Document:

Exhibit 10.1

                                 Mining Contract

                 Compania Minera Santa Rita, S. de R.L. de C.V.
                             Caborca, Sonora, Mexico

                                     For the
                                 Contract Mining

                                       At
                              El Chanate Gold Mine
                             Caborca, Sonora, Mexico

                                      With
                 Sinergia Obras Civiles y Mineras, S.A. de C.V.
                           Hermosillo, Sonora, Mexico

                                                               November 24, 2005

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                                TABLE OF CONTENTS

                                                                     Page
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1.    THE WORK.........................................................2

      1.1   Background.................................................2

      1.2   Scope of Work..............................................2

      1.3   General Information........................................2

      1.4   Mining Plan................................................3

      1.5   Pre-Production Activities..................................3

      1.6   Contractor Responsibilities................................3

      1.7   Delays Caused by MSR......................................10

      1.8   Owner's Access............................................11

      1.9   Cooperation with Other Contractors........................11

      1.10  Subcontractors............................................11

      1.11  Project Management and Organization.......................11

      1.12  MSR's Responsibilities....................................11

      1.13  Exclusion from Work.......................................12

      1.14  Possible Additional Work..................................12

2.    TERM............................................................13

3.    REPRESENTATIVES OF THE PARTIES..................................13

      3.1   MSR Representative........................................13

      3.2   Contractor Representative.................................13

4.    MINING CONTRACT AND REPORTING UNITS.............................14

5.    PAYMENT.........................................................14

      5.1   Progress Payments.........................................14

      5.2   Mining Contract Rates.....................................15

      5.3   Deviations and Corrections................................15

      5.4   Performance of Force Account Work.........................15

      5.5   Price Rise/Price Fall Calculation.........................16

      5.6   Withholding Payments and Setoff...........................20

      5.7   Mobilization and Demobilization Payments..................20

      5.8   Advance Payment...........................................20

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                                TABLE OF CONTENTS
                                   (continued)

                                                                     Page
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6.    CONTRACT VALUE..................................................21

7.    CONTRACTOR PERFORMANCE..........................................21

8.    ENVIRONMENTAL AND PERMITTING....................................22

      8.1   Permitting................................................22

      8.2   Site Conditions...........................................22

      8.3   Waste Disposal............................................23

      8.4   Sewage and Wastewater Disposal............................23

9.    SAFETY..........................................................24

      9.1   Site Safety...............................................24

      9.2   Compliance with Laws......................................24

      9.3   Contactor Responsibility..................................24

      9.4   Interim Reclamation.......................................25

      9.5   Inspection................................................25

      9.6   Security..................................................25

10.   EQUIPMENT INSPECTION............................................26

11.   CONTRACTOR STATUS...............................................26

12.   SITE AND EQUIPMENT INSPECTION AND ACCESS........................27

      12.1  Inspection................................................27

      12.2  Access to Site............................................28

      12.3  Problems at the Site......................................28

13.   ADDITIONAL CONTRACTOR DUTIES....................................29

      13.1  Dust Control..............................................29

      13.2  Additional Equipment......................................29

      13.3  Survey Control............................................29

      13.4  Monuments.................................................29

      13.5  Labor Disputes............................................29

      13.6  Wages.....................................................30

      13.7  Ad Valorem Taxes..........................................30

      13.8  Legal Issues..............................................30

      13.9  Spare Parts...............................................30

      13.10 Maintenance...............................................30

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                                TABLE OF CONTENTS
                                   (continued)

                                                                     Page
                                                                     ----

      13.11 Non-Discrimination........................................31

      13.12 Antiquities...............................................31

14.   ADDITIONAL DUTIES OF MSR........................................31

      14.1  Payment of Taxes..........................................31

      14.2  Access....................................................31

      14.3  Problems with the Work....................................32

15.   INSURANCE.......................................................32

      15.1  Coverage..................................................32

      15.2  Additional Insured........................................33

      15.3  Deductibles...............................................33

      15.4  Certificates..............................................33

      15.5  Default...................................................33

      15.6  Scope of Coverage.........................................34

      15.7  Additional Insurance......................................34

      15.8  Subcontractor Insurance...................................34

16.   LIENS AND ENCUMBRANCES..........................................35

      16.1  Prompt Payment............................................35

      16.2  No Liens..................................................35

      16.3  Repairs...................................................35

      16.4  Indemnity.................................................35

17.   INDEMNIFICATION AND DISTRIBUTION OF RISK........................35

      17.1  Indemnification by Contractor.............................35

      17.2  Damage to Contractor's Equipment..........................36

      17.3  Indemnification by MSR....................................37

      17.4  Joint Liability...........................................37

      17.5  Procedure.................................................38

      17.6  Materials of Environmental Concern........................39

      17.7  Limitation on Damages.....................................39

18.   FORCE MAJEURE...................................................39

      18.1  Definition................................................39

      18.2  Suspension of Obligations.................................40

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                                TABLE OF CONTENTS
                                   (continued)

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      18.3  Duration..................................................40

19.   CONTRACT SUSPENSION.............................................41

      19.1  Right to Suspend..........................................41

      19.2  Consequences of Suspension................................41

      19.3  Compensation for Suspension...............................41

      19.4  Resumption of Work........................................42

      19.5  Duration of Suspension....................................42

      19.6  Suspension for Cause......................................43

20.   CONTRACT TERMINATION............................................43

      20.1  Mutual Agreement..........................................43

      20.2  Default by Contractor.....................................43

      20.3  Use of Equipment..........................................44

      20.4  Default by MSR............................................45

      20.5  Termination for Convenience...............................45

      20.6  Survival..................................................46

      20.7  No Decree Required........................................46

      20.8  Release...................................................46

21.   CONTRACT AWARD AND EFFECTIVE DATE...............................47

      21.1  Notice of Award and Notice to Proceed.....................47

      21.2  Change in Rates...........................................47

22.   REPRESENTATIONS AND WARRANTIES..................................48

      22.1  MSR Representations and Warranties........................48

      22.2  Contractor Representations and Warranties.................49

      22.3  Performance Warranty......................................49

      22.4  No Third-Party Beneficiaries..............................50

      22.5  Exclusivity...............................................50

23.   LABOR LAW RELATED LIABILITIES...................................50

      23.1  Contractor's Obligations..................................50

      23.2  Indemnity.................................................51

      23.3  No Responsibility.........................................51

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                                TABLE OF CONTENTS
                                   (continued)

                                                                     Page
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24.   PERFORMANCE BOND................................................51

25.   DISPUTE RESOLUTION..............................................52

      25.1  Informal Resolution.......................................52

      25.2  Memorandum................................................52

      25.3  Refusal to Perform........................................52

26.   FORMAL DISPUTE RESOLUTION.......................................52

      26.1  Arbitration...............................................52

27.   JURISDICTION....................................................55

28.   TRANSFERABILITY OF CONTRACT.....................................55

29.   SUCCESSORS AND ASSIGNEES........................................56

30.   RECORDS AND AUDIT...............................................56

31.   CONFIDENTIALITY.................................................56

32.   MISCELLANEOUS...................................................57

      32.1  Amendment; Waivers........................................57

      32.2  Entire Agreement..........................................57

      32.3  Counterparts..............................................57

      32.4  Invalidity................................................58

      32.5  No Solicitation...........................................58

      32.6  Further Assurances........................................58

      32.7  Schedule for Performance..................................58

      32.8  Interpretation............................................58

33.   NOTICES.........................................................59

      33.1  Procedure.................................................59

      33.2  Electronic Communications.................................59

34.   MINING CONTRACT SIGNATURE PAGE..................................61

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Figures

Figure 1 - Mining Schedule.................................Appendix C, 2
Figure 2 - Dump Schedule...................................Appendix C, 3
Figure 3 - Year 1, Months 1-6 Production Schedule..........Appendix C, 4
Figure 4 - Mine Production Schedule by Quarters............Appendix C, 5
Figure 5 - Annual Mine Production Schedule.................Appendix C, 6

Appendices

A       Sinergia Bid
B       Responsibility of Parties
C & D   Mining Plan & Mining Plan Maps
D1      Haulage Profiles
E       Stand-by Rates
F       Notification Forms
        F-1     Notice of Award
        F-2     Acceptance of Notice
        F-3     Notice to Proceed
        F-4     Force Account Work Authorization
G       Summary Table of Contract Value
H       Permits Not Yet Obtained by MSR
I       Instrument of Authority for Gifford Dieterle
J       Instrument of Authority for Daniel Gutierrez Perez
K       Baseline Numbers for Purposes of Section 21.2.

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                                    PREAMBLE

      It is intended that the terms of this Mining Contract (scope of work,
conditions of work, work practices, production targets, safety requirements
etc.) are to be achievable by both parties, and that both parties can benefit
under the Mining Contract. Minera Santa Rita, S. de R.L. de C.V. ("MSR")
acknowledges the need of Sinergia Obras Civiles y Mineras, S.A. de C.V. (the
"Contractor") to profit through performing mining operations, and the Contractor
acknowledges the need of MSR to profit from suitable development of the El
Chanate property. Notwithstanding this provision, neither MSR nor Contractor
represents, warrants, promises or guarantees that the other will make a profit
from its operations hereunder.

      Both parties acknowledge that there will be adjustments needed as a result
of changes encountered during the period of the Mining Contract, and that
certain specific provisions have been included where anticipated. Not all
changes encountered can be anticipated and with that in mind a general procedure
has been provided for handling such change conditions in the Mining Contract.
Wherever possible it is intended that two-way communication and mutual agreement
between MSR and the Contractor will be able resolve most, if not all, issues.

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      THIS MINING CONTRACT (the "Mining Contract" or the "Agreement") is made
and entered into as of the 24th day of November, 2005, but effective only as of
the Effective Date (as defined in Section 21), by and between Minera Santa Rita,
S. de R.L. de C.V., a corporation organized under the federal laws of Mexico,
whose address for purposes hereof is Calle Lamberto Hernandez 73, esquina con
Avenida "I", Caborca, Sonora 83600, Mexico ("MSR") and Sinergia Obras Civiles y
Mineras, S.A., de C.V., a corporation organized under the federal laws of
Mexico, whose address for purposes hereof is Calle del Cobre No. 91, Parque
Industrial, Hermosillo, Sonora 85540, Mexico ("Contractor").

                                    RECITALS

      A. MSR intends to construct the El Chanate gold mine near Caborca, Sonora,
Mexico (the "Mine"). As part of this operation MSR desires to employ an
independent contractor to perform the mining. MSR solicited bids to perform this
work.

      B. Contractor desires to perform such mining (the "Work," as more
particularly described in Article 1 and Appendices A-D attached to this Mining
Contract), and represents that it has the skills and experience necessary to
conduct the Work, and that it is willing to and capable of performing such
operations for MSR.

      C. Contractor recognizes the reliance, faith and confidence MSR places in
Contractor (i) to furnish the experience, knowledge, skill and judgment required
to cooperate with and advance the interests of MSR at the Mine through sound
mining methods, careful supervision and efficient administration and (ii) to
pursue and complete the Work in an expeditious, timely and economical manner
consistent with the interests of MSR, all of which Contractor is able and
willing to do for the compensation and in accordance with the terms and
conditions hereinafter set forth.

                                    AGREEMENT

      NOW, THEREFORE, in consideration of the mutual conditions and covenants
hereinafter set forth, the parties agree as follows:

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                                      H-1
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1.    The Work

1.1   Background

      MSR has retained M3 Engineering and Technology Corp (M3) of Tucson,
Arizona, to complete a feasibility study for the Mine (the "Feasibility Study").
The mining portion of the Feasibility Study will be completed by Independent
Mining Consultants of Tucson, Arizona and the geotechnical portion by Call and
Nicholas, also of Tucson, Arizona. K D Engineering of Tucson was primarily
responsible for the metallurgical test work. Upon its completion, MSR will
provide Contractor with a copy of the Feasibility Study. To the extent the
completed Feasibility Study requires any material changes to the Mining Plan (as
defined in Section 1.4), those changes, to the extent they required additional
Work on the part of the Contractor, will be treated as Force Account Work (as
defined in Section 5.1.2).

1.2   Scope of Work

      Contractor agrees to conduct all of the mining and related services
described in this Article 1, and in Appendices A-D, in accordance with and
subject to the terms set forth in those Appendices and in this Mining Contract,
and to provide all necessary supervision, labor, methods, material, and supplies
necessary to perform all of the Work.

1.3   General Information

      The Mine design parameters are:

            Slope             Angles 46.5 degree inter-ramp on the north wall

                              45.0 degree inter-ramp on the south, west, and
                              east walls

            Road Width        22 meters

            Road Grade        10 %

            Bench Height      5 m working height, triple benched to 15 m

      Specific Gravity - In Place         Ore   - 2.52 tonnes per cubic meter
                                          Waste - 2.46 tonnes per cubic meter

      Bond Work Index                     11 to 14

      Moisture - In Place                 3%

      Expected Drill Penetration Rate     1.2 meters per minute

      Planned Mine Life                   6 years

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1.4   Mining Plan

      Contractor shall perform and complete all of the Work in accordance with
(a) the mining plan, drawings, maps and profiles set forth in Appendices C, D
and D-1 (collectively, the "Mining Plan"), as the Mining Plan may be modified by
MSR from time to time; (b) the provisions of any concessions covering any
property at the Mine; (c) the provisions of any surface use agreements covering
any property at the Mine; and (d) the provisions of applicable federal, state
and local permits issued or to be issued and applying to activities at the Mine
(collectively, the "Permits").

1.5   Pre-Production Activities

      As part of the Work, Contractor agrees to perform all of the
pre-production activities described in Appendix C.

1.6   Contractor Responsibilities

      In connection with the performance of the Work, the Contractor must
provide, at its sole expense:

            All appropriate equipment to allow for timely and proper
                  performance of the Work, as set forth in Appendix A
                  ("Contractor's Equipment")

            Mobilization and assembly of Contractor's Equipment

            Drilling and blasting (the drill must have an automatic sampling
                  system)

            Load, hauling and dumping of material:
                  Ore to be placed into the primary crusher
                  Waste to be placed on the designated dumps
                  Low grade ore to be placed in a low grade stockpile

            Construction and maintenance of the:
                  Internal mine roads and working surfaces
                  Access roads to the waste dumps
                  Access roads to the crusher
                  Waste dump safety berms
                  Safety berms on roadways

            Pit dewatering

            Pit lighting

            Equipment maintenance (including without limitation lubricants and
                  repair parts)

            Equipment repair shop and appropriate warehouse space

            Field supervision

            Necessary employees

            Transportation for employees to and from the Mine (as required)

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            Food for employees (as required)

            Housing for employees (as required)

            Proper and timely payment of wages and benefits of its employees and
                  making all payments required by applicable federal, state or
                  local laws, rules or regulations on account of its labor
                  relationships with its employees

            Office space, phone and fax

      In addition to the list of Contractor's responsibilities set forth above,
Contractor has agreed to perform the additional responsibilities set forth as
Contractor's Responsibilities in the attached summary document "Responsibilities
of Parties" in Appendix B. The "Responsibilities of Parties" set forth in
Appendix B are a summary of responsibilities to facilitate reference and, in the
event of any inconsistency between the responsibilities as outlined in Appendix
B and described in the main written text of the Mining Contract, the main
written text of the Mining Contract will control.

      1.6.1 Production Rates and Quantities

      (a) The Contractor shall meet the production requirements of the Mining
Plan, as described in the mining production schedule (set forth in Appendix C),
and the open-pit development plan (set forth in Appendix D). Contractor agrees
to meet those production requirements on a daily basis, and to notify MSR's
Representative promptly on any day when it does not meet those production
requirements.

      (b) MSR shall be entitled to make changes to the open-pit design and
production sequencing described in Appendices C and D in advance of or during
mining operations, and any such changes shall not be deemed to relieve
Contractor from any of its obligations under this Mining Contract, provided that
such changes do not increase the average haul distances by more than five
percent on an annual basis, and at least five calendar days advance notice of
such changes is given to Contractor. Any planned reduction in production rates
in excess of 5% must be consented to by Contractor, such consent not to be
unreasonably withheld or delayed. Any planned increase in required production
rates in excess of 5% must be consented to by Contractor, such consent not to be
unreasonably withheld or delayed. In the event that an increase in production
rates would require additional mining equipment, the Contractor would have first
right of refusal as to whether or not to add to the Contractor's Equipment fleet
in order to achieve the increased production rates. Contractor shall have five
(5) calendar days to communicate to MSR in writing that it has exercised this
right of first refusal. Contractor's failure to give that notice to MSR within
the above five (5) calendar day period shall be taken as a waiver of the right,
and in that event MSR may contract with any third party to conduct the
additional Work required by the increase in production rates. If Contractor
exercises its right of first refusal to provide the additional equipment,
Contractor agrees that the fully operational required additional mining
equipment shall be on-site within thirty (30) days after Contractor's
notification to MSR that it has exercised the right of first refusal in
question. Contractor will be compensated for any additional Work required by the
increase in production rates at the same rate as set forth in Appendix A, and
shall not be entitled to any additional compensation related to costs it incurs
in acquiring any additional equipment.

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      1.6.2 Blast Pattern Layout

      MSR will provide sufficient data points including without limitation blast
limit points and elevation points so that Contractor can lay out the blast
pattern to the designed pattern and hole depth. Blast patterns will be laid out
in the field by the MSR surveyor and the limits of the blast patterns will be
indicated. Sufficient information will be provided by the MSR surveyor so that
Contractor can calculate the depth of drilling required and the location of each
blast hole.

      1.6.3 Geology and Grade Control

      (a) Mining will be carried out under the direction of MSR's grade control
engineer. Blasthole samples will be collected by Contractor under the direction
and procedure given by MSR's grade control engineer. These blasthole samples are
required to determine the rock type and will be taken from each drill hole.
MSR's grade control engineer will be responsible for getting the samples to the
laboratory.

      (b) MSR's grade control engineer will be responsible for marking and
outlining all blasted material so that the Contractor can haul the material to
the correct destination. Blasted material will be marked using marked stakes,
ribbons or a combination. Blasted material will be marked as either (i) waste,
(ii) low grade ore for stockpile, or (iii) ore for crusher feed.

      (c) Contractor shall ensure that the material mined is sent to the correct
destination. The Contractor will be penalized for sending ore to the waste dump
or waste to the crusher. This penalty will be the calculated value of the
recoverable gold in each truckload of ore dumped on the waste pile or the
process cost of waste dumped in the crusher, and the amount of such penalty may
be withheld by MSR from subsequent payments due to Contractor under this Mining
Contract, until it is fully recovered.

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      (d) Contractor shall be responsible for not dumping inappropriate material
into the crusher. Should the crusher experience down-time as a result of such
inappropriate material being dumped, the Contractor will be penalized the
calculated cost of the down-time and necessary repairs, and the amount of such
penalty may be withheld by MSR from subsequent payments due to Contractor under
this Mining Contract, until it is fully recovered. Repeated dumping of
inappropriate material into the crusher that causes repeated crusher down-time
or repeated crusher breakdown or damage that denotes gross negligence, gross
lack of care or supervision, deliberate conduct, deficient training of
Contractor's employees, or analogous misconduct shall give MSR the right
terminate this Mining Contract pursuant to Section 20.2 hereof, without any
further liability or obligation on the part of MSR.

      1.6.4 Surveyed Volumes and Tonnage Calculations

      The following are the bulk densities (defined in tonnes per cubic meter)
that will be generally used for routine calculation of tonnages from surveyed
volumes:

Bulk density (in place) - Ore: 2.52
Bulk density (in place) - Waste: 2.46

In some situations (as designated by MSR in its sole discretion) the following
table of bulk densities may be used to more accurately calculate tonnages from
surveyed volumes:

                       Bulk Densities Used in Final Model

----------------------------------------------------------
 Model Rock  Description    Bulk     Bulk Factor    Bulk
    Code                   Density                 Density
----------------------------------------------------------
     1        Alluvium      2.00        1.00        2.00
----------------------------------------------------------
     2          Oxide       2.41        1.00        2.41
----------------------------------------------------------
     3        Sandstone     2.62        0.97        2.54
----------------------------------------------------------
     4          Fault       2.62        0.97        2.54
----------------------------------------------------------
     5        Siltstone     2.67        1.00        2.67
----------------------------------------------------------
     6       Intrusives     2.53        1.00        2.53
----------------------------------------------------------

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      1.6.5 Excess Haul Distance

      Haul distances for ore or waste other than those described in the Mining
Plan and as described in Appendix C and D will be paid for on a cost per
tonne-km. basis. An excess haul distance is a one-way haul distance greater than
1.5 km, as measured from the exit point of the pit. For example, a one-way haul
distance of 1.9 km measured from the exit point of the pit to the dumping point,
would be an excess haul distance of 0.4 km. Excess haul distances will be paid
for on a $0.044/tonne-km basis, and paid in increments of 0.5 km, starting with
the first 0.1 to 0.5 km of excess haul distance. By way of example, if the
excess haul distance was 0.2 km, Contractor would be paid an additional
$0.022/tonne; if the excess haul distance was 0.4 km, Contractor would receive
the same additional $0.022/tonne; if the excess haul distance was 0.6 km,
Contractor would be paid an additional $0.044/tonne.

      1.6.6 Reports to Be Provided by the Contractor

      Contractor agrees to provide the following reports on a timely basis to
the MSR Representative:

      (a) Daily Production Report: indicating the amount of material mined and
its destination on a daily basis and accumulated for the month to date.

      (b) Blasting Report: with content as indicated Section 1.6.11.

      (c) Daily Maintenance Report: indicating the availability of each piece of
major mining equipment, reasons for down time and status of repair work.

      (d) Daily Fuel Usage Report: indicating the fuel used by each piece of
Contractor equipment involved in mining activities.

      (e) Safety Report: a report describing accidents, safety incidents or
threat to health issues shall be provided whenever such an event occurs or is
detected (and no later than 24 hours after occurrence or detection). A routine
weekly report shall be provided even if no such event took place during the
week, and may include suggestions to improve safety.

      (f) Monthly Report: a monthly report indicating total tonnage blasted,
total explosives used, total tonnage of material mined and its destination,
monthly availability of the major mining equipment and reasons for major
breakdowns.

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      (g) Miscellaneous Report: describing other information (on a daily or
monthly basis) as may be requested by the MSR Representative from time to time.
The reports described in Sections 1.6.6(a)-(d) may be combined into one report.
Reports may be in Spanish or English.

      1.6.7 Water

            MSR has purchased a source of industrial water. This water will be
      available for dust control and other industrial uses, at no cost to the
      Contractor. The Contractor will be responsible for supplying its own
      potable water.

      1.6.8 Maintenance Shop, Warehouse and Office Space

      The Contractor shall be responsible for providing its own equipment
maintenance shop, warehouse, and office space. All site preparation and
foundation work shall be the responsibility of the Contractor. MSR will provide
water (other than potable water) and electrical services (subject to the
provisions of Section 1.6.9) for the equipment maintenance shop, the warehouse
and the office space. The facilities described in this Section 1.6.8 will be
located on site in an area agreed to by MSR.

      1.6.9 Electrical Power

      Contractor acknowledges that initially, electrical power will not be
available at the Mine. MSR is currently negotiating with CFE a contract for
construction of a power line to the Mine, which is intended to be constructed
simultaneously with the pre-production stripping, Leach Pad construction and
other infrastructure work. The Contractor must provide its own electrical power,
as necessary for it to perform the Work, until that power line is constructed.
After the power line is constructed, metered electrical power will be provided
by MSR at no additional cost to Contractor.

      1.6.10 Fuel

      MSR will provide standard quality fuel for the Work to the Contractor. Any
fuel required by the Contractor for transportation of equipment or employees to
or from the Mine, or use off the Mine site will be to the account of the
Contractor. Fuel will be metered into the mine fuel tank. The Contractor will
provide MSR with a daily fuel report indicating the amount of fuel used by each
piece of equipment. The amount of fuel used will be reconciled with the
inventory in the mine fuel tank each month. Fuel inventories will be controlled
by warehouse issue slips. Due to the likelihood of increasing fuel prices,
Contractor agrees to operate Contractor's Equipment in an efficient manner, in
order to achieve fuel usages as outlined in manufacturer's performance handbooks
for the various pieces of Contractor's Equipment. Contractor agrees that idling
of engines and non-productive use of Contractor's Equipment will be minimized.
MSR will monitor fuel consumption using the fuel reports and equipment operating
reports.

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      1.6.11 Explosives

      (a) MSR shall be responsible for procuring and warehousing of all
explosives, blasting agents and blasting accessories, as well as obtaining all
necessary permits required by federal, state or local government authorities to
allow for the use of such explosives, blasting agents and blasting accessories.
MSR will provide the Contractor with explosives needed for the Work, as
available for purchase in the Mexican authorized market. Inventories will be
controlled by warehouse issue slips. Contractor shall observe all safety
precautions and comply with all applicable federal, state and local laws, rules
and regulations with respect to handling explosives and conducting blasting
operations, and shall indemnify, defend and hold MSR harmless from and against
any and all claims, damages and losses (including reasonable attorney's fees)
incurred by or resulting to MSR from Contractor's failure to so comply.

      (b) The usage of explosives will be based on a powder factor agreed to by
the Contractor and MSR. A +5% variance on the agreed powder factor will be
allowed to cover any secondary blasting of oversize or high floor conditions
without cost to the Contractor. Explosives used above the 5% allowance will be
to the account of the Contractor.

      (c) MSR realizes that good fragmentation is in the best interest of the
Mine and the Contractor. MSR will work with the Contractor to ensure that
blasting patterns and powder factors are optimized to produce the best possible
fragmentation.

      (d) The Contractor will provide a blast report detailing the amount of
explosives and accessories used, a calculation of the powder factor, the amount
of explosives and stemming used per hole and the initiation sequence of each
blast. Other information may be requested by MSR for inclusion in the blast
reports from time to time.

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      1.6.12 Sanitary

      No on-site sanitary facilities will be available during the majority of
the construction period. The Contractor must supply portable toilets during this
period for its employees and other personnel.

      1.6.13 Communications

      The Contractor shall be responsible for its own communications systems.

      1.6.14 Housing

      The Contractor shall be responsible for any required housing requirements
for its employees and consultants.

      1.6.15 Transportation

      The Contractor shall be responsible for transporting its employees to and
from the Mine site.

1.7   Delays Caused by MSR

      1.7.1 Payment to Contractor

      Any delays, other than normal operating delays, and in excess of three
hours, caused by MSR that require the Contractor to completely shut down its
operations will be paid for on a stand-by basis. The Contractor's hourly, daily
and weekly stand-by rates for the mining fleet are set forth on Appendix E.

      1.7.2 Examples of Delays

      Delays caused by MSR shall include delays caused by not having sufficient
fuel or explosives on site, or delays caused by not having required survey
layouts, drill patterns or blasted material marked and ready for the Contractor
to conduct the Work. Normal delays caused by mine operations (such as trucks
being delayed at the crusher) shall not be considered delays caused by MSR for
purposes of this Section 1.7. In the event of any delay caused by Force Majeure
(as defined in Section 18.1), MSR will not be required to make any stand-by
payments.

      1.7.3 Calculation of Payment

      If a delay caused by MSR occurs, payment to be made to Contractor under
Section 1.7.1 for the affected equipment will be calculated as follows: after
three hours and up to the end of that shift, the hourly rate will be paid;
thereafter, the daily rate will be paid for up to seven days; if the delay is in
excess of seven days, then the weekly rate will be paid; delays in excess of the
first week will be paid at the weekly rate.

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                                      H-10
<PAGE>

1.8   Owner's Access

      Contractor will allow MSR's Representative access and adequate time to
inspect the work installations, equipment, supplies, or any area where any Work
has been, is being or will be performed at any time.

1.9   Cooperation with Other Contractors

      Contractor acknowledges that MSR intends to enter into separate contracts
with third parties for construction of the heap leach pads and ponds, access
road, pipeline, power line, and other infrastructure at the Mine. Some of the
construction work will occur simultaneously with the initial phases of the Work
under this Mining Contract. Contractor agrees to coordinate its performance of
the Work and cooperate with other contractors at all times.

1.10  Subcontractors

      The Contractor agrees not to hire any subcontractors to perform any of the
Work, except as permitted under Article 28.

1.11  Project Management and Organization

      The Contractor shall appoint management and supervision personnel with
adequate experience and capabilities to successfully perform the Work. An
organizational chart has been submitted to MSR which includes the names and
qualifications of the key personnel, and designates an authorized representative
of Contractor (the "Contractor's Representative"). The Contractor will also
designate a Site Superintendent acceptable to MSR, prior to the commencement of
any Work at the Mine. MSR reserves the right to request changes in the
Contractor's on-site staff; any such request shall be promptly honored by
Contractor without any cost to MSR. The Contractor will provide resumes of all
senior personnel to be on site, and their reporting function within the
Contractor's organization.

1.12  MSR's Responsibilities

      MSR will provide the following:

            Site ambulance

            Environmental and operating permits

            Blasting permits

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                                      H-11
<PAGE>

            Removal of cactus and other sensitive flora and fauna

            Industrial water and on-site water storage (except for potable water
                  for Contractor's employees and other personnel)

            Commercial electrical power which will be delivered to the
                  maintenance shop, crusher, and administrative offices on a
                  metered basis, subject to the provisions of Section 1.6.9

            Standard quality fuel and on-site fuel storage

            Explosives and explosives storage area

            Maintenance of site access road

            Site  surveying and layout

            Blast pattern layout

            Blasthole sample transportation

            Identification of the ore and waste

            Final Reclamation of the Mine site

            Overall site management

      In addition to the list of MSR's responsibilities set forth above, MSR has
agreed to perform the additional responsibilities set forth as MSR's
Responsibilities in the attached summary document "Responsibilities of Parties"
in Appendix B. The "Responsibilities of Parties" set forth in Appendix B are a
summary of responsibilities to facilitate reference and, in the event of any
inconsistency between the responsibilities as outlined in Appendix B and
described in the main written text of the Mining Contract, the main written text
of the Mining Contract will control.

1.13  Exclusion from Work

      The Work does not include construction and operation of leach pads, ponds,
the leachate recovery system, or any of the metallurgical recovery plant,
administrative office, laboratory, mine access road, power line, water wells and
pipe line, or crushing and conveying system, the supply and installation of
LLDPE, HDPE geomembrane materials, piping and fittings, and other infrastructure
items. These items will be the subject of separate contracts which MSR intends
to enter into with third parties

1.14  Possible Additional Work

      The Mining Plan contemplates the crushing, conveying and stacking of the
ore on the leach pads (without use of trucks). Contractor acknowledges that
during the Term of this Mining Contract MSR may modify the Mining Plan to
provide for ore to be placed on the leach pads by trucks. In that event, the
Contractor shall be required to load crushed ore, haul and dump it on the leach
pads, and to level the pile. MSR shall be responsible for the placement and
operation of the leach solution piping. The parties agree that MSR has the right
to modify the Work as set forth in this Section 1.14 at any time by providing
written notice to the Contractor, and Contractor agrees to perform the Work as
so modified. The additional Work described in this Section 1.14 shall not
constitute Force Account Work. In the event the Work is modified as set forth in
this Section 1.14, the payments to the Contractor shall be modified as reflected
in Contractor's bid for the loading, hauling and dumping (cost per tonne moved
to the pads) as set forth in Appendix A.

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                                      H-12
<PAGE>

2.    Term

      This Mining Contract shall be effective as of the date first set forth
above (the "Effective Date"), and the term of this Mining Contract (the "Term")
shall continue in effect until the earlier of (a) December 31, 2012; (b) such
time as the Work is completed; or (c) such other date as this Mining Contract is
terminated as set forth in Article 20. For purposes of this Mining Contract, the
period of time beginning on the Effective Date and ending on the one year
anniversary of the Effective Date, and each subsequent period beginning on any
anniversary of the Effective Date, and ending on the next anniversary of the
Effective Date, shall be referred to as an "Annual Period."

3.    Representatives of the Parties

3.1   MSR Representative

      MSR hereby designates its Mine Superintendent or his designee as its
representative (the "MSR Representative"). MSR shall have the right to appoint
an additional or replacement MSR Representative by written notice to Contractor.
The MSR Representative shall have the right to be present during all phases of
the Work and any Force Account Work. The MSR Representative shall have the
authority, on behalf of MSR, to enforce the provisions of this Mining Contract,
to take any action necessary to cause or promote the orderly and expeditious
prosecution of the Work and any Force Account Work, and to approve, change or
suspend the Work or any Force Account Work, in whole or in part, in the event
that the MSR Representative deems such action necessary.

3.2   Contractor Representative

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                                      H-13
<PAGE>

      Contractor's Representative shall have the full authority to act on
Contractor's behalf in connection with the Work, any Force Account Work and
other conditions specified in this Mining Contract. Before any limitation placed
by Contractor on the authority of Contractor's Representative may be effective,
such limitation shall first be disclosed to MSR in writing, and if not so
disclosed, shall not have any effect.

4.    Mining Contract and Reporting Units

      This Mining Contract uses the following units:

            Units of Measurement    Metric
            Currency                United States Dollars ($US)

5.    Payment

5.1   Progress Payments

      The terms of payment for Work performed under this Mining Contract will be
as follows:

      5.1.1 Calculation of Payments

      The Contractor will be paid twice each month. Payment will be based on
tonnage of waste to dumps, low grade ore to stockpile, and ore to the crusher,
as calculated by survey and reconciled by truck count and approved by MSR. In
the event of a discrepancy between the truck count and survey, the survey
results will be used, but the Contractor will be allowed to audit survey
calculations as needed. The Contractor shall participate in the twice monthly
surveys to avoid any conflict. Pay rates per tonne of material mined will be the
rates agreed to in Appendix A.

      5.1.2 Payment for Force Account Work

      Any additional Work (other than the additional Work described in Section
1.14) done by the Contractor at the request of MSR ("Force Account Work") will
be paid for on an agreed to hourly rate as provided by the Contractor for
Contractor's Equipment (as provided in Appendix A).

      5.1.3 Manner of Payments

      Contractor shall send invoices on the fifteenth and the last day of each
month, and invoices for Work performed by the Contractor will be paid fifteen
(15) calendar days after receipt of the invoice, providing there is no dispute
over the quantity of tonnage moved. Ten percent of the amount invoiced will be
withheld from each payment and will be paid once a final inspection is made and
the Work completed has been deemed satisfactory by MSR. The ten percent retained
from each invoice will be paid with the next payment or within thirty (30) days,
although the retained amount will accrue no interest, unless the Work to which
the retained amount pertains is deemed unsatisfactory, in which case MSR will be
obligated to pay the retained amount to Contractor only after Contractor has
corrected the deficiencies in the Work to MSR's satisfaction.

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                                      H-14
<PAGE>

5.2   Mining Contract Rates

      A table of rates by period that will be paid to the Contractor for tonnes
of material moved along with associated assumptions is set forth in Appendix A.
A table of Force Account Work rates that will be paid to the Contractor is also
set forth in Appendix A.

5.3   Deviations and Corrections

      5.3.1 Plans

      MSR has furnished to Contractor certain drawings, specifications, plans
and schedules, each of which is listed or set forth in Appendix D hereto, which
reflect design criteria for the Mine approved by MSR and comprise part of the
Mining Plan. In addition, MSR may during the Term of this Mining Contract
furnish to Contractor other proprietary information, including without
limitation additional drawings, specifications, plans or schedules which are to
be used for the Mine, all of which shall be deemed part of the Mining Plan.

      5.3.2 Deviation from Mining Plan

      If the Contractor deviates from the Mining Plan without the written
consent of MSR's Representative and such deviations are deemed by MSR in its
sole discretion to have been avoidable, no payment for such Work will be
required. Should Contractor be required to make a correction as a result of
errors in operation that were not the fault of MSR, then any such correction
will be at Contractor's expense. 5.4 Performance of Force Account Work

      5.4.1 Performance

      Force Account Work shall be performed at the request and direction of the
MSR's Representative at any time and from time to time via delivery by MSR to
Contractor of a written work order which provides any instructions, drawings,
and specifications which may be required to adequately define the additional
Work to be performed.

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                                      H-15
<PAGE>

      5.4.2 Procedure

      Within five (5) calendar days after receipt of a work order for Force
Account Work, Contractor shall submit for MSR's review and approval a proposed
Force Account Work Authorization form in the form attached as Appendix F hereto
which shall include:

      (a) a detailed estimate of any increase in the Contractor's compensation
required as a result of the additional Work;

      (b) an estimate of the time necessary to complete the additional Work
required by such work order;

      (c) advice as to the date after which the information in the proposed
Force Account Work Authorization form is no longer valid; and

      (d) a statement, with respect to the additional Work described in the
Force Account Work Authorization form, that the Contractor has made such
inspections and examinations and taken such other actions as are necessary so
that all of the provisions of Section 12.1.1 will apply to the additional Work
described in the proposed Force Account Work Authorization form.

      5.4.3 Acceptance

      Within five (5) calendar days after receipt of Contractor's written
statement, MSR shall advise Contractor in writing whether:

      (a) Contractor is to proceed with the additional Work described in the
Force Account Work Authorization form in conformance therewith;

      (b) Contractor is to proceed with the additional Work as outlined in a
revision to the Force Account Work Authorization form; or

      (c) MSR does not desire to have Contractor proceed with the additional
Work proposed by the Force Account Work Authorization form.

5.5   Price Rise/Price Fall Calculation

      5.5.1 Increase or Decrease

      The purpose of this Section 5.5 is to protect both the Contractor and MSR
should prices of supplies increase or decrease. The Contractor has a 4% annual
escalation built into its compensation rates set forth in Appendix A. If costs
of supplies increase beyond 4% on an annual basis, MSR and the Contractor agree
to share in the added expense as set forth in this Section 5.5. If costs of
supplies decrease on an annual basis, Contractor has agreed that its
compensation shall be reduced as set forth in the remainder of this Section 5.5.

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                                      H-16
<PAGE>

      5.5.2 Calculation

      Major factors in the Contractor's costs include tires, lubricants,
replacement parts, the interest rate, and labor. These components will be used
to calculate a factor as set forth below. The formula to calculate the annual
percentage escalation or decrease is:

<TABLE>
<CAPTION>
<S>                  <C>                 <C>                 <C>                 <C>
((T2 - T1) x (TRW) + (L2 - L1) x (LRW) + (P2 - P1) x (PRW) + (I2 - I1) x (IRW) + (O2 - O1) x (ORW))
------------------   -----------------   -----------------   -----------------   ------------------
(      T1                   L1                  P1                   I1                  O1       )
</TABLE>

Where:

      T1 is the lowest price of a 777 tire at the beginning of year 1
      T2 is the lowest price of a 777 tire at the beginning of year 2
      (specific tire/quantity and 3 suppliers to be specified)

      L1 is the lowest price of lube per liter at the beginning of year 1
      L2 is the lowest price of lube per liter at the beginning of year 2
      (lube type/quantity and 3 suppliers to be specified)

      P1 is the lowest price for the part list at the beginning of year 1
      P2 is the lowest price for the part list at the beginning of year 2
      (list of parts/quantities and 3 suppliers to be specified)

      I1 is the interest rate (TIIE 28 day/specified source) at the beginning of
      year 1
      I2 is the interest rate (TIIE 28 day/specified source) at the beginning of
      year 2

      O1 is the general minimum wage established by the Comision Nacional de los
      Salarios Minimos in force in the Altar, Sonora, area at the beginning of
      year 1, as published in the Diario Oficial de la Fedaracion
      O2 is the general minimum wage established by the Comision Nacional de los
      Salarios Minimos in force in the Altar, Sonora, area at the beginning of
      year 2, as published in the Diario Oficial de la Fedaracion

As indicated on Appendix A, Contractor's typical costs are composed of a number
of items which comprise different percentages of total costs, including:

      Off road tires            8.68%

      Lubricants                3.45%

      Parts                    21.05%

      Interest (Financing)      9.97%

      Labor                    18.46%

      Total                    61.61%

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                                      H-17
<PAGE>

The relative weighting (RW) of the above items (to their total) is then:

      Tires (TRW)              8.68/61.61 = 14.09%

      Lubricants (LRW)         3.45/61.61 = 5.60%

      Parts (PRW)              21.05/61.61= 34.17%

      Interest (IRW)           9.97/61.61 =  16.18%

      Labor (ORW)              18.46/61.61 = 29.96%

where for example, TRW is the relative weighting of the tire cost to the total
cost of the five items expressed as a percentage.

The Contractor will be paid 4% annual escalation (as already included in the
contract mining rates set forth in Appendix A) plus 1/2 of any increase over 4%
up to 8% using the above formula on an annualized basis. Above an 8% annualized
rate the following table will be used, which shows to what extent each party
will be responsible for bearing the cost of the escalation:

      Price Change Percentage Table

                            MSR         CONTRACTOR
                            ---         ----------
      Year 1                 50%                50%
      Year 2                 60%                40%
      Year 3                 70%                30%
      Year 4                 80%                20%
      Year 5                 90%                10%
      Year 6 - after         95%                 5%

The above calculation will be carried out annually and the results of the
calculation will be applied to the contract mining rates for waste and ore
mining for the following year.

SAMPLE CALCULATION

(a)   Calculation done at the start of year 2 (for application to year 2)

      o     3 quotes obtained by Contractor for specified tire in a specific
            quantity (usual actual purchase quantity).

            T1 = $7,850, T2 = $9,400, (T2 - T1) = $1,550, TRW = 14.09%.

      o     3 quotes obtained by Contractor for specified lube per liter in a
            specific quantity (usual actual purchase quantity).

            L1 = $1.37, L2 = $1.60, (L2 - L1) = $0.23, LRW = 5.60%.

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                                      H-18
<PAGE>

      o     3 quotes obtained by Contractor for specified parts list in specific
            quantities (usual actual purchase quantities).

            P1 = $10,000, P2 = $11,000, (P2 - P1) = $1,000, PRW = 34.17%.

      o     TIIE 28 day interest rate I1 = 10.0%, I2 = 11.0%, (I2 - I1) = 1.0%,
            IRW = 16.18%.

      o     The general minimum wage in Altar, Sonora, O1 = 100, O2 = 104, (O2 -
            O1) = 4, ORW = 29.96%

Formula:

<TABLE>
<CAPTION>
<S>                 <C>                 <C>                 <C>                 <C>
(T2 - T1) x (TRW) + (L2 - L1) x (LRW) + (P2 - P1) x (PRW) + (I2 - I1) x (IRW) + (O2 - O1) x (ORW)
-----------------   -----------------   -----------------   -----------------   ------------------
       T1                  L1                  P1                   I1                 O1

(1550) x (14.09%) + (0.23) x (5.60%) + (1000) x (34.17%) + (1.0) x (16.18%) + (4) x (29.96%)
----------------    ----------------   -----------------   ----------------   --------------
     7850                 1.37               10000               10.0              100
</TABLE>

(0.0280) + 0.0009 + 0.034 + 0.016 + 0.012) = 0.099 or 9.9%

Using the formula above, the annual escalation factor is calculated to be 9.9%.

(b)   Application of Rules

      Apply previously stated rules to determine applicable annual escalation
factor (9.9%):

      First 4.00% - already built into rates = no change.

      Next 4.00% - Contractor receives 1/2 of any increase over 4% up to 8% =
      2.00%.

      Remaining 1.90% - MSR is responsible for bearing 60% of the cost of
escalation in year 2, therefore Contractor is entitled to receive = 1.90% x 60%
= 1.14%.

      Additional applicable annual escalation factor = 2.00% + 1.14% = 3.14%.

(c)   Application to Mining Contract Rates

      From  Appendix A Contractor's mining rates for year 2 are:

            Waste mining - $0.740 per tonne; Ore mining - $0.794 per tonne.

            Waste mining = $0.740 x ( 1 + ( 3.140 / 100 ) ) = $0.7632

            Ore mining = $0.794 x ( 1 + ( 3.140 / 100 ) ) = $0.8189

      These rates would then be used for Year 2.

      (d) If the annual escalation factor is a negative %, then the same
calculations would be made (including the 4% escalation already built into the
rates), except that for decreases from 4% to 8%, MSR would receive the entire
benefit, and for decreases in excess of 8%, the percentages reflected in the
Price Change Percentage Table will reflect the percentage of the decrease by
which MSR will benefit.

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                                      H-19
<PAGE>

5.6   Withholding Payments and Setoff

      MSR may, without limiting any other rights or remedies MSR may have,
withhold from payments due to Contractor under this Mining Contract the
reasonable value of any claim which Contractor has failed to settle pursuant to
any indemnity or warranty obligations contained in this Mining Contract. MSR may
also retain from any payments due to Contractor under this Contract sufficient
funds to discharge any delinquent accounts of Contractor for which liens on
MSR's property have been or can be filed, and MSR may at any time pay therefrom
for Contractor's account such amounts as are due thereon, including any sums due
under any federal or state law. MSR shall not be deemed to be in default under
this Contract for exercising its rights under this Section 5.6 with respect to
any amounts subject to a dispute under Article 25 or 26.

5.7   Mobilization and Demobilization Payments

      Within thirty (30) calendar days prior to the date the Work is to commence
under the Notice to Proceed (as defined in Section 21.1), MSR shall pay to
Contractor a mobilization payment of $70,000. Upon termination of this Mining
Contract pursuant to Sections 20.1 or 20.4, MSR shall pay to Contractor a
demobilization payment of $70,000.

5.8   Advance Payment

      Upon the date the Work is to commence under the Notice to Proceed, MSR
shall make an advance payment of $520,000 to Contractor (the "Advance Payment").
The Advance Payment shall be made by wire transfer to an account designated by
Contractor pursuant to written instructions delivered by Contractor to MSR at
least five calendar days prior to the date the Advance Payment is due. All other
payments by MSR to Contractor under this Mining Contract may be made by MSR's
check payable to Contractor. The Advance Payment shall serve as an advance for
and a credit against any and all compensation due to Contractor from MSR under
Sections 1.6.5, 1.7, 5.1, 5.2, 5.7 or otherwise under this Mining Contract, and
MSR shall have no obligation to make any payments to Contractor under Sections
1.6.5, 1.7, 5.1, 5.2, 5.7 or otherwise under this Mining Contract until MSR has
fully recouped the entire amount of the Advance Payment. If MSR has not
recovered the full amount of the Advance Payment within 180 days after the
Effective Date, Contractor shall be obligated to repay to MSR any portion of the
Advance Royalty that has not been recouped by MSR. In the event that this Mining
Contact is terminated for any reason prior to the time at which MSR has recouped
the entire amount of the Advance Payment, the amount of the balance of the
Advance Payment not yet recouped shall serve as a credit against the
demobilization payment owed to Contractor under Section 5.7, and any other
amounts owed by MSR to Contractor upon such termination. Within fifteen (15)
calendar days after such termination, Contractor shall repay to MSR any portion
of the Advance Payment not otherwise recouped by MSR. The Advance Payment shall
be secured by a bond in the amount of $520,000, to be posted by Contractor prior
to its receipt of the Advance Payment and periodically maintained thereafter,
such bond to be issued by a Mexican licensed bonding company, and to be in form
and content satisfactory to counsel for MSR, payable to MSR. This clause is not
and will not be interpreted as a liquidated damages clause and will not limit
Contractor's liability hereunder. Contractor shall continue to be responsible
with all of its assets, proceeds, and income (including income due to Contractor
hereunder ) for the payment of any damages or losses incurred by MSR on account
of Contractor's failure to comply with any of its obligations under this Mining
Contract notwithstanding the posting of the bond provided herein.

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                                      H-20
<PAGE>

6.    Contract Value

      Based on the Contractor's rates set forth in Appendix A and the schedule
of Work provided by MSR as set forth in the Mine Plan, the anticipated payments
to Contractor under this Mining Contract (without accounting for adjustments
made pursuant to Section 5.5) are as outlined in Appendix G.

7.    Contractor Performance

      Contractor shall perform all Work and any Force Account Work in a good,
minerlike, workmanlike, and skillful fashion in accordance with good mining
practices and in full compliance with all laws, rules, regulations,
specifications and instructions of all federal, state, and local governmental
and regulatory bodies and agencies which are or may become applicable to any
phase of the Work or any Force Account Work, or any property or person engaged
in or affected by the Work or any Force Account Work, including, but not limited
to, all Permits, applicable wage and hour laws and regulations and all other
laws and regulations dealing with or relating to the employment of persons, and
all laws and regulations pertaining to the protection of the environment and the
health and safety of persons or property, and official standards or Mexican
normas oficiales. Contractor shall obtain, at Contractor's sole expense, all
licenses, permits, and authorizations from all federal, state and local
governmental and regulatory bodies and agencies which an independent contractor
is required to obtain in order to perform the Work and any Force Account Work,
and shall furnish to MSR's Representative copies thereof forthwith upon
obtaining the same. Such licenses, permits, and authorizations include but are
not limited to permits required by the federal government, the State of Sonora,
or the Municipality of Altar, Sonora, or any successor agency, permits
pertaining to contractor's licenses, and waste disposal and storage permits.
Contractor will be responsible for any penalties caused by its failure to
conform to the conditions of any of the Permits or any permit required of
Contractor. Contractor agrees that it will use Contractor's Equipment solely for
the Work and for no other purposes.

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                                      H-21
<PAGE>

8.    Environmental and Permitting

8.1   Permitting

      The Mine will be constructed on the authority of the Estudio Tecnico
Justificativo de Cambio de Uso de Suelo, Estudio de Impacto Ambiental y Estudio
de Riesgo. MSR will be responsible for obtaining Permits relating to carrying
out work at the Mine site, except for those permits solely concerning
Contractor's own business, equipment and personnel, which Contractor shall
obtain as described in Article 7. Prior to giving notice to Contractor
requesting commencement of any Work, MSR shall provide the Contractor copies of
all Permits required for performing any Work.

8.2   Site Conditions

      Contractor shall keep the Mine site free from all trash resulting from the
Work and any Force Account Work. All trash will be disposed of in such a manner
that it does not remain visible at the Mine site and in compliance with
applicable federal, state and local laws, rules and regulations and applicable
Permit requirements. No used motor oil shall be dumped at the Mine site. Upon
completion of the Work and any Force Account Work, Contractor shall leave the
Mine site clean and free of all equipment, waste materials, and rubbish.

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                                      H-22
<PAGE>

8.3   Waste Disposal

      Contractor shall comply with all applicable federal, state and local laws,
rules and regulations, governing the use, handling, processing, production or
disposal of solid wastes and hazardous or toxic wastes or substances. Contractor
shall take every reasonable precaution to prevent fuel and oil spills or other
spills (whether caused directly or indirectly by its actions or failure to act)
of hazardous materials or substances, and shall be responsible for the clean-up
of all such spills and any and all costs or damages associated therewith. MSR
shall be entitled (but not obligated to) clean, remove, or neutralize any
hazardous or toxic waste or substance brought by Contractor onto the Mine site
without MSR's written permission or without proceeding as required by applicable
environmental laws, regulations, or Mexican official standards, at Contractor's
cost, expense, and risk, which cost and expense MSR shall be entitled to deduct
from any payments due to Contractor hereunder.

8.4   Sewage and Wastewater Disposal

      Contractor shall provide, operate and maintain any facilities required for
the disposal of sewage and waste water resulting from the performance of the
Work. Under no circumstances shall Contractor discharge raw sewage or polluted
water into natural watercourses, lakes, ponds or any other area where such
discharge is unauthorized. Contractor shall ensure that all sewage and waste
water disposal installations constructed or installed by Contractor, including
without limitation temporary toilets, comply with all applicable federal, state
and local requirements. The Work shall be performed in such a manner as to
prevent solid matter, contaminants, debris and other pollutants (including
without limitation refuse, garbage, cement, concrete, sewage effluent,
industrial waste, oil and other petroleum products, aggregate processing
tailings, mineral salts and silty water) from entering streams, flowing or dry
watercourses, lakes, ponds or underground water sources.

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                                      H-23
<PAGE>

9.    Safety

9.1   Site Safety

      The Contractor will not be required to engage in any work practice or
operate in a working condition that is unsafe. Similarly, the Contractor shall
not engage in any work practice or operate in working condition that is unsafe.
Upon detection of an unsafe working condition by either party, the unsafe
condition will be addressed as a priority using appropriate procedures. MSR is
responsible for insuring that designs for the open-pit, waste dumps, stockpiles,
pads, roads, and other layouts under MSR's control are safe and in accordance
with proper standards. The Contractor shall maintain operating equipment in a
safe condition at all times, and ensure equipment operators have received
adequate prior training and that operators of mobile equipment make safety
inspections prior to operating any such equipment.

9.2   Compliance with Laws

      Contractor shall comply with all applicable federal, state and local laws,
rules, regulations and standards pertaining to protection of the environment and
health and safety, and shall require all its employees and representatives to
comply with such laws, rules, regulations, and policies in performing the Work
and any Force Account Work and while on MSR's property. Contractor shall
maintain a safe working environment and a high level of safety awareness by its
employees, including an effective safety program. Contractor shall diligently
enforce all safety policies and take appropriate corrective action in the event
of any violations of those policies, which may include discharge from the
premises, against any employee(s) who are found to have violated any of the
above-mentioned laws, rules, regulations, standards, or policies or who are
found to disregard the safety rules of the job site including, without
limitation, those against alcohol or other intoxicants, fighting, or firearms on
MSR's property. MSR is not assuming any safety responsibility for Contractor but
shall require that Contractor manage its personnel to produce the highest level
of safety performance.

9.3   Contactor Responsibility

      Contractor shall bear all responsibility under the law for the safety of
its own personnel employed in the Work and any Force Account Work and for
persons entering the Mine site as agents or visitors of Contractor.

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                                      H-24
<PAGE>

9.4   Interim Reclamation

      While the parties acknowledge that Contractor shall have no
responsibilities pertaining to final reclamation of the Mine site, Contractor
agrees that it will properly conduct any interim reclamation required by
applicable federal, state or local laws, rules or regulations or contemplated
under any Permits in connection with the performance of the Work and any Force
Account Work (for example, by segregating required or reasonably recommended
amounts of topsoil), in such a manner as to allow for completion of final
reclamation of the Mine site. The removal of cactus and other sensitive flora
and fauna ahead of construction and mining is the responsibility of MSR.
Contractor shall, however, refrain from removing any cactus or other sensitive
flora and fauna existing on the Mine site and on any adjacent area. Contractor
shall be responsible for any loss or damages sustained by MSR on account of
Contractor's failure to abide by this provision. Contractor shall be paid for
any such interim reclamation work at the hourly rates for Contractor's Equipment
set forth in Appendix A.

9.5   Inspection

      On request of MSR, Contractor shall make available to the MSR
Representative, for inspection and copying, all safety records maintained by
Contractor. In addition, within two (2) calendar days after receipt or
submission, Contractor shall furnish MSR's Representative with a copy of:

      (a) Any accident report submitted to any governmental agency by
Contractor.

      (b) Any federal or state accident investigation report issued in
connection with any accident involving an employee of Contractor at the Mine
site.

      (c) Any petition filed by Contractor to modify the application of any
safety standard at the Mine site.

9.6   Security

      Contractor shall assume full responsibility for the security of the Work
and for the materials and equipment in all Work areas. If at any time the
security arrangements of Contractor are deemed by MSR or any governmental agency
to be inadequate or incomplete, on the basis of unsatisfactory experience during
the course of the Work, MSR may take whatever action is reasonably necessary to
remedy such inadequacy or incompleteness and any additional cost of such action
shall be for the account of Contractor. The taking of such action shall in no
way relieve Contractor of any responsibility for the complete security of all
Work areas.

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                                      H-25
<PAGE>

10.   Equipment Inspection

      MSR reserves the right to inspect the Contractor's Equipment and any other
equipment which the Contractor proposes to utilize in the performance of the
Work. Such inspection shall be for the purposes of determining the condition and
suitability of all such equipment for the Work. Such determination will be at
the discretion of MSR. MSR's inspection of Contractor's Equipment shall not
relieve Contractor of its responsibility to keep Contractor's Equipment in
optimal operating conditions and safe for use on the Mine site. If MSR
determines that any of such equipment is not suitable for the Work, MSR shall
notify Contractor in writing, and Contactor shall be required to provide
replacement equipment within fifteen (15) calendar days after receipt of such
notice.

11.   Contractor Status

      All Work and any Force Account Work shall be performed by Contractor as an
independent contractor, and Contractor's employees shall at all times be under
Contractor's sole direction and control. Contractor shall receive directions
from MSR as to the desired results of Work and any Force Account Work and
Contractor shall be responsible for directing Contractor's employees as to the
means for accomplishing such results. Neither Contractor nor anyone used or
employed by Contractor shall be deemed for any purpose to be the agent, servant,
employee, or representative of MSR in the performance of this Agreement. Nothing
in this Agreement shall be construed to mean that Contractor is a partner of MSR
or a joint venturer with MSR. The relationship of Contractor to MSR under this
Agreement and with respect to the Work and any Force Account Work, shall be that
of an independent contractor. Neither Contractor nor its employees or agents is
entitled to worker's compensation benefits from or through MSR. Contractor shall
be responsible for and shall withhold or pay, or both, as may be required by
law, all taxes pertaining to the employment of its personnel and/or performance
of the Work and any Force Account Work. All fines, penalties or other charges
imposed or assessed against Contractor by reason of its violation of, or failure
to comply with, any provisions of such law, together with all expenses of
defending litigation in respect thereto, shall be paid by Contractor. Contractor
also assumes full responsibility for the payment of all payroll burdens, fringe
benefits and payroll taxes, whether federal, state, municipal or otherwise, as
to its employees, servants or agents engaged in the performance of the Work and
any Force Account Work. Further, Contractor shall make all contributions to the
pension funds that may be required to be made on behalf of its employees,
servants or agents under any collective bargaining agreement to which they are
subject, and shall defend, indemnify and hold MSR harmless from any claims or
damages (including reasonable attorney's fees) arising as a result of its
failure to do so.

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                                      H-26
<PAGE>

12.   Site and Equipment Inspection and Access

12.1  Inspection

      Contractor represents and warrants that (a) it has inspected the Mine site
where the Work is to be performed, and is familiar with the topography and
physical characteristics of the area, and after careful examination, has been
satisfied as to the nature, extent and location of the Work, the conditions of
the ground, the character, quality of the surface or subsurface materials and
structures to be encountered (as indicated by subsurface data included in drill
hole information included in the Mining Plan), the character of equipment and
facilities needed preliminary to and during the execution of the Work, the
availability of labor, water and power, the adequacy of roads and means of
ingress and egress, uncertainties of weather, conditions pertaining to
transportation, disposal, handling and storage of materials, the general and
local conditions, the prices and availabilities of equipment and materials, and
all other matters which may affect the Work, and (b) it has taken all actions
that a reasonable and prudent person engaged in providing and performing
services of a similar nature would take to become fully informed regarding all
existing and expected conditions and matters which, during the performance of
the Work, could affect the Work or performance of the Work in any way, and
especially the cost of performing the Work. Contractor hereby accepts the
conditions at the Mine site as suitable for the performance of the Work, and
hereby expressly waives and releases MSR from any and all demands or claims for
damages, fees and/or costs, incurred by Contractor by reason of any alleged
representations, warranties, tests, descriptions or statements made by MSR prior
to the date hereof, and not expressly set forth in this Mining Contract.
Although MSR has used good faith efforts to make available to Contractor such
information concerning the Mine and the Mine site as is in MSR's possession, MSR
makes no representation or warranty as to the accuracy, reliability or
completeness of any information previously provided by MSR to Contractor,
including any information contained in any of the Appendices to this Mining
Contract, and Contractor shall rely on the same at its sole risk. The failure of
Contractor to acquaint itself with any applicable conditions such as all
underground installations and workings, electrical cables, utilities,
telephone\fiber optic lines and other obstacles, shall not relieve Contractor
from the responsibility for properly estimating the difficulties and costs of
successfully performing the Work and completion of this Contract, and shall not
be grounds for adjusting either the price or the schedule for the performance of
the Work.

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                                      H-27
<PAGE>

12.2  Access to Site

      Reasonable working areas for storage, shops, equipment yards, stockpiles,
and other facilities required in connection with Contractor's performance of the
Work will be made available to Contractor by MSR during the Term of this Mining
Contract without charge. Whenever possible, the areas designated for
Contractor's working area will be located as requested by Contractor. MSR agrees
to give Contractor access to all areas which are necessary for performance of
the Work. The designated areas and their usage will be subject to approval by
MSR and shall not be occupied by Contractor without the prior written consent of
MSR, which consent shall not be unreasonably withheld.

12.3  Problems at the Site

      To the extent it becomes aware of same, Contractor shall advise MSR's
Representative in writing of any deficiencies caused by others at the Mine site
which affect Contractor's Work. MSR's Representative shall have a reasonable
period of time to have such deficiencies corrected and Contractor shall be
required to proceed with the Work unless such deficiencies are not timely
corrected (and Contractor agrees to notify MSR in writing that in its view such
a deficiency has not been timely corrected prior to any cessation of the Work by
Contractor). In the event of such a cessation of the Work, Contractor shall be
entitled to an equitable adjustment through a Force Account Work Authorization
form. This Section 12.3 shall in no way require or allow Contractor to inspect
and approve the work of MSR's other contractors or subcontractors.

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                                      H-28
<PAGE>

13.   Additional Contractor Duties

13.1  Dust Control

      Contractor shall control dust created by its activities from all Mine
access and haul roads, waste dumps and from the Mine in accordance with
applicable federal, state and local laws, rules and regulations.

13.2  Additional Equipment

      In addition to the Contractor's Equipment, Contractor shall supply at its
sole expense all equipment, supplies, tools, fuels, labor, transportation, and
support (including, but not limited to, security, sanitation and trash disposal
facilities) necessary to perform the Work and any Force Account Work. No part of
the Contractor's Equipment shall become affixed to the Mine site and Contractor
shall be entitled to make such filings with governmental agencies as it deems
necessary or advisable to protect its title in and to Contractor's Equipment.

13.3  Survey Control

      Contractor shall maintain accurate survey control as required to follow
the Mining Plan. If Contractor fails to maintain such accurate survey control,
Contractor shall remedy that failure at its sole expense, with no increase in
compensation. In the event Contractor does not maintain accurate survey control
and MSR incurs any expenses in remedying such failure (which such expenses MSR
may incur in its reasonable discretion), the amount of all such expenses may be
deducted by MSR from future payments due to Contractor under this Mining
Contract.

13.4  Monuments

      Contractor shall protect and preserve all existing land survey monuments,
including but not limited to section corners, quarter sections corners, bench
marks, and reference points established by MSR or others. Contractor shall
inform the MSR Representative immediately if any such bench mark or reference
point is disturbed or damaged and shall be responsible for its repair and/or
replacement.

13.5  Labor Disputes

      Contractor shall promptly notify MSR of any labor dispute which has
occurred or which Contractor anticipates may occur, and which has affected or
will or may affect Contractor's ability to perform the Work, or the Contractor's
ability to obtain any required materials, equipment or construction aids, and
shall give MSR such full and complete information concerning any such labor
dispute as MSR may reasonably request. Contractor shall consult with MSR prior
to making any settlement of such labor dispute.

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                                      H-29
<PAGE>

13.6  Wages

      Contractor agrees to pay its hourly employees at the Mine at wage rates at
least equal to the minimum rates required by applicable federal, state and local
law.

13.7  Ad Valorem Taxes

      Contractor shall pay when due any property tax imposed on Contractor's
Equipment or otherwise on any real or personal property owned by Contractor and
any business or occupation or transportation or other tax which may be imposed
or assessed against it or its operations or activities hereunder.

13.8  Legal Issues

      If Contractor observes that any portions of the Mining Plan or activities
at the Mine are at variance with applicable federal, state or local laws, rules
or regulations, Contractor shall promptly notify MSR in writing.

13.9  Spare Parts

      Contractor agrees to maintain an adequate quantity of spare parts, fuel,
and other consumable products at all times as necessary to avoid undue
disruption of the performance of the Work.

13.10 Maintenance

      Incidental safety, mining-related or maintenance requirements pertaining
to the Mine site shall be provided by Contractor at no additional charge to MSR.
Any such requirements which impose additional costs to Contractor in excess of
$1,000 per occurrence shall be billed by Contractor to MSR, but only after MSR
has approved the performance of such requirements in writing; provided, however,
that in any event Contractor shall timely pay the first $1,000 per occurrence,
and provided further, that if Contractor fails to perform any such incidental
safety, mining-related or maintenance requirements within a reasonable period of
time after becoming aware of the need for such performance, MSR may perform the
same on Contractor's behalf, and all reasonable expenses (not to exceed $1,000
per occurrence) incurred by MSR in connection with such performance may be
deducted by MSR from future payments due to Contractor under this Mining
Contract.

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                                      H-30
<PAGE>

13.11 Non-Discrimination

      MSR requires that the Contractor comply with all applicable federal, state
and local laws, rules and regulations concerning non-discrimination in
employment. Contractor agrees to so comply and will not discriminate against any
employee or applicant for employment because of race, age, color, religion, sex
or national origin, or because of any other conditions, as provided in Section
1st of the Mexican Constitution.

13.12 Antiquities

      All fossils, coins, articles of value or antiquity and structures and
other remains or relics of geological or archaeological interest discovered on
or in the areas of the Mine are and will remain the absolute property of the
Mexican government, as and to the extent that this is mandated by Mexican law.
Contractor shall: (a) take all reasonable precautions to prevent unauthorized
removal of, or damage to, any such discovery; (b) inform MSR's Representative
immediately upon discovery; and (c) obtain and comply with MSR's instructions
for removal and disposal of the discovery.

14.   Additional Duties of MSR

      MSR shall, in accordance with and subject to the terms and conditions of
this Mining Contract:

14.1  Payment of Taxes

      Pay any tax applicable to the mining concessions covering the properties
that make up the El Chanate project, as well as all royalty or lease fees which
may now or hereafter become due any landowner(s) as a result of ore mined
hereunder (which it is understood shall at all times remain MSR's property) or
otherwise.

14.2  Access

      Provide Contractor full and complete access, subject to MSR's normal
security control and safety procedures and applicable governmental laws, rules
and regulations and the limitations set forth in any applicable permit, to the
Mine site as required for the orderly and timely performance of the Work.

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                                      H-31
<PAGE>

14.3  Problems with the Work

      If it becomes aware of any problem in the Work or non-conformance with the
Mining Plan, give prompt written notice to Contractor; provided, however, that
MSR's failure to give such notice shall not be deemed a waiver of any of its
rights or remedies under this Mining Contract.

15.   Insurance

15.1  Coverage

      Contractor shall, prior to the execution hereof, procure, and before
commencing any activities under this Mining Contract and during the progress of
the Work and for any additional periods after termination of this Mining
Contract necessary to ensure complete coverage for any incidents that occurred
during the Term of this Mining Contract, carry, at its own expense, on forms and
with reliable insurance companies selected by Contractor and acceptable to MSR
and authorized to do business in the State of Sonora, the following insurance
coverage (which insurance, notwithstanding any provision of this Article 15 to
the contrary, shall be for the greater of the liability limits set forth below
or the limits required by applicable law):

      (a) Worker's Compensation as required by the Mexican Ley del Seguro
Social, as amended from time to time.

      (b) Comprehensive General Liability Insurance, including
premises/operations, independent contractors, contingent coverage, contractual
liability for assumed liabilities, and completed operations coverage for a
period of one year following completion of the Work, coverage for explosion,
collapse, and underground property damage liability coverage, and broad form
property damage liability endorsement, with inclusive limits of One Million
Dollars ($1,000,000.00) for injury or death resulting from any one occurrence,
and property damage liability limits of One Million Dollars ($1,000,000.00) per
occurrence, including, subject to policy terms and conditions, damage to MSR
property.

      (c) Automobile and truck liability insurance, including all
Contractor-furnished, non-owned, hired, rented, or owned equipment, with bodily
injury liability limits of One Million Dollars ($1,000,000) for injuries to or
death of any one person and Three Million Dollars ($3,000,000) for injuries to
or death of more than one person resulting from any one occurrence, and property
damage liability limits of One Million Dollars ($1,000,000) per occurrence.

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                                      H-32
<PAGE>

      (d) All policies providing coverage hereunder shall contain provisions
that no cancellation or material changes in the policies shall become effective
except on thirty (30) calendar days' advance written notice thereof to MSR. Any
notice of cancellation or change may be challenged by MSR if it is inconsistent
with this Mining Contract or detrimental to MSR's rights or interests hereunder.

15.2  Additional Insured

      All of the above-described insurance policies (with the exception of
worker's compensation) shall name MSR as an additional insured (subject to the
policy terms and conditions and the limitations on liability set forth herein)
and shall contain provisions that the insurance companies will have no right of
recovery or subrogation against MSR, its affiliates or subsidiaries, it being
the intention of the parties that Contractor's carrier shall be liable for any
and all losses covered by the above-described insurance.

15.3  Deductibles

      Any and all deductibles in the above-described insurance policies shall
not be in excess of industry norms and shall be assumed by, for the account of,
and at Contractor's sole risk.

15.4  Certificates

      Before mobilization commences or any Work is performed by Contractor,
Contractor shall secure and deliver to MSR certificates evidencing that
insurance coverage of the types and limits provided for above are in full force
and effect.

15.5  Default

      If Contractor has failed to obtain any of the above-referenced insurance
policies, such failure shall be cause for termination of this Agreement pursuant
to Section 20.2. Failure to secure the required insurance coverage, or the
failure to comply fully with any of the insurance provisions of this Mining
Contract, or the failure to secure such endorsements on the policies as may be
necessary to carry out the terms and provisions of this Mining Contract, shall
in no way act to relieve Contractor from any of its obligations under this
Mining Contract, anything in this Mining Contract to the contrary
notwithstanding. In the event that liability for any loss or damage be denied,
as a result of any of the foregoing failures by the Contractor, or if Contractor
fails to maintain any of the insurance policies herein required, Contractor will
defend, indemnify and hold MSR harmless from and against all losses, claims,
demands, and expenses (including reasonable attorneys' fees), which would
otherwise be covered by said insurance.

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                                      H-33
<PAGE>

15.6  Scope of Coverage

      The insurance protection afforded MSR under this Agreement shall inure to
the benefit of MSR and all of its affiliates; and when so requested by MSR,
Contractor shall furnish certificates of insurance showing contractual liability
coverage specifically indicating Contractor's contractual indemnity requirements
as set forth in Article 17 of this Mining Contract to apply to MSR and all
subsidiaries and affiliates of MSR as set forth in Article 17. The sum for which
insurance coverage shall be procured and maintained shall not be taken as a
liquidated damages amount and will not limit Contractor's liability under this
Mining Contract; Contractor shall continue to be responsible with all of its
assets, proceeds, and income (including income due to Contractor hereunder) for
the payment of any indemnification or other amounts due by Contractor under this
Mining Contract irrespective of the recovery of any insurance payments.

15.7  Additional Insurance

      Contractor shall have the right to maintain at its own expense any
additional kinds of insurance or increase limits above those set forth in this
Article 15.

15.8  Subcontractor Insurance

      Contractor will not allow any permitted subcontractor to enter upon or
continue the performance of any portion of the Work unless such subcontractor is
and remains insured under policies affording the same coverage and in compliance
with the same terms as described above in Sections 15.1 - 15.6. Each
subcontractor will also furnish a standard endorsement to its Comprehensive
General Liability policy naming Contractor and MSR as additional insureds under
said policy. The policy must also contain a cross-liability or severability of
interest clause. Certificates of Insurance or other evidence of insurance
acceptable to MSR shall be made available to MSR before the commencement of any
portion of the Work by any subcontractor. The parties hereby agree that the
provisions of this Section 15.8 are not intended to alter any of Contractor's
obligations set forth in the remainder of this Article 15, and that any
subcontractor's insurance policies shall be supplemental to rather than
substitutes for the policies required to be maintained by Contractor.

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                                      H-34
<PAGE>

16.   Liens and Encumbrances

16.1  Prompt Payment

      Contractor agrees to pay promptly all debts incurred by Contractor in
performance of the Work and any Force Account Work.

16.2  No Liens

      Contractor shall keep the property on which the Work is performed free of
all liens for labor or materials. Contractor shall keep all of the Contractor's
Equipment and any other equipment used in conducting the Work, free and clear of
all liens and encumbrances arising by, through, or under the Contractor, except
liens and encumbrances placed on Contractor's Equipment to secure the repayment
of money borrowed to purchase Contractor's Equipment.

16.3  Repairs

      Contractor shall at its sole expense immediately repair all damage to any
property, including without limitation Contractor's Equipment, any fixed
facilities at the Mine site, and any utilities, water lines, pipe lines, power
lines, telephone poles, power poles, buildings, and fences at the Mine site,
which may result directly or indirectly from performance of the Work.

16.4  Indemnity

      Contractor agrees to defend, indemnify and hold MSR harmless from and
against any and all losses, expenses or damages (including reasonable attorney's
fees) arising from any failure of Contractor to perform its obligations under
this Article 16. The provisions of this Article 16 shall survive any termination
or expiration of this Mining Contract notwithstanding any payment or settlement
between the parties unless such settlement is in writing and such writing
explicitly refers to this Article 16.

17.   Indemnification and Distribution of Risk

17.1  Indemnification by Contractor

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                                      H-35
<PAGE>

      In addition to those specific indemnification obligations set forth
elsewhere in this Mining Contract, Contractor agrees to indemnify, hold harmless
and defend MSR and any subsidiaries or affiliates, and their officers, directors
and employees, from and against any claim, demand, cause of action, loss,
damage, expense (including reasonable attorneys' fees), or liability whether on
account of injury to or death of persons (including the employees of MSR or
Contractor) or damage to or loss of property (including the property of MSR) or
otherwise, arising from or related to (a) the performance by Contractor, its
agents or employees of any Work or Force Account Work under this Mining
Contract, or the conduct by Contractor of any other activities at the Mine site,
including without limitation: (i) any claim, loss, or liability arising under
non-delegable duties of Contractor or arising from supplies provided for
Contractor's use by MSR; (ii) any Materials of Environmental Concern (as defined
below) which arise from or are related to activities or operations of whatever
nature undertaken by Contractor at the Mine site or pursuant to this Mining
Contract; and (iii) any action to enforce Contractor's indemnification
obligations under this Mining Contract, including without limitation this
Article 17, (b) the breach of any of Contractor's representations or warranties
in this Mining Contract, or (c) Contractor's failure to perform any of its
obligations under this Mining Contract. In connection with the foregoing
indemnity, it is agreed that Contractor shall, in particular (but without
limitation except as stated herein), be responsible for injuries to or death of
any of its employees in the course of performance of any Work or Force Account
Work under this Mining Contract or in the course of performance of any
operations or activities at the Mine, and shall indemnify, hold harmless, and
defend MSR from and against any claim based on a theory or principle involving
allegations that such employees of Contractor are borrowed servants of MSR, or
based on a theory or principle involving allegations of MSR's negligence in its
failure to supervise or control their actions.

17.2  Damage to Contractor's Equipment

      Contractor assumes responsibility for all loss of, damage to or
destruction of any of Contractor's Equipment, and all other property used in
connection with the performance of any Work under this Mining Contract or the
conduct of any activities or operations by Contractor at the Mine site,
including Contractor's facilities and personal property of Contractor's
employees, from whatever cause arising.

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                                      H-36
<PAGE>

17.3  Indemnification by MSR

      In addition to those specific indemnification obligations set forth
elsewhere in this Mining Contract, MSR agrees to indemnify, hold harmless and
defend Contractor and any subsidiaries or affiliates, and their officers,
directors and employees, from and against any claim, demand, cause of action,
loss, damage, expense (including reasonable attorneys' fees), or liability
whether on account of injury to or death of persons (including the employees of
MSR or Contractor) or damage to or loss of property (including the property of
Contractor) or otherwise, arising from or related to (a) the conduct by MSR of
any of its activities at the Mine site, including without limitation: (i) any
Materials of Environmental Concern (as defined below) which arise from or are
related to activities or operations of whatever nature undertaken by MSR at the
Mine site or pursuant to this Mining Contract; and (ii) any action to enforce
MSR's indemnification obligations under this Mining Contract, including without
limitation this Article 17, (b) the breach of any of MSR's representations or
warranties in this Mining Contract, or (c) MSR's failure to perform any of its
obligations under this Mining Contract. In connection with the foregoing
indemnity, it is agreed that MSR shall, in particular (but without limitation
except as stated herein), be responsible for injuries to or death of any of its
employees in the course of performance of any of its operations or activities at
the Mine, and shall indemnify, hold harmless, and defend Contractor from and
against any claim based on a theory or principle involving allegations that such
employees of MSR are borrowed servants of Contractor, or based on a theory or
principle involving allegations of Contractor's negligence in its failure to
supervise or control their actions.

17.4  Joint Liability

      If any claim, loss, damage, injury (including death) or liability is
attributable to the joint or concurring negligence of the Contractor and MSR or
the employees or agents of each of them, then all such loss, damage and
liability, and the cost and expenses attributable thereto, shall be borne by the
parties hereto in such proportion as may be determined by mutual agreement or by
a final judgment or award rendered on third-party or cross claims between the
parties hereto, or in the absence of either such determination, then equally
between the Contractor and MSR, and each party shall bear its own attorneys'
fees incurred in connection therewith.

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                                      H-37
<PAGE>

17.5  Procedure

      Promptly after receipt by either party hereto of the assertion of any
claim, demand, action, suit or the commencement of any proceeding (collectively,
a "Claim"), or the discovery of any fact (whether or not it involves a third
party claim) upon which such party expects to make a claim for indemnification
under this Mining Contract, such party shall give the party who may become
obligated to provide indemnification under this Mining Contract (the
"Indemnifying Party") written notice describing such Claim or fact in reasonable
detail (the "Notice of Claim"). Failure to give such notice which does not
materially disadvantage the Indemnifying Party shall not relieve the
Indemnifying Party from any liability under this Mining Contract. Except as
otherwise provided in this paragraph, the Indemnifying Party shall have the
right, at its option, to compromise or defend, at its own expense and by its own
counsel, any such matter involving the asserted liability of the party seeking
indemnification (the "Indemnified Party") as to which the Indemnifying Party
shall have acknowledged its obligation to indemnify the Indemnified Party;
provided, however, that if (i) such Claim seeks an order, injunction or other
equitable relief against the Indemnified Party or (ii) the Indemnified Party
shall have reasonably concluded that there is a substantial conflict of interest
between the Indemnified Party and the Indemnifying Party in the conduct of the
defense of such Claim, then the Indemnified Party may employ separate counsel
and participate in the defense of such Claim to the extent necessary to protect
its interests, and the Indemnifying Party shall be responsible for the fees and
expenses of such separate counsel. If the Indemnifying Party shall undertake to
compromise or defend any such asserted liability, it shall promptly notify the
Indemnified Party of its intention to do so, and the Indemnified Party agrees to
cooperate with the Indemnifying Party and its counsel in the compromise of, or
defense against, any such asserted liability. All costs and expenses incurred in
connection with such cooperation shall be borne by the Indemnifying Party. The
Indemnifying Party shall not settle or compromise any matter with respect to
which a party is seeking indemnification without the prior written consent of
the Indemnified Party. In any event, the Indemnified Party shall have the right
at its own expense to participate in the defense of such asserted liability.

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                                      H-38
<PAGE>

17.6  Materials of Environmental Concern

      For purposes of this Article 17, "Materials of Environmental Concern"
means (i) those substances included within the statutory and/or regulatory
definitions of "hazardous substance," "hazardous waste," "extremely hazardous
substance," "regulated substance," "hazardous materials," or "toxic substances"
under any applicable federal, state or local law, rule or regulation pertaining
to the protection of the environment; (ii) any material, waste or substance
which is (a) petroleum, oil or a component thereof, (b) any chemical released
from the rock, (c) explosives, (d) radioactive materials (including naturally
occurring radioactive materials), or (e) solid wastes that pose imminent and
substantial endangerment to human health and safety or the environment; and
(iii) such other substances, materials or wastes that are or become classified
or regulated as hazardous or toxic under any applicable federal, state or local
law, rule or regulation.

17.7  Limitation on Damages

      Neither party shall be liable to the other for any consequential,
punitive, special, or indirect damages, including but not limited to, loss of
profit, loss of use, loss of opportunity, loss of production or products,
whether such liability is based, or asserted to be based, upon any breach of
either party's obligations under this Mining Contract, or whether such liability
is based, or asserted to be based, upon any negligent act or omission of a
party, its personnel, agents or representatives, or whether such liability is
based, or asserted to be based, on any other legal ground.

18.   Force Majeure

18.1  Definition

      The term "Force Majeure," as used in this Mining Contract, shall mean any
and all causes beyond the control and without the fault or negligence of the
party failing to perform, such as acts of God, acts of public authorities and/or
regulatory agencies (including without limitation an inability to obtain
required permits or other approvals on terms reasonably acceptable to MSR or the
imposition of material new requirements for permits or other approvals that did
not exist on the Effective Date), lack of a viable market for the minerals
produced from the Mine (as determined by MSR in its sole discretion), actions
taken by any ejido group or other non-governmental organizations, acts of the
public enemy, expropriation, insurrections, riots, labor disputes, boycotts,
material shortages (including vendor failure), fires, explosions, floods,
breakdowns of or damage to plants, equipment, or facilities, interruptions to
transportation, embargoes, acts of military authorities, or other causes of a
similar nature which wholly or partly prevent the performance of the Work or any
other obligations under this Agreement. Notwithstanding the foregoing, inclement
weather shall not be included as an event of force majeure hereunder unless and
until twenty (20) consecutive calendar days' Work have been lost by Contractor
during any Annual Period as a result of inclement weather. For purposes of this
Section 18.1, a day of Work shall be deemed to be two (2) working shifts, each
of which represents one-half a work day. A shift shall not be deemed lost to
inclement weather unless Contractor engages in less than three (3) hours of Work
on the shift in question.

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                                      H-39
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18.2  Suspension of Obligations

      If because of Force Majeure, either party hereto is unable to carry out
any of its obligations under this Mining Contract (other than the obligation of
a party to pay money in connection with the performance of this Mining
Contract), or MSR is unable to allow the Work to continue or is unable or no
longer authorized to conduct mining operations at the Mine as contemplated under
any Permit, and if such party shall promptly give to the other party concerned
written notice of such Force Majeure, then the obligations of the party giving
such notice and the corresponding obligations of the other party shall be
suspended as of the date of such notice to the extent made necessary by such
Force Majeure and during its continuance, and the Term of this Mining Contract
shall be extended for a period of time equal to the period of Force Majeure
(subject to the provisions of Section 18.3) provided, however, that the party
giving such notice shall use its best efforts to eliminate such Force Majeure
insofar as possible with a minimum of delay.

18.3  Duration

      On the occurrence of an event of Force Majeure which substantially impairs
performance of the Work for a period in excess of 180 consecutive calendar days
or more, either party shall have the option of terminating this Mining Contract,
exercisable by giving fifteen (15) calendar days prior written notice to the
other party at any time after such inability has continued for a period of 180
consecutive calendar days and prior to the cessation of the event of Force
Majeure. In the event of termination pursuant to this Section 18.3, the parties'
obligations shall be the same as though this Agreement were terminated pursuant
to Section 20.1.

19.   Contract Suspension

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                                      H-40
<PAGE>

19.1  Right to Suspend

      MSR reserves the right to suspend (but not terminate) this Mining Contract
at any time for its convenience. Such suspension will be made by written notice
to Contractor and may include the whole or any specified part of the Mining
Contract for a period not to exceed ninety (90) calendar days. The Term of this
Mining Contract as set forth in Article 2 shall be extended by the duration of
any such suspension.

19.2  Consequences of Suspension

      If this Mining Contract, or a specified part hereof, is suspended for the
convenience of MSR, Contractor agrees to permit MSR to, by written notice,
direct the amount and type of plant, labor and equipment to be committed to the
Work, provided that MSR shall equitably compensate Contractor for such Work in
any such circumstance. Upon receipt of any such notice, Contractor will, unless
the notice requires otherwise:

      (a) Immediately discontinue Work on the date and to the extent specified
in the notice.

      (b) Place no further orders for material, services, or facilities with
respect to suspended Work other than to the extent required in the notice or as
otherwise agreed to by MSR in writing.

      (c) Promptly make every reasonable effort to obtain suspension on
reasonable terms of all such orders to the extent required in the notice.

      (d) Use its best efforts to utilize its labor and equipment in such a
manner as to minimize costs associated with suspension

19.3  Compensation for Suspension

      As compensation for suspension, Contractor will be reimbursed for the
following items and costs, to the extent that such costs result from or are
directly attributable to such suspension of Work:

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                                      H-41
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      (a) A standby charge to be paid to Contractor during the period of
suspension, which standby charge will be sufficient to compensate Contractor for
keeping (to the extent required in MSR's notice of suspension or Contractor's
obligation to subsequently perform Work hereunder) Contractor's organization and
Contractor's Equipment committed to the Mine in a standby status. Standby rates
for Contractor's Equipment shall be ownership cost of the equipment calculated
as set forth in Appendix E; provided, however, that for any particular piece of
Contractor's Equipment such rates will not be charged for more than the regular
number of hours in any 24-hour period that the particular piece of Contractor's
Equipment would be used for the Work.

      (b) All reasonable costs associated with the demobilization and
remobilization of Contractor's personnel and Contractor's Equipment.

      (c) Contractor will prepare and submit invoices for the foregoing in
accordance with Section 5.1.1, which invoices will be paid by MSR in accordance
with and subject to the provisions of Section 5.1.3.

19.4  Resumption of Work

      Upon receipt of notice to resume suspended Work, Contractor will resume
performance of the suspended Work as promptly as is practicable under the
circumstances. If, as a result of any such suspension of the Work, the parties
agree that the cost to Contractor of subsequently performing the Work is
increased, MSR will pay such increased cost in its payment for any remaining
portion of the Work, subject to a written amendment of this Agreement reflecting
such agreed upon modifications. Further, the Term of this Agreement will be
subject to extension as necessitated by the suspension, plus a reasonable
additional period for remobilization. Any claim by Contractor for an adjustment
hereunder must be asserted within sixty (60) calendar days after receipt of
written notice to resume the Work.

19.5  Duration of Suspension

      If, as a result of one or more suspensions, the Work or part of the Work
is suspended for ninety (90) consecutive calendar days or an accumulated total
of one hundred and eighty (180) calendar days during any 365 calendar day
period, Contractor shall have, during the continuation of the last suspension,
the right to terminate this Agreement in whole or in part by written notice to
MSR. Said notice shall advise MSR that unless operations are immediately resumed
on the Work under suspension, this Agreement shall be terminated in respect of
such part or whole of the Work at a date specified in the notice, but not less
than thirty (30) calendar days after receipt of the notice by MSR. In the event
of termination pursuant to this Section 19.5, the parties' obligations shall be
the same as though the Contract were terminated under Section 20.1.

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                                      H-42
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19.6  Suspension for Cause

      Notwithstanding any of the provisions of this Article 19 to the contrary,
MSR may suspend (but not terminate) this Mining Contract, without any obligation
to make any further payments to Contractor or any further liability on the part
of MSR, in the event of negligence or willful disregard by Contractor with
respect to health, safety, environmental protection, legal matters or proper
business practices.

20.   Contract Termination

20.1  Mutual Agreement

      The Mining Contract may be terminated if mutually agreed upon by MSR and
the Contractor in writing.

20.2  Default by Contractor

      Each of the following events shall constitute a default by Contractor for
purposes of this Section 20.2: (a) commencement of proceedings by or against
Contractor under any law relating to bankruptcy, moratorium, reorganization or
insolvency; or (b) any material uncorrected failure by Contractor to comply with
any of the terms or conditions of this Mining Contract, irrespective of whether
or not such failure is identified as a reason for termination elsewhere in this
Mining Contract. In the event of any alleged default by Contractor, MSR shall
notify Contractor in writing of such default condition, and if Contractor fails
to present in writing to MSR within ten (10) calendar days after its receipt of
such notice either a statement of reasons why Contractor in good faith disputes
the existence of such a default or a plan acceptable to MSR (in its sole
discretion) to correct the alleged default, Contractor shall be deemed to be in
default. In the event of such a default, MSR shall have the right to terminate
this Mining Contract for cause without liability of any kind to Contractor other
than payment for Work previously completed (including services, material and
equipment for which Contractor has executed written contracts, it being
understood that all such material and equipment covered by such contracts shall
become the property of MSR), and MSR shall have the right if it so desires to
take over the Work of the Contractor in full, and exclude the Contractor from
any further participation in the Work covered by this Mining Contract; or, at
its option MSR may take over such portion of the Work as MSR shall deem to be in
the best interest of MSR, and require the Contractor to continue with the
remaining portions of the Work. Whichever method MSR might elect to pursue, MSR
agrees to complete the Work to the best of its ability and in the most
economical manner available to it at the time. Any costs incurred by MSR in
performing any such portion of the Work covered by this Mining Contract shall be
charged against any payments due or to become due to Contractor under the terms
of this Mining Contract, and in the event the total amount due or to become due
to Contractor under the terms of this Mining Contract shall be insufficient to
cover the costs incurred by MSR in completing the Work, then the Contractor and
its sureties and/or insurers, if any, shall be liable to MSR for the difference.
If Contractor timely provides notice to MSR that it disputes the existence of
such a default, the provisions of Articles 25 and 26 shall apply, although the
termination shall take effect immediately.

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                                      H-43
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20.3  Use of Equipment

      If this Mining Contract is terminated pursuant to Section 20.2, Contractor
shall make available to MSR (for use by MSR or any third party selected by MSR),
for a period of time equivalent to the remainder of the Term of this Mining
Contract, (i) all of Contractor's Equipment and current inventories of spare
parts, consumables and mining supplies and materials owned by Contractor and
used in the performance of the Work, and all other materials, tools and supplies
used by Contractor in the performance of the Work, and (ii) all of Contractor's
employees at the Mine. If MSR chooses to use any Contractor Equipment and
materials, Contractor shall be paid for all such Contractor Equipment, current
inventories of spare parts, consumables, mining supplies and other materials
used by MSR in performance of the Work, at Contractor's cost. If MSR chooses to
use Contractor's employees for the Work, MSR must pay such employees at the same
wage and benefit rates previously paid to those employees by the Contractor. The
parties hereby acknowledge that it is their intention that if MSR uses
Contractor's Equipment and materials or employees in performing any of the Work,
the costs to MSR to use any such Contractor's Equipment and materials and
employees shall be no greater than the costs MSR would have incurred had
Contractor performed that Work under this Mining Contract.

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                                      H-44
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20.4  Default by MSR

      Should any amounts invoiced by Contractor become past due by thirty (30)
calendar days or more, or if MSR fails to perform any of its other material
obligations under this Mining Contract in a timely manner as required by this
Mining Contract, Contractor may elect to give notice in writing of such default,
specifying the same and the corrective measures to be taken. If MSR, within a
period of thirty (30) calendar days after receipt of such notice, shall fail to:
(i) remedy the default or, (ii) if the default (other than a failure to make
payment on any invoice) cannot be remedied with thirty (30) calendar days, to
implement measures within thirty (30) calendar days and diligently pursue such
measures to remedy the default within the shortest reasonable time, then and in
any such event, Contractor may terminate this Mining Contract for cause and
treat it as having been repudiated by MSR. If MSR timely provides notice to
Contractor that it disputes the existence of such a default, the provisions of
Articles 25 and 26 shall apply, and MSR shall not be deemed in default until a
final decision by the arbitrators as set forth in Article 26. In the event of
termination for MSR's default, the parties' obligations shall be the same as if
this Mining Contract had been terminated under Section 20.5, and in addition MSR
shall be obligated to make the demobilization payment to Contractor required
under Section 5.7.

20.5  Termination for Convenience

      If MSR decides, which it shall have the right to do at any time in its
sole discretion, to terminate this Mining Contract for any reason other than (a)
pursuant to Section 20.2 as the result of a default by Contractor, (b) as
specifically provided for in any of the other provisions of this Mining
Contract, (c) bankruptcy, moratorium, reorganization or insolvency or (d) as a
result of Force Majeure, then MSR will pay Contractor a termination payment
based on when such termination occurs, in accordance with the following
schedule:

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                                      H-45
<PAGE>

      Year 1   $650,000
      Year 2   $350,000
      Year 3   $180,000
      Year 4   $      0
      Year 5   $      0
      Year 6   $      0

The above termination payment shall be prorated on a monthly basis during the
year that the Mining Contract is terminated pursuant to this Section 20.1.5. As
an example, if MSR terminated the Mining Contract pursuant to this Section
20.1.5 in the fourth month of the second year of the Mining Contract (each year
running from the Effective Date or any anniversary thereof to the next
anniversary), the termination payment would be calculated as follows:

      $350,000 - ($350,000 - $180,000)    x  4  =   $293,333
                 ---------------------
                          12

Such termination payment (if any) shall be the sole obligation and liability of
MSR to Contractor in connection with MSR's termination of this Mining Contract
under this Section 20.5. For purposes of this Section 20.5, Year 1 shall be
deemed to have begun on the date of commencement of the Work, and each
subsequent year shall be deemed to have begun on the appropriate anniversary of
the date of commencement of the Work.

20.6  Survival

      The parties agree that in addition to those provisions of this Mining
Contract which expressly survive its termination, the provisions of Sections
5.7, 5.8, 8.2-8.4, 9.4, 15.1-15.8, 16.2, 17.1-17.7, 21.2, Articles 7, 11, 23,
24, 26, 27 and 31, and this Article 20 shall survive the termination of this
Mining Contract for any reason.

20.7  No Decree Required

      No judicial or arbitration proceedings or judgments or awards of any kind
shall be required for the termination of this Mining Contract to take effect on
account of a default by Contractor, or when terminated as provided in Section
20.1 or 20.5 hereof.

20.8  Release

      Upon termination of this Mining Contract for any reason, Contractor shall
provide MSR with a release satisfactory in form and substance to counsel for
MSR.

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                                      H-46
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21.   Contract Award and Effective Date

21.1  Notice of Award and Notice to Proceed

      The parties agree that this Mining Contract shall not become effective
until the date of receipt by Contractor of a formal Notice of Award, in the form
of the attached Appendix F, by email, FAX and first class mail (the "Effective
Date"). The Notice of Award will inform Contractor that it is MSR's choice of
Contractor for the Mine, should it proceed. Contractor shall return the
Acceptance of Notice as directed. The parties' obligations under this Mining
Contract are then conditional upon MSR obtaining its project financing for the
Mine and MSR's formal decision to proceed with the Mine at that point. Upon such
a decision by MSR to proceed, MSR will send the Notice to Proceed. Upon receipt
of the Notice to Proceed, Contractor agrees to mobilize for actual physical Work
as directed by MSR, which shall be no sooner than sixty (60) days but no later
than ninety (90) calendar days after receipt of the Notice to Proceed. The
Notice to Proceed shall indicate the date Contractor's Work hereunder shall
commence.

21.2  Change in Rates

      Both MSR and Contractor acknowledge that MSR's Mining Plan and Feasibility
Study are based on Contractor's rates for mining and equipment set forth in
Appendix A, and the standby rates set forth in Appendix E. MSR and Contractor
also acknowledge that the mining rates set forth in Appendix A may need to be
adjusted for inflation, and are subject to change after September 1, 2006. MSR
and Contractor agree that, as long as the Notice to Proceed is received by
Contractor on or before June 1, 2006, with a specified date of commencement of
the Work not later than September 1, 2006, the mining rates set forth in
Appendix A shall apply; provided, however, that those mining rates shall be
adjusted as described in this Section 21.2 for the rate of inflation between
September 23, 2005 and the date of commencement of the Work, calculated using
the escalation formula set forth in Section 5.5. For purposes of this Section
21.2, the baseline numbers for tires, lubricants, replacement parts, interest
rates and labor are the ones described in Appendix K hereto. For purposes of
this Section 21.2, if the escalation percentage between September 23, 2005 and
the date of commencement of the Work is four percent or less, the mining rates
set forth in Appendix A shall remain unchanged. If that escalation percentage is
greater than four percent, the mining rates set forth in Appendix A shall be
increased by an amount equal to one-half of the percentage increase in excess of
four percent (so that, for example, if that escalation percentage turns out to
be six percent, the mining rates for Year 1 and each subsequent year in Appendix
A would be increased by one percent). After any initial adjustments made to the
mining rates pursuant to this Section 21.2, subsequent adjustments will be made
pursuant to Section 5.5. MSR and Contractor further agree that if the Notice to
Proceed (as that term is defined in Section 21.1) has not been received by
Contractor on or before 5:00 Pacific Time on June 1, 2006, Contractor shall have
the right to terminate this Mining Contract. Otherwise, Contractor shall have no
right to terminate this Contract prior to June 1, 2006. Alternatively, if
Contractor has not received the Notice to Proceed by June 1, 2006, and if
Contractor subsequently increases any of its mining, equipment or standby rates,
MSR shall have no obligation to proceed with Contractor under this Mining
Contract, and may terminate this Mining Contract at any time after it receives a
notice from Contractor indicating that any of these rates will be increased and
prior to the date it delivers the Notice to Proceed. Upon termination of this
Mining Contract pursuant to this Section 21.2, MSR shall have no obligation or
liability to Contractor for any payments under Sections 5.7 or 5.8, or any other
obligations or liabilities to Contractor pursuant to this Mining Contract,
Contractor shall have no obligations or liabilities to MSR under this Mining
Contract, and MSR shall be free to enter into negotiations for contract mining
at the Mine with any third party.

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                                      H-47
<PAGE>

22.   Representations And Warranties

22.1  MSR Representations and Warranties

      MSR represents that it is a corporation duly organized, validly existing
and in good standing in Mexico, and is legally authorized to transact business
in the State of Sonora, and that, except as set forth in Appendix H, it
possesses the Permits for the Mine insofar as the Work contemplated by this
Mining Contract is concerned (other than any permits required to be obtained by
the Contractor under this Mining Contract); that it has the power to execute,
deliver and perform under this Mining Contract; that it has duly executed and
delivered this Mining Contract; that there is no action, suit, investigation or
proceeding affecting MSR, pending or (to MSR's knowledge) threatened before any
court, governmental agency or arbitrator that affects or would affect the
legality, validity or enforceability of this Mining Contract, or the
consummation of the transactions contemplated hereunder; and that, upon its
execution and delivery of this Mining Contract (assuming valid execution and
delivery by Contractor), the same will be a legal, valid and binding obligation
of MSR, enforceable against MSR in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency or similar laws and by
equitable principles generally. MSR further represents that the authority of the
individuals who signs this contract on its behalf has not been rescinded,
revoked, or restricted in any manner whatsoever.

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                                      H-48
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22.2  Contractor Representations and Warranties

      Contractor represents that it is a corporation duly organized, validly
existing and in good standing under the laws of Mexico, and is legally
authorized to transact business in the State of Sonora, and that it has the
power and authority to execute, deliver and perform under this Mining Contract;
that it has duly executed and delivered this Mining Contract; that there is no
action, suit, investigation or proceeding affecting Contractor, pending or (to
Contractor's knowledge) threatened before any court, governmental agency or
arbitrator that affects or would affect the legality, validity or enforceability
of this Mining Contract, or the consummation of the transactions contemplated
hereunder; and that, upon its execution and delivery of this Mining Contract
(assuming valid execution and delivery by MSR), the same will be a legal, valid
and binding obligation of Contractor, enforceable against Contractor in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency or similar laws and by equitable principles generally.
Contractor further represents that the authority of the individual who signs
this contract on its behalf has not been rescinded, revoked, or restricted in
any manner whatsoever.

22.3  Performance Warranty

      Contractor represents and warrants that the equipment, labor, materials
and Work furnished under this Contract will be in accordance with this Contract,
the Mining Plan and industry standards, and that Work will be free from defects
not inherent in the quality required or permitted and that the Work will conform
with the requirements of the Mining Contract. Contractor warrants that the Work
(a) shall be adequate for the purpose for which intended; and (b) shall be
comparable to similar work performed by a first class, efficient, experienced
and competent mining contractor of national stature. Work not conforming to
these requirements, including substitutions not properly approved and
authorized, may be considered defective. Contractor further warrants that all
Contractor's Equipment will be first quality and suitable for the performance of
the Work, as will all other materials and supplies furnished by Contractor.
Contractor's warranty excludes remedies for damages or defects caused by normal
wear and tear under normal usage. Contractor shall repair or replace any
defective equipment or materials and shall correct (by repair or replacement)
deficient design, engineering or construction of the Work. Contractor shall
promptly re-execute any defective Work in accordance with the Mining Contract
and the Mining Plan and without expense to MSR.

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                                      H-49
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22.4  No Third-Party Beneficiaries

      Except as specifically provided in this Mining Contract, there are no
third-party beneficiaries of this Mining Contract, this Mining Contract does not
create or confer any legal claim or cause of action in favor of any party not a
signatory to this Mining Contract and the obligations and legal duties imposed
on any party by this Mining Contract are owed exclusively to the other party or
parties and are not owed to any party not a signatory to this Mining Contract.

22.5  Exclusivity

      The express warranties provided in the Mining Contract are EXCLUSIVE AND
ARE IN LIEU OF ALL OTHER WARRANTIES EXPRESS OR IMPLIED INCLUDING ANY WARRANTY OR
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE (WHICH OTHER WARRANTIES ARE
EXPRESSLY DISCLAIMED).

23.   Labor Law Related Liabilities

23.1  Contractor's Obligations

      Contractor shall promptly and timely discharge and fulfill all its
obligations (contractual, statutory, or otherwise) directly or indirectly
relating to its labor relationships, including, but not limited to, those
derived from individual or collective employment contracts and to the Instituto
Mexicano del Seguro Social, to the Instituto del Fondo Nacional para la Vivienda
de los Trabajadores, to retirement pension funds or plans (or Afores), and to
federal, state, or local tax laws applicable to those labor relationships.

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                                      H-50
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23.2  Indemnity

      Contractor shall defend, indemnify and hold MSR harmless from and against
any and all disputes, complaints, blockades, stoppages, closure orders,
attachments, garnishments, investigations, audits, and like proceedings directly
or indirectly relating to Contractor's labor relationships and for any losses,
claims or damages (including reasonable attorney's fees) that MSR might sustain
on account of those labor relationships and applicable federal, state and local
laws, rules regulations, and Mexican official standards.

23.3  No Responsibility

      MSR is not and will not be responsible for and will not discharge any of
Contractor's liabilities and obligations to its employees, or to any agency or
authority, including, but not limited to, the Instituto Mexicano del Seguro
Social, to the Instituto del Fondo Nacional para la Vivienda de los
Trabajadores, to retirement pension funds or plans (or Afores), and to federal,
state, or local tax laws, rules or regulations applicable to those labor
relationships, and MSR is not and will not be Contractor's substitute or
surrogate employer for any purpose whatsoever.

24.   Performance Bond

      To secure and guarantee the timely and complete performance of the Work
and all of Contractor's other obligations hereunder, Contractor shall, within
thirty (30) calendar days after the Effective Date, post and periodically
maintain a performance bond issued by a Mexican licensed bonding company in the
sum of $2,000,000, in form and content satisfactory to counsel for MSR, payable
to MSR. This clause is not and will not be interpreted as a liquidated damages
clause and will not limit Contractor's liability hereunder. Contractor shall
continue to be responsible with all of its assets, proceeds, and income
(including income due to Contractor hereunder ) for the payment of any damages
or losses incurred by MSR on account of Contractor's failure to comply with any
of its obligations under this Mining Contract notwithstanding the posting of the
bond provided herein.

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                                      H-51
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25.   Dispute Resolution

25.1  Informal Resolution

      Any dispute or claim arising between MSR and Contractor relating to
interpretation of the provisions of this Mining Contract, to the Work, to the
performance of MSR or Contractor hereunder, or to payment or any portion
thereof, which has not been resolved by the appropriate staff level personnel of
the parties, shall be referred to the following parties for resolution:

      Level   MSR                  Contractor
      -----   ------------------   ----------
      I       MSR Representative   Contractor Representative
      II      President            President

25.2  Memorandum

      If the disputed issues are not resolved at Level I, a memorandum will be
prepared jointly by the Level I participants and signed by each of them clearly
outlining the unresolved issues, the amount of disagreement and the principal
persons responsible for activities leading to the dispute. Within five calendar
days of delivery of this memorandum to the Level II participants, the Level II
participants shall attempt to resolve the dispute issues, either through
telephone conversation or meeting, as appropriate. If the Level II participants
cannot resolve the dispute, then the dispute will be settled by arbitration in
accordance with the provisions of Article 26.

25.3  Refusal to Perform

      Contractor shall have no right to refuse to perform any Work requested by
MSR as provided for in this Mining Contract, except: (a) in the event of an
unexcused failure by MSR to pay any undisputed portions of Contractor's
invoices; (b) when a requested action is in violation of any applicable federal,
state or local law, rule or regulation; or (c) when in Contractor's reasonable
opinion the requested action is unsafe.

26.   Formal Dispute Resolution

26.1  Arbitration

      Unless otherwise specifically provided in this Mining Contract, all
disputes or differences between the parties that arise in connection with this
Mining Contract and that cannot be settled or resolved pursuant to Article 25
shall be resolved or settled by arbitration pursuant to the following rules:

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                                      H-52
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      26.1.1 Arbitration Rules

      Any arbitration proceedings engaged in pursuant to this Article 26 shall
be governed by the rules set forth in Book Fifth, Title IV (four), of the
Mexican Code of Commerce (the "Code of Commerce") (to the extent that they have
not been modified by this Article 26) and by the rules agreed upon in this
Article 26, and the arbitral award shall be rendered in abidance by all those
rules.

      26.1.2 Place of Arbitration

      The arbitration shall be conducted in Hermosillo, Sonora, at the offices
selected by the arbitral board. The arbitral board shall be entitled to convene
in any place or offices that it may deem fit for its members to deliberate and
to hear the parties, the witnesses, or the experts, or to examine goods or
documents.

      26.1.3 Arbitral Board

      The arbitral board shall be composed of three members designated (a) by
the Asociacion de Mineros de Sonora A.C. or (b) by a federal or state judge of
first instance sitting in Hermosillo, Sonora, Mexico, if the Asociacion de
Mineros de Sonora A.C. declines to designate the board or fails to designate the
board within thirty (30) calendar days after having been requested in writing to
do so by either MSR or Contractor, or if the designated board members cannot or
decline to serve as such within that thirty (30) calendar day period. The
arbitrators must be individuals, of age, legally qualified, of public good
ethical character, independent, and impartial, and with experience in the
settlement of commercial disputes, preferably attorneys at law. All the
decisions of the arbitral board, including the award and all kinds of procedural
rulings, shall be approved by a majority of votes.

      26.1.4 Language of the Arbitration

      The arbitration shall be conducted in the Spanish language. This rule
shall apply to all the parties' requests, to all hearings, and to all awards,
decisions, or communications of any other kind issued by the arbitral board.

      26.1.5 Applicable Substantive Law

      The disputes or differences shall be settled or resolved applying the
applicable Mexican substantive law, but the arbitrators shall have no authority
to award consequential, punitive, or special damages or losses, or both,
including lost profits. The damages or losses that may be awarded by the
arbitrator are only those that qualify as immediate and direct pursuant to
Mexican law.

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                                      H-53
<PAGE>

      26.1.6 Applicable Procedural Law

      The arbitral procedure, including the kinds and effects of the objections
to or recourses against the arbitral board's decision, shall be governed by this
clause and by the rules established by the arbitral board, as provided in
Section 1,435 (one thousand four hundred thirty-five) second paragraph of the
Code of Commerce, seeking (i) the prevailment of the material over the formal
truth, (ii) the equality of the parties, and (iii) their full opportunity to
propound and submit evidence and the unrestricted exercise of their rights.

      26.1.7 Award

      The arbitral award may be challenged before competent judge or court only
for invalidity in the cases set out in Section 1,457 (one thousand four hundred
fifty-seven) of the Code of Commerce; the judgment rendered in the invalidity
proceeding shall not be attackable or appealable by any of the recourses
provided in the Code of Commerce.

      26.1.8 Express Waiver of Other Procedures

      In a clear, precise, and irrevocable manner, the parties waive any other
dispute resolution procedure to which they are entitled pursuant to the law if
not for the arbitral covenant contained in this Article 26, with strict abidance
by and without prejudice to the stipulation contained in the first paragraph and
in Section 26.1.9.

      26.1.9 Interim or Provisional Remedies

      Notwithstanding the provisions of this Article 26, the parties may
petition to the competent state or federal tribunals for interim or provisional
remedies, and no such petition shall be understood as implying waiver or
abandonment of the right that the definitive issues be settled or resolved as
provided in this Article 26.

      26.1.10 Cost of Arbitration and Attorneys' Fees

      The parties shall bear equally the costs of arbitration, including the
arbitrators' fees. Each party shall bear separately its attorneys' fees and
costs.

      26.1.11 Judicial Remedies

      This arbitration agreement shall not be construed as barring pursuit in
any court of competent jurisdiction of judicial remedies in aid of arbitration,
including without limitation applications to compel arbitration, to stay
judicial proceedings pending arbitration, or to issue interlocutory orders of
injunction, replevin, attachment, or other measures that may be necessary to
prevent irreparable injury to a party pending arbitration.

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                                      H-54
<PAGE>

      26.1.12 Termination Right

      The prevailing party in any arbitrated matter shall have the option to
terminate this Mining Contract within thirty (30) calendar days after the
arbitrators' award, without any further liability or obligation whatsoever to
Contractor.

      26.1.13 Waiver of Right of Appeal

      Judgment upon the award rendered by the arbitrators may be entered in any
court of competent jurisdiction, and the parties hereby waive any right of
recourse or appeal to the Mexican courts, or any other court, in connection with
any question arising in the course of the arbitration. The award recognition and
enforcement judgment shall not be attackable or appealable by any of the
recourses provided in the Code of Commerce.

      26.1.14 Notices and Notifications

      The parties agree that service of any notices or notifications in
reference to any arbitration proceeding at their addresses as given in this
contract (or as subsequently amended in writing) shall be valid and sufficient.

27.   Jurisdiction

      This Mining Contract is to be governed by the laws of Mexico. The
Contractor must provide proof of its legal authority and/or authorization to do
business in Mexico, and of the duly authorized appointment and authority of
whoever is to sign this Mining Contract and any related document on its behalf.

28.   Transferability of Contract

      This Mining Contract and the rights and obligations hereunder may not be
assigned or delegated by Contractor to any third party. If either MSR or the
Contractor has a change in ownership or control, MSR (for any change in
ownership or control of the Contractor) or the Contractor (for any change in
ownership or control of MSR) shall have the option to immediately terminate this
Mining Contract, with no further liability or obligation respectively to
Contractor (other than the obligation to make payments for Work performed prior
to such termination) or to MSR (other than the Contractor's obligations that
have not been discharged as of termination of this Mining Contract under this
Article 28 or the Contractor's obligations that survive the termination,
expiration, or rescission of this Mining Contract). If Contractor elects to
terminate this Mining Contract pursuant to Section 20.5, it must render services
for at least three months after notification. Contractor may not subcontract any
portion of the Work without prior written agreement from and in accordance with
any reasonable conditions imposed by MSR. Contractor may, however, subcontract
maintenance work for Contractor's Equipment and similar activities. Contractor
shall be responsible for any non-compliance with this Mining Contract by, and
for the acts and omissions of, its permitted subcontractors, including, but not
limited to, the preservation of any and all information generated by or provided
to any such subcontractor in direct or indirect relation to its work as
confidential during the term of its contract with Contractor and for a period of
two (2) years thereafter.

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                                      H-55
<PAGE>

29.   Successors and Assignees

      MSR and the Contractor each is hereby bound, and the partners, successors,
administrators, and legal representatives of each are hereby bound, to the other
party to this Mining Contract and to the partners, successors, administrators,
and legal representatives (and said assigns) of such other party, in respect of
all covenants, agreements and obligations of this Mining Contract.

30.   Records and Audit

      At any time and from time to time during the Term of this Mining Contract,
MSR's Representative shall have the right, during normal business hours and so
as not to unreasonably interfere with Contractor's operations, to review all
records and information in Contractor's possession (other than information
concerning Contractor's costs related to the performance of the Work) pertaining
to the activities and operations conducted by Contractor under this Mining
Contract.

31.   Confidentiality

      During the Term of this Mining Contract and for a period of two (2) years
thereafter, Contractor and Contractor's employees shall treat all information
previously provided by MSR to Contractor, and all other information in
Contractor's possession or which Contractor acquires relating to the Work as
confidential, and neither Contractor nor any of its employees shall disclose to
any third-party any such information or use any such information for its or his
personal benefit. Originals of all drawings, engineering design calculations,
estimate work sheets, specifications, and all other original documents
pertaining to the Work (other than information concerning Contractor's costs
related to the performance of the Work) shall be, and remain at all times
throughout the Work and thereafter, the sole property of MSR. On completion or
termination of the Work, or from time to time as may be determined by MSR,
Contractor shall release and deliver to MSR any and all such originals which
Contractor may have prepared or may have received from others; provided,
however, that Contractor shall have the right to reproduce at its own expense
all such originals for the purposes of Contractor's record files of the project.
Contractor will not sell or copy any specifications, drawing or drawings, or
blueprints for use on any other project. Contractor specifically agrees not to
use drawings and technical information obtained from MSR with regard to the Mine
on any other project. Contractor agrees not to issue any press releases or other
public announcements concerning this Mining Contract or the Mine unless the
information contained in such press releases or other public announcements has
already been made public by MSR.

--------------------------------------------------------------------------------
                                      H-56
<PAGE>

32.   Miscellaneous

32.1  Amendment; Waivers

      No change in, addition to, or waiver of any of the provisions of this
Mining Contract shall be binding upon either party unless in writing signed by
an authorized representative of each party. No waiver by either party of any
breach of the other party of any of the provisions of this Mining Contract shall
be construed as a waiver of any subsequent breach, whether of the same or of a
different provision of this Mining Contract.

32.2  Entire Agreement

      This Mining Contract sets forth the entire Mining Contract between MSR and
Contractor with respect to operations at the Mine and supersedes all prior
negotiations and dealings between parties pertaining to the subject matter
thereof.

32.3  Counterparts

      This Mining Contract may be executed, accepted and delivered in any number
of counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument. The section headings are
inserted for convenience only and are not to be construed as part of this Mining
Contract.

--------------------------------------------------------------------------------
                                      H-57
<PAGE>

32.4  Invalidity

      If any term or provision hereof or the application thereof to any
circumstance shall to any extent, be invalid or unenforceable, the validity of
the remainder of the Mining Contract shall not be affected and such invalid or
unenforceable term or provision shall be deemed modified to the minimum extent
necessary to bring such term or provision into compliance with the law.

32.5  No Solicitation

      Each of Contractor and MSR covenant to the other that during the Term of
this Mining Contract and for two (2) years thereafter, they will not for
themselves or any other entity, directly or indirectly, solicit, induce or
attempt to induce, hire or employ key employees of the other, as an employee,
agent, consultant, advisor, representative or otherwise, without the prior
written consent of the other party, which consent shall not be unreasonably
withheld.

32.6  Further Assurances

      At the request of either party to this Mining Contract, the parties shall
execute and deliver any further instruments, mining contracts, documents or
other papers reasonably requested by that party to effect the purposes of this
Mining Contract and the transactions contemplated hereby.

32.7  Schedule for Performance

      Time is of the essence in the performance by Contractor of the Work and
all of its other duties and obligations under this Contract. Contractor agrees
to conduct the Work in such a manner as to timely meet the specific milestones
set forth in Appendix A. Otherwise, all of the Work shall commence on and shall
continue on a mutually agreed to schedule until the termination of this
Contract.

32.8  Interpretation

      The use of the term "including" anywhere in this Mining Contract shall be
deemed to mean "including without limitation."

--------------------------------------------------------------------------------
                                      H-58
<PAGE>

33.   Notices

33.1  Procedure

      Any payments required or permitted to be given hereunder shall be deemed
properly given upon personal delivery or mailing, by registered or certified
mail, return receipt requested, to the addresses set forth below. Any notices or
other written communications required or permitted to be given hereunder shall
be given or made in person, by reputable overnight courier, or by facsimile with
receipt acknowledged. Such notices shall be deemed to have been duly given and
received when actually delivered in person or sent by facsimile (during normal
business hours), or the next business day following the date they are sent if
sent by courier, and addressed as follows:

      If intended for MSR to:
            Minera Santa Rita S. de R.L. de C.V.
            Calle Lamberto Hernandez 73, esquina con Avenida "I"
            Caborca, Sonora 83600, Mexico
            Attention:  Dave Loder
            Telephone: (637) 370 5959
            Facsimile: (637) 372 7289

      and if intended for Contractor, to:
            Sinergia Obras Civiles y Mineras, S.A. de C.V.
            Calle de Cobre No. 91, Parque Industrial
            Hermosillo, Sonora 85540, Mexico
            Attention:  Daniel Gutierrez Perez
            Telephone: (662) 251 0812 (13 and 14)
            Facsimile: (662) 251 0809

or to such other person or address as the party to be notified may have
designated prior thereto by written notice to the other party.

33.2  Electronic Communications

      The electronic mail (also known as "e-mail"), capable of generating a
printed version of the sent and received message and of generating and printing
an acknowledgment of receipt received by the sender (which capabilities both
MSR's and the Contractor's systems have), shall be an acceptable means of
transmission and reception of all kinds of notices, communications, and
correspondence related to this Mining Contract, in addition to those methods of
communication set out in Section 33.1, and any notices, communications, and
correspondence sent and received by e-mail shall have the same effect as
communications made by the means set out in Section 33.1, unless the Contractor
or MSR communicates to the other, by any of the means provided in Section 33.1,
that it wishes to exclude certain types or categories of notices,
communications, and correspondence from the application of this Section 33.2 and
the date as of and from which this exclusion is to take effect, or that the
Contractor's or MSR's system has ceased to have the above capabilities. All
e-mail communications shall be deemed to have been duly given and received the
business day following the reception in the sender's system of the particular
addressee's acknowledgment of receipt. For the purposes of this Section 33.2,
the parties designate these as their respective e-mail addresses, which they may
change at any time hereafter by communication sent to the other either as
prescribed in this Article 33: (a) Contractor's: cysvial@prodigy.net.mx or
dgp@hmo.megared.net.mx, to the attention of Daniel Gutierrez Perez, and (b)
MSR's: loder@capitalgoldcorp.com, to the attention of Dave Loder, and
pritchard@capitalgoldcorp.com, to the attention of Jeff Pritchard.

--------------------------------------------------------------------------------
                                      H-59
<PAGE>

34.   Mining Contract Signature Page

                                 MINING CONTRACT

                       Contract Mining for El Chanate Mine

As set forth in Article 21, the effectiveness of this Mining Contract is
conditional upon (a) MSR obtaining its project financing for the Mine, (b) MSR's
decision to proceed with the project at that point, and (c) Contractor's receipt
of a Notice of Award.

Mining Contract terms are agreed to by MSR:

/s/ Gifford Dieterle                                  12/7/05
------------------------------                   ----------------
Gifford Dieterle                                      Date

Minera Santa Rita S. de R.L. de C.V.

Legal Address: Calle Lamberto Hernandez 73, esquina con Avenida "I", Caborca,
               Sonora 83600, Mexico

Gifford Dieterle hereby represents and warrants that the authority by which he
is signing and delivering this Mining Contract on behalf of Minera Santa Rita S.
de R.L. de C.V., granted and formalized by the notarial instrument attached
hereto as Appendix I, has not been rescinded, restricted or modified in any way
or by any means whatsoever.

Mining Contract terms are agreed to by Contractor:

/s/ Daniel Gutierrez Perez
------------------------------------                  November 24, 2005
Daniel Gutierrez Perez                                Date
Attorney in Fact
Sinergia Obras Civiles y Mineras, S.A. de C.V., Obras Civiles y Mineras

Legal Address: Calle del Cobre No. 91, Parque Industrial, Hermosillo, Sonora
               85540, Mexico

Daniel Gutierrez Perez hereby represents and warrants that the authority by
which he is signing and delivering this Mining Contract on behalf of Sinergia
Obras Civiles y Mineras, S.A. de C.V., granted and formalized by the notarial
instrument attached hereto as Appendix J, has not been rescinded, restricted or
modified in any way or by any means.

--------------------------------------------------------------------------------
                                      H-60
<PAGE>

                               MSR Acknowledgment

STATE OF NEW YORK             )
                              )ss.
CITY AND COUNTY OF NASSAU     )

      On the 7th day of December, 2005, before me personally came Gifford
Dieterle, to me known, who, being by me duly sworn, did depose and say that he
resides in Lloyd Harbor, New York; that he is the President of Minera Santa Rita
S. de R.L. de C.V., the corporation described in and which executed the above
instrument; and that he signed his name thereto by authority of the board of
directors of said corporation.

      Witness my hand and official.

                              ________s/_________________________________
                              Notary Public

      My commission expires:  April 30, 2007
                              --------------

[SEAL]

State of New York
County of Nassau  ss.:  I, KAREN V. MURPHY, County Clerk and Clerk of
                        the County Court and the Supreme Court, Nassau
                        County, Courts of Record having by law a common seal,
                        DO  HEREBY CERTIFY that

JOSEPHINE L. SCOTT

Whose name is subscribed to the annexed affidavit, deposition, certificate of
acknowledgement or proof, was at the time of taking the Same a NOTARY PUBLIC in
an for the State of NEW YORK, duly commissioned and sworn and qualified to act
as such throughout The State of New York; that pursuant to law a commission, or
a certificate of their official character, and autograph signature, have been
filed in my office; that as such the Notary Public was duly authorized by the
laws of the State of New York to administer oaths And affirmations, to receive
and certify the acknowledgement or proof of deeds, mortgages, powers of attorney
and other written instruments for lands, tenements and hereditaments to be read
in evidence or recorded in this State, to protest notes and to take and certify
affidavits and depositions; and that I am well acquainted with the handwriting
of such Notary Public or have compared the signature on the annexed instrument
with their autograph signature deposited in my office, and believe that the
signature in genuine.

      IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal

            This the 9th day of December, 2005

                                          KAREN V. MURPHY
                                    COUNTY CLERK, NASSAU COUNTY

--------------------------------------------------------------------------------
                                      H-61Execution Copy

FRANKLIN AUTO TRUST 2005-1

AMENDED AND RESTATED TRUST AGREEMENT

between

FRANKLIN RECEIVABLES LLC,

as Depositor

and

DEUTSCHE BANK TRUST COMPANY DELAWARE,

as Owner Trustee

Dated as of December 8, 2005

TABLE OF CONTENTS

Page

ARTICLE I Definitions

SECTION 1.1  Capitalized Terms

1

SECTION 1.2  Other Definitional Provisions

3

ARTICLE II  Organization

SECTION 2.1  Name

4

SECTION 2.2  Office

4

SECTION 2.3  Purposes and Powers

4

SECTION 2.4  Appointment of Owner Trustee

5

SECTION 2.5  Initial Capital Contribution of Owner Trust Estate

5

SECTION 2.6  Declaration of Trust

5

SECTION 2.7  Liability of the Depositor

5

SECTION 2.8  Title to Trust Property

6

SECTION 2.9  Situs of Trust

6

SECTION 2.10  Representations and Warranties of the Depositor

6

SECTION 2.11  [Reserved]

7

SECTION 2.12  Covenants of the Certificateholders

7

SECTION 2.13  Federal Income Tax Matters

8

ARTICLE III  Trust Certificates and Transfer of Interests

SECTION 3.1  Initial Ownership

9

SECTION 3.2  The Trust Certificates

9

SECTION 3.3  Authentication of Trust Certificates

9

SECTION 3.4  Registration of Transfer and Exchange of Trust Certificates

9

SECTION 3.5  Mutilated, Destroyed, Lost or Stolen Trust Certificates

10

SECTION 3.6  Persons Deemed Certificateholders

11

SECTION 3.7  Access to List of Certificateholders’ Names and Addresses

11

SECTION 3.8  Maintenance of Office or Agency

11

SECTION 3.9  Appointment of Paying Agent

11

SECTION 3.10  [Reserved]

12

SECTION 3.11  [Reserved]

12

SECTION 3.12  [Reserved]

12

SECTION 3.13  [Reserved]

12

SECTION 3.14  [Reserved]

12

SECTION 3.15  [Reserved]

12

SECTION 3.16  [Reserved]

12

SECTION 3.17  Trust Certificate Transfer Restrictions

12

ARTICLE IV Actions by Owner Trustee

SECTION 4.1  Prior Notice to Certificateholders with Respect to Certain Matters

14

SECTION 4.2  Action by Certificateholders with Respect to Certain Matters

15

SECTION 4.3  Action by Certificateholders with Respect to Bankruptcy

16

SECTION 4.4  Restrictions on Certificateholders’ Power

16

SECTION 4.5  Majority Control

16

SECTION 4.6  Reserved

16

SECTION 4.7  Execution of Documents

16

ARTICLE V Application of Trust Funds: Certain Duties

SECTION 5.1  Establishment of Certificate Distribution Account

16

SECTION 5.2  Application of Funds in Certificate Distribution Account

17

SECTION 5.3  [Reserved]

18

SECTION 5.4  Method of Payment

18

SECTION 5.5  No Segregation of Monies; No Interest

18

SECTION 5.6  Accounting and Reports to the Noteholders, Certificateholders, the 

Internal Revenue Service and Others

18

SECTION 5.7  Signature on Returns; Tax Matters Partner

19

ARTICLE VI  Authority and Duties of Owner Trustee

SECTION 6.1  General Authority

19

SECTION 6.2  General Duties

19

SECTION 6.3 Action upon Instruction

19

SECTION 6.4  No Duties Except as Specified in this Agreement or in Instructions

20

SECTION 6.5  No Action Except under Specified Documents or Instructions

21

SECTION 6.6  Restrictions

21

SECTION 6.7  Notice of Default Under Indenture

21

ARTICLE VII  Concerning the Owner Trustee

SECTION 7.1.  Acceptance of Trusts and Duties

21

SECTION 7.2  Furnishing of Documents

23

SECTION 7.3  Representations and Warranties

23

SECTION 7.4  Reliance; Advice of Counsel

23

SECTION 7.5  Not Acting in Individual Capacity

24

SECTION 7.6  Owner Trustee Not Liable for Trust Certificates or Receivables

24

SECTION 7.7  Owner Trustee May Own Trust Certificates and Notes

24

SECTION 7.8  Payments from Owner Trust Estate

24

SECTION 7.9  Doing Business in Other Jurisdictions

25

ARTICLE VIII Compensation of Owner Trustee

SECTION 8.1  Owner Trustee’s Fees and Expenses

25

SECTION 8.2  Indemnification

25

SECTION 8.3  Payments to the Owner Trustee

26

SECTION 8.4  Non-recourse Obligations

26

ARTICLE IX  Dissolution and Termination of Trust

SECTION 9.1  Termination of Trust Agreement

26

SECTION 9.2  [Reserved]

27

ARTICLE X  Successor Owner Trustees and Additional Owner Trustees

SECTION 10.1  Eligibility Requirements for Owner Trustee

27

SECTION 10.2  Resignation or Removal of Owner Trustee

28

SECTION 10.3  Successor Owner Trustee

28

SECTION 10.4  Merger or Consolidation of Owner Trustee

29

SECTION 10.5  Appointment of Co-Trustee or Separate Trustee

29

ARTICLE XI Miscellaneous

SECTION 11.1  Supplements and Amendments

30

SECTION 11.2  No Legal Title to Owner Trust Estate in Certificateholders

31

SECTION 11.3  Limitations on Rights of Others

32

SECTION 11.4  Notices

32

SECTION 11.5  Severability

32

SECTION 11.6  Separate Counterparts

32

SECTION 11.7  Successors and Assigns

32

SECTION 11.8  [Reserved]

33

SECTION 11.9  No Petition

33

SECTION 11.10  No Recourse

33

SECTION 11.11  Headings

33

SECTION 11.12  GOVERNING LAW

33

SECTION 11.13  [Reserved]

33

SECTION 11.14  Servicer

33

EXHIBITS

EXHIBIT A 

FORM OF TRUST CERTIFICATE

EXHIBIT B

FORM OF CERTIFICATE OF TRUST

AMENDED AND RESTATED TRUST AGREEMENT dated as of December 8, 2005 between FRANKLIN RECEIVABLES LLC, as depositor, and DEUTSCHE BANK TRUST COMPANY DELAWARE, as Owner Trustee, which amends and restates the TRUST AGREEMENT dated as of November 30, 2005 between FRANKLIN RECEIVABLES LLC, as depositor, and DEUTSCHE BANK TRUST COMPANY DELAWARE, as Owner Trustee.

ARTICLE I

Definitions

SECTION 1.1   Capitalized Terms.  Terms used but not defined in this Agreement shall have the meaning set forth in the Sale and Servicing Agreement.  For all purposes of this Agreement, the following terms shall have the meanings set forth below:

“Agreement” shall mean this Amended and Restated Trust Agreement, as the same may be amended and supplemented from time to time.

“Benefit Plan” shall have the meaning assigned to such term in Section 3.17.

“Certificate” means a certificate evidencing the beneficial interest of a Certificateholder in the Trust, substantially in the form of Exhibit A attached hereto.

“Certificate Distribution Account” shall have the meaning assigned to such term in Section 5.1.

“Certificate of Trust” shall mean the Certificate of Trust in the form of Exhibit B to be filed for the Trust pursuant to Section 3810(a) of the Statutory Trust Statute.

“Certificate Paying Agent” shall mean any paying agent or co-paying agent appointed pursuant to Section 3.9.

“Certificateholder” or “Holder” shall mean the Person in whose name a Certificate is registered on the Certificate Register.

“Certificate Register” and “Certificate Registrar” shall mean the register mentioned and the registrar appointed pursuant to Section 3.4.

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

“Corporate Trust Office” shall mean, with respect to the Owner Trustee, the principal corporate trust office of the Owner Trustee located at E.A. Delle Donne Corporate Center Montgomery Building, 1011 Centre Road, Suite 200, Wilmington, Delaware 19805-1266, with a copy of all notices and other documents to be also furnished to Deutsche Bank Trust Company Americas, 60 Wall Street, 26th Floor, New York, New York 10005, Attention: Corporate Trust and Agency Services, Structured Finance Services, or at such other address as the Owner Trustee may designate by notice to the Certificateholders and the Depositor, or the principal corporate trust office of any successor Owner Trustee (the address of which the successor owner trustee will notify the Certificateholders and the Depositor).

“Delaware Trustee” shall have the meaning assigned to such term in Section 10.1.

“Depositor” shall mean Franklin Receivables LLC, as the depositor of the Receivables pursuant to the Sale and Servicing Agreement and each successor to Franklin Receivables LLC (in the same capacity), to the extent permitted hereunder.

“Depositor Indemnification Cap” shall have the meaning assigned to such term in Section 8.2.

“ERISA” shall have the meaning assigned to such term in Section 3.17.

“Expenses” shall have the meaning assigned to such term in Section 8.2.

“Holder” or “Certificateholder” shall mean the Person in whose name a Trust Certificate is registered on the Certificate Register.

“Indemnified Parties” shall have the meaning assigned to such term in Section 8.2.

“Indenture” shall mean the Indenture among the Trust, as issuer, Wilmington Trust Company, as indenture trustee and indenture collateral agent, and Citibank, N.A., as indenture administrator, dated as of December 1, 2005, as the same may be amended and supplemented from time to time.

“Instructing Party” shall have the meaning assigned to such term in Section 6.3.

“Owner Trust Estate” shall mean all right, title and interest of the Trust in and to the property and rights assigned to the Trust pursuant to Article II of the Sale and Servicing Agreement, all funds on deposit from time to time in the Trust Accounts and all other property of the Trust from time to time, including any rights of the Owner Trustee and the Trust pursuant to the Sale and Servicing Agreement.

“Owner Trustee” shall mean Deutsche Bank Trust Company Delaware, a Delaware banking corporation not in its individual capacity but solely as owner trustee under this Agreement, and any successor Owner Trustee hereunder.

“Paying Agent” shall mean any paying agent or co-paying agent appointed pursuant to Section 3.9.

“Percentage Interest” shall mean with respect to any Trust Certificate, the percentage interest of ownership in the Trust represented thereby as set forth on the face thereof.

“Record Date” shall mean, with respect to any Distribution Date, the close of business on the last day of the calendar month preceding such Distribution Date.

“Responsible Officer” shall mean, when used with respect to the Owner Trustee, any officer assigned to the Corporate Trust Office of the Owner Trustee, including any Vice President, any Assistant Vice President, any Assistant Treasurer, any Managing Director, any trust officer or any other officer of the Owner Trustee customarily performing functions similar to those performed by any of the above designated officers or any agent acting under a power of attorney from the Owner Trustee, having responsibility for the administration of this Trust Agreement, as the case may be, and also, with respect to a particular matter relating to the Trust, any other officer of the Owner Trustee to whom such matter is referred because of such officer’s knowledge of and familiarity with such matter.  Any notice given to the address and in the manner specified in Section 11.4 hereof shall be deemed to be given to a Responsible Officer.

“Sale and Servicing Agreement” shall mean the Sale and Servicing Agreement among the Trust, Franklin Receivables LLC, as depositor, Franklin Resources, Inc., as representative, and Franklin Capital Corporation, as servicer, dated as of December 1, 2005, as the same may be amended and supplemented from time to time.

“Secretary of State” shall mean the Secretary of State of the State of Delaware.

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Statutory Trust Statute” shall mean Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code § 3801 et seq., as the same may be amended from time to time.

“Treasury Regulations” shall mean regulations, including proposed or temporary regulations, promulgated under the Code.  References herein to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations.

“Trust” shall mean the trust established by this Agreement.

“Trust Certificate” shall mean a Certificate.

SECTION 1.2   Other Definitional Provisions.

(a)

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

(b)

All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.

(c)

As used in this Agreement and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in this Agreement or in any such certificate or other document, and accounting terms partly defined in this Agreement or in any such certificate or other document to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles as in effect on the date of this Agreement or any such certificate or other document, as applicable.  To the extent that the definitions of accounting terms in this Agreement or in any such certificate or other document are inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained in this Agreement or in any such certificate or other document shall control.

(d)

The words “hereof,” “herein,” “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Section and Exhibit references contained in this Agreement are references to Sections and Exhibits in or to this Agreement unless otherwise specified; and the term “including” shall mean “including without limitation.”

(e)

The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.

ARTICLE II

Organization

SECTION 2.1   Name.  The Trust continued hereby shall be known as “Franklin Auto Trust 2005-1” in which name the Owner Trustee may engage in the transactions contemplated hereby, make and execute contracts and other instruments on behalf of the Trust and sue and be sued.

SECTION 2.2   Office.  The office of the Trust shall be in care of the Owner Trustee at the Corporate Trust Office, or at the office of the Delaware Trustee, if one exists, or at such other address as the Owner Trustee may designate by written notice to the Certificateholders and the Depositor.

SECTION 2.3   Purposes and Powers.  (a)  The purpose of the Trust is, and the Trust shall have the power and authority, to engage in the following activities:

(i)

to issue the Notes pursuant to the Indenture and the Trust Certificates pursuant to this Agreement, and to sell the Notes and the Certificates;

(ii)

with the proceeds of the sale of the Notes, to pay the organizational, start-up and transactional expenses of the Trust and to pay the balance to the Depositor pursuant to the Sale and Servicing Agreement;

(iii)

to acquire, receive and accept from time to time the Owner Trust Estate, to assign, grant, transfer, pledge, mortgage and convey the Owner Trust Estate (other than the Certificate Distribution Account) to the Indenture Collateral Agent pursuant to the Indenture for the benefit of the Indenture Trustee on behalf of the Noteholders and for the benefit of the Letter of Credit Provider, and to hold, manage and distribute to the Certificateholders pursuant to the terms of the Sale and Servicing Agreement any portion of the Owner Trust Estate released from the Lien of, and remitted to the Trust pursuant to, the Indenture;

(iv)

to enter into and perform its obligations under the Basic Documents to which it is a party;

(v)

to engage in those activities, including entering into agreements, that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith; and

(vi)

subject to compliance with the Basic Documents to which the Trust is a party, to engage in such other activities as may be required in connection with conservation of the Owner Trust Estate and the making of distributions to the Certificateholders and the Noteholders.

The Trust is hereby authorized to engage in the foregoing activities.  The Trust shall not engage in any activity other than in connection with the foregoing or other than as required or authorized by the terms of this Agreement or the Basic Documents.

SECTION 2.4   Appointment of Owner Trustee.  The Depositor hereby appoints the Owner Trustee as trustee of the Trust effective as of the date hereof, to have all the rights, powers and duties set forth herein.

SECTION 2.5   Initial Capital Contribution of Owner Trust Estate.    The Owner Trustee hereby acknowledges receipt in trust from the Depositor, as of the date hereof, of $200, which shall constitute the initial Owner Trust Estate and shall be deposited in the Certificate Distribution Account.  The Depositor shall pay organizational expenses of the Trust as they may arise or shall, upon the request of the Owner Trustee, promptly reimburse the Owner Trustee for any such expenses paid by the Owner Trustee.

SECTION 2.6   Declaration of Trust.  The Owner Trustee hereby declares that it will hold the Owner Trust Estate in trust upon and subject to the conditions set forth herein for the use and benefit of the Certificateholders, subject to the obligations of the Trust under the Basic Documents to which the Trust is a party.  It is the intention of the parties hereto that the Trust constitute a statutory trust under the Statutory Trust Statute and that this Agreement constitute the governing instrument of such statutory trust.  It is the intention of the parties hereto that, solely for federal income tax purposes and, to the extent permitted by law, for purposes of applicable state income or franchise tax, the Trust shall be disregarded as an entity apart from its owner, the Depositor, in the event that the Depositor is the sole Certificateholder for federal income tax purposes, or treated as a partnership if there is more than one Certificateholder for federal income tax purposes.  The parties agree that, unless otherwise required by appropriate tax authorities, the Trust will file or cause to be filed annual or other necessary returns, reports and other forms consistent with the characterization of the Trust as a division of the Depositor, or as a partnership, as the case may be, for such tax purposes.  Effective as of the date hereof, the Owner Trustee shall have all rights, powers and duties set forth herein and to the extent not inconsistent herewith, in the Statutory Trust Statute with respect to accomplishing the purposes of the Trust.  The Owner Trustee shall file the Certificate of Trust with the Secretary of State.

SECTION 2.7   Liability of the Depositor.  (a)  The Depositor shall pay organizational expenses of the Trust as they may arise or shall, upon the request of the Owner Trustee, promptly reimburse the Owner Trustee for any such expenses paid by the Owner Trustee.  

(b)

No Holder, other than to the extent set forth in clause (a), shall have any personal liability for any liability or obligation of the Trust.

SECTION 2.8   Title to Trust Property.  (a)  Legal title to all the Owner Trust Estate shall be vested at all times in the Trust as a separate legal entity except where applicable law in any jurisdiction requires title to any part of the Owner Trust Estate to be vested in a trustee or trustees, in which case title shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a separate trustee, as the case may be.

(b)

The Certificateholders shall not have legal title to any part of the Owner Trust Estate.  The Certificateholders shall be entitled to receive distributions with respect to their undivided Percentage Interest therein only in accordance with Articles V and IX.  No transfer, by operation of law or otherwise, of any right, title or interest by any Certificateholder of its ownership interest in the Owner Trust Estate shall operate to terminate this Agreement or the trusts hereunder or entitle any transferee to an accounting or to the transfer to it of legal title to any part of the Owner Trust Estate.

SECTION 2.9   Situs of Trust.  The Trust will be located in the State of Delaware.  All bank accounts maintained by the Owner Trustee on behalf of the Trust shall be located in the State of Delaware or the State of New York.  Payments will be received by the Trust only in Delaware or New York, and payments will be made by the Trust only from Delaware or New York.  The Trust shall not have any employees in any state other than Delaware; provided, however, that nothing herein shall restrict or prohibit the Owner Trustee, in its individual capacity, the Servicer or any agent of the Trust from having employees within or without the State of Delaware.  The only office of the Trust will be at the Corporate Trust Office in Delaware.

SECTION 2.10   Representations and Warranties of the Depositor.  The Depositor hereby represents and warrants to the Owner Trustee that:

(a)

Organization and Good Standing.  The Depositor is duly organized and validly existing as a Delaware limited liability company with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted.

(b)

Due Qualification.  The Depositor is duly qualified to do business as a limited liability company in good standing, and has obtained all necessary licenses and approvals, in all jurisdictions in which the ownership or lease of its property, the conduct of its business and the performance of its obligations under this Agreement and the Basic Documents requires such qualification.

(c)

Power and Authority.  The Depositor has the power and authority to execute and deliver this Agreement and to carry out its terms; the Depositor has full power and authority to sell and assign the property to be sold and assigned to and deposited with the Trust and the Depositor has duly authorized such sale and assignment and deposit to the Trust by all necessary action; and the execution, delivery and performance of this Agreement has been duly authorized by the Depositor by all necessary action.

(d)

No Violation.  The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the certificate of formation or limited liability company agreement of the Depositor, or any material indenture, agreement or other instrument to which the Depositor is a party or by which it is bound; nor result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than pursuant to the Basic Documents); nor violate any law or, to the best of the Depositor’s knowledge, any order, rule or regulation applicable to the Depositor of any court or of any Federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties.

(e)

No Consent Required.  No consent, license, approval or authorization or registration or declaration with, any Person or with any governmental authority, bureau or agency is required in connection with the execution, delivery or performance of this Agreement and the Basic Documents, except for such as have been obtained, effected or made.

(f)

No Proceedings.  There are no proceedings or investigations pending or, to its knowledge threatened against it before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality having jurisdiction over it or its properties (A) asserting the invalidity of this Agreement or any of the Basic Documents, (B) seeking to prevent the issuance of the Certificates or the Notes or the consummation of any of the transactions contemplated by this Agreement or any of the Basic Documents, (C) seeking any determination or ruling that might materially and adversely affect its performance of its obligations under, or the validity or enforceability of, this Agreement or any of the Basic Documents, or (D) seeking to adversely affect the federal income tax or other federal, state or local tax attributes of the Certificates.

SECTION 2.11   [Reserved]

SECTION 2.12   Covenants of the Certificateholders.  Each Certificateholder by becoming a holder of a Certificate agrees:

(a)

to be bound by the terms and conditions of the Certificates of which such Certificateholder is the beneficial owner and of this Agreement, including any supplements or amendments hereto and to perform the obligations of a Certificateholder as set forth therein or herein, in all respects as if it were a signatory hereto. This undertaking is made for the benefit of the Trust, the Owner Trustee and all other Certificateholders present and future;

(b)

to hereby appoint the Depositor so long as it is a Certificateholder as such Certificateholder’s agent and attorney-in-fact to sign any federal income tax information return filed on behalf of the Trust and agree that, if requested by the Trust, it will sign such federal income tax information return in its capacity as holder of an interest in the Trust. Each Certificateholder also hereby agrees that in its tax returns it will not take any position inconsistent with those taken in any tax returns filed by the Trust;

(c)

if such Certificateholder is other than an individual or other entity holding its Certificate through a broker who reports securities sales on Form 1099-B, to notify the Owner Trustee in writing of any transfer by it of a Certificate in a taxable sale or exchange, within 30 days of the date of the transfer; and

(d)

until the completion of the events specified in Section 9.1(e), not to, for any reason, institute proceedings for the Trust to be adjudicated as bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against the Trust, or file a petition seeking or consenting to reorganization or relief under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Trust or a substantial part of its property, or cause or permit the Trust to make any assignment for the benefit of its creditors, or admit in writing its inability to pay its debts generally as they become due, or declare or effect a moratorium on its debt or take any action in furtherance of any such action.

SECTION 2.13   Federal Income Tax Matters.  

(a)

Treatment of Notes as Indebtedness.  The Depositor, the Owner Trustee and the Certificateholder intend and agree to treat, and to take no action inconsistent with the treatment of, the Notes as indebtedness for federal income tax purposes and for purposes of applicable state or local income taxes, franchise taxes, and any other taxes imposed upon or measured by net income.

(b)

Allocations.  Net income of the Trust for any month as determined for Federal income tax purposes (and each item of income, gain, loss, credit and deduction entering into the computation thereof) shall be allocated:

(i)

for so long as all of the Trust Certificates are owned by the Depositor, the Trust shall be disregarded as an entity separate from the Depositor such that net income of the Trust for any month as determined solely for federal income tax purposes (and each item of income, gain, loss, credit and deduction entering into the computation thereof) shall be allocated to the Depositor and treated in the same manner as if the Trust were a division or branch of the Depositor; and

(ii)

in the event that the Depositor transfers (as such term is defined for federal income tax purposes) any Trust Certificates and there is more than one owner of Trust Certificates for federal income tax purposes, net income of the Trust for any month as determined solely for federal income tax purposes (and each item of income, gain, loss, credit and deduction entering into the computation thereof) shall be allocated pro rata to the Certificateholders based on their Percentage Interests.

(c)

Tax Treatment.  Notwithstanding the above, if any Class of Notes is deemed for federal income tax purposes (or for purposes of any state, local, or other income tax, franchise tax or other tax imposed upon or measured by net income) to represent an equity interest in the Trust, it is the intent and agreement of the parties hereto that the Trust shall, to the extent permitted by law, be treated for purposes of any such tax which treats Notes in such manner as a partnership among the affected Class of Noteholders and the Certificateholder.  In the event such a partnership is deemed to exist, the net income of the Trust for any month as determined for federal income tax purposes (and each item of income, gain, loss and deduction entering into the computation thereof) shall be allocated in such manner as to cause to the greatest extent possible the Certificateholder and each Noteholder to recognize net taxable income or loss at such time, and in such amounts, as each such person would have recognized such income or loss if such Notes had not been recharacterized as an equity interest in the Trust.  

ARTICLE III

Trust Certificates and Transfer of Interests

SECTION 3.1   Initial Ownership.  Upon the formation of the Trust by the contribution by the Depositor pursuant to Section 2.5 and until the issuance of the Trust Certificates, the Depositor shall be the sole beneficiary of the Trust.

SECTION 3.2   The Trust Certificates.  The Trust Certificates shall be initially issued to the Depositor as a single Certificate in a Percentage Interest of 100%.  The Trust Certificate shall be divisible into denominations of a single class representing minimum Percentage Interests of not less than 5%.  The Trust Certificates shall be executed on behalf of the Trust by manual or facsimile signature of an authorized officer of the Owner Trustee, and the Owner Trustee shall have the power and authority and it is hereby authorized and empowered, in the name and on behalf of the Trust to authorize, execute, issue and deliver the Trust Certificates.  Trust Certificates bearing the manual or facsimile signatures of individuals who were, at the time when such signatures shall have been affixed, authorized to sign on behalf of the Trust, shall be validly issued and entitled to the benefit of this Agreement, notwithstanding that such individuals or any of them shall have ceased to be so authorized prior to the authentication and delivery of such Trust Certificates or did not hold such offices at the date of authentication and delivery of such Trust Certificates.  A transferee of a Trust Certificate shall become a Certificateholder, and shall be entitled to the rights and subject to the obligations of a Certificateholder hereunder, upon due registration of such Trust Certificate in such transferee’s name pursuant to Section 3.4.

SECTION 3.3   Authentication of Trust Certificates.  Concurrently with the initial sale of the Receivables to the Trust pursuant to the Sale and Servicing Agreement, the Owner Trustee shall cause the Trust Certificates in an aggregate Percentage Interest equal to 100% to be executed on behalf of the Trust, authenticated and delivered to or upon the written order of the Depositor, signed by its chairman of the board, its president or any vice president, without further corporate action by the Depositor, in authorized denominations.  No Trust Certificate shall entitle its holder to any benefit under this Agreement, or shall be valid for any purpose, unless there shall appear on such Trust Certificate a certificate of authentication substantially in the form set forth in Exhibit A, executed by the Owner Trustee or Deutsche Bank Trust Company Americas as the Owner Trustee’s authentication agent, by manual signature; such authentication shall constitute conclusive evidence that such Trust Certificate shall have been duly authenticated and delivered hereunder.  All Trust Certificates shall be dated the date of their authentication.

SECTION 3.4   Registration of Transfer and Exchange of Trust Certificates.  The Certificate Registrar shall keep or cause to be kept, at the office or agency maintained pursuant to Section 3.8, a Certificate Register in which, subject to such reasonable regulations as it may prescribe, the Owner Trustee shall provide for the registration of the Trust Certificates and of transfers and exchanges of the Trust Certificates as herein provided.  Deutsche Bank Trust Company Americas shall be the initial Certificate Registrar.

Upon surrender for registration of transfer of any Trust Certificate at the office or agency maintained pursuant to Section 3.8, and, upon satisfaction of the conditions set forth below, the Owner Trustee shall execute, authenticate and deliver (or shall cause Deutsche Bank Trust Company Americas as its authenticating agent to authenticate and deliver), in the name of the designated transferee or transferees, one or more new Trust Certificates in authorized denominations of a like Percentage Interest dated the date of authentication by the Owner Trustee or any authenticating agent. At the option of a Holder, the Trust Certificates may be exchanged for other Trust Certificates of the same class in authorized denominations of a like Percentage Interest upon surrender of the Trust Certificates to be exchanged at the office or agency maintained pursuant to Section 3.8.

Every Trust Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer in form satisfactory to the Owner Trustee and the Certificate Registrar duly executed by the Certificateholder or his attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Certificate Registrar, which requirements include membership or participation in the Securities Transfer Agent’s Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Certificate Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.  Each Trust Certificate surrendered for registration of transfer or exchange shall be canceled and subsequently disposed of by the Owner Trustee in accordance with its customary practice.  In addition, each such Certificateholder shall comply with Section 2.12.

No service charge shall be made for any registration of transfer or exchange of Trust Certificates, but the Owner Trustee or the Certificate Registrar may, but shall not be obligated to, require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Trust Certificates.

Notwithstanding the foregoing, the Owner Trustee need not make and the Certificate Registrar need not register, transfers or exchanges of, Trust Certificates for a period of 15 days preceding the due date for any payment with respect to any Trust Certificates.

SECTION 3.5   Mutilated, Destroyed, Lost or Stolen Trust Certificates.  If (a) any mutilated Trust Certificate shall be surrendered to the Certificate Registrar, or if the Certificate Registrar shall receive evidence to its satisfaction of the destruction, loss or theft of any Trust Certificate and (b) there shall be delivered to the Certificate Registrar and the Owner Trustee, such security or indemnity as may be required by them to save each of them harmless, then in the absence of notice that such Trust Certificate shall have been acquired by a protected purchaser, the Owner Trustee on behalf of the Trust shall execute and the Owner Trustee or Deutsche Bank Trust Company Americas, as the Owner Trustee’s authenticating agent, shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust Certificate, a new Trust Certificate of like Percentage Interest.  In connection with the issuance of any new Trust Certificate under this Section, the Owner Trustee or the Certificate Registrar may, but shall not be obligated to, require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith.  Any duplicate Trust Certificate issued pursuant to this Section shall constitute conclusive evidence of an ownership interest in the Trust, as if originally issued, whether or not the lost, stolen or destroyed Trust Certificate shall be found at any time.

SECTION 3.6   Persons Deemed Certificateholders.  Every person by virtue of becoming a Certificateholder in accordance with this Agreement shall be deemed to be bound by the terms of this Agreement.  Prior to due presentation of a Trust Certificate for registration of transfer, the Owner Trustee and the Certificate Registrar and any agent of the Owner Trustee and the Certificate Registrar, may treat the Person in whose name any Trust Certificate shall be registered in the Certificate Register as the Holder of such Trust Certificate for the purpose of receiving distributions pursuant to Section 5.2 and for all other purposes whatsoever, and none of the Depositor, the Servicer, the Owner Trustee or the Certificate Registrar nor any agent of the Owner Trustee or the Certificate Registrar shall be bound by any notice to the contrary.

SECTION 3.7   Access to List of Certificateholders’ Names and Addresses.  The Owner Trustee shall furnish or cause to be furnished to the Servicer or the Depositor and the Representative within 15 days after receipt by the Owner Trustee of a request therefore from the Servicer or the Representative in writing, a list, in such form as the Servicer may reasonably require, of the names and addresses of the Certificateholders as of the most recent Record Date.  If three or more Holders of Trust Certificates or one or more Holders of Trust Certificates evidencing not less than a Percentage Interest of 25% apply in writing to the Owner Trustee, and such application states that the applicants desire to communicate with other Certificateholders with respect to their rights under this Agreement or under the Trust Certificates and such application is accompanied by a copy of the communication that such applicants propose to transmit, then the Owner Trustee shall, within five Business Days after the receipt of such application, afford such applicants access during normal business hours to the current list of Certificateholders.  Each Holder, by receiving and holding a Trust Certificate, shall be deemed to have agreed not to hold any of the Depositor, the Servicer, the Representative or the Owner Trustee or any agent thereof accountable by reason of the disclosure of its name and address, regardless of the source from which such information was derived.  

SECTION 3.8   Maintenance of Office or Agency.  The Owner Trustee shall maintain in the Borough of Manhattan, the City of New York, an office or offices or agency or agencies where Trust Certificates may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Owner Trustee in respect of the Trust Certificates and the Basic Documents may be served.  The Owner Trustee initially designates Deutsche Bank Trust Company Americas, 60 Wall Street, 26th Floor, New York, New York 10005, as its principal corporate trust office for such purposes.  The Owner Trustee shall give prompt written notice to the Depositor and the Certificateholders of any change in the location of the Certificate Register or any such office or agency.

SECTION 3.9   Appointment of Paying Agent.  The Paying Agent shall make distributions to the Certificateholders from the Certificate Distribution Account pursuant to Section 5.2 and shall report the amounts of such distributions to the Owner Trustee in writing, unless the Paying Agent is the Owner Trustee.  Any Paying Agent shall have the revocable power to withdraw funds from the Certificate Distribution Account for the purpose of making the distributions referred to above.  The Owner Trustee may revoke such power and remove the Paying Agent if the Owner Trustee determines in its sole discretion that the Paying Agent shall have failed to perform its obligations under this Agreement in any material respect.  The Paying Agent shall initially be Deutsche Bank Trust Company Americas and any co-Paying Agent chosen by the Owner Trustee, and acceptable to the Servicer.  The Paying Agent shall be permitted to resign upon 30 days’ written notice to the Owner Trustee and the Servicer.  In the event that the Owner Trustee shall no longer be the Paying Agent, the Owner Trustee shall appoint a successor to act as Paying Agent (which shall be a bank or trust company).  The Owner Trustee shall cause such successor Paying Agent or any additional Paying Agent appointed by the Owner Trustee to execute and deliver to the Owner Trustee an instrument in which such successor Paying Agent or additional Paying Agent shall agree with the Owner Trustee that as Paying Agent, such successor Paying Agent or additional Paying Agent will hold all sums, if any, held by it for payment to the Certificateholders in trust for the benefit of the Certificateholders entitled thereto until such sums shall be paid to such Certificateholders.  The Paying Agent shall return all unclaimed funds to the Owner Trustee and upon removal of a Paying Agent such Paying Agent shall also return all funds in its possession to the Owner Trustee. The provisions of Sections 7.1, 7.3, 7.4, 7.8, 8.1 and 8.2 shall apply to the Owner Trustee also in its role as Paying Agent, for so long as the Owner Trustee shall act as Paying Agent and, to the extent applicable, to any other Paying Agent appointed hereunder.  Any reference in this Agreement to the Paying Agent shall include any co-Paying Agent unless the context requires otherwise.

SECTION 3.10   [Reserved]

SECTION 3.11   [Reserved]

SECTION 3.12   [Reserved]

SECTION 3.13   [Reserved]

SECTION 3.14   [Reserved]

SECTION 3.15   [Reserved]

SECTION 3.16   [Reserved]

SECTION 3.17   Trust Certificate Transfer Restrictions.  (a)  The Trust Certificates may not be acquired by or for the account of (i) an employee benefit plan (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) that is subject to the provisions of Title 1 of ERISA, (ii) a plan described in Section 4975(e) (1) of the Code or (iii) any entity whose underlying assets include plan assets by reason of such plan’s investment in the entity (each, a “Benefit Plan”).  By accepting and holding a Trust Certificate, the Holder thereof and the beneficial owner of the Trust Certificate shall be deemed to have represented and warranted that it is not a Benefit Plan.  The Owner Trustee shall have no duty to determine whether the Trust Certificates are owned by a Benefit Plan.

(b)

With the exception of the transfer to the Depositor hereunder and any transfer to FCC Receivables Corp., the Trust Certificates may not be offered or sold except to Qualified Institutional Buyers in reliance on the exemption from the registration requirements of the Securities Act provided by Rule 144A thereunder.

Each purchaser of the Trust Certificates will be deemed to have represented and agreed as follows:

(i)

It is a Qualified Institutional Buyer as defined in Rule 144A promulgated under the Securities Act and is acquiring the Trust Certificates for its own institutional account or for the account of a Qualified Institutional Buyer.

(ii)

It understands that the Trust Certificates will be offered in a transaction not involving any public offering within the meaning of the Securities Act, and that, if in the future it decides to resell, pledge or otherwise transfer any Trust Certificates, such Trust Certificates may be resold, pledged or transferred only (a) to the Issuer (upon redemption), (b) to a person who the seller reasonably believes is a Qualified Institutional Buyer that purchases for its own account or for the account of a Qualified Institutional Buyer to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A or (c) pursuant to an effective registration statement under the Securities Act.

(iii)

It understands that the Trust Certificates will bear a legend substantially to the following effect:

THE TRUST CERTIFICATES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES OR “BLUE SKY” LAWS. THE HOLDER HEREOF, BY PURCHASING ANY TRUST CERTIFICATE, AGREES FOR THE BENEFIT OF THE TRUST THAT SUCH TRUST CERTIFICATE IS BEING ACQUIRED FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TO DISTRIBUTION AND MAY BE RESOLD, PLEDGED OR TRANSFERRED ONLY (1) TO THE TRUST (UPON REDEMPTION THEREOF OR OTHERWISE), (2) TO A PERSON THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (3) IN A TRANSACTION COMPLYING WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION.

NO INTEREST IN THIS TRUST CERTIFICATE MAY BE ACQUIRED BY OR FOR THE ACCOUNT OF (i) AN “EMPLOYEE BENEFIT PLAN” (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, (“ERISA”)) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (ii) A PLAN DESCRIBED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (INCLUDING, WITHOUT LIMITATION, INDIVIDUAL RETIREMENT ACCOUNTS AND KEOGH PLANS), OR (iii) ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN’S INVESTMENT IN THE ENTITY.  BY ACCEPTING AND HOLDING THIS CERTIFICATE, THE HOLDER HEREOF AND THE CERTIFICATE OWNER SHALL EACH BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT IT IS NOT A BENEFIT PLAN.

(c)

As a condition to the registration of any transfer of a Trust Certificate, the prospective transferee of such Trust Certificate shall represent to the Owner Trustee and the Certificate Registrar the following:

(i)

It has neither acquired nor will it transfer the Trust Certificate or cause the Trust Certificate to be marketed on or through an “established securities market” within the meaning of Section 7704(b)(1) of the Code or a secondary market (or the substantial equivalent thereof) within the meaning of Section 7704(b)(2) of the Code, including, without limitation, an over-the- counter-market or an interdealer quotation system that regularly disseminates firm buy or sell quotations.

(ii)

It either (A) is not, and will not become, a partnership, S corporation or grantor trust for U.S. federal income tax purposes, or (B) is such an entity, but none of the direct or indirect beneficial owners of any of the interests in such transferee have allowed or caused, or will allow or cause, fifty percent (50%) or more of the value of such interests to be attributable to such transferee’s ownership of the Trust Certificate.

(iii)

It understands that tax counsel to the Trust has provided an opinion substantially to the effect that the Trust will not be a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes and that the validity of such opinion is dependent in part on the accuracy of the representations in paragraphs (i) and (ii) above.

ARTICLE IV

Actions by Owner Trustee

SECTION 4.1   Prior Notice to Certificateholders with Respect to Certain Matters.  With respect to the following matters, the Owner Trustee shall not take action unless at least 30 days before the taking of such action, the Owner Trustee shall have notified the Certificateholders in writing of the proposed action and the Certificateholders (in accordance with Section 4.5) shall not have notified the Owner Trustee in writing prior to the 30th day after such notice is given that it has withheld consent or provided alternative direction:

(a)

the initiation of any material claim or lawsuit by the Trust except claims or lawsuits brought in connection with the collection of the Receivables and the compromise of any material action, claim or lawsuit brought by or against the Trust (except with respect to the aforementioned claims or lawsuits for collection of the Receivables);

(b)

the election by the Trust to file an amendment to the Certificate of Trust (unless such amendment is required to be filed under the Statutory Trust Statute or unless such amendment would not materially and adversely affect the interests of the Certificateholders);

(c)

the amendment of the Indenture by a supplemental indenture in circumstances where the consent of any Noteholder or the Letter of Credit Provider is required;

(d)

the amendment of the Indenture by a supplemental indenture in circumstances where the consent of any Noteholder or the Letter of Credit Provider is not required and such amendment materially and adversely affects the interest of the Certificateholders or the Letter of Credit Provider;

(e)

the amendment, change or modification of the Sale and Servicing Agreement, except to cure any ambiguity or defect or to amend or supplement any provision in a manner that would not materially and adversely affect the interests of the Certificateholders;

(f)

the consent to the calling, or waiver of any default of any Basic Document;

(g)

the consent to the assignment by the Indenture Trustee or the Servicer of their respective obligations under any Basic Document;

(h)

except as provided in this Agreement dissolve, terminate or liquidate the Trust in whole or in part;

(i)

merge or consolidate the Trust with or into any other entity, or convey or transfer all or substantially all of the Trust’s assets to any other entity;

(j)

cause the Trust to incur, assume or guaranty any indebtedness other than as set forth in this Agreement or the other Basic Documents;

(k)

perform any act that to the actual knowledge of a Responsible Officer of the Owner Trustee conflicts with any of the Basic Documents;

(l)

perform any act which would make it impossible to carry on the ordinary business of the Trust as described in this Agreement;

(m)

confess a judgment against the Trust;

(n)

cause the Trust to lend any funds to any entity;

(o)

change the Trust’s purpose and powers from those enumerated in this Agreement; or

(p)

possess Trust assets or assign the Trust’s right to property for other than a Trust purpose.

SECTION 4.2   Action by Certificateholders with Respect to Certain Matters.  The Owner Trustee shall not have the power, except upon the direction of the Controlling Party in accordance with the Basic Documents to (a) remove the Servicer under the Sale and Servicing Agreement pursuant to Section 8.1 thereof or (b) except as expressly provided in the Basic Documents, sell the Receivables after the termination of the Indenture.  The Owner Trustee shall take the actions referred to in the preceding sentence only upon written instructions signed by the Certificateholders or the Controlling Party, as the case may be, and the furnishing of indemnification satisfactory to the Owner Trustee by the Certificateholders.

SECTION 4.3   Action by Certificateholders with Respect to Bankruptcy.  The Owner Trustee shall not have the power to, and shall not, commence a voluntary proceeding in bankruptcy relating to the Trust without the prior written consent of each Certificateholder and the delivery to the Owner Trustee by each Certificateholder of a certificate certifying that it reasonably believes that the Trust is insolvent.

SECTION 4.4   Restrictions on Certificateholders’ Power.  The Certificateholders shall not direct the Owner Trustee to take or refrain from taking any action if such action or inaction would be contrary to any obligation of the Trust or the Owner Trustee under this Agreement or any of the Basic Documents or would be contrary to Section 2.3 nor shall the Owner Trustee be obligated to determine if a Certificateholder’s direction violates this Section 4.4 or to follow any such direction, if given.

SECTION 4.5   Majority Control.  Except as otherwise specifically provided herein, any action that may be taken by the Certificateholders under this Agreement may be taken by the Holders of Trust Certificates evidencing not less than a majority of the Percentage Interests.  Except as otherwise specifically provided herein, any written notice of the Certificateholders delivered pursuant to this Agreement shall be effective if signed by Holders of Certificates evidencing not less than a majority of the Percentage Interests at the time of the delivery of such notice.

SECTION 4.6   Reserved.

SECTION 4.7   Execution of Documents.  Notwithstanding anything herein to the contrary, the Owner Trustee is authorized, empowered and directed, on behalf of the Trust, to execute, deliver, issue and authenticate the Certificates, to execute, deliver and issue the Notes and to execute and deliver each Basic Document to which the Trust or the Owner Trustee is or is to be a party and any other document, instrument, certificate or other writing that may be necessary, convenient or incidental thereto.  Any such execution, delivery, issuance and authentication is hereby ratified and confirmed in all respects and does not and will be deemed not to conflict with, constitute or result in a breach or violation of, or a default under, any provision of or any duty under this Trust Agreement.

ARTICLE V

Application of Trust Funds: Certain Duties

SECTION 5.1   Establishment of Certificate Distribution Account.  (a)  The Owner Trustee, for the benefit of the Certificateholders, shall establish and maintain in the name of the Trust an Eligible Deposit Account (the “Certificate Distribution Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Certificateholders.

(b)

The Owner Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Certificate Distribution Account and in all proceeds thereof. If, at any time, the Certificate Distribution Account ceases to be an Eligible Deposit Account, the Owner Trustee shall within 30 calendar days establish a new Certificate Distribution Account as an Eligible Deposit Account and shall transfer or cause to be transferred any cash and/or any investments to such new Certificate Distribution Account.

(c)

All amounts held in the Certificate Distribution Account shall, to the extent permitted by applicable laws, rules and regulations, be invested, by the Owner Trustee at the Servicer’s written direction (which may be by standing instructions), in Eligible Investments that mature not later than one Business Day prior to the Distribution Date for the Monthly Period to which such amounts relate. Investments in Eligible Investments shall be made in the name of the Trust, and such investments shall not be sold or disposed of prior to their maturity.  Subject to the other provisions hereof, the Owner Trustee shall have sole control over each such investment and the income thereon, and any certificate or other instrument evidencing any such investment, if any, shall be delivered directly to the Owner Trustee.  All Investment Earnings on funds in the Certificate Distribution Account shall be distributed on the next Distribution Date pursuant to Section 5.6 of the Sale and Servicing Agreement.  The Owner Trustee shall not be liable, either individually or in its capacity as Owner Trustee, for any losses arising from investments made in Eligible Investments.

SECTION 5.2   Application of Funds in Certificate Distribution Account.  (a)  On each Distribution Date, the Owner Trustee will cause the Paying Agent to, based on the information contained in the Servicer’s Certificate delivered on the related Determination Date pursuant to Section 4.9 of the Sale and Servicing Agreement, distribute pro rata to Certificateholders based on their Percentage Interests, to the extent of the funds available, amounts deposited in the Certificate Distribution Account pursuant to Sections 5.6(a) of the Sale and Servicing Agreement on such Distribution Date.  

(b)

On each Distribution Date, the Owner Trustee shall cause the Paying Agent to send to each Certificateholder the statement provided to the Owner Trustee and the Paying Agent by the Servicer pursuant to Section 5.8 of the Sale and Servicing Agreement on such Distribution Date.

(c)

In the event that any withholding tax is imposed on the Trust’s payment (or allocations of income) to a Certificateholder, such tax shall reduce the amount otherwise distributable to the Certificateholder in accordance with this Section. The Owner Trustee is hereby authorized and directed to retain from amounts otherwise distributable to the Certificateholders sufficient funds for the payment of any tax that is legally owed by the Trust (but such authorization shall not prevent the Owner Trustee or any Certificateholder from contesting any such tax in appropriate proceedings, and withholding payment of such tax, if permitted by law, pending the outcome of such proceedings). The amount of any withholding tax imposed with respect to a Certificateholder shall be treated as cash distributed to such Certificateholder at the time it is withheld by the Trust and remitted to the appropriate taxing authority.  If there is a reasonable possibility that withholding tax is payable with respect to a distribution (such as a distribution to a non-US Certificateholder), the Owner Trustee may in it sole discretion withhold such amounts in accordance with this clause (c).  In the event that a Holder wishes to apply for a refund of any such withholding tax, the Owner Trustee shall reasonably cooperate with such Certificateholder in making such claim so long as such Certificateholder agrees to reimburse the Owner Trustee for any reasonable out-of-pocket expenses incurred.  The Servicer shall facilitate compliance with this Section 5.2(c) by performance of its duties under the Sale and Servicing Agreement.

SECTION 5.3   [Reserved]

SECTION 5.4   Method of Payment.  Subject to Section 9.1(c), distributions required to be made to Certificateholders on any Distribution Date in accordance with Section 5.2(b) shall be made to each Certificateholder of record on the preceding Record Date either by wire transfer, in immediately available funds, to the account of such Holder at a bank or other entity, if (i) such Certificateholder shall have provided to the Certificate Registrar appropriate written instructions at least five Business Days prior to such Distribution Date or (ii) such Certificateholder is the Depositor, or as set forth in any written notice from the Depositor to the Owner Trustee, an Affiliate thereof, or, if not, by check mailed to such Certificateholder at the address of such holder appearing in the Certificate Register.  Notwithstanding the foregoing, the final distribution in respect of any Trust Certificate (whether on the Final Scheduled Distribution Date or otherwise) will be payable only upon presentation and surrender of such Trust Certificate at the office or agency maintained for that purpose by the Owner Trustee pursuant to Section 3.8.

SECTION 5.5   No Segregation of Monies; No Interest.  Subject to Sections 5.1 and 5.2, monies received by the Owner Trustee hereunder need not be segregated in any manner except to the extent required by law and may be deposited under such general conditions as may be prescribed by law.  The Owner Trustee shall not be liable for any interest thereon.

SECTION 5.6   Accounting and Reports to the Noteholders, Certificateholders, the Internal Revenue Service and Others.  In accordance with Sections 10.1(b)(iii) and 10.1(c) of the Sale and Servicing Agreement, the Servicer shall (a) maintain (or cause to be maintained) the books of the Trust on a year ended September 30 based on the accrual method of accounting, (b) deliver (or cause to be delivered) to each Certificateholder, as may be required by the Code and applicable Treasury Regulations, such information as may be required (including, if applicable, Schedule K-1) to enable each Certificateholder to prepare its Federal and state income tax returns, (c) prepare or cause to be prepared, and file or cause to be filed, all tax returns, if any, relating to the Trust (including, if applicable, a partnership information return, Form 1065), to make such elections as may from time to time be required or appropriate under any applicable state or Federal statute or rule or regulation thereunder so as to maintain the Trust’s characterization as a division or branch of its 100% owner, or as a partnership, as the case may be, for Federal income tax purposes and (d) collect or cause to be collected any withholding tax as described in and in accordance with Section 5.2(c) with respect to income or distributions to the Certificateholders.  The Servicer shall make all elections pursuant to this Section as directed by the Depositor.  The Owner Trustee shall, on behalf of the Trust and upon written direction of the Servicer, sign all tax information returns furnished to it in execution form by the Servicer, and filed pursuant to this Section 5.6 and any other returns as may be required by law and so furnished to it by the Servicer, and in doing so shall rely entirely upon, and shall have no liability for information provided by, or calculations provided by, the Servicer.  In the event the Trust is characterized as a partnership for federal income tax purposes, the Servicer shall cause the Trust to elect under Section 1278 of the Code to include in income currently any market discount that accrues with respect to the Receivables, and the Trust shall not make the election provided under Section 754 of the Code.  None of the parties hereto shall make the election provided in Treasury Regulations Section 301.7701-3(c) to have the Trust classified as an association taxable as a corporation.

SECTION 5.7   Signature on Returns; Tax Matters Partner.  (a)  Notwithstanding the provisions of Section 5.6, the Owner Trustee shall sign on behalf of the Trust the tax returns of the Trust, if any, furnished to it in execution form by the Servicer, unless applicable law requires a Certificateholder to sign such documents, in which case such documents shall be signed by the Depositor so long as it is a Certificateholder, in its capacity as “tax matters partner.”

(b)

In the event the Trust is characterized as a partnership for federal income tax purposes, and the Depositor is a Certificateholder, the Depositor shall be the “tax matters partner” of the Trust pursuant to the Code.

ARTICLE VI

Authority and Duties of Owner Trustee

SECTION 6.1   General Authority.  The Owner Trustee is authorized and directed to execute and deliver the Basic Documents to which the Trust is named as a party and each certificate or other document presented in connection therewith attached as an exhibit to or contemplated by the Basic Documents to which the Trust is named as a party and any amendment thereto, in each case, in such form as the Depositor shall approve as evidenced conclusively by the Owner Trustee’s execution thereof, and on behalf of the Trust, to direct the Indenture Trustee to authenticate and deliver Class A-1 Notes in the aggregate principal amount of $75,000,000, Class A-2 Notes in the aggregate principal amount of $82,000,000, Class A-3 Notes in the aggregate principal amount of $102,000,000, Class A-4 Notes in the aggregate principal amount of $46,375,000, Class B Notes in the aggregate principal amount of $21,000,000 and Class C Notes in the aggregate principal amount of $23,625,000.  In addition to the foregoing, the Owner Trustee is authorized, but shall not be obligated, to take all actions required of the Trust pursuant to the Basic Documents.  The Owner Trustee is further authorized from time to time to take such action as the Servicer recommends to it in writing with respect to the Basic Documents.

SECTION 6.2   General Duties.  It shall be the duty of the Owner Trustee to discharge (or cause to be discharged) all of its responsibilities pursuant to the terms of this Agreement and the Basic Documents to which the Trust is a party and to administer the Trust in the interest of the Certificateholders, subject to the Basic Documents and in accordance with the provisions of this Agreement.  Notwithstanding the foregoing, the Owner Trustee shall be deemed to have discharged its duties and responsibilities hereunder and under the Basic Documents to the extent the Servicer has agreed in the Sale and Servicing Agreement, or the Depositor has agreed hereunder or thereunder, to perform any act or to discharge any duty of the Owner Trustee hereunder or of the Trust under any Basic Document, and the Owner Trustee shall not be liable for the default or failure of the Servicer or the Depositor to carry out its obligations hereunder or thereunder.

SECTION 6.3   Action upon Instruction.  (a)  Subject to Article IV, the Certificateholders (the “Instructing Party”) shall have the exclusive right to direct the actions of the Owner Trustee in the management of the Trust.  

(b)

The Owner Trustee shall not be required to take any action hereunder or under any Basic Document if the Owner Trustee shall have reasonably determined, or shall have been advised by counsel, that such action is likely to result in liability on the part of the Owner Trustee or is contrary to the terms hereof or of any Basic Document or is otherwise contrary to law.

(c)

Whenever the Owner Trustee is unable to decide between alternative courses of action permitted or required by the terms of this Agreement or any Basic Document, the Owner Trustee shall promptly give notice (in such form as shall be appropriate under the circumstances) to the Instructing Party requesting instruction as to the course of action to be adopted, and to the extent the Owner Trustee acts in good faith in accordance with any written instruction of the Instructing Party received, the Owner Trustee shall not be liable on account of such action to any Person.  If the Owner Trustee shall not have received appropriate instruction within 10 days of such notice (or within such shorter period of time as reasonably may be specified in such notice or may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking such action, not inconsistent with this Agreement or the Basic Documents, as it shall deem to be in the best interests of the Certificateholders, and shall have no liability to any Person for such action or inaction.

(d)

In the event that the Owner Trustee is unsure as to the application of any provision of this Agreement or any Basic Document or any such provision is ambiguous as to its application, or is, or appears to be, in conflict with any other applicable provision, or in the event that this Agreement permits any determination by the Owner Trustee or is silent or incomplete as to the course of action that the Owner Trustee is required to take with respect to a particular set of facts, the Owner Trustee may give notice (in such form as shall be appropriate under the circumstances) to the Instructing Party requesting instruction and, to the extent that the Owner Trustee acts or refrains from acting in good faith in accordance with any such instruction received, the Owner Trustee shall not be liable, on account of such action or inaction, to any Person.  If the Owner Trustee shall not have received appropriate instruction within 10 days of such notice (or within such shorter period of time as reasonably may be specified in such notice or may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking such action, not inconsistent with this Agreement or the Basic Documents, as it shall deem to be in the best interests of the Certificateholders, and shall have no liability to any Person for such action or inaction.

SECTION 6.4   No Duties Except as Specified in this Agreement or in Instructions.  The Owner Trustee shall not have any duty or obligation to manage, make any payment with respect to, register, record, sell, dispose of, or otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from taking any action under, or in connection with, any document contemplated hereby to which the Owner Trustee is a party, except as expressly provided by the terms of this Agreement or in any document or written instruction received by the Owner Trustee pursuant to Section 6.3; and no implied duties or obligations shall be read into this Agreement or any Basic Document against the Owner Trustee.  The Owner Trustee shall have no responsibility for filing any financing or continuation or termination statement in any public office at any time or to otherwise perfect or maintain the perfection of any security interest or lien granted to it hereunder or to prepare or file any Securities and Exchange Commission filing for the Trust or to record this Agreement or any Basic Document.  The Owner Trustee nevertheless agrees that it will, at its own cost and expense, promptly take all action as may be necessary to discharge any Liens on any part of the Owner Trust Estate that result from actions by, or claims against, the Owner Trustee (solely in its individual capacity) and that are not related to the ownership or the administration of the Owner Trust Estate.

SECTION 6.5   No Action Except under Specified Documents or Instructions.  The Owner Trustee shall not manage, control, use, sell, dispose of or otherwise deal with any part of the Owner Trust Estate except (i) in accordance with the powers granted to and the authority conferred upon the Owner Trustee pursuant to this Agreement, (ii) in accordance with the Basic Documents or (iii) in accordance with any document or instruction delivered to the Owner Trustee pursuant to Section 6.3.

SECTION 6.6   Restrictions.  The Owner Trustee shall not take any action (a) that is inconsistent with the purposes of the Trust set forth in Section 2.3 or (b) take any action (including, without limitation, participating in the establishment of a market or the inclusion of the Trust’s interests thereon, within the meaning of Treasury Regulation Section 1.7704-1(d)(1)) that, to the actual knowledge of the Owner Trustee, would result in the Trust’s becoming taxable as a corporation for Federal income tax purposes.  The Certificateholder shall not direct the Owner Trustee to take action that would violate the provisions of this Section.

SECTION 6.7   Notice of Default Under Indenture.  Within 10 business days of receipt of a written notice of Default under the Indenture by a Responsible Officer of the Owner Trustee, the Owner Trustee shall provide a copy of such notice to each Certificateholder.

ARTICLE VII

Concerning the Owner Trustee

SECTION 7.1   Acceptance of Trusts and Duties.  The Owner Trustee accepts the trusts hereby created and agrees to perform its duties hereunder with respect to such trusts but only upon the terms of this Agreement.  The Owner Trustee in its individual capacity also agrees to disburse all moneys actually received by it constituting part of the Owner Trust Estate upon the terms of the Basic Documents and this Agreement.  The Owner Trustee in its individual capacity shall not be answerable or accountable hereunder or under any Basic Document under any circumstances, except (i) for its own willful misconduct, bad faith or negligence (ii) in the case of the breach of any representation or warranty contained in Section 7.3 expressly made by the Owner Trustee, in its individual capacity, (iii) for liabilities arising from the failure of the Owner Trustee to perform obligations expressly undertaken by it in the last sentence of Section 6.4 hereof, (iv) for any investments issued by the Owner Trustee or any branch or affiliate thereof in its commercial capacity or (v) for taxes, fees or other charges on, based on or measured by, any fees, commissions or compensation received by the Owner Trustee in its individual capacity.  In particular, but not by way of limitation (and subject to the exceptions set forth in the preceding sentence):

(a)

the Owner Trustee shall not be liable for any error of judgment made by a Responsible Officer of the Owner Trustee;

(b)

the Owner Trustee shall not be liable with respect to any action taken or omitted to be taken by it in accordance with the instructions of the Servicer, the Depositor, the Controlling Party, the Indenture Administrator, the Letter of Credit Provider or any Certificateholder;

(c)

no provision of this Agreement or any Basic Document shall require the Owner Trustee to expend or risk funds or otherwise incur any financial liability in the performance of any of its rights or powers hereunder or under any Basic Document if the Owner Trustee shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured or provided to it;

(d)

under no circumstances shall the Owner Trustee be liable for indebtedness evidenced by or arising under any of the Basic Documents, including the principal of and interest on the Notes or the Certificates;

(e)

the Owner Trustee shall not be responsible for or in respect of the validity or sufficiency of this Agreement or for the due execution hereof by the Depositor or for the form, character, genuineness, sufficiency, value or validity of any of the Owner Trust Estate or for or in respect of the validity or sufficiency of the Basic Documents, other than the certificate of authentication on the Trust Certificates, and the Owner Trustee shall in no event assume or incur any liability, duty or obligation to the Depositor, the Servicer, the Representative, the Indenture Trustee, the Indenture Administrator, the Letter of Credit Provider, the Indenture Collateral Agent, any Noteholder or to any Certificateholder, other than as expressly provided for herein and in the Basic Documents;

(f)

the Owner Trustee shall not be liable for the default or misconduct of the Representative, the Letter of Credit Provider, the Indenture Administrator, the Indenture Trustee, the Servicer, the Certificateholders or the Depositor under any of the Basic Documents or otherwise and the Owner Trustee shall have no obligation or liability to insure compliance by the Representative, the Servicer, the Certificateholders, the Indenture Administrator, the Letter of Credit Provider or the Depositor with any agreement to which it is a party or to perform the obligations of the Trust under this Agreement or the Basic Documents that are required to be performed by the Indenture Trustee or the Indenture Administrator under the Indenture, the Servicer under the Sale and Servicing Agreement or the Depositor under this Agreement;

(g)

the Owner Trustee shall be under no obligation to institute, conduct or defend any litigation under this Agreement or otherwise or in relation to this Agreement or any Basic Document, at the request, order or direction of any of the Certificateholders, unless such Certificateholders have offered to the Owner Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities that may be incurred by the Owner Trustee therein or thereby.  The right of the Owner Trustee to perform any discretionary act enumerated in this Agreement or in any Basic Document shall not be construed as a duty, and, the Owner Trustee shall not be answerable for other than its negligence, bad faith or willful misconduct in the performance of any such act; and

(h)

notwithstanding any Person’s right to instruct the Owner Trustee, neither the Owner Trustee nor any agent, employee, director or officer of the Owner Trustee shall have any obligation to execute any certificates or other documents required pursuant to the Sarbanes-Oxley Act of 2002 or the rules and regulations promulgated thereunder, and the refusal to comply with any such instructions shall not constitute a default or breach under any Basic Document.

SECTION 7.2   Furnishing of Documents.  The Owner Trustee shall furnish to the Certificateholders promptly upon receipt of a written request therefor, duplicates or copies of all reports, notices, requests, demands, certificates, financial statements and any other instruments furnished to the Owner Trustee under the Basic Documents.

SECTION 7.3   Representations and Warranties. The Owner Trustee in its individual capacity hereby represents and warrants to the Depositor, the Representative, the Letter of Credit Provider, and for the benefit of the Certificateholders, that:

(a)

It is a Delaware banking corporation, duly organized and validly existing in good standing under the laws of the State of Delaware and having an office within the State of Delaware.  It has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement.

(b)

It has taken all corporate action necessary to authorize the execution and delivery by it of this Agreement, and this Agreement will be executed and delivered by one of its officers who is duly authorized to execute and deliver this Agreement on its behalf.

(c)

Neither the execution nor the delivery by it of this Agreement, nor the consummation by it of the transactions contemplated hereby nor compliance by it with any of the terms or provisions hereof will contravene any federal or Delaware state law, governmental rule or regulation governing the banking or trust powers of the Owner Trustee or any judgment or order binding on it, or constitute any default under its charter documents or by-laws.

SECTION 7.4   Reliance; Advice of Counsel.  (a)  The Owner Trustee shall incur no liability to anyone in acting upon any signature, instrument, notice, resolution, request, consent, order, certificate, report, opinion, bond or other document or paper reasonably believed by it to be genuine and believed by it to be signed by the proper party or parties.  The Owner Trustee may accept a duly certified copy of a resolution of the board of directors or other governing body of any corporate party as conclusive evidence that such resolution has been duly adopted by such body and that the same is in full force and effect.  As to any fact or matter the method of the determination of which is not specifically prescribed herein, the Owner Trustee may for all purposes hereof conclusively rely on a certificate, signed by the president or any vice president or by the treasurer, secretary or other authorized officers of the relevant party, as to such fact or matter, and such certificate shall constitute full protection to the Owner Trustee for any action reasonably taken or omitted to be taken by it in good faith in reliance thereon.

(b)

In the exercise or administration of the trusts hereunder and in the performance of its duties and obligations under this Agreement or the Basic Documents, the Owner Trustee (i) may act directly or through its agents or attorneys pursuant to agreements entered into with any of them, and the Owner Trustee shall not be liable for the conduct or misconduct of such agents or attorneys if such agents or attorneys shall have been selected by the Owner Trustee with reasonable care, and (ii) may consult with counsel, accountants and other skilled persons to be selected with reasonable care and employed by it.  The Owner Trustee shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the written opinion or advice of any such counsel, accountants or other such persons and not contrary to this Agreement or any Basic Document herein.

SECTION 7.5   Not Acting in Individual Capacity.  Except as provided herein or in any other Basic Document, in accepting the trusts hereby created Deutsche Bank Trust Company Delaware acts solely as Owner Trustee hereunder and not in its individual capacity and all Persons having any claim against the Owner Trustee by reason of the transactions contemplated by this Agreement or any Basic Document shall look only to the Owner Trust Estate for payment or satisfaction thereof.

SECTION 7.6   Owner Trustee Not Liable for Trust Certificates or Receivables.  The recitals contained herein and in the Trust Certificates (other than the signature and countersignature of the Owner Trustee on the Trust Certificates) shall be taken as the statements of the Depositor and the Owner Trustee assumes no responsibility for the correctness thereof.  The Owner Trustee makes no representations as to the validity or sufficiency of this Agreement, of any Basic Document or of the Trust Certificates (other than the signature and countersignature of the Owner Trustee on the Trust Certificates) or the Notes, or of any Receivable or related documents.  The Owner Trustee shall at no time have any responsibility or liability for or with respect to the legality, validity and enforceability of any Receivable, or the perfection and priority of any security interest created by any Receivable in any Financed Vehicle or the maintenance of any such perfection and priority, or for or with respect to the sufficiency of the Owner Trust Estate or its ability to generate the payments to be distributed to the Certificateholders under this Agreement or the Noteholders under the Indenture, including, without limitation:  the existence, condition and ownership of any Financed Vehicle; the existence and enforceability of any insurance thereon; the existence and contents of any Receivable or any computer or other record thereof; the validity of the assignment of any Receivable to the Trust or of any intervening assignment; the completeness of any Receivable; the performance or enforcement of any Receivable; the compliance by the Depositor or the Servicer with any warranty or representation made under any Basic Document or in any related document or the accuracy of any such warranty or representation or any action of the Indenture Trustee, the Letter of Credit Provider or the Servicer or any subservicer taken in the name of the Owner Trustee.

SECTION 7.7   Owner Trustee May Own Trust Certificates and Notes.  The Owner Trustee in its individual or any other capacity may become the owner or pledgee of Trust Certificates or Notes and may deal with the Depositor, the Indenture Trustee, the Indenture Administrator, the Letter of Credit Provider and the Servicer in banking transactions with the same rights as it would have if it were not Owner Trustee.

SECTION 7.8   Payments from Owner Trust Estate.  All payments to be made by the Owner Trustee under this Agreement or any of the Basic Documents to which the Trust or the Owner Trustee is a party shall be made only from the income and proceeds of the Owner Trust Estate and only to the extent that the Trust shall have received income or proceeds from the Owner Trust Estate to make such payments in accordance with the terms hereof.  Deutsche Bank Trust Company Delaware, or any successor thereto, in its individual capacity, shall not be liable for any amounts payable under this Agreement or any of the Basic Documents to which the Trust or the Owner Trustee is a party.

SECTION 7.9   Doing Business in Other Jurisdictions.  Notwithstanding anything contained to the contrary, neither Deutsche Bank Trust Company Delaware or any successor thereto, nor the Owner Trustee shall be required to take any action in any jurisdiction other than in the State of Delaware if the taking of such action will, even after the appointment of a co-trustee or separate trustee in accordance with Section 10.5 hereof, (i) require the consent or approval or authorization or order of or the giving of notice to, or the registration with or the taking of any other action in respect of, any state or other governmental authority or agency of any jurisdiction other than the State of Delaware, unless the Certificateholder shall have given the Owner Trustee an indemnity therefor reasonably satisfactory to it; (ii) result in any fee, tax or other governmental charge under the laws of the State of Delaware becoming payable by Deutsche Bank Trust Company Delaware (or any successor thereto, unless the Certificateholder shall have given the Owner Trustee an indemnity therefor reasonably satisfactory to it); or (iii) subject Deutsche Bank Trust Company Delaware (or any successor thereto) to personal jurisdiction in any jurisdiction other than the State of Delaware for causes of action arising from acts unrelated to the consummation of the transactions by Deutsche Bank Trust Company Delaware (or any successor thereto) or the Owner Trustee, as the case may be, contemplated hereby.

ARTICLE VIII

Compensation of Owner Trustee

SECTION 8.1   Owner Trustee’s Fees and Expenses.  The Owner Trustee shall receive from Franklin Capital Corporation as compensation for its services hereunder such fees as have been separately agreed upon before the date hereof between Franklin Capital Corporation and the Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed by Franklin Capital Corporation for its other reasonable expenses hereunder, including the reasonable compensation, expenses and disbursements of such agents, representatives, experts and counsel as the Owner Trustee may employ.

SECTION 8.2   Indemnification.  The Depositor shall be liable as primary obligor for, and shall indemnify the Owner Trustee, the Certificate Registrar, the Paying Agent and their successors, assigns, agents and servants (collectively, the “Indemnified Parties”) from and against, any and all liabilities, obligations, losses, damages, taxes, claims, actions and suits of any kind and nature whatsoever, and any and all reasonable costs, expenses and disbursements (including reasonable legal fees and expenses) related thereto (collectively, “Expenses”) which may at any time be imposed on, incurred by, or asserted against the Owner Trustee or any Indemnified Party in any way relating to or arising out of this Agreement, the Basic Documents, the Owner Trust Estate, the administration of the Owner Trust Estate or the action or inaction of the Owner Trustee hereunder, except only that the Depositor shall not be liable for or required to indemnify the Owner Trustee from and against Expenses arising or resulting from any of the matters described in the third sentence of Section 7.1.  The indemnities contained in this Section shall survive the resignation or termination of the Owner Trustee or the termination of this Agreement.  Notwithstanding anything set forth in this Section 8.2, the Depositor shall only be required to indemnify the parties listed in this Section 8.2 to the extent of any Available Funds remaining following distributions made pursuant to clauses (i) through (ix) of Section 5.6(a) of the Sale and Servicing Agreement (the “Depositor Indemnification Cap”); provided, however, that if the aggregate amount of indemnification for which the Depositor would otherwise be required to indemnify the parties listed in this Section 8.2 exceeds the Depositor Indemnification Cap, Franklin Capital Corporation shall indemnify the parties listed in this Section 8.2 for the difference.  In addition, the indemnification provided herein shall not constitute a claim against the Depositor (provided, however, that, as set forth in this paragraph, the Indemnified Parties shall be entitled to receive indemnification from the Depositor in an amount not to exceed the Depositor Indemnification Cap).

SECTION 8.3   Payments to the Owner Trustee.  Any amounts paid to the Owner Trustee pursuant to this Article VIII shall be deemed not to be a part of the Owner Trust Estate immediately after such payment.

SECTION 8.4   Non-recourse Obligations.  Notwithstanding anything in this Agreement or any Basic Document, the Owner Trustee agrees in its individual capacity and in its capacity as Owner Trustee for the Trust that all obligations of the Trust to the Owner Trustee individually or as Owner Trustee for the Trust shall be recourse to the Owner Trust Estate only and specifically shall not be recourse to the assets of any Certificateholder.

ARTICLE IX

Dissolution and Termination of Trust

SECTION 9.1   Termination of Trust Agreement.  (a)  The Trust shall dissolve upon the latest of (i) the maturity or other liquidation of the last Receivable (including the purchase by the Servicer at its option of the corpus of the Trust as described in Section 9.1 of the Sale and Servicing Agreement) and the subsequent distribution of amounts in respect of such Receivables as provided in the Basic Documents or (ii) the payment to the holders of the Notes of all amounts required to be paid to them pursuant to the Indenture and payment to the Letter of Credit Provider all amounts payable or reimbursable to it; provided, however, that in no event shall the trust created by this Agreement continue beyond the expiration of 21 years from the death of the last survivor of the descendants living on the date of this Agreement of Rose Kennedy of the Commonwealth of Massachusetts; and provided, further, that the rights to indemnification under Section 8.2 shall survive the termination of the Trust.  The Servicer shall promptly notify the Owner Trustee of any prospective dissolution pursuant to this Section 9.1.  The bankruptcy, liquidation, dissolution, death or incapacity of any Certificateholder, or Holder, shall not (x) operate to terminate this Agreement or the Trust, nor (y) entitle such Certificateholder’s or Holder’s legal representatives or heirs to claim an accounting or to take any action or proceeding in any court for a partition or winding up of all or any part of the Trust or Owner Trust Estate nor (z) otherwise affect the rights, obligations and liabilities of the parties hereto.

(b)

Except as provided in clause (a), neither the Depositor nor any Certificateholder shall be entitled to revoke or terminate the Trust.

(c)

Notice of any dissolution of the Trust, specifying the Distribution Date upon which the Certificateholders shall surrender their Trust Certificates to the Paying Agent for payment of the final distribution and cancellation, shall be given by the Owner Trustee by letter to the Certificateholders mailed within five Business Days of receipt of notice of such termination from the Servicer given pursuant to Section 9.1(c) of the Sale and Servicing Agreement, stating (i) the Distribution Date upon or with respect to which final payment of the Trust Certificates shall be made upon presentation and surrender of the Trust Certificates at the office of the Paying Agent therein designated, (ii) the amount of any such final payment and (iii) that the Record Date otherwise applicable to such Distribution Date is not applicable, payments being made only upon presentation and surrender of the Trust Certificates at the office of the Paying Agent therein specified.  The Owner Trustee shall give such notice to the Certificate Registrar (if other than the Owner Trustee) and the Paying Agent (if other than the Owner Trustee) at the time such notice is given to the Certificateholders.  Upon presentation and surrender of the Trust Certificates, the Paying Agent shall cause to be distributed to the Certificateholders amounts distributable on such Distribution Date pursuant to Section 5.2.

In the event that all of the Certificateholders shall not have surrendered their Trust Certificates for cancellation within six months after the date specified in the above mentioned written notice, the Owner Trustee shall give a second written notice to the remaining Certificateholders to surrender their Trust Certificates for cancellation and receive the final distribution with respect thereto.  If within one year after the second notice all the Trust Certificates shall not have been surrendered for cancellation, the Owner Trustee may take appropriate steps, or may appoint an agent to take appropriate steps, to contact the remaining Certificateholders concerning surrender of their Trust Certificates, and the cost thereof shall be paid by the Depositor from the funds and other assets that shall remain subject to this Agreement. Any funds remaining in the Trust after exhaustion of such remedies shall be distributed, subject to applicable escheat laws, by the Owner Trustee to the Depositor.  The Certificateholders shall thereafter look solely to the Depositor as general unsecured creditors.

(d)

Any funds remaining in the Trust after funds for final distribution have been distributed or set aside for distribution shall be distributed by the Owner Trustee to the Depositor.

(e)

Upon dissolution and completion of the winding up of the Trust, including the payment or making reasonable provision for payment of all obligations of the Trust in accordance with Section 3808(e) of the Statutory Trust Statute, the Owner Trustee shall cause the Certificate of Trust to be canceled by filing a certificate of cancellation with the Secretary of State in accordance with the provisions of Section 3810 of the Statutory Trust Statute and thereupon the Trust and this Agreement shall terminate.  The Servicer shall act as the liquidator of the Trust and shall be responsible for directing the Owner Trustee to take all required actions in connection with the winding up of the Trust.

SECTION 9.2   [Reserved]

ARTICLE X

Successor Owner Trustees and Additional Owner Trustees

SECTION 10.1   Eligibility Requirements for Owner Trustee.  The Owner Trustee shall at all times be a corporation (i) satisfying the provisions of Section 3807(a) of the Statutory Trust Statute; (ii) authorized to exercise corporate trust powers; (iii) having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by Federal or State authorities; and (iv) rated at least  “Baa3” by Moody’s.  If such corporation shall publish reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purpose of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  In case at any time the Owner Trustee shall cease to be eligible in accordance with the provisions of this Section, the Owner Trustee shall resign immediately in the manner and with the effect specified in Section 10.2.  In addition, at all times the Owner Trustee or a co-trustee shall be a person that satisfies the requirements of Section 3807(a) of the Statutory Trust Statute (the “Delaware Trustee”).

SECTION 10.2   Resignation or Removal of Owner Trustee.  The Owner Trustee may at any time resign and be discharged from the trusts hereby created by giving written notice thereof to the Servicer.  Upon receiving such notice of resignation, the Servicer shall promptly appoint a successor Owner Trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Owner Trustee and one copy to the successor Owner Trustee, by either of the Rating Agencies.  If no successor Owner Trustee shall have been so appointed and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Owner Trustee may petition any court of competent jurisdiction for the appointment of a successor Owner Trustee.

If at any time the Owner Trustee shall cease to be eligible in accordance with the provisions of Section 10.1 and shall fail to resign after written request therefor by the Servicer, or if at any time the Owner Trustee shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a receiver of the Owner Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Owner Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the Servicer may remove the Owner Trustee.  If the Servicer shall remove the Owner Trustee under the authority of the immediately preceding sentence, the Servicer shall promptly appoint a successor Owner Trustee by written instrument, in triplicate, one copy of which instrument shall be delivered to the outgoing Owner Trustee so removed, and one copy to the successor Owner Trustee and shall pay all fees owed to the outgoing Owner Trustee.

Any resignation or removal of the Owner Trustee and appointment of a successor Owner Trustee pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor Owner Trustee pursuant to Section 10.3 and payment of all fees and expenses owed to the outgoing Owner Trustee.  The Servicer shall provide notice of such resignation or removal of the Owner Trustee to each of the Rating Agencies.

SECTION 10.3   Successor Owner Trustee.  Any successor Owner Trustee appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the Servicer, and to its predecessor Owner Trustee an instrument accepting such appointment under this Agreement, and thereupon the resignation or removal of the predecessor Owner Trustee shall become effective and such successor Owner Trustee, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor under this Agreement, with like effect as if originally named as Owner Trustee.  The predecessor Owner Trustee shall upon payment of its fees and expenses deliver to the successor Owner Trustee all documents and statements and monies held by it under this Agreement and the Servicer and the predecessor Owner Trustee shall execute and deliver such instruments and do such other things as may reasonably be required for fully and certainly vesting and confirming in the successor Owner Trustee all such rights, powers, duties and obligations.

No successor Owner Trustee shall accept appointment as provided in this Section unless at the time of such acceptance such successor Owner Trustee shall be eligible pursuant to Section 10.1.

Upon acceptance of appointment by a successor Owner Trustee pursuant to this Section, the Servicer shall mail notice thereof to all Certificateholders, the Indenture Trustee, the Noteholders and the Rating Agencies.  If the Servicer shall fail to mail such notice within 10 days after acceptance of appointment by the successor Owner Trustee, the successor Owner Trustee shall cause such notice to be mailed at the expense of the Servicer.

SECTION 10.4   Merger or Consolidation of Owner Trustee.  Any corporation into which the Owner Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Owner Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Owner Trustee, shall be the successor of the Owner Trustee hereunder; provided, however, that such corporation shall be eligible pursuant to Section 10.1, without the execution or filing of any instrument or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding; and provided further that the Owner Trustee shall mail notice of such merger, sale, conversion or consolidation to the Rating Agencies.

SECTION 10.5   Appointment of Co-Trustee or Separate Trustee.  Notwithstanding any other provisions of this Agreement, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Owner Trust Estate or any Financed Vehicle may at the time be located, the Servicer and the Owner Trustee acting jointly shall have the power and shall execute and deliver all instruments to appoint one or more Persons approved by the Owner Trustee to act as co-trustee, jointly with the Owner Trustee, or separate trustee or separate trustees, of all or any part of the Owner Trust Estate, and to vest in such Person, in such capacity, such title to the Owner Trust Estate, or any part thereof, and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Servicer and the Owner Trustee may consider necessary or desirable.  If the Servicer shall not have joined in such appointment within 15 days after the receipt by it of a request so to do, the Owner Trustee subject, alone shall have the power to make such appointment.  No co-trustee or separate trustee under this Agreement shall be required to meet the terms of eligibility as a successor trustee pursuant to Section 10.1 and no notice of the appointment of any co-trustee or separate trustee shall be required pursuant to Section 10.3.

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

(i)

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

(ii)

no trustee under this Agreement shall be personally liable by reason of any act or omission of any other trustee under this Agreement; and

(iii)

the Servicer and the Owner Trustee acting jointly may at any time accept the resignation of or remove any separate trustee or co-trustee.

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

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

ARTICLE XI

Miscellaneous

SECTION 11.1   Supplements and Amendments.  (a)  This Agreement may be amended by the Depositor and the Owner Trustee and with prior written notice to the Rating Agencies, without the consent of any of the Noteholders or the Certificateholders (i) to cure any ambiguity, to correct any defect or supplement any provisions in this Agreement which may be inconsistent with any other provision herein, to comply with any changes in the Code, or to make any other provisions with respect to matters or questions arising under this Agreement which shall not be inconsistent with the provisions of this Agreement; provided, however, that such action shall not, adversely affect in any material respect the interests of any Noteholder; and provided further that such action shall not adversely affect in any material respect the interests of any Certificateholder without the consent of the Holders of Certificates evidencing not less than a majority in Percentage Interest.  An amendment shall be deemed not to adversely affect the interests of any Noteholder in any material respect if either each Rating Agency confirms in writing that such amendment will not result in a reduction or withdrawal of the then current rating of the outstanding Class(es) of Notes or none of Rating Agencies, within 10 days’ after receipt of notice of such amendment, shall have notified the Depositor, the Servicer or the Issuer in writing that such amendment will result in a reduction or withdrawal of the then current rating of the outstanding Class(es) of Notes.

(b)

This Agreement may also be amended from time to time, by the Depositor and the Owner Trustee, with prior written notice to the Rating Agencies, with the consent of the Holders of Notes evidencing not less than a majority of the Outstanding Amount of the Notes and, to the extent the Certificates are affected thereby, the consent of the Holders of Certificates evidencing not less than a majority in Percentage Interest for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Noteholders or the Certificateholders; provided, however, that no such amendment shall (i) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on Receivables or distributions that shall be required to be made for the benefit of the Noteholders or the Certificateholders or (ii) reduce the aforesaid percentage of the Outstanding Amount of the Notes and the Percentage Interest required to consent to any such amendment, without the consent of the Holders of all the outstanding Notes and Holders of all outstanding Certificates.

Promptly after the execution of any such amendment or consent, the Servicer shall furnish written notification of the substance of such amendment or consent to each Certificateholder, the Indenture Trustee and each of the Rating Agencies.

(c)

It shall not be necessary for the consent of the Certificateholders, the Noteholders or the Indenture Trustee pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof.  The manner of obtaining such consents (and any other consents of the Certificateholders provided for in this Agreement or in any other Basic Document) and of evidencing the authorization of the execution thereof by the Certificateholders shall be subject to such reasonable requirements as the Owner Trustee may prescribe.

(d)

Promptly after the execution of any amendment to the Certificate of Trust, the Owner Trustee shall cause the filing of such amendment with the Secretary of State.

(e)

Prior to the execution of any amendment to this Agreement or the Certificate of Trust, the Owner Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and that all conditions precedent to the execution and delivery of such amendment have been satisfied.  The Owner Trustee may, but shall not be obligated to, enter into any such amendment which affects the Owner Trustee’s own rights, duties or immunities under this Agreement or otherwise.  The Servicer shall furnish copies of any such amendments to this Agreement to each Rating Agency.

SECTION 11.2   No Legal Title to Owner Trust Estate in Certificateholders.  The Certificateholders shall not have legal title to any part of the Owner Trust Estate.  The Certificateholders shall be entitled to receive distributions with respect to their undivided beneficial ownership interest therein only in accordance with Articles V and IX.  No transfer, by operation of law or otherwise, of any right, title or interest of the Certificateholders to and in their ownership interest in the Owner Trust Estate shall operate to terminate this Agreement or the trusts hereunder or entitle any transferee to an accounting or to the transfer to it of legal title to any part of the Owner Trust Estate.

SECTION 11.3   Limitations on Rights of Others.  Except for Section 2.7, the provisions of this Agreement are solely for the benefit of the Owner Trustee, the Depositor, the Certificateholders, the Servicer and, to the extent expressly provided herein, the Indenture Trustee and the Noteholders, and nothing in this Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Owner Trust Estate or under or in respect of this Agreement or any covenants, conditions or provisions contained herein.

SECTION 11.4   Notices.  (a)  Unless otherwise expressly specified or permitted by the terms hereof, all notices shall be in writing and shall be deemed given upon receipt personally delivered, delivered by overnight courier or mailed certified mail, return receipt requested and shall be deemed to have been duly given upon receipt, if to the Owner Trustee, addressed to the Corporate Trust Office; if to the Depositor, addressed to 47 West 200 South, Suite 500, Salt Lake City, Utah  84101, Attention Harold E. Miller, Jr., with a copy to Franklin Resources, Inc., One Franklin Parkway, San Mateo, California  94403, Attention:  Jennifer Bolt; or, as to each party, at such other address as shall be designated by such party in a written notice to each other party.

(b)

Any notice required or permitted to be given to a Certificateholder shall be given by first-class mail, postage prepaid, at the address of such Holder as shown in the Certificate Register.  Any notice so mailed within the time prescribed in this Agreement shall be conclusively presumed to have been duly given, whether or not the Certificateholder receives such notice.

SECTION 11.5   Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

SECTION 11.6   Separate Counterparts.  This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

SECTION 11.7   Successors and Assigns.  This Agreement shall inure to the benefit of, the Representative, the Owner Trustee and its successors, each Certificateholder and its successors and permitted assigns and be binding upon the parties hereto and their respective successors and permitted assigns.  Any request, notice, direction, consent, waiver or other instrument or action by a Certificateholder shall bind the successors and assigns of such Certificateholder.  Except as otherwise provided in this Agreement, no other Person shall have any right or obligation hereunder.  

SECTION 11.8   [Reserved]

SECTION 11.9   No Petition.  The Owner Trustee (not in its individual capacity but solely as Owner Trustee), by entering into this Agreement, each Certificateholder, by accepting a Trust Certificate, and the Indenture Trustee and each Noteholder by accepting the benefits of this Agreement, hereby covenant and agree that they will not at any time institute against the Depositor, or join in any institution against the Depositor of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States Federal or state bankruptcy or similar law in connection with any obligations relating to the Trust Certificates, the Notes, this Agreement or any of the Basic Documents.

SECTION 11.10   No Recourse.  Each Certificateholder by accepting a Trust Certificate acknowledges that such Certificateholder’s Trust Certificates represent beneficial ownership interests in the Trust only and do not represent interests in or obligations of the Depositor, the Servicer, the Owner Trustee, the Indenture Trustee, the Letter of Credit Provider, or any Affiliate thereof and no recourse by such Certificateholder may be had against such parties or their assets, except as may be expressly set forth or contemplated in this Agreement, the Trust Certificates or the Basic Documents.

SECTION 11.11   Headings.  The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.

SECTION 11.12   GOVERNING LAW.  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

SECTION 11.13    [Reserved]

SECTION 11.14   Servicer.  The Servicer is authorized to prepare, or cause to be prepared, execute and deliver on behalf of the Trust all such documents, reports, filings, instruments, certificates and opinions as it shall be the duty of the Trust or the Owner Trustee to prepare, file or deliver pursuant to the Basic Documents.  Upon written request, the Owner Trustee shall execute and deliver to the Servicer a limited power of attorney appointing the Servicer the Trust’s agent and attorney-in-fact to prepare, or cause to be prepared, execute and deliver all such documents, reports, filings, instruments, certificates and opinions.

IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to be duly executed by their respective officers hereunto duly authorized as of the day and year first above written.

DEUTSCHE BANK TRUST COMPANY DELAWARE,

as Owner Trustee

By: /s/ Elizabeth B. Ferry

Name: Elizabeth B. Ferry

Title:   Assistant Vice President

FRANKLIN RECEIVABLES LLC,

as Depositor

By:

FRANKLIN CAPITAL CORPORATION,

its managing member

By:/s/ Harold E. Miller, Jr.

Name:

Harold E. Miller, Jr.

Title:

President and CEO

Acknowledged and agreed as to

Sections 8.1 and 8.2:

FRANKLIN CAPITAL CORPORATION

By:   /s/ Harold E. Miller, Jr.

Name:

Harold E. Miller, Jr.

Title:

President and CEO

EXHIBIT A

FRANKLIN AUTO TRUST 2005-1

ASSET-BACKED CERTIFICATE

No. 1

100% Percentage Interest

SEE REVERSE FOR CERTAIN DEFINITIONS

THE TRUST CERTIFICATES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES OR “BLUE SKY” LAWS. THE HOLDER HEREOF, BY PURCHASING ANY TRUST CERTIFICATE, AGREES FOR THE BENEFIT OF THE ISSUER THAT SUCH TRUST CERTIFICATE IS BEING ACQUIRED FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TO DISTRIBUTION AND MAY BE RESOLD, PLEDGED OR TRANSFERRED ONLY (1) TO THE ISSUER (UPON REDEMPTION THEREOF OR OTHERWISE), (2) TO A PERSON THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (3) IN A TRANSACTION COMPLYING WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION.

NO INTEREST IN THIS TRUST CERTIFICATE MAY BE ACQUIRED BY OR FOR THE ACCOUNT OF (1) AN “EMPLOYEE BENEFIT PLAN” (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, (“ERISA”)) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (2) A PLAN DESCRIBED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (INCLUDING, WITHOUT LIMITATION, INDIVIDUAL RETIREMENT ACCOUNTS AND KEOGH PLANS), OR (3) ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF SUCH PLAN’S INVESTMENT IN THE ENTITY (EACH A “BENEFIT PLAN”).  BY ACCEPTING AND HOLDING THIS CERTIFICATE, THE HOLDER HEREOF AND THE CERTIFICATE OWNER SHALL EACH BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT IT IS NOT A BENEFIT PLAN.

FRANKLIN AUTO TRUST 2005-1

ASSET-BACKED CERTIFICATE

evidencing a beneficial ownership interest in certain distributions of the Trust, as defined below, the property of which includes a pool of motor vehicle retail installment sale contracts secured by new and used automobiles and light trucks, and sold to the Trust by Franklin Receivables LLC.

(This Trust Certificate does not represent an interest in or obligation of Franklin Receivables LLC or any of its Affiliates, except to the extent described below.)

THIS CERTIFIES THAT FRANKLIN RECEIVABLES LLC is the registered owner of 100% Percentage Interest nonassessable, fully-paid, beneficial ownership interest in Franklin Auto Trust 2005-1 (the “Trust”) formed by Franklin Receivables LLC, a limited liability company (the “Depositor”).  

The Trust is existing pursuant to the Amended and Restated Trust Agreement, dated as of December 8, 2005 (the “Trust Agreement”) between the Depositor and Deutsche Bank Trust Company Delaware, not in its individual capacity but solely as owner trustee (the “Owner Trustee”), a summary of certain of the pertinent provisions of which is set forth below.  To the extent not otherwise defined herein, the capitalized terms used herein have the meanings assigned to them in the Trust Agreement.

This Certificate is one of the duly authorized Trust Certificates designated as “Asset-Backed Certificates” (herein called the “Trust Certificates”).  Under the Indenture dated as of December 1, 2005 among the Trust, Wilmington Trust Company, as indenture trustee and indenture collateral agent, and Citibank, N.A., as indenture administrator, the Trust also issued six classes of Notes designated as “Class A-1 4.49625% Asset-Backed Notes” (the “Class A-1 Notes”), “Class A-2 4.84% Asset-Backed Notes” (the “Class A-2 Notes”), “Class A-3 4.91% Asset-Backed Notes” (the “Class A-3 Notes”), “Class A-4 5.01% Asset-Backed Notes” (the “Class A-4 Notes”), “Class B 5.12% Asset-Backed Notes” (the Class B Notes”) and “Class C 5.44% Asset-Backed Notes” (the “Class C Notes” and, together with the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and the Class B Notes, the “Notes”).  This Trust Certificate is issued under and is subject to the terms, provisions and conditions of the Trust Agreement, to which Trust Agreement the holder of this Trust Certificate by virtue of the acceptance hereof assents and by which such holder is bound.  The property of the Trust includes a pool of prime, non-prime and sub-prime motor vehicle retail installment sale contracts secured by new and used automobiles and light trucks, (the “Receivables”), all monies received on the Receivables on or after the Cutoff Date, security interests in the vehicles financed thereby, certain bank accounts and the proceeds thereof, proceeds from claims on certain insurance policies and certain other rights under the Trust Agreement and the Sale and Servicing Agreement.

Under the Trust Agreement, there will be distributed on the 20th day of each month or, if such 20th day is not a Business Day, the next Business Day (the “Distribution Date”), commencing in January 2006 to the Person in whose name this Trust Certificate is registered at the close of business on the last day of the calendar month immediately preceding the Distribution Date (the “Record Date”) such Certificateholder’s Percentage Interest in the amount to be distributed to Certificateholders on such Distribution Date.

The holder of this Trust Certificate acknowledges and agrees that its rights to receive distributions in respect of this Trust Certificate are subordinated to the rights of the Noteholders as described in the Sale and Servicing Agreement, the Indenture and the Trust Agreement, as applicable.

It is the intent of the Depositor, the Owner Trustee, and the Certificateholders that, for purposes of Federal income taxes, and to the extent permitted by law, for purposes of applicable state income or franchise tax, the Trust will be disregarded as an entity apart from its owner if there is only one owner for Federal income tax purposes, or, if there is more than one owner for Federal income tax purposes, will be treated as a partnership the partners of which are the Certificateholders, provided, however, that if any Class of Notes is deemed for federal income tax purposes (or for purposes of any state, local or other income tax, franchise tax or other tax imposed upon or measured by net income) to represent an equity interest in the Trust, it is the intent and agreement of the parties hereto that the Trust shall, to the extent permitted by law, be treated for purposes of any such tax which treats Notes in such manner as a partnership among the affected Class of Noteholders and the Certificateholder.  The Certificateholders by acceptance of a Trust Certificate, agree to treat, and to take no action inconsistent with the treatment of, the Trust and the Trust Certificates for such tax purposes as just described.

Each Certificateholder, by its acceptance of a Trust Certificate, represents that (i) it has neither acquired nor will it transfer the Trust Certificate or cause the Trust Certificate to be marketed on or through an “established securities market” within the meaning of Section 7704(b)(1) of the Code or a secondary market (or the substantial equivalent thereof) within the meaning of Section 7704(b)(2) of the Code, including, without limitation, an over-the-counter-market or an interdealer quotation system that regularly disseminates firm buy or sell quotations; (ii) it either (A) is not, and will not become, a partnership, S corporation or grantor trust for U.S. federal income tax purposes, or (B) is such an entity, but none of the direct or indirect beneficial owners of any of the interests in such transferee have allowed or caused, or will allow or cause, fifty percent (50%) or more of the value of such interests to be attributable to such transferee’s ownership of the Trust Certificate; and (iii) it understands that tax counsel to the Trust has provided an opinion substantially to the effect that the Trust will not be treated as a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes and that the validity of such opinion is dependent in part on the accuracy of the representations in paragraphs (i) and (ii) above.

Each Certificateholder, by its acceptance of a Trust Certificate, covenants and agrees that such Certificateholder will not at any time institute against the Trust or the Depositor, or join in any institution against the Trust or the Depositor of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States Federal or state bankruptcy or similar law in connection with any obligations relating to the Trust Certificates, the Notes, the Trust Agreement or any of the Basic Documents.

Distributions on this Trust Certificate will be made as provided in the Trust Agreement by the Owner Trustee by wire transfer or check mailed to the Certificateholder of record in the Trust Certificate Register without the presentation or surrender of this Trust Certificate or the making of any notation hereon.  Except as otherwise provided in the Trust Agreement and notwithstanding the above, the final distribution on this Trust Certificate will be made after due notice by the Owner Trustee of the pendency of such distribution and only upon presentation and surrender of this Trust Certificate at the office or agency maintained for the purpose by the Owner Trustee in the Borough of Manhattan, the City of New York.

Reference is hereby made to the further provisions of this Trust Certificate set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon shall have been executed by an authorized officer of the Owner Trustee, by manual signature, this Trust Certificate shall not entitle the holder hereof to any benefit under the Trust Agreement or the Sale and Servicing Agreement or be valid for any purpose.

THIS TRUST CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS.

IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in its individual capacity, has caused this Trust Certificate to be duly executed.

	Date:  December 8, 2005

	 
	 	 
	 	FRANKLIN AUTO TRUST 2005-1

	 	 
	 	 
	 	By:

DEUTSCHE BANK TRUST COMPANY DELAWARE,

solely as Owner Trustee and not in its individual capacity

	 	 
	 	 
	 	By:

______________________________________

Authorized Signatory

OWNER TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Trust Certificates of Franklin Auto Trust 2005-1 referred to in the within-mentioned Trust Agreement.

	Date:  December 8, 2005

	 
	 	 
	 	DEUTSCHE BANK TRUST COMPANY DELAWARE,

	 	solely as Owner Trustee and not in its individual capacity

	 	 
	 	 
	 	By:

______________________________________

Authorized Signatory

	 	 
	 	OR

	 	 
	 	DEUTSCHE BANK TRUST COMPANY DELAWARE,

	 	solely as Owner Trustee and not in its individual capacity

	 	 
	 	By:

Deutsche Bank Trust Company Americas, 

as Authenticating Agent

	 	 
	 	 
	 	By:

______________________________________

Authorized Signatory

(Reverse of Trust Certificate)

The Trust Certificates do not represent an obligation of, or an interest in, the Depositor, the Servicer, the Owner Trustee or any of their respective Affiliates and no recourse may be had against such parties or their assets, except as may be expressly set forth or contemplated herein or in the Trust Agreement, the Indenture or the Basic Documents.  In addition, this Trust Certificate is not guaranteed by any governmental agency or instrumentality and is limited in right of payment to certain collections with respect to the Receivables (and certain other amounts), all as more specifically set forth herein and in the Sale and Servicing Agreement.  The Trust Certificates are limited in right of payment to certain collections and recoveries respecting the Receivables, all as more specifically set forth in the Sale and Servicing Agreement.  A copy of each of the Sale and Servicing Agreement and the Trust Agreement may be examined during normal business hours at the principal office of the Depositor, and at such other places, if any, designated by the Depositor, by any Certificateholder upon written request.

The Trust Agreement permits, with certain exceptions therein provided, the amendment thereof and the modification of the rights and obligations of the Depositor and the rights of the Certificateholders under the Trust Agreement at any time by the Depositor and the Owner Trustee and with the consent of the holders of the Notes and the Trust Certificates evidencing not less than a majority of the Outstanding Amount of the Notes and a majority in Percentage Interest of the Certificates.  Any such consent by the holder of this Trust Certificate shall be conclusive and binding on such holder and on all future holders of this Trust Certificate and of any Trust Certificate issued upon the transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent is made upon this Trust Certificate.  The Trust Agreement also permits the amendment thereof, in certain limited circumstances, without the consent of the holders of any of the Trust Certificates.

As provided in the Trust Agreement and subject to certain limitations therein set forth, the transfer of this Trust Certificate is registerable in the Certificate Register upon surrender of this Trust Certificate for registration of transfer at the offices or agencies of the Certificate Registrar maintained by the Owner Trustee in the Borough of Manhattan, the City of New York, accompanied by a written instrument of transfer in form satisfactory to the Owner Trustee and the Certificate Registrar duly executed by the holder hereof or such holder’s attorney duly authorized in writing, and thereupon one or more new Trust Certificates in authorized denominations evidencing the same aggregate interest in the Trust will be issued to the designated transferee.  The initial Certificate Registrar appointed under the Trust Agreement is Deutsche Bank Trust Company Americas.

As provided in the Trust Agreement and subject to certain limitations therein set forth, Trust Certificates are exchangeable for new Trust Certificates in authorized denominations evidencing the same aggregate denomination, as requested by the holder surrendering the same.

No service charge will be made for any such registration of transfer or exchange, but the Owner Trustee or the Certificate Registrar may require payment of a sum sufficient to cover any tax or governmental charge payable in connection therewith.

The Owner Trustee, the Certificate Registrar and any agent of the Owner Trustee or the Certificate Registrar may treat the person in whose name this Trust Certificate is registered as the owner hereof for all purposes, and none of the Owner Trustee, the Certificate Registrar or any such agent shall be affected by any notice to the contrary.

The obligations and responsibilities created by the Trust Agreement and the Trust created thereby shall terminate upon the payment to Certificateholders of all amounts required to be paid to them pursuant to the Trust Agreement and the Sale and Servicing Agreement and the disposition of all property held as part of the Owner Trust Estate.  The Servicer may at its option purchase the corpus of the Trust at a price specified in the Sale and Servicing Agreement, and such purchase of the Receivables and other property of the Trust will effect early retirement of the Trust Certificates; however, such right of purchase is exercisable, subject to certain restrictions, only as of the last day of any Monthly Period as of which the Pool Balance is 10% or less of the Original Pool Balance.

ASSIGNMENT

PLEASE INSERT SOCIAL SECURITY OR OTHER

IDENTIFYING NUMBER OF ASSIGNEE

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

______________________________________________________________________________

______________________________________________________________________________

(Please print or type name and address, including postal zip code, of assignee)

the within Trust Certificate, and all rights thereunder, hereby irrevocably constitutes and appoints _______________________________________________ attorney to transfer said Trust Certificate on the books of the Certificate Registrar, with full power of substitution in the premises.

	Dated:

	 
	 	 
	 	 
	 	__________________________________*

	 	Signature Guaranteed:

*

NOTICE:  The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Trust Certificate in every particular, without alteration, enlargement or any change whatever.  Such signature must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Certificate Registrar, which requirements include membership or participation in STAMP or such other “signature guarantee program” as may be determined by the Certificate Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

EXHIBIT B

FORM OF

CERTIFICATE OF TRUST OF

FRANKLIN AUTO TRUST 2005-1

THIS Certificate of Trust of Franklin Auto Trust 2005-1 (the “Trust”), is being duly executed and filed on behalf of the Trust by the undersigned, as trustee, to form a statutory trust under the Delaware Statutory Trust Act (12 Del. Code, § 3801 et seq.) (the “Act”).

1.

Name.  The name of the statutory trust formed by this Certificate of Trust is FRANKLIN AUTO TRUST 2005-1.

2.

Delaware Trustee.  The name and business address of the Indenture Trustee of the Trust in the State of Delaware is Deutsche Bank Trust Company Delaware, 1011 Centre Road, Wilmington, Delaware 19805.

3.

Effective Date.  This Certificate of Trust shall be effective upon filing.

IN WITNESS WHEREOF, the undersigned, has duly executed this Certificate of Trust in accordance with Section 3811(a)(1) of the Act.

DEUTSCHE BANK TRUST COMPANY DELAWARE,

not in its individual capacity but

solely as trustee of the Trust

By: _________________________________

Name:

Title:

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