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Exhibit 4.3
EXECUTION COPY
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SALE AND SERVICING
AGREEMENT
among
FRANKLIN AUTO TRUST 2000-1
Issuer,
FRANKLIN RECEIVABLES LLC
Seller,
FRANKLIN CAPITAL CORPORATION
Servicer,
and
FRANKLIN RESOURCES, INC.,
Representative
Dated as of March 1, 2000
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Table of Contents
Page
ARTICLE I
Definitions
SECTION 1.1 Definitions............................................... 1
SECTION 1.2 Other Definitional Provisions............................. 18
ARTICLE II
Conveyance of Receivables
SECTION 2.1 Conveyance of Receivables................................. 19
ARTICLE III
The Receivables
SECTION 3.1 Representations and Warranties of Seller.................. 19
SECTION 3.2 Repurchase upon Breach.................................... 23
SECTION 3.3 Custody of Receivables Files.............................. 24
SECTION 3.4 Duties of Servicer as Custodian........................... 25
SECTION 3.5 Instructions; Authority To Act............................ 26
SECTION 3.6 Custodian's Indemnification............................... 26
SECTION 3.7 Effective Period and Termination.......................... 27
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.1 Duties of Servicer........................................ 27
SECTION 4.2 Collection and Allocation of Receivable Payments.......... 28
SECTION 4.3 Realization upon Receivables.............................. 28
SECTION 4.4 Financed Vehicle Insurance................................ 28
SECTION 4.5 Maintenance of Security Interests in Financed Vehicles.... 28
SECTION 4.6 Covenants of Servicer..................................... 29
SECTION 4.7 Purchase of Receivables upon Breach....................... 30
SECTION 4.8 Servicing Fee............................................. 30
SECTION 4.9 Servicer's Certificate.................................... 31
SECTION 4.10 Annual Statement as to Compliance; Notice of Default...... 30
SECTION 4.11 Annual Independent Certified Public Accountants'
Report.................................................... 32
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SECTION 4.12 Access to Certain Documentation and Information
Regarding Receivables..................................... 31
SECTION 4.13 Servicer Expenses......................................... 31
SECTION 4.14 Appointment of Subservicer................................ 31
SECTION 4.15 Obligations under Basic Documents......................... 31
ARTICLE V
Distributions; Statements to Certificateholders
and Noteholders
SECTION 5.1 Establishment of Trust Accounts........................... 32
SECTION 5.2 Collections............................................... 36
SECTION 5.3 Application of Collections................................ 37
SECTION 5.4 Deficiency Notice......................................... 37
SECTION 5.5 Additional Deposits....................................... 38
SECTION 5.6 Distributions............................................. 38
SECTION 5.7 [RESERVED]................................................ 38
SECTION 5.8 Statements to Certificateholders and Noteholders.......... 39
SECTION 5.9 Net Deposits.............................................. 41
SECTION 5.10 Optional Deposits by the Security Insurer................. 41
ARTICLE VI
The Seller
SECTION 6.1 Representations of the Seller............................. 40
SECTION 6.2 Corporate Existence....................................... 43
SECTION 6.3 Liability of Seller; Indemnities.......................... 44
SECTION 6.4 Merger or Consolidation of, or Assumption of the
Obligations of, Seller.................................... 43
SECTION 6.5 Limitation on Liability of Seller and Others.............. 44
SECTION 6.6 Seller May Own Certificates or Notes...................... 44
ARTICLE VII
The Servicer
SECTION 7.1 Representations of Servicer............................... 46
SECTION 7.2 Indemnities of Servicer................................... 46
SECTION 7.3 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer.................................. 47
SECTION 7.4 Limitation on Liability of Servicer and Others............ 49
SECTION 7.5 Servicer Not To Resign.................................... 48
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ARTICLE VIIA
The Servicer and the Representative
SECTION 7.1A Representations of Franklin Resources..................... 48
SECTION 7.2A Limitation on Liability of Franklin Resources and
Others.................................................... 50
ARTICLE VIII
Default
SECTION 8.1 Servicer Default.......................................... 50
SECTION 8.2 Appointment of Successor.................................. 52
SECTION 8.3 [RESERVED]................................................ 52
SECTION 8.4 Notification to Noteholders and Certificateholders........ 52
SECTION 8.5 Waiver of Past Defaults................................... 52
ARTICLE IX
Termination
SECTION 9.1 Optional Purchase of All Receivables...................... 53
ARTICLE X
Administrative Duties of the Servicer
SECTION 10.1 Administrative Duties..................................... 54
SECTION 10.2 Records................................................... 56
SECTION 10.3 Additional Information to be Furnished to the Issuer...... 56
SECTION 10.4 Replacement Note Policy................................... 56
ARTICLE XI
Miscellaneous Provisions
SECTION 11.1 Amendment................................................. 57
SECTION 11.2 Protection of Title to Trust.............................. 58
SECTION 11.3 Notices................................................... 60
SECTION 11.4 Assignment................................................ 61
SECTION 11.5 Limitations on Rights of Others........................... 61
SECTION 11.6 Severability.............................................. 61
SECTION 11.7 Separate Counterparts..................................... 61
SECTION 11.8 Headings.................................................. 62
SECTION 11.9 Governing Law............................................. 62
SECTION 11.10 Assignment to Trustee..................................... 62
SECTION 11.11 Nonpetition Covenants..................................... 62
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SECTION 11.12 Limitation of Liability of Owner Trustee, Trustee and
Indenture Collateral Agent................................ 62
SECTION 11.13 Independence of the Servicer.............................. 63
SECTION 11.14 No Joint Venture.......................................... 63
SECTION 11.15 Third-Party Beneficiaries................................. 63
SECTION 11.16 Disclaimer by Security Insurer............................ 63
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SCHEDULES
Schedule A - Schedule of Receivables
Schedule B - Location of Receivables
EXHIBITS
Exhibit A - Reserved
Exhibit B - Reserved
Exhibit C - Form of Monthly Noteholder and Certificateholder Statement
Exhibit D - Form of Servicer's Certificate
Exhibit E - Form of Note Policy
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SALE AND SERVICING AGREEMENT, dated as of March 1, 2000, among
FRANKLIN AUTO TRUST 2000-1, a Delaware business trust (the "Issuer"), FRANKLIN
RECEIVABLES LLC, a Delaware limited liability company (the "Seller"), FRANKLIN
CAPITAL CORPORATION, a Utah corporation (the "Servicer" or "Franklin Capital"),
and FRANKLIN RESOURCES, INC., a Delaware corporation ("Franklin Resources" or
the "Representative").
WHEREAS the Issuer desires to purchase a portfolio of receivables
arising in connection with motor vehicle retail installment sale contracts
acquired by Franklin Capital through motor vehicle dealers;
WHEREAS the Seller has purchased such receivables from Franklin
Capital and is willing to sell such receivables to the Issuer;
WHEREAS the Servicer is willing to service all such receivables;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I.
Definitions
SECTION 1.1 Definitions. Whenever used in this Agreement, the following
words and phrases shall have the following meanings:
"Actuarial Method" means the method of allocating a fixed level
payment on an obligation between principal and interest, pursuant to which the
portion of such payment that is allocated to interest is equal to the product of
(i) one-twelfth of the fixed rate of interest on such obligation and (ii) the
outstanding principal balance of such obligation.
"Additional Servicing Fee" means, with respect to any Monthly
Period, the fee payable to the Servicer for services rendered during such
Monthly Period, which shall be equal to one-twelfth of the excess, if any, of
(a) the applicable Servicing Fee Rate multiplied by the Pool Balance applicable
to Prime Receivables, Non-Prime Receivables and Sub-Prime Receivables, as
applicable as of the first day of such Monthly Period over (b) 1.25% multiplied
by the Pool Balance as of the first day of such Monthly Period.
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. A Person shall not be deemed to be an
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Affiliate of any person solely because such other Person has the contractual
right or obligation to manage such Person unless such other Person controls such
Person through equity ownership or otherwise.
"Aggregate Principal Balance" means, with respect to any date of
determination, the sum of the Principal Balances for all Receivables (other than
(i) any Receivable that became a Liquidated Receivable during the related
Monthly Period and (ii) any Receivable that was purchased or repurchased by any
Person pursuant to this Agreement during the related Monthly Period) as of the
date of determination.
"Agreement" means this Sale and Servicing Agreement, as the same may
be amended and supplemented from time to time.
"Amount Financed" means, with respect to a Receivable, the aggregate
amount advanced under such Receivable toward the purchase price of the Financed
Vehicle and any related costs, including amounts advanced in respect of
accessories, insurance premiums, service, car club and warranty contracts, other
items customarily financed as part of retail automobile installment sale
contracts or promissory notes, and related costs.
"Annual Percentage Rate" or "APR" of a Receivable means the annual
percentage rate of finance charges as stated in the related Contract or as
recalculated based upon the terms of such Contract.
"Available Funds" means, with respect to any Determination Date, the
sum of (i) the Collected Funds for such Determination Date (including amounts
withdrawn from the Payahead Account but excluding amounts deposited into the
Payahead Account), (ii) all Purchase Amounts deposited in the Collection Account
during the related Monthly Period, and proceeds of any repurchase by a Dealer
pursuant to Dealer Agreement, (iii) following the acceleration of the Notes
pursuant to Section 5.2 of the Indenture, the amount of money or property
collected pursuant to Section 5.4 of the Indenture since the preceding
Determination Date by the Trustee or Controlling Party for distribution pursuant
to Section 5.6 of the Indenture, and (iv) any Insolvency Proceeds received
pursuant to Section 9.1(b) of this Agreement.
"Base Servicing Fee" means, with respect to any Monthly Period, the
fee payable to the Servicer for services rendered during such Monthly Period,
which shall be equal to one-twelfth of the applicable Servicing Fee Rate
multiplied by the Pool Balance applicable to Prime Receivables, Non-Prime
Receivables and Sub-Prime Receivables, as applicable as of the first day of such
Monthly Period; provided that the Base Servicing Fee shall not be greater than
one-twelfth of 1.25% per annum multiplied by the Pool Balance as of the first
day of such Monthly Period.
"Basic Documents" means the Certificate of Trust, the Trust
Agreement, this Agreement, the Indenture, the Spread Account Agreement, the
Purchase Agreement, the Insurance Agreement, the Indemnification Agreement, the
Depository Agreement and other documents and certificates delivered in
connection therewith.
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"Business Day" means a day other than a Saturday, a Sunday or other
day on which commercial banks located in the states of California or New York
are authorized or obligated to be closed.
"Certificate" means a certificate evidencing the beneficial
interest of a Certificateholder in the Trust.
"Certificate Distribution Account" has the meaning assigned to
such term in the Trust Agreement.
"Certificateholder" means each person in whose name a Certificate
is registered.
"Class" means the Class A-1 Notes or the Class A-2 Notes, as the
context requires.
"Class A-1 Notes" has the meaning assigned to such term in the
Indenture.
"Class A-2 Notes" has the meaning assigned to such term in the
Indenture.
"Closing Date" means March 28, 2000.
"Collected Funds" means, with respect to any Determination Date, the
amount of funds in or to be deposited in the Collection Account representing
collections (excluding amounts constituting the Supplemental Servicing Fee) on
the Receivables during the related Monthly Period, including all Net Liquidation
Proceeds collected during the related Monthly Period (but excluding any Purchase
Amounts).
"Collection Account" means the account designated as such,
established and maintained pursuant to Section 5.1 of this Agreement.
"Computer Tape" means the computer tapes or other electronic media
furnished by or on behalf of the Seller to the Issuer and its assigns and the
Security Insurer describing certain characteristics of the Receivables as of the
Cutoff Date.
"Contract" means a motor vehicle retail installment sale contract.
"Controlling Party" means the Security Insurer, so long as no
Insurer Default shall have occurred and be continuing, and the Trustee, for so
long as an Insurer Default shall have occurred and be continuing.
"Corporate Trust Office" means (i) with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee, which at the
time of execution of this Agreement is 0000 Xxxxxx Xxxx Xxxxx 000, Xxxxxxxxxx,
Xxxxxxxx 00000, Attention: Corporate Trust Department and (ii) with respect to
the Trustee and the Indenture Collateral Agent, the
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principal corporate office of the Trustee, which at the time of execution of
this Agreement is 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000, Attention: Capital Markets Fiduciary Services.
"Cram Down Loss" means, with respect to a Receivable, if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued an order
reducing the amount owed on such Receivable or otherwise modifying or
restructuring the scheduled payments to be made on such Receivable, an amount
equal to the excess of (i) the principal balance of such Receivable immediately
prior to such order over (ii) (a) the principal balance of such Receivable as so
reduced and/or (b) if such court shall have issued an order reducing the
effective rate of interest on such Receivable, the net present value (using as
the discount rate the higher of the APR on such Receivable or the rate of
interest, if any, specified by the court in such order) of the scheduled
payments as so modified or restructured. A "Cram Down Loss" shall be deemed to
have occurred on the date of issuance of such order.
"Cutoff Date" means as to any Receivable, March 1, 2000.
"Dealer" means a dealer who sold a Financed Vehicle and who
originated and assigned the respective Receivable to Franklin Capital under an
existing agreement between such dealer and Franklin Capital.
"Dealer Agreement" means any agreement between a Dealer and Franklin
Capital relating to the acquisition of Receivables from a Dealer by Franklin
Capital.
"Deficiency Claim Date" means, with respect to any Distribution
Date, the fourth Business Day immediately preceding such Distribution Date.
"Deficiency Notice" shall have the meaning set forth in Section
5.4(a) of this Agreement.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper, negotiable
certificates of deposit and other obligations that constitute instruments and
are susceptible of physical delivery ("Physical Property"):
(i) transfer of possession thereof to the Trustee, endorsed to, or
registered in the name of, the Trustee or its nominee or endorsed in
blank;
(b) with respect to a certificated security:
(i) delivery thereof in bearer form to the Indenture Collateral
Agent; or
(ii) delivery thereof in registered form to the Indenture Collateral
Agent and
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(A) the certificate is endorsed to the Indenture
Collateral Agent or in blank by effective endorsement; or
(B) the certificate is registered in the name of the
Indenture Collateral Agent, upon original issue or registration of
transfer by the Issuer;
(c) with respect to an uncertificated security:
(i) the delivery of the uncertificated security to the
Indenture Collateral Agent; or
(ii) the Issuer has agreed that it will comply with instructions
originated by the Indenture Collateral Agent without further consent
by the registered owner;
(d) with respect to any security issued by the U.S. Treasury that is a
book-entry security held through the Federal Reserve System pursuant to Federal
book-entry regulations:
(i) a Federal Reserve Bank by book entry credits the book-entry
security to the securities account (as defined in 31 CFR Part 357)
of a participant (as defined in 31 CFR Part 357) which is also a
securities intermediary; and
(ii) the participant indicates by book entry that the book-entry
security has been credited to the Indenture Collateral Agent
securities account; and
(e) with respect to a security entitlement:
(i) the Indenture Collateral Agent becomes the entitlement
holder; or
(ii) the securities intermediary has agreed that it will comply with
entitlement orders originated by the Indenture Collateral Agent
without further consent by the entitlement holder.
(f) For the purpose of clauses (b) and (c) hereof "delivery" means:
(i) with respect to a certificated security:
(A) the Indenture Collateral Agent acquires possession
thereof;
(B) another person (other than a securities intermediary)
either acquires possession thereof on behalf of the Indenture
Collateral Agent or, having previously acquired possession thereof,
acknowledges that it holds for the Indenture Collateral Agent; or
(C) a securities intermediary acting on behalf of the
Indenture Collateral Agent acquires possession of thereof, only if
the certificate is in
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registered form and has been specially endorsed to the Indenture
Collateral Agent by an effective endorsement;
(ii) with respect to an uncertificated security:
(A) the issuer registers the Indenture Collateral Agent as the
registered owner, upon original issue or registration of transfer;
or
(B) another person (other than a securities intermediary) either
becomes the registered owner thereof on behalf of the Indenture
Collateral Agent or, having previously become the registered owner,
acknowledges that it holds for the Indenture Collateral Agent;
(g) for purposes of this definition, except as otherwise indicated, the
following terms shall have the meaning assigned to each such term in the UCC:
(i) "certificated security"
(ii) "effective endorsement"
(iii) "entitlement holder"
(iv) "instrument"
(v) "securities account"
(vi) "securities entitlement"
(vii) "securities intermediary"
(viii) "uncertificated security"
(h) in each case of Delivery contemplated herein, the Indenture Collateral
Agent shall make appropriate notations on its records, and shall cause the same
to be made on the records of its nominees, indicating that securities are held
in trust pursuant to and as provided in this Agreement.
"Depository Agreement" means the Note Depository Agreement.
"Determination Date" means, with respect to any Distribution Date,
the fifth Business Day immediately preceding such Distribution Date.
"Distribution Amount" means, with respect to any Distribution Date,
the sum of (i) the Available Funds for the immediately preceding Determination
Date, (ii) the Note Policy
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Claim Amount, if any, received by the Trustee with respect to such Distribution
Date and (iii) amounts deposited by the Security Insurer as an Insurer Optional
Deposit, if any.
"Distribution Date" means, with respect to each Monthly Period, the
fifteenth day of the following calendar month, or if such day is not a Business
Day, the immediately following Business Day, commencing in April 2000.
"Draw Date" means, with respect to any Distribution Date, the second
Business Day immediately preceding such Distribution Date.
"Eligible Deposit Account" means either (a) an account with an
Eligible Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any domestic branch of a foreign bank), having corporate trust powers and
acting as trustee for funds deposited in such account, so long as any of the
securities of such depository institution have a credit rating from each Rating
Agency in one of its generic rating categories which signifies investment grade.
"Eligible Institution" means (a) the corporate trust department of
the Trustee or any other entity specified in this Agreement or (b) a depository
institution organized under the laws of the United States of America or any one
of the states thereof or the District of Columbia (or any domestic branch of a
foreign bank), which (i) has either (A) a long-term unsecured debt rating of AAA
or better by Standard & Poor's and Aaa or better by Moody's or (B) a certificate
of deposit rating of A-1+ or better by Standard & Poor's and P-1 or better by
Moody's or any other short-term or certificate of deposit rating acceptable to
the Rating Agencies and to the Security Insurer and (ii) whose deposits are
insured by the FDIC. If so qualified under clause (b) above, the Owner Trustee
or the Trustee may be considered an Eligible Institution.
"Eligible Investments" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any state thereof or the District of Columbia (or
any domestic branch of a foreign bank) and subject to supervision and
examination by Federal or state banking or depository institution authorities
(including depository receipts issued by any such institution or trust company
as custodian with respect to any obligation referred to in clause (a) above or
portion of such obligation for the benefit of the holders of such depository
receipts); provided, however, that at the time of the investment or contractual
commitment to invest therein (which shall be deemed to be made again each time
funds are reinvested following each Distribution Date), the commercial paper or
other short-term senior unsecured debt obligations (other than such obligations
the rating of which is based on the credit of a Person other than such
depository institution or trust company) of such
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depository institution or trust company shall have a credit rating from
Standard & Poor's of A-1+ and from Moody's of P-1;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from Standard & Poor's of
A-1+ and from Moody's of P-1;
(d) investments in money market funds (including funds for which the
Trustee or the Owner Trustee or any of their respective Affiliates is investment
manager or advisor) having a rating from Standard & Poor's of AAA-m or AAAm-G
and from Moody's of Aaa and having been approved by the Security Insurer;
(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America or
any agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with a depository institution or trust company (acting as principal)
referred to in clause (b) above;
(g) any demand deposit in a trust account maintained by The Chase
Manhattan Bank; provided that such deposits shall consist of direct obligations
of, and obligations guaranteed as to timely payment by, The Chase Manhattan
Bank; and
(h) any other investment which would satisfy the Rating Agency
Condition and is consistent with the ratings of the Notes and which, so long as
no Insurer Default shall have occurred and be continuing, has been approved by
the Security Insurer.
Any of the foregoing Eligible Investments may be purchased by or
through the Owner Trustee or the Trustee or any of their Affiliates.
"FDIC" means the Federal Deposit Insurance Corporation.
"Final Scheduled Distribution Date" means with respect to (i) the
Class A-1 Notes, the August 2003 Distribution Date, and (ii) the Class A-2
Notes, the October 2007 Distribution Date.
"Final Scheduled Maturity Date" means September 30, 2007.
"Financed Vehicle" means a new or used automobile or light-truck,
together with all accessions thereto, securing an Obligor's indebtedness under
the respective Receivable.
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"First Payment Default" means any Receivable for which the first
scheduled payment remains unpaid as of the date upon which the second scheduled
payment has become due.
"Indemnification Agreement" means the Indemnification Agreement
dated March 28, 2000 by and among the Security Insurer, the Seller, the
Representative and Xxxxxxx, Xxxxx & Co.
"Indenture" means the Indenture, dated as of March 1, 2000, among
the Issuer, the Indenture Collateral Agent and the Trustee, as the same may be
amended and supplemented from time to time.
"Indenture Collateral Agent" means the Person acting as Indenture
Collateral Agent under the Indenture, its successors in interest and any
successor Indenture Collateral Agent under the Indenture.
"Insolvency Event" means, with respect to a specified Person, (a)
the filing of a petition against such Person or the entry of a decree or order
for relief by a court having jurisdiction in the premises in respect of such
Person or any substantial part of its property in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator, or similar official for such Person or for any
substantial part of its property, or ordering the winding-up or liquidation of
such Person's affairs, and such petition, decree or order shall remain unstayed
and in effect for a period of 60 consecutive days; or (b) the commencement by
such Person of a voluntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or the
consent by such Person to the entry of an order for relief in an involuntary
case under any such law, or the consent by such Person to the appointment of or
taking possession by, a receiver, liquidator, assignee, custodian, trustee,
sequestrator, or similar official for such Person or for any substantial part of
its property, or the making by such Person of any general assignment for the
benefit of creditors, or the failure by such Person generally to pay its debts
as such debts become due, or the taking of action by such Person in furtherance
of any of the foregoing.
"Insolvency Proceeds" shall have the meaning set forth in Section
9.1(b) of this Agreement.
"Insurance Agreement" means the Insurance and Reimbursement
Agreement, dated as of March 28, 2000, among the Security Insurer, the Trustee,
the Servicer, Franklin Resources and the Seller.
"Insurance Agreement Trigger Event " means an "Insurance
Agreement Trigger Event" as defined in the Insurance Agreement.
"Insurance Policy" means, with respect to a Receivable, any
insurance policy (including the insurance policies described in Section 4.4 of
this Agreement) benefiting the
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holder of the Receivable providing loss or physical damage, credit life, credit
disability, theft, mechanical breakdown or similar coverage with respect to the
Financed Vehicle or the Obligor.
"Insurer's Agent" means The Chase Manhattan Bank.
"Insurer Default" means the occurrence and continuance of any of
the following events:
(a) the Security Insurer shall have failed to make a payment
required under the Note Policy in accordance with its terms;
(b) the Security Insurer shall have (i) filed a petition or
commenced any case or proceeding under any provision or chapter of the United
States Bankruptcy Code or any other similar federal or state law relating to
insolvency, bankruptcy, rehabilitation, liquidation or reorganization, (ii) made
a general assignment for the benefit of its creditors or (iii) had an order for
relief entered against it under the United States Bankruptcy Code or any other
similar federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation or reorganization which is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department of
Insurance or other competent regulatory authority shall have entered a final and
nonappealable order, judgment or decree (i) appointing a custodian, trustee,
agent, liquidator, rehabilitator or receiver for the Security Insurer or for all
or any material portion of its property or (ii) authorizing the taking of
possession by a custodian, trustee, agent, liquidator, rehabilitator or receiver
of the Security Insurer (or the taking of possession of all or any material
portion of the property of the Security Insurer); provided, however, that the
Security Insurer's rights shall be immediately reinstated upon cure of such
Insurer Default.
"Insurer Optional Deposit" has the meaning specified in Section
5.10 of this Agreement.
"Interest Rate" means, with respect to (i) the Class A-1 Notes,
7.02% per annum and (ii) the Class A-2 Notes, 7.25% per annum (in each case,
computed on the basis of a 360-day year consisting of twelve 30-day months).
"Investment Earnings" means, with respect to any Distribution Date,
the investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts (other than the Spread Account) and the
Certificate Distribution Account.
"Issuer" means Franklin Auto Trust 2000-1.
"Lien" means a security interest, lien, charge, pledge, equity, or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of any
act or omission by the related Obligor.
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"Lien Certificate" means, with respect to a Financed Vehicle, an
original certificate of title, certificate of lien or other notification issued
by the Registrar of Titles of the applicable state to a secured party which
indicates that the lien of the secured party on the Financed Vehicle is recorded
on the original certificate of title. In any jurisdiction in which the original
certificate of title is required to be given to the Obligor, the term "Lien
Certificate" shall mean only a certificate or notification, if any, issued to a
secured party.
"Liquidated Receivable" means, with respect to any Determination
Date, a Receivable as to which, as of the last day of the related Monthly
Period, either (i) the Servicer has determined in good faith that all amounts it
expects to recover have been received, (ii) more than $25.00 of a scheduled
payment is 180 or more days delinquent, and the Servicer has repossessed the
Financed Vehicle or the Obligor has filed for bankruptcy, (iii) more than $25.00
of a scheduled payment is 120 or more days delinquent, the Servicer has not
repossessed the Financed Vehicle and the Obligor has not declared bankruptcy or
(iv) the Financed Vehicle has been sold and the proceeds received. In any case,
if more than $25.00 of principal and interest on a Receivable as of the last day
of the related Monthly Period is 180 or more days delinquent, then such
Receivable shall be a Liquidated Receivable and shall have a Principal Balance
of zero.
"Month-End Pool Balance" means, as of the end of any Monthly Period
(other than the initial Monthly Period), the Pool Balance for the immediately
preceding Monthly Period, or in the case of the initial Monthly Period the
Original Pool Balance, less an amount equal to the sum of the following amounts
with respect to the related Monthly Period, computed, with respect to Simple
Interest Receivables, in accordance with the Simple Interest Method, and, with
respect to Precomputed Receivables, in accordance with the Actuarial Method: (i)
that portion of all collections on Receivables allocable to principal, including
full and, with respect to Simple Interest Receivables, partial principal
prepayments, received during such Monthly Period (including, with respect to
Precomputed Receivables, amounts withdrawn from the Payahead Account but
excluding amounts deposited into the Payahead Account) with respect to such
Monthly Period, (ii) the principal balance of each Receivable that was purchased
or repurchased by Franklin Capital, the Seller, the Servicer or any affiliate of
any of them as of the last day of such Monthly Period, (iii) at the option of
the Security Insurer, the outstanding principal balance of those Receivables
that were required to be repurchased by the Seller and Franklin Capital during
such Monthly Period but were not so repurchased, (iv) without duplication of
amounts in clause (ii), the principal balance of each Receivable that became a
Liquidated Receivable during such Monthly Period and (v) the aggregate amount of
Cram Down Losses during such Monthly Period.
"Monthly Period" means, with respect to each Distribution Date, the
calendar month preceding the month in which such Distribution Date occurs.
"Moody's" means Xxxxx'x Investors Service, Inc., or its successor.
"Net Liquidation Proceeds" means, with respect to Liquidated
Receivables, (i) proceeds from the disposition of the Financed Vehicles relating
to the Liquidated Receivables, less reasonable Servicer out-of-pocket costs,
including repossession and resale expenses not
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already deducted from such proceeds, and any amounts required by law to be
remitted to the Obligor, (ii) any proceeds from an Insurance Policy or (iii)
other monies received from the Obligor or otherwise.
"Non-Prime Receivables" means those Receivables indicated on
Schedule A hereto as non-prime.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.1(a)(ii) of this Agreement.
"Note Policy" means the financial guarantee insurance policy issued
by the Security Insurer to the Trustee for the benefit of the Noteholders with
respect to the Notes, including any endorsements thereto, in the form of Exhibit
E to the Indenture.
"Note Policy Claim Amount" shall have the meaning set forth in
Section 5.4(a) of this Agreement.
"Note Pool Factor" means, with respect to each Class of Notes and
the close of business on any Distribution Date, a seven-digit decimal figure
equal to the outstanding principal amount of such Class of Notes as of such
Distribution Date after giving effect to principal distributions on such date
divided by the original outstanding principal amount of such Class of Notes.
"Noteholder" or "Holder" means the Person in whose name a Note is
registered on the Note Register.
"Noteholders' Interest Carryover Shortfall" means, with respect to
any Distribution Date, the excess of the Noteholders' Interest Distributable
Amount for the preceding Distribution Date, over the amount in respect of
interest that was actually deposited in the Note Distribution Account on such
preceding Distribution Date, plus interest on the amount of interest due but not
paid to Noteholders on the preceding Distribution Date, to the extent permitted
by law, at the respective Interest Rate borne by each Class of Notes from the
fifteenth day of the calendar month preceding such Distribution Date to but
excluding the fifteenth day of the following calendar month.
"Noteholders' Interest Distributable Amount" means, with respect to
any Distribution Date, the sum of the Noteholders' Monthly Interest
Distributable Amount for such Distribution Date and the Noteholders' Interest
Carryover Shortfall for such Distribution Date.
"Noteholders' Monthly Interest Distributable Amount" means, with
respect to any Distribution Date, the product of, (i) one-twelfth of the
Interest Rate for each Class and (ii) the outstanding principal amount of the
Notes of such Class immediately preceding such Distribution Date.
"Notes" means the Class A-1 Notes and the Class A-2 Notes.
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"Obligor" on a Receivable means the purchaser or co-purchasers of
the Financed Vehicle and any other Person who owes payments under the
Receivable.
"Officer's Certificate" means a certificate signed by the (a)
chairman of the board, the president, any executive vice president or any vice
president and (b) any executive vice president, vice president, treasurer,
assistant treasurer, controller, secretary or assistant secretary of the
Representative, the Seller or the Servicer, as appropriate.
"Opinion of Counsel" means one or more written opinions of counsel
who may be an employee of or counsel to the Representatives, the Seller or the
Servicer, which counsel shall be reasonably acceptable to the addressees.
"Original Pool Balance" means $123,002,882.71.
"Owner Trust Estate" has the meaning assigned to such term in the
Trust Agreement.
"Owner Trustee" means Bankers Trust (Delaware), not in its
individual capacity but solely as Owner Trustee under the Trust Agreement, its
successors in interest or any successor Owner Trustee under the Trust Agreement.
"Payahead" means, with respect to each Precomputed Receivable and
any Distribution Date, an amount equal to the excess of (i) the aggregate amount
of payments made by or on behalf of the Obligor on such Distribution Date with
respect to such Precomputed Receivable over (ii) the portion of such payments
which is applied to the Scheduled Payment; provided, however that such amount
shall constitute a "Payahead" only to the extent that such amount, together with
the previous Payahead Balance, is insufficient to prepay the Precomputed
Receivable in full.
"Payahead Account" means the account designated as such, established
and maintained pursuant to Section 5.1(a)(iii) of this Agreement.
"Payahead Balance" means, with respect to each Precomputed
Receivable, an amount equal to the sum, as of the close of business on the last
day of a Monthly Period, of all Payaheads made by or on behalf of the Obligor
with respect to such Precomputed Receivable, as reduced by the application of
the amount of Payaheads required to be applied to Scheduled Payments and to
prepay such Precomputed Receivable in full.
"Person" means any individual, corporation, estate, partnership,
joint venture, association, joint stock company, trust (including any
beneficiary thereof), unincorporated organization or government or any agency or
political subdivision thereof.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
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"Pool Balance" means, as of the end of any Monthly Period, the
aggregate Principal Balance of the Receivables (exclusive of Liquidated
Receivables) at the end of such Monthly Period, after giving effect to all
payments (other than Payaheads remaining in the Payahead Account) received from
Obligors and any Purchase Amounts to be remitted by Franklin Capital, the Seller
or Servicer, as the case may be, on the Determination Date following such
Monthly Period and all losses, including Cram Down Losses, realized on
Receivables liquidated during such Monthly Period.
"Precomputed Receivable" means any Receivable under which the
portions of a payment allocable to interest and principal are determined in
accordance with the Rule of 78s Method.
"Prime Receivables" means those Receivables indicated on Schedule A
hereto as prime.
"Principal Balance" means, with respect to any Receivable, as of any
date, the Amount Financed minus (i) that portion of all amounts received
(including Payaheads applied to scheduled payments) on or prior to such date and
allocable to principal in accordance with (x) in the case of Simple Interest
Receivables, the terms of the Receivable and (y) in the case of Precomputed
Receivables, the Actuarial Method, and (ii) any Cram Down Loss in respect of
such Receivable.
"Principal Distributable Amount" means, with respect to any
Distribution Date, the excess of (i) the aggregate outstanding principal balance
of the Notes as of the preceding Distribution Date (after giving effect to
distributions thereon) or in the case of the first Distribution Date, as of the
Closing Date, over (ii) the Month-End Pool Balance as of the end of the
preceding Monthly Period; provided, however, that, on the Final Scheduled
Distribution Date for any Class of Notes, the Principal Distributable Amount
will not be less than the outstanding principal balance of such Class of Notes.
"Purchase Agreement" means the Purchase Agreement, dated as of March
1, 2000, between the Seller and Franklin Capital pursuant to which the Seller
acquired the Receivables, as such Agreement may be amended from time to time.
"Purchase Amount" means, with respect to any Receivable required to
be repurchased or purchased pursuant to Section 3.2 or Section 4.7 of this
Agreement or as to which the Servicer has exercised the purchase option pursuant
to Section 9.1(a) of this Agreement, an amount equal to the sum of (i) 100% of
the Principal Balance thereof and (ii) all accrued and unpaid interest thereon
(including one month's interest thereon, in the month of payment, at the APR
less, so long as Franklin Capital is the Servicer, the Base Servicing Fee).
"Purchased Receivable" means a Receivable purchased as of the close
of business on the last day of a Monthly Period by the Servicer pursuant to
Section 4.7 of this Agreement,
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repurchased by the Seller, or the Representative pursuant to Section 3.2 of this
Agreement or purchased by Franklin Capital pursuant to the Purchase Agreement.
"Rating Agency" means Moody's and Standard & Poor's. If no such
organization or successor maintains a rating on the Notes, "Rating Agency" shall
be a nationally recognized statistical rating organization or other comparable
Person designated by the Seller and acceptable to the Security Insurer (so long
as an Insurer Default shall not have occurred and be continuing), notice of
which designation shall be given in writing by the Servicer to the Trustee, the
Owner Trustee, the Security Insurer and the Servicer.
"Rating Agency Condition" means, with respect to any action or
amendment that either (i) each Rating Agency confirms in writing that such
amendment will not result in a reduction or withdrawal of such rating or (ii)
none of the Rating Agencies, within 10 days after receipt of notice of such
action or amendment, shall have notified the Seller, the Servicer or the Owner
Trustee in writing that such action or amendment will result in a reduction or
withdrawal of the then current rating of any Class of the Notes.
"Realized Losses" means, with respect to any Receivable that becomes
a Liquidated Receivable, the excess of the Principal Balance of such Liquidated
Receivable (immediately prior to it becoming a Liquidated Receivable) over the
Net Liquidation Proceeds to the extent allocable to principal.
"Receivable" means any Contract listed on Schedule A (which Schedule
may be in the form of microfiche).
"Receivable Files" means the documents specified in Section 3.3
of this Agreement.
"Record Date" means, with respect to each Distribution Date, the day
immediately preceding such Distribution Date, unless otherwise specified in this
Agreement.
"Registrar of Titles" means, with respect to any state, the
governmental agency or body responsible for the registration of, and the
issuance of certificates of title relating to, motor vehicles and liens thereon.
"Rule of 78s Method" means the method under which a portion of a
payment allocated to earned interest and the portion allocable to principal is
determined according to the sum of the month's digits or any equivalent method
commonly referred to as the "Rule of 78s."
"Schedule of Receivables" has the meaning assigned thereto in
Section 3.1(d) of this Agreement.
"Scheduled Payment" means, with respect to each Precomputed
Receivable, that portion of the payment required to be made by the Obligor
during the respective Monthly Period
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sufficient to amortize the Principal Balance thereof under the Actuarial Method
over the term of the Receivable and to provide interest at the APR.
"Security Insurer" means MBIA Insurance Corporation, a stock
insurance company incorporated under the laws of the State of New York, or any
successor thereto, as issuer of the Note Policy.
"Seller" means Franklin Receivables LLC, a Delaware limited
liability company, and its successors in interest to the extent permitted
hereunder.
"Servicer" means Franklin Capital, as the servicer of the
Receivables, and each successor Servicer pursuant to Section 7.3 or 8.2 of this
Agreement.
"Servicer Default" means an event specified in Section 8.1 of
this Agreement.
"Servicer's Certificate" means an Officer's Certificate of the
Servicer delivered pursuant to Section 4.9 of this Agreement, substantially in
the form of Exhibit D to this Agreement.
"Servicing Fee" has the meaning specified in Section 4.8 of this
Agreement.
"Servicing Fee Rate" means with respect to (i) Prime Receivables,
1.0% per annum, (ii) Non-Prime Receivables, 1.50% per annum and (iii) Sub-Prime
Receivables, 2.0% per annum.
"Simple Interest Method" means the method of allocating a fixed
level payment to principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the product of the fixed rate
of interest multiplied by the unpaid principal balance multiplied by the period
of time elapsed since the preceding payment of interest was made (in some states
assuming 30 day months), divided by the actual number of days in a year (360
days in states which assume 30 day months) and the remainder of such payment is
allocable to principal.
"Simple Interest Receivable" means any Receivable under which the
portions of a payment allocable to interest and principal are determined in
accordance with the Simple Interest Method.
"Spread Account" means a segregated trust account which is also an
Eligible Deposit Account for the benefit of the Security Insurer established and
governed by the Spread Account Agreement.
"Spread Account Agreement" means the Spread Account and Payment
Agreement, dated as of March 1, 2000, by and among the Seller, the Servicer, the
Representative, the Security Insurer and The Chase Manhattan Bank.
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"Spread Account Deposit Amounts" means the amounts required to be
deposited into the Spread Account pursuant to the Spread Account Agreement.
"Spread Account Deposit Event" has the meaning assigned to such term
in the Spread Account Agreement.
"Standard & Poor's" means Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc.
"Sub-Prime Receivables" means those Receivables indicated on
Schedule A hereto as sub-prime.
"Supplemental Servicing Fee" means charges collected (from whatever
source) on the Receivables during the related Monthly Period including, in the
case of a Precomputed Receivable that is prepaid in full, the difference (to the
extent not required to be rebated to the Obligor) between the Principal Balance
of such Receivable (plus accrued interest to the date of prepayment) and the
principal balance of such Receivable computed according to the Rule of 78s, and
other late fees, prepayment fees, administrative fees and expenses or similar
charges allowed by applicable law with respect to Receivables, plus reinvestment
proceeds on any payments received in respect of Receivables during the related
Monthly Period.
"Trust" means the Issuer.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), and all proceeds of the foregoing.
"Trust Accounts" has the meaning assigned thereto in Section
5.1(b) of this Agreement.
"Trust Agreement" means the Amended and Restated Trust Agreement,
dated as of March 1, 2000, between the Seller and the Owner Trustee, as the same
may be amended and supplemented from time to time.
"Trust Officer" means, (i) in the case of the Trustee, the chairman
or vice-chairman of the board of directors, the chairman or vice-chairman of the
executive committee of the board of directors, the president, any vice
president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any trust officer or assistant
trust officer, the controller and any assistant controller or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers having direct responsibility for the
administration of this Agreement and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject, and (ii) in the case of the Owner Trustee, any officer in the corporate
trust office of the Owner
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Trustee with direct responsibility for the administration of this Agreement or
any of the Basic Documents on behalf of the Owner Trustee.
"Trust Property" has the meaning assigned thereto in Section 2.1
of this Agreement.
"Trustee" means the Person acting as Trustee under the Indenture,
its successors in interest and any successor trustee under the Indenture.
"UCC" means the Uniform Commercial Code as in effect in the State of
New York on the date of this Agreement.
SECTION 1.2 Other Definitional Provisions
(a) Capitalized terms used herein and not otherwise defined herein
have the meanings assigned to them in the Indenture, or, if not defined therein,
in the Trust Agreement.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any instrument governed hereby and in any certificate or
other document made or delivered pursuant hereto unless otherwise defined
therein.
(c) As used in this Agreement, in any instrument governed hereby and
in any certificate or other document made or delivered pursuant hereto or
thereto, accounting terms not defined in this Agreement or in any such
instrument, certificate or other document, and accounting terms partly defined
in this Agreement or in any such instrument, certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles as in effect on the date of this
Agreement or any such instrument, certificate or other document, as applicable.
To the extent that the definitions of accounting terms in this Agreement or in
any such instrument, certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the
definitions contained in this Agreement or in any such instrument, certificate
or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section, Schedule and Exhibit
references contained in this Agreement are references to Sections, Schedules and
Exhibits in or to this Agreement unless otherwise specified; and the term
"including" shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument
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or statute as from time to time amended, modified or supplemented and includes
(in the case of agreements or instruments) references to all attachments thereto
and instruments incorporated therein; references to a Person are also to its
permitted successors and assigns.
ARTICLE II
Conveyance of Receivables
SECTION 2.1 Conveyance of Receivables. In consideration of the Issuer's
delivery to or upon the order of the Seller on the Closing Date of (x) the net
proceeds from the sale of the Notes, (y) the Certificates and (z) the other
amounts to be distributed from time to time to the Seller in accordance with the
terms of this Agreement, the Seller does hereby sell, transfer, assign, set over
and otherwise convey to the Issuer, without recourse (subject to the obligations
set forth herein), all right, title and interest of the Seller in and to:
(a) the Receivables, all monies representing interest payments and
principal payments received thereunder on and after the Cutoff Date and, with
respect to Precomputed Receivables, all monies representing interest and
principal payments received thereunder prior to the Cutoff Date that are due on
or after the Cutoff Date;
(b) an assignment of the security interests in the Financed Vehicles
granted by Obligors pursuant to the Receivables and any other interest of the
Seller in such Financed Vehicles;
(c) any proceeds with respect to the Receivables from claims on any
physical damage, credit life or disability insurance policies covering Financed
Vehicles or Obligors and any proceeds from the liquidation of the Receivables;
(d) any proceeds from any Receivable repurchased by a Dealer,
pursuant to a Dealer Agreement, as a result of a breach of representation or
warranty in the related Dealer Agreement;
(e) the related Receivables Files;
(f) all of the Seller's right, title and interest in its rights and
benefits, but none of its obligations or burdens, under the Purchase Agreement,
including the delivery requirements, the representations and warranties and the
cure and repurchase obligations of Franklin Capital under the Purchase
Agreement; and
(g) the proceeds of any and all of the foregoing (the items
specified in clauses (a) through (g) are referred to herein as the "Trust
Property").
It is the intention of the Seller that the transfer and assignment
contemplated by this Agreement shall constitute a sale of the Receivables and
other Trust Property from the Seller
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to the Trust and the beneficial interest in and title to the Receivables and the
other Trust Property shall not be part of the Seller's estate in the event of
the filing of a bankruptcy petition by or against the Seller under any
bankruptcy law. In the event that, notwithstanding the intent of the Seller, the
transfer and assignment contemplated hereby is held not to be a sale, this
Agreement shall constitute a grant of a security interest in the property
referred to in this Section 2.1 for the benefit of the Noteholders, the
Certificateholders and the Security Insurer.
ARTICLE III
The Receivables
SECTION 3.1 Representations and Warranties of the Seller. The Seller makes
the following representations and warranties as to the Receivables on which the
Issuer is deemed to have relied in acquiring the Receivables and upon which the
Security Insurer shall be deemed to rely in issuing the Note Policy. Such
representations and warranties speak as of the execution and delivery of this
Agreement and as of the Closing Date (unless another date or time period is
otherwise specified or indicated in the particular representation or warranty),
but shall survive the sale, transfer and assignment of the Receivables to the
Issuer and the pledge thereof to the Trustee pursuant to the Indenture.
(a) Title. Immediately prior to the transfer and assignment herein
contemplated, the Seller had good and marketable title to each Receivable, free
and clear of all Liens and, immediately upon the transfer thereof, the Trust
shall have good and marketable title to each such Receivable, free and clear of
all Liens (or a valid first priority perfected security interest in such
Receivable); and the transfer of the Receivables to the Trust has been perfected
under the UCC. No Dealer or any other Person has any right to receive proceeds
of any Receivables.
(b) All Filings Made. All filings (including, without limitation,
UCC filings) necessary in any jurisdiction to give the Trust a first priority
perfected ownership interest in the Receivables, and to give the Trustee a first
priority perfected security interest therein, shall have been made.
(c) Characteristics of Receivables. Each Receivable (i) was
originated in the United States of America and is denominated in United States
dollars by a Dealer in connection with the retail sale of a Financed Vehicle in
the ordinary course of such Dealer's business, was fully and properly executed
by the parties thereto, was purchased by the Seller from Franklin Capital which
in turn shall have purchased such Receivable from such Dealer under an existing
dealer agreement with Franklin Capital, and shall have been validly assigned by
Franklin Capital to the Seller in accordance with its terms, (ii) shall have
created or shall create a valid, subsisting and enforceable first priority
perfected security interest in favor of Franklin Capital in the Financed
Vehicle, which security interest has been assigned by Franklin Capital to the
Seller, which in turn shall be assignable by the Seller to the Trust, (iii)
shall contain customary and enforceable provisions such that the rights and
remedies of the holder thereof shall be adequate
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for realization against the collateral of the benefits of the security, (iv)
shall provide for level monthly payments (provided that the payment in the first
or last month in the life of the Receivable may be different from the level
payment) that fully amortize the Amount Financed by maturity, (v) in the case of
a Precomputed Receivable, shall provide for, in the event that such Contract is
prepaid, a prepayment that fully pays the Principal Balance and includes a full
month's interest to the date of payment in the month of prepayment at the
interest rate as determined in accordance with the Rule of 78s Method if such
payment is received less than 15 calendar days prior to the related due date and
(vi) has not been amended or collections with respect to which have been waived,
other than as evidenced in the Receivable File relating thereto.
(d) Schedule of Receivables. The information set forth in Schedule A
to this Agreement (the "Schedule of Receivables") is true and correct in all
material respects as of the Cutoff Date, and no selection procedures believed by
the Seller to be adverse to the Noteholders or the Security Insurer were
utilized in selecting the Receivables. The Computer Tape regarding the
Receivables is true and correct in all material respects as of the Cutoff Date.
(e) Compliance With Law. Each Receivable complied at the time it was
originated or made and complies at the execution of this Agreement in all
material respects with all requirements of applicable Federal, state and local
laws and regulations thereunder, including, without limitation, usury laws, the
Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Xxxxxxxx-Xxxx Warranty Act, the Xxxx-Xxxxxxxx Act, the
Federal Reserve Board's Regulations B and Z, state adaptations of the National
Consumer Act and other consumer credit laws and equal credit opportunity and
disclosure laws.
(f) Binding Obligation. Each Receivable represents the legal, valid
and binding payment obligation in writing of the Obligor thereunder, enforceable
by the holder thereof in accordance with its terms except as such enforceability
may be limited by applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and similar laws now or hereafter in effect related
to or affecting creditors' rights generally and subject to general principles of
equity (whether applied in a proceeding at law or in equity); and all parties to
each Receivable had full legal capacity to execute and deliver such Receivable
and all other documents related thereto and to grant the security interest
purported to be granted thereby.
(g) No Government Obligor. None of the Receivables are due from the
United States of America or any State or from any agency, department or
instrumentality of the United States of America or any State.
(h) Security Interest in Financed Vehicle. Immediately prior to the
sale, assignment and transfer thereof to the Trust, each Receivable is secured
by a validly perfected first priority security interest in the Financed Vehicle
in favor of Franklin Capital as secured party or all necessary and appropriate
actions have been commenced that would result in the valid perfection of a first
priority security interest in the Financed Vehicle in favor of Franklin Capital
as secured party. Immediately after the sale, assignment and transfer thereof to
the Trust,
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although the Lien Certificate will indicate Franklin Capital as lienholder and
will not indicate the Trust or Owner Trustee as secured party, each Receivable
will be secured by an enforceable and perfected security interest in the
Financed Vehicle in favor of the Trust as secured party for the benefit of the
Noteholders and the Security Insurer, which security interest is prior to all
other Liens in such Financed Vehicle.
(i) Receivables in Force. As of the Closing Date, no Receivable has
been satisfied, subordinated or rescinded, nor has any Financed Vehicle been
released from the Lien granted by the related Receivable in whole or in part
unless another vehicle has been substituted as collateral securing the
Receivable without any other modification to such Receivable.
(j) No Waiver. No provision of a Receivable has been waived except
as reflected in the Receivable File relating to such Receivable.
(k) No Defenses. As of the Closing Date, no right of rescission,
setoff, counterclaim or defense has been asserted or threatened with respect to
any Receivable.
(l) No Liens. To the best of the Seller's knowledge, as of the
Closing Date there are no Liens or claims, including Liens for work, labor,
materials or unpaid state or federal taxes relating to any Financed Vehicle
securing the related Receivable, that are or may be prior to or equal to the
Lien granted by such Receivable.
(m) No Default. No Receivable has a payment that is more than 30
days delinquent as of the Cutoff Date and, except for any delinquency in payment
on any Receivable not more than 30 days delinquent, no default, breach,
violation or event (in any such case) permitting acceleration under the terms of
any Receivable has occurred; and except for any delinquency in payment on any
Receivable not more than 30 days delinquent, no continuing condition that with
notice or the lapse of time would constitute a default, breach, violation or
event (in any such case) permitting acceleration under the terms of any
Receivable shall have arisen as of the Cutoff Date; and the Seller has not
waived and shall not waive any of the foregoing. For purposes of this clause
(m), a Receivable is considered 30 days delinquent as of the end of the month
following the date on which a second consecutive Scheduled Payment has not been
made. As of the Closing Date, no Receivable has had an uncured First Payment
Default.
(n) No Bankruptcies. No Obligor on any Receivable was the subject of
a bankruptcy proceeding commenced following the execution of the related
Contract except an Obligor that has received a discharge or dismissal under the
United States Bankruptcy Code.
(o) No Repossessions. As of the Cutoff Date, no Financed Vehicle
securing any Receivable is in repossession status.
(p) Adverse Selection. No selection procedures adverse to the
Noteholders or the Security Insurer were utilized in selecting the Receivables
from those owned by Franklin Capital which met the selection criteria contained
in this Agreement.
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(q) Chattel Paper. Each Receivable constitutes "chattel paper" as
defined in the UCC.
(r) Insurance. Under the terms of each Receivable the Obligor is
required to maintain physical damage insurance or comprehensive and collision
insurance covering the Financed Vehicle.
(s) Lawful Assignment. No Receivable was originated in, as of the
Cutoff Date, or is subject to the laws of, any jurisdiction under which the
sale, transfer and assignment of such Receivable or this Agreement is unlawful,
void or voidable.
(t) Reserved.
(u) One Original. There is only one original executed copy of each
Receivable.
(v) Location of Receivable Files. The Receivable Files are kept at
one or more of the locations listed in Schedule B and each item required to be
in a Receivable File is in such Receivable File.
(w) Computer Records. As of the Closing Date, the accounting and
computer records relating to the Receivables of the Seller have been marked to
show the absolute ownership by the Owner Trustee on behalf of the Trust of the
Receivables.
(x) Taxes. To the knowledge of the Seller, there are no state or
local taxing jurisdictions which have asserted that nonresident holders of notes
issued by a trust which holds assets similar to the assets to be held by the
Trust are subject to the jurisdiction's income or other taxes solely by reason
of the location in the jurisdiction of the Owner Trustee, the Seller, the
Servicer, the Representative, the obligors on or the assets securing the
Receivables held by the Trust, or the issuer of a financial guaranty insurance
policy.
(y) Maturity of Receivables. Each Receivable has a final maturity
date not later than March 2007; each Receivable has an original term to maturity
of not more than 84 months; the weighted average original term of the
Receivables is approximately 64.3 months; and the weighted average remaining
term of the Receivables is approximately 60.5 months as of the Cutoff Date. No
Receivable shall have a remaining term of less than six months as of the Cutoff
Date.
(z) Financing. As of the Cutoff Date, approximately 36.28% of the
aggregate Principal Balance of the Receivables, represent new vehicles; the
remainder of the Receivables represent used vehicles; approximately 0.63% of the
aggregate Principal Balance of the Receivables represent Precomputed Receivables
and the remainder of the Receivables represent Simple Interest Receivables; all
of the Receivables which are Precomputed Receivables are Rule of 78s
Receivables. Approximately 51.77% of the aggregate Principal Balance of the
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Receivables, represent Prime Receivables, approximately 44.92% of the aggregate
Principal Balance of the Receivables, represent Non-Prime Receivables and
approximately 3.31% of the aggregate Principal Balance of the Receivables,
represent Sub-Prime Receivables. The aggregate Principal Balance of the
Receivables is $123,002,882.71.
(aa) APR. As of the Cutoff Date, the weighted average Annual
Percentage Rate of the Receivables is approximately 12.20%. Each Receivable
has an APR equal to or greater than 8.25%.
(bb) Number. As of the Cutoff Date, there are 8,261 Receivables.
(cc) Balance. Each Receivable has a remaining Principal Balance of
not less than $1,031.81 and not more than $46,286.73, and as of the Cutoff Date,
the average Principal Balance of the Receivables is $14,889.59.
SECTION 3.2 Repurchase upon Breach. (a) The Representative, the Seller, the
Servicer, the Security Insurer or the Issuer, as the case may be, shall inform
the other parties to this Agreement and the Trustee promptly, in writing, upon
the discovery of any breach of the Representative's or the Seller's
representations and warranties made pursuant to Section 3.1. As of the last day
of the second (or, if the Representative or the Seller so elects, the first)
month following the discovery by the Representative or the Seller or receipt by
the Representative or the Seller of notice from any of the Representative, the
Seller, the Servicer, the Security Insurer or the Issuer of such breach, unless
such breach is cured by such date, the Representative and the Seller shall
jointly and severally have an obligation to repurchase any Receivable in which
the interests of the Noteholders or the Security Insurer are materially and
adversely affected by any such breach as of such date. The "second month" shall
mean the month following the month in which discovery occurs or notice is given,
and the "first month" shall mean the month in which discovery occurs or notice
is given. In consideration of and simultaneously with the repurchase of the
Receivable, the Representative and/or the Seller shall remit, or cause Franklin
Capital to remit pursuant to the Purchase Agreement, to the Collection Account
the Purchase Amount in the manner specified in Section 5.5 and the Issuer shall
execute such assignments and other documents reasonably requested by such person
in order to effect such repurchase. The sole remedy of the Issuer, the Owner
Trustee, the Trustee, the Noteholders or the Certificateholders with respect to
a breach of representations and warranties pursuant to Section 3.1 and the
agreement contained in this Section shall be the repurchase of Receivables
pursuant to this Section, subject to the conditions contained herein or to
enforce the obligations of Franklin Capital to the Seller to repurchase such
Receivables pursuant to the Purchase Agreement. Neither the Owner Trustee nor
the Trustee shall have a duty to conduct any affirmative investigation as to the
occurrence of any conditions requiring the repurchase of any Receivable pursuant
to this Section.
(b) Pursuant to Section 2.1 of this Agreement, the Seller conveyed
to the Trust all of the Seller's right, title and interest in its rights and
benefits, but none of its obligations or burdens, under the Purchase Agreement
including the Seller's rights under the Purchase Agreement and the delivery
requirements, the representations and warranties and the cure or
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repurchase obligations of Franklin Capital thereunder. The Seller hereby
represents and warrants to the Trust that such assignment is valid, enforceable
and effective to permit the Trust to enforce such obligations of Franklin
Capital under the Purchase Agreement.
SECTION 3.3 Custody of Receivables Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Issuer hereby
revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act as the agent of the Issuer and the Trustee as custodian of
the following documents or instruments which are hereby constructively delivered
to the Trustee, as of the Cutoff Date as pledgee of the Issuer with respect to
each Receivable:
(a) the original Receivable;
(b) a record of the information supplied by the Obligor in the
original credit application;
(c) the original certificate of title or such documents that the
Servicer shall keep on file, in accordance with its customary procedures,
evidencing the security interest of Franklin Capital in the Financed Vehicle (it
being understood that (i) the original certificates of title generally are not
delivered to Franklin Capital for 120 days but that promptly upon delivery they
shall be delivered to the Servicer as custodian hereunder and (ii) in
California, Franklin Capital participates in the California electronic lien and
title system and does not receive physical documentation); and
(d) any and all other documents that the Servicer shall keep on
file, in accordance with its customary procedures, relating to a Receivable, an
Obligor or a Financed Vehicle.
SECTION 3.4 Duties of Servicer as Custodian. (a) Safekeeping. The Servicer
shall hold the Receivables Files on behalf of the Issuer and the Trustee and
maintain such accurate and complete accounts, records and computer systems
pertaining to each Receivable File as shall enable the Issuer to comply with
this Agreement. In performing its duties as custodian the Servicer shall act
with reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to the receivable files relating to all comparable
automotive receivables that the Servicer services for itself or others, except
that the Servicer shall not be obligated, and does not currently intend, to (i)
pay any premium of force-placed insurance concerning any Financed Vehicle or
(ii) monitor any Obligor's maintenance of such insurance. The Servicer shall
conduct, or cause to be conducted, periodic audits of the Receivables Files held
by it under this Agreement and of the related accounts, records and computer
systems, in such a manner as shall enable the Issuer, the Security Insurer or
the Trustee to verify the accuracy of the Servicer's record keeping. The
Servicer shall promptly report to the Issuer, the Security Insurer and the
Trustee any failure on its part to hold the Receivables Files and maintain its
accounts, records and computer systems as herein provided and promptly take
appropriate action to remedy any such failure.
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(b) Maintenance of Records. The Servicer shall maintain each
Receivable File at the offices specified in Schedule B to this Agreement or at
such other office as shall be specified to the Issuer, the Trustee and the
Security Insurer by written notice not later than 10 days after any change in
location provided that the Controlling Party does not object to such change. The
Servicer shall at all times maintain the original of the fully executed
Receivable and store such original Receivable in a fireproof facility.
Additionally, the Servicer shall maintain the Receivable Files in an organized
and orderly manner.
(c) Access to Records. The Servicer will provide, on the Closing
Date, an Officer's Certificate stating that the Receivables Files contain all
materials which are required to be kept therein by Section 3.3(a), (b), (c) and
(d). At any time following the Closing Date, the Security Insurer may conduct a
review of the Receivables Files, or a sample thereof as it may specify, at its
own expense but with the cooperation of the Servicer. Should the Security
Insurer find a material number of documents missing or any other irregularities,
then the Trustee shall perform a review, for the benefit of the Security Insurer
and at the expense of the Servicer, of all the Receivables Files.
Upon reasonable prior notice, the Servicer shall make available to
the Issuer, the Trustee, the Security Insurer or any duly authorized
representatives, attorneys or auditors of any of the foregoing, a list of
locations of, and access to, the Receivables Files and records and computer
systems maintained by the Servicer at such times during normal business hours as
the Issuer, the Trustee or the Security Insurer shall instruct.
(d) Release of Documents. Upon written instruction from the Trustee
or the Security Insurer, at any time following a Servicer Default or termination
of the Servicer's appointment pursuant to Section 3.7 the Servicer shall release
any Receivable File to the Trustee, the Trustee's agent, or the Trustee's
designee, as the case may be, or the Security Insurer, as the case may be, at
such place or places as the Trustee or the Security Insurer, as the case may be,
may designate, as soon as practicable.
SECTION 3.5 Instructions; Authority To Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivables
Files upon its receipt of written instructions signed by a Trust Officer of the
Trustee. A copy of such instructions shall be furnished by the Trustee to the
Security Insurer. The Trustee shall not have any duty or obligation to provide
the Servicer with any such instructions with respect to the Receivables Files.
SECTION 3.6 Custodian's Indemnification. The Servicer as custodian shall
indemnify and hold harmless the Trust, the Security Insurer, the Owner Trustee
and the Trustee and each of their officers, directors, employees and agents for
any and all liabilities, obligations, losses, compensatory damages, payments,
costs or expenses (including reasonable attorneys' fees and expenses) that may
be imposed on, incurred by or asserted against the Trust, the Security Insurer,
the Owner Trustee or the Trustee or any of their officers, directors, employees
and agents as the result of any improper act or omission in any way relating to
the maintenance and custody by the Servicer as custodian of the Receivables
Files; provided, however, that the Servicer shall
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not be liable to the Trust, the Owner Trustee, the Trustee or the Security
Insurer, as the case may be, for any portion of any such amount resulting from
the willful misfeasance, bad faith or negligence of the Owner Trustee, the
Trustee or the Security Insurer, as the case may be. This provision shall not be
considered to limit the Servicer's or any other party's rights, obligations,
liabilities, claims or defenses which arise as a matter of law or pursuant to
any other provision of this Agreement.
SECTION 3.7 Effective Period and Termination. The Servicer's appointment as
custodian shall become effective as of the Cutoff Date and shall continue in
full force and effect until terminated pursuant to this Section 3.7. If Franklin
Capital shall resign as Servicer in accordance with the provisions of this
Agreement or if all of the rights and obligations of any Servicer shall have
been terminated under Section 8.1, the appointment of such Servicer as custodian
shall be terminated, in the same manner as the Servicer may be terminated under
Section 8.1. The Trustee or, with the consent of the Trustee, the Owner Trustee
may, in each case, with the consent of the Security Insurer, and the Security
Insurer may, terminate the Servicer's appointment as custodian (i) with cause or
(ii) upon the occurrence of an Insurance Agreement Trigger Event or a Spread
Account Deposit Event (excluding the event described in clause (v) of the
definition thereof), upon written notification to the Servicer and the Trustee
or Security Insurer, as the case may be. As soon as practicable after any
termination of such appointment, the Servicer shall deliver the Receivables
Files to the Trustee or the Trustee's agent at such place or places as the
Trustee, with the consent of the Security Insurer, or the Trustee shall, at the
direction of the Security Insurer, reasonably designate in writing. If the
Servicer shall be terminated as custodian hereunder for any reason but shall
continue to serve as Servicer, the Trustee shall, or shall cause its agent to,
make the Receivables Files available to the Servicer during normal business
hours upon reasonable notice so as to permit the Servicer to perform its
obligations as Servicer hereunder.
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.1 Duties of Servicer. The Servicer, as agent for the Issuer and
the Security Insurer (to the extent provided herein), shall manage, service,
administer and make collections on the Receivables (other than Purchased
Receivables) with reasonable care, using that degree of skill and attention that
the Servicer exercises with respect to all comparable automotive receivables
that it services for itself or others, except that the Servicer shall not be
obligated, and does not currently intend, to (i) pay any premium of force-placed
insurance concerning any Financed Vehicle or (ii) monitor any Obligor's
maintenance of such insurance. The Servicer's duties shall include collection
and posting of all payments, responding to inquiries of Obligors on such
Receivables, investigating delinquencies, sending payment statements or coupon
books to Obligors, accounting for collections and furnishing monthly and annual
statements to the Owner Trustee, the Trustee and the Security Insurer with
respect to distributions. Subject to the provisions of Section 4.2(b), the
Servicer shall follow its customary standards, policies and procedures in
performing its duties as Servicer. Without limiting the
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generality of the foregoing, the Servicer is authorized and empowered to execute
and deliver, on behalf of itself, the Issuer, the Owner Trustee, the Trustee,
the Security Insurer, the Certificateholders and the Noteholders or any of them,
any and all instruments of satisfaction or cancellation, or partial or full
release or discharge, and all other comparable instruments, with respect to such
Receivables or to the Financed Vehicles securing such Receivables. If the
Servicer shall commence a legal proceeding to enforce a Receivable, the Issuer
(in the case of a Receivable other than a Purchased Receivable) shall thereupon
be deemed to have automatically assigned, solely for the purpose of collection,
such Receivable to the Servicer. If in any enforcement suit or legal proceeding
it shall be held that the Servicer may not enforce a Receivable on the ground
that it shall not be a real party in interest or a holder entitled to enforce
such Receivable the Owner Trustee shall, at the Servicer's expense and
direction, take steps to enforce such Receivable, including bringing suit in its
name or the name of the Trust, the Trustee, the Certificateholders or the
Noteholders. The Owner Trustee and the Security Insurer shall upon the written
request of the Servicer furnish the Servicer with any powers of attorney and
other documents reasonably necessary or appropriate (as certified to the Owner
Trustee and/or the Security Insurer by the Servicer) to enable the Servicer to
carry out its servicing and administrative duties hereunder.
SECTION 4.2 Collection and Allocation of Receivable Payments. (a) The
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Receivables as and when the same shall become
due and shall follow such collection procedures as it follows with respect to
all comparable automotive receivables that it services for itself or others. The
Servicer shall allocate collections between principal and interest in accordance
with its customary servicing procedures.
(b) The Servicer may, in accordance with its customary servicing
policies grant extensions, rebates or adjustments on a Receivable; provided,
however, that if the Servicer extends the date for final payment by the Obligor
of any Receivable beyond the Final Scheduled Maturity Date, it shall promptly
repurchase such Receivable from the Trust in accordance with Section 4.7. The
Servicer may in its discretion waive any late payment charge or any other fees
that may be collected in the ordinary course of servicing a Receivable. The
Servicer shall not voluntarily agree to any alteration of the interest rate on
any Receivable.
SECTION 4.3 Realization upon Receivables. On behalf of the Issuer and the
Security Insurer, the Servicer shall use its best efforts, consistent with its
customary servicing procedures, to repossess or otherwise convert the ownership
of the Financed Vehicle securing any Receivable as to which the Servicer shall
have determined eventual payment in full is unlikely. From time to time, as
appropriate for servicing or foreclosing upon any Receivable, the Owner Trustee
shall, upon written request of the Servicer, execute such documents as shall be
reasonably necessary to prosecute any such proceedings. The Servicer shall
follow such customary and usual practices and procedures as it shall deem
necessary or advisable in its servicing of automotive receivables, which may
include reasonable efforts to realize proceeds from Receivables repurchased by a
Dealer, pursuant to a Dealer Agreement, as a result of a breach of
representation or warranty in the related Dealer Agreement or a default by an
Obligor resulting in the repossession of the Financed Vehicle under such Dealer
Agreement. The foregoing shall be subject to the provision
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that, in any case in which the Financed Vehicle shall have suffered damage, the
Servicer shall not expend funds in connection with the repair or the
repossession of such Financed Vehicle unless it shall determine in its
reasonable discretion that such repair and/or repossession will increase the Net
Liquidation Proceeds by an amount greater than the amount of such expenses.
SECTION 4.4 Financed Vehicle Insurance. In the event of a loss or claim
under a physical damages insurance policy or comprehensive and collision
insurance policy, the Servicer shall, in accordance with its customary servicing
procedures take all necessary action to enforce all available rights and claims
under such insurance policy. Notwithstanding the foregoing, the Servicer shall
not be obligated to, and does not (a) monitor the placement or maintenance of
such insurance by Obligors or (b) pay any premium of force-placed insurance
concerning any Financed Vehicle.
SECTION 4.5 Maintenance of Security Interests in Financed Vehicles. (a)
The Servicer shall, in accordance with its customary servicing procedures, take
such steps as are necessary to maintain perfection of the security interest
created by each Receivable in the related Financed Vehicle in favor of the
Seller. The Servicer is hereby authorized to take such steps as are necessary to
re-perfect such security interest on behalf of the Issuer and the Indenture
Collateral Agent in the event of the relocation of a Financed Vehicle or for any
other reason.
(b) Upon the occurrence of an Insurance Agreement Trigger Event, and
subject to the other provisions of this Agreement, the Security Insurer may (so
long as an Insurer Default shall not have occurred and be continuing) instruct
the Owner Trustee and the Servicer to take or cause to be taken, or, if an
Insurer Default shall have occurred, upon the occurrence of a Servicer Default,
the Owner Trustee and the Servicer shall take or cause to be taken such action
as may, in the opinion of counsel to the Security Insurer (or, if an Insurer
Default shall have occurred and be continuing, counsel to the Owner Trustee), be
necessary to perfect or reperfect the security interests in the Financed
Vehicles securing the Receivables in the name of the Trust by such reasonable
means as may, in the opinion of counsel to the Security Insurer or the Owner
Trustee (as applicable), be necessary or prudent. The Servicer hereby agrees to
pay all expenses related to such perfection or reperfection and to take all
action necessary therefor.
SECTION 4.6 Covenants of Servicer. The Servicer shall not release the
Financed Vehicle securing any Receivable from the security interest granted by
such Receivable in whole or in part except in the event of payment in full by
the Obligor thereunder or payment in full less a deficiency which the Servicer
would not attempt to collect in accordance with its customary procedures or in
connection with repossession or except as may be required by an insurer in order
to receive proceeds from insurance covering such Financed Vehicle, nor shall the
Servicer impair the rights of the Issuer, the Trustee, the Indenture Collateral
Agent, the Security Insurer, the Certificateholders or the Noteholders in such
Receivables (it being understood that no action of the Servicer taken in
compliance with the terms of this Agreement shall be deemed to impair such
rights), nor shall the Servicer increase the number of scheduled payments due
under a Receivable.
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SECTION 4.7 Purchase of Receivables upon Breach. The Representative, the
Seller, the Servicer, the Security Insurer or the Issuer shall inform the other
parties and the Trustee promptly, in writing, upon the discovery of any breach
of the Servicer's covenants pursuant to Sections 4.2(b), 4.4, 4.5 or 4.6, or of
any breach of the Servicer's representations and warranties made pursuant to
Section 7.1(b). As of the last day of the second (or, if the Servicer so elects,
the first) month following the discovery by the Servicer or receipt by the
Servicer of notice from any of the Representative, the Seller, the Servicer, the
Security Insurer, the Issuer or the Trustee of such breach, unless such breach
is cured by such date, the Servicer shall be obligated to purchase any
Receivable in which the interests of the Noteholders, the Certificateholders or
the Security Insurer are materially and adversely affected by such breach as of
such date. The "second month" shall mean the month following the month in which
discovery occurs or notice is given, and the "first month" shall mean the month
in which discovery occurs or notice is given. In consideration of the purchase
of any such Receivable pursuant to the preceding sentence, the Servicer shall
remit the Purchase Amount in the manner specified in Section 5.5. The sole
remedy of the Issuer, the Trustee, the Noteholders or the Certificateholders
with respect to a breach pursuant to Sections 4.2(b), 4.4, 4.5 or 4.6, or to a
breach of representations and warranties pursuant to Section 7.1(b), shall be
limited to the purchase of Receivables in accordance with this Section 4.7. The
Trustee and the Owner Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the purchase of
any Receivable pursuant to this Section 4.7. A successor Servicer shall not have
repurchase obligations for breaches by the predecessor servicer.
SECTION 4.8 Servicing Fee. The "Servicing Fee" for a Distribution
Date shall equal the sum of the Base Servicing Fee, the Supplemental Servicing
Fee, any Additional Servicing Fee, all Investment Earnings on the Collection
Account plus any reimbursement pursuant to Section 5.2(b). The Servicer shall be
entitled to retain from collections the Base Servicing Fee and the Investment
Earnings as provided herein. The Servicer shall also be entitled to retain the
Supplemental Servicing Fee to the extent that such amount is not required to be
deposited to the Spread Account pursuant to the Spread Account Agreement. The
Servicer, in its discretion at its election, may defer receipt of all or any
portion of the Servicing Fee for any Monthly Period to and until a later Monthly
Period for any reason (other than for the purpose of evading the priorities set
forth in Section 5.6(b)), including in order to avoid a shortfall in any
payments due on any Notes. Any such deferred amount shall be payable to (or may
be retained from subsequent collections by) the Servicer on demand.
SECTION 4.9 Servicer's Certificate. (a) No later than 12:00 noon New York
City time on each Determination Date, the Servicer shall deliver to the Owner
Trustee, the Trustee, the Security Insurer or its fiscal agent, the Indenture
Collateral Agent and each Rating Agency a Servicer's Certificate containing,
among other things, (i) all information necessary to enable the Trustee to make
any withdrawal and deposit required by Section 5.6(a), 5.6(b), 5.6(c) and
5.6(d), to give any notice required by Section 5.4 and to make the distributions
required by Section 5.6, (ii) all information necessary to enable the Trustee to
send the statements required by Section 5.8 to the Owner Trustee, the
Noteholders, the Certificateholders, each Rating Agency and the Security
Insurer, (iii) a listing of all Receivables purchased during the related Monthly
Period, identifying the Receivables so purchased, (iv) all information necessary
to enable the Trustee to
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reconcile all deposits to, and withdrawals from, the Collection Account for the
related Monthly Period and Distribution Date, including the accounting required
by Section 5.9, (v) the amount of "Covered Amounts" to be deposited to the
Collection Account for the related Distribution Date pursuant to the Servicer
Deposit Supporting Agreement, (vi) all information necessary to enable the Owner
Trustee to make the distribution required by the Trust Agreement and (vii) a
statement of the then current long-term rating and short-term rating of the
Representative maintained by each Rating Agency. Receivables purchased by the
Servicer, the Seller or the Representative and each Receivable which became a
Liquidated Receivable or which was paid in full during the related Monthly
Period shall be identified by account number (as set forth in Schedule A
hereto). A copy of such certificate may be obtained by any Noteholder or
Certificateholder by a request in writing to the Trustee addressed to the
Corporate Trust Office or from the Servicer. Neither the Trustee nor the Owner
Trustee shall be under any obligation to confirm or reconcile the information
provided pursuant to Section 4.9(a)(iv).
(b) If the Servicer's Certificate contains a manifest error, the
Security Insurer's written notice to the Servicer, the Owner Trustee and the
Trustee containing the corrected information shall be deemed to amend such
Servicer's Certificate.
SECTION 4.10 Annual Statement as to Compliance; Notice of Default. (a) The
Servicer shall deliver to the Owner Trustee, the Trustee and the Security
Insurer, on or before January 31 of each year beginning January 31, 2001 an
Officer's Certificate, dated as of the preceding September 30, stating that (i)
a review of the activities of the Servicer during the preceding 12-month period
and of its performance under this Agreement has been made under such officer's
supervision and (ii) to the best of such officer's knowledge, based on such
review, the Servicer has fulfilled all its obligations under this Agreement
throughout such year or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officers and the
nature and status thereof. The Trustee shall send a copy of such certificate and
the report referred to in Section 4.11 to the Rating Agencies. A copy of such
certificate and the report referred to in Section 4.11 may be obtained by any
Certificateholder by a request in writing to the Owner Trustee addressed to the
Corporate Trust Office or by any Noteholder by a request in writing to the
Trustee addressed to the Corporate Trust Office. Upon the telephone request of
the Owner Trustee, the Trustee will promptly furnish the Owner Trustee a list of
Noteholders as of the date specified by the Owner Trustee. Each Noteholder, by
its acceptance of a Note, shall be deemed to agree that the Trustee shall be
under no liability for providing the list of Noteholders to the Owner Trustee as
described in the immediately preceding sentence.
(b) The Servicer shall deliver to the Owner Trustee, the Trustee,
the Security Insurer and the Rating Agencies, promptly after having obtained
knowledge thereof, but in no event later than five Business Days thereafter,
written notice in an Officer's Certificate of any event which with the giving of
notice or lapse of time, or both, would become a Servicer Default under Section
8.1(a) or (b).
SECTION 4.11 Annual Independent Certified Public Accountants' Report. The
Servicer shall cause a firm of independent certified public accountants, which
may also render
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other services to the Servicer or the Seller, to deliver to the Seller, the
Owner Trustee, the Trustee and the Security Insurer on or before January 31 of
each year beginning January 31, 2001 an agreed-upon procedures report addressed
to the Servicer, the Seller, the Owner Trustee, the Trustee and the Security
Insurer and each Rating Agency, expressing a summary of findings, (based on
certain procedures performed on the documents, records and accounting records
that such accountants considered appropriate under the circumstances) relating
to the servicing of the Receivables, or the administration of the Receivables
and of the Trust, as the case may be, during the preceding year ended September
30, and that, on the basis of the accounting and auditing procedures considered
appropriate under the circumstances, such firm is of the opinion that such
servicing or administration was conducted in compliance with the terms of this
Agreement, except for (i) such exceptions as such firm shall believe to be
immaterial and (ii) such other exceptions as shall be set forth in such report.
Such report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
SECTION 4.12 Access to Certain Documentation and Information Regarding
Receivables. The Servicer shall provide to representatives of the Trustee, the
Owner Trustee and the Security Insurer reasonable access to the Receivable
Files. The Servicer shall provide to the Certificateholders and Noteholders
access to the Receivable Files in such cases where the Certificateholders or
Noteholders shall be required by applicable statutes or regulations to review
such documentation as demonstrated by evidence satisfactory to the Servicer in
its reasonable judgment. Access shall be afforded without charge, but only upon
reasonable request and during the normal business hours at the respective
offices of the Servicer. Nothing in this Section shall affect the obligation of
the Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors and the failure of the Servicer to provide access to
information as a result of such obligation shall not constitute a breach of this
Section.
SECTION 4.13 Servicer Expenses. The Servicer shall be required to pay all
expenses incurred by it in connection with its activities hereunder and under
any of the Basic Documents, including fees and disbursements of independent
accountants, taxes imposed on the Servicer and expenses incurred in connection
with distributions and reports to Certificateholders and Noteholders.
SECTION 4.14 Appointment of Subservicer. The Servicer may at any
time appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder; provided, however, that the Servicer shall remain obligated
and be liable to the Issuer, the Owner Trustee, the Trustee, the Security
Insurer, the Certificateholders and the Noteholders for the servicing and
administering of the Receivables in accordance with the provisions hereof
without diminution of such obligation and liability by virtue of the appointment
of such subservicer and to the same extent and under the same terms and
conditions as if the Servicer alone were servicing and administering the
Receivables. The fees and expenses of the subservicer shall be as agreed between
the Servicer and its subservicer from time to time and none of the Issuer, the
Owner
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Trustee, the Trustee, the Security Insurer, the Certificateholders or the
Noteholders shall have any responsibility therefor.
SECTION 4.15 Obligations under Basic Documents. The Servicer shall perform
all of its obligations under the Basic Documents.
ARTICLE V
Distributions;
Statements to Certificateholders and Noteholders
SECTION 5.1 Establishment of Trust Accounts.
(a)(i) The Trustee on behalf of the Noteholders, the Owner Trustee
(on behalf of the Certificateholders) and the Security Insurer, shall
establish and maintain in the name of the Indenture Collateral Agent an
Eligible Deposit Account (the "Collection Account"), bearing a designation
clearly indicating that the funds deposited therein are held on behalf of
the Noteholders, the Owner Trustee on behalf of the Certificateholders,
and the Security Insurer. Investment Earnings on funds in the Collection
Account shall be paid to the Servicer.
(ii) The Trustee, on behalf of the Noteholders and the Security
Insurer, shall establish and maintain in the name of the Indenture
Collateral Agent an Eligible Deposit Account (the "Note Distribution
Account"), bearing a designation clearly indicating that the funds
deposited therein are held on behalf of the Noteholders and the Security
Insurer. The Note Distribution Account shall initially be established with
the Trustee.
(iii) The Trustee on behalf of the Noteholders, the Owner Trustee
(on behalf of the Certificateholders) and the Security Insurer, shall
establish and maintain in the name of the Indenture Collateral Agent an
Eligible Deposit Account (the "Payahead Account"), bearing a designation
clearly indicating that the funds deposited therein are held on behalf of
the Noteholders, the Owner Trustee on behalf of the Certificateholders,
and the Security Insurer. Investment Earnings on funds in the Payahead
Account shall be paid to the Servicer.
(b) Funds on deposit in the Collection Account, the Note
Distribution Account, the Payahead Account (collectively the "Trust Accounts")
and the Certificate Distribution Account shall be invested by the Indenture
Collateral Agent with respect to Trust Accounts and by the Owner Trustee with
respect to the Certificate Distribution Account (or any custodian with respect
to funds on deposit in any such account) in Eligible Investments selected in
writing by the Servicer (pursuant to standing instructions or otherwise);
provided, however, it is understood and agreed that neither the Indenture
Collateral Agent nor the Owner Trustee shall be liable for any loss arising from
such investment in Eligible Investments. All such Eligible
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Investments shall be held by or on behalf of the Indenture Collateral Agent or
the Owner Trustee, as applicable, for the benefit of the Noteholders and/or the
Certificateholders, as applicable, and the Security Insurer. Other than as
permitted by the Rating Agencies and the Security Insurer, funds on deposit in
the Collection Account, the Payahead Account, the Note Distribution Account and
the Certificate Distribution Account shall be invested in Eligible Investments
that will mature so that such funds will be available at the close of business
on the Business Day immediately preceding the Distribution Date next succeeding
the date of such investment. Funds deposited in a Trust Account or the
Certificate Distribution Account on the day immediately preceding a Distribution
Date upon the maturity of any Eligible Investments are not required to be
invested overnight.
(c)(i) The Indenture Collateral Agent shall possess all right, title
and interest in all funds on deposit from time to time in the Trust Accounts and
in all proceeds thereof (excluding all Investment Earnings on the Collection
Account and the Payahead Account) and all such funds, investments, proceeds and
income shall be part of the Owner Trust Estate. Except as otherwise provided
herein, the Trust Accounts shall be under the sole dominion and control of the
Indenture Collateral Agent for the benefit of the Noteholders and the
Certificateholders, as the case may be, and the Security Insurer. If, at any
time, any of the Trust Accounts or the Certificate Distribution Account ceases
to be an Eligible Deposit Account, the Indenture Collateral Agent (or the
Servicer on its behalf) or the Owner Trustee, as applicable, shall within 10
Business Days (or such longer period as to which each Rating Agency and (unless
an Insurer Default shall have occurred and be continuing) the Security Insurer
may consent) establish a new Trust Account or a new Certificate Distribution
Account, as applicable, as an Eligible Deposit Account and shall transfer any
cash and/or any investments to such new Trust Account or a new Certificate
Distribution Account, as applicable. In connection with the foregoing, the
Servicer agrees that, in the event that any of the Trust Accounts are not
accounts with the Trustee, the Servicer shall notify a Trust Officer of the
Trustee in writing promptly upon any of such Trust Accounts ceasing to be an
Eligible Deposit Account.
(ii) With respect to the Trust Account Property, the Indenture
Collateral Agent, and with respect to the Certificate Distribution
Account, the Issuer agrees, by its respective acceptance hereof, that:
A. any Trust Account Property or any property in the
Certificate Distribution Account that is held in deposit accounts
shall be held solely in Eligible Deposit Accounts subject to the
penultimate sentence of Section 5.1(c)(i); and, except as otherwise
provided herein, each such Eligible Deposit Account shall be subject
to the exclusive custody and control of the Indenture Collateral
Agent with respect to the Trust Accounts and the Issuer with respect
to the Certificate Distribution Account, and the Indenture
Collateral Agent or the Issuer, as applicable, shall have sole
signature authority with respect thereto;
B. any Trust Account Property shall be Delivered to the
Indenture Collateral Agent in accordance with the definition of
"Delivery" and shall be held, pending maturity or disposition,
solely by the Indenture Collateral Agent or such
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other Person acting solely for the Indenture Collateral Agent as
required for Delivery; and
C. in the event that the Indenture Collateral Agent, in its
capacity as securities intermediary, has or subsequently obtains by
agreement, operation of law or otherwise a security interest in the
Trust Accounts or any security entitlement credited thereto, the
Indenture Collateral Agent, in its capacity as securities
intermediary, hereby agrees that such security interest shall be
subordinate to the security interest of the Indenture Collateral
Agent. The financial assets and other items deposited to the Trust
Accounts will not be subject to deduction, set-off, banker's lien,
or any other right in favor of any person (except that the Indenture
Collateral Agent, in its capacity as securities intermediary, may
set off the face amount of any checks which have been credited to
the Trust Accounts but are subsequently returned unpaid because of
uncollected or insufficient funds).
(d) The Servicer shall have the power, revocable by the Controlling
Party or by the Issuer with the consent of the Controlling Party, to instruct
the Indenture Collateral Agent to make withdrawals and payments from the Trust
Accounts for the purpose of permitting the Servicer or the Issuer to carry out
its respective duties hereunder or permitting the Trustee to carry out its
duties under the Indenture.
(e) The Servicer shall on or prior to each Distribution Date (and
prior to deposits to the Note Distribution Account) transfer from the Collection
Account to the Payahead Account all Payaheads as described in Section 5.3
received by the Servicer during the Monthly Period. Notwithstanding the
foregoing and the first sentence of Section 5.2, for so long as the Servicer is
permitted to make monthly remittances to the Collection Account pursuant to
Section 5.2, Payaheads need not be remitted to and deposited in the Payahead
Account but instead may be remitted to and held by the Servicer. So long as such
condition is met, the Servicer shall not be required to segregate or otherwise
hold separate any Payaheads remitted to the Servicer as aforesaid but shall be
required to remit Payaheads to the Collection Account in accordance with Section
5.6(a).
(f) The Servicer shall on or prior to each Distribution Date
transfer from the Collection Account to the Spread Account all amounts
constituting a part of the Supplemental Servicing Fee not retained by the
Servicer pursuant to Section 4.8.
SECTION 5.2 Collections. (a) The Servicer shall remit within two Business
Days of receipt thereof to the Collection Account or Payahead Account, as
applicable, all payments by or on behalf of the Obligors with respect to the
Receivables (other than Purchased Receivables) and all Net Liquidation Proceeds,
both as collected during the Monthly Period less any payments owed thereon to
the Servicer. Notwithstanding the foregoing, for so long as (i) Franklin Capital
remains the Servicer, (ii) no Servicer Default shall have occurred and be
continuing, (iii) there exists no Insurer Default, (iv) the Servicer's (or if
the Servicer is Franklin Capital, and the Representative has entered into an
agreement, guaranty, surety or other arrangement backing
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Franklin Capital's obligations acceptable to the Rating Agencies and the
Security Insurer, then the Representative's) short term obligations are rated at
least A-1 by Standard & Poor's and P-1 by Moody's and (v) the Rating Agency
Condition shall have been satisfied (and any conditions or limitations imposed
by the Rating Agencies in connection therewith are complied with), the Servicer
may remit such collections with respect to the preceding calendar month to the
Collection Account or Payahead Account, as applicable, on the second Business
Day immediately preceding the related Distribution Date. If, however, one of the
conditions in clauses (i) through (v) of the preceding sentence is not
satisfied, then the Servicer shall remit such collections with respect to the
preceding calendar month to the Collection Account or Payahead Account, as
applicable, within two Business Days of receipt thereof or, if the Servicer has
already held such collections for two Business Days, it shall remit such
collections to the Collection Account or Payahead Account, as applicable,
immediately. Pending deposit thereof into the Collection Account or the Payahead
Account, the Servicer may use or invest collections at its own risk and for its
own benefit and need not segregate collections from its own funds. For purposes
of this Article V the phrase "payments by or on behalf of Obligors" shall mean
payments made with respect to the Receivables by Persons other than the Servicer
or the Seller.
(b) The Servicer will be entitled to be reimbursed from amounts on
deposit in the Collection Account with respect to a Monthly Period for amounts
previously deposited in the Collection Account but later determined by the
Servicer to have resulted from mistaken deposits or postings or checks returned
for insufficient funds. The amount to be reimbursed hereunder shall be paid to
the Servicer on the related Distribution Date pursuant to Section 5.6(b)(i) upon
certification by the Servicer of such amounts and the provision of such
information to the Trustee and the Security Insurer as may be necessary in the
opinion of the Security Insurer to verify the accuracy of such certification. In
the event that the Security Insurer has not received evidence satisfactory to it
of the Servicer's entitlement to reimbursement pursuant to Section 5.2(b), the
Security Insurer shall (unless an Insurer Default shall have occurred and be
continuing) give the Trustee notice to such effect, following receipt of which
the Trustee shall not make a distribution to the Servicer in respect of such
amount pursuant to Section 5.6(b)(i), or if the Servicer prior thereto has been
reimbursed pursuant to Section 5.6(b)(i) or Section 5.9, the Trustee shall
withhold such amounts from amounts otherwise distributable to the Servicer on
the next succeeding Distribution Date.
SECTION 5.3 Application of Collections. All collections for the Monthly
Period shall be applied by the Servicer as follows:
With respect to each Receivable (other than a Purchased Receivable),
payments by or on behalf of the Obligor (other than Supplemental Servicing Fees
with respect to such Receivable, to the extent collected), shall be applied
first, in the case of Precomputed Receivables, to the Scheduled Payment and, in
the case of Simple Interest Receivables, to interest and principal in accordance
with the Simple Interest Method. With respect to Precomputed Receivables, any
remaining excess shall be added to the Payahead Balance, and shall be applied to
prepay the Precomputed Receivable, but only if the sum of such excess and the
previous Payahead Balance shall be sufficient to prepay the Precomputed
Receivable in full.
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Otherwise, any such remaining excess payments shall constitute a Payahead and
shall increase the Payahead Balance.
All amounts collected that are payable to the Servicer as
Supplemental Servicing Fees hereunder shall, other than as provided in Section
5.9, be deposited in the Collection Account and paid to the Servicer in
accordance with Section 5.6(b).
SECTION 5.4 Deficiency Notice. (a) In the event that the Servicer's
Certificate with respect to any Determination Date shall state that the amount
of the Available Funds with respect to such Determination Date is less than the
sum of the amounts payable on the related Distribution Date pursuant to clauses
(iii) and (iv) of Section 5.6(b) remaining after application of clauses (i) and
(ii) of Section 5.6(b) (any such deficiency being a "Note Policy Claim Amount"),
then on the Deficiency Claim Date immediately preceding such Distribution Date
the Trustee, based solely on the information provided in the Servicer's
Certificate, shall deliver to the Indenture Collateral Agent, the Security
Insurer, the fiscal agent of the Security Insurer, the Owner Trustee, the
Insurer's Agent and the Servicer, by hand delivery, telex or facsimile
transmission, a written notice (a "Deficiency Notice") in accordance with the
terms of the Note Policy specifying the Note Policy Claim Amount for such
Distribution Date.
(b) Any Deficiency Notice shall be delivered by 10:00 a.m., New York
City time, on the related Deficiency Claim Date. The amounts distributed to the
Trustee pursuant to a Deficiency Notice shall be deposited by the Trustee into
the Collection Account pursuant to Section 5.5.
SECTION 5.5 Additional Deposits. The Servicer, the Seller, and the
Representative, as applicable, shall deposit or cause to be deposited in the
Collection Account on the second Business Day immediately prior to the
Distribution Date following the date on which such obligations are due the
aggregate Purchase Amount with respect to Purchased Receivables. On or before
each Draw Date, the Trustee shall remit to the Collection Account any amounts
delivered to the Trustee pursuant to a Deficiency Notice.
SECTION 5.6 Distributions. (a) No later than 12:00 noon New York City time
on each Distribution Date, the Trustee shall (based solely on the information
contained in the Servicer's Certificate delivered on the related Determination
Date) cause to be made the following transfers and distributions in the amounts
set forth in the Servicer's Certificate for such Distribution Date from the
Payahead Account (i) to the Collection Account, in immediately available funds,
the aggregate previous Payaheads to be applied to Scheduled Payments on
Precomputed Receivables for the related Monthly Period or prepayments for the
related Monthly Period, pursuant to Section 5.3, in the amounts set forth in the
Servicer's Certificate for such Distribution Date and (ii) to the Seller, in
immediately available funds, the investment earnings, net of losses on the
Payaheads for the related Monthly Period.
(b) On each Distribution Date other than the Distribution Date on
which Insolvency Proceeds are to be distributed, the Trustee shall (based solely
on the information
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contained in the Servicer's Certificate delivered with respect to the related
Determination Date) distribute the following amounts and in the following order
of priority:
(i) from the Distribution Amount, to the Servicer, the Base
Servicing Fee for the related Monthly Period, any amounts constituting the
Base Servicing Fee for previous Monthly Periods which have not been paid
and any amounts specified in Section 5.2(b), to the extent the Servicer
has not reimbursed itself in respect of such amounts pursuant to Section
5.9;
(ii) from the Distribution Amount, to the Security Insurer, any
accrued and unpaid fees of the Security Insurer payable pursuant to the
Insurance Agreement (to the extent such fees have not been previously paid
by the Servicer or Franklin Capital);
(iii) from the Distribution Amount, to the Note Distribution
Account, the Noteholders' Interest Distributable Amount;
(iv) from the Distribution Amount, to the Note Distribution
Account, the Principal Distributable Amount;
(v) from the Available Funds, to the Security Insurer, any interest
due on outstanding Surety Draws (as defined below);
(vi) from the Available Funds, to the Security Insurer, to the
extent of available funds, the amount, if any, to reimburse the Security
Insurer for amounts paid under the Note Policy (to the extent not
reimbursed from other amounts available to the Security Insurer) (such
amounts paid, the "Surety Draws") and any other Insurer Optional Deposits
paid by the Insurer;
(vii) from the Available Funds, to the Spread Account, Spread
Account Deposit Amounts;
(viii) from the Available Funds, to the Trustee and Indenture
Collateral Agent, to the extent of available funds, all outstanding fees,
expenses and indemnification not previously paid to them by the Servicer;
(ix) from the Available Funds, to the Servicer, the Additional
Servicing Fee and for the related Monthly Period and any overdue
Additional Servicing Fees; and
(x) from the Available Funds, to the Certificate Distribution
Account for distribution to the Certificateholders or their designees, any
remaining funds.
provided, however, that, (A) following an acceleration of the Notes or, (B) if
an Insurer Default shall have occurred and be continuing, following the
occurrence of an Event of Default pursuant to Section 5.1(i), 5.1(ii), 5.1(iii),
5.1(v) or 5.1(vi) of the Indenture, or (C) following the receipt of Insolvency
Proceeds pursuant to Section 9.1(b), amounts deposited in the Note Distribution
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Account shall be applied to the Noteholders to the extent necessary to pay
accrued and unpaid interest on the Notes and then, to the extent funds are
available therefor, principal on the Notes until the principal balance of the
Notes has been reduced to zero, in accordance with the provisions of Section 5.6
of the Indenture. Notwithstanding item (ix) above, for so long as the Servicer
and/or its affiliates are the owners of the Certificates, amounts to be remitted
pursuant to such item (ix) to the Certificate Distribution Account may instead
be distributed directly to the Certificateholders by the Servicer.
(c) Reserved.
(d) In the event that the Collection Account is maintained with an
institution other than the Indenture Collateral Agent, the Servicer shall
instruct and cause such institution to make all deposits and distributions
pursuant to Section 5.6(a) and Section 5.6(b) on the related Distribution Date.
SECTION 5.7 [RESERVED] .
SECTION 5.8 Statements to Certificateholders and Noteholders. On or prior
to each Determination Date, the Servicer shall provide to the Trustee (with a
copy to the Security Insurer and the Rating Agencies) for the Trustee to forward
to each Noteholder of record, to each Paying Agent, if any, and to the Owner
Trustee for the Owner Trustee to forward to each Certificateholder of record, a
statement substantially in the form of Exhibit C, setting forth at least the
following information with respect to distributions on the related Distribution
Date as to the Notes and the Certificates to the extent applicable:
(i) the amount of such distribution allocable to principal of
each Class of Notes;
(ii) the amount of such distribution allocable to interest on or
with respect to each Class of Notes;
(iii) the amount of such distribution payable pursuant to a claim
on the Note Policy and any remaining outstanding balance available to be
drawn under the Note Policy;
(iv) the Month-End Pool Balance as of the close of business on the
last day of the preceding Monthly Period;
(v) the aggregate outstanding principal amount of each Class of
the Notes and the Note Pool Factor for each such Class, after giving
effect to payments allocated to principal reported under (i) above;
(vi) the amount of the Servicing Fee paid to the Servicer with
respect to the related Monthly Period and/or due but unpaid with respect
to such Monthly Period or prior Monthly Periods, as the case may be;
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(vii) the Noteholders' Interest Carryover Shortfall;
(viii) the amount of the aggregate Realized Losses, if any, for the
related Monthly Period;
(ix) the aggregate Purchase Amounts for Receivables, if any, that
were repurchased in such period;
(x) the amounts which were collected by the Servicer;
(xi) the aggregate amount which was received by the Trust from the
Servicer;
(xii) any reimbursements to the Security Insurer;
(xiii) delinquency information relating to Receivables which are 30,
60 or 90 days delinquent;
(xiv) the aggregate Payahead Balance; and
(xv) the aggregate amount distributed to the Certificateholders.
Each amount set forth pursuant to paragraph (i), (ii), (iii), (vii), (x) and
(xi) above shall be expressed as a dollar amount per $1,000 of the initial
principal balance of the Notes (or Class thereof).
SECTION 5.9 Net Deposits. As an administrative convenience, unless the
Servicer is required to remit collections within two Business Days of receipt
thereof, the Servicer will be permitted to make the deposit of collections on
the Receivables and Purchase Amounts for or with respect to each Monthly Period
net of distributions to be made to the Servicer with respect to such Monthly
Period. Similarly, the Servicer may cause to be made a single, net transfer,
from the Collection Account to the Payahead Account, or vice versa. The
Servicer, however, will account to the Owner Trustee, the Trustee, the Indenture
Collateral Agent, the Noteholders and the Certificateholders as if all deposits,
distributions and transfers were made individually.
SECTION 5.10 Optional Deposits by the Security Insurer. The Security
Insurer shall at any time, and from time to time, with respect to a Distribution
Date, have the option (but shall not be required, except in accordance with the
terms of the Note Policy) to deliver or cause to be delivered amounts ("Insurer
Optional Deposits") to the Trustee for deposit into the Collection Account for
any of the following purposes: (i) to provide funds in respect of the payment of
fees or expenses of any provider of services to the Trust with respect to such
Distribution Date or (ii) to include such amount to the extent that without such
amount a draw would be required to be made on the Note Policy.
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ARTICLE VI
The Seller
SECTION 6.1 Representations of the Seller. The Seller makes the following
representations on which the Security Insurer shall be deemed to have relied in
executing and delivering the Note Policy and on which the Issuer is deemed to
have relied in acquiring the Receivables. The representations speak as of the
execution and delivery of this Agreement and as of the Closing Date (unless
another date or time period is otherwise specified or indicated in the
particular representation or warranty), and shall survive the sale to the Issuer
and the pledge thereof to the Trustee pursuant to the Indenture.
(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, and had at all
relevant times, and has, the power, authority and legal right to acquire and own
the Receivables.
(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
property, including the Receivables, or the conduct of its business shall
require such qualifications.
(c) Power and Authority of the Seller. The Seller has the power and
authority to execute and deliver this Agreement and to perform its obligations
under each of the Basic Documents to which the Seller is a party; the Seller has
full power and authority to sell and assign the property to be sold and assigned
to and deposited with the Issuer and the Seller has duly authorized such sale
and assignment to the Issuer by all necessary action; and the execution,
delivery and performance of each of the Basic Documents to which the Seller is a
party has been duly authorized by the Seller by all necessary action.
(d) Binding Obligation. This Agreement and each of the Basic
Documents to which the Seller is a party constitute legal, valid and binding
obligations of the Seller, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws now or hereafter in effect relating to
creditors' rights generally and subject to general principles of equity (whether
applied in a proceeding at law or in equity).
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof and thereof do not
result in any breach of any of the terms and provisions of, nor constitute (with
or without notice or lapse of time or both) a default under, the certificate of
formation or limited liability company agreement of the Seller, or any
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
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Documents); nor violate any law or, to the best of its 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.
(f) No Proceedings. There are no proceedings or investigations
pending against the Seller or, to its best knowledge, threatened against the
Seller, before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller or its
properties: (i) asserting the invalidity of this Agreement or any of the Basic
Documents, the Notes or the Certificates, (ii) seeking to prevent the issuance
of the Notes or the Certificates or the consummation of any of the transactions
contemplated by this Agreement or any of the Basic Documents, (iii) seeking any
determination or ruling that could reasonably be expected to have a material and
adverse effect on the performance by the Seller of its obligations under, or the
validity or enforceability of, the Basic Documents, the Notes or the
Certificates or (iv) that might adversely affect the federal income tax
attributes of the Issuer, the Notes or the Certificates.
(g) All Consents. All authorizations, consents, orders or approvals
of or registrations or declarations with any court, regulatory body,
administrative agency or other government instrumentality required to be
obtained, effected or given by the Seller in connection with the execution and
delivery by the Seller of this Agreement or any of the Basic Documents to which
it is a party and the performance by the Seller of the transactions contemplated
by this Agreement, or any of the Basic Documents to which it is a party, have
been duly obtained, effected or given and are in full force and effect, except
where failure to obtain the same would not have a material and adverse effect
upon the rights of the Issuer, the Noteholders or the Certificateholders.
(h) Chief Executive Office. The chief executive office of the Seller
is at 00 Xxxx 000 Xxxxx, Xxxx Xxxx Xxxx, Xxxx 00000.
SECTION 6.2 Corporate Existence. (a) During the term of this Agreement,
the Seller will keep in full force and effect its existence, rights and
franchises as a limited liability company under the laws of the jurisdiction of
its formation and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Basic Documents
and each other instrument or agreement necessary or appropriate to the proper
administration of this Agreement and the transactions contemplated hereby.
(b) During the term of this Agreement, the Seller shall observe the
applicable legal requirements for the recognition of the Seller as a legal
entity separate and apart from its Affiliates, including as follows:
(i) the Seller shall maintain records and books of account separate
from those of its Affiliates;
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(ii) except as otherwise provided in this Agreement, the Seller
shall not commingle its assets and funds with those of its Affiliates;
(iii) the Seller shall hold such appropriate meetings of its members
as are necessary to authorize all the Seller's actions required by law to
be authorized by the members, shall keep minutes of such meetings and of
meetings of its stockholder(s) and observe all other customary formalities
(and any successor Seller not a corporation shall observe similar
procedures in accordance with its governing documents and applicable law);
(iv) the Seller shall at all times hold itself out to the public
under the Seller's own name as a legal entity separate and distinct from
its Affiliates; and
(v) all transactions and dealings between the Seller and its
Affiliates will be conducted on an arm's-length basis.
SECTION 6.3 Liability of Seller; Indemnities. The Seller shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.
(a) The Seller shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Trust, the Security Insurer, the Trustee and the
Indenture Collateral Agent from and against any taxes that may at any time be
asserted against any such Person with respect to the transactions contemplated
in this Agreement and any of the Basic Documents (except any income taxes
arising out of fees paid to any of them and except any taxes to which the Owner
Trustee or the Trustee may otherwise be subject to), including any sales, gross
receipts, general corporation, tangible personal property, privilege or license
taxes (but, in the case of the Issuer, not including any taxes asserted with
respect to, federal or other income taxes arising out of distributions on the
Certificates and the Notes) and costs and expenses in defending against the
same.
(b) The Seller shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Trustee, the Indenture Collateral Agent, the Security
Insurer, and the Noteholders from and against any loss, liability or expense
incurred by reason of (i) the Seller's willful misfeasance, bad faith or
negligence in the performance of its duties under this Agreement or the other
Basic Documents, or by reason of reckless disregard of its obligations and
duties under this Agreement and (ii) the Seller's or the Issuer's violation of
Federal or state securities laws in connection with the offering and sale of the
Notes.
(c) The Seller shall indemnify, defend and hold harmless the Owner
Trustee and its officers, directors, employees and agents from and against any
and all costs, expenses, losses, claims, damages and liabilities arising out of,
or incurred in connection with the acceptance or performance of the trusts and
duties set forth herein and in the Basic Documents except to the extent that
such cost, expense, loss, claim, damage or liability shall be due to the
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willful misfeasance, bad faith or negligence (except for errors in judgment) of
the Owner Trustee.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee, the Trustee or the Indenture Collateral Agent and
the termination of this Agreement, the Indenture or the Trust Agreement, as
applicable, and shall include reasonable fees and expenses of counsel and other
expenses of litigation. If the Seller shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such payments
are made thereafter shall collect any of such amounts from others, such Person
shall promptly repay such amounts to the Seller, without interest.
SECTION 6.4 Merger or Consolidation of, or Assumption of the Obligations
of, the Seller. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Seller shall be a party or (c) which may succeed to the properties and assets of
the Seller substantially as a whole, which Person in any of the foregoing cases
executes an agreement of assumption to perform every obligation of the Seller
under this Agreement, shall be the successor to the Seller hereunder without the
execution or filing of any document or any further act by any of the parties to
this Agreement; provided, however, that (i) unless an Insurer Default shall have
occurred and be continuing, the Seller shall have received the written consent
of the Security Insurer prior to entering into any such transaction, (ii)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 3.1 shall have been breached and no Servicer
Default, and no event which, after notice or lapse of time, or both, would
become a Servicer Default shall have happened and be continuing, (iii) the
Seller shall have delivered to the Owner Trustee, the Trustee and the Security
Insurer an Officer's Certificate and an Opinion of Counsel each stating that
such consolidation, merger or succession and such agreement of assumption comply
with this Section and that all conditions precedent, if any, provided for in
this Agreement relating to such transaction have been complied with, (iv) the
Rating Agency Condition shall have been satisfied with respect to such
transaction and (v) the Seller shall have delivered to the Owner Trustee, the
Trustee and the Security Insurer an Opinion of Counsel stating that, in the
opinion of such counsel, either (A) all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary fully to preserve and protect the interest of the Owner Trustee and
the Trustee, respectively, in the Receivables and reciting the details of such
filings or (B) no such action shall be necessary to preserve and protect such
interest. Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (i), (ii), (iii),
(iv) and (v) above shall be conditions to the consummation of the transactions
referred to in clauses (a), (b) or (c) above.
SECTION 6.5 Limitation on Liability of Seller and Others. The Seller and
any member or officer or employee or agent of the Seller may rely in good faith
on the advice of counsel or on any document of any kind, prima facie properly
executed and submitted by any Person respecting any matters arising under any
Basic Document. The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it in any
expense or liability.
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SECTION 6.6 Seller May Own Certificates or Notes. The Seller and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates or Notes with the same rights as it would have if it
were not the Seller or an Affiliate thereof, except as expressly provided herein
or in any Basic Document. Notes or Certificates so owned by the Seller or such
Affiliate shall have an equal and proportionate benefit under the provisions of
the Basic Documents, without preference, priority, or distinction as among all
of the Notes or Certificates, provided, however, that any Notes or Certificates
owned by the Seller or any Affiliate thereof, during the time such Notes or
Certificates are owned by them, shall be without voting rights for any purpose
set forth in the Basic Documents and will not be entitled to the benefits of the
Note Policy. The Seller shall notify the Owner Trustee, the Trustee and the
Security Insurer promptly after it or any of its Affiliates become the owner of
a Certificate or a Note. The Seller hereby notifies the Owner Trustee that
immediately following the issuance of the Certificates it will own all the
Certificates.
ARTICLE VII
The Servicer
SECTION 7.1 Representations of Servicer. Franklin Capital, in its capacity
as Servicer, makes the following representations on which the Security Insurer
shall be deemed to have relied in executing and delivering the Note Policy and
on which the Issuer is deemed to have relied in acquiring the Receivables. The
representations speak as of the execution and delivery of this Agreement and as
of the Closing Date, and shall survive the sale of the Receivables to the Issuer
and the pledge thereof to the Trustee pursuant to the Indenture.
(a) Organization and Good Standing. Franklin Capital is duly
organized and validly existing as a corporation in good standing under the laws
of the state of its incorporation, with the corporate power and authority to own
its properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant times,
and has, the power, authority and legal right to acquire, own, sell and service
the Receivables and to hold the Receivable Files as custodian.
(b) Due Qualification. Franklin Capital is duly qualified to do
business and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of property or the conduct of its
business (including the servicing of the Receivables as required by this
Agreement) shall require such qualifications, and was duly qualified and had all
licenses in all relevant jurisdictions required for the origination of the
Receivables.
(c) Power and Authority of the Servicer. Franklin Capital has the
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder, and the execution, delivery and performance
of this Agreement have been duly authorized by Franklin Capital by all necessary
corporate action. All authorizations, consents, orders or approvals of or
registrations or declarations with any court, regulatory body,
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administrative agency or other government instrumentality required to be
obtained, effected or given by Franklin Capital in connection with the execution
and delivery by the Servicer of this Agreement or any of the Basic Documents to
which it is a party and the performance by the Servicer of the transactions
contemplated by this Agreement or any of the Basic Documents to which it is a
party, have been duly obtained, effected or given and are in full force and
effect, except where failure to obtain the same would not have a material
adverse effect upon the rights of the Issuer or the Noteholders.
(d) Binding Obligation. This Agreement constitutes a legal, valid
and binding obligation of Franklin Capital, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and similar laws now or hereafter in effect relating
to creditors' rights generally, and subject to general principles of equity
(whether applied in a proceeding at law or in equity).
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof do not result in any
breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time) a default under the articles of incorporation or
by-laws of Franklin Capital, or any indenture, agreement or other instrument to
which Franklin Capital is a party or by which it shall be bound; or result in
the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement or other instrument (other than
pursuant to the Basic Documents); or violate any law or, to the best of Franklin
Capital's knowledge, any order, rule or regulation applicable to Franklin
Capital of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over Franklin
Capital or its properties.
(f) No Proceedings. There are no proceedings or investigations
pending against Franklin Capital, or, to its best knowledge, threatened against
Franklin Capital, before any court, regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over Franklin Capital or
its properties: (i) asserting the invalidity of this Agreement or any of the
Basic Documents or the Notes, (ii) seeking to prevent the issuance of the Notes
or the consummation of any of the transactions contemplated by this Agreement or
any of the Basic Documents, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by Franklin Capital of its
obligations under, or the validity or enforceability of this Agreement or any of
the Basic Documents or the Notes or (iv) relating to Franklin Capital and which
might adversely affect the federal income tax or ERISA attributes of the Issuer
or the Notes.
SECTION 7.2 Indemnities of Servicer. (a) The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement and the representations made by
the Servicer herein.
(b) The Servicer shall defend, indemnify and hold harmless the Owner
Trustee, the Trustee, the Trust, the Indenture Collateral Agent, the Security
Insurer, the Noteholders and the Seller from and against any and all costs,
expenses, losses, damages, claims,
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and liabilities, arising out of or resulting from the use, ownership or
operation by the Servicer or any Affiliate thereof of a Financed Vehicle.
(c) The Servicer shall indemnify, defend and hold harmless the Owner
Trustee, the Trustee, the Seller, the Trust, the Indenture Collateral Agent, the
Security Insurer, their respective officers, directors, agents and employees and
the Noteholders from and against any and all costs, expenses, losses, claims,
damages, and liabilities to the extent that such costs, expenses, losses,
claims, damages, or liabilities arose out of, or were imposed upon any such
Person through, the negligence, willful misfeasance or bad faith of the Servicer
in the performance of its duties under this Agreement or the other Basic
Documents or by reason of reckless disregard of its obligations and duties under
this Agreement.
(d) The Servicer shall indemnify, defend and hold harmless the Owner
Trustee, the Trustee and the Indenture Collateral Agent and their officers,
directors, employees and agents from and against all costs, expenses, losses,
claims, damages and liabilities arising out of or incurred in connection with
the acceptance or performance of the trusts and duties herein, the Indenture and
in the Trust Agreement, except to the extent that such costs, expenses, losses,
claims, damages or liabilities shall be due to the willful misfeasance, bad
faith or negligence (except for errors in judgment) of the Owner Trustee, the
Indenture Trustee or the Indenture Collateral Agent, as applicable.
For purposes of this Section, in the event of the termination of the
rights and obligations of Franklin Capital (or any successor thereto pursuant to
Section 7.3) as Servicer pursuant to Section 8.1, or a resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer (other than the Trustee)
pursuant to Section 8.2.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Trustee or the termination of this
Agreement, the Indenture or the Trust Agreement, as applicable, and shall
include reasonable fees and expenses of counsel and expenses of litigation. If
the Servicer shall have made any indemnity payments pursuant to this Section and
the recipient thereafter collects any of such amounts from others, such Person
shall promptly repay such amounts to the Servicer, without interest.
SECTION 7.3 Merger or Consolidation of, or Assumption of the Obligations
of, the Servicer. Any Person (a) into which the Servicer may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Servicer shall be a party, (c) which may succeed to the properties and assets of
the Servicer, substantially as a whole or (d) with respect to the Servicer's
obligations hereunder, which is a corporation 50% or more of the voting stock of
which is owned, directly or indirectly, by Franklin Resources, which Person
executed an agreement of assumption to perform every obligation of the Servicer
hereunder shall be the successor to the Servicer under this Agreement without
further act on the part of any of the parties to this Agreement; provided,
however, that (i) unless an Insurer Default shall have occurred and be
continuing, the Servicer shall have received the written consent of the Security
Insurer prior to entering into any such transaction, (ii) immediately after
giving effect to such
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transaction, no Servicer Default and no event which, after notice or lapse of
time, or both, would become a Servicer Default shall have happened and be
continuing, (iii) the Servicer shall have delivered to the Owner Trustee, the
Trustee and the Security Insurer an Officer's Certificate and an Opinion of
Counsel (which shall not be addressed to the Security Insurer as long as an
Insurer Default exists) each stating that such consolidation, merger or
succession and such agreement of assumption comply with this Section and that
all conditions precedent provided for in this Agreement relating to such
transaction have been complied with, (iv) the Rating Agency Condition shall have
been satisfied with respect to such transaction and (v) the Servicer shall have
delivered to the Owner Trustee, the Trustee and the Security Insurer an Opinion
of Counsel (which shall not be addressed to the Security Insurer as long as an
Insurer Default exists) stating that, in the opinion of such counsel, either (A)
all financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect the
interest of the Owner Trustee and the Trustee, respectively, in the Receivables
and reciting the details of such filings or (B) no such action shall be
necessary to preserve and protect such interest. Notwithstanding anything herein
to the contrary, the execution of the foregoing agreement of assumption and
compliance with clauses (i), (ii), (iii), (iv) and (v) above shall be conditions
to the consummation of the transactions referred to in clauses (a), (b), (c) or
(d) above.
SECTION 7.4 Limitation on Liability of the Servicer and Others. Neither
the Servicer nor any of its directors, officers, employees or agents shall be
under any liability to the Issuer, the Noteholders or the Certificateholders,
except as provided under this Agreement, for any action taken or for refraining
from the taking of any action pursuant to this Agreement or for errors in
judgment; provided, however, that this provision shall not protect the Servicer
or any such person against any liability that would otherwise be imposed by
reason of willful misfeasance, bad faith or negligence (except for errors in
judgment) in the performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement. The Servicer or any subservicer and
any of their respective directors, officers, employees or agents may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its duties to service the Receivables in accordance
with this Agreement, and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer, may (but shall not be required
to) undertake any reasonable action that it may deem necessary or desirable to
protect the interests of the Certificateholders under the Trust Agreement and
the Noteholders under the Indenture.
SECTION 7.5 Servicer Not To Resign. Subject to the provisions of Section
7.3, the Servicer may not resign from the obligations and duties hereby imposed
on it as Servicer under this Agreement or the other Basic Documents except upon
determination that by reason of a change in legal requirements the performance
of its duties under this Agreement would cause it to be in violation of such
legal requirements in a manner which would result in a material adverse effect
on the Servicer and the Security Insurer does not elect to waive the obligations
of
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the Servicer to perform the duties which render it legally unable to act or does
not elect to delegate those duties to another Person. Notice of any such
determination permitting the resignation of the Servicer shall be communicated
to the Owner Trustee, the Trustee and the Security Insurer at the earliest
practicable time (and, if such communication is not in writing, shall be
confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered to and satisfactory to the Owner Trustee, the Trustee and the Security
Insurer concurrently with or promptly after such notice. No such resignation of
the Servicer shall become effective until a successor servicer shall have
assumed the responsibilities and obligations of Franklin Capital in accordance
with Section 8.2 of this Agreement.
ARTICLE VIIA
The Representative
SECTION 7.1A Representations of Franklin Resources. Franklin Resources
makes the following representations on which the Security Insurer shall be
deemed to have relied in executing and delivering the Note Policy and on which
the Issuer is deemed to have relied in acquiring the Receivables. The
representations speak as of the execution and delivery of this Agreement and as
of the Closing Date, and shall survive the sale of the Receivables to the Issuer
and the pledge thereof to the Trustee pursuant to the Indenture.
(a) Organization and Good Standing. Franklin Resources is duly
organized and validly existing as a corporation in good standing under the laws
of the state of its incorporation, with the corporate power and authority to own
its properties and to conduct its business as such properties are currently
owned and such business is presently conducted.
(b) Due Qualification. Franklin Resources is duly qualified to do
business and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of property or the conduct of its
business shall require such qualifications.
(c) Power and Authority. Franklin Resources has the corporate power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder, and the execution, delivery and performance of this
Agreement have been duly authorized by Franklin Resources by all necessary
corporate action. All authorizations, consents, orders or approvals of or
registrations or declarations with any court, regulatory body, administrative
agency or other government instrumentality required to be obtained, effected or
given by Franklin Resources in connection with the execution and delivery by
Franklin Resources of this Agreement or any of the Basic Documents to which it
is a party and the performance by Franklin Resources of the transactions
contemplated by this Agreement or any of the Basic Documents to which it is a
party, have been duly obtained, effected or given and are in full force and
effect, except where failure to obtain the same would not have a material
adverse effect upon the rights of the Issuer or the Noteholders.
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(d) Binding Obligation. This Agreement constitutes a legal, valid
and binding obligation of Franklin Resources, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and similar laws now or hereafter in effect relating
to creditors' rights generally, and subject to general principles of equity
(whether applied in a proceeding at law or in equity).
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof do not result in any
breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time) a default under the articles of incorporation or
by-laws of Franklin Resources, or any indenture, agreement or other instrument
to which Franklin Resources is a party or by which it shall be bound; or result
in the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement or other instrument (other than
pursuant to the Basic Documents); or violate any law or, to the best of Franklin
Resources' knowledge, any order, rule or regulation applicable to Franklin
Resources of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over Franklin Resources or its properties.
(f) No Proceedings. There are no proceedings or investigations
pending against Franklin Resources or, to its best knowledge, threatened against
Franklin Resources, before any court, regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over Franklin Resources
or its properties: (i) asserting the invalidity of this Agreement or any of the
Basic Documents or the Notes, (ii) seeking to prevent the issuance of the Notes
or the consummation of any of the transactions contemplated by this Agreement or
any of the Basic Documents, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by Franklin Resources of its
obligations under, or the validity or enforceability of, this Agreement or any
of the Basic Documents or the Notes or (iv) relating to Franklin Resources and
which might adversely affect the federal income tax or ERISA attributes of the
Issuer or the Notes.
SECTION 7.2A Limitation on Liability of Franklin Resources and Others.
Neither Franklin Resources nor any of its directors, officers, employees or
agents shall be under any liability to the Issuer, the Noteholders or the
Certificateholders, except as provided under this Agreement, for any action
taken or for refraining from the taking of any action pursuant to this Agreement
or for errors in judgment; provided, however, that this provision shall not
protect Franklin Resources or any such person against any liability that would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties under this Agreement. Franklin Resources or and any of its directors,
officers, employees or agents may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
arising under this Agreement.
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ARTICLE VIII
Default
SECTION 8.1 Servicer Default. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) Any failure by the Servicer to deliver to the Owner
Trustee or the Trustee for deposit in any of the Trust Accounts or the
Certificate Distribution Account any payment required to be so delivered under
the terms of the Notes, the Certificates or this Agreement that shall continue
unremedied for a period of 30 Business Days after written notice of such failure
is received by the Servicer from the Security Insurer, the Owner Trustee or the
Trustee or after discovery of such failure by an Officer of the Servicer; or
(b) Failure by the Servicer or the Seller (as the case may be)
duly to observe or to perform in any material respect any other covenants or
agreements of the Servicer or the Seller (as the case may be) set forth in the
Notes, the Certificates, this Agreement or any other Basic Document, which
failure shall (i) materially and adversely affect the rights of the
Certificateholders, the Security Insurer or the Noteholders and (ii) continue
unremedied for a period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given (A) to
the Servicer by the Security Insurer, the Owner Trustee or the Trustee or (B) to
the Servicer, the Owner Trustee and the Trustee by the Holders of Notes
evidencing not less than 25% of the outstanding principal amount of the Notes as
applicable (or for such longer period, not in excess of 120 days, as may be
reasonably necessary to remedy such default; provided that such default is
capable of remedy within 120 days and the Servicer delivers an Officers'
Certificate to the Security Insurer, the Owner Trustee and the Trustee to such
effect and to the effect that the Servicer has commenced or will promptly
commence, and will diligently pursue, all reasonable efforts to remedy such
default); or
(c) An Insolvency Event occurs with respect to the Servicer
or any successor; or
(d) So long as an Insurer Default shall not have occurred and
be continuing, an Insurance Agreement Trigger Event described in Section 6.01 of
the Insurance Agreement shall have occurred;
then, and in each and every case, (i) so long as no Insurer Default shall have
occurred and be continuing, the Trustee may, with the consent of the Security
Insurer and at the direction of the Security Insurer, the Trustee shall, subject
to subsection (b) of this Section 8.1 or (ii) if an Insurer Default shall have
occurred and be continuing, any of the Trustee or the Holders of Notes
evidencing not less than a majority of the principal amount of the Notes then
outstanding or Holders of Certificates of Percentage Interests greater than 50%
in the case of any default that does not adversely affect the Trustee or the
Noteholders, in any case by notice given in writing to the Servicer (and to the
Trustee if given by the Security Insurer or, as applicable, the Noteholders or
the Certificateholders) may terminate all of the rights and obligations of the
Servicer under
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this Agreement. For purposes of Section 8.1(b), any determination of an adverse
effect on the interest of the Certificateholders or the Noteholders pursuant to
Section 8.1(b) shall be made without consideration of the availability of funds
under the Note Policy. On or after the receipt by the Servicer of such written
notice, all authority, power, obligations and responsibilities of the Servicer
under this Agreement, whether with respect to the Notes, the Certificates or the
Receivables or otherwise, automatically shall pass to, be vested in and become
obligations and responsibilities of the Trustee provided that the Trustee is not
unwilling or unable to act; provided, however, that the Trustee shall have no
liability with respect to any obligation which was required to be performed by
the prior Servicer prior to the date that the Trustee becomes the Servicer or
any claim of a third party based on any alleged action or inaction of the prior
Servicer. The Trustee is authorized and empowered by this Agreement, as
successor Servicer to execute and deliver, on behalf of the prior Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and the other Trust Property and related
documents, to show the Trustee as lienholder or secured party on the related
Lien Certificates, or otherwise. The prior Servicer agrees to cooperate with the
successor Servicer in effecting the termination of the responsibilities and
rights of the prior Servicer under this Agreement, including, without
limitation, the transfer to the successor Servicer for administration by it of
all cash amounts that shall at the time be held by the prior Servicer for
deposit, or have been deposited by the prior Servicer, in the Collection Account
or thereafter received with respect to the Receivables and the delivery to the
successor Servicer of all Receivables Files, records and a computer tape in
readable form containing all information necessary to enable the successor
Servicer to service the Receivables and the other Trust Property. The terminated
Servicer shall grant the Trustee, (in its capacity as Trustee and/or successor
Servicer), the Owner Trustee and the Security Insurer reasonable access to the
terminated Servicer's premises at the Servicer's reasonable expense.
SECTION 8.2 Appointment of Successor. (a) Upon the Servicer's receipt
of notice of termination, pursuant to Section 8.1 or the Servicer's resignation
in accordance with the terms of this Agreement, the predecessor Servicer shall
continue to perform its functions as Servicer under this Agreement, in the case
of termination, only until the date specified in such termination notice or, if
no such date is specified in a notice of termination, until receipt of such
notice and, in the case of resignation, until the later of (x) the date 45 days
from the delivery to the Owner Trustee and the Trustee of written notice of such
resignation (or written confirmation of such notice) in accordance with the
terms of this Agreement and (y) the date upon which the predecessor Servicer
shall become unable to act as Servicer, as specified in the notice of
resignation and accompanying Opinion of Counsel. In the event of the Servicer's
termination hereunder, the Trustee shall, provided it is not unwilling or unable
to act, assume the obligations of the Servicer hereunder and, unless an Insurer
Default shall have occurred and be continuing, shall accept its appointment by a
written assumption in form acceptable to the Security Insurer. Notwithstanding
the above, the Trustee, with the prior written consent of the Security Insurer,
or the Security Insurer shall, if the Trustee shall be unwilling or legally
unable so to act, appoint, or petition a court of competent jurisdiction to
appoint, any established institution having a net worth of not less than
$50,000,000 and whose regular business shall include the servicing of
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automotive receivables as the successor to the Servicer under this Agreement.
Any successor Servicer shall be acceptable to the Security Insurer.
(b) Upon appointment, the successor Servicer (including the
Trustee acting as successor Servicer) shall be the successor in all respects to
the predecessor Servicer and shall be subject to all the responsibilities,
duties and liabilities arising thereafter relating thereto placed on the
predecessor Servicer, subject to the exceptions set forth in Section 8.2(a)
hereof, and shall be entitled to the Servicing Fee and all the rights granted to
the predecessor Servicer by the terms and provisions of this Agreement.
SECTION 8.3 [RESERVED]
SECTION 8.4 Notification to Noteholders and Certificateholders. Upon
any termination of, or appointment of a successor to, the Servicer pursuant to
this Article VIII, the Owner Trustee shall give prompt written notice thereof to
Certificateholders and the Security Insurer, and the Trustee shall give prompt
written notice thereof to Noteholders and to the Rating Agencies.
SECTION 8.5 Waiver of Past Defaults. So long as no Insurer Default
shall have occurred and be continuing, the Security Insurer (or, if an Insurer
Default shall have occurred and be continuing, the Holders of Notes evidencing
not less than a majority of the outstanding principal amount of the Notes, or
Holders of Certificates of Percentage Interests greater than 50% in the case of
any default which does not adversely affect the Trustee or the Noteholders (in
each case, in any default which does not adversely affect the Security Insurer)
may, on behalf of all Noteholders and Certificateholders, waive any default by
the Servicer in the performance of its obligations hereunder and its
consequences, except a default in making any required deposits to or payments
from any of the Trust Accounts in accordance with this Agreement. Upon any such
waiver of a past default, such default shall cease to exist, and any Servicer
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereto.
ARTICLE IX
Termination
SECTION 9.1 Optional Purchase of All Receivables. (a) On the last day
of any Monthly Period as of which the Pool Balance shall be less than or equal
to 10% of the Original Pool Balance, the Servicer shall have the option to
purchase the Owner Trust Estate, other than the Trust Accounts and the
Certificate Distribution Account (with the consent of the Security Insurer if
such purchase would result in a claim on the Note Policy or would result in any
amount owing to the Security Insurer under the Insurance Agreement remaining
unpaid); provided, however, that the amount to be paid for such purchase (as set
forth in the following sentence) shall be sufficient to pay the full amount of
principal, premium and other amounts owing to the Security Insurer if any, and
interest then due and payable on the Notes. To exercise such option,
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the Servicer shall deposit pursuant to Section 5.5 in the Collection Account an
amount equal to the aggregate Purchase Amount for the Receivables, plus any
amounts then due and owing to the Security Insurer plus the appraised value of
any other property held by the Trust, such value to be determined by an
appraiser mutually agreed upon by the Servicer, the Security Insurer (unless an
Insurer Default shall have occurred and be continuing), the Owner Trustee and
the Trustee, and shall succeed to all interests in and to the Trust.
(b) Upon any sale of the assets of the Trust pursuant to the
Trust Agreement, the Servicer shall instruct the Trustee to deposit the proceeds
from such sale after all payments and reserves therefrom (including the expenses
of such sale) have been made (the "Insolvency Proceeds") in the Collection
Account. On the Distribution Date on which the Insolvency Proceeds are deposited
in the Collection Account (or, if such proceeds are not so deposited on a
Distribution Date, on the Distribution Date immediately following such deposit),
the Servicer shall instruct the Trustee to make, and the Trustee shall make, the
following deposits and distributions (after the application on such Distribution
Date of the Distribution Amount pursuant to Section 5.6(b)) from the Insolvency
Proceeds and the Distribution Amount for such Distribution Date:
(i) to the Note Distribution Account, any portion of the
Noteholders' Interest Distributable Amount not otherwise deposited into
the Note Distribution Account on such Distribution Date; and
(ii) to the Note Distribution Account, the outstanding
principal amount of the Notes (after giving effect to the reduction in
the outstanding principal amount of the Notes to result from the
deposits made in the Note Distribution Account on such Distribution
Date).
Any Insolvency Proceeds remaining after the deposits described above shall be
paid first to the Security Insurer to the extent of any amounts owing to the
Security Insurer under the Insurance Agreement and not paid, and second, to the
extent of any remaining funds, to the Certificateholders.
(c) Notice of any termination of the Trust shall be given by
the Servicer to the Owner Trustee, the Trustee, the Indenture Collateral Agent,
the Security Insurer and the Rating Agencies as soon as practicable after the
Servicer has received notice thereof.
(d) Following the satisfaction and discharge of the Indenture
and the payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder and
the Owner Trustee will succeed to the rights of the Trustee pursuant to this
Agreement.
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ARTICLE X
Administrative Duties of the Servicer
SECTION 10.1 Administrative Duties. (a) Duties with Respect to the
Indenture and Depository Agreements. The Servicer shall perform all its duties
and the duties of the Issuer under the Indenture and the other Basic Documents.
In addition, the Servicer shall consult with the Owner Trustee as the Servicer
deems appropriate regarding the duties of the Issuer under the Indenture and the
other Basic Documents. The Servicer shall monitor the performance of the Issuer
and shall advise the Owner Trustee when action is necessary to comply with the
Issuer's duties under the Indenture and the other Basic Documents. The Servicer
shall prepare for execution by the Issuer or shall cause the preparation by
other appropriate Persons of all such documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the Issuer to prepare, file
or deliver pursuant to the Indenture and the other Basic Documents. In
furtherance of the foregoing, the Servicer shall take all necessary action that
is the duty of the Issuer to take pursuant to the Indenture and the other Basic
Documents, including, without limitation, pursuant to Sections 2.7, 3.5, 3.6,
3.7, 3.9, 6.7, 7.2, 7.3, 11.1 and 11.15 of the Indenture.
(b) Duties with Respect to the Issuer.
(i) In addition to the duties of the Servicer set forth in
this Agreement or any of the Basic Documents, the Servicer shall
perform such calculations and shall prepare for execution by the Issuer
or the Owner Trustee or shall cause the preparation by other
appropriate Persons of all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the
Issuer or the Owner Trustee to prepare, file or deliver pursuant to
this Agreement or any of the Basic Documents or state or Federal
securities laws, and at the request of the Owner Trustee shall take all
appropriate action that it is the duty of the Issuer to take pursuant
to this Agreement or any of the Basic Documents, including, without
limitation, pursuant to Sections 2.6 and 2.13 of the Trust Agreement.
In accordance with the directions of the Issuer or the Owner Trustee,
the Servicer shall administer, perform or supervise the performance of
such other activities in connection with the Collateral (including the
Basic Documents) as are not covered by any of the foregoing provisions
and as are expressly requested by the Issuer or the Owner Trustee and
are reasonably within the capability of the Servicer.
(ii) Notwithstanding anything in this Agreement or any of the
Basic Documents to the contrary, the Servicer shall be responsible for
promptly notifying the Owner Trustee in the event that any withholding
tax is imposed on the Issuer's payments (or allocations of income) to
an Owner (as defined in the Trust Agreement) as contemplated in Section
5.2(c) of the Trust Agreement. Any such notice shall be in writing and
specify the amount of any withholding tax required to be withheld by
the Owner Trustee pursuant to such provision.
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(iii) Notwithstanding anything in this Agreement or the Basic
Documents to the contrary, the Servicer shall be responsible for
performance of the duties of the Issuer or the Owner Trustee set forth
in Section 5.6(a), (b), (c) and (d) of the Trust Agreement with respect
to, among other things, accounting and reports to Holders (as defined
in the Trust Agreement); provided, however, that once prepared by the
Servicer and filed with the appropriate tax authorities, the Owner
Trustee shall retain responsibility for the distribution of the
Schedule K-1s necessary to enable each Certificateholder to prepare its
federal and state income tax returns.
(iv) The Servicer shall perform the duties of the Servicer
specified in Section 10.2 of the Trust Agreement required to be
performed in connection with the resignation or removal of the Owner
Trustee, and any other duties expressly required to be performed by the
Servicer under this Agreement or any of the Basic Documents.
(v) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Servicer may enter into
transactions with or otherwise deal with any of its Affiliates;
provided, however, that the terms of any such transactions or dealings
shall be in accordance with any directions received from the Issuer and
shall be, in the Servicer's opinion, no less favorable to the Issuer in
any material respect.
(c) Tax Matters. The Servicer shall prepare and file, on
behalf of the Seller, so long as it is a Certificateholder, all tax returns, tax
elections, financial statements and such annual or other reports of the Issuer
as are necessary for preparation of tax reports as provided in Article V of the
Trust Agreement, including without limitation Forms 1099. All tax returns will
be signed by Seller, so long as it is a Certificateholder.
(d) Non-Ministerial Matters. With respect to matters that in
the reasonable judgment of the Servicer are non-ministerial, the Servicer shall
not take any action pursuant to this Article X unless within a reasonable time
before the taking of such action, the Servicer shall have notified the Owner
Trustee and the Trustee of the proposed action and the Owner Trustee and, with
respect to items (A), (B), (C) and (D) below, the Trustee shall not have
withheld consent or provided an alternative direction. For the purpose of the
preceding sentence, "non-ministerial matters" shall include:
(A) the amendment of or any supplement to the
Indenture;
(B) the initiation of any claim or lawsuit by the
Issuer and the compromise of any action, claim or lawsuit
brought by or against the Issuer (other than in connection
with the collection of the Receivables);
(C) the amendment, change or modification of this
Agreement or any of the Basic Documents;
(D) the appointment of successor Note Registrars,
successor Paying Agents and successor Trustees pursuant to the
Indenture or the appointment of
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Successor Servicers or the consent to the assignment by the
Note Registrar, Paying Agent or Trustee of its obligations
under the Indenture; and
(E) the removal of the Trustee.
(e) Exceptions. Notwithstanding anything to the contrary in
this Agreement, except as expressly provided herein or in the other Basic
Documents, the Servicer, in its capacity hereunder, shall not be obligated to,
and shall not, (1) make any payments to the Noteholders or Certificateholders
under the Basic Documents, (2) sell the Owner Trust Estate pursuant to Section
5.5 of the Indenture, (3) take any other action that the Issuer directs the
Servicer not to take on its behalf or (4) in connection with its duties
hereunder assume any indemnification obligation of any other Person.
SECTION 10.2 Records. The Servicer shall maintain appropriate books of
account and records relating to services performed under this Agreement, which
books of account and records shall be accessible for inspection by the Issuer at
any time during normal business hours.
SECTION 10.3 Additional Information to be Furnished to the Issuer. The
Servicer shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.
SECTION 10.4 Replacement Note Policy. In the event of an Insurer
Default or the rating of the Security Insurer is downgraded by any Rating Agency
such that the rating of any Class of Notes is reduced, suspended or withdrawn,
the Servicer shall be permitted, provided that all amounts payable to the
Security Insurer pursuant to the Insurance Agreement have been paid in full, (i)
replace the Note Policy with a financial guaranty insurance policy issued by
another insurer provided that the ratings on the financial strength of such
replacement insurer are higher than those of the insurer sought to be replaced
(after giving effect to such reduction) or (ii) eliminate or provide another
form of credit enhancement; provided that in the case of clause (ii), the Rating
Agencies consent thereto and confirmation that the ratings of the Notes will be
increased from their then-current levels (after giving effect to such reduction)
as a result of such action shall have been obtained. It shall be a condition to
substitution of any such new financial guaranty insurance policy or other form
of credit enhancement that there be delivered to the Trustee (i) an Officer's
Certificate by the Servicer stating that the conditions to such substitution set
forth in this Section 10.4 (other than in clause (ii)) have been satisfied and
(ii) a legal opinion, acceptable in form to the Trustee, from counsel to the
provider of such financial guaranty insurance policy or other form of credit
enhancement with respect to the enforceability thereof and such other matters as
the Trustee may require. Upon receipt of written notice of any such substitution
from the Servicer and the taking of physical possession of the replacement
financial guaranty insurance policy or other form of credit enhancement, the
Trustee shall, within five Business Days following receipt of such notice and
such taking of physical possession, deliver the Note Policy marked "Cancelled"
to the Security Insurer, and the Security Insurer will have no further liability
under the Note Policy.
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ARTICLE XI
Miscellaneous Provisions
SECTION 11.1 Amendment. This Agreement may be amended from time to time
by the Representative, the Seller, the Servicer and the Owner Trustee, with the
consent of the Trustee (which consent may not be unreasonably withheld), with
the prior written consent of the Security Insurer (so long as no Insurer Default
has occurred and is continuing) but without the consent of any of the
Noteholders or the Certificateholders, to cure any ambiguity, to correct or
supplement any provisions in this Agreement, to comply with any changes in the
Code, or to make any other provisions with respect to matters or questions
arising under this Agreement which shall not be inconsistent with the provisions
of this Agreement or the Insurance Agreement; provided, however, that such
action shall not, adversely affect in any material respect the interests of any
Noteholder or Certificateholder; 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 adversely affect the interests of the
Security Insurer. An amendment shall be deemed not to adversely affect the
interests of any such holder if the Rating Agency Condition shall have been
satisfied.
This Agreement may also be amended from time to time by the
Representative, the Seller, the Servicer and the Owner Trustee, with the consent
of the Security Insurer (so long as no Insurer Default has occurred and is
continuing), the consent of the Trustee, the consent of the Holders of Notes
evidencing not less than a majority of the outstanding principal amount of the
Notes and the consent of the Holders of Certificates evidencing not less than a
Percentage Interest greater than 50% for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall (a) increase
or reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that shall be required
to be made for the benefit of the Noteholders or the Certificateholders or (b)
reduce the aforesaid percentage of the outstanding principal amount of the Notes
and the Percentage Interests, the Holders of which are required to consent to
any such amendment, without the consent of the Holders of all the outstanding
Notes and the Certificates, of each Class affected thereby; 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
adversely affect the interest of the Security Insurer.
Promptly after the execution of any such amendment or consent
pursuant to either of the preceding paragraphs, the Owner Trustee shall furnish
written notification of the substance of such amendment or consent to each
Certificateholder and the Rating Agencies (and the Security Insurer, if the
Security Insurer's consent was not obtained).
It shall not be necessary for the consent of
Certificateholders or Noteholders pursuant to this Section to approve the
particular form of any proposed amendment or consent, but it shall be sufficient
if such consent shall approve the substance thereof. The manner of obtaining
such consents (and any other consents of Noteholders or Certificateholders
provided
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for in this Agreement) and of evidencing the authorization of any action by
Noteholders or Certificateholders shall be subject to such reasonable
requirements as the Trustee or the Owner Trustee, as applicable, may prescribe.
Prior to the execution of any amendment to this Agreement, the
Owner Trustee, the Trustee and the Security Insurer shall be entitled to receive
and rely upon an Opinion of Counsel stating that the execution of such amendment
is authorized or permitted by this Agreement and the Opinion of Counsel referred
to in Section 11.2(i)(1) has been delivered. The Owner Trustee and the Trustee
may, but shall not be obligated to, enter into any such amendment which affects
the Issuer's, the Owner Trustee's or the Trustee's, as applicable, own rights,
duties or immunities under this Agreement or otherwise.
SECTION 11.2 Protection of Title to Trust. (a) The Seller shall execute
and file such financing statements and cause to be executed and filed such
continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Issuer and the interests of the Indenture Collateral Agent on behalf of the
Noteholders, the Certificateholders and the Security Insurer in the Receivables
and in the proceeds thereof. The Seller shall deliver (or cause to be delivered)
to the Security Insurer, the Owner Trustee and the Indenture Collateral Agent
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.
(b) Neither the Seller nor the Servicer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of Section 9-402(7)
of the UCC, unless it shall have given the Security Insurer, the Owner Trustee
and the Trustee at least five days' prior written notice thereof and shall have
promptly filed appropriate amendments to all previously filed financing
statements or continuation statements. Promptly upon such filing, the Seller or
the Servicer, as the case may be, shall unless an Insurer Default shall have
occurred and be continuing, deliver to the Security Insurer, the Owner Trustee
and the Trustee an Opinion of Counsel in form and substance reasonably
satisfactory to the Security Insurer, or if an Insurer Default shall have
occurred and be continuing an Opinion of Counsel satisfactory to the Trustee
stating either (A) all financing statements and continuation statements have
been executed and filed that are necessary fully to preserve and protect the
interest of the Trust and the Trustee in the Receivables, and reciting the
details of such filings or referring to prior Opinions of Counsel in which such
details are given, or (B) no such action shall be necessary to preserve and
protect such interest.
(c) Each of the Seller and the Servicer shall have an
obligation to give the Security Insurer, the Owner Trustee and the Trustee at
least 60 days' prior written notice of any relocation of its principal executive
office if, as a result of such relocation, the applicable provisions of the UCC
would require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and shall promptly file
any such amendment. The Servicer shall at all times maintain each office from
which it shall service Receivables, and its principal executive office, within
the United States of America.
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(d) The Servicer shall maintain accounts and records as to
each Receivable accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Receivable, including payments
and recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection Account
in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that,
from and after the time of sale under this Agreement of the Receivables to the
Issuer, the Servicer's master computer records (including any backup archives)
that refer to a Receivable shall indicate clearly the interest of the Issuer and
the Trustee on behalf of the Certificateholders, the Noteholders and the
Security Insurer in such Receivable and that such Receivable is owned by the
Issuer and has been pledged to the Trustee. Indication of the Issuer's and the
Trustee's interest in a Receivable shall be deleted from or modified on the
Servicer's computer systems when, and only when, the related Receivable shall
have been paid in full or repurchased.
(f) If at any time the Seller or the Servicer shall propose to
sell, grant a security interest in or otherwise transfer any interest in
automotive receivables to any prospective purchaser, lender or other transferee,
the Servicer shall give to such prospective purchaser, lender or other
transferee computer tapes, records or printouts (including any restored from
backup archives) that, if they shall refer in any manner whatsoever to any
Receivable, shall indicate clearly that such Receivable has been sold and is
owned by the Issuer and has been pledged to the Trustee on behalf of the
Certificateholders, the Noteholders and the Security Insurer.
(g) The Servicer shall permit the Trustee and the Security
Insurer and their respective agents at any time during normal business hours to
inspect, audit and make copies of and abstracts from the Servicer's records
regarding any Receivable or any other portion of the Trust Property. The
preceding sentence shall not create any duty or obligation on the part of the
Trustee to perform any such acts.
(h) Upon request, the Servicer shall furnish to the Security
Insurer, the Owner Trustee or the Trustee, within five Business Days, a list of
all Receivables (by contract number and name of Obligor) then held as part of
the Trust, together with a reconciliation of such list to the Schedule of
Receivables and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Security Insurer, the
Owner Trustee and the Trustee:
(1) Upon the execution and delivery of this Agreement and, if
required pursuant to Section 11.1, of each amendment, an Opinion of
Counsel stating that, in the opinion of such Counsel, in form and
substance reasonably satisfactory to the Controlling Party, either (A)
all financing statements and continuation statements have been executed
and filed that are necessary fully to preserve and protect the interest
of the Trust and the Trustee in the Receivables, and reciting the
details of such filings or referring to prior
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Opinions of Counsel in which such details are given or (B) no such
action shall be necessary to preserve and protect such interest; and
(2) On or before October 30 of each calendar year, a
certificate signed by the Secretary or Assistant Secretary of the
Servicer and an authorized officer of the managing member of the Seller
stating that, to such officer's knowledge, following consultation with
counsel, the Servicer or the Seller, as applicable, has determined that
it was not necessary or desirable to file any continuation UCC
financing statement or other UCC financing statement during such fiscal
year in order to maintain the perfection of the Trustee's security
interest, for the benefit of the Noteholders and the Security Insurer,
in the Trust Property or if the Servicer or the Seller has determined
that any such filing was necessary or desirable, describing the reason
for any such filing and attaching a copy thereof to such certificate.
Each Opinion of Counsel referred to in clause (l) or (2) above
shall specify any action necessary (as of the date of such opinion) to be taken
in the following year to preserve and protect such interest.
(j) The Seller shall, to the extent required by applicable
law, cause the Certificates and the Notes to be registered with the Commission
pursuant to Section 12(b) or Section 12(g) of the Exchange Act within the time
periods specified in such sections.
(k) On or before December 31 of each year, the Servicer shall
forward to the Owner Trustee a list of the scheduled holidays in California for
the following calendar year.
SECTION 11.3 Notices. All demands, notices and communications upon or
to the Seller, the Servicer, the Owner Trustee, the Trustee or the Rating
Agencies under this Agreement shall be in writing, personally delivered,
delivered by overnight courier or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in the
case of the Seller to 00 Xxxx 000 Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, XX 00000,
Attention: Xxxxxxxx X. Xxxx, with a copy to Franklin Resources, 000 Xxxxxxxx
Xxxxxx Xxxx., Xxx Xxxxx, XX 00000, Attention: General Counsel; (b) in the case
of the Servicer to 00 Xxxx 000 Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, XX 00000,
Attention: Xxxxxxxx X. Xxxx, with a copy to Franklin Resources, 000 Xxxxxxxx
Xxxxxx Xxxx., Xxx Xxxxx, XX 00000, Attention: General Counsel; (c) in the case
of the Representative, to 000 Xxxxxxxx Xxxxxx Xxxx., Xxx Xxxxx, XX 00000,
Attention: General Counsel; (d) in the case of the Issuer or the Owner Trustee,
at the Corporate Trust Office of the Owner Trustee, with a copy to Bankers Trust
Company, 0 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Trust and Agency Group, Structured Finance; (e) in the case of the
Trustee or the Indenture Collateral Agent, at the Corporate Trust Office; (f) in
the case of the Security Insurer, to MBIA Insurance Corporation, 000 Xxxx
Xxxxxx, Xxxxxx, Xxx Xxxx 00000, Attention: Insured Portfolio Management-SF; (g)
in the case of Moody's, to Xxxxx'x Investors Service, Inc., ABS Monitoring
Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; and (g) in the case of
Standard & Poor's, to Standard & Poor's Ratings Group, 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Asset Backed Surveillance Department. Any
notice required or permitted to be mailed to a Noteholder or Certificateholder
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shall be given by first class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register or Note Register, as applicable. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder or Noteholder shall receive such notice.
SECTION 11.4 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 6.4 and 7.3 and as provided in
the provisions of this Agreement concerning the resignation of the Servicer,
this Agreement may not be assigned by the Seller or the Servicer without the
prior written consent of the Owner Trustee, the Trustee and the Security Insurer
(or if an Insurer Default shall have occurred and be continuing the Holders of
Notes evidencing not less than 66% of the principal amount of the outstanding
Notes.)
SECTION 11.5 Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Seller, the Servicer, the Issuer,
the Owner Trustee and for the benefit of the Certificateholders, the Trustee,
the Security Insurer and the Noteholders, as third-party beneficiaries. Nothing
in this Agreement, whether express or implied, shall be construed to give to any
other Person, other than express third-party beneficiaries, any legal or
equitable right, remedy or claim in the Owner Trust Estate or under or in
respect of this Agreement or any covenants, conditions or provisions contained
herein.
SECTION 11.6 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.7 Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.8 Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.9 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.10 Assignment to Trustee. The Seller hereby acknowledges and
consents to any mortgage, pledge, assignment and grant of a security interest by
the Issuer to the Trustee pursuant to the Indenture for the benefit of the
Issuer Secured Parties (as defined in the Indenture) of all right, title and
interest of the Issuer in, to and under the Receivables and/or the assignment of
any or all of the Issuer's rights and obligations hereunder to the Trustee.
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SECTION 11.11 Nonpetition Covenants. (a) Notwithstanding any prior
termination of this Agreement, the parties hereto shall not, prior to the date
which is one year and one day after the termination of this Agreement with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Issuer to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Issuer under any federal
or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Issuer.
(b) Notwithstanding any prior termination of this Agreement,
the parties hereto shall not, prior to the date that is one year and one day
after the termination of this Agreement with respect to the Seller, acquiesce
to, petition or otherwise invoke or cause the Seller to invoke the process of
any court or government authority for the purpose of commencing or sustaining a
case against the Seller under any federal or state bankruptcy, insolvency or
similar law, appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator, or other similar official of the Seller or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Seller.
SECTION 11.12 Limitation of Liability of Owner Trustee, Trustee and
Indenture Collateral Agent. (a) Notwithstanding anything contained herein to the
contrary, this Agreement has been countersigned by Bankers Trust (Delaware) not
in its individual capacity but solely in its capacity as Owner Trustee of the
Issuer and in no event shall Bankers Trust (Delaware) in its individual capacity
or, except as expressly provided in the Trust Agreement, as Owner Trustee have
any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder or in any of the certificates, notices
or agreements delivered pursuant hereto, as to all of which recourse shall be
had solely to the assets of the Issuer. For all purposes of this Agreement, in
the performance of its duties or obligations hereunder or in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by The Chase Manhattan Bank, not in its
individual capacity but solely as Trustee and as Indenture Collateral Agent, and
in no event shall The Chase Manhattan Bank have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Issuer.
SECTION 11.13 Independence of the Servicer. For all purposes of this
Agreement, the Servicer shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Owner Trustee with respect to
the manner in which it accomplishes the performance of its obligations
hereunder. Unless expressly authorized by the Issuer, the Servicer shall have no
authority to act for or represent the Issuer or the Owner Trustee in any way and
shall not otherwise be deemed an agent of the Issuer or the Owner Trustee.
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SECTION 11.14 No Joint Venture. Nothing contained in this Agreement (i)
shall constitute the Servicer and either of the Issuer or the Owner Trustee as
members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be construed to
impose any liability as such on any of them or (iii) shall be deemed to confer
on any of them any express, implied or apparent authority to incur any
obligation or liability on behalf of the others.
SECTION 11.15 Third-Party Beneficiaries. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. The Security Insurer and its successors and
assigns shall be a third-party beneficiary to the provisions of this Agreement,
and shall be entitled to rely upon and directly to enforce such provisions of
this Agreement, except as expressly limited by the terms hereof, so long as no
Insurer Default consisting of a failure to pay under the Note Policy shall have
occurred and be continuing. Except as expressly stated otherwise herein or in
the Basic Documents, any right of the Security Insurer to direct, appoint,
consent to, approve of, or take any action under this Agreement, shall be a
right exercised by the Security Insurer in its sole and absolute discretion.
SECTION 11.16 Disclaimer by Security Insurer. 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 and the Trustee.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective duly authorized
officers as of the day and year first above written.
FRANKLIN AUTO TRUST 2000-1
By BANKERS TRUST (DELAWARE),
not in its individual capacity but solely as Owner
Trustee on behalf of the Trust,
By /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Vice President;
Attorney-in-Fact
FRANKLIN RECEIVABLES LLC,
Seller
By FRANKLIN CAPITAL CORPORATION,
as managing member
By /s/ Xxxxxx X. Xxxxxx Xx.
-------------------------------------
Name: Xxxxxx X. Xxxxxx Xx.
Title: President and CEO
FRANKLIN CAPITAL CORPORATION,
Servicer,
By /s/ Xxxxxx X. Xxxxxx Xx.
-------------------------------------
Name: Xxxxxx X. Xxxxxx Xx.
Title: President and CEO
FRANKLIN RESOURCES, INC.,
Representative,
By /s/ Xxxxxxxx X. Xxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxx
Title: Vice President
-65-
72
Acknowledged and Accepted:
THE CHASE MANHATTAN BANK, not
in its individual capacity
but solely as Trustee,
THE CHASE MANHATTAN BANK, not
in its individual capacity
but solely as Indenture Collateral
Agent
By /s/ Xxxxxxxx Xxxxxxxxxx
--------------------------------
Name: Xxxxxxxx Xxxxxxxxxx
Title: Assistant Vice President
By
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Name:
Title:
Acknowledged and Accepted:
BANKERS TRUST (DELAWARE),
not in its individual capacity
but solely as Owner Trustee,
By /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Vice President
Acknowledged and Accepted:
-66-
73
SCHEDULE A
Schedule of Receivables
74
SCHEDULE B
Location of Receivables
Franklin Capital Corporation
00 Xxxx 000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Downtown Self Storage
000 Xxxx 000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
75
Exhibit A
[Reserved]
76
Exhibit B
[Reserved]
77
Exhibit C
FORM OF MONTHLY NOTEHOLDER STATEMENT
FRANKLIN AUTO TRUST 2000-1
Class A-1 7.02% Asset Backed Notes
Class A-2 7.25% Asset Backed Notes
Distribution Date:
Monthly Period:
Under the Sale and Servicing Agreement, dated as of March 1, 2000 (the
"Sale and Servicing Agreement"), among Franklin Capital Corporation, as
servicer, Franklin Receivables LLC, as seller, Franklin Resources, Inc., as
representative and Franklin Auto Trust 2000-1, as issuer, the Servicer is
required to prepare certain information each month regarding current
distributions to Noteholders and the performance of the Trust during the
previous month. The information that is required to be prepared with respect to
the Distribution Date and Monthly Period listed above is set forth below.
Certain of the information is presented on the basis of an original principal
amount of $1,000 per Note, and certain other information is presented based upon
the aggregate amounts for the Trust as a whole. Capitalized terms used herein
and not otherwise defined herein have the meanings assigned to those terms in
the Sale and Servicing Agreement.
A. Information Regarding the Current Monthly Distribution.
1. Notes.
(a) The aggregate amount of the
distribution with respect to:
the Class A-1 Notes..................................$________
the Class A-2 Notes..................................$________
(b) The amount of the distribution set
forth in paragraph A.1.(a) above in
respect of interest on:
the Class A-1 Notes..................................$________
the Class A-2 Notes..................................$________
(c) The amount of the distribution set
78
forth in paragraph A.1.(a) above in
respect of principal of:
the Class A-1 Notes..................................$________
the Class A-2 Notes..................................$________
(d) The amount of the distribution in
A.1.(a) payable pursuant to a claim
on the Note Policy with respect to:
the Class A-1 Notes..................................$_______
the Class A-2 Notes..................................$_______
(e) The remaining outstanding balance
available to be drawn under the
Note Policy................................................$_______
(f) The amount of the distribution set
forth in paragraph A.1.(a) above
per $1,000 interest in:
the Class A-1 Notes..................................$________
the Class A-2 Notes..................................$________
(g) The amount of the distribution set
forth in paragraph A.1.(b) above
per $1,000 interest in:
the Class A-1 Notes..................................$________
the Class A-2 Notes..................................$________
(h) The amount of the distribution set
forth in paragraph A.1.(c) above
per $1,000 interest in:
the Class A-1 Notes..................................$________
the Class A-2 Notes..................................$________
(i) The amount of the distribution set
forth in paragraph A.1.(d) above
per $1,000 interest in:
the Class A-1 Notes.................................$________
the Class A-2 Notes.................................$________
B. Information Regarding the Performance of the Trust.
1. Pool Balance and Note Principal Balance.
(a)The Pool Balance at the close of business on
the last day of the Monthly Period..........................$_____
79
(b) The aggregate outstanding principal amount
of each Class of Notes after giving effect
to payments allocated to principal as set
forth in Paragraph A.1(c) above with respect
to:
the Class A-1 Notes............................................................$________
the Class A-2 Notes............................................................$________
(c) The Note Pool Factor for each Class of Notes
after giving affect to the payments set forth
in paragraph A.1(c) with respect to:
the Class A-1 Notes.............................................................________
the Class A-2 Notes.............................................................________
(d) The amount of aggregate Realized Losses for the
second preceding Monthly Period.....................................................$________
(e) The aggregate Purchase Amount for all Receivables
that were repurchased in the Monthly Period.........................................$________
(f) The aggregate Payahead Balance on such Distribution
Date................................................................................$________
(g) The change in the Payahead Balance from the preceding
Distribution Date...................................................................$________
2. Servicing Fee.
The aggregate amount of the Servicing
Fee paid to the Servicer with respect
to the preceding Monthly Period......................................................$________
3. Payment Shortfalls.
(a) The amount of the Noteholders' Interest Carryover
Shortfall after giving effect to the payments set
forth in paragraph A.1(b) above with respect to:
the Class A-1 Notes...........................................................$_________
the Class A-2 Notes...........................................................$_________
80
(b) The amount of the Noteholders' Interest Carryover
Shortfall set forth in paragraph B.3.(a) above per
$1,000 interest with respect to:
the Class A-1 Notes............................................................$________
the Class A-2 Notes............................................................$________
4. (a) The aggregate amount of collections by
the Servicer during the preceding
Monthly Period........................................................................$______
(b) The aggregate amount which was received by
the Trust from the Servicer during the
preceding Monthly Period..............................................................$______
(c) The aggregate amount of reimbursements to
the Security Insurer during the preceding
Monthly Period........................................................................$______
(d) The number of Receivables that are delinquent
for over:
30 days........................................................................______
60 days........................................................................______
90 days........................................................................______
81
Exhibit D
Form of Servicer's Certificate
82
Exhibit E
Form of Note Policy
