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Exhibit 4.1
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Execution Copy
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FRANKLIN AUTO TRUST 1999-1
AMENDED AND RESTATED TRUST AGREEMENT
between
FRANKLIN RECEIVABLES LLC
and
BANKERS TRUST (DELAWARE)
Owner Trustee
Dated as of May 1, 1999
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Table of Contents
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ARTICLE I
Definitions
SECTION 1.1 Capitalized Terms................................................1
SECTION 1.2 Other Definitional Provisions....................................3
ARTICLE II
Organization
SECTION 2.1 Name.............................................................4
SECTION 2.2 Office...........................................................4
SECTION 2.3 Purposes and Powers..............................................4
SECTION 2.4 Appointment of Owner Trustee.....................................5
SECTION 2.5 Initial Capital Contribution of Trust Estate.....................5
SECTION 2.6 Declaration of Trust.............................................6
SECTION 2.7 Liability of the Seller..........................................6
SECTION 2.8 Title to Trust Property..........................................6
SECTION 2.9 Situs of Trust...................................................7
SECTION 2.10 Representations and Warranties of the Seller.....................7
SECTION 2.11 [Reserved].......................................................8
SECTION 2.12 Covenants of the Certificateholders..............................8
SECTION 2.13 Federal Income Tax Allocations...................................9
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.1 Initial Ownership................................................9
SECTION 3.2 The Trust Certificates..........................................10
SECTION 3.3 Authentication of Trust Certificates............................10
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SECTION 3.4 Registration of Transfer and Exchange of Trust Certificates.....10
SECTION 3.5 Mutilated, Destroyed, Lost or Stolen Trust Certificates.........11
SECTION 3.6 Persons Deemed Certificateholders...............................12
SECTION 3.7 Access to List of Certificateholders' Names and Addresses.......12
SECTION 3.8 Maintenance of Office or Agency.................................12
SECTION 3.9 Appointment of Paying Agent.....................................13
SECTION 3.10 [Reserved]......................................................13
SECTION 3.11 [Reserved]......................................................13
SECTION 3.12 [Reserved]......................................................13
SECTION 3.13 [Reserved]......................................................13
SECTION 3.14 [Reserved]......................................................13
SECTION 3.15 [Reserved]......................................................13
SECTION 3.16 [Reserved]......................................................13
SECTION 3.17 Trust Certificate Transfer Restrictions.........................14
ARTICLE IV
Actions by Owner Trustee
SECTION 4.1 Prior Notice to Certificateholders with Respect to Certain
Matters.........................................................15
SECTION 4.2 Action by Certificateholders with Respect to Certain Matters....17
SECTION 4.3 Action by Certificateholders with Respect to Bankruptcy.........17
SECTION 4.4 Restrictions on Certificateholders' Power.......................17
SECTION 4.5 Majority Control................................................17
SECTION 4.6 Rights of Security Insurer......................................18
SECTION 4.7 Execution of Documents..........................................18
ARTICLE V
Application of Trust Funds: Certain Duties
SECTION 5.1 Establishment of Certificate Distribution Account...............18
SECTION 5.2 Application of Funds in Certificate Distribution Account........19
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SECTION 5.3 [Reserved]......................................................19
SECTION 5.4 Method of Payment...............................................20
SECTION 5.5 No Segregation of Monies; No Interest...........................20
SECTION 5.6 Accounting and Reports to the Noteholders, Certificateholders,
the Internal Revenue Service and Others.........................20
SECTION 5.7 Signature on Returns; Tax Matters Partner.......................21
ARTICLE VI
Authority and Duties of Owner Trustee
SECTION 6.1 General Authority...............................................21
SECTION 6.2 General Duties..................................................21
SECTION 6.3 Action upon Instruction.........................................22
SECTION 6.4 No Duties Except as Specified in this Agreement or in
Instructions....................................................23
SECTION 6.5 No Action Except under Specified Documents or Instructions......23
SECTION 6.6 Restrictions....................................................23
SECTION 6.7 Notice of Default Under Indenture...............................23
ARTICLE VII
Concerning the Owner Trustee
SECTION 7.1 Acceptance of Trusts and Duties.................................24
SECTION 7.2 Furnishing of Documents.........................................25
SECTION 7.3 Representations and Warranties..................................25
SECTION 7.4 Reliance; Advice of Counsel.....................................26
SECTION 7.5 Not Acting in Individual Capacity...............................26
SECTION 7.6 Owner Trustee Not Liable for Trust Certificates or Receivables..26
SECTION 7.7 Owner Trustee May Own Trust Certificates and Notes..............27
SECTION 7.8 Payments from Owner Trust Estate................................27
SECTION 7.9 Doing Business in Other Jurisdictions...........................27
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ARTICLE VIII
Compensation of Owner Trustee
SECTION 8.1 Owner Trustee's Fees and Expenses...............................28
SECTION 8.2 Indemnification.................................................28
SECTION 8.3 Payments to the Owner Trustee...................................28
SECTION 8.4 Non-recourse Obligations........................................28
ARTICLE IX
Dissolution and Termination of Trust
SECTION 9.1 Termination of Trust Agreement..................................29
SECTION 9.2 [Reserved]......................................................30
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
SECTION 10.1 Eligibility Requirements for Owner Trustee......................30
SECTION 10.2 Resignation or Removal of Owner Trustee.........................31
SECTION 10.3 Successor Owner Trustee.........................................31
SECTION 10.4 Merger or Consolidation of Owner Trustee........................32
SECTION 10.5 Appointment of Co-Trustee or Separate Trustee...................32
ARTICLE XI
Miscellaneous
SECTION 11.1 Supplements and Amendments......................................34
SECTION 11.2 No Legal Title to Owner Trust Estate in Certificateholders......35
SECTION 11.3 Limitations on Rights of Others.................................35
SECTION 11.4 Notices.........................................................36
SECTION 11.5 Severability....................................................36
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SECTION 11.6 Separate Counterparts...........................................36
SECTION 11.7 Successors and Assigns..........................................36
SECTION 11.8 [Reserved]......................................................37
SECTION 11.9 No Petition.....................................................37
SECTION 11.10 No Recourse.....................................................37
SECTION 11.11 Headings........................................................37
SECTION 11.12 GOVERNING LAW...................................................37
SECTION 11.13 [Reserved]......................................................37
SECTION 11.14 Servicer........................................................37
SECTION 11.15 Third Party Beneficiary.........................................38
EXHIBITS
EXHIBIT A FORM OF TRUST CERTIFICATE
EXHIBIT B FORM OF CERTIFICATE OF TRUST
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AMENDED AND RESTATED TRUST AGREEMENT dated as of May 1, 1999 between
FRANKLIN RECEIVABLES LLC, as seller, and BANKERS TRUST (DELAWARE), as Owner
Trustee to TRUST AGREEMENT dated as of May 6, 1999 between FRANKLIN RECEIVABLES
LLC, as seller, and BANKERS TRUST (DELAWARE), as Owner Trustee.
ARTICLE I
Definitions
SECTION 1.1 Capitalized Terms. For all purposes of this Agreement,
the following terms shall have the meanings set forth below
"Agreement" shall mean this Trust Agreement, as the same may be
amended and supplemented from time to time.
"Basic Documents" shall mean this Agreement, the Sale and Servicing
Agreement, the Indenture, the Purchase Agreement, the Spread Account Agreement,
the Insurance Agreement, the Indemnification Agreement, the Note Depository
Agreement and the other documents and certificates delivered in connection
therewith.
"Benefit Plan" shall have the meaning assigned to such term in
Section 3.17.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss. 3801 et seq., as the same may be amended from
time to time.
"Certificate" means a certificate evidencing the beneficial interest
of a Certificateholder in the Trust, substantially in the form of Exhibit A
attached hereto.
"Certificate Distribution Account" shall have the meaning assigned
to such term in Section 5.1.
"Certificate of Trust" shall mean the Certificate of Trust in the
form of Exhibit B to be filed for the Trust pursuant to Section 3810(a) of the
Business Trust Statute.
"Certificate Paying Agent" shall mean any paying agent or co-paying
agent appointed pursuant to Section 3.9.
"Certificateholder" or "Holder" shall mean the Person in whose name
a Trust Certificate is registered on the Certificate Register.
"Certificate Register" and "Certificate Registrar" shall mean the
register mentioned and the registrar appointed pursuant to Section 3.4.
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"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and Treasury Regulations promulgated thereunder.
"Corporate Trust Office" shall mean, with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee located at
E.A. Delle Donne Corporate Center Xxxxxxxxxx Building, 0000 Xxxxxx Xxxx, Xxxxx
000, Xxxxxxxxxx, Xxxxxxxx 00000, with a copy of all notices and other documents
to be also furnished to Bankers Trust Company, 0 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust and Agency Group, Structured
Finance, or at such other address as the Owner Trustee may designate by notice
to the Certificateholders and the Seller, or the principal corporate trust
office of any successor Owner Trustee (the address of which the successor owner
trustee will notify the Certificateholders and the Seller).
"Delaware Trustee" shall have the meaning assigned to such term in
Section 10.1.
"ERISA" shall have the meaning assigned to such term in Section
3.17.
"Expenses" shall have the meaning assigned to such term in Section
8.2.
"Holder" or "Certificateholder" shall mean the Person in whose name
a Trust Certificate is registered on the Certificate Register.
"Indemnified Parties" shall have the meaning assigned to such term
in Section 8.2.
"Indenture" shall mean the Indenture between the Trust, as issuer,
and The Chase Manhattan Bank, as trustee and indenture collateral agent, dated
as of May 1, 1999, as the same may be amended and supplemented from time to
time.
"Owner Trust Estate" shall mean all right, title and interest of the
Trust in and to the property and rights assigned to the Trust pursuant to
Article II of the Sale and Servicing Agreement, all funds on deposit from time
to time in the Trust Accounts and all other property of the Trust from time to
time, including any rights of the Owner Trustee and the Trust pursuant to the
Sale and Servicing Agreement.
"Owner Trustee" shall mean Bankers Trust (Delaware), a Delaware
banking corporation not in its individual capacity but solely as owner trustee
under this Agreement, and any successor Owner Trustee hereunder.
"Paying Agent" shall mean any paying agent or co-paying agent
appointed pursuant to Section 3.9.
"Percentage Interest" shall mean with respect to any Trust
Certificate, the percentage interest of ownership in the Trust represented
thereby as set forth on the face thereof.
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"Record Date" shall mean, with respect to any Distribution Date, the
close of business on the last day of the calendar month preceding such
Distribution Date.
"Responsible Officer" shall mean, when used with respect to the
Owner Trustee, any officer assigned to the Corporate Trust Office of the Owner
Trustee, including any Vice President, any Assistant Vice President, any
Assistant Treasurer, any Managing Director, any trust officer or any other
officer of the Owner Trustee customarily performing functions similar to those
performed by any of the above designated officers or any agent acting under a
power of attorney from the Owner Trustee, having responsibility for the
administration of this Trust Agreement, as the case may be, and also, with
respect to a particular matter relating to the Trust, any other officer of the
Owner Trustee to whom such matter is referred because of such officer's
knowledge of and familiarity with such matter. Any notice given to the address
and in the manner specified in Section 11.4 hereof shall be deemed to be given
to a Responsible Officer.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement among the Trust, Franklin Receivables LLC, as seller, Franklin
Resources, Inc., as representative, and Franklin Capital Corporation, as
servicer, dated as of May 1, 1999, as the same may be amended and supplemented
from time to time.
"Secretary of State" shall mean the Secretary of State of the State
of Delaware.
"Security Insurer" shall mean MBIA Insurance Corporation, or its
successor in interest.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Seller" shall mean Franklin Receivables LLC as the Seller of the
Receivables and each successor to Franklin Receivables LLC (in the same
capacity), to the extent permitted hereunder.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
"Trust Certificate" shall mean a Certificate.
SECTION 1.2 Other Definitional Provisions.
(a) Capitalized terms used herein and not otherwise defined
have the meanings assigned to them in the Sale and Servicing Agreement or, if
not defined therein, in the Indenture.
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(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement 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 certificate or other document, and
accounting terms partly defined in this Agreement or in any such 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 certificate or other document, as applicable.
To the extent that the definitions of accounting terms in this Agreement or in
any such 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 certificate or other document shall
control.
(d) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.
ARTICLE II
Organization
SECTION 2.1 Name. The Trust created hereby shall be known as
"Franklin Auto Trust 1999-1" in which name the Owner Trustee may engage in the
transactions contemplated hereby, make and execute contracts and other
instruments on behalf of the Trust and xxx and be sued.
SECTION 2.2 Office. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office, or at the office of the Delaware
Trustee, if one exists, or at such other address as the Owner Trustee may
designate by written notice to the Certificateholders, the Security Insurer and
the Seller.
SECTION 2.3 Purposes and Powers. (a) The purpose of the Trust is,
and the Trust shall have the power and authority, to engage in the following
activities:
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(i) to issue the Notes pursuant to the Indenture and the
Trust Certificates pursuant to this Agreement, and to sell the Notes
and the Certificates;
(ii) with the proceeds of the sale of the Notes, to pay
the organizational, start-up and transactional expenses of the Trust
and to pay the balance to the Seller pursuant to the Sale and
Servicing Agreement;
(iii) to acquire, receive and accept from time to time
the Owner Trust Estate, to assign, grant, transfer, pledge, mortgage
and convey the Owner Trust Estate (other than the Certificate
Distribution Account) to the Indenture Collateral Agent pursuant to
the Indenture for the benefit of the Security Insurer and the
Trustee on behalf of the Noteholders and to hold, manage and
distribute to the Certificateholders pursuant to the terms of the
Sale and Servicing Agreement any portion of the Owner Trust Estate
released from the Lien of, and remitted to the Trust pursuant to,
the Indenture;
(iv) to enter into and perform its obligations under the
Basic Documents to which it is a party;
(v) to engage in those activities, including entering
into agreements, that are necessary, suitable or convenient to
accomplish the foregoing or are incidental thereto or connected
therewith; and
(vi) subject to compliance with the Basic Documents to
which the Trust is a party, to engage in such other activities as
may be required in connection with conservation of the Owner Trust
Estate and the making of distributions to the Certificateholders and
the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
Documents.
SECTION 2.4 Appointment of Owner Trustee. The Seller hereby appoints
the Owner Trustee as trustee of the Trust effective as of the date hereof, to
have all the rights, powers and duties set forth herein.
SECTION 2.5 Initial Capital Contribution of Owner Trust Estate. The
Seller hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $200. The Owner Trustee hereby
acknowledges receipt in trust from the Seller, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Owner Trust Estate
and shall be deposited in the Certificate Distribution Account. The Seller shall
pay organizational expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner Trustee for any such
expenses paid by the Owner Trustee.
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SECTION 2.6 Declaration of Trust. The Owner Trustee hereby declares
that it will hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Certificateholders,
subject to the obligations of the Trust under the Basic Documents to which the
Trust is a party. It is the intention of the parties hereto that the Trust
constitute a business trust under the Business Trust Statute and that this
Agreement constitute the governing instrument of such business trust. It is the
intention of the parties hereto that, solely for federal income tax purposes,
the Trust shall be disregarded as an entity apart from its owner, the Seller, in
the event that the Seller is the sole Certificateholder for federal income tax
purposes, or treated as a partnership if there is more than one
Certificateholder for federal income tax purposes. The parties agree that,
unless otherwise required by appropriate tax authorities, the Trust will file or
cause to be filed annual or other necessary returns, reports and other forms
consistent with the characterization of the Trust as a division of the Seller,
or as a partnership, as the case may be, for such tax purposes. Effective as of
the date hereof, the Owner Trustee shall have all rights, powers and duties set
forth herein and to the extent not inconsistent herewith, in the Business Trust
Statute with respect to accomplishing the purposes of the Trust. The Owner
Trustee shall file the Certificate of Trust with the Secretary of State.
SECTION 2.7 Liability of the Seller . (a) The Seller shall pay
organizational expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner Trustee for any such
expenses paid by the Owner Trustee.
(b) No Holder, other than to the extent set forth in clause
(a), shall have any personal liability for any liability or obligation of the
Trust.
SECTION 2.8 Title to Trust Property. (a) Legal title to all the
Owner Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Owner Trust Estate to be vested in a trustee or trustees, in which
case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.
(b) The Certificateholders shall not have legal title to any
part of the Owner Trust Estate. The Certificateholders shall be entitled to
receive distributions with respect to their undivided Percentage Interest
therein only in accordance with Articles V and IX. No transfer, by operation of
law or otherwise, of any right, title or interest by any Certificateholder of
its ownership interest in the Owner Trust Estate shall operate to terminate this
Agreement or the trusts hereunder or entitle any transferee to an accounting or
to the transfer to it of legal title to any part of the Owner Trust Estate.
SECTION 2.9 Situs of Trust. The Trust will be located in the State
of Delaware. All bank accounts maintained by the Owner Trustee on behalf of the
Trust shall be located in the State of Delaware or the State of New York.
Payments will be received by the Trust only in Delaware or New York, and
payments will be made by the Trust only from Delaware or New York. The Trust
shall not have any employees in any state other than Delaware; provided,
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however, that nothing herein shall restrict or prohibit the Owner Trustee, in
its individual capacity, the Servicer or any agent of the Trust from having
employees within or without the State of Delaware. The only office of the Trust
will be at the Corporate Trust Office in Delaware.
SECTION 2.10 Representations and Warranties of the Seller. The
Seller hereby represents and warrants to the Owner Trustee that:
(a) Organization and Good Standing. The Seller is duly
organized and validly existing as a Delaware limited liability company with
power and authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted.
(b) Due Qualification. The Seller is duly qualified to do
business as a limited liability company in good standing, and has obtained
all necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of its property, the conduct of its business and the
performance of its obligations under this Agreement and the Basic
Documents requires such qualification.
(c) Power and Authority. The Seller has the power and
authority to execute and deliver this Agreement and to carry out its
terms; the Seller has full power and authority to sell and assign the
property to be sold and assigned to and deposited with the Trust and the
Seller has duly authorized such sale and assignment and deposit to the
Trust by all necessary action; and the execution, delivery and performance
of this Agreement has been duly authorized by the Seller by all necessary
action.
(d) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do
not conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time) a default
under, the certificate of formation or limited liability company agreement
of the Seller, or any material indenture, agreement or other instrument to
which the Seller is a party or by which it is bound; nor result in the
creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement or other instrument (other than
pursuant to the Basic Documents); nor violate any law or, to the best of
the Seller's knowledge, any order, rule or regulation applicable to the
Seller of any court or of any Federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Seller or its properties.
(e) No Consent Required. No consent, license, approval or
authorization or registration or declaration with, any Person or with any
governmental authority, bureau or agency is required in connection with
the execution, delivery or performance of this Agreement and the Basic
Documents, except for such as have been obtained, effected or made.
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(f) No Proceedings. There are no proceedings or investigations
pending or, to its knowledge threatened against it before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over it or its properties (A)
asserting the invalidity of this Agreement or any of the Basic Documents,
(B) seeking to prevent the issuance of the Certificates or the Notes or
the consummation of any of the transactions contemplated by this Agreement
or any of the Basic Documents, (C) seeking any determination or ruling
that might materially and adversely affect its performance of its
obligations under, or the validity or enforceability of, this Agreement or
any of the Basic Documents, or (D) seeking to adversely affect the federal
income tax or other federal, state or local tax attributes of the
Certificates.
SECTION 2.11 [Reserved]
SECTION 2.12 Covenants of the Certificateholders. Each
Certificateholder by becoming a holder of a Certificate agrees:
(a) to be bound by the terms and conditions of the
Certificates of which such Certificateholder is the beneficial owner and of this
Agreement, including any supplements or amendments hereto and to perform the
obligations of a Certificateholder as set forth therein or herein, in all
respects as if it were a signatory hereto. This undertaking is made for the
benefit of the Trust, the Owner Trustee, the Security Insurer and all other
Certificateholders present and future;
(b) to hereby appoint the Seller so long as it is a
Certificateholder as such Certificateholder's agent and attorney-in-fact to sign
any federal income tax information return filed on behalf of the Trust and agree
that, if requested by the Trust, it will sign such federal income tax
information return in its capacity as holder of an interest in the Trust. Each
Certificateholder also hereby agrees that in its tax returns it will not take
any position inconsistent with those taken in any tax returns filed by the
Trust;
(c) if such Certificateholder is other than an individual or
other entity holding its Certificate through a broker who reports securities
sales on Form 1099-B, to notify the Owner Trustee in writing of any transfer by
it of a Certificate in a taxable sale or exchange, within 30 days of the date of
the transfer; and
(d) until the completion of the events specified in Section
9.1(e), not to, for any reason, institute proceedings for the Trust to be
adjudicated as bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trust or a substantial part of its property, or cause or permit
the Trust to make any assignment for the benefit of its creditors, or admit in
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writing its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of any such
action.
SECTION 2.13 Federal Income Tax Allocations. Net income of the Trust
for any month as determined for Federal income tax purposes (and each item of
income, gain, loss, credit and deduction entering into the computation thereof)
shall be allocated:
(a) for so long as (i) all of the Trust Certificates are owned
by the Seller, the Trust shall be disregarded as an entity separate from the
Seller such that net income of the Trust for any month as determined solely for
federal income tax purposes (and each item of income, gain, loss, credit and
deduction entering into the computation thereof) shall be allocated to the
Seller and treated in the same manner as if the Trust were a division or branch
of the Seller; and
(b) in the event that the Seller transfers (as such term is
defined for federal income tax purposes) any Trust Certificates and there is
more than one owner of Trust Certificates for federal income tax purposes, net
income of the Trust for any month as determined solely for federal income tax
purposes (and each item of income, gain, loss, credit and deduction entering
into the computation thereof) shall be allocated pro rata to the
Certificateholders based on their Percentage Interests.
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.1 Initial Ownership. Upon the formation of the Trust by
the contribution by the Seller pursuant to Section 2.5 and until the issuance of
the Trust Certificates, the Seller shall be the sole beneficiary of the Trust.
SECTION 3.2 The Trust Certificates. The Trust Certificates shall be
issued in minimum denominations of 1% Percentage Interest in a single class. The
Trust Certificates shall be initially issued to the Seller in a Percentage
Interest of 100%. The Trust Certificates shall be executed on behalf of the
Trust by manual or facsimile signature of an authorized officer of the Owner
Trustee, and the Owner Trustee shall have the power and authority and it is
hereby authorized and empowered, in the name and on behalf of the Trust to
authorize, execute, issue and deliver the Trust Certificates. Trust Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures shall have been affixed, authorized to sign on behalf of
the Trust, shall be validly issued and entitled to the benefit of this
Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the authentication and delivery of such
Trust Certificates or did not hold such offices at the date of authentication
and delivery of such Trust Certificates. A transferee of a Trust Certificate
shall become a Certificateholder, and shall be entitled to the rights and
subject to the obligations
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of a Certificateholder hereunder, upon due registration of such Trust
Certificate in such transferee's name pursuant to Section 3.4.
SECTION 3.3 Authentication of Trust Certificates. Concurrently with
the initial sale of the Receivables to the Trust pursuant to the Sale and
Servicing Agreement, the Owner Trustee shall cause the Trust Certificates in an
aggregate Percentage Interest equal to 100% to be executed on behalf of the
Trust, authenticated and delivered to or upon the written order of the Seller,
signed by its chairman of the board, its president or any vice president,
without further corporate action by the Seller, in authorized denominations. No
Trust Certificate shall entitle its holder to any benefit under this Agreement,
or shall be valid for any purpose, unless there shall appear on such Trust
Certificate a certificate of authentication substantially in the form set forth
in Exhibit A, executed by the Owner Trustee or Bankers Trust Company as the
Owner Trustee's authentication agent, by manual signature; such authentication
shall constitute conclusive evidence that such Trust Certificate shall have been
duly authenticated and delivered hereunder. All Trust Certificates shall be
dated the date of their authentication.
SECTION 3.4 Registration of Transfer and Exchange of Trust
Certificates. The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 3.8, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Owner
Trustee shall provide for the registration of the Trust Certificates and of
transfers and exchanges of the Trust Certificates as herein provided. Bankers
Trust Company shall be the initial Certificate Registrar.
Upon surrender for registration of transfer of any Trust Certificate
at the office or agency maintained pursuant to Section 3.8, and, upon
satisfaction of the conditions set forth below, the Owner Trustee shall execute,
authenticate and deliver, (or shall cause Bankers Trust Company as its
authenticating agent to authenticate and deliver), in the name of the designated
transferee or transferees, one or more new Trust Certificates in authorized
denominations of a like Percentage Interest dated the date of authentication by
the Owner Trustee or any authenticating agent. At the option of a Holder, the
Trust Certificates may be exchanged for other Trust Certificates of the same
class in authorized denominations of a like Percentage Interest upon surrender
of the Trust Certificates to be exchanged at the office or agency maintained
pursuant to Section 3.8.
Every Trust Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the Certificateholder or his attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institution" meeting
the requirements of the Certificate Registrar, which requirements include
membership or participation in the Securities Transfer Agent's Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Certificate Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended. Each Trust
Certificate surrendered for registration of transfer or exchange
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shall be canceled and subsequently disposed of by the Owner Trustee in
accordance with its customary practice. In addition, each such Certificateholder
shall comply with Section 2.12(c)
No service charge shall be made for any registration of transfer or
exchange of Trust Certificates, but the Owner Trustee or the Certificate
Registrar may, but shall not be obligated to, require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Trust Certificates.
Notwithstanding the foregoing, the Owner Trustee need not make and
the Certificate Registrar need not register, transfers or exchanges of, Trust
Certificates for a period of 15 days preceding the due date for any payment with
respect to any Trust Certificates.
SECTION 3.5 Mutilated, Destroyed, Lost or Stolen Trust Certificates.
If (a) any mutilated Trust Certificate shall be surrendered to the Certificate
Registrar, or if the Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Trust Certificate and (b)
there shall be delivered to the Certificate Registrar, the Owner Trustee and
(unless an Insurer Default shall have occurred and be continuing) the Security
Insurer, such security or indemnity as may be required by them to save each of
them harmless, then in the absence of notice that such Trust Certificate shall
have been acquired by a protected purchaser, the Owner Trustee on behalf of the
Trust shall execute and the Owner Trustee or Bankers Trust Company, as the Owner
Trustee's authenticating agent, shall authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Trust Certificate, a
new Trust Certificate of like Percentage Interest. In connection with the
issuance of any new Trust Certificate under this Section, the Owner Trustee or
the Certificate Registrar may, but shall not be obligated to, require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Trust Certificate issued
pursuant to this Section shall constitute conclusive evidence of an ownership
interest in the Trust, as if originally issued, whether or not the lost, stolen
or destroyed Trust Certificate shall be found at any time.
SECTION 3.6 Persons Deemed Certificateholders. Every person by
virtue of becoming a Certificateholder in accordance with this Agreement shall
be deemed to be bound by the terms of this Agreement. Prior to due presentation
of a Trust Certificate for registration of transfer, the Owner Trustee, the
Certificate Registrar and the Security Insurer and any agent of the Owner
Trustee, the Certificate Registrar and the Security Insurer, may treat the
Person in whose name any Trust Certificate shall be registered in the
Certificate Register as the Holder of such Trust Certificate for the purpose of
receiving distributions pursuant to Section 5.2 and for all other purposes
whatsoever, and none of the Seller, the Servicer, the Owner Trustee, the
Certificate Registrar or the Security Insurer nor any agent of the Owner
Trustee, the Certificate Registrar, or the Security Insurer shall be bound by
any notice to the contrary.
SECTION 3.7 Access to List of Certificateholders' Names and
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
Servicer, the Seller or (unless an Insurer Default shall have occurred and be
continuing) the Security Insurer and the
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Representative within 15 days after receipt by the Owner Trustee of a request
therefore from the Servicer or the Representative in writing, a list, in such
form as the Servicer may reasonably require, of the names and addresses of the
Certificateholders as of the most recent Record Date. If three or more Holders
of Trust Certificates or one or more Holders of Trust Certificates evidencing
not less than a Percentage Interest of 25% apply in writing to the Owner
Trustee, and such application states that the applicants desire to communicate
with other Certificateholders with respect to their rights under this Agreement
or under the Trust Certificates and such application is accompanied by a copy of
the communication that such applicants propose to transmit, then the Owner
Trustee shall, within five Business Days after the receipt of such application,
afford such applicants access during normal business hours to the current list
of Certificateholders. Each Holder, by receiving and holding a Trust
Certificate, shall be deemed to have agreed not to hold any of the Seller, the
Servicer, the Representative, the Owner Trustee or the Security Insurer or any
agent thereof accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.
SECTION 3.8 Maintenance of Office or Agency. The Owner Trustee shall
maintain in the Borough of Manhattan, the City of New York, an office or offices
or agency or agencies where Trust Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Owner Trustee in respect of the Trust Certificates and the Basic Documents
may be served. The Owner Trustee initially designates Bankers Trust Company, 0
Xxxxxx Xxxxxx-00xx xxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its principal corporate
trust office for such purposes. The Owner Trustee shall give prompt written
notice to the Seller, the Certificateholders and (unless an Insurer Default
shall have occurred and be continuing) the Security Insurer of any change in the
location of the Certificate Register or any such office or agency.
SECTION 3.9 Appointment of Paying Agent. The Paying Agent shall make
distributions to the Certificateholders from the Certificate Distribution
Account pursuant to Section 5.2 and shall report the amounts of such
distributions to the Owner Trustee in writing, unless the Paying Agent is the
Owner Trustee. Any Paying Agent shall have the revocable power to withdraw funds
from the Certificate Distribution Account for the purpose of making the
distributions referred to above. The Owner Trustee may revoke such power and
remove the Paying Agent if the Owner Trustee determines in its sole discretion
that the Paying Agent shall have failed to perform its obligations under this
Agreement in any material respect. The Paying Agent shall initially be Bankers
Trust Company and any co-Paying Agent chosen by the Owner Trustee, and
acceptable to the Servicer and the Security Insurer. The Paying Agent shall be
permitted to resign upon 30 days' written notice to the Owner Trustee and the
Servicer. In the event that the Owner Trustee shall no longer be the Paying
Agent, the Owner Trustee shall appoint a successor to act as Paying Agent (which
shall be a bank or trust company). The Owner Trustee shall cause such successor
Paying Agent or any additional Paying Agent appointed by the Owner Trustee to
execute and deliver to the Owner Trustee an instrument in which such successor
Paying Agent or additional Paying Agent shall agree with the Owner Trustee that
as Paying Agent, such successor Paying Agent or additional Paying Agent will
hold all sums, if any, held by it for payment to the Certificateholders in trust
for the benefit of the
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Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders. The Paying Agent shall return all unclaimed funds to the
Owner Trustee and upon removal of a Paying Agent such Paying Agent shall also
return all funds in its possession to the Owner Trustee. The provisions of
Sections 7.1, 7.3, 7.4, 7.8, 8.1 and 8.2 shall apply to the Owner Trustee also
in its role as Paying Agent, for so long as the Owner Trustee shall act as
Paying Agent and, to the extent applicable, to any other Paying Agent appointed
hereunder. Any reference in this Agreement to the Paying Agent shall include any
co-Paying Agent unless the context requires otherwise.
SECTION 3.10 [Reserved]
SECTION 3.11 [Reserved]
SECTION 3.12 [Reserved]
SECTION 3.13 [Reserved]
SECTION 3.14 [Reserved]
SECTION 3.15 [Reserved]
SECTION 3.16 [Reserved]
SECTION 3.17 Trust Certificate Transfer Restrictions. (a) The Trust
Certificates may not be acquired by or for the account of (i) an employee
benefit plan (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) that is subject to the provisions of
Title 1 of ERISA, (ii) a plan described in Section 4975(e) (1) of the Code or
(iii) any entity whose underlying assets include plan assets by reason of such
plan's investment in the entity (each, a "Benefit Plan"). By accepting and
holding a Trust Certificate, the Holder thereof shall be deemed to have
represented and warranted that it is not a Benefit Plan. The Owner Trustee shall
have no duty to determine whether the Trust Certificates are owned by a Benefit
Plan.
(b) With the exception of the transfer to the Seller hereunder
and any transfer to FCC Receivables Corp., the Trust Certificates may not be
offered or sold except to Qualified Institutional Buyers in reliance on the
exemption from the registration requirements of the Securities Act provided by
Rule 144A thereunder.
Each purchaser of the Trust Certificates will be deemed to have
represented and agreed as follows:
(i) It is a Qualified Institutional Buyer as defined in Rule
144A promulgated under the Securities Act and is acquiring the Trust
Certificates for its own institutional account or for the account of
a Qualified Institutional Buyer.
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(ii) It understands that the Trust Certificates will be
offered in a transaction not involving any public offering within
the meaning of the Securities Act, and that, if in the future it
decides to resell, pledge or otherwise transfer any Trust
Certificates, such Trust Certificates may be resold, pledged or
transferred only (a) to the Issuer (upon redemption), (b) to a
person who the seller reasonably believes is a Qualified
Institutional Buyer that purchases for its own account or for the
account of a Qualified Institutional Buyer to whom notice is given
that the resale, pledge or transfer is being made in reliance on
Rule 144A or (c) pursuant to an effective registration statement
under the Securities Act.
(iii) It understands that the Trust Certificates will bear a
legend substantially to the following effect:
THE TRUST CERTIFICATES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES OR
"BLUE SKY" LAWS. THE HOLDER HEREOF, BY PURCHASING ANY TRUST CERTIFICATE,
AGREES FOR THE BENEFIT OF THE ISSUER THAT SUCH TRUST CERTIFICATE IS BEING
ACQUIRED FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TO DISTRIBUTION AND MAY
BE RESOLD, PLEDGED OR TRANSFERRED ONLY (1) TO THE ISSUER (UPON REDEMPTION
THEREOF OR OTHERWISE), (2) TO A PERSON THE TRANSFEROR REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (3) IN A
TRANSACTION COMPLYING WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER JURISDICTION.
NO INTEREST IN THIS TRUST CERTIFICATE MAY BE ACQUIRED BY OR FOR THE
ACCOUNT OF (i) AN "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED,
("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (ii) A
PLAN DESCRIBED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (INCLUDING, WITHOUT LIMITATION, INDIVIDUAL RETIREMENT ACCOUNTS
AND XXXXX PLANS), OR (iii) ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN
ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY. BY ACCEPTING AND
HOLDING THIS CERTIFICATE, THE HOLDER HEREOF AND THE
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CERTIFICATE OWNER SHALL EACH BE DEEMED TO HAVE REPRESENTED AND WARRANTED
THAT IT IS NOT A BENEFIT PLAN.
ARTICLE IV
Actions by Owner Trustee
SECTION 4.1 Prior Notice to Certificateholders with Respect to
Certain Matters. With respect to the following matters, the Owner Trustee shall
not take action unless at least 30 days before the taking of such action, the
Owner Trustee shall have notified the Certificateholders and the Security
Insurer in writing of the proposed action and neither the Certificateholders (in
accordance with Section 4.5) nor (so long as an Insurer Default shall not have
occurred) the Security Insurer shall have notified the Owner Trustee in writing
prior to the 30th day after such notice is given that it has withheld consent or
provided alternative direction (provided that no consent or direction of the
Certificateholders pursuant to this Section 4.1 shall be effective without the
consent of the Security Insurer):
(a) the initiation of any material claim or lawsuit by the
Trust except claims or lawsuits brought in connection with the collection of the
Receivables and the compromise of any material action, claim or lawsuit brought
by or against the Trust (except with respect to the aforementioned claims or
lawsuits for collection of the Receivables);
(b) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed under the
Business Trust Statute or unless such amendment would not materially and
adversely affect the interests of the Certificateholders);
(c) the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Noteholder or the Security Insurer is
required;
(d) the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Noteholder or the Security Insurer is
not required and such amendment materially and adversely affects the interest of
the Certificateholders or the Security Insurer;
(e) the amendment, change or modification of the Sale and
Servicing Agreement, except to cure any ambiguity or defect or to amend or
supplement any provision in a manner that would not materially and adversely
affect the interests of the Certificateholders;
(f) the consent to the calling, or waiver of any default of
any Basic Document;
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(g) the consent to the assignment by the Indenture Trustee or
the Servicer of their respective obligations under any Basic Document;
(h) except as provided in this Agreement dissolve, terminate
or liquidate the Trust in whole or in part;
(i) merge or consolidate the Trust with or into any other
entity, or convey or transfer all or substantially all of the Trust's assets to
any other entity;
(j) cause the Trust to incur, assume or guaranty any
indebtedness other than as set forth in this Agreement or the other Basic
Documents;
(k) perform any act that to the actual knowledge of a
Responsible Officer of the Owner Trustee conflicts with any of the Basic
Documents;
(l) perform any act which would make it impossible to carry on
the ordinary business of the Trust as described in this Agreement;
(m) confess a judgment against the Trust;
(n) cause the Trust to lend any funds to any entity;
(o) change the Trust's purpose and powers from those
enumerated in this Agreement; or
(p) possess Trust assets or assign the Trust's right to
property for other than a Trust purpose.
The Servicer shall notify the Certificateholders and the Security Insurer in
writing of any appointment of a successor Note Registrar, Certificate Paying
Agent or Certificate Registrar within five Business Days thereof.
SECTION 4.2 Action by Certificateholders with Respect to Certain
Matters. The Owner Trustee shall not have the power, except upon the direction
of the Controlling Party in accordance with the Basic Documents to (a) remove
the Servicer under the Sale and Servicing Agreement pursuant to Section 8.1
thereof or (b) except as expressly provided in the Basic Documents, sell the
Receivables after the termination of the Indenture. The Owner Trustee shall take
the actions referred to in the preceding sentence only upon written instructions
signed by the Certificateholders or the Controlling Party, as the case may be,
and the furnishing of indemnification satisfactory to the Owner Trustee by the
Certificateholders.
SECTION 4.3 Action by Certificateholders with Respect to Bankruptcy.
The Owner Trustee shall not have the power to, and shall not, commence a
voluntary proceeding in bankruptcy relating to the Trust without the prior
written consent of the Security Insurer (unless
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an Insurer Default shall have occurred and be continuing) and the delivery to
the Owner Trustee by each Certificateholder of a certificate certifying that it
reasonably believes that the Trust is insolvent.
SECTION 4.4 Restrictions on Certificateholders' Power. The
Certificateholders shall not direct the Owner Trustee to take or refrain from
taking any action if such action or inaction would be contrary to any obligation
of the Trust or the Owner Trustee under this Agreement or any of the Basic
Documents or would be contrary to Section 2.3 nor shall the Owner Trustee be
obligated to determine if a Certificateholder's direction violates this Section
4.4 or to follow any such direction, if given.
SECTION 4.5 Majority Control. Except as otherwise specifically
provided herein, any action that may be taken by the Certificateholders under
this Agreement may be taken by the Holders of Trust Certificates evidencing not
less than a majority of the Percentage Interests. Except as otherwise
specifically provided herein, any written notice of the Certificateholders
delivered pursuant to this Agreement shall be effective if signed by Holders of
Certificates evidencing not less than a majority of the Percentage Interests at
the time of the delivery of such notice.
SECTION 4.6 Rights of Security Insurer. Notwithstanding anything to
the contrary in the Basic Documents, without the prior written consent of the
Security Insurer (so long as no Insurer Default shall have occurred and be
continuing), the Owner Trustee shall not (i) initiate any claim, suit or
proceeding by the Trust or compromise any claim, suit or proceeding brought by
or against the Trust, other than with respect to the enforcement of any
Receivable or any rights of the Trust thereunder, (ii) authorize the merger or
consolidation of the Trust with or into any other business trust or other entity
(other than in accordance with Section 3.10 of the Indenture) or (iii) amend the
Certificate of Trust.
SECTION 4.7 Execution of Documents. Notwithstanding anything herein
to the contrary, the Owner Trustee is authorized, empowered and directed, on
behalf of the Trust, to execute, deliver, issue and authenticate the
Certificates, to execute, deliver and issue the Notes and to execute and deliver
each Basic Document to which the Trust or the Owner Trustee is or is to be a
party and any other document, instrument, certificate or other writing that may
be necessary, convenient or incidental thereto. Any such execution, delivery,
issuance and authentication is hereby ratified and confirmed in all respects and
does not and will be deemed not to conflict with, constitute or result in a
breach or violation of, or a default under, any provision of or any duty under
this Trust Agreement.
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ARTICLE V
Application of Trust Funds: Certain Duties
SECTION 5.1 Establishment of Certificate Distribution Account. (a)
The Owner Trustee, for the benefit of the Certificateholders and the Security
Insurer, shall establish and maintain in the name of the Trust an Eligible
Deposit Account (the "Certificate Distribution Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Certificateholders and the Security Insurer.
(b) The Owner Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Certificate Distribution Account
and in all proceeds thereof. If, at any time, the Certificate Distribution
Account ceases to be an Eligible Deposit Account, the Owner Trustee shall within
30 calendar days establish a new Certificate Distribution Account as an Eligible
Deposit Account and shall transfer or cause to be transferred any cash and/or
any investments to such new Certificate Distribution Account.
(c) All amounts held in the Certificate Distribution Account shall,
to the extent permitted by applicable laws, rules and regulations, be invested,
by the Owner Trustee at the Servicer's written direction (which may be by
standing instructions), in Eligible Investments that mature not later than one
Business Day prior to the Distribution Date for the Monthly Period to which such
amounts relate. Investments in Eligible Investments shall be made in the name of
the Trust, and such investments shall not be sold or disposed of prior to their
maturity. Subject to the other provisions hereof, the Owner 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 Owner Trustee. All Investment Earnings on funds in the
Certificate Distribution Account shall be distributed on the next Distribution
Date pursuant to Section 5.6 of the Sale and Servicing Agreement.
SECTION 5.2 Application of Funds in Certificate Distribution
Account. (a) On each Distribution Date, the Owner Trustee will cause the Paying
Agent to, based on the information contained in the Servicer's Certificate
delivered on the related Determination Date pursuant to Section 4.9 of the Sale
and Servicing Agreement, distribute pro rata to Certificateholders based on
their Percentage Interests, to the extent of the funds available, amounts
deposited in the Certificate Distribution Account pursuant to Sections 5.6(b) of
the Sale and Servicing Agreement on such Distribution Date.
(b) On each Distribution Date, the Owner Trustee shall cause the
Paying Agent to send to each Certificateholder the statement provided to the
Owner Trustee and the Paying Agent by the Servicer pursuant to Section 5.8 of
the Sale and Servicing Agreement on such Distribution Date.
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(c) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to a Certificateholder, such tax shall reduce
the amount otherwise distributable to the Certificateholder in accordance with
this Section. The Owner Trustee is hereby authorized and directed to retain from
amounts otherwise distributable to the Certificateholders sufficient funds for
the payment of any tax that is legally owed by the Trust (but such authorization
shall not prevent the Owner Trustee or any Certificateholder from contesting any
such tax in appropriate proceedings, and withholding payment of such tax, if
permitted by law, pending the outcome of such proceedings). The amount of any
withholding tax imposed with respect to a Certificateholder shall be treated as
cash distributed to such Certificateholder at the time it is withheld by the
Trust and remitted to the appropriate taxing authority. If there is a reasonable
possibility that withholding tax is payable with respect to a distribution (such
as a distribution to a non-US Certificateholder), the Owner Trustee may in it
sole discretion withhold such amounts in accordance with this clause (c). In the
event that a Holder wishes to apply for a refund of any such withholding tax,
the Owner Trustee shall reasonably cooperate with such Certificateholder in
making such claim so long as such Certificateholder agrees to reimburse the
Owner Trustee for any reasonable out-of-pocket expenses incurred. The Servicer
shall facilitate compliance with this Section 5.2(c) by performance of its
duties under the Sale and Servicing Agreement.
SECTION 5.3 [Reserved]
SECTION 5.4 Method of Payment. Subject to Section 9.1(c),
distributions required to be made to Certificateholders on any Distribution Date
in accordance with Section 5.2(b) shall be made to each Certificateholder of
record on the preceding Record Date either by wire transfer, in immediately
available funds, to the account of such Holder at a bank or other entity, if (i)
such Certificateholder shall have provided to the Certificate Registrar
appropriate written instructions at least five Business Days prior to such
Distribution Date or (ii) such Certificateholder is the Seller, or as set forth
in any written notice from the Seller to the Owner Trustee, an Affiliate
thereof, or, if not, by check mailed to such Certificateholder at the address of
such holder appearing in the Certificate Register. Notwithstanding the
foregoing, the final distribution in respect of any Trust Certificate (whether
on the Final Scheduled Distribution Date or otherwise) will be payable only upon
presentation and surrender of such Trust Certificate at the office or agency
maintained for that purpose by the Owner Trustee pursuant to Section 3.8.
SECTION 5.5 No Segregation of Monies; No Interest. Subject to
Sections 5.1 and 5.2, monies received by the Owner Trustee hereunder need not be
segregated in any manner except to the extent required by law and may be
deposited under such general conditions as may be prescribed by law. The Owner
Trustee shall not be liable for any interest thereon.
SECTION 5.6 Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue Service and Others. In accordance with
Sections 10.1(b)(iii) and 10.1(c) of the Sale and Servicing Agreement, the
Servicer shall (a) maintain (or cause to be maintained) the books of the Trust
on a year ended September 30 based on the accrual method of accounting, (b)
deliver (or cause to be delivered) to each Certificateholder, as may be required
by the Code and
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applicable Treasury Regulations, such information as may be required (including,
if applicable, Schedule K-1) to enable each Certificateholder to prepare its
Federal and state income tax returns, (c) prepare or cause to be prepared, and
file or cause to be filed, all tax returns, if any, relating to the Trust
(including, if applicable, a partnership information return, Form 1065), to make
such elections as may from time to time be required or appropriate under any
applicable state or Federal statute or rule or regulation thereunder so as to
maintain the Trust's characterization as a division or branch of its 100% owner,
or as a partnership, as the case may be, for Federal income tax purposes and (d)
collect or cause to be collected any withholding tax as described in and in
accordance with Section 5.2(c) with respect to income or distributions to the
Certificateholders. The Servicer shall make all elections pursuant to this
Section as directed by the Seller. The Owner Trustee shall, on behalf of the
Trust and upon written direction of the Servicer, sign all tax information
returns furnished to it in execution form by the Servicer, and filed pursuant to
this Section 5.6 and any other returns as may be required by law and so
furnished to it by the Servicer, and in doing so shall rely entirely upon, and
shall have no liability for information provided by, or calculations provided
by, the Servicer. In the event the Trust is characterized as a partnership for
federal income tax purposes, the Servicer shall cause the Trust to elect under
Section 1278 of the Code to include in income currently any market discount that
accrues with respect to the Receivables, and the Trust shall not make the
election provided under Section 754 of the Code.
SECTION 5.7 Signature on Returns; Tax Matters Partner. (a)
Notwithstanding the provisions of Section 5.6, the Owner Trustee shall sign on
behalf of the Trust the tax returns of the Trust, if any, furnished to it in
execution form by the Servicer, unless applicable law requires a
Certificateholder to sign such documents, in which case such documents shall be
signed by the Seller so long as it is a Certificateholder, in its capacity as
"tax matters partner."
(b) In the event the Trust is characterized as a partnership
for federal income tax purposes, and the Seller is a Certificateholder, the
Seller shall be the "tax matters partner" of the Trust pursuant to the Code.
ARTICLE VI
Authority and Duties of Owner Trustee
SECTION 6.1 General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is named
as a party and each certificate or other document presented in connection
therewith attached as an exhibit to or contemplated by the Basic Documents to
which the Trust is named as a party and any amendment thereto, in each case, in
such form as the Seller shall approve as evidenced conclusively by the Owner
Trustee's execution thereof, and on behalf of the Trust, to direct the Trustee
to authenticate and deliver Class A-1 Notes in the aggregate principal amount of
$66,500,000 and Class A-2 Notes in the aggregate principal amount of
$40,023,000. In addition to the foregoing, the Owner Trustee is authorized, but
shall not be obligated, to take all actions
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required of the Trust pursuant to the Basic Documents. The Owner Trustee is
further authorized from time to time to take such action as the Servicer
recommends to it in writing with respect to the Basic Documents.
SECTION 6.2 General Duties. It shall be the duty of the Owner
Trustee to discharge (or cause to be discharged) all of its responsibilities
pursuant to the terms of this Agreement and the Basic Documents to which the
Trust is a party and to administer the Trust in the interest of the
Certificateholders, subject to the Basic Documents and in accordance with the
provisions of this Agreement. Notwithstanding the foregoing, the Owner Trustee
shall be deemed to have discharged its duties and responsibilities hereunder and
under the Basic Documents to the extent the Servicer has agreed in the Sale and
Servicing Agreement, or the Seller has agreed hereunder or thereunder, to
perform any act or to discharge any duty of the Owner Trustee hereunder or of
the Trust under any Basic Document, and the Owner Trustee shall not be liable
for the default or failure of the Servicer or the Seller to carry out its
obligations hereunder or thereunder.
SECTION 6.3 Action upon Instruction. (a) Subject to Article IV, the
Security Insurer (so long as an Insurer Default shall not have occurred and be
continuing) or the Certificateholders (if an Insurer Default shall have occurred
and be continuing) (the "Instructing Party") shall have the exclusive right to
direct the actions of the Owner Trustee in the management of the Trust. Such
direction may be exercised at any time by written instruction of the
Certificateholders pursuant to Article IV.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Basic Document if the Owner Trustee shall have reasonably
determined, or shall have been advised by counsel, that such action is likely to
result in liability on the part of the Owner Trustee or is contrary to the terms
hereof or of any Basic Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any Basic Document, the Owner Trustee shall promptly give notice
(in such form as shall be appropriate under the circumstances) to the
Instructing Party requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction of the Instructing Party received, the Owner
Trustee shall not be liable on account of such action to any Person. If the
Owner Trustee shall not have received appropriate instruction within 10 days of
such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the Basic Documents, as it shall deem to be
in the best interests of the Certificateholders and the Security Insurer, and
shall have no liability to any Person for such action or inaction.
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(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Basic Document or any such
provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the Instructing
Party requesting instruction and, to the extent that the Owner Trustee acts or
refrains from acting in good faith in accordance with any such instruction
received, the Owner Trustee shall not be liable, on account of such action or
inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or refrain
from taking such action, not inconsistent with this Agreement or the Basic
Documents, as it shall deem to be in the best interests of the
Certificateholders and the Security Insurer, and shall have no liability to any
Person for such action or inaction.
SECTION 6.4 No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 6.3; and no implied duties or obligations
shall be read into this Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or continuation or termination statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder or to prepare or file any Securities and Exchange
Commission filing for the Trust or to record this Agreement or any Basic
Document. The Owner Trustee nevertheless agrees that it will, at its own cost
and expense, promptly take all action as may be necessary to discharge any Liens
on any part of the Owner Trust Estate that result from actions by, or claims
against, the Owner Trustee (solely in its individual capacity) and that are not
related to the ownership or the administration of the Owner Trust Estate.
SECTION 6.5 No Action Except under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in accordance with the Basic Documents
or (iii) in accordance with any document or instruction delivered to the Owner
Trustee pursuant to Section 6.3.
SECTION 6.6 Restrictions. The Owner Trustee shall not take any
action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.3 or (b) that, to the actual knowledge of the Owner Trustee, would
result in the Trust's becoming taxable as a corporation
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for Federal income tax purposes. The Certificateholders shall not direct the
Owner Trustee to take action that would violate the provisions of this Section.
SECTION 6.7 Notice of Default Under Indenture. Within 10 business
days of receipt of a written notice of Default under the Indenture by a
Responsible Officer of the Owner Trustee, the Owner Trustee shall provide a copy
of such notice to each Certificateholder.
ARTICLE VII
Concerning the Owner Trustee
SECTION 7.1. Acceptance of Trusts and Duties. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts but only upon the terms of this Agreement. The Owner
Trustee in its individual capacity also agrees to disburse all moneys actually
received by it constituting part of the Owner Trust Estate upon the terms of the
Basic Documents and this Agreement. The Owner Trustee in its individual capacity
shall not be answerable or accountable hereunder or under any Basic Document
under any circumstances, except (i) for its own willful misconduct, bad faith or
negligence (ii) in the case of the breach of any representation or warranty
contained in Section 7.3 expressly made by the Owner Trustee, in its individual
capacity, (iii) for liabilities arising from the failure of the Owner Trustee to
perform obligations expressly undertaken by it in the last sentence of Section
6.4 hereof, (iv) for any investments issued by the Owner Trustee or any branch
or affiliate thereof in its commercial capacity or (v) for taxes, fees or other
charges on, based on or measured by, any fees, commissions or compensation
received by the Owner Trustee in its individual capacity. In particular, but not
by way of limitation (and subject to the exceptions set forth in the preceding
sentence):
(a) the Owner Trustee shall not be liable for any error of
judgment made by a Responsible Officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the instructions of
the Servicer, the Seller, the Controlling Party, the Security Insurer or any
Certificateholder;
(c) no provision of this Agreement or any Basic Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers hereunder
or under any Basic Document if the Owner Trustee shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable
for indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes or the Certificates;
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(e) the Owner Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the due
execution hereof by the Seller or for the form, character, genuineness,
sufficiency, value or validity of any of the Owner Trust Estate or for or in
respect of the validity or sufficiency of the Basic Documents, other than the
certificate of authentication on the Trust Certificates, and the Owner Trustee
shall in no event assume or incur any liability, duty or obligation to the
Seller, the Servicer, the Representative, the Security Insurer, the Trustee, the
Indenture Collateral Agent, any Noteholder or to any Certificateholder, other
than as expressly provided for herein and in the Basic Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Representative, the Security Insurer, the Trustee, the
Servicer, the Certificateholders or the Seller under any of the Basic Documents
or otherwise and the Owner Trustee shall have no obligation or liability to
insure compliance by the Representative, the Security Insurer, the Servicer, the
Certificateholders or the Seller with any agreement to which it is a party or to
perform the obligations of the Trust under this Agreement or the Basic Documents
that are required to be performed by the Trustee under the Indenture, the
Servicer under the Sale and Servicing Agreement or the Seller under this
Agreement; and
(g) the Owner Trustee shall be under no obligation to
institute, conduct or defend any litigation under this Agreement or otherwise or
in relation to this Agreement or any Basic Document, at the request, order or
direction of any of the Certificateholders, unless such Certificateholders have
offered to the Owner Trustee security or indemnity satisfactory to it against
the costs, expenses and liabilities that may be incurred by the Owner Trustee
therein or thereby. The right of the Owner Trustee to perform any discretionary
act enumerated in this Agreement or in any Basic Document shall not be construed
as a duty, and, the Owner Trustee shall not be answerable for other than its
negligence, bad faith or willful misconduct in the performance of any such act.
SECTION 7.2 Furnishing of Documents. The Owner Trustee shall furnish
to the Certificateholders promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.
SECTION 7.3 Representations and Warranties. The Owner Trustee in its
individual capacity hereby represents and warrants to the Seller, the Security
Insurer, the Representative, and for the benefit of the Certificateholders,
that:
(a) It is a Delaware banking corporation, duly organized and
validly existing in good standing under the laws of the State of Delaware and
having an office within the State of Delaware. It has all requisite corporate
power and authority to execute, deliver and perform its obligations under this
Agreement.
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(b) It has taken all corporate action necessary to authorize
the execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated hereby
nor compliance by it with any of the terms or provisions hereof will contravene
any federal or Delaware state law, governmental rule or regulation governing the
banking or trust powers of the Owner Trustee or any judgment or order binding on
it, or constitute any default under its charter documents or by-laws.
SECTION 7.4 Reliance; Advice of Counsel. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper reasonably believed by it to be genuine and believed by it to
be signed by the proper party or parties. The Owner Trustee may accept a duly
certified copy of a resolution of the board of directors or other governing body
of any corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the method of the determination of which is not specifically
prescribed herein, the Owner Trustee may for all purposes hereof conclusively
rely on a certificate, signed by the president or any vice president or by the
treasurer, secretary or other authorized officers of the relevant party, as to
such fact or matter, and such certificate shall constitute full protection to
the Owner Trustee for any action reasonably taken or omitted to be taken by it
in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder
and in the performance of its duties and obligations under this Agreement or the
Basic Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the written opinion or advice of any such
counsel, accountants or other such persons and not contrary to this Agreement or
any Basic Document herein.
SECTION 7.5 Not Acting in Individual Capacity. Except as provided
herein or in any other Basic Document, in accepting the trusts hereby created
Bankers Trust (Delaware) acts solely as Owner Trustee hereunder and not in its
individual capacity and all Persons having any claim against the Owner Trustee
by reason of the transactions contemplated by this Agreement or any Basic
Document shall look only to the Owner Trust Estate for payment or satisfaction
thereof.
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SECTION 7.6 Owner Trustee Not Liable for Trust Certificates or
Receivables. The recitals contained herein and in the Trust Certificates (other
than the signature and countersignature of the Owner Trustee on the Trust
Certificates) shall be taken as the statements of the Seller and the Owner
Trustee assumes no responsibility for the correctness thereof. The Owner Trustee
makes no representations as to the validity or sufficiency of this Agreement, of
any Basic Document or of the Trust Certificates (other than the signature and
countersignature of the Owner Trustee on the Trust Certificates) or the Notes,
or of any Receivable or related documents. The Owner Trustee shall at no time
have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Receivable, or the perfection and priority of
any security interest created by any Receivable in any Financed Vehicle or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Owner Trust Estate or its ability to generate the payments to
be distributed to the Certificateholders under this Agreement or the Noteholders
under the Indenture, including, without limitation: the existence, condition and
ownership of any Financed Vehicle; the existence and enforceability of any
insurance thereon; the existence and contents of any Receivable or any computer
or other record thereof; the validity of the assignment of any Receivable to the
Trust or of any intervening assignment; the completeness of any Receivable; the
performance or enforcement of any Receivable; the compliance by the Seller or
the Servicer with any warranty or representation made under any Basic Document
or in any related document or the accuracy of any such warranty or
representation or any action of the Trustee or the Servicer or any subservicer
taken in the name of the Owner Trustee.
SECTION 7.7 Owner Trustee May Own Trust Certificates and Notes. The
Owner Trustee in its individual or any other capacity may become the owner or
pledgee of Trust Certificates or Notes and may deal with the Seller, the Trustee
and the Servicer in banking transactions with the same rights as it would have
if it were not Owner Trustee.
SECTION 7.8 Payments from Owner Trust Estate. All payments to be
made by the Owner Trustee under this Agreement or any of the Basic Documents to
which the Trust or the Owner Trustee is a party shall be made only from the
income and proceeds of the Owner Trust Estate and only to the extent that the
Owner Trust shall have received income or proceeds from the Owner Trust Estate
to make such payments in accordance with the terms hereof. Bankers Trust
(Delaware), or any successor thereto, in its individual capacity, shall not be
liable for any amounts payable under this Agreement or any of the Basic
Documents to which the Trust or the Owner Trustee is a party.
SECTION 7.9 Doing Business in Other Jurisdictions. Notwithstanding
anything contained to the contrary, neither Bankers Trust (Delaware) or any
successor thereto, nor the Owner Trustee shall be required to take any action in
any jurisdiction other than in the State of Delaware if the taking of such
action will, even after the appointment of a co-trustee or separate trustee in
accordance with Section 10.5 hereof, (i) require the consent or approval or
authorization or order of or the giving of notice to, or the registration with
or the taking of any other action in respect of, any state or other governmental
authority or agency of any jurisdiction other than the State of Delaware, unless
the Certificateholder shall have given the Owner Trustee
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an indemnity therefor reasonably satisfactory to it; (ii) result in any fee, tax
or other governmental charge under the laws of the State of Delaware becoming
payable by Bankers Trust (Delaware) (or any successor thereto, unless the
Certificateholder shall have given the Owner Trustee an indemnity therefor
reasonably satisfactory to it); or (iii) subject Bankers Trust (Delaware) (or
any successor thereto) to personal jurisdiction in any jurisdiction other than
the State of Delaware for causes of action arising from acts unrelated to the
consummation of the transactions by Bankers Trust (Delaware) (or any successor
thereto) or the Owner Trustee, as the case may be, contemplated hereby.
ARTICLE VIII
Compensation of Owner Trustee
SECTION 8.1 Owner Trustee's Fees and Expenses. The Owner Trustee
shall receive from Franklin Capital Corporation as compensation for its services
hereunder such fees as have been separately agreed upon before the date hereof
between Franklin Capital Corporation and the Owner Trustee, and the Owner
Trustee shall be entitled to be reimbursed by Franklin Capital Corporation for
its other reasonable expenses hereunder, including the reasonable compensation,
expenses and disbursements of such agents, representatives, experts and counsel
as the Owner Trustee may employ.
SECTION 8.2 Indemnification. The Seller shall be liable as primary
obligor for, and shall indemnify the Owner Trustee, the Certificate Registrar,
the Paying Agent and their successors, assigns, agents and servants
(collectively, the "Indemnified Parties") from and against, any and all
liabilities, obligations, losses, damages, taxes, claims, actions and suits of
any kind and nature whatsoever, and any and all reasonable costs, expenses and
disbursements (including reasonable legal fees and expenses) related thereto
(collectively, "Expenses") which may at any time be imposed on, incurred by, or
asserted against the Owner Trustee or any Indemnified Party in any way relating
to or arising out of this Agreement, the Basic Documents, the Owner Trust
Estate, the administration of the Owner Trust Estate or the action or inaction
of the Owner Trustee hereunder, except only that the Seller shall not be liable
for or required to indemnify the Owner Trustee from and against Expenses arising
or resulting from any of the matters described in the third sentence of Section
7.1. The indemnities contained in this Section shall survive the resignation or
termination of the Owner Trustee or the termination of this Agreement.
SECTION 8.3 Payments to the Owner Trustee. Any amounts paid to the
Owner Trustee pursuant to this Article VIII shall be deemed not to be a part of
the Owner Trust Estate immediately after such payment.
SECTION 8.4 Non-recourse Obligations. Notwithstanding anything in
this Agreement or any Basic Document, the Owner Trustee agrees in its individual
capacity and in its capacity as Owner Trustee for the Trust that all obligations
of the Trust to the Owner Trustee
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individually or as Owner Trustee for the Trust shall be recourse to the Owner
Trust Estate only and specifically shall not be recourse to the assets of any
Certificateholder.
ARTICLE IX
Dissolution and Termination of Trust
SECTION 9.1 Termination of Trust Agreement. (a) This Agreement and
the Trust shall terminate and be of no further force or effect upon the latest
of (i) the maturity or other liquidation of the last Receivable (including the
purchase by the Servicer at its option of the corpus of the Trust as described
in Section 9.1 of the Sale and Servicing Agreement) and the subsequent
distribution of amounts in respect of such Receivables as provided in the Basic
Documents or (ii) the payment to the Certificateholders of all amounts required
to be paid to them pursuant to this Agreement and the payment to the Security
Insurer of all amounts payable or reimbursable to it, provided, however, that in
no event shall the trust created by this Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living on the date of this Agreement of Xxxx Xxxxxxx of the Commonwealth of
Massachusetts; and provided, further, that the rights to indemnification under
Section 8.2 shall survive the termination of the Trust. The Servicer shall
promptly notify the Owner Trustee and the Security Insurer of any prospective
termination pursuant to this Section 9.1. The bankruptcy, liquidation,
dissolution, death or incapacity of any Certificateholder, or Holder, shall not
(x) operate to terminate this Agreement or the Trust, nor (y) entitle such
Certificateholder's or Holder's legal representatives or heirs to claim an
accounting or to take any action or proceeding in any court for a partition or
winding up of all or any part of the Trust or Owner Trust Estate nor (z)
otherwise affect the rights, obligations and liabilities of the parties hereto.
(b) Except as provided in clause (a), neither the Seller nor
any Certificateholder shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Distribution Date upon which the Certificateholders shall surrender their Trust
Certificates to the Paying Agent for payment of the final distribution and
cancellation, shall be given by the Owner Trustee by letter to the
Certificateholders mailed within five Business Days of receipt of notice of such
termination from the Servicer given pursuant to Section 9.1(c) of the Sale and
Servicing Agreement, stating (i) the Distribution Date upon or with respect to
which final payment of the Trust Certificates shall be made upon presentation
and surrender of the Trust Certificates at the office of the Paying Agent
therein designated, (ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the Trust
Certificates at the office of the Paying Agent therein specified. The Owner
Trustee shall give such notice to the Certificate Registrar (if other than the
Owner Trustee) and the Paying Agent (if other than the Owner Trustee) at the
time such notice is given to the Certificateholders. Upon presentation and
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surrender of the Trust Certificates, the Paying Agent shall cause to be
distributed to the Certificateholders amounts distributable on such Distribution
Date pursuant to Section 5.2.
In the event that all of the Certificateholders shall not have
surrendered their Trust Certificates for cancellation within six months after
the date specified in the above mentioned written notice, the Owner Trustee
shall give a second written notice to the remaining Certificateholders to
surrender their Trust Certificates for cancellation and receive the final
distribution with respect thereto. If within one year after the second notice
all the Trust Certificates shall not have been surrendered for cancellation, the
Owner Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Trust Certificates, and the cost thereof shall be paid by the
Seller from the funds and other assets that shall remain subject to this
Agreement. Any funds remaining in the Trust after exhaustion of such remedies
shall be distributed, subject to applicable escheat laws, by the Owner Trustee
to the Seller. The Certificateholders shall thereafter look solely to the Seller
as general unsecured creditors.
(d) Any funds remaining in the Trust after funds for final
distribution have been distributed or set aside for distribution shall be
distributed by the Owner Trustee to the Seller.
(e) Upon dissolution and completion of the winding up of the
Trust, the Owner Trustee shall cause the Certificate of Trust to be canceled by
filing a certificate of cancellation with the Secretary of State in accordance
with the provisions of Section 3810 of the Business Trust Statute and thereupon
the Trust and this Agreement shall terminate.
SECTION 9.2 [Reserved]
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
SECTION 10.1 Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation (i) satisfying the provisions of
Section 3807(a) of the Business Trust Statute; (ii) authorized to exercise
corporate trust powers; and (iii) having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by Federal or State
authorities. If such corporation shall publish reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Owner Trustee shall cease to be eligible in accordance with
the provisions of this Section, the Owner Trustee shall resign immediately in
the manner and with the effect specified in Section 10.2. In addition, at all
times the Owner Trustee or a co-trustee shall be a person that satisfies the
requirements of Section 3807(a) of the Business Trustee Statute (the "Delaware
Trustee").
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SECTION 10.2 Resignation or Removal of Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Servicer and the Security Insurer. Upon
receiving such notice of resignation, the Servicer shall promptly appoint a
successor Owner Trustee acceptable to the Security Insurer (so long as an
Insurer Default shall not have occurred) by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Owner Trustee
and one copy to the successor Owner Trustee, provided that the Servicer shall
have received written confirmation from each of the Rating Agencies that the
proposed appointment will not result in an increased capital charge to the
Security Insurer by either of the Rating Agencies. If no successor Owner Trustee
shall have been so appointed and have accepted appointment within 30 days after
the giving of such notice of resignation, the resigning Owner Trustee or the
Security Insurer (so long as an Insurer Default shall not have occurred) may
petition any court of competent jurisdiction for the appointment of a successor
Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the Servicer, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Owner Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Servicer with the consent of the Security Insurer, or the
Security Insurer (in each case, so long as an Insurer Default shall not have
occurred) may remove the Owner Trustee. If the Servicer shall remove the Owner
Trustee under the authority of the immediately preceding sentence, the Servicer
shall promptly appoint a successor Owner Trustee acceptable to the Security
Insurer by written instrument, in triplicate, one copy of which instrument shall
be delivered to the outgoing Owner Trustee so removed, one copy to the Security
Insurer and one copy to the successor Owner Trustee and shall pay all fees owed
to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.3 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Servicer shall provide notice of such
resignation or removal of the Owner Trustee to each of the Rating Agencies.
SECTION 10.3 Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the
Servicer, the Security Insurer and to its predecessor Owner Trustee an
instrument accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee shall become effective
and such successor Owner Trustee, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and obligations of
its predecessor under this Agreement, with like effect as if originally named as
Owner Trustee. The predecessor Owner Trustee shall upon payment of its fees and
expenses deliver to the successor Owner Trustee all documents and statements and
monies held by it under this Agreement and the
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Servicer and the predecessor Owner Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Owner Trustee all such rights,
powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section, the Servicer shall mail notice thereof to all
Certificateholders, the Security Insurer, the Trustee, the Noteholders and the
Rating Agencies. If the Servicer shall fail to mail such notice within 10 days
after acceptance of appointment by the successor Owner Trustee, the successor
Owner Trustee shall cause such notice to be mailed at the expense of the
Servicer.
SECTION 10.4 Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder; provided, however, that such corporation shall be eligible pursuant
to Section 10.1, without the execution or filing of any instrument or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; and provided further that the Owner Trustee shall mail
notice of such merger, sale, conversion or consolidation to the Rating Agencies.
SECTION 10.5 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Financed Vehicle may at the time be located,
the Servicer and the Owner Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Owner Trustee and the Security Insurer (so long as an Insurer Default shall
not have occurred) to act as co-trustee, jointly with the Owner Trustee, or
separate trustee or separate trustees, of all or any part of the Owner Trust
Estate, and to vest in such Person, in such capacity, such title to the Owner
Trust Estate, or any part thereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the Servicer and
the Owner Trustee may consider necessary or desirable. If the Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request so to do, the Owner Trustee subject, unless an Insurer Default shall
have occurred and be continuing, to the approval of the Security Insurer (which
approval shall not be unreasonably withheld) alone shall have the power to make
such appointment. No co-trustee or separate trustee under this Agreement shall
be required to meet the terms of eligibility as a successor trustee pursuant to
Section 10.1 and no notice of the appointment of any co-trustee or separate
trustee shall be required pursuant to Section 10.3.
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Each separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Owner Trustee shall be conferred upon and
exercised or performed by the Owner Trustee and such separate
trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately
without the Owner Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act
or acts are to be performed, the Owner Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction)
shall be exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under
this Agreement; and
(iii) the Servicer and the Owner Trustee acting jointly
may at any time accept the resignation of or remove any separate
trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Servicer and the Security Insurer.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
ARTICLE XI
Miscellaneous
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SECTION 11.1 Supplements and Amendments. (a) This Agreement may be
amended by the Seller and the Owner Trustee, with the prior written consent of
the Security Insurer (so long as an Insurer Default shall not have occurred and
be continuing) and with prior written notice to the Rating Agencies, without the
consent of any of the Noteholders or the Certificateholders (i) to cure any
ambiguity, to correct any defect or supplement any provisions in this Agreement
which may be inconsistent with any other provision herein, to comply with any
changes in the Code, or to make any other provisions with respect to matters or
questions arising under this Agreement which shall not be inconsistent with the
provisions of this Agreement or the Insurance Agreement; provided, however, that
such action shall not, adversely affect in any material respect the interests of
any Noteholder; provided further that such action shall not adversely affect in
any material respect the interests of any Certificateholder without the consent
of the Holders of Certificates evidencing not less than a majority in Percentage
Interest; and provided further that if an Insurer Default has occurred and is
continuing and the Security Insurer has not consented to such action, such
action shall not materially and adversely affect the interest of the Security
Insurer. An amendment shall be deemed not to adversely affect the interests of
any Noteholder in any material respect if either each Rating Agency confirms in
writing that such amendment will not result in a reduction or withdrawal of such
rating or none of Rating Agencies, within 10 days' after receipt of notice of
such amendment, shall have notified the Seller, the Servicer or the Issuer in
writing that such amendment will result in a reduction or withdrawal of the then
current rating of the Notes.
(b) This Agreement may also be amended from time to time, with
the prior written consent of the Security Insurer (so long as an Insurer Default
shall not have occurred and be continuing), by the Seller and the Owner Trustee,
with prior written notice to the Rating Agencies, with the consent of the
Holders of Notes evidencing not less than a majority of the Outstanding Amount
of the Notes and, to the extent the Certificates are affected thereby, the
consent of the Holders of Certificates evidencing not less than a majority in
Percentage Interest 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 subject to the express rights of the Security Insurer
under the Basic Documents, no such amendment shall (i) 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, (ii) reduce the
aforesaid percentage of the Outstanding Amount of the Notes and the Percentage
Interest required to consent to any such amendment, without the consent of the
Holders of all the outstanding Notes and Holders of all outstanding Certificates
or (iii) if an Insurer Default shall have occurred and be continuing, and the
Security Insurer has not consented to such action, such action shall not
adversely affect in any material respect the interests of the Security Insurer.
Promptly after the execution of any such amendment or consent, the
Servicer shall furnish written notification of the substance of such amendment
or consent to each Certificateholder, the Trustee and each of the Rating
Agencies.
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(c) It shall not be necessary for the consent of the
Certificateholders, the Noteholders or the Trustee pursuant to this Section to
approve the particular form of any proposed amendment or consent, but it shall
be sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents (and any other consents of the Certificateholders
provided for in this Agreement or in any other Basic Document) and of evidencing
the authorization of the execution thereof by the Certificateholders shall be
subject to such reasonable requirements as the Owner Trustee may prescribe.
(d) Promptly after the execution of any amendment to the
Certificate of Trust, the Owner Trustee shall cause the filing of such amendment
with the Secretary of State.
(e) Prior to the execution of any amendment to this Agreement
or the Certificate of Trust, the Owner 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. The Owner
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise. The Servicer shall furnish copies of any such amendments
to this Agreement to each Rating Agency and the Security Insurer.
SECTION 11.2 No Legal Title to Owner Trust Estate in
Certificateholders. The Certificateholders shall not have legal title to any
part of the Owner Trust Estate. The Certificateholders shall be entitled to
receive distributions with respect to their undivided beneficial ownership
interest therein only in accordance with Articles V and IX. No transfer, by
operation of law or otherwise, of any right, title or interest of the
Certificateholders to and in their ownership interest in the Owner Trust Estate
shall operate to terminate this Agreement or the trusts hereunder or entitle any
transferee to an accounting or to the transfer to it of legal title to any part
of the Owner Trust Estate.
SECTION 11.3 Limitations on Rights of Others. Except for Section
2.7, the provisions of this Agreement are solely for the benefit of the Owner
Trustee, the Security Insurer, the Seller, the Certificateholders, the Servicer
and, to the extent expressly provided herein, the Trustee and the Noteholders,
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 11.4 Notices. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt personally delivered, delivered by overnight courier
or mailed certified mail, return receipt requested and shall be deemed to have
been duly given upon receipt, if to the Owner Trustee, addressed to the
Corporate Trust Office; if to the Seller, addressed to 00 Xxxx 000 Xxxxx, Xxxxx
000, Xxxx Xxxx Xxxx, XX 00000, Attention Xxxxxxxx X. Xxxx, with a copy to
Franklin Resources, Inc., 000 Xxxxxxxx Xxxxxx Xxxx., Xxx Xxxxx, XX 00000,
Attention: General Counsel; if to the
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Security Insurer, addressed to MBIA Insurance Corporation, 000 Xxxx Xxxxxx,
Xxxxxx, XX 00000, Attention: Insured Portfolio Management SF; or, as to each
party, at such other address as shall be designated by such party in a written
notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.
SECTION 11.5 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 11.6 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 11.7 Successors and Assigns. This Agreement shall inure to
the benefit of, the Representative, the Security Insurer, the Owner Trustee and
its successors, each Certificateholder and its successors and permitted assigns
and be binding upon the parties hereto and their respective successors and
permitted assigns. Any request, notice, direction, consent, waiver or other
instrument or action by a Certificateholder shall bind the successors and
assigns of such Certificateholder. Except as otherwise provided in this
Agreement, no other Person shall have any right or obligation hereunder. Without
limiting the generality of the foregoing, all covenants and agreements in this
Agreement which confer rights upon the Security Insurer shall be for the benefit
of and run directly to the Security Insurer, and the Security Insurer shall be
entitled to rely on and enforce such covenants, subject, however, to the
limitations on such rights provided in this Agreement and the Basic Documents.
The Security Insurer may disclaim any of its rights and powers under this
Agreement (but not its duties and obligations under the Note Policy) upon
delivery of a written notice to the Owner Trustee.
SECTION 11.8 [Reserved]
SECTION 11.9 No Petition. The Owner Trustee (not in its individual
capacity but solely as Owner Trustee), by entering into this Agreement, each
Certificateholder, by accepting a Trust Certificate, and the Trustee and each
Noteholder by accepting the benefits of this Agreement, hereby covenant and
agree that they will not at any time institute against the Seller, or join in
any institution against the Seller of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States Federal or state bankruptcy or similar law in connection with
any obligations relating to the Trust Certificates, the Notes, this Agreement or
any of the Basic Documents.
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SECTION 11.10 No Recourse. Each Certificateholder by accepting a
Trust Certificate acknowledges that such Certificateholder's Trust Certificates
represent beneficial ownership interests in the Trust only and do not represent
interests in or obligations of the Seller, the Servicer, the Owner Trustee, the
Trustee, the Security Insurer or any Affiliate thereof and no recourse by such
Certificateholder may be had against such parties or their assets, except as may
be expressly set forth or contemplated in this Agreement, the Trust Certificates
or the Basic Documents.
SECTION 11.11 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 11.12 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, 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 11.13 [Reserved]
SECTION 11.14 Servicer. The Servicer is authorized to prepare, or
cause to be prepared, execute and deliver on behalf of the Trust all such
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Trust or the Owner Trustee to prepare, file or deliver
pursuant to the Basic Documents. Upon written request, the Owner Trustee shall
execute and deliver to the Servicer a limited power of attorney appointing the
Servicer the Trust's agent and attorney-in-fact to prepare, or cause to be
prepared, execute and deliver all such documents, reports, filings, instruments,
certificates and opinions.
SECTION 11.15. Third Party Beneficiary. The Security Insurer shall
be a third party beneficiary hereof and, except as expressly limited by the
terms hereof, so long as no Insurer Default constituting a failure to pay under
the Note Policy shall have occurred and be continuing, shall be entitled to
enforce the provisions hereof as if a party hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized as of the day and year first above written.
BANKERS TRUST (DELAWARE),
as Owner Trustee
By: /s/ M. Xxxx Xxxxxxx
______________________________
Name: M. Xxxx Xxxxxxx
Title: Assistant Secretary
FRANKLIN RECEIVABLES LLC,
as Seller
By: FRANKLIN CAPITAL CORPORATION
its managing member
By: /s/ Xxxxxxxx X. Xxxx
______________________________
Name: Xxxxxxxx X. Xxxx
Title: President
Acknowledged and agreed as to
Section 8.1:
FRANKLIN CAPITAL CORPORATION
By: /s/ Xxxxxxxx X. Xxxx
_______________________________
Name: Xxxxxxxx X. Xxxx
Title: President
37
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EXHIBIT A
No. 1 100% Percentage Interest
SEE REVERSE FOR CERTAIN DEFINITIONS
THE TRUST CERTIFICATES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES OR "BLUE
SKY" LAWS. THE HOLDER HEREOF, BY PURCHASING ANY TRUST CERTIFICATE, AGREES FOR
THE BENEFIT OF THE ISSUER THAT SUCH TRUST CERTIFICATE IS BEING ACQUIRED FOR ITS
OWN ACCOUNT AND NOT WITH A VIEW TO DISTRIBUTION AND MAY BE RESOLD, PLEDGED OR
TRANSFERRED ONLY (1) TO THE ISSUER (UPON REDEMPTION THEREOF OR OTHERWISE), (2)
TO A PERSON THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (3)
IN A TRANSACTION COMPLYING WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER JURISDICTION.
NO INTEREST IN THIS TRUST CERTIFICATE MAY BE ACQUIRED BY OR FOR THE
ACCOUNT OF (1) AN "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, ("ERISA")) THAT IS
SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (2) A PLAN DESCRIBED IN SECTION
4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (INCLUDING, WITHOUT
LIMITATION, INDIVIDUAL RETIREMENT ACCOUNTS AND XXXXX PLANS), OR (3) ANY ENTITY
WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF SUCH PLAN'S INVESTMENT
IN THE ENTITY (EACH A "BENEFIT PLAN"). BY ACCEPTING AND HOLDING THIS
CERTIFICATE, THE HOLDER HEREOF AND THE CERTIFICATE OWNER SHALL EACH BE DEEMED TO
HAVE REPRESENTED AND WARRANTED THAT IT IS NOT A BENEFIT PLAN.
A-1
45
FRANKLIN AUTO TRUST 1999-1
ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in certain distributions of the
Trust, as defined below, the property of which includes a pool of motor vehicle
retail installment sale contracts secured by new and used automobiles and light
trucks, and sold to the Trust by Franklin Receivables LLC.
(This Trust Certificate does not represent an interest in or obligation of
Franklin Receivables LLC or any of its Affiliates, except to the extent
described below.)
THIS CERTIFIES THAT FRANKLIN RECEIVABLES LLC is the registered owner
of 100% Percentage Interest nonassessable, fully-paid, beneficial ownership
interest in Franklin Auto Trust 1999-1 (the "Trust") formed by Franklin
Receivables LLC, a limited liability company (the "Seller").
The Trust was created pursuant to an Amended and Restated Trust
Agreement dated as of May 1, 1999 (the "Trust Agreement"), between the Seller
and Bankers Trust (Delaware), not in its individual capacity but solely as owner
trustee (the "Owner Trustee"), a summary of certain of the pertinent provisions
of which is set forth below. To the extent not otherwise defined herein, the
capitalized terms used herein have the meanings assigned to them in the Trust
Agreement.
This Certificate is one of the duly authorized Trust Certificates
designated as "Asset Backed Certificates" (herein called the "Trust
Certificates"). Under the Indenture dated as of May 1, 1999, between the Trust
and Chase Manhattan Bank as trustee and indenture collateral agent, the Trust
also issued two classes of Notes designated as "Class A-1 5.52% Asset Backed
Notes" (the "Class A-1 Notes"), and "Class A-2 6.05% Asset Backed Notes" (the
"Class A-2 Notes" and together with the Class A-1 Notes, the "Notes"). This
Trust Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the holder of this
Trust Certificate by virtue of the acceptance hereof assents and by which such
holder is bound. The property of the Trust includes a pool of prime, non-prime
and sub-prime motor vehicle retail installment sale contracts secured by new and
used automobiles and light trucks, (the "Receivables"), all monies received on
the Receivables on or after May 1, 1999, security interests in the vehicles
financed thereby, certain bank accounts and the proceeds thereof, proceeds from
claims on certain insurance policies and certain other rights under the Trust
Agreement and the Sale and Servicing Agreement.
Under the Trust Agreement, there will be distributed on the 15th day
of each month or, if such 15th day is not a Business Day, the next Business Day
(the "Distribution Date"), commencing in June 1999 to the Person in whose name
this Trust Certificate is registered at the close of business on the last day of
the calendar month immediately preceding the Distribution Date (the "Record
Date") such Certificateholder's Percentage Interest in the amount to be
distributed to Certificateholders on such Distribution Date.
A-2
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The holder of this Trust Certificate acknowledges and agrees that
its rights to receive distributions in respect of this Trust Certificate are
subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement, the Indenture and the Trust Agreement, as applicable.
It is the intent of the Seller, the Servicer, and the
Certificateholders that, for purposes of Federal income taxes, the Trust will be
disregarded as an entity apart from its owner if there is only one owner for
Federal income tax purposes, or, if there is more than one owner for Federal
income tax purposes, will be treated as a partnership the partners of which are
the Certificateholders. The Certificateholders by acceptance of a Trust
Certificate, agree to treat, and to take no action inconsistent with the
treatment of, the Trust and the Trust Certificates for such tax purposes as just
described.
Each Certificateholder, by its acceptance of a Trust Certificate,
covenants and agrees that such Certificateholder will not at any time institute
against the Trust or the Seller, or join in any institution against the Trust or
the Seller of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States Federal or
state bankruptcy or similar law in connection with any obligations relating to
the Trust Certificates, the Notes, the Trust Agreement or any of the Basic
Documents.
Distributions on this Trust Certificate will be made as provided in
the Trust Agreement by the Owner Trustee by wire transfer or check mailed to the
Certificateholder of record in the Trust Certificate Register without the
presentation or surrender of this Trust Certificate or the making of any
notation hereon. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Trust Certificate will
be made after due notice by the Owner Trustee of the pendency of such
distribution and only upon presentation and surrender of this Trust Certificate
at the office or agency maintained for the purpose by the Owner Trustee in the
Borough of Manhattan, the City of New York.
Reference is hereby made to the further provisions of this Trust
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Trust Certificate shall not entitle the holder hereof to any benefit under
the Trust Agreement or the Sale and Servicing Agreement or be valid for any
purpose.
THIS TRUST CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS.
A-3
47
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and
not in its individual capacity, has caused this Trust Certificate to be duly
executed.
Date: May 27, 1999
FRANKLIN AUTO TRUST 1999-1
By: BANKERS TRUST (DELAWARE),
solely as Owner Trustee and not in its individual
capacity
By: ________________________________
Authorized Signatory
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates of Franklin Auto Trust 1999-1
referred to in the within-mentioned Trust Agreement.
Date: May 27, 1999
BANKERS TRUST (DELAWARE),
solely as Owner Trustee and not in its individual
capacity
By: ________________________________
Authorized Signatory
OR
BANKERS TRUST (DELAWARE)
solely as Owner Trustee and not in its individual
capacity
By: Bankers Trust Company, as Authenticating Agent
By: ________________________________
Authorized Signatory
A-4
48
(Reverse of Trust Certificate)
The Trust Certificates do not represent an obligation of, or an
interest in, the Seller, the Servicer, the Owner Trustee or any of their
respective Affiliates and no recourse may be had against such parties or their
assets, except as may be expressly set forth or contemplated herein or in the
Trust Agreement, the Indenture or the Basic Documents. In addition, this Trust
Certificate is not guaranteed by any governmental agency or instrumentality and
is limited in right of payment to certain collections with respect to the
Receivables (and certain other amounts), all as more specifically set forth
herein and in the Sale and Servicing Agreement. The Trust Certificates are
limited in right of payment to certain collections and recoveries respecting the
Receivables, all as more specifically set forth in the Sale and Servicing
Agreement. A copy of each of the Sale and Servicing Agreement and the Trust
Agreement may be examined during normal business hours at the principal office
of the Seller, and at such other places, if any, designated by the Seller, by
any Certificateholder upon written request.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Seller and the rights of the Certificateholders under the
Trust Agreement at any time by the Seller and the Owner Trustee with the prior
written consent of the Security Insurer (so long as an Insurer Default shall not
have occurred and be continuing) and with the consent of the holders of the
Notes and the Trust Certificates evidencing not less than a majority of the
outstanding principal balance of the Notes and a majority in Percentage Interest
of the Certificates. Any such consent by the holder of this Trust Certificate
shall be conclusive and binding on such holder and on all future holders of this
Trust Certificate and of any Trust Certificate issued upon the transfer hereof
or in exchange hereof or in lieu hereof whether or not notation of such consent
is made upon this Trust Certificate. The Trust Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
holders of any of the Trust Certificates.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Trust Certificate is
registerable in the Certificate Register upon surrender of this Trust
Certificate for registration of transfer at the offices or agencies of the
Certificate Registrar maintained by the Owner Trustee in the Borough of
Manhattan, the City of New York, accompanied by a written instrument of transfer
in form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Trust Certificates in authorized
denominations evidencing the same aggregate interest in the Trust will be issued
to the designated transferee. The initial Certificate Registrar appointed under
the Trust Agreement is Bankers Trust Company.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, Trust Certificates are exchangeable for new Trust
Certificates in authorized denominations evidencing the same aggregate
denomination, as requested by the holder surrendering the same.
A-5
49
No service charge will be made for any such registration of transfer or
exchange, but the Owner Trustee or the Certificate Registrar may require payment
of a sum sufficient to cover any tax or governmental charge payable in
connection therewith.
The Owner Trustee, the Certificate Registrar and any agent of the
Owner Trustee or the Certificate Registrar may treat the person in whose name
this Trust Certificate is registered as the owner hereof for all purposes, and
none of the Owner Trustee, the Certificate Registrar or any such agent shall be
affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement
and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement and the Sale and Servicing Agreement and the disposition of all
property held as part of the Owner Trust Estate. The Servicer may at its option
purchase the corpus of the Trust at a price specified in the Sale and Servicing
Agreement, and such purchase of the Receivables and other property of the Trust
will effect early retirement of the Trust Certificates; however, such right of
purchase is exercisable, subject to certain restrictions, only as of the last
day of any Monthly Period as of which the Pool Balance is 10% or less of the
Original Pool Balance.
A-6
50
ASSIGNMENT
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
the within Trust Certificate, and all rights thereunder, hereby irrevocably
constitutes and appoints _______________________________________________
attorney to transfer said Trust Certificate on the books of the Certificate
Registrar, with full power of substitution in the premises.
Dated:
*
Signature Guaranteed:
*
----------
* NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Trust Certificate in
every particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements include membership
or participation in STAMP or such other "signature guarantee program" as may be
determined by the Certificate Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
A-7
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EXHIBIT B
[FORM OF]
CERTIFICATE OF TRUST OF
FRANKLIN AUTO TRUST 1999-1
THIS Certificate of Trust of Franklin Auto Trust 1999-1 (the
"Trust"), is being duly executed and filed by _________________________________,
as trustee, to form a business trust under the Delaware Business Trust Act (12
Del. Code, ss. 3801 et seq.).
1. Name. The name of the business trust formed hereby is FRANKLIN
AUTO TRUST 1999-1.
2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware is _______________________, ________________,
__________________, _______________, Delaware _________, Attention:____________.
B-1
52
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust.
BANKERS TRUST (DELAWARE),
not in its individual capacity but
solely as owner trustee of the Trust.
By:____________________________________
Name:
Title:
B-2
