RATE CAP TRANSACTION AGREEMENT

This Agreement is made as of August 29, 2006 (the "Trade Date"), by and among
LASALLE BANK NATIONAL ASSOCIATION (the "Floating Rate Payer") and FRANKLIN
CREDIT MANAGEMENT CORPORATION (the "Fixed Rate Payer").

WHEREAS, the Fixed Rate Payer desires to enter into an arrangement for the
purpose of limiting its interest expense on certain existing floating rate
liabilities; and

WHEREAS, the Floating Rate Payer desires to enter into such an arrangement with
the Fixed Rate Payer;

NOW, THEREFORE, the parties hereto agree as follows:

1. Payment of Fixed Amount. The Fixed Rate Payer agrees to pay to the Floating
Rate Payer a Fixed Amount USD 101,000.00 on or before August 31, 2006 (the
"Fixed Rate Payer Payment Date"), in consideration of the Floating Rate Payer
agreeing to make a payment to the Fixed Rate Payer for each Calculation Period
(as defined below) during which the Floating Rate (as defined below) exceeds the
Cap Rate (as defined below).

2. Payment of Floating Amounts. The Floating Rate Payer agrees to make a payment
of the Floating Amount (as defined below) on each Floating Rate Payer Payment
Date (as defined below) in immediately available funds at such location as the
Fixed Rate Payer shall direct. For each Floating Rate Payer Payment Date, the
Floating Rate Payer shall deliver to the Fixed Rate Payer a notice containing a
computation of the Floating Amount payable.

3. Definitions. The definitions and provisions contained in the 2000 ISDA
Definitions (as published by the International Swap Dealers Association, Inc.)
are incorporated by reference into this Agreement. In the event of any
inconsistency between those definitions and provisions and the provisions of
this Agreement, the provisions of this Agreement shall govern.

(a) "Business Day" shall mean a day on which banks are open in New York for the
transaction of general commercial banking business and on which dealings may be
carried on in the London interbank eurodollar market.
 
(b) "Calculation Agent" shall mean the Floating Rate Payer.

(c) "Calculation Period" shall mean each period from, and including, one
Floating Rate Payer Payment Date to, but excluding, the next following Floating
Rate Payer Payment Date, except that (i) the initial Calculation Period will
commence on, and include, the Effective Date, and (ii) the final Calculation
Period will end on, but exclude, the Termination Date.

(d) "Cap Rate" shall mean 5.75%.

(e) "Designated Maturity" shall mean 1 Month

(f) "USD" and the sign "$" mean lawful currency of the United States of America.

(g) "Effective Date" shall mean August 31, 2006.

(h) "Floating Amount" with respect to any Calculation Period shall mean an
amount equal to (i) the amount by which the interest earned on the Notional
Amount for the Calculation Period at the Floating Rate would exceed (ii) the
amount of interest which would have been earned on the Notional Amount for the
Calculation Period at the Cap Rate, all said calculations being based on a
Floating Rate Day Count Fraction of Actual/360. (If the amount calculated in
clause (i) shall be less than the amount calculated under clause (ii), the
Floating Amount for said Calculation Period shall be zero).

 
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(i) "Floating Rate" means (i) with respect to the initial Calculation Period,
the rate determined for the Floating Rate Option two (2) London Banking Days
prior to the Effective Date for value on the Effective Date; and (ii) with
respect to any subsequent Calculation Period, the rate determined with respect
to such period for the Floating Rate Option.

(j)  "Floating Rate Option" shall mean USD-LIBOR-BBA

(k) "Floating Rate Payer Payment Date" shall mean the last day of each month,
commencing on September 30, 2006 and ending on the Termination Date, subject to
adjustment in accordance with the Modified Following Business Day Convention.

(l) "Notional Amount" shall mean USD 300,000,000.00.
 
(m) "Reset Date" shall mean each Floating Rate Payer Payment Date to, but not
including, the Termination Date.

(n) "Termination Date" shall mean August 31, 2007.

4. Representations and Warranties - The Fixed Rate Payer. The Fixed Rate Payer
hereby represents and warrants to the Floating Rate Payer that:

(a) The Fixed Rate Payer is a corporation validly existing and in good standing
under the laws of the jurisdiction of its organization and such jurisdiction is
a State of the United States of America.

(b) The Fixed Rate Payer has the corporate power and authority to own its
property and assets and to carry on its business as currently conducted.

(c) The Fixed Rate Payer has the corporate power to execute, deliver and perform
this Agreement.

(d) The execution, delivery and performance of this Agreement (i) have been duly
authorized by all requisite corporate or organizational action on the part of
the Fixed Rate Payer and (ii) will not (A) violate (1) any provision of law, (2)
the constitutional documents of the Fixed Rate Payer, (3) any applicable order
of any court or agency of government or (4) any indenture, agreement or other
instrument to which the Fixed Rate Payer is a party or by which the Fixed Rate
Payer or any of its property or assets is bound, (B) be in conflict with, result
in a breach of or constitute (with due notice or lapse of time or both) a
default under any indenture, agreement or other instrument to which the Fixed
Rate Payer is a party or by which the Fixed Rate Payer or any of its property or
assets is bound or (C) result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever upon any property or assets of the Fixed
Rate Payer.

(e) This Agreement has been duly executed and delivered by the Fixed Rate Payer
and constitutes a legal, valid and binding obligation of the Fixed Rate Payer,
enforceable in accordance with its terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency or similar laws
from time to time in effect).

 
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(f) No action, consent or approval of, or registration or filing with, or any
other action by any governmental agency, bureau, commission or court has been
required in connection with the execution, delivery and performance by the Fixed
Rate Payer of this Agreement, or if so required, such registration or filing has
been made, such consent or approval has been given or such other appropriate
action has been taken.

5. Representations and Warranties - The Floating Rate Payer. The Floating Rate
Payer hereby represents and warrants to the Fixed Rate Payer that:

(a) The Floating Rate Payer is a bank organized or formed under the laws of the
United States of America.

(b) The Floating Rate Payer has the corporate or organizational power and
authority to own its property and assets and to carry on its business as
currently conducted.

(c) The Floating Rate Payer has the corporate or organizational power to
execute, deliver and perform this Agreement.

(d) The execution, delivery and performance of this Agreement (i) have been duly
authorized by all requisite corporate or organizational action on the part of
the Floating Rate Payer and (ii) will not (A) violate (1) any provision of law,
(2) the constitutional documents of the Floating Rate Payer, (3) any applicable
order of any court or agency of government or (4) any indenture, agreement or
other instrument to which the Floating Rate Payer is a party or by which the
Floating Rate Payer or any of its property or assets is bound, (B) be in
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any indenture, agreement or other instrument to
which the Floating Rate Payer is a party or by which the Floating Rate Payer or
any of its property or assets is bound or (C) result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
property or assets of the Floating Rate Payer.

(e) This Agreement has been duly executed and delivered by the Floating Rate
Payer and constitutes a legal, valid and binding obligation of the Floating Rate
Payer, enforceable in accordance with its terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency or similar laws
from time to time in effect).

(f) No action, consent or approval of, or registration or filing with, or any
other action by any governmental agency, bureau, commission or court has been
required in connection with the execution, delivery and performance by the
Floating Rate Payer of this Agreement, or if so required, such registration or
filing has been made, such consent or approval has been given or such other
appropriate action has been taken.

6. Assignment and Transfer. Neither party may assign or transfer its rights or
obligations under this Agreement without the prior written consent of the other
party and any purported assignment in violation of this Section shall be void;
provided, however, that the consent to transfer shall not be unreasonably
withheld.

7. Other Provisions Relating to the Fixed Amount. In no event shall the Fixed
Amount (or any portion thereof) paid to the Floating Rate Payer pursuant to
Section 1 hereof be refundable, provided that nothing contained herein shall be
deemed to constitute a waiver by the Fixed Rate Payer of any of its rights to
collect damages from, or to enforce other remedies against, the Floating Rate
Payer in the event that the Floating Rate Payer fails to perform its obligations
hereunder.

 
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8. Amendments and Waivers. No amendment, modification or waiver with respect to
this Agreement will be effective unless in writing and executed by each of the
parties hereto.

9. Notices. All notices, requests and other communications to either party
hereunder shall be in writing and shall be given to such party at its address,
telex or telecopier number set forth on the signature page hereof or such other
address, telex or telecopier number as such party may hereafter specify for the
purpose of notice to the other party.

10. Termination. This Agreement shall terminate on the Termination Date, subject
to any applicable requirement for payment as set forth in Section 2 hereof.

11. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
 
12. Authorization Documents. Upon the execution of this Agreement, the Fixed
Rate Payer shall promptly deliver to the Floating Rate Payer, certified evidence
of the authority, incumbency and specimen signature of each authorized person
executing this Agreement on its behalf.

13. Account Details:

Payments to the Floating Rate Payer:
LaSalle Bank National Association, ABA #0710-0050-5, A/C 2090102-9030, Attn:
Derivative Operations

Payments to the Fixed Rate Payer:                    Please Advise

14. Set-off. Upon the occurrence of any default by the Fixed Rate Payer with
respect to any indebtedness or other amounts payable by the Fixed Rate Payer to
the Floating Rate Payer (irrespective of the currency, place of payment or
booking office of the obligation) under any other agreements between the Fixed
Rate Payer and the Floating Rate Payer or instrument(s) or undertaking(s) issued
or executed by one party to, or in favor of, the other party, the Floating Rate
Payer may at its option (but shall not be obligated to) reduce such amounts by
its setoff of such amounts against any amount(s) payable (whether at such time
or in the future or upon the occurrence of a contingency) by the Floating Rate
Payer to the Fixed Rate Payer hereunder. For purposes hereof, if a payment
obligation is unascertained, the Floating Rate Payer may in good faith estimate
that obligation and setoff in respect of the estimate, subject to an accounting
when the obligation is ascertained.

15.  Relationship Between the Parties. Each party represents to the other party
that:

(a) Non-Reliance. It is acting for its own account, and it has made its own
independent decisions to enter into this Transaction and as to whether this
Transaction is appropriate or proper for it based upon its own judgment and upon
advice from such advisors as it has deemed necessary. It is not relying on any
communication (written or oral) of the other party as investment advice or as a
recommendation to enter into this Transaction; it being understood that
information and explanation related to the terms and conditions of this
Transaction shall not be considered investment advice or a recommendation to
enter into this Transaction. No communication (written or oral) received from
the other party shall be deemed to be an assurance or guarantee as to the
expected results of this Transaction.

 
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(b) Assessment and Understanding. It is capable of assessing the merits of and
understanding (on its own behalf or through independent professional advice),
and understands and accepts the terms, conditions and risks of this Transaction.
It is also capable of assuming, and assumes, the risks of this Transaction.

(c) Status of Parties. The other party is not acting as a fiduciary or an
advisor to it in respect of this Transaction.

16.  Waiver of Jury Trial. Each party irrevocably waives any and all right to
trial by jury in any legal proceeding instituted in connection with this
Agreement or this Transaction to the fullest extent permitted by law. As to any
matter for which a jury trial cannot be waived, each party agrees not to assert
any such matter as a cross claim or counterclaim in, nor move to consolidate the
same with, any legal proceeding in which a jury trial is waived."

17. IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT

To help the government fight the funding of terrorism and money laundering
activities, Federal law requires all financial institutions to obtain, verify,
and record information that identifies each entity or person that opens an
account.

When you open an account, we will ask for the business’ full legal name, street
address, and tax identification number and other information that will assist us
in identifying the business. We may also ask for other identifying information
such as your date of birth and a copy of your driver’s license.
 
 

 

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

LASALLE BANK NATIONAL ASSOCIATION

By:
________________________________
By:
________________________________
 
Name:
 
Name:
 
Title:
 
Title:

Address:
540 West Madison Avenue
 
Suite 2132
 
Chicago, IL 60661
   
Attention:
Treasury Documentation
Facsimile:
312-992-5847
Phone:
312-992-5842

FRANKLIN CREDIT MANAGEMENT CORPORATION

By:
________________________________
 
Name:
 
Title:

   
Address:
101 Hudson Street
 
Jersey City, NJ 07302
   
Attention:
Paul Colasono
Facsimile:
201-604-4400
Telephone:
201-604-4402

 
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