FRANKLIN AUTO TRUST 2004-1

$148,000,000 2.57% CLASS A-1 ASSET BACKED NOTES

$45,000,000 3.57% CLASS A-2 ASSET BACKED NOTES

$57,000,000 4.15% CLASS A-3 ASSET BACKED NOTES

FRANKLIN RECEIVABLES LLC

(SELLER)

UNDERWRITING AGREEMENT

June 22, 2004

Citigroup Global Markets Inc.

390 Greenwich Street

New York, New York 10013

Ladies and Gentlemen:

1.

Introductory.  Franklin Receivables LLC (the “Seller”) has previously filed a
registration statement with the Securities and Exchange Commission (the
“Commission”) relating to the issuance and sale from time to time of up to
$1,200,000,000 of asset backed notes and/or asset backed certificates and
proposes to cause Franklin Auto Trust 2004-1 (the “Trust”) to issue and sell to
Citigroup Global Markets Inc. (the “Underwriter”) $148,000,000 principal amount
of its 2.57% Class A-1 Asset Backed Notes (the “Class A-1 Notes”), $45,000,000
principal amount of its 3.57% Class A-2 Asset Backed Notes (the “Class A-2
Notes”) and $57,000,000 principal amount of its 4.15% Class A-3 Asset Backed
Notes (the “Class A-3 Notes” and together with the Class A-1 Notes and the Class
A-2 Notes, the “Notes”).  The Notes will have the benefit of a financial
guaranty insurance policy issued by MBIA Insurance Corporation (the “Security
Insurer”).  The Trust will also issue Certificates (the “Certificates” and
together with the Notes, the “Securities”) which will be retained by the Seller.
 The assets of the Trust will include, among other things, a pool of prime,
non-prime and sub-prime motor vehicle retail installment sale contracts (the
“Initial Receivables”) secured by new and used automobiles and light trucks
financed thereby (the “Initial Financed Vehicles”), and certain monies received
thereunder on or after July 1, 2004 (the “Initial Cutoff Date”) and additional
prime, non-prime and sub-prime motor vehicle retail installment sale contracts
(the “Subsequent Receivables” and together with the Initial Receivables, the
“Receivables”) secured by new and used automobiles and light trucks financed
thereby (the “Subsequent Financed Vehicles”), and certain monies received
thereunder on or after the related cutoff date (each a “Subsequent Cutoff Date”)
and the other property and the proceeds thereof to be conveyed to the Trust
pursuant to the Sale and Servicing Agreement to be dated as of July 1, 2004 (the
“Sale and Servicing Agreement”) among the Trust, the Seller, Franklin Capital
Corporation (“Franklin Capital”), as servicer (the “Servicer”), and Franklin
Resources, Inc. (“Franklin Resources”).  Pursuant to the Sale and Servicing
Agreement, the Seller will sell the Receivables to the Trust and the Servicer
will service the Receivables on behalf of the Trust.  In addition, pursuant to
the Sale and Servicing Agreement, the Servicer will agree to perform certain
administrative tasks on behalf of the Trust imposed on the Trust under the
Indenture.  The Notes will be issued pursuant to the Indenture to be dated as of
July 1, 2004 (as amended and supplemented from time to time, the “Indenture”),
between the Trust and The Bank of New York (the “Trustee”).  The Seller will
form the Trust pursuant to a Trust Agreement to be dated as of October 20, 2003
(the “Short-Form Trust Agreement”), as amended and restated by the Amended and
Restated Trust Agreement to be dated as of July 1, 2004 (the “Amended and
Restated Trust Agreement” and together with the Short-Form Trust Agreement, the
“Trust Agreement”) between the Seller and Deutsche Bank Trust Company Delaware,
as owner trustee (the “Owner Trustee”).  The Certificates, each representing a
fractional undivided equity interest in the Trust, will be issued pursuant to
the Trust Agreement.

The Receivables were or will be originated or acquired by Franklin Capital.
 Franklin Capital will sell the Receivables owned by it to the Seller pursuant
to the terms of the Purchase Agreement dated as of July 1, 2004 (the “Loan
Purchase Agreement”) between the Seller and Franklin Capital.

Capitalized terms used and not otherwise defined herein shall have the meanings
given them in the Sale and Servicing Agreement.  As used herein, the term “Basic
Documents” refers to the Sale and Servicing Agreement, Indenture, Trust
Agreement, Spread Account Agreement, Loan Purchase Agreement, the letter
agreement in the form of Exhibit A hereto (the “Letter Agreement”), Insurance
and Indemnity Agreement, Indemnification Agreement and Note Depository
Agreement.  As used herein, the term “Subsequent Acquisition Agreement” means
any Subsequent Purchase Agreement between Franklin Capital and the Seller and
any Subsequent Transfer Agreement among Franklin Capital, Franklin Resources,
the Seller and the Trust.

2.

Representations and Warranties of the Seller and Franklin Capital.   Each of the
Seller and Franklin Capital jointly and severally represents and warrants to and
agrees with the Underwriter that:

(a)

A registration statement on Form S-3 (No. 333-106297), including a prospectus,
relating to the Notes has been filed with the Commission and has become
effective.  Such registration statement, as amended as of the date of the
Agreement, together with any filings incorporated by reference into it, is
hereinafter referred to as the “Registration Statement,” and the prospectus
included in such Registration Statement, as supplemented to reflect the terms of
the Notes as first filed with the Commission after the date of this Agreement
pursuant to and in accordance with Rule 424(b) (“Rule 424(b)”) under the
Securities Act of 1933, as amended, (the “Act”), including all material
incorporated by reference therein, is hereinafter referred to as the
“Prospectus”; the “Base Prospectus” means the base prospectus dated the date
hereof included in the Prospectus; the “Prospectus Supplement” means the
prospectus supplement dated the date hereof included in the Prospectus.

(b)

On the effective date of the Registration Statement relating to the Notes, such
registration statement conformed in all respects to the requirements of the Act
and the rules and regulations of the Commission promulgated under the Act (the
“Rules and Regulations”) and did not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and on the date of this
Agreement the Registration Statement conform, and at the time of the filing of
the Prospectus in accordance with Rule 424(b), the Registration Statement and
the Prospectus will conform in all respects to the requirements of the Act and
the Rules and Regulations, and neither of such documents includes or will
include any untrue statement of a material fact or omits or will omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading.  The preceding sentence does not apply to
statements in or omissions from such documents based upon (i) written
information furnished to the Seller by the Underwriter specifically for use
therein, it being understood that the only such information consists of the
Underwriter’s Information (as defined in Section 7(f)) or (ii) the information
set forth in the Prospectus under the caption “The Insurer.”

(c)

The Notes are “asset backed securities” within the meaning of, and satisfy the
requirements for use of, Form S-3 under the Act.

(d)

The computer tape of the Receivables created as of May 31, 2004 and made
available to the Underwriter by the Servicer, was complete and accurate in all
material respects as of the date thereof and includes a description of the
Receivables that are described in the Schedule attached to the Loan Purchase
Agreement.

(e)

The documents incorporated by reference in the Registration Statement and
Prospectus, at the time they were or hereafter are filed with the Commission,
complied and will comply in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules
and regulations of the Commission thereunder.

(f)

Each of the Seller, Franklin Capital and Franklin Resources is a corporation or
limited liability company, as applicable, duly organized, validly existing and
in good standing under the laws of its respective state of incorporation or
formation, as applicable, is duly qualified to transact business as a foreign
corporation or limited liability company, as applicable, in each jurisdiction in
which it is required to be so qualified and has all necessary licenses, permits
and consents to conduct its business as presently conducted and as described in
the Prospectus and to perform its obligations under the Basic Documents.

(g)

This Agreement and each of the Basic Documents to which it is a party has been
duly authorized, executed and delivered by the Seller, Franklin Capital and
Franklin Resources, constitutes a valid and binding agreement of each of the
Seller, Franklin Capital and Franklin Resources, enforceable against the Seller,
Franklin Capital and Franklin Resources in accordance with its terms, subject as
to the enforcement of remedies (x) to applicable bankruptcy, insolvency,
reorganization, moratorium, and other similar laws affecting creditors’ rights
generally, (y) to general principles of equity (regardless of and whether the
enforcement of such remedies is considered in a proceeding in equity or at law)
and (z) with respect to rights of indemnity under this Agreement, the Letter
Agreement and the Indemnification Agreement, to limitations of public policy
under applicable securities laws.

(h)

None of the Seller, Franklin Capital or Franklin Resources is in breach or
violation of any credit or security agreement or other agreement or instrument
to which it is a party or by which it or its properties may be bound, or in
violation of any applicable law, statute, regulation or ordinance or any
governmental body having jurisdiction over it, which breach or violation would
have a material and adverse effect on its ability to perform its obligations
under this Agreement or any of the Basic Documents, in each case, to which it is
a party.

(i)

Other than as contemplated by this Agreement or as disclosed in the Prospectus,
there is no broker, finder or other party that is entitled to receive from the
Seller, Franklin Capital or any affiliate thereof or the Underwriter, any
brokerage or finder’s fee or other fee or commission as a result of any of the
transactions contemplated by this Agreement.

(j)

None of Franklin Capital, Franklin Resources or the Seller has entered into, nor
will it enter into, any contractual arrangement with respect to the distribution
of the Notes, except for this Agreement.

(k)

The Trust is not an “investment company” and is not required to be registered as
an “investment company,” as such term is defined in the Investment Company Act
of 1940, as amended (the “Investment Company Act”).

(l)

As of the Closing Date (as defined below), the representations and warranties of
the Seller, Franklin Capital and Franklin Resources, in each of its capacities
under each of the Basic Documents to which it is a party, will be true and
correct in all material respects and each such representation and warranty is so
incorporated herein by this reference.

(m)

On or before the Closing Date, the Basic Documents will have been duly
authorized, executed and delivered by each of the parties thereto.

(n)

The Certificates, when duly and validly executed by the Owner Trustee,
authenticated and delivered in accordance with the Trust Agreement, and
delivered to and paid for pursuant hereto will be validly issued and outstanding
and entitled to the benefits of the Trust Agreement.

(o)

The Trust’s assignment of the Collateral to the Indenture Collateral Agent
pursuant to the Indenture will vest in the Indenture Collateral Agent, for the
benefit of the Noteholders, a first priority perfected security interest
therein, subject to no other outstanding Lien.

(p)

The Notes, when duly and validly executed by the Trustee, authenticated and
delivered in accordance with the Indenture, and delivered and paid for pursuant
hereto will be enforceable in accordance with their terms, subject as to
enforceability to the effects of applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and similar laws now or
hereafter in effect relating to creditors’ rights generally and subject to
general principles of equity (whether in a proceeding at law or in equity).

(q)

Neither the execution, delivery or performance of any of the Basic Documents by
the Seller, or Franklin Capital, nor the issuance, sale and delivery of the
Notes or Certificates, nor the fulfillment of the terms of the Notes or
Certificates, will conflict with, or result in a breach, violation or
acceleration of, or constitute a default under, any term or provision of the
organizational documents of the Seller, or Franklin Capital, any material
indenture or other material agreement or instrument to which the Seller, or
Franklin Capital is a party or by which either of them or their properties is
bound or result in a violation of or contravene the terms of any statute, order
or regulation applicable to the Seller, or Franklin Capital of any court,
regulatory body, administrative agency, governmental body or arbitrator having
jurisdiction over the Seller, or Franklin Capital, or will result in the
creation of any lien upon any material property or assets of the Seller, or
Franklin Capital (other than pursuant to the Basic Documents).

(r)

There are no legal or governmental proceedings pending to which the Seller,
Franklin Capital or Franklin Resources is a party or of which any of its
properties is the subject, which if determined adversely to the Seller, Franklin
Capital or Franklin Resources would individually or in the aggregate have a
material adverse effect on the financial position, shareholders’ equity or
results of operations of any of them; and to the best of the Seller’s, Franklin
Capital’s or Franklin Resources’ knowledge, no such proceedings are threatened
or contemplated by governmental authorities or others.

(s)

No consent, license, approval, authorization or order of or declaration or
filing with any governmental authority is required for the issuance of the Notes
and Certificates or sale of the Notes or the consummation of the other
transactions contemplated by this Agreement or the Basic Documents, except such
as have been duly made or obtained.

(t)

Since the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any material adverse change, or
any development which could reasonably be expected to result in a material
adverse change, in or affecting the financial position, shareholders’ equity or
results of operations of the Seller, Franklin Capital or Franklin Resources, or
the Seller’s, Franklin Capital’s or Franklin Resources’ ability to perform its
obligations under this Agreement or any of the Basic Documents to which it is a
party.

(u)

Any taxes, fees and other governmental charges due on or prior to the Closing
Date (including, without limitation, sales taxes) in connection with the
execution, delivery and issuance of this Agreement, the Basic Documents and the
Securities have been or will have been paid at or prior to the Closing Date.

(v)

The Receivables transferred by Franklin Capital to the Seller are tangible
chattel paper as defined in the Uniform Commercial Code as in effect in the
State of Utah.  The Receivables transferred by the Seller to the Trust are
tangible chattel paper as defined in the Uniform Commercial Code as in effect in
the States of Delaware and Utah.

(w)

Under generally accepted accounting principles, (i) Franklin Capital will report
its transfer of the Receivables transferred by it to the Seller pursuant to the
Loan Purchase Agreement and (ii) the Seller will report its transfer of the
Receivables to the Trustee pursuant to the Sale and Servicing Agreement as a
sale of the Receivables for financial accounting purposes.

(x)

Immediately prior to the transfer of the Receivables to the Seller pursuant to
the Loan Purchase Agreement, Franklin Capital was the sole owner of all right,
title and interest in, and had good and marketable title to the Receivables and
the other property to be transferred to the Seller.  Franklin Capital, pursuant
to the Loan Purchase Agreement, is transferring to the Seller ownership of the
Receivables, the security interest in the Financed Vehicles securing the
Receivables and the proceeds of each of the foregoing, and, immediately prior to
the transfer thereof to the Trust, the Seller will be the sole owner of all
right, title and interest in, and will have good and marketable title to, the
Receivables and the other property to be transferred by it to the Trust pursuant
to the Sale and Servicing Agreement.  The assignment of the Receivables, all
documents and instruments relating thereto and all proceeds thereof to the Trust
pursuant to the Sale and Servicing Agreement vests in the Trust all interests
which are purported to be conveyed thereby, free and clear of any liens,
security interests or encumbrances.

(y)

Immediately prior to the transfer of the Receivables to the Seller, Franklin
Capital’s interest in the Receivables and the proceeds thereof shall be
perfected upon the filing of UCC-1 financing statements (the “Financing
Statements”) in the offices specified in Schedule I for Franklin Capital and
there shall be no unreleased statements affecting the Receivables filed in such
offices other than the Financing Statements.  If a court concludes that the
transfer of the Receivables from Franklin Capital to the Seller is a sale, the
interest of the Seller in the Receivables and the proceeds thereof will be
perfected upon the filing of the Financing Statements in the offices specified
in Schedule I for Franklin Capital.  If a court concludes that such transfer is
not a sale, the Loan Purchase Agreement and the transactions contemplated
thereby constitute a grant by Franklin Capital to the Seller of a valid security
interest in the Receivables and the proceeds thereof, which security interest
will be perfected upon the filing of the Financing Statements in the offices
specified in Schedule I for Franklin Capital.  No filing or other action, other
than the filing of the Financing Statements in the offices specified in Schedule
I for Franklin Capital, is necessary to perfect and maintain the interest or the
security interest of the Seller in the Receivables and the proceeds thereof
against third parties.

(z)

Immediately prior to the transfer of the Receivables to the Trust pursuant to
the Sale and Servicing Agreement, the Seller’s interest in the Receivables and
the proceeds thereof shall be perfected upon the filing of the Financing
Statements in the offices specified in Schedule I for Franklin Capital and there
shall be no unreleased statements affecting the Receivables filed in such
offices other than the Financing Statements.  If a court concludes that the
transfer of the Receivables from the Seller to the Trust is a sale, the interest
of the Trust in the Receivables and the proceeds thereof will be perfected upon
the filing of the Financing Statements in the offices specified in Schedule I
for the Seller.  If a court concludes that such transfer is not a sale, the Sale
and Servicing Agreement and the transactions contemplated thereby constitute a
grant by the Seller to the Trust of a valid security interest in the Receivables
and the proceeds thereof, which security interest will be perfected upon the
filing of the Financing Statements in the offices specified in Schedule I for
the Seller.  No filing or other action, other than the filing of the Financing
Statements in the offices specified in Schedule I for the Seller and Franklin
Capital referred to above and any related continuation statements, is necessary
to perfect and maintain the interest or the security interest of the Trust in
the Receivables and the proceeds thereof against third parties.

(aa)

The Trust Agreement need not be qualified under the Trust Indenture Act of 1939,
as amended (the “Trust Indenture Act”).

(bb)

The Indenture has been qualified under the Trust Indenture Act.

(cc)

As of the Closing Date, each of the respective representations and warranties of
the Seller and Franklin Capital set forth in the Basic Documents will be true
and correct, and the Underwriter may rely on such representations and warranties
as if they were set forth herein in full.

3.

Purchase, Sale and Delivery of the Notes.  On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, the Seller agrees to cause the Trust to sell to the
Underwriter, and the Underwriter agrees to purchase from the Trust, the
principal amount of each class of Notes set forth on Schedule II hereto at a
purchase price equal to “Price $” as specified on Schedule II hereto.

The Seller will deliver the Notes to the Underwriter, against payment of the
purchase price to or upon the order of the Seller by wire transfer or check in
Federal (same day) Funds, at the office of McKee Nelson LLP, 5 Times Square, New
York, NY 10036, at 10:00 a.m., New York time on July 8, 2004, or at such other
time not later than seven full business days thereafter as the Underwriter and
the Seller determine, such time being herein referred to as the “Closing Date.”
 The Notes to be so delivered will be initially represented by one or more Notes
registered in the name of Cede & Co., the nominee of The Depository Trust
Company (“DTC”).  The interests of beneficial owners of the Notes will be
represented by book entries on the records of DTC and participating members
thereof.  Definitive Notes will be available only under the limited
circumstances specified in the Basic Documents.

4.

Offering by Underwriter.  It is understood that, the Underwriter proposes to
offer the Notes for sale to the public (which may include selected dealers), on
the terms set forth in the Prospectus.  It is further understood that the
Underwriter shall not deliver any Computational Materials to any potential
investors unless such Computational Materials have been approved of by the
Seller.

5.

Covenants of the Seller and Franklin Capital.  Each of the Seller and Franklin
Capital, jointly and severally, covenants and agrees with the Underwriter that:

(a)

The Seller will file the Prospectus, properly completed, with the Commission
pursuant to and in accordance with subparagraph (2) (or, if applicable and if
consented to by the Underwriter, subparagraph (5)) of Rule 424(b) no later than
the second business day following the date it is first used.  The Seller and
Franklin Capital will advise the Underwriter promptly of any such filing
pursuant to Rule 424(b).  The Seller shall file with the Commission a current
report on Form 8-K (the “Current Report”) including any “computational
materials,” “structural terms sheets” or “collateral term sheets” (together,
“Computational Materials”) (i) no later than the date that the Prospectus
Supplement is filed with respect to “computational materials” and “structural
terms sheets” (as such terms are interpreted in the No-Action letters addressed
to Kidder, Peabody Acceptance Corporation I, et al. and the Public Securities
Association dated May 20, 1994 and February 17, 1995, respectively
(collectively, the “PSA Letters”)) or (ii) no later than two days following
their date of first use with respect to “collateral term sheets” (as such term
is interpreted in the PSA Letters).

(b)

The Seller and Franklin Capital will advise the Underwriter promptly of any
proposal to amend or supplement the Registration Statement or the Prospectus and
will not effect such amendment or supplement without the prior written consent
of the Underwriter, which consent shall not be unreasonably withheld or delayed;
and the Seller and Franklin Capital will advise the Underwriter promptly of any
amendment of, or supplement to, of the Registration Statement or the Prospectus
and of the institution by the Commission of any stop order proceedings in
respect of the Registration Statement and will use its best efforts to prevent
the issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.  

(c)

If, at any time when a prospectus relating to the Notes is required to be
delivered by the Underwriter or dealer either (i) any event occurs as a result
of which the Prospectus, as then amended or supplemented, would include an
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made not misleading, or (ii) for any other reason it shall be
necessary to amend or supplement the Prospectus to comply with the Act, the
Seller and Franklin Capital promptly will notify the Underwriter of such event
and promptly will prepare, at their own expense, an amendment or supplement
which will correct such statement or omission.  Neither the Underwriter’s
consent to, nor the Underwriter’s distribution of any amendment or supplement to
the Prospectus shall constitute a waiver of, or limitation on, any right of the
Underwriter hereunder.

(d)

The Seller and Franklin Capital will furnish to the Underwriter copies of the
Prospectus, the Registration Statement and all amendments and supplements to
such documents, in each case as soon as available and in such quantities as the
Underwriter reasonably requests.

(e)

The Seller and Franklin Capital will take all actions that are reasonably
necessary to arrange for the qualification of the Notes for offering and sale
under the laws of such jurisdictions as the Underwriter designates and will
maintain such qualifications in effect so long as required under such laws for
the distribution of the Notes; provided, however, that in no event shall the
Seller be obligated to qualify as a foreign corporation or to execute a general
or unlimited consent to service of process in any such jurisdiction.  The Seller
and Franklin Capital will promptly advise the Underwriter of the receipt by the
Seller or Franklin Capital of any notification with respect to the suspension of
the qualification of the Notes for offer or sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.

(f)

On or prior to the Closing Date, the Seller and Franklin Capital shall enter
into, and shall cause the Trust to enter into, each Basic Document to which any
of the Seller, Franklin Capital or the Trust are contemplated to be a party
pursuant to this Agreement or any Basic Document.

(g)

The Seller and Franklin Capital shall furnish or make available to the
Underwriter or its counsel such additional documents and information regarding
the Seller and Franklin Capital and their respective affairs as the Underwriter
may from time to time reasonably request, including any and all documentation
reasonably requested in connection with its due diligence efforts regarding
information in the Registration Statement and the Prospectus and in order to
evidence the accuracy or completeness of any of the conditions contained in this
Agreement; and all actions taken by the Seller to authorize the sale of the
Notes shall be reasonably satisfactory in form and substance to the Underwriter.

(h)

The Seller and Franklin Capital shall, at all times upon request of the
Underwriter or its advisors, or both, from the date hereof through the Closing
Date, (i) make available to the Underwriter or its advisors, or both, prior to
acceptance of its purchase, such information (in addition to that contained in
the Registration Statement and the Prospectus) concerning the offering, the
Seller and any other relevant matters as they possess or can acquire without
unreasonable effort or expense and (ii) provide the Underwriter or its advisors,
or both, prior to acceptance of its subscription, the opportunity to ask
questions of, and receive answers from, the Seller and Franklin Capital with
respect to such matters.

(i)

The Seller and Franklin Capital shall cause the Trust to make generally
available to Noteholders, as soon as practicable, but no later than sixteen
months after the date hereof, an earnings statement of the Trust covering a
period of at least twelve consecutive months beginning after the later of (i)
the effective date of the Registration Statement relating to the Notes and (ii)
the effective date of the most recent post-effective amendment to the
Registration Statement to become effective prior to the date of this Agreement
and, in each case, satisfying the provisions of Section 11(a) of the Act
(including Rule 158 promulgated thereunder).

(j)

Until the retirement of the Notes, the Seller will deliver to the Underwriter
the annual statements of compliance and the annual independent certified public
accountants’ reports furnished to the Trustee or the Owner Trustee pursuant to
the Basic Documents, as soon as such statements and reports are furnished to the
Trustee or the Owner Trustee.

(k)

So long as any of the Notes are outstanding, the Seller will furnish to the
Underwriter (i) as soon as practicable after the end of the fiscal year all
documents required to be distributed to Noteholders or filed with the Commission
on behalf of the Trust pursuant to the Exchange Act, or any order of the
Commission thereunder and (ii) from time to time, any other information
concerning the Seller or Franklin Capital as the Underwriter may reasonably
request only insofar as such information reasonably relates to the Registration
Statement or the Prospectus or the transactions contemplated by the Basic
Documents.

(l)

On or before the Closing Date, the Seller and Franklin Capital shall cause the
computer records of the Seller and Franklin Capital relating to the Receivables
to show the absolute ownership by the Owner Trustee on behalf of the Trust of
the Receivables, and from and after the Closing Date neither the Seller nor
Franklin Capital shall take any action inconsistent with the ownership by the
Owner Trustee on behalf of the Trust of such Receivables, other than as
permitted by the Sale and Servicing Agreement.

(m)

To the extent, if any, that any of the ratings provided with respect to the
Notes by the rating agency or agencies that initially rate any of the Notes are
conditional upon the furnishing of documents or the taking of any other actions
by the Seller or Franklin Capital on or prior to the Closing Date, one of the
Seller or Franklin Capital shall furnish such documents and take any such other
actions.  A copy of any such document shall be provided to the Underwriter at
the time it is delivered to the rating agencies.

(n)

Franklin Capital will pay all expenses incident to the performance of its
obligations under this Agreement, including (i) the printing and filing of the
documents (including the Registration Statement and the Prospectus), (ii) the
preparation, issuance and delivery of the Notes to the Underwriter, (iii) the
fees and disbursements of Franklin Capital’s, the Seller’s and Franklin
Resources’ counsel (including without limitation, local counsel in the State of
Utah) and accountants, (iv) the qualification of the Notes under state
securities laws, including filing fees and the fees and disbursements of counsel
for the Underwriter in connection therewith and in connection with the
preparation of any blue sky or legal investment survey, if any is requested, (v)
the printing and delivery to the Underwriter of copies of the Registration
Statement and the Prospectus and each amendment thereto, (vi) the fees and
reasonable expenses of the Underwriter and its counsel, (vii) any fees charged
by rating agencies for the rating of the Notes, (viii) the fees and expenses of
the Trustee and its counsel, (ix) the fees and expenses of the Owner Trustee,
the Trust and each of their counsel and (x) the fees and expenses of the
Security Insurer and its counsel.

(o)

At each subsequent transfer date, the Trust will have acquired good title to the
Subsequent Receivables (including an assignment of the security interests in the
Financed Vehicles securing the Subsequent Receivables and the proceeds of each
of the foregoing), free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity.  The transfer of the Subsequent Receivables
by Franklin Capital to the Seller pursuant to the Loan Purchase Agreement, and
by the Seller to the Trust pursuant to the Sale and Servicing Agreement at the
applicable subsequent transfer date will be treated by Franklin Capital and the
Seller for financial accounting and reporting purposes as a sale of assets and
not as a pledge of assets to secure debt.

6.

Conditions of the Obligations of the Underwriter.  The obligations of the
Underwriter to purchase and pay for the Notes will be subject to the accuracy,
as of the date hereof and as of the Closing Date, of the representations and
warranties on the part of the Seller and Franklin Capital herein, to the
accuracy of the written statements of officers of the Seller and Franklin
Capital made pursuant to the provisions of this Section, to the performance by
the Seller and Franklin Capital of its obligations hereunder and to the
following additional conditions precedent:

(a)

The Underwriter shall have received a letter, dated the date hereof, of
PricewaterhouseCoopers LLP, confirming that such accountants are independent
public accountants within the meaning of the Act and the Rules and Regulations,
and substantially in the form of the drafts to which the Underwriter has
previously agreed and otherwise in form and substance reasonably satisfactory to
the Underwriter (i) regarding certain numerical information contained in the
Prospectus and the Computational Materials and (ii) relating to certain
agreed-upon procedures.

(b)

The Prospectus and the Computational Materials shall have been filed with the
Commission in accordance with the Rules and Regulations and Section 5(a) hereof.
 On or prior to the Closing Date, no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or, to the knowledge of the Seller or
Franklin Capital, shall be contemplated by the Commission.

(c)

Subsequent to the execution and delivery of this Agreement, there shall not have
occurred (i) any change, or any development involving a prospective change, in
or affecting the Receivables or particularly the business or properties of (x)
the Trust, the Seller, Franklin Capital or Franklin Resources or (y) the
Security Insurer which, in the reasonable judgment of the Underwriter,
materially impairs the investment quality of the Notes; (ii) any downgrading in
the rating of (x) any securities of Franklin Resources by any “nationally
recognized statistical rating organization” (as defined for purposes of Rule
436(g) under the Act), or any public announcement that any such organization has
under surveillance or review its rating of any such debt securities (other than
an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating) or (y) the claims-paying
ability of the Security Insurer by any “nationally recognized statistical rating
organization” or if the claims-paying ability of the Security Insurer has been
put on the “watch list” of any such rating organization with negative
implications; (iii) any suspension or limitation of trading in securities
generally on the New York or American Stock Exchanges, or any setting of minimum
prices for trading on such exchange; (iv) any suspension of trading of any
securities of Franklin Resources on any exchange, the NASDAQ National Market or
in the over-the-counter market; (v) any banking moratorium declared by Federal
or New York authorities; (vi) any outbreak or escalation of hostilities in which
the United States is involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency if, in the judgment
of the Underwriter, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the sale of and payment for the Notes or (vii) a material
disruption has occurred in securities settlement or clearance services in the
United States.

(d)

On the Closing Date, each of the Basic Documents and the Securities shall have
been duly authorized, executed and delivered by the parties thereto, shall be in
full force and effect and no default shall exist thereunder, and the Owner
Trustee shall have received a fully executed copy thereof or, with respect to
the Notes, a conformed copy thereof.  The Basic Documents and the Securities
shall be substantially in the forms heretofore provided to the Underwriter.

(e)

The Underwriter shall have received an opinion of McKee Nelson LLP, special
counsel to Franklin Capital, the Seller and Franklin Resources, dated the
Closing Date, satisfactory in form and substance to the Underwriter, to the
effect that:

(i)

The Seller is validly existing and in good standing under the laws of the State
of Delaware.

(ii)

Each Basic Document (other than the Trust Agreement) to which it is a party is
and each Subsequent Acquisition Agreement will be, when executed and delivered,
a valid and binding obligation of each of the Seller, Franklin Capital, Franklin
Resources and the Trust, enforceable against each such party in accordance with
its terms, except as enforceability thereof may be limited by (x) the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, (y) general
principles of equity regardless of whether such enforceability is considered in
a proceeding at law or in equity and (z) with respect to rights or indemnity
thereunder, limitations of public policy under applicable securities laws.

(iii)

When the Notes have been validly executed, authenticated and delivered in
accordance with the provisions of the Indenture and delivered to and paid for by
the Underwriter pursuant to this Agreement, the Notes will constitute valid and
binding obligations of the Trust enforceable in accordance with their terms and
entitled to the benefits of the Indenture, except that enforceability thereof
may be subject to (a) the effect of bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (b) general principles of equity regardless of
whether such enforceability is considered in a proceeding at law or in equity.

(iv)

The execution and delivery by the Seller of the Basic Documents and each
Subsequent Acquisition Agreement to which it is a party, the consummation of the
transactions contemplated thereby and compliance with any of the provisions
thereof by the Seller will not violate (i) any of the terms, conditions or
provisions of the certificate of formation or the limited liability company
operating agreement of the Seller, each as amended, (ii) any federal or State of
New York statute, rule or regulation applicable to the Seller or the Delaware
Limited Liability Company Act (other than federal and state securities or blue
sky laws, as to which such counsel need not express any opinion) or (iii) any
judgment, written injunction, decree, order or ruling of any court or
governmental authority binding on the Seller of which such counsel has
knowledge.

(v)

To such counsel’s knowledge, the execution, delivery and performance by the
Seller of the Basic Documents and each Subsequent Acquisition Agreement to which
it is a party will not violate or result in a material breach of any of the
terms of or constitute a material default under or (except as contemplated in
the Basic Documents and each Subsequent Acquisition Agreement) result in the
creation of any lien, charge or encumbrance on any property or assets of the
Seller, pursuant to the terms of any indenture, mortgage, deed of trust or other
material agreement.

(vi)

The Indenture has been duly qualified under the Trust Indenture Act.

(vii)

The Registration Statement is effective under the Act and, to the best of such
counsel’s knowledge and information, no stop order suspending the effectiveness
of the Registration Statement has been issued under the Act and no proceedings
therefor have been initiated or threatened by the Commission.

(viii)

Neither the Trust nor the Seller is an "investment company" or under the
"control" of an "investment company" as such terms are defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act") and neither the
Trust nor the Seller is required to register under the Investment Company Act.

(ix)

The Trust Agreement is not required to be qualified under the Trust Indenture
Act.

(x)

The statements in the Base Prospectus, set forth under the captions "The Notes"
and "Description of the Purchase Agreements and the Trust Documents," as
modified by the statements in the Prospectus Supplement set forth under the
caption "Description of the Notes" and "Description of the Trust Documents," to
the extent such statements purport to summarize certain provisions of the Notes
or of the Basic Documents, are fair and accurate in all material respects.

(xi)

The statements in the Prospectus Supplement under the captions "Summary of Terms
of the Notes -- ERISA Considerations," and "ERISA Considerations," and in the
Base Prospectus under the headings "Prospectus Summary -- ERISA Considerations,"
and "ERISA Considerations," to the extent that they constitute matters of
federal or New York law, or federal or New York legal conclusions, provide a
fair and accurate summary of such law or conclusions.

(xii)

No consent or approval of, notice to, filing with, or other action by any New
York or federal governmental entity is required for the execution and delivery
by each of the Seller, Franklin Capital or Franklin Resources of the Basic
Documents or any Subsequent Acquisition Agreement to which it is a party or the
consummation by each of the Seller, Franklin Capital or Franklin Resources of
the transactions contemplated thereby where the failure to make or obtain such
consent or approval of, notice to, filing with, or other action by, or take such
action would reasonably be expected to have a material adverse effect on the
ability of such entity to perform its obligations under the Basic Documents or
any Subsequent Acquisition Agreement, except for (i) the filing of UCC financing
statements, (ii) filings and other actions required pursuant to state securities
or blue sky laws (as to which such counsel need not express any opinion), and
(iii) those that have already been obtained, made or taken.

(xiii)

The Prospectus and the Registration Statement (except the financial statements
and other financial, numerical, quantitative and statistical information
contained or incorporated by reference therein, as to which such counsel need
not express any view) comply as to form in all material respects with the
requirements of the Act and the rules and regulations promulgated thereunder.

(xiv)

The Loan Purchase Agreement is effective to create a valid security interest (as
defined in Section 1-201(37) of the New York Uniform Commercial Code (the
“NYUCC”)) in the Initial Receivables in favor of the Seller, and each Subsequent
Purchase Agreement will be effective to create a valid security interest (as
defined in Section 1-201(37) of the NYUCC) in the Subsequent Receivables in
favor of the Seller.

(xv)

The Sale and Servicing Agreement is effective to create a valid security
interest (as defined in Section 1-201(37) of the NYUCC) in the Initial
Receivables in favor of the Trust, and each Subsequent Transfer Agreement will
be effective to create a valid security interest (as defined in Section
1-201(37) of the NYUCC) in the Subsequent Receivables in favor of the Trust.

(xvi)

The Indenture is effective to create a valid security interest (as defined in
Section 1-201(37) of the NYUCC) in the Receivables in favor of the Indenture
Collateral Agent.

(xvii)

The filing of the financing statements in the applicable filing offices will be
effective to perfect the security interest of each transferee described in
paragraphs (xiv), (xv), and (xvi) above in the Receivables and the related
collateral in which a security interest can be perfected by the filing of the
related financing statement.  Such security interest in favor of each transferee
will be prior to any security interest in any related  receivables and the
related collateral (other than collateral consisting of investment property) in
favor of any other creditor of the Trust.

(xviii)

Such counsel shall state that they have participated in the preparation of the
Registration Statement and the Prospectus, and that no facts have come to their
attention which cause them to believe that the Registration Statement relating
to the Notes as of its effective date, and the Prospectus (other than
information regarding the Security Insurer under the caption “The Insurer”), as
of the date of this Agreement, and any amendment or supplement thereto, as of
its date when it became effective, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Prospectus
(other than information regarding the Security Insurer under the caption “The
Insurer”) on its date contained or on the Closing Date contains, any untrue
statement of a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided that such counsel need not express any view with respect to the
financial, statistical or computational material included in or incorporated by
reference into the Registration Statement relating to the Notes, the Prospectus
or any amendment or supplement thereto.

Such opinion may contain such assumptions, qualifications and limitations as are
customary in opinions of this type and are reasonably acceptable to the
Underwriter.  In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the federal law
of the United States of America, the laws of the State of New York and the laws
of the State of Delaware.

(f)

The Underwriter shall have received an opinion of in-house counsel to Franklin
Capital, the Seller and Franklin Resources, dated the Closing Date, satisfactory
in form and substance to the Underwriter, to the effect that:

(i)

Franklin Resources has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of its incorporation,
with full corporate power and authority to own its properties and conduct its
business as described in the Prospectus and each of Franklin Capital, the Seller
and Franklin Resources is duly qualified to transact business and is in good
standing in each jurisdiction in which its failure to qualify would have a
material adverse effect upon the business or the ownership of its property.

(ii)

Each of Franklin Capital, the Seller and Franklin Resources has the power and
authority to execute and deliver and perform its obligations under each Basic
Document and each Subsequent Acquisition Agreement to which it is a party.

(iii)

Each Basic Document to which Franklin Resources and/or the Seller is a party has
been duly authorized, executed and delivered by Franklin Resources or the
Seller, as applicable. Each Subsequent Acquisition Agreement to which Franklin
Resources and/or the Seller is a party has been duly authorized by Franklin
Resources or the Seller, as applicable.

(iv)

The execution, delivery and performance of the Basic Documents and each
Subsequent Acquisition Agreement to which Franklin Resources is a party will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any of the properties or assets of Franklin
Resources, pursuant to the terms of its certificate of incorporation or its
by-laws, any statute, any rule, regulation or order of any governmental agency
or body or any court having jurisdiction over Franklin Resources or any of its
properties or any material agreement or instrument known to such counsel after
due investigation, to which Franklin Resources is a party or by which Franklin
Resources or any of its properties are bound.

(v)

To the best of such counsel’s knowledge, there are no legal or governmental
proceedings pending, threatened or contemplated by governmental authorities or
others to which any of Franklin Capital, the Seller or Franklin Resources is or
may be a party or of which any property of Franklin Capital, the Seller or
Franklin Resources is the subject, (i) asserting the invalidity of all or any
part of any Basic Document or any Subsequent Acquisition Agreement or (ii) that
could materially adversely affect the ability of any of Franklin Capital, the
Seller or Franklin Resources to perform its respective obligations under any of
the Basic Documents and or any Subsequent Acquisition Agreement to which it is a
party.

Such opinion may contain such assumptions, qualifications and limitations as are
customary in opinions of this type and are reasonably acceptable to the
Underwriter.  In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the federal law
of the United States of America and the laws of the State of Delaware and Utah.

(g)

The Underwriter shall have received an opinion of Nisen & Elliot, LLC, special
counsel to Franklin Capital, the Seller and Franklin Resources, dated the
Closing Date, satisfactory in form and substance to the Underwriter, to the
effect that:

(i)

Such counsel is familiar with Franklin Capital’s standard operating procedures
relating to Franklin Capital’s acquisition of a perfected first priority
security interest in the motor vehicles financed by the retail installment sale
contracts purchased by Franklin Capital in the ordinary course of Franklin
Capital’s business and relating to the sale by Franklin Capital to Seller of
such contracts and such security interests in the Financed Vehicles.  Assuming
that Franklin Capital’s standard procedures are followed with respect to the
perfection of security interests in the Financed Vehicles (and such counsel has
no reason to believe that Franklin Capital has not or will not continue to
follow its standard procedures in connection with the perfection of security
interests in the Financed Vehicles), Franklin Capital has acquired or will
acquire a perfected first priority security interest in the Financed Vehicles.

(ii)

Franklin Capital has all necessary licenses required by law in connection with
performance as Servicer pursuant to the Sale and Servicing Agreement.

(iii)

Immediately prior to the transfer of the Initial Receivables by Franklin Capital
pursuant to the Loan Purchase Agreement, Franklin Capital was the sole owner of
all right, title and interest in the Initial Receivables and the other property
transferred by it to the Seller.  Immediately prior to the transfer of the
Subsequent Receivables by Franklin Capital pursuant to the Subsequent Purchase
Agreement, Franklin Capital will be the sole owner of all right, title and
interest in the Subsequent Receivables and the other property transferred by  it
to the Seller.  Immediately prior to the transfer of the Initial Receivables by
the Seller pursuant to the Sale and Servicing Agreement, the Seller was the sole
owner of all right, title and interest in the Initial Receivables and the other
property transferred by it to the Trust.  Immediately prior to the transfer of
the Subsequent Receivables by the Seller pursuant to the Subsequent Transfer
Agreement, the Seller will be the sole owner of all right, title and interest in
the Subsequent Receivables and the other property transferred by it to the
Trust.

Such opinion may contain such assumptions, qualifications and limitations as are
customary in opinions of this type and are reasonably acceptable to the
Underwriter.

(h)

The Underwriter shall have received the opinion of Callister Nebeker &
McCullough, counsel to Franklin Capital or such other counsel acceptable to the
Underwriter, dated the Closing Date, satisfactory in form and substance to the
Underwriter to the effect that:

(i)

Franklin Capital has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of its incorporation,
with full corporate power and authority to own its properties and conduct its
business, and is duly qualified to transact business and is in good standing in
each jurisdiction in which its failure to qualify would have a material adverse
effect upon the business or the ownership of its property.

(ii)

Franklin Capital has full power and authority to sell and assign the property to
be sold and assigned to the Seller by it pursuant to the Loan Purchase Agreement
and has duly authorized such sale and assignment to the Trust by all necessary
corporate action.

(iii)

This Agreement and each of the Basic Documents to which it is a party have been
duly authorized, executed and delivered by Franklin Capital.

(iv)

Neither the transfer of the Receivables by Franklin Capital to the Seller or the
Seller to the Trustee on behalf of the Trust, nor the assignment by the Seller
of the Trust Estate to the Trust, nor the grant by the Trust of the security
interest in the Collateral to the Indenture Collateral Agent pursuant to the
Indenture, nor the execution, delivery and performance by the Seller or Franklin
Capital of this Agreement and the Basic Documents to which it is a party, nor
the consummation of the transactions contemplated thereby will conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of Franklin Capital, pursuant to
the terms of the certificate of incorporation or the by-laws of Franklin Capital
or any statute, rule, regulation or order of any governmental agency or body, or
any court having jurisdiction over Franklin Capital or the Seller or their
properties, or any agreement or instrument known to me after due investigation
to which Franklin Capital is a party or by which Franklin Capital or any of its
properties is bound.

(v)

Such counsel shall deliver an opinion regarding Utah state tax consequences in
form and substance reasonably acceptable to the Underwriter.

(vi)

The Receivables conveyed by Franklin Capital to the Seller are tangible chattel
paper as defined in the Uniform Commercial Code as in effect in the State of
Utah.

(vii)

If the transfer of Receivables from Franklin Capital to the Seller is considered
a sale, such sale will be perfected upon the filing of financing statements with
the Utah Department of Commerce, Division of Corporations and Commercial Code.
 If the transfer of Receivables from Franklin Capital to the Seller is
considered a financing, such financing will create a first priority perfected
security interest in the Receivables in favor of the Seller upon the filing of
financing statements with the Utah Department of Commerce, Division of
Corporations and Commercial Code.

(viii)

The Receivables conveyed by the Seller to the Trust are tangible chattel paper
as defined in the Uniform Commercial Code as in effect in the State of Utah and
the State of Delaware.

(ix)

Assuming that the Sale and Servicing Agreement is effective to create a valid
security interest in the Receivables in favor of the Trust, and assuming that
such security interest will be perfected upon the filing of financing statements
with the Secretary of State of the State of Delaware, the security interest in
the Receivables in favor of the Trust will be subject to no prior or equal
security interest.

(x)

Assuming that the Indenture is effective to create a valid security interest in
favor of the Indenture Collateral Agent and assuming that such security interest
will be perfected, upon the filing of financing statements with the Secretary of
State of the State of Delaware, the security interest in the Receivables in
favor of the Indenture Collateral Agent will be subject to no prior or equal
security interest.

Such opinion may contain such assumptions, qualifications and limitations as are
customary in opinions of this type and are reasonably acceptable to the
Underwriter.  In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the federal law
of the United States of America, the laws of the State of New York and the State
of Utah and, to the extent applicable to paragraph (viii) above, the Uniform
Commercial Code as in effect in the State of Delaware.

(i)

The Underwriter shall have received an opinion addressed to it of McKee Nelson
LLP, in its capacity as counsel to the Seller, dated the Closing Date, with
respect to (i) the consolidation of the assets and liabilities of the Seller
with those of each of (x) Franklin Capital and (y) Franklin Resources, under the
doctrine of substantive consolidation and (ii) the creation of (x) a “true sale”
with respect to the transfers of the Receivables from Franklin Capital to the
Seller and (y) with respect to the transfer of the Receivables to the Trust, a
valid and binding security interest in the Receivables and the Seller shall have
furnished or caused to be furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such matters.
 Such opinions shall be limited to the laws of the State of New York and United
States federal law.

(j)

The Underwriter shall have received an opinion of Thacher Proffitt & Wood LLP,
counsel to the Trustee, dated the Closing Date and satisfactory in form and
substance to the Underwriter, to the effect that:

(i)

The Trustee has been duly organized as a banking corporation and is validly
existing and in good standing under the laws of the State of New York.

(ii)

The Trustee has the requisite power and authority to execute, deliver and
perform its obligations under the Indenture and has taken all necessary action
to authorize the execution, delivery and performance by it of the Indenture.

(iii)

The Indenture has been duly executed and delivered by the Trustee and
constitutes a legal, valid and binding obligation of the Trustee, enforceable
against the Trustee in accordance with its respective terms, except that such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, or other similar laws affecting the enforcement of creditors’ rights
generally, and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

(iv)

The Notes have been duly authenticated by the Trustee in accordance with the
terms of the Indenture.

Such opinion may contain such assumptions, qualifications and limitations as are
customary in opinions of this type and are reasonably acceptable to the
Underwriter.  In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the federal law
of the United States of America and the laws of the State of New York.

(k)

The Underwriter shall have received an opinion of Richards, Layton & Finger,
P.A., counsel to the Owner Trustee, dated the Closing Date and satisfactory in
form and substance to the Underwriter, to the effect that:

(i)

The Owner Trustee is a banking corporation duly incorporated and organized and
validly existing under the laws of the Delaware.

(ii)

The Owner Trustee has the full corporate trust power to accept the office of
owner trustee under the Trust Agreement and to enter into and perform its
obligations under the Trust Agreement, the Indenture and the Sale and Servicing
Agreement.

(iii)

The execution and delivery of the Trust Agreement, the Indenture and the Sale
and Servicing Agreement, and the performance by the Owner Trustee of its
obligations under the Trust Agreement, the Sale and Servicing Agreement and the
Indenture have been duly authorized by all necessary action of the Owner Trustee
and each has been duly executed and delivered by the Owner Trustee.

(iv)

The Trust Agreement constitutes the valid and binding obligations of the Owner
Trustee enforceable against the Owner Trustee in accordance with its terms.

(v)

The execution and delivery by the Owner Trustee of the Trust Agreement, the
Indenture and the Sale and Servicing Agreement do not require any consent,
approval or authorization of, or any registration or filing with, any applicable
governmental authority.

(vi)

Each of the Notes and Certificates has been duly executed and delivered by the
Owner Trustee, on behalf of the Trust.

(vii)

Neither the consummation by the Owner Trustee of the transactions contemplated
in the Sale and Servicing Agreement, the Indenture or the Trust Agreement nor
the fulfillment of the terms thereof by the Owner Trustee will conflict with,
result in a breach or violation of, or constitute a default under any law of the
United States of America or the State of New York governing its banking or trust
powers or the charter, by-laws or other organizational documents of the Owner
Trustee.

(viii)

No approval, authorization or other action by, or filing with, any governmental
authority of the United States of America or the State of New York having
jurisdiction over the banking or trust powers of the Owner Trustee is required
in connection with the execution and delivery by the Owner Trustee of the Trust
Agreement, the Indenture or the Sale and Servicing Agreement.

Such opinion may contain such assumptions, qualifications and limitations as are
customary in opinions of this type and are reasonably acceptable to the
Underwriter.  In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the federal law
of the United States of America and the laws of the State of New York and
Delaware.

(l)

The Underwriter shall have received an opinion of Richards, Layton & Finger,
P.A., special Delaware counsel for the Trust, dated the Closing Date,
satisfactory in form and substance to the Underwriter, to the effect that:

(i)

The Trust Agreement constitutes the valid and binding obligation of the Owner
Trustee and the Seller enforceable against the Owner Trustee and the Seller in
accordance with its terms subject to (i) applicable bankruptcy, insolvency,
moratorium, receivership, reorganization, fraudulent conveyance and similar laws
relating to and affecting the rights and remedies of creditors generally, and
(ii) principles of equity (regardless of whether considered and applied in a
proceeding in equity or at law).

(ii)

The Certificate of Trust has been duly filed with the Secretary of State.  The
Trust has been duly formed and is validly existing as a statutory trust under
the Delaware Statutory Trust Act (the “Statutory Trust Act”).  The Trust has the
power and authority under the Trust Agreement and the Statutory Trust Act to
execute and deliver the Indenture and the Sale and Servicing Agreement, to issue
the Notes and the Certificates and to pledge the Trust Estate to the Indenture
Collateral Agent as security for the Notes.

(iii)

Assuming that the Certificates have been duly executed and issued by the Trust
and duly authenticated by the Owner Trustee in accordance with the Trust
Agreement and delivered to and paid for pursuant to the Underwriting Agreement,
the Certificates have been validly issued and are entitled to the benefits of
the Trust Agreement.

(iv)

To the extent that Article 9 of the Uniform Commercial Code as in effect in the
State of Delaware (the “Delaware UCC”) is applicable (without regard to
conflicts of laws principles), and assuming that the security interest created
by each of the Sale and Servicing Agreement and the Indenture in the Receivables
has been duly created and has attached, upon the filing of UCC-1 financing
statements with the Secretary of State of the State of Delaware the Trust will
have a perfected security interest in the transfer of Receivables pursuant to
the Sale and Servicing Agreement and the proceeds thereof, and the Indenture
Collateral Agent will have a perfected security interest in such Receivables and
the proceeds thereof.

(v)

No re-filing or other action is necessary under the Delaware UCC in order to
maintain the perfection of such security interests except for the filing of
continuation statements at five year intervals.

(vi)

Under § 3805(b) of the Statutory Trust Act, no creditor of any Certificateholder
shall have any right to obtain possession of, or otherwise exercise legal or
equitable remedies with respect to, the property of the Trust except in
accordance with the terms of the Trust Agreement.

(vii)

Under § 3805(c) of the Statutory Trust Act, and assuming that the Sale and
Servicing Agreement conveys good title to the Receivables to the Trust as a true
sale and not as a security arrangement, the Trust rather than the
Certificateholders is the owner of the Receivables.

(viii)

The execution and delivery by the Owner Trustee of the Trust Agreement and, on
behalf of the Trust, the Indenture and the Sale and Servicing Agreement do not
require any consent, approval or authorization of, or any registration or filing
with, any governmental authority of the State of Delaware, except for the filing
of the Certificate of Trust with the Secretary of State.

(ix)

Neither the consummation by the Owner Trustee of the transactions contemplated
in the Trust Agreement or, on behalf of the Trust, the transactions contemplated
in the Indenture and the Sale and Servicing Agreement nor the fulfillment of the
terms thereof by the Owner Trustee will conflict with or result in a breach or
violation of any law of the State of Delaware.

Such opinion may contain such assumptions, qualifications and limitations as are
customary in opinions of this type and are reasonably acceptable to the
Underwriter.  In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the federal law
of the United States of America and the laws of the State of Delaware.

(m)

The Note Policy shall have been duly executed and issued at or prior to the
Closing Date and shall conform in all material respects to the description
thereof in the Prospectus.

(n)

The Underwriter shall have received an opinion of Alston & Bird LLP, counsel for
the Security Insurer, dated the Closing Date, satisfactory in form and substance
to the Underwriter, to the effect that:

(i)

The Security Insurer is validly existing under the laws of the jurisdiction of
its incorporation, is duly qualified and/or licensed to do business in all
jurisdictions where the nature of its operations as contemplated in the Note
Policy, the Indemnification Agreement and the Insurance and Indemnity Agreement
requires such qualification, and has the power and authority (corporate and
other) to issue the Note Policy and to enter into the Note Policy, the
Indemnification Agreement and the Insurance and Indemnity Agreement and to
perform its obligations under the Note Policy, the Indemnification Agreement and
the Insurance and Indemnity Agreement.

(ii)

The execution, delivery and performance by the Security Insurer of the Note
Policy, the Indemnification Agreement and the Insurance and Indemnity Agreement
have been duly authorized by all necessary corporate action on the part of the
Security Insurer.

(iii)

The execution, delivery and performance by the Security Insurer of the Note
Policy, the Indemnification Agreement and the Insurance and Indemnity Agreement
do not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of any state or
other governmental agency or authority which has not previously been effected.

(iv)

The Note Policy, the Indemnification Agreement and the Insurance and Indemnity
Agreement have been duly authorized, executed and delivered by the Security
Insurer, and constitute legal, valid and binding obligations of the Security
Insurer, enforceable against the Security Insurer in accordance with their
respective terms, except to the extent that the enforceability thereof may be
subject to bankruptcy, insolvency, reorganization, conservatorship, moratorium
or other similar laws now or hereafter in effect relating to creditors’ rights
as such laws would apply in the event of the insolvency, liquidation or
reorganization or other similar occurrence with respect to the Security Insurer
or the event of any moratorium or similar occurrence affecting the Security
Insurer.

(v)

The obligations of the Security Insurer under the Note Policy will rank equally
with the general obligations and all other unsecured indebtedness of the
Security Insurer outstanding on the Closing Date or thereafter that are not
contractually subordinated to the payment of such obligations under the Note
Policy.

(vi)

The Note Policy is not required to be registered under the Act in connection
with the offer and sale of the Notes in the manner contemplated in the
Prospectus.

(o)

The Underwriter shall have received an opinion of in-house counsel to the
Security Insurer, dated the Closing Date, satisfactory in form and substance to
the Underwriter, to the effect that such counsel has no reason to believe that,
as of the date of the Prospectus Supplement and as of the Closing Date, the
information with respect to the Security Insurer under the caption “The Insurer”
in the Prospectus Supplement contained or contains any untrue statement of a
material fact or omitted or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.  Such opinion may
contain such assumptions, qualifications and limitations as are customary in
opinions of this type and are reasonably acceptable to the Underwriter.  In
rendering such opinion, such counsel may state that they express no opinion as
to the laws of any jurisdiction other than the federal law of the United States
of America and the laws of the State of New York.

(p)

On or prior to the Closing Date there shall not have occurred any downgrading,
nor shall any notice have been given of (A) any intended or potential
downgrading or (B) any review or possible change in rating the direction of
which has not been indicated, in the rating accorded the Security Insurer’s
claims paying ability by any “nationally recognized statistical rating
organization.”

(q)

Franklin Capital and the Underwriter shall have received from the Security
Insurer a certificate, signed by the President, a senior vice president or a
vice president of the Security Insurer, dated the Closing Date, to the effect
that the signer of such certificate has carefully examined the Policy and the
related documents and that, to the best of his or her knowledge based on
reasonable investigation:

(i)

The information in the Prospectus Supplement as of the date hereof under the
captions “The Insurer” and “The Note Policy” (the “Security Insurer
Information”) is true and correct in all material respects and does not contain
any untrue statement of a fact that is material to the Security Insurer’s
ability to perform its obligations under the Note Policy.  There has been no
material adverse change in the financial condition of the Security Insurer since
March 31, 2004.

(ii)

There are no actions, suits, proceedings or investigations pending or, to the
best of the Security Insurer’s knowledge, threatened against it at law or in
equity or before or by any court, governmental agency, board or commission or
any arbitrator which, if decided adversely, would materially and adversely
affect its condition (financial or otherwise) or operations of it or would
materially and adversely affect its ability to perform its obligations under the
Note Policy or the Insurance Agreement.

(iii)

The execution and delivery of the Insurance Agreement, the Indemnification
Agreement and the Note Policy and the compliance with the terms and provisions
thereof will not conflict with, result in a breach of, or constitute a default
under any of the terms, provisions or conditions of, the Restated Charter or
By-Laws of the Security Insurer, or any agreement, indenture or other instrument
to which the Security Insurer is a party.

(iv)

The issuance of the Note Policy and the execution, delivery and performance of
the Indemnification Agreement and the Insurance Agreement have been duly
authorized by all necessary corporate proceedings.  No further approvals or
filings of any kind, including, without limitation, any further approvals of or
further filing with any governmental agency or other governmental authority, or
any approval of the Security Insurer’s board of directors or stockholders, are
necessary for the Note Policy, the Indemnification Agreement and the Insurance
Agreement to constitute the legal, valid and binding obligations of the Security
Insurer.

(r)

The Underwriter shall have received each opinion of counsel delivered to either
rating agency or the Security Insurer.

(s)

The Underwriter shall have received a certificate dated the Closing Date of the
Seller, executed by any one of the Chairman of the Board, the President, any
Executive Vice President, Senior Vice President or Vice President, the
Treasurer, any Assistant Treasurer, the Secretary, the principal financial
officer or the principal accounting officer of the Seller, in which such officer
shall state that, to the best of its knowledge after reasonable investigation,
(i) the representations and warranties of the Seller, contained in this
Agreement and the Basic Documents to which it is a party are true and correct in
all material respects, (ii) that the Seller, has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied under such
agreements at or prior to the Closing Date, and (iii) since the date of its
incorporation, except as may be disclosed in the Prospectus or in such
certificate, no material adverse change, or any development involving a
prospective material adverse change, in or affecting particularly the business
or properties of the Trust, Franklin Capital or the Seller, has occurred.  

(t)

The Underwriter shall have received a certificate dated the Closing Date of
Franklin Capital, executed by any one of the Chairman of the Board, the
President, any Executive Vice President, Senior Vice President or Vice
President, the Treasurer, any Assistant Treasurer, the Secretary, the principal
financial officer or the principal accounting officer of Franklin Capital in
which such officer shall state that, to the best of its knowledge after
reasonable investigation, (i) the representations and warranties of Franklin
Capital contained in this Agreement, the Loan Purchase Agreement and the Sale
and Servicing Agreement are true and correct in all material respects, (ii) that
Franklin Capital has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied under such agreements at or prior to
the Closing Date and (iii) since March 31, 2004, except as may be disclosed in
the Prospectus or in such certificate, no material adverse change, or any
development involving a prospective material adverse change, in or affecting
particularly the business or properties of the Trust, Franklin Capital or the
Seller, has occurred.  

(u)

The Underwriter shall have received evidence satisfactory to it and counsel for
the Underwriter that, on or before the Closing Date, UCC-1 financing statements
shall have been submitted to the Owner Trustee or Trustee, as the case may be,
for filing in the appropriate filing offices reflecting (1) the transfer of the
interest in the Receivables, certain other property and the proceeds thereof (A)
from Franklin Capital to the Seller and (B) from the Seller to the Trust, and
(2) the grant of the security interest by the Trust in the Receivables, certain
other property and the proceeds thereof to the Indenture Collateral Agent.

(v)

The Notes shall be rated “AAA” and “Aaa” by S&P and Moody’s, respectively, and
neither S&P nor Moody’s shall have placed the Notes under surveillance or review
with possible negative implications.

The Seller will provide or cause to be provided to the Underwriter such
conformed copies of such of the foregoing opinions, certificates, letters and
documents as the Underwriter shall reasonably request.

7.

Indemnification and Contribution.

(a)

The Seller and Franklin Capital, jointly and severally, agree to indemnify and
hold harmless the Underwriter against any and all losses, claims, damages or
liabilities, joint or several, or any action in respect thereof (including but
not limited to, any loss, claim, damage or liability (or action relating to
purchases and sales of the Notes)), to which the Underwriter may become subject,
under the Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained or incorporated in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading, and will reimburse the
Underwriter for any legal or other expenses reasonably incurred by the
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that neither the Seller nor Franklin Capital shall be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in reliance upon and in conformity
with the Underwriter’s Information.

(b)

The Underwriter agrees to indemnify and hold harmless the Seller and Franklin
Capital against any losses, claims, damages or liabilities to which the Seller
or Franklin Capital may become subject, under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained or incorporated in the
Registration Statement, the Prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with the
Underwriter’s Information, and will reimburse any legal or other expenses
reasonably incurred by Franklin Capital or the Seller in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred.

(c)

Promptly after receipt by an indemnified party under this Section of notice of
the commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under subsection
(a) or (b) above, notify the indemnifying party of the commencement thereof; but
the omission to so notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party under subsection (a) or (b)
above, except to the extent it has been materially prejudiced by such failure
and, provided further, that the failure to notify any indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section.  In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and to
the extent that it may wish to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party (which counsel may be counsel
to the indemnifying party, if such counsel is otherwise satisfactory to such
indemnified party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, except to
the extent provided in the next following paragraph, the indemnifying party will
not be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation.

Any indemnified party shall have the right to employ separate counsel in any
such action and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless: (i)
the employment thereof has been specifically authorized by the indemnifying
party in writing; (ii) such indemnified party shall have been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying party and in
the reasonable judgment of such counsel it is advisable for such indemnified
party to employ separate counsel; or (iii) the indemnifying party has failed to
assume the defense of such action and employ counsel reasonably satisfactory to
the indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however, the indemnifying party shall not, in connection
with any one such action or separate but substantially similar or related
actions arising out of the same general allegations or circumstances, be liable
for the reasonable fees and expenses of more than one separate firm of attorneys
(in addition to local counsel) at any time for all such indemnified parties,
which firm shall be designated in writing by the Underwriter, if the indemnified
party under this Section 7 consists of the Underwriter, or by the Seller and
Franklin Capital, if the indemnified parties under this Section 7 consist of the
Seller and Franklin Capital.

Each indemnified party, as a condition of the indemnity agreements contained in
Section 7 (a) and (b) hereof, shall use its best efforts to cooperate with the
indemnifying party in the defense of any such action or claim.  No indemnifying
party shall be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.  No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement (i) does not include a statement as to
or admission of, fault, culpability or a failure to act by or on behalf of any
such indemnified party, and (ii) includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.

(d)

If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless the indemnified party under subsection (a) or (b)
above then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Seller and
Franklin Capital on the one hand and the Underwriter on the other from the
offering of the Notes or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Seller or Franklin Capital on the one hand and
the Underwriter on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities as well as any
other relevant equitable considerations.  The relative benefits received by the
Seller and Franklin Capital on the one hand and the Underwriter on the other
shall be deemed to be in such proportion that the Underwriter shall be
responsible for that portion represented by the underwriting discounts and
commissions received by the Underwriter (the “Spread”) and the Seller and
Franklin Capital shall be responsible for the total proceeds from the offering
of the Notes (before deducting expenses).  The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Seller or Franklin
Capital or the Underwriter and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue statement or
omission.  The Seller, Franklin Capital and the Underwriter agree that it would
not be just and equitable if contributions pursuant to this subsection (d) were
to be determined by pro rata allocation or by any other method of allocation
which does not take into account the equitable considerations referred to
herein.

The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any action
or claim which is the subject of this subsection (d).  Notwithstanding the
provisions of this subsection (d), in no case shall the Underwriter be
responsible for any amount (not including the fees and expenses of its counsel)
in excess of the Spread received by the Underwriter, as set forth on the cover
page of the Prospectus.  No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

(e)

The obligations of the Seller and Franklin Capital under this Section shall be
in addition to any liability which the Seller and Franklin Capital may otherwise
have and shall extend, upon the same terms and conditions, to each person, if
any, who controls the Underwriter within the meaning of the Act or the Exchange
Act.  The obligations of the Underwriter shall be in addition to any liability
which the Underwriter may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Seller, and each of its officers that
signed the Registration Statement.

(f)

The Underwriter confirms that the information set forth under the caption
“Underwriting” in the Prospectus Supplement (the “Underwriter’s Information”) is
correct and constitutes the only information furnished in writing to the Seller
by or on behalf of the Underwriter specifically for inclusion in the
Registration Statement and the Prospectus.

8.

Survival of Representations and Obligations.  The respective indemnities,
agreements, representations, warranties and other statements of the Seller or
its officers and of the Underwriter set forth in or made pursuant to this
Agreement or contained in certificates of officers of the Seller submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of any investigation or statement as to the results thereof, made by or on
behalf of the Underwriter, the Seller or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Notes.  If for any reason the purchase
of the Notes by the Underwriter is not consummated, Franklin Capital shall
remain responsible for the expenses to be paid or reimbursed by Franklin Capital
pursuant to Section 5(n) (other than clause (vi) thereof in the case of a
failure by the Underwriter to comply with its obligations hereunder) and the
respective obligations of the Seller, Franklin Capital and the Underwriter
pursuant to Section 7 shall remain in effect.  If for any reason the purchase of
the Notes by the Underwriter is not consummated (other than because of (a) a
failure by the Underwriter to comply with its obligations hereunder or (b) a
failure to satisfy the conditions set forth in items (i)(y), (iii), (v) and (vi)
of Section 6(c)), Franklin Capital will reimburse the Underwriter for all
out-of-pocket expenses reasonably incurred by it in connection with the offering
of the Notes.

9.

Notices.  Any written request, demand, authorization, direction, notice, consent
or waiver shall be personally delivered or mailed certified mail, return receipt
requested (or in the form of telex or facsimile notice, followed by written
notice as aforesaid) and shall be deemed to have been duly given upon receipt,
if sent to the Underwriter, when delivered to the Underwriter at 390 Greenwich
Street, New York, New York 10013, Attention: Paul Humphrey (Fax # (212)
723-8591), if sent to Franklin Capital when delivered to 47 West 200 South,
Suite 500, Salt Lake City, UT 84101, Attention:  Harold E. Miller, Jr. (Fax #
(801) 236-2685), with a copy to Franklin Resources, Inc., One Franklin Parkway,
San Mateo, California 94403 Attention:  General Counsel and if sent to the
Seller when delivered to 47 West 200 South, Suite 500, Salt Lake City, UT 84101,
Attention:  Harold E. Miller, Jr. (Fax # (801) 236-2685), with a copy to
Franklin Resources, Inc., One Franklin Parkway, San Mateo, California 94403,
Attention:  General Counsel.

10.

Successors.  This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 7, and no other person
will have any right or obligations hereunder.

11.

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

12.

Applicable Law.  This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to the choice
of law provisions thereof.

--------------------------------------------------------------------------------

If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us one of the counterparts hereof, whereupon it will
become a binding agreement among the Seller, Franklin Capital and the
Underwriter in accordance with its terms.

Very truly yours,

FRANKLIN RECEIVABLES LLC,

By:

FRANKLIN CAPITAL CORPORATION,

its managing member

By:

/s/ Harold E. Miller, Jr.                     

Name:

Harold E. Miller, Jr.

Title:

President/CEO

FRANKLIN CAPITAL CORPORATION,

By:

/s/ Harold E. Miller, Jr.                     

Name:

Harold E. Miller, Jr.

Title:

President/CEO

The foregoing Underwriting

Agreement is hereby confirmed

and accepted as of the date

first written above.

CITIGROUP GLOBAL MARKETS INC.

By:

 /s/ Jeff Cady                        

Name:

Jeff Cady

Title:

Vice President

--------------------------------------------------------------------------------

SCHEDULE I

OFFICES

Franklin Capital Corporation

Utah Department of Commerce, Division of Corporations and Commercial Code

Franklin Receivables LLC

Secretary of State of the State of Delaware

Franklin Auto Trust 2004-1

Secretary of State of the State of Delaware

--------------------------------------------------------------------------------

SCHEDULE II

 

Original

       

Principal

Investor

Investor

   

Security

Balance $

Price

Price $

Price

Price $

Rate

Class A-1 Notes

$148,000,000

99.999740%

$147,999,615.20

99.824740%

$147,740,615.20

2.57%

Class A-2 Notes

$45,000,000

99.996712%

$44,998,520.40

99.771712%

$44,897,270.40

3.57%

Class A-3 Notes

$57,000,000

99.996712%

$56,998,125.84

99.751712%

$56,858,475.84

4.15%

Total Price to Public:

$249,996,261.44

Total Price to Seller:

$249,496,361.44

Underwriting Discounts

 and Commissions:

$499,900.00

--------------------------------------------------------------------------------

EXHIBIT A

--------------------------------------------------------------------------------

June 22, 2004

Citigroup Global Markets Inc.

390 Greenwich Street

New York, New York 10013

Re:

Underwriting Agreement for Franklin Auto Trust 2004-1, dated June 22, 2004 the

“Underwriting Agreement”) among Franklin Receivables LLC, Franklin Capital

Corporation (“Franklin Capital”) and Citigroup Global Markets Inc. (the
“Underwriter”).

Ladies and Gentlemen:

Pursuant to the Underwriting Agreement, Franklin Capital has undertaken certain
financial obligations with respect to the indemnification of the Underwriter
with respect to the Registration Statement, and the Prospectus described in the
Underwriting Agreement.  Any financial obligations of Franklin Capital under the
Underwriting Agreement, whether or not specifically enumerated in this
paragraph, are hereinafter referred to as the “Joint and Several Obligations;”
provided, however, that “Joint and Several Obligations” shall mean only the
financial obligations of Franklin Capital under the Underwriting Agreement
(including the payment of money damages for a breach of any of Franklin
Capital’s obligations under the Underwriting Agreement, whether financial or
otherwise) but shall not include any obligations not relating to the payment of
money.

As a condition of its execution of the Underwriting Agreement, the Underwriter
has required the undersigned, Franklin Resources, Inc. (“Franklin Resources”),
the parent corporation of Franklin Capital, to acknowledge its joint and several
liability with Franklin Capital for the payment of the Joint and Several
Obligations under the Underwriting Agreement.

Now, therefore, the Underwriter and Franklin Resources do hereby agree that:

1.

Franklin Resources hereby agrees to be absolutely and unconditionally jointly
and severally liable with Franklin Capital to the Underwriter for the payment of
the Joint and Several Obligations under the Underwriting Agreement.

--------------------------------------------------------------------------------

2.

Franklin Resources may honor its obligations hereunder either by direct payment
of any Joint and Several Obligations or by causing any Joint and Several
Obligations to be paid to the Underwriter by Franklin Capital or another
affiliate of Franklin Resources.

--------------------------------------------------------------------------------

Capitalized terms used herein and not defined herein shall have their respective
meanings as set forth in the Underwriting Agreement.

Very truly yours,

FRANKLIN RESOURCES, INC.

By:                                                 

Name:

Title:

CITIGROUP GLOBAL MARKETS INC.

By:                                                  

Name:

Title: