Exhibit 10.76
AMENDMENT NO. 4 TO
FIRST AMENDED AND RESTATED FORBEARANCE AGREEMENT
AND AMENDMENT TO CREDIT AGREEMENTS
THIS AMENDMENT NO. 4 TO FIRST AMENDED AND RESTATED FORBEARANCE AGREEMENT AND
AMENDMENT TO CREDIT AGREEMENTS (this “Amendment”), is effective as of the 26th
day of March, 2010 (the “Amendment Effective Date”), by and among FRANKLIN
CREDIT ASSET CORPORATION (“Franklin Asset”), FRANKLIN CREDIT HOLDING CORPORATION
(“Holding”), Flow 2006 F CORP., FCMC 2006 M CORP., FCMC 2006 K CORP. and THE
HUNTINGTON NATIONAL BANK (“Lender”). This Amendment further amends and modifies
a certain First Amended and Restated Forbearance Agreement and Amendment to
Credit Agreements, dated as of December 19, 2008 (as amended, restated,
supplemented or otherwise modified from time to time prior to the Amendment
Effective Date, the “Forbearance Agreement”) by and among the parties hereto and
certain other parties to such Forbearance Agreement. All capitalized terms used
in this Amendment and not otherwise defined herein shall have the meanings
ascribed to such terms in the Forbearance Agreement. Franklin Asset, Holding and
each Static Loan Borrower (as defined below) shall be individually an “Amendment
Loan Party” and together the “Amendment Loan Parties.”
WHEREAS, Flow 2006 F Corp., FCMC 2006 M Corp., and FCMC 2006 K Corp. (each a
“Static Loan Borrower” and together, the “Static Loan Borrowers”), Franklin
Asset, certain other parties thereto, and Lender are parties to that certain
Master Credit and Security Agreement, dated as of October 13, 2004, as the same
has been amended, supplemented, restated, or otherwise modified prior to the
date of this Amendment (the “Franklin Master Agreement”), pursuant to which
Lender holds certain outstanding loans evidenced by (i) a certain Flow 2006 F
Corp. note dated December 1, 2006, in the original principal amount of
$19,863,972.93, (ii) a certain FCMC 2006 M Corp. amended and restated note dated
August 30, 2006, in the original principal amount of $16,183,766.66, and (iii) a
certain FCMC 2006 K Corp. amended and restated promissory note dated August 30,
2006, in the original principal amount of $14,433,383.90 (collectively, the
“Static Loans”);
WHEREAS, the Static Loan Borrowers have defaulted and may continue to default
under the Forbearance Agreement, the Franklin Master Agreement and the
promissory notes and other Loan Documents executed in connection therewith in
respect of (i) their failure to make scheduled principal and interest payments
when due thereunder, and (ii) their failure after the Amendment Effective Date
to make any scheduled principal and interest payments due thereunder as a result
of the cash flow from the Mortgage Loans securing the Static Loans being
insufficient to pay such amounts (collectively the defaults under clauses
(i) and (ii) above shall be referred to as the “Identified Forbearance
Defaults”);
WHEREAS, pursuant to the terms of the Forbearance Agreement, Lender has agreed
not to exercise its rights to initiate proceedings to foreclose or otherwise
realize upon the Mortgage Loans securing the Static Loans prior to March 31,
2010, and Franklin Asset and the Static Loan Borrowers have requested that
Lender further extend such forbearance; and

 

 

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WHEREAS, Franklin Asset owns and holds of 100% of the Capital Stock of, among
other Subsidiaries, the Static Loan Borrowers.
NOW, THEREFORE, the parties hereto agree as follows:
1. Extension of Forbearance for the Static Loans. The first sentence of Section
1(a) of the Forbearance Agreement is deleted and is hereby replaced with the
following:
Absent the occurrence and continuance of a Forbearance Default other than an
Identified Forbearance Default, prior to June 30, 2010 (the “Forbearance Date”),
Lender agrees not to initiate collection proceedings or exercise its remedies
under the Loan Documents in respect of any Static Loan against any Loan Party or
any Collateral for such Static Loan or elect to have interest accrue under the
respective Loan Documents at the stated rate applicable after default.
2. Conditions of Effectiveness. This Amendment shall become effective as of the
Amendment Effective Date, upon satisfaction of all of the following conditions
precedent:
(a) Lender shall have received execution and delivery of, to the satisfaction of
Lender and its counsel, three (3) duly executed copies of this Amendment;
(b) The representations contained in the immediately following paragraph shall
be true and accurate.
3. Representations and Warranties. Each Amendment Loan Party represents and
warrants to Lender as follows: except in respect of the Identified Forbearance
Defaults, (a) the execution, delivery, and performance of this Amendment by each
Amendment Loan Party has been duly authorized by all requisite corporate or
organizational action on the part of such Amendment Loan Party and will not
violate any of its organizational documents; (c) this Amendment has been duly
executed and delivered by each Amendment Loan Party, and each of this Amendment,
the Forbearance Agreement, and each other Loan Document as amended hereby
constitutes the legal, valid, and binding obligation of each Amendment Loan
Party, enforceable against such Amendment Loan Party in accordance with the
terms thereof; and (d) no event has occurred and is continuing, and no condition
exists, which would constitute a Forbearance Default.
4. Ratification and Reaffirmation. Each Amendment Loan Party agrees (i) that all
the obligations, indebtedness, and liabilities of each Static Loan Borrower to
Lender under the Forbearance Agreement are the valid and binding obligations of
such Static Loan Borrower; (ii) that the obligations, indebtedness, and
liabilities of each Static Loan Borrower evidenced by each Loan Document
executed and delivered by each Static Loan Borrower is valid and binding without
any present right of offset, claim, defense, or recoupment of any kind and are
hereby ratified and confirmed in all respects; and (iii) that the Liens and
security interests granted to Lender as security for all obligations and
liabilities of each Static Loan Borrower under the Forbearance Agreement and the
other Loan Documents are valid and binding and are hereby ratified and confirmed
in all respects.

 

 

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5. Reference to and Effect on the Loan Documents. Upon the effectiveness of this
Amendment, each reference in the Forbearance Agreement to “Forbearance Agreement
and Amendment to Credit Agreements,” “Forbearance Agreement,” “Agreement,” the
prefix “herein,” “hereof,” or words of similar import, and each reference in the
Loan Documents to the Forbearance Agreement, shall mean and be a reference to
the Forbearance Agreement as amended hereby. In respect of each Static Loan
Borrower, except to the extent amended or modified hereby, all of the
representations, warranties, terms, covenants, and conditions of the Forbearance
Agreement and the other Loan Documents shall remain as written originally and in
full force and effect in accordance with their respective terms and are hereby
ratified and confirmed, and nothing herein shall affect, modify, limit, or
impair any of the rights and powers which Lender may have hereunder or
thereunder. Nothing in this Amendment shall constitute a novation. The
amendments set forth herein shall be limited precisely as provided for herein,
and shall not be deemed to be a waiver of, amendment of, consent to, or
modification of any of Lender’s rights under, or of any other term or provisions
of, the Forbearance Agreement or any other Loan Document, or of any term or
provision of any other instrument referred to therein or herein or of any
transaction or future action which would require the consent of Lender.
6. Waiver and Release of All Claims and Defenses; Communications.
(a) Each Amendment Loan Party, for itself and its respective successors and
assigns, agents, employees, officers, and directors, hereby forever waive,
relinquish, discharge, and release all defenses and Claims of every kind or
nature, whether existing by virtue of state, federal, or local law, by
agreement, or otherwise, against (i) Lender, its successors, assigns, directors,
officers, shareholders, agents, employees, and attorneys, and (ii) all
participants in any Commercial Loans or Advances, such participants’ successors,
assigns, directors, officers, shareholders, agents, employees, and attorneys,
(iii) any obligation evidenced by any Credit Agreement, any promissory note,
instrument, or other Loan Document in connection therewith, and (iv) any
Collateral, in each instance, which any Amendment Loan Party, may have or may
have made at any time up through and including the date of this Amendment,
including without limitation, any affirmative defenses, counterclaims, setoffs,
deductions, or recoupments, by any Amendment Loan Party. “Claims” means all
debts, demands, actions, causes of action, suits, dues, sums of money, accounts,
bonds, warranties, covenants, contracts, controversies, promises, agreements, or
obligations of any kind, type, or description, and any other claim or demand of
any nature whatsoever, whether known or unknown, accrued or unaccrued, disputed
or undisputed, liquidated of contingent, in contract, tort, at law, or in
equity, which any Amendment Loan Party, claimed to have, now has, or shall or
may have. The term Claims also includes all causes of action, liabilities, and
rights arising under or by virtue of any Credit Agreement, promissory note, or
other document or any transaction entered into in connection therewith. Nothing
contained in this Amendment prevents enforcement of this waiver and release.

 

 

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(b) Each party to this Amendment acknowledges and agrees that one purpose of
this Amendment is to facilitate the resolution of the Identified Forbearance
Defaults and that, consistent with such purpose, no part of any oral or written
communications between or among any Amendment Loan Party or Lender regarding the
transactions contemplated in this Amendment, exclusive of this written Amendment
itself (collectively, “Communications”), shall be utilized or deemed to be
admissible as evidence in any litigation involving any party to this Amendment.
Communications shall be deemed to constitute “compromise negotiations,” and not
to constitute evidence that is “discoverable,” as those phrases are used in the
Federal Rules of Evidence and any applicable state rules of evidence, and no
Communications shall be deemed to constitute evidence that is otherwise
admissible for any other purpose.
(c) The release and communication provisions provided by paragraphs (a) and
(b) of this Section, shall survive and continue in full force and effect
notwithstanding the occurrence of a Forbearance Default under the terms of this
Amendment or the termination of this Amendment.
7. No Waiver. Nothing in this Amendment shall be construed to waive, modify, or
cure any default or Event of Default or Forbearance Default (other than the
Identified Forbearance Defaults) that exist that exists or may exist under the
Forbearance Agreement or other Loan Document.
8. Waiver of Right to Trial by Jury. EACH PARTY TO THIS AMENDMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR
CAUSE OF ACTION (1) ARISING UNDER THIS AMENDMENT OR ANY LOAN DOCUMENT, OR (2) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO THIS AMENDMENT OR ANY OTHER LOAN DOCUMENT,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE, AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION, OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AMENDMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO
TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
9. Counterparts. This Amendment may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, and all of which together will
constitute one and the same instrument. Receipt by Lender of a facsimile copy of
an executed signature page hereof will constitute receipt by Lender of an
executed counterpart of this Amendment.

 

 

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10. Costs and Expenses. Each Amendment Loan Party agrees to pay on demand all
costs and expenses of Lender in connection with the preparation, reproduction,
execution, and delivery of this Amendment and all other Loan Documents entered
into in connection herewith, including the reasonable fees and out-of-pocket
expenses of Lender’s counsel with respect thereto.
11. Further Assurances. Each Amendment Loan Party agrees to execute and deliver
such additional documents, instruments, and agreements reasonably requested by
Lender as may be reasonably necessary or appropriate to effectuate the purposes
of this Amendment.
12. Governing Law. This Amendment and the rights and obligations of the parties
hereto shall be governed by, and construed and interpreted in accordance with,
the laws of the State of Ohio.
13. Headings. Section headings in this Amendment are included herein for
convenience of reference only and will not constitute a part of this Amendment
for any other purpose.
14. Patriot Act Notice. Lender hereby notifies each Amendment Loan Party that
pursuant to the requirements of the USA Patriot Act (Title III of Pub.L. 10756,
signed into law October 26, 2001) (the “Act”), it is required to obtain, verify,
and record information that identifies each party hereto, which information
includes the name and address of each Amendment Loan Party and other information
that will allow Lender to identify each such party in accordance with the Act.
[Signature page follows.]

 

 

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IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as of the
Amendment Effective Date.

                      AMENDMENT LOAN PARTIES:    
 
                    FRANKLIN CREDIT ASSET CORPORATION    
 
                    By:   /s/ Thomas J. Axon                  
 
      Name:   Thomas J. Axon    
 
      Title:   President    
 
                    Address for Notices:    
 
                    101 Hudson St., 25th Floor
Jersey City, New Jersey 07302
Fax: (201) 604-4400
Attention: General Counsel    
 
                    FRANKLIN CREDIT HOLDING CORPORATION    
 
                    By:   /s/ Thomas J. Axon                  
 
      Name:   Thomas J. Axon    
 
      Title:   President    
 
                    Address for Notices:    
 
                    Same as above    
 
                    FLOW 2006 F CORP.    
 
                    By:   /s/ Thomas J. Axon                  
 
      Name:   Thomas J. Axon    
 
      Title:   President    
 
                    Address for Notices:    
 
                    Same as above    

Signature Page to Amendment No. 4 to First Amended and Restated Forbearance
Agreement and Amendment to Credit Agreements

 

 

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                      FCMC 2006 M CORP.    
 
                    By:   /s/ Thomas J. Axon                  
 
      Name:   Thomas J. Axon    
 
      Title:   President    
 
                    Address for Notices:    
 
                    Same as above    
 
                    FCMC 2006 K CORP.    
 
                    By:   /s/ Thomas J. Axon                  
 
      Name:   Thomas J. Axon    
 
      Title:   President    
 
                    Address for Notices:    
 
                    Same as above    

Signature Page to Amendment No. 4 to First Amended and Restated Forbearance
Agreement and Amendment to Credit Agreements

 

 

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                      LENDER:    
 
                    THE HUNTINGTON NATIONAL BANK    
 
                    By:   /s/ David Abshier                  
 
      Name:   David Abshier    
 
      Title:   Authorized Signer    
 
                    Address for Notices:    
 
                    41 South High Street (HCO810)
Columbus, Ohio 43229
Attn: Commercial Lending
Telephone No.: (614) 480-4449
Telecopier No.: (614) 480-4999    
 
                    With a copy to:    
 
                    Porter Wright Morris & Arthur LLP
41 South High Street
Columbus, Ohio 43215
Attn: Timothy E. Grady, Esq.
Telecopier No.: (614) 227-2105
Telephone No.: (614) 227-2100    

Signature Page to Amendment No. 4 to First Amended and Restated Forbearance
Agreement and Amendment to Credit Agreements