehicle retail installment sale contracts and other motor vehicle installment sale contracts generally purchased by the Originators (as hereinafter defined) from motor vehicle dealers, all of which receivables were acquired by the Depositor pursuant to the Loan Contribution Agreement;

WHEREAS the Sponsor as of the date hereof has caused the Depositor to form the Issuing Entity;

WHEREAS the Depositor is willing to sell such receivables to the Issuing Entity and assign its rights but none of its obligations under the Loan Contribution Agreement to the Issuing Entity; and

WHEREAS the Servicer is willing to service 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 1.01  Definitions.  Whenever used in this Agreement, the following words and phrases shall have the following meanings:

“Adviser” has the meaning specified in Section 9.2.

“Actuarial Receivable” means any Receivable under which the portion of a payment allocable to principal and the portion of a payment allocable to interest is determined in accordance with the Scheduled Payment.

“Advance” means the amount, as of the close of business on the last day of a Collection Period, which the Servicer is required to advance on the related Actuarial Receivable pursuant to Section 5.7(a).

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

“Amount Financed” with respect to a Receivable means the amount advanced under the Receivable toward the purchase price of the Financed Vehicle and any related costs.

“Auction” has the meaning specified in Section 9.2.

“Auction Procedures” has the meaning specified in Section 9.2.

“Auction Property” has the meaning specified in Section 9.2.

“Available Principal” means, with respect to any Distribution Date, the sum of the following amounts without duplication: (a) that portion of all collections on the Receivables allocable to principal in respect of the preceding Collection Period using (x) in the case of a Simple Interest Receivable, the Simple Interest Method and (y) in the case of an Actuarial Receivable, the actuarial method (including, with respect to Actuarial Receivables, amounts withdrawn from the Payahead Account and allocable to principal and excluding amounts deposited into the Payahead Account and allocable to principal, in each case, in respect of the preceding Collection Period); (b) Liquidation Proceeds attributable to the principal amount of Receivables which became Liquidated Receivables during the preceding Collection Period in accordance with the Servicer’s customary servicing procedures; (c) all Adv ances made by the Servicer of principal due on the Actuarial Receivables in respect of the preceding Collection Period; (d) to the extent attributable to principal, the Purchase Amount of each Receivable repurchased by the Depositor or the Sponsor or purchased by the Servicer as of the close of business on the last day of the preceding Collection Period; and (e) partial prepayments on Receivables in respect of the preceding Collection Period relating to refunds of extended warranty contract costs or of credit life or disability insurance policy premiums, but only if such costs or premiums were financed by the respective Obligor and only to the extent not included in clause (a) above; provided, however, that in calculating the Available Principal all payments and proceeds (including Liquidation Proceeds) of any Receivables (i) repurchased by the Depositor or the Sponsor or purchased by the Servicer the Purchase Amount of which has been included in the Available Principal on a prior Distribution Date, and (ii) distributed to the Servicer, with respect to such Distribution Date, as reimbursement for Outstanding Advances in accordance with Section 5.7 shall all be excluded.

“Balloon Loan” means a Receivable originated with a stated maturity of less than the period of time of the corresponding amortization schedule.

“Balloon Payment” means the final payment required to be made under a Balloon Loan.

“Basic Documents” means the Certificate of Trust, the Trust Agreement, the Indenture, the Loan Contribution Agreement, the Depository Agreement and other documents and certificates delivered in connection therewith.

“Certificate” means a Trust Certificate (as defined in the Trust Agreement).

“Certificateholder” has the meaning assigned to such term in the Trust Agreement.

“Certificateholders’ Distributable Amount” means, with respect to any Distribution Date, the amounts to be distributed to the Certificateholders pursuant to Section 5.6(b).

“Class A Noteholders’ Distributable Amount” means, with respect to any Distribution Date, the sum of the Class A Noteholders’ Principal Distributable Amount and the Class A Noteholders’ Interest Distributable Amount.

“Class A Noteholders’ Interest Carryover Shortfall” means, with respect to any Distribution Date, the excess of the Class A Noteholders’ Monthly Interest Distributable Amount for the preceding Distribution Date and any outstanding Class A Noteholders’ Interest Carryover Shortfall on such preceding Distribution Date, over the amount in respect of interest that is actually deposited in the Note Distribution Account with respect to the Class A Notes on such preceding Distribution Date, plus interest on the amount of interest due but not paid to Class A Noteholders on the preceding Distribution Date, to the extent permitted by law, at the Interest Rate borne by the Class A Notes from such preceding Distribution Date through the current Distribution Date.

“Class A Noteholders’ Interest Distributable Amount” means, with respect to any Distribution Date, the sum of the Class A Noteholders’ Monthly Interest Distributable Amount for such Distribution Date and the Class A Noteholders’ Interest Carryover Shortfall for such Distribution Date. Interest on the Class A-1 Notes shall be computed on the basis of the actual number of days in a 360 day year. Interest on the Class A Notes other than the Class A-1 Notes shall be computed on the basis of a 360 day year of twelve 30-day months.

“Class A Noteholders’ Monthly Interest Distributable Amount” means, with respect to any Distribution Date and the Class A Notes, the product of (i)(A) in the case of the Class A-1 Notes, the product of the Interest Rate for such class and a fraction, the numerator of which is the number of days elapsed from and including the prior Distribution Date (or, in the case of the first Distribution Date, from and including [   ]) to but excluding such Distribution Date and the denominator of which is 360 and (B) in the case of each other class of Class A Notes, one-twelfth of the Interest Rate for such class and (ii) the outstanding principal balance of such class on the immediately preceding Distribution Date, after giving effect to all distributions of principal to Noteholders of such class on such Distribution Date (or, in the case of the first Distribution Date, on the Closing Date).

“Class A Noteholders’ Monthly Principal Distributable Amount” means, with respect to any Distribution Date, the Class A Noteholders’ Percentage of the Principal Distribution Amount.

“Class A Noteholders’ Percentage” means 100% until the point in time at which the Class A Notes have been paid in full and zero thereafter.

“Class A Noteholders’ Principal Carryover Shortfall” means, as of the close of any Distribution Date, the excess of the Class A Noteholders’ Monthly Principal Distributable Amount and any outstanding Class A Noteholders’ Principal Carryover Shortfall from the preceding Distribution Date over the amount in respect of principal that is actually deposited in the Note Distribution Account with respect to the Class A Notes.

“Class A Noteholders’ Principal Distributable Amount” means, with respect to any Distribution Date, the sum of the Class A Noteholder’s Monthly Principal Distributable Amount for such Distribution Date and the Class A Noteholders’ Principal Carryover Shortfall as of the close of the preceding Distribution Date; provided, however, that the Class A Noteholders’ Principal Distributable Amount shall not exceed the outstanding principal balance of the Class A Notes. In addition, on the Final Scheduled Distribution Date of each class of Class A Notes, the principal required to be deposited in the Note Distribution Account will include the amount necessary (after giving effect to the other amounts to be deposited in the Note Distribution Account on such Distribution Date and allocable to principal) to reduce the Outstanding Amount of such class of Class A Notes to zero.

“Class B Noteholders’ Distributable Amount” means, with respect to any Distribution Date, the sum of the Class B Noteholders’ Principal Distributable Amount and the Class B Noteholders’ Interest Distributable Amount.

“Class B Noteholders’ Interest Carryover Shortfall” means, with respect to any Distribution Date, the excess of the Class B Noteholders’ Monthly Interest Distributable Amount for the preceding Distribution Date and any outstanding Class B Noteholders’ Interest Carryover Shortfall on such preceding Distribution Date, over the amount in respect of interest that is actually deposited in the Note Distribution Account with respect to the Class B Notes on such preceding Distribution Date, plus interest on the amount of interest due but not paid to Class B Noteholders on the preceding Distribution Date, to the extent permitted by law, at the Interest Rate borne by the Class B Notes from such preceding Distribution Date through the current Distribution Date.

“Class B Noteholders’ Interest Distributable Amount” means, with respect to any Distribution Date, the sum of the Class B Noteholders’ Monthly Interest Distributable Amount for such Distribution Date and the Class B Noteholders’ Interest Carryover Shortfall for such Distribution Date. Interest on the Class B Notes shall be computed on the basis of a 360 day year of twelve 30-day months.

“Class B Noteholders’ Monthly Interest Distributable Amount” means, with respect to any Distribution Date and the Class B Notes, the product of (i) one-twelfth of the Interest Rate for such class and (ii) the outstanding principal balance of such class on the immediately preceding Distribution Date, after giving effect to all distributions of principal to Noteholders of such class on such Distribution Date (or, in the case of the first Distribution Date, on the Closing Date).

“Class B Noteholders’ Monthly Principal Distributable Amount” means, with respect to any Distribution Date, the Class B Noteholders’ Percentage of the Principal Distribution Amount.

“Class B Noteholders’ Percentage” means 0% until the point in time at which the Class B Notes have been paid in full and 100% thereafter.

“Class B Noteholders’ Principal Carryover Shortfall” means, as of the close of any Distribution Date, the excess of the Class B Noteholders’ Monthly Principal Distributable Amount and any outstanding Class B Noteholders’ Principal Carryover Shortfall from the preceding Distribution Date over the amount in respect of principal that is actually deposited in the Note Distribution Account with respect to the Class B Notes.

“Class B Noteholders’ Principal Distributable Amount” means, with respect to any Distribution Date, the sum of the Class B Noteholder’s Monthly Principal Distributable Amount for such Distribution Date and the Class B Noteholders’ Principal Carryover Shortfall as of the close of the preceding Distribution Date; provided, however, that the Class B Noteholders’ Principal Distributable Amount shall not exceed the outstanding principal balance of the Class B Notes. In addition, on the Final Scheduled Distribution Date of the Class B Notes, the principal required to be deposited in the Note Distribution Account will include the amount necessary (after giving effect to the other amounts to be deposited in the Note Distribution Account on such Distribution Date and allocable to principal) to reduce the Outstanding Amount of the Class B Notes to zero.

“Closing Date” means [       ].

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

“Collection Period” means a calendar month, except with respect to the first Collection Period, which shall be the period from the Cutoff Date to [   ]. Any amount stated “as of the close of business on the last day of a Collection Period” shall give effect to the following calculations as determined as of the end of the day on such last day: (1) all applications of collections, (2) all current and previous Payaheads, (3) all applications of Payahead Balances, (4) all Advances and reductions of Outstanding Advances and (5) all distributions to be made on the immediately following Distribution Date.

“Computer Tape” means the computer tapes furnished to the Trustee describing certain characteristics of the Receivables as of the Cutoff Date.

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

“Contract Rate” of a Receivable means the annual rate of finance charges stated in the related Contract.

“Cram Down Loss” means, with respect to a Receivable if a court of appropriate jurisdiction in a bankruptcy or 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 (i) the excess of the principal balance of such Receivable immediately prior to such order over the principal balance of such Receivable as so reduced and/or (ii) if such court shall have issued an order reducing the effective rate of interest on such Receivable, the net present value (using as the discount rate the higher of the Contract Rate on such Receivable or the rate of interest, if any, specified by the court in such order) of the scheduled payments as so modified or restructured. A “Cram Down Loss” shall be deemed to have occurred on the date of issuance of s uch order.

“Cutoff Date” means [       ].

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

“Dealer Agreement” means any agreement between a Dealer and an Originator relating to the acquisition of Receivables from a Dealer by such Originator.  “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” within the meaning of Section 9.105(1)(i) of the UCC and are susceptible of physical delivery, transfer thereof to the Trustee or its nominee or custodian by physical delivery to the Trustee or its nominee or custodian endorsed to, or registered in the name of, the Trustee or its nominee or custodian or endorsed in blank, and, with respect to a certificated security (as defined in Section 8-102 of the UCC) transfer thereof (i) by delivery of such certificated security endorsed to, or registered in the name of, the Trustee or its nominee or custodian or endorsed in blank to a financial intermediary (as defined in Section 8-313 of the UCC) and the making by such financial intermediary of entries on its books and records identifying such cert ificated securities as belonging to the Trustee or its nominee or custodian and the sending by such financial intermediary of a confirmation of the purchase of such certificated security by the Trustee or its nominee or custodian, or (ii) by delivery thereof to a “clearing corporation” (as defined in Section 8-102(3) of the UCC) and the making by such clearing corporation of appropriate entries on its books reducing the appropriate securities account of the transferor and increasing the appropriate securities account of a financial intermediary by the amount of such certificated security, the identification by the clearing corporation of the certificated securities for the sole and exclusive account of the financial intermediary, the maintenance of such certificated securities by such clearing corporation or a “custodian bank” (as defined in Section 8-102(4) of the UCC) or the nominee of either subject to the clearing corporation’s exclusive control, the sending of a confirmation by the financial intermediary of the purchase by the Trustee or its nominee or custodian of such securities and the making by such financial intermediary of entries on its books and records identifying such certificated securities as belonging to the Trustee or its nominee or custodian (all of the foregoing, “Physical Property”), and, in any event, any such Physical Property in registered form shall be in the name of the Trustee or its nominee or custodian; and such additional or alternative procedures as may hereafter become appropriate to effect the complete transfer of ownership of any such Trust Account Property to the Trustee or its nominee or custodian, consistent with changes in applicable law or regulations or the interpretation thereof;

(b) with respect to any securities issued by the U.S. Treasury, the Federal Home Loan Mortgage Corporation or by the Federal National Mortgage Association that is a book-entry security held through the Federal Reserve System pursuant to Federal book-entry regulations, the following procedures, all in accordance with applicable law, including applicable Federal regulations and Articles 8 and 9 of the UCC: book-entry registration of such Trust Account Property to an appropriate book-entry account maintained with a Federal Reserve Bank by a financial intermediary which is also a “depository” pursuant to applicable Federal regulations and issuance by such financial intermediary of a deposit advice or other written confirmation of such book-entry registration to the Trustee or its nominee or custodian of the purchase by the Trustee or its nominee or custodian of such book-entry securities; the making by such financial intermediary of entries in its books and records identifying such book-entry security held through the Federal Reserve System pursuant to Federal book-entry regulations as belonging to the Trustee or its nominee or custodian and indicating that such custodian holds such Trust Account Property solely as agent for the Trustee or its nominee or custodian; and such additional or alternative procedures as may hereafter become appropriate to effect complete transfer of ownership of any such Trust Account Property to the Trustee or its nominee or custodian, consistent with changes in applicable law or regulations or the interpretation thereof; and

(c) with respect to any item of Trust Account Property that is an uncertificated security under Article 8 of the UCC and that is not governed by clause (b) above, registration on the books and records of the Issuing Entity thereof in the name of the financial intermediary, the sending of a confirmation by the financial intermediary of the purchase by the Trustee or its nominee or custodian of such uncertificated security, the making by such financial intermediary of entries on its books and records identifying such uncertificated certificates as belonging to the Trustee or its nominee or custodian.

“Depositor” means Ace Securities Corp., as the depositor of the Receivables, and each successor to Ace Securities Corp., (in the same capacity) to the extent permitted hereunder.

“Depository Agreement” means the Note Depository Agreement.

“Determination Date” means, with respect to any Distribution Date, the earlier of the eighth Business Day of the month in which a Distribution Date occurs and the fourth Business Day preceding such Distribution Date.

“Distribution Date” means, with respect to each Collection Period, the fifteenth day of the following month, or if such day is not a Business Day, the immediately following Business Day, commencing in [   ].

“Eligible Deposit Account” means either (a) a segregated account with an Eligible Institution or (b) a segregated trust account with the corporate trust department of a depository institution (other than the Depositor or any affiliate of the Depositor) 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 depository institution (other than the Depositor or any affiliate of the Depositor) 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 (A) either a long-term senior unsecured debt rating of AAA or a short-term senior unsecured debt or certificate of deposit rating of A-l+ or better by Standard & Poor’s and (B)(1) a long-term senior unsecured debt rating of Al or better and (2) a short-term senior unsecured debt rating of P-l or better by Moody’s, or any other long-term, short-term or certificate of deposit rating acceptable to the Rating Agencies and (ii) whose deposits are insured by the Federal Deposit Insurance Corporation. If so qualified, the Owner Trustee or the 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 (including the Depositor or any Affiliate of the Depositor) 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 P-1;

(c)

commercial paper (including commercial paper of the Depositor or any Affiliate of the Depositor) 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 P-1;

(d)

investments in money market funds (including funds for which the Depositor, the Trustee or the Owner Trustee or 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; and

(g)

any other investment which would not cause either Rating Agency to downgrade or withdraw its then current rating of any class of the Notes.

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

“Final Scheduled Distribution Date” means with respect to (i) the Class A-1 Notes, the [   ] Distribution Date, (ii) the Class A-2 Notes, the [   ] Distribution Date, (iii) the Class A-3 Notes, the [   ] Distribution Date, (iv) the Class A-4 Notes, the [   ] Distribution Date, (iv) the Class A-5 Notes, the February 2003 Distribution Date, and (vi) the Class B Notes, the [   ] Distribution Date.

“Final Scheduled Maturity Date” means [  ].

“Financed Vehicle” means a new or used automobile, (including passenger car, minivan, sport/utility vehicle or light truck) together with all accessions thereto, securing an Obligor’s indebtedness under the respective Receivable.

“Indenture” means the Indenture dated as of [   ], between the Issuing Entity and the Trustee, as the same may be amended and supplemented from time to time.

“Initial Pool Balance” means the Pool Balance as of the Cutoff Date, which is $[   ].

“Insolvency Event” means, with respect to a specified Person, (a) the filing 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 (including any receiver appointed under the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended), 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 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.

“Interest Distribution Amount” means, with respect to any Distribution Date, the sum of the following amounts without duplication: (a) that portion of all collections on the Receivables allocable to interest in respect of the preceding Collection Period using (x) in the case of a Simple Interest Receivable, the Simple Interest Method and (y) in the case of an Actuarial Receivable, the actuarial method (including, with respect to Actuarial Receivables, amounts withdrawn from the Payahead Account and allocable to interest, and excluding amounts deposited into the Payahead Account and allocable to interest, in each case in respect of the preceding Collection Period); (b) Liquidation Proceeds attributable to interest on the Receivables which became Liquidated Receivables during the preceding Collection Period in accordance with the Servicer’s customary servicing procedures; (c) all Advan ces made by the Servicer of interest due on the Actuarial Receivables; (d) the Purchase Amount of each Receivable repurchased by the Depositor or the Sponsor or purchased by the Servicer as of the close of business on the last day of the preceding Collection Period to the extent attributable to accrued interest on such Receivable; (e) Recoveries for such Collection Period and (f) Investment Earnings for such Distribution Date; provided, however, that in calculating the Interest Distribution Amount (i) all payments and proceeds (including Liquidation Proceeds) of any Receivables repurchased by the Depositor or the Sponsor or purchased by the Servicer the Purchaser Amount of which has been included in the Interest Distribution Amount on a prior Distribution Date, and (ii) distributed to the Servicer with respect to such Distribution Date, as reimbursement for Outstanding Advances in accordance with Section 5.7 shall all be excluded.

“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 (except the Payahead Account) to be deposited into the Collection Account on such Distribution Date pursuant to Section 5.1(b).

“Issuing Entity” means [                         ].

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

“Liquidated Receivables” means, Receivables (i) which have been liquidated by the Servicer through the sale of the related Financed Vehicle, (ii) as to which all or a portion representing 10% or more of a scheduled payment due is 150 or more days delinquent or (iii) with respect to which proceeds have been received which, in the Servicer’s judgment, constitute the final amounts recoverable in respect of such Receivable.

“Liquidation Distribution Date” has the meaning specified in Section 9.2.

“Liquidation Proceeds” means, with respect to any Liquidated Receivable, the moneys collected in respect thereof, from whatever source (other than any proceeds from any Dealer commission) on a Liquidated Receivable during the Collection Period in which such Receivable became a Liquidated Receivable, net of the sum of any amounts expended by the Servicer in connection with such liquidation and any amounts required by law to be remitted to the Obligor on such Liquidated Receivable.

“Loan Contribution Agreement” means the Loan Contribution Agreement dated as of [   ] among the Originators and the Depositor.

“Loans” At any time, collectively, all Loans that have been sold to the Depositor under the Mortgage Loan Purchase Agreement or substituted for pursuant to the Mortgage Loan Purchase Agreement and transferred and conveyed to the Issuing Entity, in each case together with the Related Documents, and that remain subject to the terms thereof.

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

“Net Losses” means the sum of Realized Losses and Cram Down Losses minus Recoveries for any Collection Period.

“Net Mortgage Rate” With respect to any Loan and any day, the related Mortgage Rate less the sum of the related Servicing Fee Rate, the Administrative Fee Rate and the Indenture Trustee Fee Rate.

“Note Distribution Account” means the account designated as such, established and maintained pursuant to Section 5.1.

“Note Pool Factor” for each class of Notes as of the close of business on a Distribution Date means a seven-digit decimal figure equal to the outstanding principal balance of such class of Notes divided by the original outstanding principal balance of such class of Notes. The Note Pool Factor for the Notes will be 1.0000000 as of the Cutoff Date; thereafter, the Note Pool Factor for each class of Notes will decline to reflect reductions in the outstanding principal balance of such class of Notes.

“Noteholder” means a Person in whose name a Note is registered.

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

“Officers’ Certificate” means a certificate signed by (a) the president, any senior vice president or any vice president and (b) a secretary or assistant secretary of the Depositor, the Sponsor or the Servicer, as appropriate, provided that no one person may sign in a capacity fulfilling both clause (a) and clause (b).

“Originators” means the direct and indirect subsidiaries of [   ] which contributed Receivables to the Depositor pursuant to the Loan Contribution Agreement.

“Outstanding Advances” on the Actuarial Receivables means the sum, as of the close of business on the last day of a Collection Period, of all Advances as reduced as provided in Section 5.7(a).

“Owner Trust Estate” has the meaning assigned to such term in the Trust Agreement.

“Owner Trustee” means [   ], 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.

“Payahead” on an Actuarial Receivable means the amount, as of the close of business on the last day of a Collection Period, computed in accordance with Section 5.3 with respect to such Receivable.

“Payahead Account” means the account designated as such, established and maintained pursuant to Section 5.1.

“Payahead Balance” on an Actuarial Receivable means the sum, as of the close of business on the last day of a Collection Period, of all Payaheads made by or on behalf of the Obligor with respect to such Actuarial Receivable, as reduced by applications of previous Payaheads with respect to such Actuarial Receivable, pursuant to Sections 5.3 and 5.7.

“Payment Date” The [25]th day of each month, or if such day is not a Business Day, then the next Business Day.

“Percentage Interest” shall mean, with respect to any Certificate, the percentage interest of ownership in the Trust represented thereby as set forth on the face thereof.

“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” as of the close of business on the last day of a Collection Period means the aggregate Principal Balance of the Receivables (excluding Purchased Receivables and Liquidated Receivables).

“Principal Balance” of a Receivable, as of the close of business on the last day of a Collection Period, means the Amount Financed minus the sum of (i)(a) with respect to a Simple Interest Receivable, that portion of all payments made by or on behalf of the related Obligor on or prior to such day and allocable to principal using the Simple Interest Method and (b) in the case of an Actuarial Receivable, that portion of all Scheduled Payments due on or prior to such day allocable to principal using the actuarial method, (ii) any refunded portion of extended warranty protection plan costs or of physical damage, theft, credit life, credit accident or health insurance premiums included in the Amount Financed, (iii) any payment of the Purchase Amount with respect to the Receivable allocable to principal, (iv) any prepayment in full or any partial prepayments applied to reduce the Principal Bala nce of the Receivable and (v) Cram Down Losses in respect of such Receivable.

“Principal Distribution Amount” means, with respect to any Distribution Date, the sum of (i) (a) with respect to Simple Interest Receivables, that portion of all collections on the Receivable allocable to principal in respect of the preceding Collection Period and (b) with respect to Actuarial Receivables, the sum of (x) the amount of all Scheduled Payments allocable to principal due during the preceding Collection Period and (y) the portion of all prepayments in full allocable to principal received during the preceding Collection Period, in the case of both (a) and (b), without regard to any extensions or modifications thereof effected after the Cutoff Date, other than with respect to any extensions or modifications required in connection with Cram Down Losses during such Collection Period; (ii) the principal balance of each Receivable that was repurchased by the Depositor or the Sponsor , or purchased by the Servicer, in each case, as of the close of business on the last day of the preceding Collection Period (except to the extent included in (i) above); (iii) the principal balance of each Liquidated Receivable which became such during the preceding Collection Period (except to the extent included in (i) above); (iv) partial prepayments on Receivables in respect of the preceding Collection Period relating to refunds of extended service contracts, or of physical damage, credit life, credit accident or heath insurance premium, disability insurance policy premiums, but only if such costs or premiums were financed by the respective Obligor and only to the extent not included in clause (i) above; and (v) the aggregate amount of Cram Down Losses during such Collection Period.

“Purchase Amount” means the amount, as of the close of business on the last day of a Collection Period, required to prepay in full the respective Receivable under the terms thereof including interest at the Contract Rate to the end of the month of purchase (without giving effect to Outstanding Advances).

“Purchased Receivable” means a Receivable purchased as of the close of business on the last day of a Collection Period by (i) the Servicer pursuant to Section 4.7 or (ii) repurchased by the Depositor or the Sponsor pursuant to Section 3.2.

“Rating Agency” means Moody’s and/or Standard & Poor’s. If no such organization or successor is any longer in existence, “Rating Agency” shall be a nationally recognized statistical rating organization or other comparable Person designated by the Depositor, notice of which designation shall be given to the Trustee, the Owner Trustee and the Servicer.

“Rating Agency Condition” means, with respect to any action, that (i) each Rating Agency (other than Standard & Poor’s) shall have been given 10 days’ prior notice thereof (or such shorter period as shall be acceptable to the Rating Agencies) and that none of the Rating Agencies shall have notified the Depositor, the Servicer, the Owner Trustee or the Trustee in writing that such action will, in and of itself, result in a reduction or withdrawal of the then current rating of any class of the Notes and (ii) Standard & Poor’s, if it is still a Rating Agency, shall have notified the Depositor, the Servicer, the Owner Trustee or the Trustee in writing that such action will not, in and of itself, result in a reduction or the withdrawal of the then current rating of any class of the Notes.

“Realized Losses” means the excess of the Principal Balance of any Liquidated Receivable over Liquidation Proceeds to the extent allocable to principal.

“Receivable” means any Contract listed on Schedule A (which Schedule may be in the form of microfiche) but excluding Liquidated Receivables and Purchased Receivables.

“Receivable Files” means the documents specified in Section 3.3.

“Recoveries” means, with respect to any Liquidated Receivable, monies collected in respect thereof, from whatever source (other than any proceeds from  any Dealer commission), during any Collection Period following the Collection Period in which such Receivable became a Liquidated Receivable, net of the sum of any amounts expended by the Servicer for the account of the Obligor and any amounts required by law to be remitted to the Obligor.

“Regulation AB” means Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time, and subject to such clarification and interpretation as have been provided by the Commission in the adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time.

“Related Financed Vehicle” means a Financed Vehicle securing the Obligor’s indebtedness under a Related Receivable.

“Related Originator” means, with respect to any Receivable, the Originator who originated such Receivable and who contributed such Receivable to the Depositor pursuant to the Loan Contribution Agreement.

“Related Receivable” means, with respect to any Originator, a Receivable originated by such Originator who contributed such Receivable to the Depositor pursuant to the Loan Contribution Agreement.

“Reserve Account” means the account designated as such, established and maintained pursuant to Section 5.1.

“Reserve Account Initial Deposit” means an amount equal to $[      ].

“Reserve Account Transfer Amount” means an amount equal to the lesser of (i) the amount of cash or other immediately available funds on deposit in the Reserve Account on such Distribution Date (before giving effect to any withdrawals therefrom relating to such Distribution Date) or (ii) the amount, if any, by which (x) the sum of the Total Servicing Fee, the Class A Noteholders’ Interest Distributable Amount, the Class B Noteholders’ Distributable Amount, the Class A Noteholders’ Principal Distributable Amount and the Class B Noteholders’ Principal Distributable Amount for such Distribution Date exceeds (y) the sum of the Interest Distribution Amount and the Available Principal for such Distribution Date.

“Scheduled Payment” on an Actuarial Receivable means that portion of the payment required to be made by the Obligor during the respective Collection Period sufficient to amortize the Principal Balance under the actuarial method over the term of the Actuarial Receivable (except, in the case a Balloon Loan, to the extent necessary to amortize the Principal Balance to the amount of the Balloon Payment over the life of the Actuarial Receivable) and to provide interest at the Contract Rate.

“Securities” means the Notes.

“Securities Act” means the Securities Act of 1933, as amended.

“Securityholder” means a Noteholder or Certificateholder.

“Servicer” means [   ], the servicer of the Receivables, and each successor to [   ], (in the same capacity) pursuant to Section 7.3 or 8.2.

“Servicer Default” means an event specified in Section 8.1.

“Servicer’s Certificate” means an Officers’ Certificate of the Servicer delivered pursuant to Section 4.9, in the form of Exhibit B.

“Servicing Criteria” means the “servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be amended from time to time.

“Servicing Fee” has the meaning specified in Section 4.8.

“Servicing Fee Rate” means [   ]% 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 and the remainder of such payment is allocable to principal.

“Simple Interest Receivable” means any Receivable under which the portion of a payment allocable to principal and the portion of a payment allocable to interest is determined in accordance with the Simple Interest Method.

“Specified Reserve Account Balance” means, with respect to any Distribution Date the greater of (a) 5.0% of the sum of the aggregate outstanding principal amount of the Notes on such Distribution Date (after giving effect to all payments on the Notes to be made on such Distribution Date), or (b) 2.0% of the sum of the aggregate initial principal balance of the Notes.

“Sponsor” means [   ], as the sponsor of the Issuing Entity.

“Standard & Poor’s” means Standard & Poor’s Ratings Group, or its successor.

“Subcontractor”:  Any vendor, subcontractor or other Person that is not responsible for the overall servicing (as “servicing” is commonly understood by participants in the asset-backed securities market) of the Receivables but performs one or more discrete functions identified in Item 1122(d) of Regulation AB with respect to the Receivables under the direction or authority of the Servicer or a Subservicer.

“Subservicer”:  Any Person that services Receivables on behalf of the Servicer or any Subservicer and is responsible for the performance (whether directly or through Subservicers or Subcontractors) of a substantial portion of the material servicing functions required to be performed by the Servicer under this Agreement that are identified in Item 1122(d) of Regulation AB.

 “Total Distribution Amount” means, for each Distribution Date, the sum of (i) the Interest Distribution Amount, (ii) the Available Principal and (iii) the Reserve Account Transfer Amount, in each case in respect of such Distribution Date.

“Total Servicing Fee” means with respect to each Distribution Date the Servicing Fee for the related Collection Period and all accrued and unpaid Servicing Fees for prior Collection Periods.

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

“Trust” means the Issuing Entity.

“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), including the Reserve Account Initial Deposit, and all proceeds of the foregoing.

“Trust Accounts” has the meaning assigned thereto in Section 5.1.

“Trust Agreement” means the Trust Agreement dated as of [   ], 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 Trustee, any Officer within the Corporate Trust Office of the Trustee, including any Vice President, Assistant Vice President, Assistant Treasurer, Assistant Secretary or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers 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 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.

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

“weighted average net mortgage rate” With respect to the Mortgage Loans in the aggregate, and any Due Date, the average of the Net Mortgage Rate for each Mortgage Loan as of the last day of the related Due Period weighted on the basis of the related Principal Balances outstanding as of the last day of the related Due Period for each Mortgage Loan as determined by the Servicer in accordance with the Servicer’s normal servicing procedures.

SECTION 1.02  Other Definitional Provisions.  (a) Capitalized terms used herein and not otherwise defined herein have the meanings assigned to them in the Indenture.

(a)

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.

(b)

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, certifi cate or other document shall control.

(c)

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.”

(d)

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.

ARTICLE II

CONVEYANCE OF RECEIVABLES

SECTION 2.01  Conveyance of Receivables.  In consideration of the Issuing Entity’s delivery to or upon the order of the Depositor on the Closing Date of the Certificates and of the net proceeds from the sale of the Notes and 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 sell, transfer, assign, set over and otherwise convey to the Issuing Entity, without recourse (subject to the obligations herein):

(a)

all right, title and interest of the Depositor in and to the Receivables, and all moneys received thereon (other than any proceeds from any Dealer commission), on or after the Cutoff Date and, with respect to Receivables which are Actuarial Receivables, all monies received thereon prior to the Cutoff Date that are due on or after the Cutoff Date;

(b)

all right, title and interest of the Depositor in the security interests in the Financed Vehicles granted by Obligors pursuant to the Receivables and any other interest of the Depositor in the Financed Vehicles;

(c)

all right, title and interest of the Depositor in and to any proceeds from claims on any physical damage, repossession, loss, skip, credit life and credit accident, vendor’s single interest and health insurance policies or certificates relating to the Financed Vehicles or the Obligors;

(d)

all right, title and interest of the Depositor in and to refunds for the costs of extended service contracts with respect to Financed Vehicles, refunds of unearned premiums with respect to credit life and credit accident and health insurance policies or certificates covering an Obligor or Financed Vehicle or his or her obligations with respect to a Financed Vehicle and any recourse to Dealers for any of the foregoing;

(e)

the interest of the Depositor in 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 or a default by an Obligor resulting in the repossession of the Financed Vehicle under such Dealer Agreement;

(f)

all right, title and interest in all funds on deposit from time to time in the Trust Accounts, including the Reserve Account Initial Deposit, and in all investments and proceeds thereof (including all income thereon);

(g)

all right, title and interest of the Depositor under the Loan Contribution Agreement; and

(h)

the proceeds of any and all of the foregoing (the items specified in clauses (a) through (h) is referred to herein as the “Trust Property”).

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 Trust and the beneficial interest in and title to the Receivables and such 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 grant of a security interest to the Owner Trustee in the Trust Property for the benefit of the Securityholders.

ARTICLE III

THE RECEIVABLES

SECTION 3.01  Representations and Warranties of Depositor and Sponsor.

The Sponsor and the Depositor, jointly and severally, make the following representations and warranties as to the Receivables on which the Issuing Entity is deemed to have relied in acquiring the Receivables. Such representations and warranties speak as of the execution and delivery of the Agreement, but shall survive the sale, transfer and assignment of the Receivables to the Issuing Entity and the pledge thereof to the Trustee pursuant to the Indenture.

(a)

Title. It is the intention of the Depositor that the transfer and assignment contemplated by the Loan Contribution Agreement constitute a contribution of the Related Receivables from the Originators to the Depositor pursuant to the Loan Contribution Agreement and that the beneficial interest in and title to such Related Receivables not be part of the debtor’s estate in the event of the filing of a petition for bankruptcy or insolvency by or against such Originator. No Related Receivable has been sold, transferred, contributed, assigned or pledged by such Originator to any Person other than the Depositor pursuant to the Loan Contribution Agreement. Immediately prior to the transfer and assignment contemplated by the Loan Contribution Agreement, such Originator had good and marketable title to each Related Receivable conveyed by it to the Depositor, free and clear of all Liens and, immedi ately upon the transfer thereof, the Depositor shall have good and marketable title to each such Related Receivable, free and clear of all Liens; and the transfer of the Related Receivables to the Depositor has been perfected under the UCC. It is the intention of the Depositor that the transfer and assignment herein contemplated constitute a sale of the Receivables from the Depositor to the Issuing Entity and that the beneficial interest in and title to such Receivables not be part of the debtor’s estate in the event of the filing of a petition for receivership by or against the Depositor. No Receivable has been sold, transferred, assigned or pledged by the Depositor to any Person other than the Issuing Entity. 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 Issuing Entity shall have good and marketable title to each such Receivable, free and c lear of all Liens; and the transfer of the Receivables to the Issuing Entity has been perfected under the UCC.

(b)

All Filings Made. All filings (including UCC filings) necessary in any jurisdiction to give the Depositor a first priority perfected security interest in the Receivables, to give the Issuing Entity a first priority perfected ownership interest in the Receivables, and to give the Trustee a first priority perfected security interest therein, shall have been presented to the Trustee for filing in the appropriate filing offices. Upon such filing by the Servicer, the Trustee will have a first priority perfected security interest in the Trust Property.

(c)

Characteristics of Receivables. Each Receivable (A) has been either originated by a Dealer in the regular course of such Dealer’s business and purchased from such Dealer by an Originator in the ordinary course of the Originator’s business or otherwise originated by the Originator in the ordinary course of the Originator’s business, and each Obligor was approved in accordance with the Related Originator’s standard underwriting procedures in effect at the time such Receivable was originated or purchased, (B) was conveyed by the Related Originator to the Depositor, (C) has created or shall create a valid, subsisting and enforceable first priority security interest in favor of the Related Originator in the Related Financed Vehicle, which security interest has been assigned by the Related Originator to the Depositor, which is assignable by the Depositor to the Issuing Entity a nd by the Issuing Entity to the Trustee, (D) contains customary and enforceable provisions under the laws of the State governing such Receivable such that the rights and remedies of the holder thereof are adequate for realization against the collateral of the benefits of the security; and (E) provides for level monthly payments that fully amortizes the Amount Financed by maturity (except for the last payment, which may be different from the level payment and except, with respect to a Balloon Loan, to the extent of the Balloon Payment).

(d)

Schedule of Receivables. The information set forth in Schedule A to this Agreement is true and correct in all material respects as of the opening of business on the Cutoff Date and no selection procedures believed by the Depositor to be adverse to the Noteholders or the Certificateholders 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, the sale of the Financed Vehicle and the sale of any physical damage and credit life and credit accident and health insurance and any extended service contracts complied in all material respects at the time it was originated or made and at the Closing Date (after giving effect to the transactions contemplated by the Basic Documents) complies in all material respects with all requirements of applicable federal, state and local laws and regulations thereunder, including 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 Federal Reserve Board’s Regulations B and Z, the Soldier’s and Sailor’s Civil Relief Act of 1940, state adaptations of the National Consumer Act and the Unif orm Consumer Credit Code, 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 such 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 is 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)

Security Interest in Financed Vehicle. Immediately prior to the sale, assignment, and transfer thereof under the Agreement, (i) each Receivable shall be secured by a validly perfected first priority security interest in the Financed Vehicle in favor of the Related Originator as secured party or (ii) application has been made with the appropriate governmental authority for a valid perfected first priority security interest in the Financed Vehicle in favor of the Related Originator, and such security interest is or shall be prior to all other Liens upon and security interests in such Financed Vehicle which now exist or may hereafter arise or be created (except, as to priority, for any tax liens or mechanics’ liens which may arise after the Closing Date).

(i)

Receivables in Force. No Receivable has been satisfied, subordinated or rescinded, nor has any Financed Vehicle been released from the Lien granted by the related Receivable in whole or in part unless another vehicle has been substituted as collateral securing the Receivable without any other modification to such Receivable.

(j)

No Waiver. No provision of a Receivable has been modified or waived except as reflected in the Receivable File relating to such Receivable.

(k)

No Amendments. No Receivable has been amended, except as permitted pursuant to Section 4.2.

(l)

No Defenses. No right of rescission, setoff, counterclaim or defense has been asserted or threatened with respect to any Receivable. The operation of the terms of any Receivable or the exercise of any right thereunder will not render such Receivable unenforceable in whole or in part or subject to any such right of rescission, setoff, counterclaim, or defense.

(m)

No Liens. As of the Cutoff 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. Except for payment delinquencies continuing for a period of not more than thirty days as of the Cutoff Date and, except as permitted in this paragraph, no default, breach, violation or event (in any such case) permitting acceleration under the terms of any Receivable has occurred; and 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 has arisen; and the Depositor has not waived and shall not waive any of the foregoing.

(o)

Maturity of Receivables. Each Receivable has an original maturity of not more than [   ] months; the weighted average original maturity of the Receivables is [   ] months as of the Cutoff Date; the remaining term of each Receivable is [   ] months or less as of the Cutoff Date; the weighted average remaining term of the Receivables is [   ] months as of the Cutoff Date; and the latest scheduled maturity of any Receivable shall be no later than the Final Scheduled Maturity Date.

(p)

No Bankruptcies. No Obligor on any Receivable was noted in the related Receivable File as having filed for bankruptcy in a proceeding which remained undischarged as of the Cutoff Date.

(q)

No Repossessions. As of the Cutoff Date, no Financed Vehicle securing any Receivable is in repossession status.

(r)

Chattel Paper. Each Receivable constitutes “chattel paper” as defined in the UCC.

(s)

Contract Rate. The weighted average Contract Rate of the Receivables as of the Cutoff Date is approximately [   ]%.

(t)

Principal Balance. Each Receivable has an outstanding principal balance as of the Cutoff Date of not less than $[   ] or more than $[   ]. The average principal balance of the Receivables as of the Cutoff Date is $[   ]. The aggregate principal balance of the Receivables as of the Cutoff Date is $[   ].

(u)

Financing. Approximately [   ]% of the aggregate principal balance of the Receivables, constituting approximately [   ]% of the number of Receivables, as of the Cutoff Date, represents financing of new vehicles; the remainder of the Receivables represents financing of used vehicles. Approximately [   ]% of the aggregate principal balance of the Receivables, constituting approximately [   ]% of the number of Receivables, as of the Cutoff Date, represents financing of Balloon Loans. Approximately [   ]% of the aggregate Principal Balance of the Receivables, constituting approximately [   ]% of the number of Receivables, as of the Cutoff Date, represents financing of Simple Interest Receivables; the remainder of the Receivables represents financing of Actuarial Receivables.

(v)

Paid-Ahead. Not more than [   ]% of the aggregate Principal Balance of the Receivable is paid-ahead more than six months.

(w)

Insurance; Other. Each Related Originator, in accordance with its customary procedures, has confirmed (A) that each Obligor has obtained insurance covering the Financed Vehicle as of the date of execution of the Related Receivable insuring against loss and damage due to fire, theft, collision and other risks generally covered by comprehensive and collision coverage and that each Receivable requires the Obligor to maintain such insurance naming the applicable Originator and its successors and assigns as a loss payee, (B) each Receivable that finances the cost of premiums for credit life and credit accident and health insurance is covered by an insurance policy or certificate of insurance naming the applicable Originator as loss payee (lienholder) under each such insurance policy and certificate of insurance and (C) as to each Receivable that finances the cost of an extended service contract, the respective Financed Vehicle which secures the Receivable is covered by an extended service contract.

(x)

Lawful Assignment. No Receivable has been originated in, or as of the Closing Date is subject to the laws of, any jurisdiction under which the sale, transfer and assignment of such Receivable or this Agreement or the pledge of such Receivable to the Trustee under the Indenture (i) is unlawful, void, voidable or unenforceable in accordance with its terms or (ii) would render such Receivable void, voidable or unenforceable in accordance with its terms. None of any of the Originators nor the Depositor has entered into any agreement with any account debtor that prohibits, restricts or conditions the assignment of all or any portion of the Receivable.

(y)

No Insurance Premiums. As of the Cutoff Date, no portion of the principal balance of any Receivable included amounts attributable to the payment of any physical damage or theft insurance premium.

(z)

One Original. There is only one manually executed original copy of each Receivable.

(aa)

Origination of Receivables. Based on the billing address of the Obligors and the principal balance of Receivables as of the Cutoff Date, approximately [   ]% of the Receivables were originated by Dealers in [   ], each Obligor has been approved by the Originator based on the Originator’s standard underwriting procedures as in effect at the time the related Receivable was entered into. Based on the billing address of the Obligors and the principal balance of the Receivables as of the Cutoff Date, not more than [   ]% of the Receivables were originated in any one state other than [   ].

(bb)

Receivable Files. The Receivable Files are kept at the locations listed in Schedule B.

(cc)

Computer Records. As of the Closing Date, the accounting and computer records relating to the Receivables of the Depositor and each Originator have been marked to show the absolute ownership by the Owner Trustee on behalf of the Trust of the Receivables.

SECTION 3.02  Repurchase Upon Breach.  The Sponsor, the Depositor, the Servicer or the Owner Trustee, as the case may be, shall inform the other parties to this Agreement and the Trustee promptly, in writing, upon its discovery of any breach of the Depositor’s and the Sponsor’s representations and warranties made pursuant to Section 3.1. Unless any such breach shall have been cured by the last day of the first Collection Period following the discovery thereof by the Owner Trustee or receipt by the Owner Trustee of written notice from the Sponsor, the Depositor or the Servicer of such breach, the Sponsor and the Depositor shall be jointly and severally obligated to repurchase any Receivable in which the interests of the Noteholders or Certificateholders are materially and adversely affected by any such breach as of the last day of such Collection Period. In consideration o f and simultaneously with the repurchase of the Receivable, the Sponsor and/or the Depositor shall remit to the Collection Account the Purchase Amount in the manner specified in Section 5.4 and the Issuing Entity shall execute such assignments and other documents reasonably requested by the Sponsor and/or the Depositor in order to effect such repurchase. The sole remedy of the Issuing Entity, the Owner Trustee, the Trustee, 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 to require the Sponsor and/or the Depositor to repurchase Receivables pursuant to this Section, subject to the conditions contained herein. Neither the Owner Trustee nor the Trustee 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.

SECTION 3.03  Custody of Receivable Files.  To assure uniform quality in servicing the Receivables and to reduce administrative costs, the Issuing Entity and the Trustee hereby revocably appoints the Servicer, and the Servicer hereby accepts such appointment, to act as the agent of the Issuing Entity and the Trustee as custodian of the following documents or instruments which are hereby constructively delivered to the Trustee, as pledgee of the Issuing Entity with respect to each Receivable:

(a)

the original of the 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 the Depositor in the Financed Vehicle (it being understood that the original certificates of title generally are not delivered to the Servicer for 90 days but that promptly upon delivery they shall be delivered to the Servicer as custodian hereunder); 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 3.04  Duties of Servicer as Custodian.  (a) SAFEKEEPING.  The Servicer shall hold the Receivable Files on behalf of the Issuing Entity and the Trustee and maintain such accurate and complete accounts, records and computer systems pertaining to each Receivable File as shall enable the Issuing Entity 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. 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 Issuing Entity or the Trustee to verify the accuracy of the Servicer’s record keeping. The Servicer shall promptly report to the Issuing Entity and the 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.

(a)

Maintenance of and Access to Records. The Servicer shall maintain each Receivable File at one of its offices specified in Schedule B to this Agreement or at such other office as shall be specified to the Issuing Entity and the Trustee by written notice not later than 90 days after any change in location. Upon reasonable prior notice, the Servicer shall make available to the Issuing Entity and the Trustee or their respective duly authorized representatives, attorneys or auditors a list of locations of the Receivable Files and records and computer systems maintained by the Servicer at such times during normal business hours as the Issuing Entity or the Trustee shall instruct.

(b)

Release of Documents. Upon written instruction from the Trustee, the Servicer shall release any Receivable File to the Trustee, the Trustee’s agent, or the Trustee’s designee, as the case may be, at such place or places as the Trustee may designate, as soon as practicable and upon the release and delivery of any such document in accordance with the instructions of the Trustee, the Servicer shall be released from any further liability and responsibilities under this Section 3.4 with respect to such documents unless and until such time as such document may be returned to the Servicer.

SECTION 3.05  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 Trustee.

SECTION 3.06  Custodian’s Indemnification.  The Servicer as custodian shall indemnify and hold harmless the Trust, the Owner Trustee and the 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 or the 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 where the final determination that any such improper act or omission by the Servicer resulted in such liability, obligation, loss, damage, payment, cost or expense is established by a court of law, by an arbitrator or by way of settlement agreed to by the Servicer; provided, however, that the Servicer shall not be liable to the Trust or the Owner Trustee for any portion of any such amount resulting from the willful misfeasance, bad faith or negligence of the Owner Trustee and the Servicer shall not be liable to the Trustee for any portion of any such amount resulting from the willful misfeasance, bad faith or negligence of the Trustee. 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 3.07  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. If [   ] 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 by the Trustee or by the Holders of Notes evidencing not less than 25% of the Outstanding Amount of the Notes or such Holders may terminate the rights and obligations of the Servicer under Section 8.1. The Trustee or, with the consent of the Trustee, the Owner Trustee, may terminate the Servicer’s appointment as custodian, with cause, at any time upon written notification to the Servicer, and wit hout cause upon 30 days’ prior written notification to the Servicer and the Rating Agencies. As soon as practicable after any termination of such appointment, the Servicer shall deliver the Receivable Files to the Trustee or the Trustee’s agent at such place or places as the Trustee may reasonably designate in writing. If the Servicer shall be terminated as custodian hereunder for any reason but shall continue to serve as Servicer, the 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.

ARTICLE IV

ADMINISTRATION AND SERVICING OF RECEIVABLES

SECTION 4.01  Duties of Servicer.  The Servicer, as agent for the Issuing Entity  (to the extent provided herein), 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. The Servicer’s duties shall include collection and posting of all payments, responding to inquiries of Obligors on such Receivables, investigating delinquencies, sending payment coupons or periodic statements or invoices to Obligors, reporting any tax information to Obligors, accounting for collections and furnishing monthly and annual statements to the Owner Trustee and the Trustee with respect to distributions and making Advances pursuant to Section 5.7. Subject to the provisions of Section 4.2, 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 Issuing Entity, the Owner Trustee, the 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 Issuing Entity (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 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 4.02  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 the customary servicing procedures it follows with respect to all comparable automotive receivables that it services for itself or others.

(a)

The Servicer may not grant extensions or modify the original due dates of a Receivable; provided, however, that the Servicer may (i) modify the original due date of a Receivable by authorizing an Obligor to skip up to two scheduled principal and interest payments in any rolling 12-month period and extend the final maturity date with respect to any such Receivable by a term equal to one month for each payment skipped, (ii) modify the original due date and terms of a Receivable by re-amortizing the Receivable and extending the final maturity date once during the term of a Receivable, and (iii) grant extensions or modify the original due dates of a Receivable with respect to a Receivable for which a court of appropriate jurisdiction in a bankruptcy or insolvency proceeding shall have issued an order reducing the amount owed on such Receivable or otherwise modifying or restructuring the scheduled payme nts or other terms on such Receivable; provided, however, that the Servicer may not extend the date for final payment by the Obligor of any Receivable beyond the last day of the Collection Period preceding the Class B Note Final Scheduled Distribution Date. 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 voluntarily agree to any reduction of (i) the original interest rate, (ii) the amount of any Scheduled Payment on an Actuarial Receivable or the original regular scheduled payment on a Simple Interest Receivable, or (iii) the Principal Balance of any Receivable.

SECTION 4.03  Realization Upon Receivables.  On behalf of the Issuing Entity, the Servicer shall use all reasonable 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 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 b reach 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 Liquidation Proceeds by an amount greater than the amount of such expenses.

SECTION 4.04  Physical Damage Insurance; Other Insurance.  (a) The Servicer shall, in accordance with its customary servicing procedures, verify (i) that each Obligor shall have obtained insurance covering the Financed Vehicle, as of the date of the execution of the Receivable, insuring against loss and damage due to fire, theft, collision and other risks generally covered by comprehensive and collision coverage and that each Receivable requires the Obligor to maintain such physical loss and damage insurance naming the Related Originator and its successors and assigns as a loss payee, (ii) that each Receivable that finances the cost of premiums for credit life and credit accident and health insurance is covered by an insurance policy or certificate naming the Originator as policyholder (creditor) and (iii) as to each Receivable that finances the cost of an extended service contract , the respective Financed Vehicle which secures the Receivable is covered by an extended service contract.

(a)

To the extent applicable, the Servicer shall not take any action which would result in noncoverage under any of the insurance policies referred to in Section 4.4(a) which, but for the actions of the Servicer, would have been covered thereunder. The Servicer, on behalf of the Trustee shall take such reasonable action as shall be necessary to permit recovery under any of the foregoing insurance policies. Any amounts collected by the Servicer under any of the foregoing insurance policies, shall be deposited in the Collection Account pursuant to Section 5.2. The parties hereto acknowledge that the Servicer shall not be required to force place any insurance coverage referred to in Section 4.4(a)(i) above, or any other insurance coverage.

SECTION 4.05  Maintenance of Security Interests in Financed Vehicles.  The Servicer shall, in accordance with its customary servicing procedures, take such steps as are necessary to maintain perfection of (i) the security interest created by each Receivable in the related Financed Vehicle and (ii) the interest of the Trust in the Receivables created by this Agreement, including but not limited to obtaining the execution by the Obligors and the recording, registering, filing, re-recording, re-registering and refiling of all security agreements, financing statements and continuation statements or instruments as are necessary to maintain the security interest granted by Obligors under the respective Receivables, the Originators under the Loan Contribution Agreement, the Depositor hereunder and the Issuing Entity under the Indenture. The Servicer is hereby authorized to take such steps as are necessary to re-perfect such security interest on behalf of the Issuing Entity and the Trustee in the event of the relocation of a Financed Vehicle or for any other reason.

SECTION 4.06  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 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 Issuing Entity, the Trustee, 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 increase the number of scheduled payments due under a Receivable. Notwithstanding the foregoing, the Servicer may, as described in Section 4.2(b), grant extensions or modify the original due dates of a Receivable or make such other changes with respect to a Receivable for which a court of appropriate jurisdiction in a bankruptcy or insolvency proceeding shall have issued an order reducing the amount owed on such Receivable or otherwise modifying or restructuring the scheduled payments on such Receivable; provided, however, that the Servicer may not extend the date for final payment by the Obligor of any Receivable beyond the last day of the Collection Period preceding the Class B Note Final Scheduled Distribution Date.

SECTION 4.07  Purchase of Receivables Upon Breach.  The Servicer or the Owner Trustee shall inform the other party and the Trustee and the Depositor promptly, in writing, upon the discovery of any breach pursuant to Section 4.2(b), 4.5 or 4.6. Unless the breach shall have been cured by the last day of the second Collection Period following such discovery thereof by the Owner Trustee or the receipt by the Owner Trustee of notice of such breach, 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 the last day of such second Collection Period (or, at the Servicer’s option, the last day of the first Collection Period following the discovery). In consideration of the purchase of any such Receivable pursuant to the preceding sentence, the Servicer sha ll remit the Purchase Amount in the manner specified in Section 5.4. The sole remedy of the Issuing Entity, the Owner Trustee, the Trustee, the  Certificateholders or the Noteholders with respect to a breach of Section 4.2(b), 4.5 or 4.6 shall be to require the Servicer to purchase Receivables pursuant to this Section. Neither the Trustee nor the Owner Trustee shall have any duty to conduct any affirmative investigation as to the occurrence of any condition requiring the purchase of any Receivable pursuant to this Section.

SECTION 4.08  Servicing Fee.  The servicing fee for each Distribution Date shall equal the product of (i) one-twelfth, (ii) the Servicing Fee Rate and (iii) the Pool Balance as of the first day of the related Collection Period (the “Servicing Fee”). In addition, the “Servicing Fee” described in (a) and (b) above shall include late fees, prepayment charges and other similar charges allowed by applicable law with respect to Receivables collected (from whatever source) on the Receivables.

SECTION 4.09  Servicer’s Certificate.  Not later than 11:00 a.m. (New York time) on each Determination Date, the Servicer shall deliver to the Owner Trustee, the Trustee and the Depositor, with a copy to the Rating Agencies, a Servicer’s Certificate containing all information necessary (as listed below) to make the distributions pursuant to Sections 5.5 and 5.6 (including, if required, withdrawals from or deposits to the Payahead Account and Advances by the Servicer pursuant to Section 5.7) for the Collection Period preceding the date of such Servicer’s Certificate. Receivables to be purchased by the Servicer or to be repurchased by the Depositor or the Sponsor shall be identified by the Servicer by account number with respect to such Receivable (as specified in Schedule A).

Such information shall include, to the extent applicable:

(i)

the aggregate amount of (a) security interest collections  with respect to the Notes and the Certificates, (b)  aggregate Security Principal Collections with respect to the Notes and the Certificates and (c) Security Collections for the related Collection Period with respect to the Notes and the Certificates;

(ii)

the amount of such distribution to the Securityholders of the Notes and the Certificates applied to reduce the principal balance thereof and separately stating the portion thereof in respect of the accelerated principal distribution amount  and the amount to be deposited in the Funding Account on such Payment Date;

(iii)

the amount of such distribution to the Securityholders of the Notes and the Certificates allocable to interest and separately stating the portion thereof in respect of overdue accrued interest;

(iv)

the credit enhancement draw amount, if any, for such Payment Date and the aggregate amount of prior draws thereunder not yet reimbursed;

(v)

the aggregate Principal Balance of (a) the ________ Loans, (b) the ______ Loans, (c) the _________ Loans, as of the end of the preceding Collection Period and (d) all of the Mortgage Loans;

(vi)

the weighted average net mortgage rate for the related Collection Period and the weighted average net mortgage rate for the aggregate of the Stated Principal Balance of (A) all of the Mortgage Loans and (B) the Adjustable Rate Mortgage Loans, for the following Collection Period;

(vii)

the special capital distribution amount and the required special capital distribution amount, in each case as the end of the related Collection Period; and

(viii)

the aggregate amount of Additional Loans acquired during the previous Collection Period with amounts in respect of Net Principal Collections from the Funding Account;

(ix)

the aggregate liquidation loss amounts with respect to the related Collection Period, the amount of any remaining Carryover Loss Amount with respect to the Notes and Certificates, respectively, and the aggregate of the liquidation loss amounts from all Collection Periods to date expressed as a percentage of the sum of (a) the Cut-Off Date Pool Balance and (b) the amount by which the Pool Balance as of the latest date that the Additional Loans have been transferred to the Depositor exceeds the Cut-Off Date Pool Balance;

(x)

any unpaid interest on the Notes and Certificates, respectively, after such Distribution Date;

(xi)

the aggregate Principal Balance of each Class of Notes and of the Certificates after giving effect to the distribution of principal on such Payment Date;

(xii)

the respective Security Percentage applicable to the Notes and Certificates, after application of payments made on such Payment Date;

(xiii)

the applicable record dates, accrual periods, determination dates for calculating distributions and general distribution dates;

(xiv)

the total cash flows received and the general sources thereof;

(xv)

the related amount of the Servicing Fees paid to or retained by the Servicer for the related Due Period;

(xvi)

the amount of any Net Swap Payment payable to the Derivative Administrator, any Net Swap Payment payable to the Swap Provider, any Swap Termination Payment payable to the Derivative Administrator and any Swap Termination Payment payable to the Swap Provider;

(xvii)

the Interest Carry Forward Amount and any Basis Risk Shortfall Carry Forward Amount for each Class of Notes;

(xviii)

the Note Principal Balance or Note Notional Amount, as applicable, of each Class after giving effect (i) to all distributions allocable to principal on such Distribution Date and (ii) the allocation of any applied loss amounts for such Distribution Date;

(xix)

the number and Stated Principal Balance of the Loans in each Loan Group in respect of which (A) one Scheduled Payment is Delinquent, (B) two Scheduled Payments are delinquent, (C) three or more Scheduled Payments are delinquent and (D) foreclosure proceedings have been commenced, in each case as of the close of business on the last day of the calendar month preceding such Distribution Date and separately identifying such information for the (1) first lien Mortgage Loans, (2) second lien Mortgage Loans, and (3) adjustable rate Loans, in each such Loan Group; provided, however, that such information will not be provided on the statements relating to the first Payment Date;

(xx)

the amount of Advances included in the distribution on such Distribution Date (including the general purpose of such Advances), the aggregate amount of unreimbursed Advances at the close of business on the Distribution Date, and the general source of funds for reimbursements;

(xxi)

the cumulative amount of applied loss amounts to date;

(xxii)

if applicable, material modifications, extensions or waivers to Loan terms, fees, penalties or payments during the preceding calendar month or that have become material over time;

(xxiii)

with respect to any Loan that was liquidated during the preceding calendar month, the loan number and Stated Principal Balance of, and Realized Loss on, such Loan as of the close of business on the Determination Date preceding such Distribution Date;

(xxiv)

the total number and principal balance of any real estate owned or REO properties as of the close of business on the Determination Date preceding such Distribution Date;

(xxv)

the three month rolling average of the percent equivalent of a fraction, the numerator of which is the aggregate Stated Principal Balance of the Mortgage Loans that are 60 days or more delinquent or are in bankruptcy or foreclosure or are REO properties, and the denominator of which is the aggregate Stated Principal Balance of all of the Loans in each case as of the close of business on the last day of the calendar month preceding such Distribution Date and separately identifying such information for the (1) first lien Loans, and (2) adjustable rate Loans;

(xxvi)

the Realized Losses during the related Prepayment Period and the cumulative Realized Losses through the end of the preceding month;

(xxvii)

whether a Trigger Event exists;

(xxviii)

updated pool composition data including the following with respect to each Loan Group:  average loan balance, weighted average mortgage rate, weighted average loan-to-value ratio at origination, weighted average FICO at origination weighted average remaining term; [NOTE - Item 1121(a)(8) requires updated pool composition information, the foregoing is a suggestion of what to provide]

(xxix)

information about any additions of, substitutions for or removal of any Loans from the Trust Fund, and any changes in the underwriting, acquisition or selection criteria as to any Mortgage Loans added to the Trust Fund;

(xxx)

the amount, if any of fees or expenses accrued and paid, with an identification of the payee and the general purpose of such fees;

(xxxi)

the amount of, if any, of excess cash flow or excess spread and the application of such excess cash flow;

(xxxii)

 interest rates, as applicable, to the pool assets and securities;

(xxxiii)

 the beginning and ending balance of the reserve fund or similar account, if any together with any material activity;

(xxxiv)

 if applicable, material modifications, extensions or waivers to pool asset terms, fees penalties or payments during the distribution period or that have become material overtime;

(xxxv)

 material breaches of pool asset representation or warranties or transaction covenants;

(xxxvi)

 Information regarding any new issuance of securities backed by the same asset pool, any pool asset changes, such as additions or removals in connection with a prefunding and pool asset substitutions and repurchases, and cash flows available for future purchases, such as the balances of any prefunding, if applicable;

(xxxvii)

The special hazard amount, fraud loss amount and bankruptcy amount, if applicable, as of the close of business on the applicable distribution date and a description of any change in the calculation of these amount; and

(xxxviii)

With respect to any series of securities as to which the trust fund includes mortgage securities, additional information as required under this Agreement and specified in the related prospectus supplement.  

In the case of information furnished pursuant to clauses (ii) and (iii) above, the amounts shall be expressed as an aggregate dollar amount per Note, as applicable, with a $1,000 denomination.

SECTION 4.10  Annual Statement as to Compliance: Notice of Default.  (a) The Servicer shall deliver to the Owner Trustee and the Trustee, on or before [   ] of each calendar year beginning in 2007, an Officers’ Certificate (an “Annual Statement of Compliance”), dated as of December 31 of the preceding year, stating as to each signatory thereof, that (i) a review of the activities of the Servicer during the preceding calendar year (or, in the case of the first such report, during the period from the Closing Date to December 31, [   ]) and of its performance under this Agreement or other applicable servicing agreement has been made under such officers’ supervision and (ii) to the best of such officers’ knowledge, based on such review, the Servicer has fulfilled all its obligations under this Agreement or other applicable servicing agreemen t throughout such year (or, in the case of the first such certificate, such shorter period) 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 or cure provisions thereof. The Trustee 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 Trustee addressed to the Corporate Trust Office. Upon the telephone request of the Owner Trustee, the Trustee will promptly furnish the Owner Trustee a list of Noteholders as of the date specified by the Owner Trustee.  Such Annual Statement of Compliance shall contain no restrictions or limitations on its use.  In the event that the Servicer has delegated any servicing re sponsibilities with respect to the Loans to a subservicer, the Servicer shall deliver a similar Annual Statement of Compliance by that subservicer to the Indenture Trustee as described above as and when required with respect to the Servicer.

If the Servicer cannot deliver the related Annual Statement of Compliance by [   ] of such year, the Indenture Trustee, at its sole option, may permit a cure period for the Servicer to deliver such Annual Statement of Compliance, but in no event later than [     ] of such year.

Failure of the Servicer to timely comply with this Section 4.10 shall be deemed a Servicing Default, and the Indenture Trustee may, in addition to whatever rights the Indenture Trustee may have under this Agreement and at law or equity or to damages, including injunctive relief and specific performance, upon notice immediately terminate all the rights and obligations of the Servicer under this Agreement and in and to the Mortgage Loans and the proceeds thereof without compensating the Servicer for the same.  This paragraph shall supercede any other provision in this Agreement or any other agreement to the contrary.

(a)

The Servicer shall deliver to the Owner Trustee, the Trustee and the Rating Agencies, promptly after having obtained knowledge thereof, but in no event later than five (5) Business Days thereafter, written notice in an Officers’ 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  Assessments of Compliance and Attestation Reports.  Assessment of Compliance and Annual Accountants’ Report.  

(a)

On or before 60 days after the end of each fiscal year, commencing with the fiscal year ended [      ], 2007, the Servicer shall:

(i)

deliver to the Issuing Entity a report regarding the Servicer’s assessment of compliance with the Servicing Criteria during the immediately preceding calendar year, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB.  Such report shall be addressed to the Issuing Entity and signed by an authorized officer of the Servicer, and shall address each of the Servicing Criteria specified on a certification substantially in the form of Exhibit F hereto delivered to the Issuing Entity concurrently with the execution of this Agreement;

(ii)

deliver to the Issuing Entity a report of a registered public accounting firm reasonably acceptable to the Issuing Entity that attests to, and reports on, the assessment of compliance made by the Servicer and delivered pursuant to the preceding paragraph.  Such attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the Exchange Act;

(iii)

cause each Subservicer and each Subcontractor determined by the Servicer to be “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, to deliver to the Issuing Entity an assessment of compliance and accountants’ attestation as and when provided in paragraphs (i) and (ii) of this Section; and

(iv)

if requested by the Issuing Entity, deliver to the Issuing Entity and any other Person that will be responsible for signing the certification (a “Sarbanes Certification”) required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) on behalf of an asset-backed Issuing Entity with respect to a securitization transaction a certification in the form attached hereto as Exhibit D.

The Servicer acknowledges that the parties identified in clause (a)(iv) above may rely on the certification provided by the Servicer pursuant to such clause in signing a Sarbanes Certification and filing such with the Commission.  The Issuing Entity will not request delivery of a certification under clause (a)(iv) above unless the Depositor is required under the Exchange Act to file an annual report on Form 10-K with respect to an Issuing Entity whose asset pool includes the Receivables.

(b)

Each assessment of compliance provided by a Subservicer pursuant to Section 4.11(a)(iii) shall address each of the Servicing Criteria specified on a certification to be delivered to the Servicer and Issuing Entity on or prior to the date of such appointment.  An assessment of compliance provided by a Subcontractor pursuant to Section 4.11(a)(iii) need not address any elements of the Servicing Criteria other than those specified by the Servicer and the Issuing Entity on the date of such appointment.

SECTION 4.12  Access to Certain Documentation and Information Regarding Receivables.  The Servicer shall provide to the Certificateholders and the Noteholders access to the Receivable Files in such cases where the Certificateholders or the 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 (not less than seventy-two hours) 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, 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 or Subcontractor.

(a)

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 Rating Agency Condition shall have been satisfied in connection therewith; provided further that the Servicer shall remain obligated and be liable to the Issuing Entity, the Owner Trustee, the Trustee, 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 Issuing Entity, the Owner Trustee, the Truste e, the Certificateholders or the Noteholders shall have any responsibility therefor.

(b)

The Servicer shall cause any Subservicer used by the Servicer (or by any Subservicer) for the benefit of the Issuing Entity to comply with the reporting and compliance provisions of this Agreement to the same extent as if such Subservicer were the Servicer, and to provide the information required with respect to such Subservicer as is required to file all required reports with the Commission.  The Servicer shall be responsible for obtaining from each Subservicer and delivering to the Issuing Entity any servicer compliance statement required to be delivered by such Subservicer under Section 4.11, any assessment of compliance and attestation required to be delivered by such Subservicer under Section 4.11 and any certification required to be delivered to the Person that will be responsible for signing the Sarbanes Certification under Section 3.12(a)(iv) as and when required to be delivered.

(c)

The Servicer shall promptly upon request provide to the Issuing Entity a written description (in form and substance satisfactory to the Issuing Entity) of the role and function of each Subcontractor utilized by the Servicer or any Subservicer, specifying (i) the identity of each such Subcontractor, (ii) which, if any, of such Subcontractors are “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, and (iii) which, if any, elements of the Servicing Criteria will be addressed in assessments of compliance provided by each Subcontractor identified pursuant to clause (ii) of this paragraph.

As a condition to the utilization of any Subcontractor determined to be “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, the Servicer shall cause any such Subcontractor used by the Servicer (or by any Subservicer) for the benefit of the Issuing Entity and the Depositor to comply with the reporting and compliance provisions of this Agreement to the same extent as if such Subcontractor were the Servicer.  The Servicer shall be responsible for obtaining from each Subcontractor and delivering to the Issuing Entity any assessment of compliance and attestation required to be delivered by such Subcontractor, in each case as and when required to be delivered.

SECTION 4.15  Information to be Provided by the Servicer.  

(a)

At the request of the Issuing Entity, for the purpose of satisfying its reporting obligation under the Exchange Act with respect to any class of asset-backed securities, the Servicer shall (or shall cause each Subservicer to) (i) notify the Issuing Entity in writing of any material litigation or governmental proceedings pending against the Servicer or any Subservicer and (ii) provide to the Issuing Entity a description of such proceedings.

(b)

As a condition to the succession to the Servicer or any Subservicer as servicer or subservicer under this Agreement by any Person (i) into which the Servicer or such Subservicer may be merged or consolidated, or (ii) which may be appointed as a successor to the Servicer or any Subservicer, the Servicer shall provide to the Issuing Entity and the Depositor, at least 10 Business Days prior to the effective date of such succession or appointment, (x) written notice to the Issuing Entity of such succession or appointment and (y) in writing and in form and substance reasonably satisfactory to the Issuing Entity, all information reasonably requested by the Issuing Entity in order to comply with its reporting obligation under Item 6.02 of Form 8-K with respect to any class of asset-backed securities.

(c)

In addition to such information as the Servicer, as servicer, is obligated to provide pursuant to other provisions of this Agreement, if so requested by the Issuing Entity the Servicer shall provide such information regarding the performance or servicing of the Receivables as is reasonably required to facilitate preparation of distribution reports in accordance with Item 1121 of Regulation AB.  Such information shall be provided concurrently with the monthly reports otherwise required to be delivered by the Servicer under this Agreement, commencing with the first such report due not less than ten Business Days following such request.

SECTION 4.16  Remedies.

(a)

The Servicer shall be liable to the Issuing Entity and the Depositor for any monetary damages incurred as a result of the failure by the Servicer, any Subservicer or any Subcontractor to deliver any information, report, certification, attestation, accountants’ letter or other material when and as required under this Article III, including any failure by the Servicer to identify any Subcontractor “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, and shall reimburse the applicable party for all costs reasonably incurred by each such party in order to obtain the information, report, certification, accountants’ letter or other material not delivered as required by the Servicer, any Subservicer, or any Subcontractor.  

(b)

The Seller shall promptly reimburse the Issuing Entity for all reasonable expenses incurred by the Issuing Entity as such are incurred, in connection with the termination of the Servicer as servicer and the transfer of servicing of the Receivables to a successor servicer.  The provisions of this paragraph shall not limit whatever rights the Issuing Entity may have under other provisions of this Agreement or otherwise, whether in equity or at law, such as an action for damages, specific performance or injunctive relief.  

SECTION 4.17  Intention of the Parties and Interpretation.  Each of the parties acknowledges and agrees that the purpose of Sections 4.10 and 4.11 of this Agreement is to facilitate compliance with the provisions of Regulation AB promulgated by the SEC under the 1934 Act (17 C.F.R. §§ 229.1100 - 229.1123), as such may be amended from time to time and subject to clarification and interpretive advice as may be issued by the staff of the SEC from time to time.  Therefore, each of the parties agrees that (a) the obligations of the parties hereunder shall be interpreted in such a manner as to accomplish that purpose, (b) the parties’ obligations hereunder will be supplemented and modified as necessary to be consistent with any such amendments, interpretive advice or guidance, convention or consensus among active participants in the asset-backed securities markets, ad vice of counsel, or otherwise in respect of the requirements of Regulation AB, (c) the parties shall comply with requests made by the Indenture Trustee or the Depositor for delivery of additional or different information as the Indenture Trustee or the Depositor may determine in good faith is necessary to comply with the provisions of Regulation AB, and (d) no amendment of this Agreement shall be required to effect any such changes in the parties’ obligations as are necessary to accommodate evolving interpretations of the provisions of Regulation AB.

ARTICLE V

DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS

SECTION 5.01  Establishment of Trust Accounts.  (a) (i) The Servicer, for the benefit of the Noteholders and the Certificateholders, shall establish and maintain in the name of the Trustee an Eligible Deposit Account (the “Collection Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Noteholders and the Certificateholders.

The Collection Account shall be maintained with the Trustee as long as such account is an Eligible Deposit Account.

(i)

The Servicer, for the benefit of the Noteholders, shall establish and maintain in the name of the Trustee an Eligible Deposit Account (the “Note Distribution Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Noteholders. The Note Distribution Account shall be maintained with the Trustee as long as such account is an Eligible Deposit Account.

(ii)

The Servicer, for the benefit of the Noteholders and the Certificateholders, shall establish and maintain in the name of the Trustee an Eligible Deposit Account (the “Reserve Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Noteholders and the Certificateholders.

The Reserve Account shall be maintained with the Trustee as long as such account is an Eligible Deposit Account.

(b)

Funds on deposit in the Collection Account, the Note Distribution Account, the Payahead Account and the Reserve Account (collectively, the “Trust Accounts”) shall be invested by the Trustee (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 delivered to a Trust Officer of the Trustee and a Trust Officer of the Owner Trustee or other written notice so delivered); provided, however, it is understood and agreed that neither the Trustee 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 Trustee or the Owner Trustee, as applicable, for the benefit of the Noteholders and the Certificateholders, as applicable; on each Distribution Date all interest and other inve stment income (net of losses and investment expenses) on funds on deposit therein shall be deposited into the Collection Account and shall be deemed to constitute a portion of the Interest Distribution Amount. Other than as permitted by the Rating Agencies, funds on deposit in the Collection Account, the Note Distribution Account, the Payahead Account and the Reserve Account shall be invested in Eligible Investments that will mature so that such funds will be available at the close of business on the Transfer Date preceding the following Distribution Date. Funds deposited in a Trust Account on a Transfer Date which immediately precedes a Distribution Date upon the maturity of any Eligible Investments are not required to be invested overnight.

(c)

(i)

The Trustee 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 (including all income thereon) 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 Trustee for the benefit of the Noteholders and the Certificateholders , or the Noteholders, as the case may be. If, at any time, any of the Trust Accounts ceases to be an Eligible Deposit Account, the Trustee (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 as an Eligible Deposit Account and shall transfer any cash and/or any investments to such new Trust Account. In connection wi th the foregoing, the Servicer agrees that, in the event that any of the Trust Accounts are not accounts with the Trustee, the Servicer shall notify the Trustee or the Owner Trustee, as applicable, in writing promptly upon any of such Trust Accounts ceasing to be an Eligible Deposit Account.

(i)

With respect to the Trust Account Property, the Trustee, agrees, by its acceptance hereof, that:

(A)

any Trust Account Property 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 Trustee, and the Trustee, shall have sole signature authority with respect thereto;

(B)

any Trust Account Property that constitutes Physical Property shall be delivered to the Trustee in accordance with paragraph (a) of the definition of “Delivery” and shall be held, pending maturity or disposition, solely by the Trustee or a financial intermediary (as such term is defined in Section 8-313(4) of the UCC) acting solely for the Trustee;

(C)

any Trust Account Property that is a book- entry security held through the Federal Reserve System pursuant to Federal book-entry regulations shall be delivered in accordance with paragraph (b) of the definition of “Delivery” and shall be maintained by the Trustee, pending maturity or disposition, through continued book-entry registration of such Trust Account Property as described in such paragraph; and

(D)

any Trust Account Property that is an “uncertificated security” under Article 8 of the UCC and that is not governed by clause (C) above shall be delivered to the Trustee in accordance with paragraph (c) of the definition of “Delivery” and shall be maintained by the Trustee, pending maturity or disposition, through continued registration of the Trustee’s (or its nominee’s) ownership of such security.

(ii)

The Servicer shall have the power, revocable by the Trustee or by the Owner Trustee with the consent of the Trustee, to instruct the Trustee to make withdrawals and payments from the Trust Accounts for the purpose of permitting the Servicer or the Owner Trustee to carry out its respective duties hereunder or permitting the Trustee to carry out its duties under the Indenture.

(d)

(i)

The Servicer shall establish and maintain with the Trustee an Eligible Deposit Account (the “Payahead Account”).

(i)

The Servicer shall on or prior to each Distribution Date (and prior to deposits to the Note Distribution  Account) transfer from the Collection Account to the Payahead Account  all Payaheads as described in Section 5.3 received by the Servicer  during the Collection Period. Notwithstanding the foregoing and the  first sentence of Section 5.2, for so long as the Servicer is permitted  to make monthly remittances to the Collection Account pursuant to  Section 5.2, Payaheads need not be remitted to and deposited in the  Payahead Account but instead may be remitted to and held by the  Servicer. So long as such condition is met, the Servicer shall not be  required to segregate or otherwise hold separate any Payaheads remitted  to the Servicer as aforesaid but shall be required to remit Payaheads  to the Collection Account in acco rdance with Section 5.5(a).

SECTION 5.02  Collections.  The Servicer shall remit within two Business Days of receipt thereof to the Collection Account all collected funds received from payments by or on behalf of the Obligors with respect to the Receivables, and all Liquidation Proceeds, both as collected during the Collection Period. Notwithstanding the foregoing, for so long as (i) the Servicer is [   ], (ii) no Servicer Default shall have occurred and be continuing, (iii) if the Servicer does not have a short term debt rating or deposit rating as applicable, of at least A-1 from Standard & Poor’s and P-1 from Moody’s, a guaranty, letter of credit, surety bond or other similar instrument is issued covering the amounts described in clauses (a), (b), (d) and (e) of the definition of Available Principal and amounts described in clauses (a), (b), (d) and (e) of the definition of Interest Distribution Amount, which is acceptable to the Rating Agencies and issued by an entity, which has a short-term debt or deposit rating, as applicable, of at least A-1 from Standard & Poor’s and P-1 from 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 shall remit such collections to the Collection Account on the related Transfer Date. 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, the Sponsor or the Depositor. The Rating Agency Condition with respect to this Section 5.4 and the Closing Date shall be deemed to be satisfied upon the issuance to the Depositor of the rating letters on the Closing Date.

SECTION 5.03  Application of Collections.  (a) All collections for the Collection Period shall be applied by the Servicer as follows:

With respect to each Actuarial Receivable (other than a Purchased Receivable), payments by or on behalf of the Obligor shall be applied first to reduce Outstanding Advances as described in Section 5.7(a). Next, any excess shall be applied, in the case of Actuarial Receivables, to the Scheduled Payment and, shall be applied in the case of Simple Interest Receivables, to interest and principal in accordance with the Simple Interest Method. With respect to Actuarial Receivables, any remaining excess shall be added to the Payahead Balance, and shall be applied to prepay the Actuarial Receivable, but only if the sum of such excess and the previous Payahead Balance shall be sufficient to prepay the Actuarial Receivable in full. Otherwise, any such remaining excess payments shall constitute a Payahead and shall increase the Payahead Balance.

(a)

All Liquidation Proceeds shall be applied to the related Receivable in accordance with the Servicer’s customary servicing procedures.

SECTION 5.04  Additional Deposits.  The Servicer shall deposit in the Collection Account the aggregate Advances pursuant to Section 5.7. The Servicer, the Sponsor and the Depositor shall deposit or cause to be deposited in the Collection Account the aggregate Purchase Amount with respect to any Purchased Receivables and the Servicer shall deposit therein any amounts to be paid under Section 9.1. The Servicer will deposit or cause to be deposited the aggregate Purchase Amount with respect to Purchased Receivables within two Business Days after such obligations become due, unless the Servicer shall not be required to make deposits within two Business Days of receipt pursuant to Section 5.2 (in which case such deposit will be made by the related Transfer Date). All such other deposits shall be made on the Transfer Date following the end of the related Collection Period.

SECTION 5.05  Distributions.  (a) On each Distribution Date, the Trustee shall cause to be transferred from the Payahead Account, or from the Servicer in the event the provisions of Section 5.1(d)(ii) are applicable, (i) to the Collection Account, in immediately available funds, the aggregate previous Payaheads to be applied to Scheduled Payments on Actuarial Receivables for the related Collection Period or prepayments for the related Collection Period, pursuant to Sections 5.3 and 5.7, in the amounts set forth in the Servicer’s Certificate for such Distribution Date and (ii) to the Depositor, in immediately available funds, the investment earnings, net of losses on the Payaheads for the related Collection Period. A single, net transfer may be made.

(a)

On each Determination Date, the Servicer shall calculate all amounts required to determine the amounts to be deposited from the Reserve Account into the Collection Account and from the Collection Account into the Note Distribution Account.

(b)

On or before each Distribution Date, the Servicer shall instruct the Trustee (based on the information contained in the Servicer’s Certificate delivered on the related Determination Date pursuant to Section 4.9) to withdraw from the Reserve Account and deposit in the Collection Account and the Trustee shall so withdraw and deposit the Reserve Account Transfer Amount for such Distribution Date.

(c)

The Servicer shall instruct the Trustee (based on the information contained in the Servicer’s Certificate delivered on the related Determination Date pursuant to Section 4.9) to make, and the Trustee shall make, a distribution from the Collection Account to the Servicer by 11:00 a.m. (New York time), amounts in respect of Outstanding Advances to the extent that the Servicer is entitled to reimbursement in respect thereof in accordance with Section 5.7. Subject to the last paragraph of this Section 5.5(d), no later than each Distribution Date, the Servicer shall instruct the Trustee (based on the information contained in the Servicer’s Certificate delivered on the related Determination Date pursuant to Section 4.9) to make, and the Trustee shall make, the following deposits and distributions from the Collection Account for deposit in the applicable Account by 10:00 a.m. (New York time), to the extent of the Total Distribution Amount, in the following order of priority:

(i)

to the Servicer, from the Total Distribution Amount, the Total Servicing Fee;

(ii)

to the Note Distribution Account, from the Total Distribution Amount remaining after the application of clause (i), the Class A Noteholders’ Interest Distributable Amount;

(iii)

to the Note Distribution Account, from the Total Distribution Amount remaining after the application of clause (i) and (ii), the Class B Noteholders’ Interest Distributable Amount;

(iv)

to the Note Distribution Account, from the Total Distribution Amount remaining after the application of clauses (i) through (iii), the Class A Noteholders’ Principal Distributable Amount;

(v)

to the Note Distribution Account, from the Total Distribution Amount remaining after the application of clauses (i) through (iv), the Class B Noteholders’ Principal Distributable Amount; and

(vi)

to the Trustee for deposit in the Reserve Account, from the Total Distribution Amount, the amounts remaining after the application of clauses (i) through (v) above; provided, however, that following the occurrence of an Event of Default pursuant to Section 5.1(i), 5.1(ii), 5.1(iv) or 5.1(v) of the Indenture or an acceleration of the Notes pursuant to Section 5.2 of the Indenture, amounts on deposit in the Collection Account, and, in the case of an acceleration, amounts in the Reserve Account, will be deposited in the Note Distribution Account and applied to the Class A Notes to the extent necessary to pay accrued and unpaid interest on the Class A Notes and then, to the extent funds are available therefore, principal on the Class A Notes until the principal balance of the Class A Notes has been reduced to zero, before any amounts are deposited in the Note Distribution Account fo r application to the Class B Notes. Following the payment in full of the Class A Notes, amounts on deposit in the Collection Account will be deposited in the Note Distribution Account to the extent necessary to pay accrued and unpaid interest on the Class B and then, to the extent funds are available therefore, principal on the Class B Notes until the principal balance thereof has been reduced to zero.

In the event that the Collection Account is maintained with an institution other than the Trustee, the Servicer shall instruct and cause such institution to make all deposits and distributions pursuant to this Section 5.5(d) on the related Transfer Date.

SECTION 5.06  Reserve Account.  (a) On the Closing Date, the Depositor shall deposit the Reserve Account Initial Deposit into the Reserve Account. In no circumstances will the Depositor be required to deposit from its own funds any amounts in the Reserve Account other than the Reserve Account Initial Deposit to be made on the Closing Date.

(a)

If the amount on deposit in the Reserve Account on any Distribution Date (after giving effect to any and all deposits and withdrawals therefrom on such Distribution Date) is greater than the Specified Reserve Account Balance for such Distribution Date, the Servicer shall instruct the Trustee to distribute, and the Trustee shall distribute, the amount of the excess to the Paying Agent for distribution to the Certificateholders pursuant to the Trust Agreement. Amounts properly distributed pursuant to Section 5.6(b) shall be deemed released from the Trust and the security interest therein granted to the Trustee and the Depositor shall in no event thereafter be required to refund any such distributed amounts.

SECTION 5.07  Advances.  (a) As of the close of business on the last day of each Collection Period, if the payments by or on behalf of the Obligor on an Actuarial Receivable (other than a Purchased Receivable) shall be less than the Scheduled Payment, the Payahead Balance shall be applied by the Servicer to the extent of the shortfall and such Payahead Balance shall be reduced accordingly. Next, the Servicer shall advance any remaining shortfall (such amount an “Advance”), to the extent that the Servicer, at its sole discretion, shall determine that the Advance shall be recoverable from the Obligor, the Purchase Amount, Liquidation Proceeds or proceeds of any other Actuarial Receivables. With respect to each Actuarial Receivable, the Advance shall increase Outstanding Advances. Outstanding Advances shall be reduced by subsequent payments by or on behalf of the Obligor, co llections of Liquidation Proceeds in respect of the related Receivable or payments of the Purchase Amount of the related Receivable.

If the Servicer shall determine that an Outstanding Advance with respect to any Actuarial Receivable shall not be recoverable as aforesaid, the Servicer shall be reimbursed from any collections (including Liquidation Proceeds) on other Actuarial Receivables in the Trust and Outstanding Advances with respect to such Actuarial Receivables shall be reduced accordingly.

(a)

The Servicer shall not make any advance with respect to interest on or principal of Simple Interest Receivables.

SECTION 5.08  Statements to Certificateholders and Noteholders.  On each Determination Date, the Servicer shall provide to the Trustee (with a copy to the Rating Agencies) for the Trustee to forward to each Noteholder of record and to each Paying Agent, if any,  and to the Owner Trustee for the Owner Trustee to forward to each Certificateholder of record, a statement substantially in the form of Exhibit A, setting forth at least the following information as to the Notes and the Certificates to the extent applicable:

(i)

the amount of such distribution allocable to principal of each class of the Notes;

(ii)

the amount of such distribution allocable to interest on or with respect to each class of the Notes;

(iii)

the Pool Balance as of the close of business on the last day of the preceding Collection Period, after giving effect to payments allocated to principal reported under (i) above;

(iv)

the aggregate outstanding principal balance 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 Total Servicing Fee paid to the Servicer with respect to the related Collection Period;

(vi)

the amount of the aggregate Realized Losses for such Collection Period;

(vii)

cumulative Realized Losses from the Closing Date, including Realized Losses for such Collection Period;

(viii)

Recoveries, if any, for such Collection Period;

(ix)

aggregate outstanding principal balance of Receivables that are currently in repossession status (excluding Liquidated Receivables);

(x)

the Reserve Account Transfer Amount, if any, for such Distribution Date, the Specified Reserve Account Balance for such Distribution Date, the amount distributed to the Certificateholders from the Reserve Account on such Distribution Date, and the balance of the Reserve Account (if any) on such Distribution Date, after giving effect to changes therein on such Distribution Date;

(xi)

the Class A Noteholders’ Interest Carryover Shortfall, the Class B Noteholders’ Interest Carryover Shortfall, the Class A Noteholders’ Principal Carryover Shortfall, and the Class B Noteholders’ Principal Carryover Shortfall;

(xii)

the aggregate Purchase Amount paid by the Sponsor, the Depositor or the Servicer with respect to the related Collection Period;

(xiii)

 the aggregate Payahead Balance;

(xiv)

the amounts collected by the Servicer;

(xv)

the amounts received by the Trust from the Servicer; and

(xvi)

delinquency information relating to the Receivables which are 30, 60 and 90 days delinquent.

Each amount set forth pursuant to paragraph (i), (ii) or (xi) above shall be expressed as a dollar amount per $1,000 of the initial principal balance of the Notes.

SECTION 5.09  Net Deposits.  As an administrative convenience, if the Servicer is not required to remit collected funds within two Business Days of receipt thereof, the Servicer will be permitted to make the deposit of such funds, aggregate Advances and Purchase Amounts for or with respect to the Collection Period net of distributions to be made to the Servicer with respect to the Collection Period. Similarly, the Servicer may cause to be made a single, net transfer, from the Collection Account to the Payahead Account, or vice versa. The Servicer, however, will account to the Owner Trustee, the Trustee, the Noteholders and the Certificateholders as if all deposits, distributions and transfers were made individually.

SECTION 5.10  Reserved.

ARTICLE VI

THE DEPOSITOR

SECTION 6.01  Representations of Depositor.  The Depositor makes the following representations on which the Issuing Entity is deemed to have relied in acquiring the Receivables. The representations speak as of the execution and delivery of this Agreement and shall survive the sale of the Receivables to the Issuing Entity and the pledge thereof to the Trustee pursuant to the Indenture.

(a)

Organization and Good Standing. The Depositor is duly organized and validly existing as a corporation in good standing under the laws of the State of [   ] 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 and own the Receivables.

(b)

Due Qualification. The Depositor is duly qualified to do business as a foreign corporation in good standing, 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, except where the failure to so obtain would not have a material adverse impact either on the Depositor, the transactions contemplated in the Basic Documents or the Receivables.

(c)

Power and Authority of the Depositor. The Depositor has the corporate 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 corporate power and authority to sell and assign the property to be sold and assigned to and deposited with the Issuing Entity; the Depositor has duly authorized such sale and assignment to the Issuing Entity by all necessary corporate 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 corporate 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 their respective 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 articles of association or by-laws of the Depositor, or any material indenture, agreement or other instrument to which the Depositor is a party or by which it shall be 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 De positor 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) seeking to affect adversely the Federal or state income tax or ERISA attributes of the Issuing Entity, the Notes or the Certificates.

(g)

All Consents. All authorizations, licenses, 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 adverse effect upon the rights of the Issuing Entity, the Noteholders or the Certificateholders.

(h)

Indebtedness. All indebtedness of the Depositor will be extinguished concurrently with the sale of the Trust Property by the Depositor to the Trust.

SECTION 6.02  Corporate Existence.  (a) During the term of this Agreement, subject to Section 6.4, the Depositor will keep in full force and effect its existence, rights and franchises as a corporation under the laws of the jurisdiction of its incorporation 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.

(a)

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 corporate 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 board of directors as are necessary to authorize all the Depositor’s corporate actions required by law to be authorized by the board of directors, shall keep minutes of such meetings and of meetings of its stockholder(s) and observe all other customary corporate 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 6.03  Liability of Depositor; Indemnities.  The Depositor shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Depositor under this Agreement and the representations made by the Depositor in this Agreement.

(a)

The Depositor shall indemnify, defend and hold harmless the Issuing Entity, the Owner Trustee and the Trustee and their respective officers, directors, employees and agents 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 the Owner Trustee or the Trustee and except any taxes to which the Owner Trustee or the 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 Issuing Entity, not including any taxes asserted with respect to, and as of the date of, the sale of the Receivables to the Issuing Entity or the issuance and original sale of the Notes, or asserted with respect to ownership of the Receivable s or Federal or other income taxes arising out of distributions on the Certificates and the Notes) and reasonable costs and expenses in defending against the same or in connection with any application relating to the Notes or Certificates under any state securities laws.

(b)

The Depositor shall indemnify, defend and hold harmless the Issuing Entity, the Owner Trustee, the Trustee, the Certificateholders and the Noteholders and the officers, directors, employees and agents of the Issuing Entity, the Owner Trustee and the Trustee from and against any and all costs, expenses, losses, claims, damages and liabilities to the extent arising out of, or imposed upon such Person through (i) the Depositor’s willful misfeasance, bad faith or gross negligence in the performance of its duties under this Agreement, or by reason of reckless disregard of its obligations and duties under this Agreement and (ii) the Depositor’s or the Issuing Entity’s violation of federal or state securities laws in connection with the offering and sale of the Notes or in connection with any application relating to the Notes under any state securities laws.

(c)

The Depositor shall be liable as primary obligor for, and shall indemnify, defend and hold harmless the Owner Trustee and its officers, directors, employees and agents from and against any and all losses, claims, damages and liabilities and reasonable costs and expenses arising out of, or incurred in connection with, this Agreement or any of the Basic Documents, the Owner Trust Estate, the acceptance or performance of the trusts and duties set forth herein and in the Trust Agreement or the action or the inaction of the Owner Trustee hereunder and under the Trust Agreement, except to the extent that such cost, expense, loss, claim, damage or liability: (i) shall be due to the failure of the Owner Trustee to perform in accordance with the Trust Agreement or the willful misfeasance, bad faith or negligence of the Owner Trustee, or (ii) shall arise from the breach by the Owner Trustee of any of its rep resentations or warranties set forth in Section 7.3 of the Trust Agreement. Such liability and indemnification shall survive the termination of the Trust. In the event of any claim, action or proceeding for which indemnity will be sought pursuant to this paragraph, the Owner Trustee’s choice of legal counsel shall be subject to the approval of the Depositor, which approval shall not be unreasonably withheld.

(d)

The Depositor shall pay any and all taxes levied or assessed upon all or any part of the Trust Estate (other than those taxes expressly excluded from the Depositor’s responsibilities pursuant to the parentheticals in paragraph (a) above).

Indemnification under this Section shall survive the resignation or removal of the Owner Trustee or the Trustee and the termination of this Agreement or the Indenture or the Trust Agreement, as applicable, and shall include reasonable fees and expenses of counsel and other reasonable 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 6.04  Merger or Consolidation of, or Assumption of The Obligations of, 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, shall be the successor to the Depositor without the execution or filing of any document or any further act by any of the parties to this Agreement; provided, however, that the Depositor hereby covenants that it will not consummate any of the foregoing transactions except upon satisfaction of the following: (i) the surviving Depositor if other than Ace Securities Corp. executes an agreement of assumption to perform every obligation of the Depositor under this Agreement, (ii) immediately after giving effect to such transaction, no repres entation or warranty made pursuant to Section 3.1 or 6.1 shall have been breached and no Event of Default, and no event that, after notice or lapse of time, or both, would become an Event of Default shall have happened and be continuing, (iii) the Depositor shall have delivered to the Owner Trustee and the Trustee an Officers’ 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, and that the Rating Agency Condition shall have been satisfied with respect to such transaction, (iv) the surviving Depositor shall have a consolidated net worth at least equal to that of the predecessor Depositor, (v) such transaction will not result in a material adverse federal or state tax consequence to the Issuing Entity, the Noteholders or the Certificateholders and (vi) unless Ace Securities Cor p., is the surviving entity, the Depositor shall have delivered to the Owner Trustee and the Trustee an Opinion of Counsel either (A) stating that, in the opinion of such counsel, 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 Trustee, respectively, in the Receivables and reciting the details of such filings, or (B) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interests.

SECTION 6.05  Limitation on Liability of Depositor and Others.  The Depositor and any director 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 (provided that such reliance shall not limit in any way the Depositor’s obligations under Section 3.2). Except as provided in this Agreement, 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 6.06  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 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.

SECTION 6.07  Security Interest.  During the term of this Agreement, the Depositor will not take any action to assign the security interest in any Financed Vehicles other than pursuant to the Basic Documents.

ARTICLE VII

THE SERVICER AND THE SPONSOR

SECTION 7.01  Representations of [   ].  [   ] makes the following representations on which the Issuing Entity is deemed to have relied in acquiring the Receivables. The representations speak as of the execution and delivery of the Agreement and shall survive the sale of the Receivables to the Issuing Entity and the pledge thereof to the Trustee pursuant to the Indenture.

(a)

Organization and Good Standing.  [   ] is duly organized and validly existing as a corporation in good standing under the laws of the State of Florida 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 service the Receivables.

(b)

Due Qualification.  [   ] 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, except where the failure to so obtain would not have a material adverse impact either on [   ], the transactions contemplated in the Basic Documents or the Receivables.

(c)

Power and Authority of [   ].  [   ] 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 [   ] 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 [   ] in connection with the execution and delivery by [   ] of this Agreement or any of the Basic Documents to which it is a party and the performance by [   ] 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 forc e and effect, except where failure to obtain the same would not have a material adverse effect upon the rights of the Issuing Entity, the Noteholders or Certificateholders.

(d)

Binding Obligation.  This Agreement constitutes a legal, valid and binding obligation of [   ], 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 of 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 incorporation or by-laws of [   ], or any material indenture, agreement or other instrument to which [   ] is a party or by which it shall be 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 [   ] of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having j urisdiction over [   ] or its properties.

(f)

No Proceedings.  There are no proceedings or investigations pending against [   ], or, to its best knowledge, threatened against [   ], before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over [   ] 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 [   ] of its obligations under, or the validity or enforceability of this Agreement or any of the Basic Documents, the Notes or the Certificates or (iv) s eeking to affect adversely the federal or state income tax or ERISA attributes of the Issuing Entity, the Notes or the Certificates.

(g)

No Amendment or Waiver. No provision of any Receivable has been waived, altered or modified in any respect, except pursuant to a document, instrument or writing included in the relevant Receivable File, and no such amendment, waiver, alteration or modification causes such Receivable not to conform to the other warranties contained in this Section or those of the Depositor and the Sponsor contained in Section 3.1.

(h)

Approvals. All approvals, licenses, authorizations, consents, orders or other actions of any person, corporation or other organization, or of any court, governmental agency or body or official, required in connection with the execution and delivery of this Agreement have been or will be taken or obtained on or prior to the Closing Date.

(i)

Location of Receivable Files. The Receivable Files are kept in the offices of the Servicer, specified in Schedule B, or at such other office specified in accordance with Section 3.4(b).

SECTION 7.02  Indemnities of Servicer.  The Servicer shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Servicer under this Agreement.

The Servicer shall indemnify, defend and hold harmless the Issuing Entity, the Owner Trustee, the Trustee, the Depositor, the Certificateholders and the Noteholders and any of the officers, directors, employees and agents of the Issuing Entity, the Owner Trustee, the Trustee or the Depositor from any and all losses, claims, damages, liabilities and reasonable costs and expenses (including reasonable attorneys’ fees and expenses) to the extent arising out of, or imposed upon any such Person through, the gross negligence, willful misfeasance or bad faith of the Servicer in the performance of its obligations and duties under this Agreement or in the performance of the obligations and duties of any subservicer under any subservicing agreement or by reason of the reckless disregard of its obligations and duties under this Agreement or by reason of the reckless disregard of the obligations of any su bservicer under any subservicing agreement, where the final determination that any such cost, expense, loss, claim, damage or liability arose out of, or was imposed upon any such Person through, any such gross negligence, willful misfeasance, bad faith or recklessness on the part of the Servicer or any subservicer, is established by a court of law, by an arbitrator or by way of settlement agreed to by the Servicer. Notwithstanding the foregoing, if the Servicer is rendered unable, in whole or in part, by virtue of an act of God, act of war, fires, earthquake or other natural disasters, to satisfy its obligations under this Agreement, the Servicer shall not be deemed to have breached any such obligation upon the sending of written notice of such event to the other parties hereto, for so long as the Servicer remains unable to perform such obligation as a result of such event. This provision shall not be construed 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.

The Servicer shall indemnify, defend and hold harmless the Issuing Entity, the Owner Trustee, the Trustee, the Depositor, the Certificateholders and the Noteholders or any of the officers, directors, employees and agents of the Issuing Entity, the Owner Trustee, the Trustee or the Depositor from any and all losses, claims, damages, liabilities and reasonable costs and expenses (including reasonable attorneys’ fees and expenses) to the extent arising out of or imposed upon any such Person as a result of any compensation payable to any subcustodian or subservicer (including any fees payable in connection with the release of any Receivable File from the custody of such subservicer or in connection with the termination of the servicing activities of such subservicer with respect to any Receivable) whether pursuant to the terms of any subservicing agreement or otherwise.

The Servicer shall indemnify, defend and hold harmless the Trustee, the Owner Trustee, the Trust, the Depositor, the Certificateholders and the Noteholders from and against any taxes that may at any time be asserted against the Trustee, the Trust, the Owner Trustee, the Certificateholders, the the Noteholders or the Depositor (other than any taxes based upon the income of any such person), with respect to the transactions contemplated herein including, without limitation, any sales, gross receipts, general corporation, tangible personal property, privilege, or license taxes and costs and expenses in defending against the same.

The Servicer shall indemnify, defend, and hold harmless the Owner Trustee and Trustee and each of their agents, officers, employees and other Persons employed by each of them in connection with the Basic Documents from and against all reasonable costs and expenses, losses, claims, damages, and liabilities arising out of or incurred in connection with the acceptance or performance of the trusts and duties herein contained or contained in the Basic Documents, if any, except to the extent that such reasonable cost or expense, reasonable loss, claim, damage or liability: (a) shall be due to the willful misfeasance, bad faith, or negligence (except for errors in judgment) of the Owner Trustee or Trustee; (b) relates to any tax other than the taxes with respect to which the Servicer shall be required to indemnify the Owner Trustee or Trustee; or (c) shall arise from the Owner Trustee’s or Trustee
46;s breach of any of its representations or warranties set forth in the Trust Agreement or the Indenture, as applicable.

Indemnification under this Section shall survive the resignation and removal of the Trustee and the Owner Trustee or the termination of this Agreement.

SECTION 7.03  Merger or Consolidation of, or Assumption of The Obligations of, [   ].  Any Person (a) into which [   ] may be merged or consolidated, (b) which may result from any merger or consolidation to which [   ] shall be a party or (c) which may succeed to the properties and assets of [   ], substantially as a whole, shall be the successor to [   ] without the execution or filing of any document or any further act by any of the parties to this Agreement; provided, however, that [   ] hereby covenants that it will not consummate any of the foregoing transactions except upon satisfaction of the following: (i) the surviving Servicer if other than [   ], executes an agreement of assumption to perform every obligation of [   ] under this Agreement, (ii) immediately after giving effect to such transact ion, no representation or warranty made pursuant to Section 7.1 shall have been breached and no Servicer Default, and no event that, after notice or lapse of time, or both, would become a Servicer Default shall have occurred and be continuing, (iii) the Servicer shall have delivered to the Owner Trustee and the Trustee an Officers’ 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, and that the Rating Agency Condition shall have been satisfied with respect to such transaction, (iv) the surviving Servicer shall have a consolidated net worth at least equal to that of the predecessor Servicer, and (v) such transaction will not result in a material adverse federal or state tax consequence to the Issuing Entity, the Noteholders or the Certificateholders.

SECTION 7.04  Limitation on Liability of [   ] and Others.  Neither [   ] nor any of its directors, officers, employees or agents shall be under any liability to the Issuing Entity, the Noteholders or the Certificateholders, except as provided under this Agreement, for any action taken or for refraining from the taking of any action by [   ] or any subservicer pursuant to this Agreement or for errors in judgment; provided, however, that this provision shall not protect [   ] or any such person against any liability that would otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence in the performance of duties or by reason of reckless disregard of obligations and duties under this Agreement. [   ] or any subservicer and any of their respective directors, officers, employees or agents may rely in good fait h 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, [   ] shall not be under any obligation to appear in, prosecute or defend any legal action that shall 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 [   ], may (but shall not be required to) undertake any reasonable action that it may deem necessary or desirable in respect of the Basic Documents to protect the interests of the Certificateholders under this Agreement and the Noteholders under the Indenture.

SECTION 7.05  [   ] Not to Resign as Servicer.  Subject to the provisions of Section 7.3, [   ] hereby agrees not to resign from the obligations and duties hereby imposed on it as Servicer under this Agreement except upon determination that the performance of its duties hereunder shall no longer be permissible under applicable law or if such resignation is required by regulatory authorities. Notice of any such determination permitting the resignation of [   ], as Servicer shall be communicated to the Owner Trustee and the Trustee 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 the Owner Trustee and the Trustee concurrently with or promptly after such notice. No such resignation shall become effective until the earlier of the Trustee or a Successor Servicer having assumed the responsibilities and obligations of the resigning Servicer in accordance with Section 8.2 or the date upon which any regulatory authority requires such resignation.

SECTION 7.06  Corporate Existence.  (a) During the term of this Agreement, subject to Section 6.4, [   ] will keep in full force and effect its existence, rights and franchises as a corporation under the laws of the jurisdiction of its incorporation 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.

(a)

During the term of this Agreement, [   ] shall observe the applicable legal requirements for the recognition of [   ] as a legal entity separate and apart from its Affiliates, including as follows:

(i)

[   ] shall maintain corporate records and books of account separate from those of its Affiliates;

(ii)

except as otherwise provided in this Agreement, [   ] shall not commingle its assets and funds with those of its Affiliates;

(iii)

[   ] shall hold such appropriate meetings of its board of directors as are necessary to authorize all [   ] corporate actions required by law to be authorized by the board of directors, shall keep minutes of such meetings and of meetings of its stockholder(s) and observe all other customary corporate formalities (and any successor Servicer not a corporation shall observe similar procedures in accordance with its governing documents and applicable law);

(iv)

[   ] shall at all times hold itself out to the public under [   ] own name as a legal entity separate and distinct from its Affiliates; and

(v)

all transactions and dealings between [   ] and its Affiliates will be conducted on an arm’s-length basis.

ARTICLE VIII

DEFAULT

SECTION 8.01  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 Trustee for deposit in any of the Trust Accounts any required payment or to direct the Trustee to make any required distributions therefrom that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Owner Trustee or the Trustee or after discovery of such failure by an Authorized Officer of the Servicer; or

(b)

failure on the part of the Servicer duly to observe or to perform in any material respect any other covenants or agreements of the Servicer set forth in this Agreement or any other Basic Document, which failure shall (i) materially and adversely affect the rights of either the Certificateholders or Noteholders and (ii) continue unremedied for a period of 60 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 Trustee or (B) to the Servicer and to the Owner Trustee and the Trustee by the Holders of Notes evidencing not less than 25% of the Outstanding Amount of the Notes (or for such longer period, not in excess of 120 days, as may be reasonably necessary to remedy such default; provided that such default is capable of remedy within 120 days and the Servicer delivers an Officers’ Cer tificate to the Owner Trustee and the Trustee to such effect and to the effect that the Servicer has commenced or will promptly commence, and will diligently pursue, all reasonable efforts to remedy such default); or

(c)

an Insolvency Event occurs with respect to the Servicer or any successor;

(d)

any failure by the Servicer, any Subservicer or any Subcontractor to deliver any information, report, certification, attestation or accountants’ letter when and as required (including, without limitation, any failure by the Servicer to identify any Subcontractor “participating in the servicing function” within the meaning of Item 1122 of Regulation AB), which continues unremedied for [ten] calendar days after the date on which such information, report, certification or accountants’ letter was required to be delivered

then, and in each and every case, other than in the case of a Servicer Default set forth in clause (d) above, so long as the Servicer Default shall not have been remedied, either the Trustee, or the Holders of Notes evidencing not less than 25% of the Outstanding Amount of the Notes, by notice then given in writing to the Servicer and the Owner Trustee (and to the Trustee if given by the Noteholders) may terminate all the rights and obligations (other than the obligations set forth in Section 7.2) of the Servicer under this Agreement. In the case of a Servicer Default set forth in clause (d) above, so long as the Servicer Default shall not have been remedied, the Issuing Entity shall be entitled to terminate, in its sole discretion, the rights and obligations of the Servicer as servicer under this Agreement; provided that to the extent that any provision of this Agreement expressly provides for the survival of cert ain rights or obligations following termination of the Servicer as servicer, such provision shall be given effect; provided, however, that the Issuing Entity shall not be entitled to terminate the rights and obligations of the Servicer pursuant to this section if a failure of the Servicer to identify a Subcontractor “participating in the servicing function” within the meaning of Item 1122 of Regulation AB was attributable solely to the role or functions of such Subcontractor with respect to receivables other than the Receivables.

On or after the receipt by the Servicer of such written notice, all authority and power of the Servicer under this Agreement, whether with respect to the Notes, the Certificates or the Receivables or otherwise, shall, without further action, pass to and be vested in the Trustee or such successor Servicer as may be appointed under Section 8.2; and, without limitation, the Trustee and the Owner Trustee are hereby authorized and empowered to execute and deliver, on behalf of the predecessor 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 related documents, or otherwise. The predecessor Servicer shall cooperate with the successor Servicer, the Trustee and the Owner Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Agreement, including the transfer to the successor Servicer for administration by it of all cash amounts that shall at the time be held by the predecessor Servicer for deposit, or shall thereafter be received by it with respect to a Receivable. All reasonable costs and expenses (including reasonable 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. Upon receipt of notice of the occurrence of a Servicer Default, the Owner Trustee shall give notice thereof to the Rating Agencies.

SECTION 8.02  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 earlier of (x) the date 45 days from the delivery to the Owner Trustee and the Trustee of written notice of such resignation (or written confirmation of such notice) in accordance with the terms of this Agreement or (y) the date upon which the predecessor Servicer shall become unable to act as Servicer, as specified in the notice of resignation and accompanying Op inion of Counsel. In the event of the Servicer’s termination hereunder, the Trustee shall appoint a successor Servicer, and the successor Servicer shall accept its appointment by a written assumption in form acceptable to the Owner Trustee and the Trustee. In the event that a successor Servicer has not been appointed at the time when the predecessor Servicer has ceased to act as Servicer in accordance with this Section, the Trustee without further action shall automatically be appointed the successor Servicer and the Trustee shall be entitled to the Servicing Fee. Notwithstanding the above, the Trustee shall, if it shall be unwilling or unable so to act, appoint or petition a court of competent jurisdiction to 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, as the successor to the Servicer under this Agreement.

(a)

Upon appointment, the successor Servicer (including the Trustee 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 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 shall be liable for any acts or omissions of any predecessor Servicer.

SECTION 8.03  Payment of Servicing Fee; Repayment of Advances.  If the Servicer shall change, the predecessor Servicer shall be entitled to (i) receive any accrued and unpaid Servicing Fees through the date of the successor Servicer’s acceptance hereunder in accordance with Section 4.8. and (ii) reimbursement for Outstanding Advances pursuant to Sections 5.3 and 5.7 with respect to all Advances made by the predecessor Servicer.

SECTION 8.04  Notification to Noteholders and Certificateholders.  Upon the receipt by a Trust Officer of the Owner Trustee of written notice of 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 Trustee shall give prompt written notice thereof to Noteholders and to the Rating Agencies.

SECTION 8.05  Waiver of Past Defaults.  The Holders of Notes evidencing not less than a majority of the Outstanding Amount of the Notes (or the Holders (as defined in the Trust Agreement) of Certificates evidencing not less than a majority of the Percentage Interest, as applicable, in the case that the Outstanding Amount of the Notes is zero) may, on behalf of all Noteholders and Certificateholders, as the case may be, waive in writing 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 9.01  Optional Purchase of All Receivables.  (a) On the last day of any Collection Period immediately preceding a Determination Date as of which the then outstanding Pool Balance is 5% or less of the Initial Pool Balance, the Servicer shall have the option to purchase the Owner Trust Estate, other than the Trust Accounts. To exercise such option, the Depositor shall deposit pursuant to Section 5.4 in the Collection Account an amount which, when added to the amounts on deposit in the Collection Account for such Distribution Date, equals the unpaid principal amount of the then outstanding Notes, plus accrued and unpaid interest thereon. Each class of Notes will be redeemed concurrently therewith.

(a)

Reserved.

(b)

Notice of any termination of the Trust shall be given by the Servicer to the Owner Trustee, the Trustee and the Rating Agencies as soon as practicable after the Servicer has received knowledge thereof.

SECTION 9.02  Mandatory Sale of All Contracts.  In accordance with the procedures and schedule set forth in Exhibit C hereto (the “Auction Procedures”), the Trustee (or, if the Notes have been paid in full and the Indenture shall have been discharged in accordance with its terms, the Owner Trustee) shall conduct or shall cause to be conducted an auction (the “Auction”) of the Receivables remaining in the Trust (such Receivables hereinafter referred to as the “Auction Property”) in order to effect a termination of the Trust pursuant to Section 9.1 of the Trust Agreement if the Servicer has not exercised its option to purchase the Receivables within 90 days after the last day of the Collection Period as of which such right can be exercised pursuant to Section 9.1 . Such Auction shall be conducted within 10 days following such date. The Depositor, the Spo nsor, or the Servicer may, but shall not be required to, bid at the Auction. Such Trustee shall sell or shall cause the sale and transfer of the Auction Property to the highest bidder therefor at the Auction provided that;

(i)

the Auction has been conducted in accordance with the Auction Procedures;

(ii)

such Trustee has received good faith bids for the Auction Property from two prospective purchasers that are considered by such Trustee, in its sole discretion, to be competitive participants in the market for motor vehicle retail installment sale contracts and other motor vehicle installment sale contracts;

(iii)

a financial advisor, as advisor to such Trustee (in such capacity, the “Advisor”), shall have advised such Trustee in writing that at least two of such bidders (including the winning bidder) are participants in the market for motor vehicle retail installment sale contracts and other motor vehicle installment sale contracts willing and able to purchase the Auction Property;

(iv)

the highest bid in respect of the Auction Property is not less than the aggregate fair market value of the Auction Property (as determined by such Trustee in its sole discretion);

(v)

any bid submitted by the Depositor, the Sponsor, the Servicer or any Affiliate of any of them shall reasonably represent the fair market value of the Auction Property, as independently verified and represented in writing by a qualified independent third party evaluator (which may include the Advisor or an investment bank firm) selected by such Trustee; and

(vi)

the highest bid would result in proceeds from the sale of the Auction Property which will be at least equal to the sum of (A) the greater of (1) the aggregate Purchase Price for the Receivables (including defaulted Receivables), plus the appraised value of any other property held by the Trust (less liquidation expenses) or (2) an amount that, when added to amounts on deposit in the Collection Account and available for distribution to Securityholders on the second Distribution Date following the consummation of such sale (the “Liquidation Distribution Date”), would result in proceeds sufficient to distribute to Securityholders the amounts of interest due to the Securityholders for such Distribution Date and any unpaid interest payable to the Securityholders with respect to one or more prior Distribution Dates and the outstanding principal amount of the Notes, and (B) th e Total Servicing Fee payable on such second Distribution Date.  Provided that all of the conditions set forth in clauses (i) through (vi) have been met, such Trustee shall sell and transfer the Auction Property, without representation, warranty or recourse, to such highest bidder in accordance with and upon completion of the Auction Procedures. Such Trustee shall deposit the purchase price for the Auction Property in the Collection Account at least one Business Day prior to such second succeeding Distribution Date. In addition, the Auction must stipulate that the Servicer be retained to service the Receivables on terms substantially similar to those in the Agreement. In the event that any of such conditions are not met or such highest bidder fails or refuses to comply with any of the Auction Procedures, such Trustee shall decline to consummate such sale and transfer. In the event such sale and transfer is not consummated in accordance with the foregoing, however, such Trustee may from time to time in t he future, but shall not be under any further obligation to, solicit bids for sale of the assets of the Trust upon the same terms and conditions as set forth above.

If any of the foregoing conditions are not met, such Trustee shall decline to consummate such sale and shall not be under any obligation to solicit any further bids or otherwise negotiate any further sale of Receivables remaining in the Trust. In such event, however, such Trustee may from time to time solicit bids in the future for the purchase of such Receivables pursuant to this Section 9.2.

If applicable, the Trustee shall provide notice to the Owner Trustee of the termination of the Trust pursuant to this Section 9.2 as soon as practicable upon the consummation of the mandatory sale of the Receivables pursuant to this Section 9.2. Each of the Servicer, the Trustee and the Depositor acknowledge that the duties and responsibilities of the Issuing Entity under the Basic Documents shall be performed by the Servicer, and not by the Owner Trustee.

ARTICLE X

ADMINISTRATIVE DUTIES OF THE SERVICER

SECTION 10.01  Administrative Duties.  (a) Duties with respect to the Indenture and Depository Agreement and the Basic Documents. The Servicer shall perform all its duties and the duties of the Issuing Entity under the Depository Agreement. In addition, the Servicer shall consult with the Owner Trustee as the Servicer deems appropriate regarding the duties of the Issuing Entity under the Indenture, the Depository Agreement and the Basic Documents. The Servicer shall monitor the performance of the Issuing Entity and shall provide notice to the Owner Trustee when action is necessary to comply with the Issuing Entity’s duties under the Indenture, the Depository Agreement and the Basic Documents. The Servicer shall prepare for execution by the Issuing Entity or shall cause the preparation by other appropriate Persons of all such documents, reports, filings, instruments, certificat es and opinions as it shall be the duty of the Issuing Entity to prepare, file or deliver pursuant to the Indenture, the Depository Agreement and the Basic Documents. In furtherance of the foregoing, the Servicer shall take all appropriate action that is the duty of the Issuing Entity to take pursuant to the Indenture and the Basic Documents.

(a)

Duties with Respect to the Issuing Entity. (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 Issuing Entity 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 Issuing Entity or the Owner Trustee to prepare, file or deliver pursuant to this Agreement or any of the Basic Documents, and at the request of the Owner Trustee shall take all appropriate action that is the duty of the Issuing Entity to take pursuant to this Agreement or any of the Basic Documents. The Servicer shall administer, perform or supervise the performance of such other activities in connection with the Collateral (including the Basic Documents) as ar e not covered by any of the foregoing provisions and as are expressly requested by the Owner Trustee and are reasonably within the capability of the Servicer.

(i)

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 Issuing Entity’s payments (or allocations of income) to a Certificateholder (as defined in the Trust Agreement) as contemplated in Section 5.2(c) of the Trust Agreement. Any such notice shall specify the amount of any withholding tax required to be withheld by the Owner Trustee pursuant to such provision.

(ii)

Notwithstanding anything in this Agreement or the Basic Documents to the contrary, the Servicer shall be responsible for performance of the duties of 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 Owners (as defined in the Trust Agreement); provided, however, that the Owner Trustee shall retain responsibility for the distribution to Certificateholders of the Schedule K-1s furnished to the Owner Trustee by the Servicer which may be necessary to enable each Certificateholder to prepare its federal and state income tax returns.

(iii)

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.

(iv)

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 Issuing Entity and shall be, in the Servicer’s opinion, no less favorable to the Issuing Entity in any material respect.

(b)

Tax Matters. The Servicer shall prepare and file all tax returns, tax elections, financial statements and such annual or other reports of the Issuing Entity as are necessary for preparation of tax reports, including without limitation forms 1099 and 1065, if applicable.

(c)

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 and the Trustee of the proposed action and the Owner Trustee and, with respect to items (A), (B), (C) and (D) below, the 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 Issuing Entity and

(B)

the compromise of any action, claim or lawsuit brought by or against the Issuing Entity (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 Trustees pursuant to the Indenture or the appointment of Successor Servicers or the consent to the assignment by the Note Registrar, Paying Agent or Trustee of its obligations under the Indenture; and  (E) the removal of the Trustee.

(d)

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 Indenture Trust Estate pursuant to Section 5.4 of the Indenture, (3) take any other action that the Issuing Entity 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 10.02  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 Issuing Entity at any time during normal business hours.

SECTION 10.03  Additional Information to be Furnished to the Issuing Entity.  The Servicer shall furnish to the Issuing Entity from time to time such additional information regarding the Collateral as the Issuing Entity shall reasonably request.

ARTICLE XI

MISCELLANEOUS PROVISIONS

SECTION 11.01  Amendment.  This Agreement may be amended by all of the Sponsor, the Depositor, the Servicer and the Owner Trustee, with the consent of the Trustee (which consent may not be unreasonably withheld), but without the consent of any of the Noteholders or the Certificateholders, to cure any ambiguity or defect, to correct or supplement any provisions in this Agreement or for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions in this Agreement or of modifying in any manner the rights of the Noteholders or the Certificateholders; provided, however, that such action shall not, as evidenced by an Opinion of Counsel delivered to the Owner Trustee and the Trustee, adversely affect in any material respect the interests of any Noteholder or Certificateholder.

This Agreement may also be amended from time to time by all of the Sponsor, the Depositor, the Servicer and the Owner Trustee, with the consent of the Trustee, the consent of the Holders of Notes evidencing not less than a majority of the Outstanding Amount of the Notes 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 Amount of the Notes and the Percentage Interest, the Holders of which are require d to consent to any such amendment, without the consent of the Holders of all the outstanding Notes.

Prior to its execution of any such amendment or consent, the Owner Trustee shall furnish written notification of the substance of such amendment or consent to the Rating Agencies. Promptly after its execution of any such amendment or consent, the Owner Trustee shall furnish written notification of the substance of such amendment or consent to each Rating Agency, each Certificateholder and the Trustee.

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.

Prior to the execution of any amendment to this Agreement, the Owner Trustee and the 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 that all conditions precedent to the execution and delivery of such amendment have been satisfied and the Opinion of Counsel referred to in Section 11.2(i)(1) has been delivered. The Owner Trustee and the Trustee may, but shall not be obligated to, enter into any such amendment which affects the Owner Trustee’s or the Trustee’s, as applicable, own rights, duties or immunities under this Agreement or otherwise.

SECTION 11.02  Protection of Title to Trust.  (a) The Depositor shall execute and file 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 Issuing Entity and the interests of the Trustee in the Receivables and in the proceeds thereof. The Depositor shall deliver (or cause to be delivered) to the Owner Trustee and the Trustee file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following such filing.

(a)

Neither the Depositor nor the Servicer shall (nor shall the Servicer permit an Originator to) 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 ss. 9-402(7) of the UCC, unless it shall have given the Owner Trustee and the 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.

(b)

Each of the Depositor and the Servicer shall have an obligation to give the Owner Trustee and the Trustee at least 60 days’ prior written notice of any relocation of its principal executive office 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 executive office, within the United States of America.

(c)

The Servicer shall (and shall cause each Originator with respect to the Related Receivables to) 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 and Payahead Account in respect of such Receivable.

(d)

The Servicer shall maintain its computer systems so that, from and after the time of sale under this Agreement of the Receivables, the Servicer’s master computer records (including any backup archives) that refer to a Receivable shall indicate clearly the interest of the Issuing Entity and the Trustee in such Receivable and that such Receivable is owned by the Issuing Entity and has been pledged to the Trustee. Indication of the Issuing Entity’s and the 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 by the Depositor or the Sponsor or purchased by the Servicer.

(e)

If at any time the Sponsor, 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 Issuing Entity and has been pledged to the Trustee.

(f)

The Servicer shall permit the Trustee and its 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.

(g)

Upon request at any time the Owner Trustee or the Trustee shall have reasonable grounds to believe that such request is necessary in connection with the performance of its duties under this Agreement or any of the Basic Documents, the Servicer shall furnish to the Owner Trustee or to the 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.

(h)

The Servicer shall deliver to the Owner Trustee and the Trustee:

(1)

promptly after the execution and delivery of this Agreement and of each amendment thereto, an Opinion of Counsel either (A) stating that, in the opinion of such counsel, all financing statements and continuation statements have been executed and filed that are necessary fully to preserve and protect the interest of the Owner Trustee and the 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) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interest; and

(2)

within 120 days after the beginning of each calendar year beginning with the first calendar year beginning more than three months after the Cutoff Date, an Opinion of Counsel, dated as of a date during such 120-day period, either (A) stating that, in the opinion of such counsel, all financing statements and continuation statements have been executed and filed that are necessary fully to preserve and protect the interest of the Owner Trustee and the 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) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interest.

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.

(i)

The Depositor shall, to the extent required by applicable law, cause the Notes to be registered with the Securities and Exchange Commission pursuant to Section 12(b) or Section 12(g) of the Exchange Act within the time periods specified in such sections.

SECTION 11.03  Notices.  All demands, notices and communications upon or to the Depositor, the Servicer, the Owner Trustee, the Trustee or the Rating Agencies under this Agreement shall be in writing, personally delivered, sent by overnight courier or mailed by certified mail, return receipt requested, and shall be deemed to have been duly given upon receipt (a) in the case of the Depositor, to Ace Securities Corp., 6525 Morrison Boulevard, Suite 318, Charlotte, North Carolina 28211, Attention: General Counsel, (b) in the case of the Sponsor, to [   ], Attention: General Counsel, (c) in the case of the servicer, to [   ], Attention: General Counsel, (d) in the case of the Issuing Entity or the Owner Trustee, at the Corporate Trust Office (as defined in the Trust Agreement), (e) in the case of the Trustee, at the Corporate Trust Office, (f) in the case of Moody&# 146;s, to Moody’s Investors Service, Inc., to 99 Church Street, New York, New York 10004, Attention: ABS Monitoring Department and (e) in the case of Standard & Poor’s, to Standard & Poor’s Corporation, 55 Water Street, New York, New York 10041, Attention of Asset Backed Surveillance Department.

SECTION 11.04  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.

SECTION 11.05  Limitations On Rights Of Others.  The provisions of this Agreement are solely for the benefit of the Depositor, the Servicer, the Issuing Entity, the Owner Trustee and for the benefit of the Certificateholders, the Trustee and the Noteholders, as third-party beneficiaries, and nothing in this Agreement, whether express or implied, shall be construed to give to any other Person 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 11.06  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 11.07  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 11.08  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 11.09  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 Trustee.  The Depositor hereby acknowledges and consents to any mortgage, pledge, assignment and grant of a security interest by the Issuing Entity to the Trustee pursuant to the Indenture for the benefit of the Noteholders of all right, title and interest of the Issuing Entity in, to and under the Receivables and/or the assignment of any or all of the Issuing Entity’s rights and obligations hereunder to the Trustee.

SECTION 11.11  Nonpetition Covenant.  Notwithstanding any prior termination of this Agreement, the Servicer and the Depositor shall not, prior to the date which is one year and one day after the termination of this Agreement with respect to the Issuing Entity, acquiesce, petition or otherwise invoke or cause the Issuing Entity to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Issuing Entity 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 Issuing Entity or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuing Entity.

SECTION 11.12  Limitation of Liability of Owner Trustee and Trustee.  (a) Notwithstanding anything contained herein to the contrary, this Agreement has been countersigned by [   ], not in its individual capacity but solely in its capacity as Owner Trustee of the Issuing Entity and in no event shall [   ], 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 Issuing Entity hereunder or under 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 Issuing Entity.

(a)

Notwithstanding anything contained herein to the contrary, this Agreement has been accepted by [   ] not in its individual capacity but solely as Trustee and in no event shall [   ] have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuing Entity 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 Issuing Entity.

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 Issuing Entity or the Owner Trustee with respect to the manner in which it accomplishes the performance of its obligations hereunder. Unless expressly authorized by the Issuing Entity, the Servicer shall have no authority to act for or represent the Issuing Entity or the Owner Trustee in any way and shall not otherwise be deemed an agent of the Issuing Entity or the Owner Trustee.

SECTION 11.14  No Joint Venture.  Nothing contained in this Agreement (i) shall constitute the Servicer and either of the Issuing Entity or the Owner Trustee as members of 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  Intent of the Parties; Reasonableness.  

The Seller, Servicer, Sponsor and Issuing Entity acknowledge and agree that the purpose of Article Three of this Agreement is to facilitate compliance by the Issuing Entity and the Depositor with the provisions of Regulation AB and related rules and regulations of the Commission.  

None of the Sponsor nor the Issuing Entity shall exercise its right to request delivery of information or other performance under these provisions other than in good faith, or for purposes other than compliance with the Securities Act, the Exchange Act and the rules and regulations of the Commission thereunder (or the provision in a private offering of disclosure comparable to that required under the Securities Act).  The Servicer acknowledges that interpretations of the requirements of Regulation AB may change over time, whether due to interpretive guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees to comply with requests made by the Issuing Entity in good faith for delivery of information under these provisions on the basis of evolving interpretations of Regulation AB.  In con nection with this transaction, the Servicer shall cooperate fully with the Issuing Entity to deliver to the Issuing Entity (including any of its assignees or designees), any and all statements, reports, certifications, records and any other information necessary in the good faith determination of the Issuing Entity to permit the Issuing Entity to comply with the provisions of Regulation AB, together with such disclosures relating to the Servicer, any Subservicer and the Receivables, or the servicing of the Receivables, reasonably believed by the Issuing Entity  to be necessary in order to effect such compliance.

The Issuing Entity (including any of its assignees or designees) shall cooperate with the Servicer by providing timely notice of requests for information under these provisions and by reasonably limiting such requests to information required, in the reasonable judgment or the Issuing Entity to comply with Regulation AB.

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.

[                                ]

By:

[______________________________]

not in its individual capacity but solely as

Owner Trustee on behalf of the Trust,

By:____________________________________

Name:

Title:

[                                                                    ]

Servicer and Sponsor,

By:____________________________________

Name:

Title:

ACE SECURITIES CORP.

Depositor,

By:____________________________________

Name:

Title:

Acknowledged and Accepted:

[                                        ]

in its individual capacity

but solely as Trustee,

By:___________________________

   Name:

   Title:

Acknowledged and Accepted:

[                                        ]

not in its individual capacity

but solely as Owner Trustee,

By:___________________________

  Name:

  Title:

SCHEDULE A

SCHEDULE OF RECEIVABLES

Delivered to the Owner Trustee and the Trustee at Closing

SCHEDULE B

LOCATION OF RECEIVABLES

EXHIBIT A

FORM OF MONTHLY SECURITYHOLDER STATEMENT

[   ]

[   ]% Class A-1 Asset-Backed Notes

[   ]% Class A-2 Asset-Backed Notes

[   ]% Class A-3 Asset-Backed Notes

[   ]% Class A-4 Asset-Backed Notes

[   ]% Class A-5 Asset-Backed Notes

[   ]% Class B Asset-Backed Notes

Asset Backed Certificates

Distribution Date:

Collection Period:

Under the Sale and Servicing Agreement dated as of [   ] among [   ], as servicer (the “Servicer”) and sponsor (the “Sponsor”), Ace Securities Corp., as depositor (the “Depositor”), [   ], as Issuing Entity (the “Trust”), the Servicer is required to prepare certain information each month regarding current distributions to Noteholders and Certificateholders 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 Collection 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.

A.

Information Regarding the Current Monthly Distribution.

1.   Notes.
(a)	The aggregate amount of the distribution with respect to each class of the Notes.	$
(b)	The amount of the distribution set forth in paragraph A.1.(a) above in respect of interest on each class of the Notes.	$
(c)	The amount of the distribution set forth in paragraph A.1.(a) above in respect of principal of each class of the Notes	$
(d)	The amount of the distributions set forth in paragraph A.1(a) payable out of amounts withdrawn from the Reserve Account with respect to the Notes.	$
(e)	The amount of the distribution set forth in paragraph A.1.(a) above per $1,000 interest in each class of the Notes.	$
(f)	The amount of the distribution set forth in paragraph A.1.(b) above per $1,000 interest in each class of the Notes.	$
(g)	The amount of the distribution set forth in paragraph A.1.(c) above per $1,000 interest in each class of the Notes	$
(h)	The amount of the distribution set forth in paragraph A.1.(d) above per $1,000 interest in the Notes	$
2.   Certificates.
(a)	The aggregate amount of the distribution with respect to the certificates	$
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 Collection Period giving effect to payments allocated to principal as set forth in Paragraph A.1(c)	$
(b)	The Note Balance of each class after giving effect to payments allocated to principal as set forth in Paragraph A.1(c)	$
(c)	The Note Pool Factor of each class after giving affect to the payments set forth in paragraph A.1(c)	$
(d)	Reserved	$
(e)	Reserved	$
(f)	The aggregate Purchase Amount for all Receivables that were repurchased in the preceding Collection Period.	$
(g)	The aggregate Payahead Balance on such Distribution Date.	$
(h)	The change in the Payahead Balance from the preceding Distribution Date.	$
(i)	The amount of Outstanding Advances on such Distribution Date.	$
(j)	The change in Outstanding Advances from the preceding Distribution Date.	$
(k)	Total Collections by the Servicer.	$
(l)	All amounts received by the Trust from the Servicer.	$
2.   Servicing Fee.
The aggregate amount of the  Servicing Fee paid to the Servicer  with respect to the preceding  Collection  Period
3.   Payment Shortfalls.
(a)	The amount of the Class A Noteholders’ Interest Carryover Shortfall after giving effect to the payments set forth in paragraph A.1(b) above	$
(b)	The amount of the Class A Noteholders’ Interest Carryover Shortfall set forth in paragraph B.3.(a) above per $1,000 interest with respect to the Class A Notes.	$
(c)	The amount of the Class B Noteholders’ Interest Carryover Shortfall after giving effect to the payments set forth in paragraph A.1(b) above:	$
(d)	The amount of the Class B Noteholders’ Interest Carryover Shortfall set forth in paragraph B.3.(c) above per $1,000 interest with respect to the Class B Notes	$
(e)	The amount of the Class A Noteholders’ Principal Carryover Shortfall after giving effect to the payments set forth in paragraph A.1(c) above	$
(f)	The amount of the Class A Noteholders’ Principal Carryover Shortfall set forth in paragraph B.3.(e) above per $1,000 interest with respect to the Class B Notes	$
(g)	The amount of the Class B Noteholders’ Principal Carryover Shortfall after giving effect to the payments set forth in paragraph A.1(c) above.
(h)	The amount of the Class B Noteholders’ Principal Carryover Shortfall set forth in paragraph B.3.(g) above per $1,000 interest with respect to the Class B Notes:	$
4.   Losses and Delinquencies
(a)	The aggregate amount scheduled to be paid, including unearned finance and other charges, for which Obligors are delinquent 60 days or more.	$
(b)	The amount of the aggregate Realized Losses for such Collection Period.	$
(c)	Cumulative Realized Losses from the Closing Date, including Realized Losses for such Collection Period.	$
(d)	Recoveries, if any, for such Collection Period.	$
(e)	Aggregate outstanding principal balance of Receivables that are currently in repossession status (excluding Liquidation Receivables.	$
5.   Reserve Account
(a)	The Reserve Account balance as of the last day of the preceding Collection Period, including earnings.	$
(b)	Earnings included in above Balance	$
(c)	Transfer to Reserve Account from Collection Account on Distribution Date.	$
(d)	The Reserve Account balance as of the Distribution Date set forth above after giving effect to the Collection Account on such Distribution Date.	$
(e)	The Specified Reserve Account Balance as of the Distribution Date set forth above.	$
6.   Delinquency
(a)	Percentage of principal balance of Receivables delinquent 1 to 30 days.	%
(b)	Percentage of principal balance of Receivables delinquent 31 to 60 days	%
(c)	Percentage of principal balance of Receivables delinquent 61 to 90 days.	%

EXHIBIT B

FORM OF SERVICER’S CERTIFICATE

[           ]

CERTIFICATE OF SERVICING OFFICER

The undersigned certifies that he is the [title], of [   ], a corporation organized under the laws of the State of [   ](“[   ]”) and that as such he is duly authorized to execute and deliver this certificate on behalf of [   ] pursuant to Section 4.9 of the Sale and Servicing Agreement, dated as of [   ] (the “Agreement”) by and among [   ], as servicer (the “Servicer”) and sponsor (the “Sponsor”), Ace Securities Corp., as depositor (the “Depositor”) and [   ], as Issuing Entity (the “Issuing Entity”), (all capitalized terms used herein without definition having the respective meanings specified in the Agreement), and further certifies that:

1.

The Monthly Securityholder Statement for the period from

2

As of the date hereof, no Servicer Default or event that with notice or lapse of time or both would become a Servicer Default has occurred. [If a Servicer Default has occurred, such Servicer Default shall be specified and its current status reported.]

IN WITNESS WHEREOF, we have affixed hereunto our signatures this day of ____________________, _____.

[                         ]

as Servicer

By: _________________________________

Name:

Title:

EXHIBIT C

TERMINATION - AUCTION PROCEDURES

The following sets forth the auction procedures to be followed in connection with a sale effected pursuant to Section 9.2 of the Sale and Servicing Agreement (the “Agreement”), dated as of [   ] by and among [   ] (the “Trust”), [   ], as servicer (the “Servicer”) and sponsor (the “Sponsor”) and Ace Securities Corp., as depositor (the “Depositor”). Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in the Agreement. All references herein to “Trustee” shall be references to [   ], as Indenture Trustee, pursuant to an Indenture, dated as of [   ], between the Trust and the Indenture Trustee. However, if the Notes have been paid in full, and the Indenture has been discharged in accordance with its terms, all references herein to “Trustee& #148; shall be references to the Owner Trustee.

PRE-AUCTION PROCESS

(a)

Upon receiving notice of the Auction, the Advisor will initiate its general Auction procedures consisting of the following: (i) with the assistance of the Servicer, prepare a general solicitation package along with a confidentiality agreement; (ii) derive a list of qualified bidders, in a commercially reasonable manner; (iii) initiate contact with all qualified bidders; (iv) send a confidentiality agreement to all qualified bidders; (v) upon receipt of a signed confidentiality agreement, send solicitation packages to all interested bidders on behalf of the applicable Trustee; and (vi) notify the Servicer of all potential bidders and anticipated timetable.

(b)

The general solicitation package will include: (i) the prospectus from the public offering of the Notes; (ii) a copy of all monthly servicing reports or a copy of all annual servicing reports and the prior year’s monthly servicing reports; (iii) a form of a Purchase Agreement and Sale and Servicing Agreement; (iv) a description of the minimum purchase price required to cause the Trustee to sell the Auction Property as set forth in Section 9.2 of the Agreement; (v) a formal bidsheet; (vi) a detailed timetable; and (vii) a preliminary data tape of the Pool Balance as of the related Distribution Date reflecting the same data attributes used to create the Cutoff Date tables for the Prospectus Supplement dated [   ] relating to the offering of the Notes.

(c)

The applicable Trustee, with the assistance of the Servicer and the Advisor, will maintain an auction package beginning at the time of closing of the transaction, which will contain terms (i)-(iii) listed in the preceding paragraph. If the Advisor is unable to perform its role as advisor to the applicable Trustee, the Servicer acting in its capacity under the Agreement will select a successor Advisor and inform the applicable Trustee of its actions.

(d)

The Advisor will send solicitation packages to all bidders at least 15 business days before the date of the Auction. Bidders will be required to submit any due diligence questions in writing to the Advisor for determination of their relevancy, no later than 10 business days before the date of the Auction. The Servicer and the Advisor will be required to satisfy all relevant questions at least five Business Days prior to the date of the Auction and distribute the questions and answers to all bidders.

AUCTION PROCESS

(a)

(a) _______________________, in its role as Advisor to the applicable Trustee, will be allowed to bid in the Auction, but will not be required to do so.

(b)

The Servicer will also be allowed to bid in the Auction if it deems appropriate, but will not be required to do so.

(c)

On the date of the Auction, all bids will be due by facsimile to the offices of the applicable Trustee by 1:00 p.m. New York City time, with the winning bidder to be notified by 2:00 p.m. New York City time. All acceptable bids (as described in Section 9.2 of the Agreement) will be due on a conforming basis on the bid sheet contained in the solicitation package.

(d)

If the applicable Trustee receives fewer than two market value bids from participants in the market for motor vehicle retail installment sale contracts and other motor vehicle installment sale contracts willing and able to purchase the Auction Property, the applicable Trustee shall decline to consummate the sale.

(e)

Upon notification to the winning bidder, a good faith deposit equal to one percent (1%) of the Pool Balance will be required to be wired to the applicable Trustee upon acceptance of the bid. This deposit, along with any interest income attributable to it, will be credited to the purchase price but will not be refundable. The applicable Trustee will establish a separate account for the acceptance of the good faith deposit, until such time as the account is fully funded and all monies are transferred into the Collection Account, such time not to exceed one Business Day before the related Distribution Date (as described above).

(f)

The winning bidder will receive on the date of the Auction a copy of the draft Purchase Agreement, Sale and Servicing Agreement and Servicer’s Representations and Warranties (which shall be substantially identical to the representations and warranties set forth in Section 7.1 of the Agreement).

(g)

______________, in its capacity as Advisor to the applicable Trustee, will provide to the applicable Trustee a letter concluding whether or not the winning bid is a fair market value bid. __________________ will also provide such letter if it is the winning bidder. In the case where _____________ or the Servicer is the winning bidder it will in its letter provide for market comparable valuations.

(h)

The Auction will stipulate that the Servicer be retained to service the Receivables sold pursuant to the terms of the Purchase and Sale Agreement and Servicing Agreement.

EXHIBIT D

FORM OF ANNUAL CERTIFICATION

Re:

The Sale and Servicing Agreement dated as of [      ], 200[ ] (the “Agreement”), among [            ] as Issuing Entity, [          ] as Servicer and Ace Securities Corp. as Depositor

I, ________________________________, the _______________________ of [NAME OF COMPANY] (the “Company”), certify to the Issuing Entity and the Depositor, and their officers, with the knowledge and intent that they will rely upon this certification, that:

(1)

I have reviewed the servicer compliance statement of the Company provided in accordance with Item 1123 of Regulation AB (the “Compliance Statement”), the report on assessment of the Company’s compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided in accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Item 1122 of Regulation AB (the “Servicing Assessment”), the registered public accounting firm’s attestation report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of Regulation AB (the “Attestation Report”), and all servicing reports, officer’s certificates and other information relating to the servicing of the Receivables by the Company during 200[ ] that were delivered by the Company to the Issuing Entity and the Depositor pursuant to the Agreement (collectively, the “Company Servicing Information”);

(2)

Based on my knowledge, the Company Servicing Information, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in the light of the circumstances under which such statements were made, not misleading with respect to the period of time covered by the Company Servicing Information;

(3)

Based on my knowledge, all of the Company Servicing Information required to be provided by the Company under the Agreement has been provided to the Issuing Entity and the Depositor;

(4)

I am responsible for reviewing the activities performed by the Company as servicer under the Agreement, and based on my knowledge and the compliance review conducted in preparing the Compliance Statement and except as disclosed in the Compliance Statement, the Servicing Assessment or the Attestation Report, the Company has fulfilled its obligations under the Agreement in all material respects; and

(5)

The Compliance Statement required to be delivered by the Company pursuant to the Agreement, and the Servicing Assessment and Attestation Report required to be provided by the Company and by any Subservicer or Subcontractor pursuant to the Agreement, have been provided to the Issuing Entity, the Depositor and the Trustees.  Any material instances of noncompliance described in such reports have been disclosed to the Issuing Entity and the Depositor.  Any material instance of noncompliance with the Servicing Criteria has been disclosed in such reports.

Date:

_________________________

By:  ________________________

Name:

Title:

EXHIBIT E

MORTGAGE LOAN SCHEDULE

(Provided Upon Request)

EXHIBIT F

POWER OF ATTORNEY

(Provided Upon Request)

EXHIBIT G

FORM OF REQUEST FOR RELEASE

DATE:

TO:

RE:

REQUEST FOR RELEASE OF DOCUMENTS

In connection with your administration of the Mortgage Collateral, we request the release of the Mortgage File described below.

Servicing Agreement Dated:

Series #:

Account #:

Pool #:

Loan #:

Borrower Name(s):

Reason for Document Request: (circle one)   

Mortgage Loan

Prepaid in Full

Mortgage Loan Repurchased

“We hereby certify that all amounts received or to be received in connection with such payments which are required to be deposited have been or will be so deposited as provided in the Servicing Agreement.”

____________________________________

[Name of Servicer]

Authorized Signature

TO CUSTODIAN/INDENTURE TRUSTEE: Please acknowledge this request, and check off documents being enclosed with a copy of this form. You should retain this form for your files in accordance with the terms of the Servicing Agreement.

Enclosed Documents:

[  ]

Promissory Note

[  ]

Primary Insurance Policy

[  ]

Mortgage or Deed of Trust

[  ]

Assignment(s) of Mortgage or

Deed of Trust

[  ]

Title Insurance Policy

[  ]

Other:  ___________________________

_________________________________

Name

_________________________________

Title

_________________________________

Date

EXHIBIT H

SERVICING CRITERIA TO BE ADDRESSED

IN ASSESSMENT OF COMPLIANCE

Definitions

Primary Servicer – transaction party having borrower contact

Master Servicer – aggregator of pool assets

Securities Administrator – waterfall calculator (may be the Trustee, or may be the Master Servicer)

Back-up Servicer – named in the transaction (in the event a Back up Servicer becomes the Primary Servicer, follow Primary Servicer obligations)

Custodian – safe keeper of pool assets

Paying Agent – distributor of funds to ultimate investor

Trustee – fiduciary of the transaction

Note:  The definitions above describe the essential function that the party performs, rather than the party’s title.  So, for example, in a particular transaction, the trustee may perform the “paying agent” and “securities administrator” functions, while in another transaction, the securities administrator may perform these functions.

Where there are multiple checks for criteria the attesting party will identify in their management assertion that they are attesting only to the portion of the distribution chain they are responsible for in the related transaction agreements.

Key:

X – obligation

[X] – under consideration for obligation

Reg AB Reference Servicing Criteria Primary Servicer Master Servicer Securities Admin Custodian Paying Agent Trustee

General Servicing Considerations

1122(d)(1)(i)	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.	X	X	X		X (Sec. 9.01)
1122(d)(1)(ii)	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.	X	X	X
1122(d)(1)(iii)	Any requirements in the transaction agreements to maintain a back-up servicer for the Pool Assets are maintained.
1122(d)(1)(iv)	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements.	X	X
	Cash Collection and Administration
1122(d)(2)(i)	Payments on pool assets are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the transaction agreements.	X	X	X	X
1122(d)(2)(ii)	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.	X	X	X	X	X
1122(d)(2)(iii)	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements.	X	X	X	X	X (Sec. 8.01)
1122(d)(2)(iv)	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of over collateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements.		[X]			X
1122(d)(2)(v)	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.	X	X	X		X
1122(d)(2)(vi)	Unissued checks are safeguarded so as to prevent unauthorized access.	X
1122(d)(2)(vii)	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements.	X	X	X	X	X
	Investor Remittances and Reporting
1122(d)(3)(i)	Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of Pool Assets serviced by the Servicer.	X	X	X		X
1122(d)(3)(ii)	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.	X	X	X	X	X
1122(d)(3)(iii)	Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction agreements.	X	X	X	X	X
1122(d)(3)(iv)	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.	X	X	X	X	X
	Pool Asset Administration
1122(d)(4)(i)	Collateral or security on pool assets is maintained as required by the transaction agreements or related pool asset documents.	X	X
1122(d)(4)(ii)	Pool assets  and related documents are safeguarded as required by the transaction agreements	X	X
1122(d)(4)(iii)	Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.	X	X			X
1122(d)(4)(iv)	Payments on pool assets, including any payoffs, made in accordance with the related pool asset documents are posted to the Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related pool asset documents.	X
1122(d)(4)(v)	The Servicer’s records regarding the pool assets agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.	X
1122(d)(4)(vi)	Changes with respect to the terms or status of an obligor's pool assets (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents.	X	X
1122(d)(4)(vii)	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements.	X	X
1122(d)(4)(viii)	Records documenting collection efforts are maintained during the period a pool asset is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent pool assets including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).	X
1122(d)(4)(ix)	Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents.	X	X
1122(d)(4)(x)	Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s pool asset documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable pool asset documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related pool assets, or such other number of days specified in the transaction agreements.	X
1122(d)(4)(xi)	Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements.	X
1122(d)(4)(xii)	Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the Servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission.	X
1122(d)(4)(xiii)	Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the transaction agreements.	X
1122(d)(4)(xiv)	Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements.		X	X		X
1122(d)(4)(xv)	Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.			X		X

CORRESP

February 22, 2007

Securities and Exchange Commission
Division of Corporate Finance
100 F Street NE
Mail Stop 3561
Washington, DC  20549
Attn: Hanna T. Teshome

Re:

Ace Securities Corp. (the “Registrant”) Registration Statement on Form S-3, File No. 333-131866

____

Ladies and Gentlemen:

Pursuant to Rule 461 promulgated under the Securities Act of 1933, as amended, the Registrant hereby requests that the effective date for the above-referenced Registration Statement on Form S-3 be accelerated so that it will be declared effective at 5:00 p.m., Eastern Standard Time, on Friday, February 23, 2007, or as soon as thereafter as practicable.

The Registrant acknowledges that (1) should the Securities and Exchange Commission (the “Commission”) or the staff, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to the filing; (2) the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the Registrant from its full responsibility for the adequacy and accuracy of the disclosure in the filing; and (3) the Registrant may not assert this action as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Very Truly Yours,

Ace Securities Corp., as Registrant

By: /s/ Evelyn Echevarria

Name: Evelyn Echevarria

Title: Director