Exhibit 10.1
PURCHASE AGREEMENT dated as of June 1, 2002, between FRANKLIN CAPITAL
CORPORATION, a Utah corporation (the "Seller"), and FRANKLIN RECEIVABLES LLC, a
Delaware limited liability company (the "Purchaser").
WHEREAS in the regular course of its business, the Seller has
purchased certain prime, non-prime and sub-prime motor vehicle retail
installment sale contracts secured by new and used automobiles and light trucks
from motor vehicle dealers;
WHEREAS the Seller and the Purchaser wish to set forth the terms
pursuant to which the Receivables (as hereinafter defined) are to be sold by the
Seller to the Purchaser, which Receivables will be transferred by the Purchaser,
pursuant to the Sale and Servicing Agreement (as hereinafter defined), to
Franklin Auto Trust 2002-1 (the "Trust"), which Trust will issue four classes of
Asset Backed Notes (the "Notes"), which will be debt of the Trust and
Certificates representing the ownership interest in the Trust (the
"Certificates").
NOW, THEREFORE, in consideration of the foregoing, other good and
valuable consideration and the mutual terms and covenants contained herein, the
parties hereto agree as follows:
ARTICLE I
Certain Definitions
Terms not defined in this Agreement shall have the meaning set forth
in the Sale and Servicing Agreement. As used in this Agreement, the following
terms shall, unless the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms of the
terms defined):
"Agreement" shall mean this Purchase Agreement, as the same may be
amended and supplemented from time to time, and as supplemented by each
Subsequent Purchase Agreement.
"Assignment" shall collectively, mean the document of assignment
attached to this Agreement as Exhibit A and any Assignment delivered in
connection with a Subsequent Purchase Agreement.
"Certificateholder" means a holder of a Certificate.
"Closing Date" shall mean June 13, 2002.
"Collections" shall mean all amounts collected by the Servicer (from
whatever source) on or with respect to the Receivables.
"Computer Tape" means the computer tapes or other electronic media
furnished by the Seller to the Purchaser describing certain characteristics of
the Receivables.
"Initial Cutoff Date" shall mean June 1, 2002.
"Initial Receivables" shall mean the Receivables listed on Schedule A
hereto on the Closing Date.
"Initial Receivables Property" shall have the meaning specified in
Section 2.01.
"Lien" means a security interest, lien, charge, pledge, equity, or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of any
act or omission by the related Obligor.
"Noteholder" means a holder of a Note.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
Financed Vehicle and any other Person who owes payments under the Receivable.
"Prospectus" shall mean the Prospectus (as defined in the Underwriting
Agreement).
"Purchase Amount" means, with respect to any Receivable required to be
repurchased by the Seller pursuant to Section 6.02 of this Agreement, an amount
equal to the sum of (i) 100% of the Principal Balance thereof and (ii) all
accrued and unpaid interest thereon (including one month's interest thereon, in
the month of payment, at the APR less, so long as Franklin Capital is the
Servicer, the Base Servicing Fee).
"Purchaser" shall mean Franklin Receivables LLC, a Delaware
limited liability company, its successors and assigns.
"Receivable" shall mean any Contract listed on Schedule A hereto
(which Schedule may be in the form of microfiche) as such Schedule shall be
amended to reflect the transfer of Subsequent Receivables pursuant to Section
2.02.
"Repurchase Event" shall have the meaning specified in Section 6.02.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement dated as of June 1, 2002, among the Trust, as issuer, Franklin
Receivables LLC, as seller, Franklin Capital Corporation, as servicer, and
Franklin Resources, Inc., as representative, as the same may be amended and
supplemented from time to time.
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"Schedule of Receivables" shall mean the list of Receivables annexed
hereto as Schedule A, as supplemented from time to time to reflect the
Subsequent Receivables.
"Security Insurer" shall mean MBIA Insurance Corporation.
"Seller" shall mean Franklin Capital Corporation, a Utah corporation,
its successors and assigns.
"Subsequent Closing Date" shall have the meaning assigned to such term
in each Subsequent Purchase Agreement.
"Subsequent Cutoff Date" shall, with respect to a Subsequent
Receivable, have the meaning assigned to such term in the related Subsequent
Purchase Agreement.
"Subsequent Purchase Agreement" shall have the meaning specified in
Section 2.02(b)(i).
"Subsequent Receivables" shall mean the Receivables sold by the Seller
to the Purchaser after the Closing Date and on the applicable Subsequent Closing
Date pursuant to the Purchase Agreement and the related Subsequent Purchase
Agreement and which Receivables shall be listed on the Subsequent Schedule of
Receivables to such Subsequent Purchase Agreement.
"Subsequent Receivables Property" shall have the meaning specified in
Section 2.02(a).
"Subsequent Schedule of Receivables" shall mean the list of Subsequent
Receivables annexed as Schedule A to a Subsequent Purchase Agreement.
"Subsequent Receivables Purchase Price" shall have the meaning
assigned to such term in a Subsequent Purchase Agreement.
"Trust" shall mean Franklin Auto Trust 2002-1.
"Underwriting Agreement" shall mean the Underwriting Agreement, dated
May 29, 2002 among Xxxxxxx Xxxxx Xxxxxx, Inc., the Purchaser and the Seller.
ARTICLE II
Conveyance of Receivables
SECTION 2.01. Conveyance of Initial Receivables. In consideration of
the Purchaser's delivery to or upon the order of the Seller of $176,250,000 the
Seller does hereby sell, transfer, assign, set over and otherwise convey to the
Purchaser, without recourse (subject to
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the obligations herein), all right, title and interest of the Seller in and to
(collectively, the "Initial Receivables Property"):
(i) the Initial Receivables, and all monies representing interest
payments and principal payments received thereunder on and after the Initial
Cutoff Date;
(ii) an assignment of the security interests in the Financed Vehicles
granted by Obligors pursuant to the Initial Receivables and any other interest
of the Seller in such Financed Vehicles;
(iii) any proceeds with respect to the Initial Receivables from claims
on any physical damage, credit life or disability insurance policies covering
Financed Vehicles or Obligors and any proceeds from the liquidation of the
Initial Receivables;
(iv) any proceeds from any Initial Receivables repurchased by a
Dealer, pursuant to a Dealer Agreement, as a result of a breach of
representation or warranty in the related Dealer Agreement;
(v) all of the Seller's rights under any extended warranty service
contracts on the Financed Vehicles;
(vi) the related Receivables Files; and
(vii) the proceeds of any and all of the foregoing.
SECTION 2.02. Subsequent Receivables.
(a) Subject to and upon the terms and conditions set forth in
Section 2.02(b) and in the related Subsequent Purchase Agreement, in
consideration of the Purchaser's delivery on the related Subsequent Closing Date
to or upon the order of the Seller of an amount equal to the applicable
Subsequent Purchase Price as set forth in the related Subsequent Purchase
Agreement, Seller does hereby sell, transfer, assign, set over and otherwise
convey to the Purchaser, without recourse (subject to the obligations herein and
in the related Subsequent Purchase Agreement) all right, title and interest of
the Seller in and to (collectively, the "Subsequent Receivables Property"):
(i) the Subsequent Receivables listed on Schedule A to the
related Subsequent Purchase Agreement, and all moneys due
thereon on or after the related Subsequent Cutoff Date;
(ii) an assignment of the security interests in the Financed
Vehicles granted by Obligors pursuant to such Subsequent
Receivables and any other interest of the Seller in such
Financed Vehicles;
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(iii) any proceeds with respect to such Subsequent Receivables
from claims on any physical damage, credit life or
disability insurance policies covering the related
Financed Vehicles or Obligors and any proceeds from the
liquidation of such Subsequent Receivables;
(iv) any proceeds from any Subsequent Receivable repurchased
by a Dealer, pursuant to a Dealer Agreement, as a result
of a breach of representation or warranty in the related
Dealer Agreement;
(v) all of the Seller's rights under any extended warranty
service contracts on the related Financed Vehicles;
(vi) the related Receivables Files; and
(vii) the proceeds of any and all of the foregoing.
(b) The Seller shall transfer to the Purchaser, and the Purchaser
shall acquire, the Subsequent Receivables and the other property and rights
related thereto described in Section 2.02(a) to be transferred on the related
Subsequent Closing Date only upon the satisfaction of each of the following
conditions on or prior to the related Subsequent Closing Date:
(i) The Seller shall have delivered to the Purchaser a duly
executed written agreement in substantially the form of
Exhibit B hereto (the "Subsequent Purchase Agreement"),
which shall include supplements to Schedule A, listing
the Subsequent Receivables;
(ii) as of each Subsequent Closing Date, (A) the Seller shall
not be insolvent and shall not become insolvent as a
result of the transfer of Subsequent Receivables on such
Subsequent Closing Date, (B) the Seller shall not intend
to incur or believe that it shall incur debts that would
be beyond its ability to pay as such debts mature, (C)
such transfer shall not have been made with actual intent
to hinder, delay or defraud any Person and (D) the assets
of the Seller shall not constitute unreasonably small
capital to carry out its business as conducted;
(iii) the Funding Period shall not have terminated;
(iv) each of the conditions set forth in Section 2.2(b) of the
Sale and Servicing Agreement shall have been satisfied;
(v) each of the representations and warranties made by the
Seller pursuant to Section 3.1 with respect to the
Subsequent Receivables to be transferred on such
Subsequent Closing Date shall be true and correct as of
such Subsequent Closing Date, and the Seller
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shall have performed all obligations to be performed by
it hereunder on or prior to such Subsequent Closing Date;
(vi) the Seller shall, at its own expense, on or prior to the
Subsequent Closing Date indicate in its computer files
that the Subsequent Receivables identified in the
Subsequent Closing Agreement have been sold to the Trust
pursuant to this Agreement and the related Subsequent
Purchase Agreement;
(vii) the Seller shall have taken any action required to
maintain the first perfected ownership interest of the
Purchase in the Trust Property; and
(viii) no selection procedures adverse to the interests of the
Noteholders, the Certificateholders or the Security
Insurer shall have been utilized in selecting the
Subsequent Receivables.
SECTION 2.03. The Closing. The sale and purchase of the Initial
Receivables shall take place at a closing (the "Closing") at the offices of
Xxxxxxxx & Xxxxxxxx LLP, 1290 Avenue of the Americas, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, on the Closing Date, simultaneously with the closings under the Sale
and Servicing Agreement.
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Purchaser. The
Purchaser hereby represents and warrants to the Seller as of the date hereof,
and as of the Closing Date, in the case of the Initial Receivables, and as of
the applicable Subsequent Closing Date, in the case of Subsequent Receivables:
(a) Organization and Good Standing. The Purchaser has been duly
organized and is validly existing as a limited liability company in good
standing under the laws of the State of Utah, with the power and authority to
own its properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant times,
and has, the power, authority and legal right to acquire and own the
Receivables.
(b) Due Qualification. The Purchaser is duly qualified to do
business and is in good standing, and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or lease of property or
the conduct of its business shall require such qualifications.
(c) Power and Authority. The Purchaser has the power and authority
to execute and deliver this Agreement and the related Subsequent Purchase
Agreement and to carry out its terms and the execution, delivery and performance
of this Agreement and the related Subsequent Purchase Agreement has been duly
authorized by the Purchaser by all necessary action.
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(d) No Violation. The consummation of the transactions contemplated
by this Agreement and the related Subsequent Purchase Agreement and the
fulfillment of the terms hereof do not conflict with, result in any breach of
any of the terms and provisions of, nor constitute (with or without notice or
lapse of time or both) a default under, the certificate of formation or limited
liability company agreement of the Purchaser, or any indenture, agreement or
other instrument to which the Purchaser is a party or by which it is bound; nor
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than the Sale and Servicing Agreement) nor violate any law or, to the
best of the Purchaser's knowledge, any order, rule or regulation applicable to
the Purchaser of any court or of any Federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Purchaser or its properties.
(e) No Proceedings. There are no proceedings or investigations
pending or, to the Purchaser's best knowledge, threatened, before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Purchaser or its properties: (i) asserting the
invalidity of this Agreement and the related Subsequent Purchase Agreement, (ii)
seeking to prevent the consummation of any of the transactions contemplated by
this Agreement or (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Purchaser of its
obligations under, or the validity or enforceability of, this Agreement and the
related Subsequent Purchase Agreement.
SECTION 3.02. Representations and Warranties of the Seller.
(a) The Seller hereby represents and warrants to the Purchaser as of
the date hereof and as of the Closing Date, in the case of the Initial
Receivables, and as of the applicable Subsequent Closing Date, in the case of
Subsequent Receivables:
(i) Organization and Good Standing. The Seller has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Utah, with the power and authority to
own its properties and to conduct its business as such properties are
currently owned and such business is presently conducted, and had at
all relevant times, and has, the power, authority and legal right to
acquire and own the Receivables.
(ii) Due Qualification. The Seller is duly qualified to do
business as a foreign corporation and is in good standing, and has
obtained all necessary licenses and approvals, in all jurisdictions in
which the ownership or lease of property or the conduct of its
business shall require such qualifications.
(iii) Power and Authority. The Seller has the power and
authority to execute and deliver this Agreement and to carry out its
terms; the Seller has full power and authority to sell and assign the
property sold and assigned to the Purchaser hereby and has duly
authorized such sale and assignment to the
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Purchaser by all necessary corporate action; and the execution,
delivery and performance of this Agreement has been duly authorized by
the Seller by all necessary corporate action.
(iv) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
shall not conflict with, result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of
time) or both a default under, the articles of incorporation or
by-laws of the Seller, or any indenture, agreement or other instrument
to which the Seller is a party or by which it is bound; nor result in
the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other
instrument (other than this Agreement); nor violate any law or, to the
best of the Seller's knowledge, any order, rule or regulation
applicable to the Seller of any court or of any Federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties.
(v) No Proceedings. To the Seller's best knowledge, there are
no proceedings or investigations pending, or threatened, before any
court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties:
(A) asserting the invalidity of this Agreement, (B) seeking to prevent
the consummation of any of the transactions contemplated by this
Agreement, or (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of, this
Agreement.
(b) The Seller represents to the Purchaser that, as of the date set
forth in Section 3.1 of the Sale and Servicing Agreement, in the case of the
Initial Receivables, and as of the date of the applicable Subsequent Date, in
the case of Subsequent Receivables, each of the representations set forth in
said section is hereby made to the Purchaser and the Security Insurer as if the
same were fully set forth herein.
ARTICLE IV
Conditions
SECTION 4.01. Conditions to Obligation of the Purchaser. The
obligation of the Purchaser to purchase the Receivables is subject to the
satisfaction of the following conditions:
(a) Representations and Warranties True. The representations and
warranties of the Seller hereunder shall be true and correct on the Closing
Date, in the case of the Initial Receivables, and on the applicable Subsequent
Closing Date, in the case of Subsequent Receivables, in each case with the same
effect as if then made, and the Seller shall have performed all obligations to
be performed by it hereunder on or prior to the Closing Date, in the
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case of the Initial Receivables, and on or prior to the applicable Subsequent
Closing Date, in the case of Subsequent Receivables.
(b) Computer Files Marked. The Seller shall, at its own expense, on
or prior to the Closing Date, in the case of the Initial Receivables, and on or
prior to the applicable Subsequent Closing Date, in the case of Subsequent
Receivables, indicate in its computer files that receivables created in
connection with the Receivables have been sold to the Purchaser pursuant to this
Agreement or the applicable Subsequent Purchase Agreement, as the case may be,
and deliver to the Purchaser the Schedule of Receivables (and the applicable
Subsequent Schedule of Receivables, in the case of Subsequent Receivables),
certified by the Chairman, the President, a Vice President or the Treasurer to
be true, correct and complete.
(c) Documents To Be Delivered by the Seller at the Closing, in the
case of the Initial Receivables (and at the applicable Subsequent Closing Date,
in the case of Subsequent Receivables).
(i) The Assignment. At the Closing, in the case of the
Initial Receivables (and at the applicable Subsequent Closing Date, in
the case of Subsequent Receivables), the Seller will execute and
deliver an Assignment. The Assignment shall be substantially in the
form of Exhibit A hereto.
(ii) Evidence of UCC Filing. On or prior to the Closing Date,
in the case of the Initial Receivables, and on or prior to the
applicable Subsequent Closing Date, in the case of Subsequent
Receivables, the Seller shall record and file, at its own expense, a
UCC-l financing statement with the Utah Department of Commerce,
Division of Corporations and Commercial Code, authorized by the
Seller, as seller or debtor, and naming the Purchaser, as purchaser or
secured party, describing the Receivables and the other property
included in the Trust Property as collateral, meeting the requirements
of the laws of each such jurisdiction and in such manner as is
necessary to perfect the sale, transfer, assignment and conveyance of
such Receivables to the Purchaser. The Seller shall deliver a
file-stamped copy, or other evidence satisfactory to the Purchaser of
such filing, to the Purchaser on or prior to the Closing Date, in the
case of the Initial Receivables, and on or prior to the applicable
Subsequent Closing Date, in the case of Subsequent Receivables.
(iii) Other Documents. Such other documents as the Purchaser
may reasonably request.
(d) Other Transactions. The transactions contemplated by the Sale
and Servicing Agreement to be consummated on the Closing Date, in the case of
the Initial Receivables (and on the applicable Subsequent Closing Date, in the
case of Subsequent Receivables) shall be consummated on such date.
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SECTION 4.02. Conditions to Obligation of the Seller. The obligation
of the Seller to sell the Receivables to the Purchaser is subject to the
satisfaction of the following conditions:
(a) Representations and Warranties True. The representations and
warranties of the Purchaser hereunder shall be true and correct on the Closing
Date, in the case of the Initial Receivables (and on the applicable Subsequent
Closing Date, in the case of Subsequent Receivables), with the same effect as if
then made, and the Seller shall have performed all obligations to be performed
by it hereunder on or prior to the Closing Date, in the case of the Initial
Receivables (and on or prior to the applicable Subsequent Closing Date, in the
case of Subsequent Receivables).
(b) Receivables Purchase Price. On the Closing Date, in the case
of the Initial Receivables, and on the applicable Subsequent Closing Date, in
the case of Subsequent Receivables, the Purchaser shall have delivered to the
Seller the purchase price specified in Section 2.01 of this Agreement, in the
case of the Initial Receivables, and the applicable Subsequent Receivables
Purchase Price, in the case of Subsequent Receivables.
ARTICLE V
Covenants of the Seller
The Seller agrees with the Purchaser as follows; provided, however,
that to the extent that any provision of this Article conflicts with any
provision of the Sale and Servicing Agreement, the Sale and Servicing Agreement
shall govern:
SECTION 5.01. Protection of Right, Title and Interest.
(a) Filings. The Seller shall cause all financing statements and
continuation statements and any other necessary documents covering the right,
title and interest of the Purchaser in and to the Receivables and the other
property included in the Trust Property to be promptly filed, and at all times
to be kept recorded, registered and filed, all in such manner and in such places
as may be required by law fully to preserve and protect the right, title and
interest of the Purchaser hereunder to the Receivables and the other property
included in the Trust Property. The Seller shall deliver to the Purchaser file
stamped copies of, or filing receipts for, any document recorded, registered or
filed as provided above, as soon as available following such recordation,
registration or filing. The Purchaser shall cooperate fully with the Seller in
connection with the obligations set forth above and will execute any and all
documents reasonably required to fulfill the intent of this paragraph.
(b) Name Change. Within 15 days after the Seller makes any change in
its name, identity or corporate structure which would make any financing
statement or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the applicable provisions of the UCC or any title
statute, the Seller shall give the Purchaser notice of any such
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change, and no later than 5 days after the effective date thereof, shall file
such financing statements or amendments as may be necessary to continue the
perfection of the Purchaser's interest in the property included in the Owner
Trust Estate.
SECTION 5.02. Other Liens or Interests. Except for the conveyances
hereunder and under any Subsequent Purchase Agreement, and pursuant to the Sale
and Servicing Agreement and any Subsequent Transfer Agreement, the Seller will
not sell, pledge, assign or transfer to any Person, or grant, create, incur,
assume or suffer to exist any Lien on, any interest in, to and under the
Receivables, and the Seller shall defend the right, title and interest of the
Purchaser in, to and under the Receivables against all claims of third parties
claiming through or under the Seller; provided, however, that the Seller's
obligations under this Section shall terminate upon the termination of the Trust
pursuant to the Sale and Servicing Agreement.
SECTION 5.03. Chief Executive Office. During the term of the
Receivables, the Seller will maintain its chief executive office in Utah and its
jurisdiction of formation in Utah.
SECTION 5.04. Costs and Expenses. The Seller agrees to pay all
reasonable costs and disbursements in connection with the perfection, as against
all third parties, of the Purchaser's right, title and interest in and to the
Receivables.
SECTION 5.05 Sale. It is the intention of the Seller that the
transfer and assignment contemplated by this Agreement and each Subsequent
Purchase Agreement shall constitute a sale of the Initial Receivables, the
Subsequent Receivables and other Trust Property from the Seller to the Trust and
the beneficial interest in and title to the Initial Receivables, the Subsequent
Receivables and the other Trust Property shall not be part of the Seller's
estate in the event of the filing of a bankruptcy petition by or against the
Seller under any bankruptcy law. In the event that, notwithstanding the intent
of the Seller, the transfer and assignment contemplated hereby and each
Subsequent Purchase Agreement is held not to be a sale, this Agreement and each
Subsequent Purchase Agreement shall constitute a grant of a security interest in
the property referred to in this Section 2.01 and Section 2.02 for the benefit
of the Purchaser.
ARTICLE VI
Miscellaneous Provisions
SECTION 6.01. Obligations of Seller. The obligations of the Seller
under this Agreement shall not be affected by reason of any invalidity,
illegality or irregularity of any Receivable.
SECTION 6.02. Repurchase Events. The Seller hereby covenants and
agrees with the Purchaser for the benefit of the Purchaser, the Trust, the
Trustee, the Noteholders, the Certificateholders and the Security Insurer that
the occurrence of a breach of any of the Seller's representations and warranties
contained in Section 3.02(b) shall constitute events obligating the Seller to
repurchase Receivables hereunder ("Repurchase Events"), at the Purchase Amount
from
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the Purchaser or from the Trustee. The repurchase obligation of the Seller shall
constitute the sole remedy to the Purchaser, the Trust, the Trustee, the
Noteholders or the Certificateholders against the Seller with respect to any
Repurchase Event.
SECTION 6.03. Purchaser Assignment of Repurchased Receivables.
With respect to all Receivables repurchased by the Seller pursuant to this
Agreement, the Purchaser shall assign, without recourse, representation or
warranty, to the Seller all the Purchaser's right, title and interest in and to
such Receivables, and all security and documents relating thereto.
SECTION 6.04. [Reserved]
SECTION 6.05. Trust. The Seller acknowledges and agrees that (a)
the Purchaser will, pursuant to the Sale and Servicing Agreement, sell the
Receivables, the other Initial Receivables Property, and the other Subsequent
Receivables Property to the Trust and assign its rights under this Agreement and
any Subsequent Purchase Agreement to the Trust, and (b) the representations and
warranties contained in this Agreement and any Subsequent Purchase Agreement and
the rights of the Purchaser under this Agreement and under any Subsequent
Purchase Agreement, including those under Section 6.02, are intended to benefit
the Trust, the Noteholders, the Certificateholders and the Security Insurer. The
Seller hereby consents to all such sales and assignments.
SECTION 6.06. Amendment. This Agreement may be amended from time
to time, with prior written notice to the Rating Agencies, by a written
amendment duly executed and delivered by the Seller and the Purchaser, without
the consent of the Noteholders, but with the consent of the Security Insurer,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Noteholders; provided that such amendment will not, in
the Opinion of Counsel satisfactory to the Trustee, materially and adversely
affect the interest of any Noteholder. This Agreement may also be amended by the
Seller and the Purchaser, with prior written notice to the Rating Agencies, with
the consent of the holders of Notes evidencing at least a majority of the
outstanding principal amount of the Notes for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Noteholders and
with the consent of the Security Insurer; provided, however, that no such
amendment may (i) increase or reduce in any manner the amount of, or accelerate
or delay the timing of, collections of payments on Receivables or distributions
that are required to be made for the benefit of the Noteholders or (ii) reduce
the aforesaid percentage of the Notes which are required to consent to any such
amendment, without the consent of the holders of all the outstanding Notes.
SECTION 6.07. Accountants' Letters. (a) PricewaterhouseCoopers
LLP will review the characteristics of the Initial Receivables described in the
Schedule of Receivables set forth as Schedule A hereto and will compare those
characteristics to the information with respect to the Initial Receivables
contained in the Prospectus Supplement dated May 29, 2002; (b) the Seller will
cooperate with the Purchaser and PricewaterhouseCoopers LLP in making available
all information and taking all steps reasonably necessary to permit such
accountants to complete
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the review set forth in clause (a) above and to deliver the letters required of
them under the Underwriting Agreement; and (c) PricewaterhouseCoopers LLP will
deliver to the Purchaser a letter, dated the date of the Prospectus, in the form
previously agreed to by the Seller and the Purchaser, with respect to the
financial and statistical information contained in the Prospectus Supplement
dated May 29, 2002, and with respect to such other information as may be agreed
in the form of the letter.
SECTION 6.08. Waivers. No failure or delay on the part of the
Purchaser in exercising any power, right or remedy under this Agreement or any
Assignment shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or remedy preclude any other or further
exercise thereof or the exercise of any other power, right or remedy.
SECTION 6.09. Notices. All demands, notices and communications
under this Agreement shall be in writing, personally delivered, mailed by
certified mail, return receipt requested or delivered by overnight courier, and
shall be deemed to have been duly given upon receipt (a) in the case of the
Seller, to 00 Xxxx 000 Xxxxx, Xxxxx 000, Xxxx xxxx Xxxx, XX 00000, Attention:
Xxxxxx X. Xxxxxx, Xx., with a copy to Franklin Resources, Inc., Xxx Xxxxxxxx
Xxxxxxx, Xxx Xxxxx, XX 00000, (b) in the case of the Purchaser, to 00 Xxxx 000
Xxxxx, Xxxxx 000, Xxxx xxxx Xxxx, XX 00000, Attention: Xxxxxx X. Xxxxxx, Xx.,
with a copy to Franklin Resources, Inc., Xxx Xxxxxxxx Xxxxxxx, Xxx Xxxxx, XX
00000, (c) in the case of Moody's, to Xxxxx'x Investors Service, Inc., ABS
Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; (d) in the
case of Standard & Poor's, to Standard & Poor's Corporation, 00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention of Asset Backed Surveillance Department; (e)
in the case of the Security Insurer, to MBIA Insurance Corporation, 000 Xxxx
Xxxxxx, Xxxxxx, Xxx Xxxx 00000, Attn: Insured Portfolio Management (IPM-SF), or
as to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
SECTION 6.10. Costs and Expenses. The Seller will pay all expenses
incident to the performance of its obligations under this Agreement and
the Seller agrees to pay all reasonable out-of-pocket costs and expenses of the
Purchaser, excluding fees and expenses of counsel, in connection with the
perfection as against third parties of the Purchaser's right, title and interest
in and to the Receivables and the enforcement of any obligation of the Seller
hereunder.
SECTION 6.11. Representations of the Seller and the Purchaser. The
respective agreements, representations, warranties and other statements by the
Seller and the Purchaser set forth in or made pursuant to this Agreement shall
remain in full force and effect and will survive the closing under Section 2.03,
in the case of the Initial Receivables, and the applicable closing for
Subsequent Receivables.
SECTION 6.12. Confidential Information. The Purchaser agrees that it
will neither use nor disclose to any Person the names and addresses of the
Obligors under the Receivables, except in connection with the enforcement of the
Purchaser's rights hereunder, under the Sale and Servicing Agreement or as
required by any of the foregoing or by law.
-13-
SECTION 6.13. Headings and Cross-References. The various headings in
this Agreement are included for convenience only and shall not affect the
meaning or interpretation of any provision of this Agreement. References in this
Agreement to Section names or numbers are to such Sections of this Agreement.
SECTION 6.14. GOVERNING LAW. THIS AGREEMENT AND THE ASSIGNMENTS
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW AND RULE 327(B) OF THE NEW YORK CIVIL PRACTICE LAWS AND
RULES, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER OR
THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 6.15. Counterparts. This Agreement may be executed in two or
more counterparts and by different parties on separate counterparts, each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
SECTION 6.16. Third Party Beneficiary. The Security Insurer is an
express third party beneficiary of this Agreement.
SECTION 6.17. No Proceedings. So long as this Agreement is in
effect, and for one year and one day following its termination, the Seller
agrees that it will not file any involuntary petition or otherwise institute any
bankruptcy, reorganization arrangement, insolvency or liquidation proceeding or
other proceedings under any federal or state bankruptcy law or similar law
against the Purchaser.
[SIGNATURE PAGE FOLLOWS]
-14-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers duly authorized as of the date and year
first above written.
FRANKLIN RECEIVABLES LLC,
as Purchaser
By: Franklin Capital Corporation,
its managing member
By: /s/ Xxxxxx X. Xxxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: President/CEO
FRANKLIN CAPITAL CORPORATION,
as Seller
By: /s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: President/CEO
-15-
SCHEDULE A
to Purchase Agreement
Schedule of Receivables
The following is a list of Initial Receivables on the Closing Date:
[Delivered to the Trustee at Closing]
SCHEDULE 1
to Purchase Agreement
Location of Receivable Files
Franklin Capital Corporation
00 Xxxx 000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Downtown Self Storage
000 Xxxx 000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
A-1
EXHIBIT A
to Purchase Agreement
ASSIGNMENT
For value received, in accordance with the Purchase Agreement, dated as of June
1, 2002 (the "Purchase Agreement"), between the undersigned and Franklin
Receivables LLC (the "Purchaser") [and the Subsequent Purchase Agreement, dated
as of [insert Subsequent Transfer Agreement date], between the undersigned and
the Purchaser (the "Subsequent Purchase Agreement")], the undersigned does
hereby sell, assign, transfer and otherwise convey unto the Purchaser, without
recourse, all right, title and interest of the undersigned in and to (i) the
[Initial] [Subsequent] Receivables, and all monies representing interest and
principal payments received thereon on and after the [Initial] [Subsequent]
Cutoff Date; (ii) the security interest of the Seller in the Financed Vehicles
granted by the Obligors pursuant to the [Initial] [Subsequent] Receivables and
any other interest of the Seller in such Financed Vehicles; (iii) the interest
of the Seller in any proceeds with respect to the [Initial] [Subsequent]
Receivables from claims on any physical damage, credit life or disability
insurance policies relating to the Financed Vehicles or Obligors and any
proceeds from the liquidation of the [Initial] [Subsequent] Receivables; (iv)
the interest of the Seller in any proceeds from any [Initial] [Subsequent]
Receivables repurchased by a Dealer pursuant to a Dealer Agreement as a result
of a breach of a representation or warranty in the related Dealer Agreement; (v)
all rights under any extended warranty service contracts on the related Financed
Vehicles; (vi) the related Receivables Files; and (vii) the proceeds of any and
all of the foregoing. The foregoing sale does not constitute and is not intended
to result in any assumption by the Purchaser of any obligation of the
undersigned to the Obligors, insurers or any
A-1
other person in connection with the [Initial] [Subsequent] Receivables, related
Receivable Files, any insurance policies or any agreement or instrument relating
to any of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Purchase Agreement [and the Subsequent Purchase Agreement] and is to be governed
by the Purchase Agreement [and the Subsequent Purchase Agreement]. The
undersigned acknowledges and agrees that the Purchaser may further assign the
items enumerated in clauses (i) through (vii) above to Franklin Auto Trust
2002-1 which may in turn assign its interests in the items in (i) through (vii)
above to The Bank of New York, as trustee (the "Trustee") for the benefit of the
Noteholders, the Certificateholders and the Security Insurer, and that the
Trustee will have the right to enforce any of the rights of the Purchaser under
the Purchase Agreement [and the Subsequent Purchase Agreement].
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Purchase Agreement [or the Subsequent Purchase
Agreement].
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
A-2
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of [June __, 2002] [or insert Subsequent Transfer Agreement
date, in the case of a Subsequent Purchase Agreement].
FRANKLIN CAPITAL CORPORATION
By: _____________________________
Name:
Title:
A-3
EXHIBIT B
to Purchase Agreement
FORM OF
SUBSEQUENT PURCHASE AGREEMENT
This SUBSEQUENT PURCHASE AGREEMENT (this "Agreement") is dated as of
_________, 200__, and by and between FRANKLIN CAPITAL CORPORATION, a Utah
corporation (the "Seller"), and FRANKLIN RECEIVABLES LLC, a Delaware limited
liability company (the "Purchaser")
W I T N E S S E T H:
WHEREAS, the Seller and the Purchaser are parties to the Purchase
Agreement, dated as of June 1, 2002 (as amended or supplemented from time to
time, the "Purchase Agreement");
WHEREAS, pursuant to the Purchase Agreement and this Agreement, the
Seller wishes to convey the Subsequent Receivables to the Purchaser; and
WHEREAS, the Purchaser is willing to accept such conveyance subject to
the terms and conditions hereof.
NOW, THEREFORE, in consideration of the foregoing and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Seller and the Purchaser hereby agree as follows:
1. Defined Terms. Capitalized terms used herein shall have the
meanings ascribed to them in the Purchase Agreement, unless otherwise defined
herein.
"Subsequent Cutoff Date" shall mean, with respect to the
Subsequent Receivables conveyed hereby, [July 1, 2002] [August 1, 2002].
"Subsequent Closing Date" shall mean, with respect to the Subsequent
Receivables conveyed hereby, _____, 200_.
2. Subsequent Schedule of Receivables. Annexed hereto as Schedule
A is a supplement to Schedule A to the Purchase Agreement listing the
Receivables that constitute the Subsequent Receivables to be conveyed pursuant
to this Agreement on the Subsequent Closing Date.
B-1
3. Conveyance of Subsequent Receivables. In consideration of the
Purchaser's delivery to or upon the order of the Seller of $____________ (the
"Subsequent Receivables Purchase Price"), the Seller does hereby sell, transfer,
assign, set over and otherwise convey to the Purchaser, without recourse (except
as provided in the Purchase Agreement), all right title and interest of the
Seller in and to:
(i) the Subsequent Receivables listed on Schedule A
hereto, and all moneys due thereon on or after the
related Subsequent Cutoff Date;
(ii) an assignment of the security interests in the
Financed Vehicles granted by Obligors pursuant to
such Subsequent Receivables and any other interest
of the Seller in such Financed Vehicles;
(iii) any proceeds with respect to such Subsequent
Receivables from claims on any physical damage,
credit life or disability insurance policies
covering the related Financed Vehicles or Obligors
and any proceeds from the liquidation of such
Subsequent Receivables;
(iv) any proceeds from any Subsequent Receivable
repurchased by a Dealer, pursuant to a Dealer
Agreement, as a result of a breach of
representation or warranty in the related Dealer
Agreement;
(v) all of the Seller's rights under any extended
warranty service contracts on the related Financed
Vehicles;
(vi) the related Receivables Files; and
(vii) the proceeds of any and all of the foregoing.
4. Representations and Warranties of the Seller. The Seller hereby
represents and warrants to the Purchaser as of the date of this Agreement and as
of the Subsequent Closing Date that:
(a) Legal, Valid and Binding Obligation. This Agreement
constitutes a legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or equity).
(b) Organization and Good Standing. The Seller has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Utah, with the power and authority to
own its properties and to conduct its business as such properties are
currently owned and such business is presently conducted, and had at
all
B-2
relevant times, and has, the power, authority and legal right to
acquire and own the Receivables.
(c) Due Qualification. The Seller is duly qualified to do
business as a foreign corporation and is in good standing, and has
obtained all necessary licenses and approvals, in all jurisdictions in
which the ownership or lease of property or the conduct of its
business shall require such qualifications.
(d) Power and Authority. The Seller has the power and
authority to execute and deliver this Agreement and to carry out its
terms; the Seller has full power and authority to sell and assign the
property sold and assigned to the Purchaser hereby and has duly
authorized such sale and assignment to the Purchaser by all necessary
corporate action; and the execution, delivery and performance of this
Agreement has been duly authorized by the Seller by all necessary
corporate action.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
shall not conflict with, result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of
time) or both a default under, the articles of incorporation or
by-laws of the Seller, or any indenture, agreement or other instrument
to which the Seller is a party or by which it is bound; nor result in
the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other
instrument (other than this Agreement); nor violate any law or, to the
best of the Seller's knowledge, any order, rule or regulation
applicable to the Seller of any court or of any Federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties.
(f) No Proceedings. To the Seller's best knowledge, there are
no proceedings or investigations pending, or threatened, before any
court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties:
(A) asserting the invalidity of this Agreement, (B) seeking to prevent
the consummation of any of the transactions contemplated by this
Agreement, or (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of, this
Agreement.
(g) Insolvency. As of the Subsequent Cutoff Date and the
Subsequent Closing Date, the Seller is not insolvent nor will it be
made insolvent after giving effect to the conveyance set forth in
Section 3 of this Agreement, nor is it aware of any pending insolvency
with respect to the Seller.
(h) Principal Balance. The aggregate Principal Balance of the
Subsequent Receivables listed on Schedule A annexed hereto and
conveyed to the Purchaser pursuant this Agreement as of the Subsequent
Cutoff Date is $__________.
B-3
5. Seller's Conditions Precedent. The obligation of the Purchaser
to acquire the Subsequent Receivables hereunder is subject to the satisfaction,
on or prior to the Subsequent Purchase Date, of the following conditions
precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Seller in Section 4 of this
Agreement and in the Purchase Agreement shall be true and correct as
of the date of this Agreement and as of the Subsequent Purchase Date;
(b) Purchase Agreement Conditions. Each of the conditions set
forth in Sections 2.02(b) and 4.01 of the Purchase Agreement
applicable to the conveyance of Subsequent Receivables shall have been
satisfied;
(c) Collections. The Seller shall have delivered to the
Purchaser for deposit to the Collection Account all collections in
respect of Subsequent Receivables required to be deposited by the
Purchaser to the Collection Account pursuant to Section 5.2(b) of the
Sale and Servicing Agreement;
(d) Delivery of Assignment. The Seller shall have delivered
an Assignment substantially in the form of Exhibit A to the Purchase
Agreement; and
(e) Additional Information. The Seller shall have delivered
to the Purchaser such information as was reasonably requested by the
Purchaser to satisfy itself as to (i) the accuracy of the
representations and warranties set forth in Section 4 of this
Agreement and in the Purchase Agreement and (ii) the satisfaction of
the conditions set forth in this Section 5.
6. Purchaser's Conditions Precedent. The obligation of the Seller
to sell the Subsequent Receivables hereunder is subject to the satisfaction of
the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Purchaser in Section 3.01
of the Purchase Agreement shall be true and correct as of the date of
this Agreement and as of the Subsequent Purchase Date;
(b) Subsequent Receivables Purchase Price. On the Subsequent
Closing Date, the Purchaser shall have delivered to the Seller the
purchase price specified in Section 3 of this Agreement.
7. Ratification of Agreement. As supplemented by this Agreement,
the Purchase Agreement is in all respects ratified and confirmed and the
Purchase Agreement as so supplemented by this Agreement shall be read, taken and
construed as one and the same instrument.
B-4
8. Counterparts. This Agreement may be executed in two or more
counterparts (and by different parties in separate counterparts), each of which
shall be an original but all of which together shall constitute one and the same
instrument.
9. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING, WITHOUT LIMITATION, SECTIONS
5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND RULE 327(B) OF THE
NEW YORK CIVIL PRACTICE LAWS AND RULES, AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER OR THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
10. Third Party Beneficiary. The Security Insurer is an express
third party beneficiary of this Agreement.
[Remainder of page intentionally left blank]
B-5
IN WITNESS WHEREOF, the Seller and the Purchaser have caused this
Agreement to be duly executed and delivered by their respective duly authorized
officers as of the day and the year first above written.
FRANKLIN RECEIVABLES LLC,
as Purchaser
By: Franklin Capital Corporation,
its managing member
By: _________________________
Name:
Title:
FRANKLIN CAPITAL CORPORATION,
as Seller
By: __________________________
Name:
Title:
B-6
SCHEDULE A
to Subsequent Purchase Agreement
SCHEDULE OF SUBSEQUENT RECEIVABLES
