Exhibit 10.55
Execution Copy
JOINDER AND AMENDMENT NO. 1 TO
FORBEARANCE AGREEMENT
     THIS JOINDER AND AMENDMENT NO. 1 TO FORBEARANCE AGREEMENT (this
“Amendment”) is entered into at Columbus, Ohio, as of March 31, 2008 (the
“Amendment Effective Date”), by and among the BORROWERS listed on Schedule 1
hereto (each, a “Borrower” and collectively, the “Borrowers”), FRANKLIN CREDIT
MANAGEMENT CORPORATION, a Delaware corporation (“FCMC” or “Guarantor”) and THE
HUNTINGTON NATIONAL BANK (“Huntington” or “Lender”). This Amendment amends and
modifies a certain Forbearance Agreement and Amendment to Credit Agreements
dated as of December 28, 2007 (as amended, supplemented, restated or otherwise
modified from time to time prior to the date hereof, the “Forbearance
Agreement”), by and among the Borrowers (other than the Additional
Subsidiaries), FCMC and Lender. All capitalized terms not otherwise defined
herein shall have the meanings ascribed to such terms in the Forbearance
Agreement.
RECITALS:
     A. As of December 28, 2007, the Borrowers (other than the Additional
Subsidiaries), FCMC and Lender executed the Forbearance Agreement amending and
restating the terms of certain extensions of credit to the Borrowers and FCMC,
as applicable; and
     B. As of December 28, 2007, the Borrowers (other than the Additional
Subsidiaries) executed and delivered to Lender, inter alia, an Amended and
Restated Promissory Note (A Note) in the original principal sum of $600,000,000
(the “Tranche A Note”); and
     C. As of December 28, 2007, the Borrowers (other than the Additional
Subsidiaries) executed and delivered to Lender, inter alia, an Amended and
Restated Promissory Note (B-1 Note) in the original principal sum of
$79,051,123.50 (the “Tranche B-1 Note”); and
     D. As of December 28, 2007, the Borrowers (other than the Additional
Subsidiaries) executed and delivered to Lender, inter alia, an Amended and
Restated Promissory Note (B-2 Note) in the original principal sum of
$79,051,123.50, the original outstanding principal balance of which was
ultimately confirmed to be $61,110,686.61, pursuant to a certain letter
agreement dated January 11, 2008 (the “Tranche B-2 Note”); and
     E. As of December 28, 2007, the Borrowers (other than the Additional
Subsidiaries) executed and delivered to Lender, inter alia, an Amended and
Restated Promissory Note (B-3 Note) in the original principal sum of
$79,051,123.50 (the “Tranche B-3 Note”); and
     F. As of December 28, 2007, the Borrowers (other than the Additional
Subsidiaries) executed and delivered to Lender, inter alia, an Amended and
Restated Promissory Note (B-4 Note) in the original principal sum of
$79,051,123.50 (the “Tranche B-4 Note”); and

 

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     G. As of December 28, 2007, the Borrowers (other than the Additional
Subsidiaries) executed and delivered to Lender, inter alia, an Amended and
Restated Promissory Note (B-5 Note) in the original principal sum of $25,000,000
(the “Tranche B-5 Note”); and
     H. As of December 28, 2007, the Borrowers (other than the Additional
Subsidiaries) executed and delivered to Lender, inter alia, an Amended and
Restated Promissory Note (C Note) in the original principal sum of $125,000,000
(the “Tranche C Note”); and
     I. As of December 28, 2007, the Borrowers (other than the Additional
Subsidiaries) executed and delivered to Lender, inter alia, an Amended and
Restated Promissory Note (D Note) in the original principal sum of $5,000,000
(the “Tranche D Note” and together with the Tranche A Note, the Tranche B-1
Note, the Tranche B-2 Note, the Tranche B-3 Note, the Tranche B-4 Note, the
Tranche B-5 Note, and the Tranche C Note, collectively, the “Notes”); and
     J. Lender has required all Subsidiaries of FCMC to be parties to the
Forbearance Agreement, the Notes and the other Loan Documents, and Rontex 1617
Corporation, Juniper Corp., Newport 50 Corporation, Fort 100 Corporation, Fort
100 B Corporation, Tribeca Funding Corporation, Six Harrison Corporation, Hudson
Management Corporation, New Haven 58 Corporation, Norwich 42 Corporation, Island
52 Corporation, Flow 2007 E Corp. and Emgold 57 Corp. (the “Additional
Subsidiaries” and individually, an “Additional Subsidiary”) are each a
Subsidiary of FCMC and are not parties signatory to the Forbearance Agreement,
the Notes or other Loan Documents previously and desire to join as Borrowers to
the Forbearance Agreement, the Notes and the other Loan Documents; and
     K. FCMC and the applicable Borrowers have failed to comply with certain
provisions of Section 11, “Certain Post-Closing Deliverables,” of the
Forbearance Agreement by failing to deliver certain financial statements,
schedules, documents and other items as required by the Forbearance Agreement,
and Section 12(d), “Interest Coverage Ratios,” of the Forbearance Agreement for
the monthly period ending January 31, 2008, by failing to maintain a minimum
ratio of Adjusted EBITDA to Interest Expense, as required by the Forbearance
Agreement (collectively, the “Identified Forbearance Defaults”), and each of the
Acknowledged Defaults are continuing; and
     L. FCMC and the Borrowers have requested that Lender (i) join the
Additional Subsidiaries as Borrowers and parties to the Forbearance Agreement
and the other Loan Documents, (ii) extend an additional period of forbearance in
respect of the Static Loans, (iii) extend additional credit to Borrowers
pursuant to Tranche D, (iv) amend and modify certain terms and covenants in the
Forbearance Agreement, (v) adjust the Interest Period, the Interest Rate, and
the Payment Date with respect to interest on the Tranche C, and (vi) extend the
time periods or modify the requirements for FCMC and the Borrowers to satisfy
certain post-closing deliverables composing the Identified Forbearance Defaults,
and Lender is willing to do so upon the terms and subject to the conditions
contained herein.
     NOW, THEREFORE, in consideration of the mutual covenants, agreements and
promises contained herein, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, the parties hereto for
themselves and their successors and assigns do hereby agree, represent and
warrant as follows:

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     1. Joinder. Each Additional Subsidiary hereby acknowledges, agrees and
confirms that, by its execution of this Amendment, such Additional Subsidiary
will be a Borrower under the Forbearance Agreement, each Note and other Loan
Document and shall have all of the obligations of a Borrower thereunder as if it
had executed the Forbearance Agreement each Note and other Loan Document. Each
Additional Subsidiary hereby ratifies, as of the date hereof, and agrees to be
bound by, all of the terms, provisions and conditions contained in the
Forbearance Agreement, each Note and other Loan Document, including without
limitation (a) all of the representations and warranties of the Borrowers set
forth in Section 9 of the Forbearance Agreement, and (b) all of the covenants
set forth in Section 12 of the Forbearance Agreement.
     2. Extension of Forbearance for Static Loans. Absent the occurrence and
continuance of a Forbearance Default, prior to July 31, 2008, Lender agrees not
to initiate collection proceedings or exercise its remedies under the Loan
Documents in respect of any Static Loan against Guarantor, any Borrower or any
Collateral or elect to have interest accrue under the respective Loan Documents
at the stated rate applicable after default.
     3. Definitions Amended. The definitions of “Interest Period,” “Interest
Rate,” “Payment Date,” “Tranche C Collections Amount,” “Tranche D” and “Tranche
D Commitment” set forth in Section 2, “Certain Defined Terms,” of the
Forbearance Agreement are hereby amended to recite as follows:
“Interest Period” shall mean, with respect to any Advance, (i) initially, the
period commencing on any funding date with respect to such Advance and ending on
the calendar day prior to the Payment Date of the next succeeding month (except
with respect to a Tranche C Advance, as to which the “Interest Period” shall
commence on the Tranche C Accrual Date) (ii) thereafter, each period commencing
on the Payment Date of one month and ending on the calendar day prior to the
Payment Date of the next succeeding month; provided, that if any Interest Period
would otherwise expire on a day which is not a business day, such Interest
Period shall be extended to the next succeeding business day; provided, however,
that if such next succeeding business day occurs in the following calendar
month, then such Interest Period shall expire on the immediately preceding
business day, and provided further that interest shall continue to accrue on all
amounts due and payable hereunder that remain unpaid on the applicable
Termination Date until such time as such amounts are paid in full.
“Interest Rate” shall mean, for each day in respect of (a) the Tranche A
Advances, the Tranche B Advances or the Tranche D Advances, as applicable, a per
annum rate equal to LIBOR for that day plus the relevant Applicable Margin, and
(b) the Tranche C Advances, a rate of 20% per annum.
“Payment Date” shall mean either (a) the fifth (5th) day of each calendar month
or, if such day is not a business day, the next succeeding business day, or
(b) in the case of the final Payment Date for the Tranche A Advances, the
Tranche B Advances, the Tranche C Advances or the Tranche D Advances, the
Tranche A Termination Date, the Tranche B Termination Date, the

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Tranche C Termination Date or the Tranche D Termination Date, respectively;
provided, however, payments of interest accrued on the Advances shall commence
on February 5, 2008 (except with respect to the Tranche C Advances, which shall
commence on the first Payment Date following the Tranche C Accrual Date). If the
due date of any payment due in respect to any Advance shall be a day that is not
a business day, such due date shall be extended to the next succeeding business
day; provided, however, that if such next succeeding business day occurs in the
following calendar month, then such due date shall be the immediately preceding
business day.
“Tranche C Collections Amount” shall mean, with respect to any Payment Date and
the portion of the Applicable Collections Amount for such Payment Date remaining
after giving effect to the payments provided in clauses first through eleventh
of Section 5(d), (i) 90% of such remaining Applicable Collections Amount for so
long as FCMC is continuing to service the Mortgage Loans pledged as Collateral,
and (ii) otherwise 100% of such remaining Applicable Collections Amount if FCMC
is no longer servicing such Mortgage Loans until all Tranche C Advances are paid
in full.
“Tranche D” shall mean (i) a revolving credit facility to Borrowers in the
maximum principal sum outstanding at any time of $10,000,000, and, in addition,
(ii) a Letter of Credit facility pursuant to which Lender in its discretion may
issue Letters of Credit for the account of FCMC, Tribeca or any other Borrower;
provided that Letter of Credit Exposure shall at no time exceed $5,500,000.
“Tranche D Commitment” shall mean as to Lender, subject to the terms and
conditions of this Agreement, the commitment of Lender to (i) fund Tranche D
Advances up to $10,000,000 outstanding at any time under the revolving credit
portion of Tranche D and (ii) issue Letters of Credit; provided that Letter of
Credit Exposure shall at no time exceed $5,500,000.
     4. Definitions Added. The following defined terms are hereby added to
Section 2, “Certain Defined Terms,” of the Forbearance Agreement in their
correct alphabetical order and shall recite as follows:
“Amendment No. 1” shall mean a certain Joinder and Amendment No. 1 to
Forbearance Agreement dated as of March 31, 2008.
“Reserves” shall mean such reserves as Lender reasonably deems appropriate to
establish in such amounts, and with respect to such matters, as Lender in its
good faith discretion shall deem necessary or appropriate, including without
limitation, reserves with respect to (i) sums that FCMC or any Borrower is
required to pay pursuant to its contractual obligations (such as taxes,
assessments, insurance premiums, or, in the case of leased assets, rents or
other amounts payable under such leases), (ii) Liens or trusts for ad valorem,
excise, sales, or other taxes where given priority under applicable law in and
to an item of Collateral, and (iii) up to $5,000,000 at any time as a reserve
for

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the payment of any Required Payment or interest under any Advance, or any fees
or expenses owing or anticipated to be owing to Lender under the terms of any
Loan Document.
“Tranche C Accrual Date” shall mean the first Business Day following payment in
full satisfaction of all outstanding amounts under the Tranche A Note and shall
be the date upon which interest shall begin to accrue on the Tranche C Note.
     5. Amendments to Tranche D Provisions. New subsections (iv) and (v) are
hereby added to Paragraph (d), “Tranche D Advances,” of Section 3, “Amended and
Restated Advances,” of the Forbearance Agreement and shall recite as follows:
(iv) The proceeds of each Tranche D Advance under the revolving portion of
Tranche D shall be used (x) in an amount up to $1,000,000 shall be designated
for use by Tribeca to assure that certain state licensing requirements of
Tribeca are met (including without limitation, “wet funding” of qualified
Mortgage Loans) (y) for the working capital and general corporate needs of each
Borrower as Lender shall advance in its sole discretion and (z) to enable FCMC,
Tribeca or a Borrower to purchase real property in which such Person has a Lien,
whether by foreclosure, trustee’s sale, power of sale or other involuntary
arrangement or pursuant to a deed-in-lieu of foreclosure or other voluntary
conveyance arrangement (including without limitation paying indebtedness secured
by a prior Lien on such real property) and to pay expenses of any such voluntary
or involuntary arrangement with respect to such real property; provided, however
that FCMC, Tribeca or such Borrower (A) has presented to Lender at least fifteen
(15) days prior to any such proposed date for foreclosure sale or purchase an
analysis satisfactory to Lender concerning any such proposed purchase and
disbursements and a draw request for a Tranche D Advance, and (B) Lender has
provided its prior written consent to such purchase of real estate and
disbursements related thereto. Each Tranche D Advance relating to any Letter of
Credit shall be used to solely assure that all state licensing requirements of
the applicable Borrower are met.
(v) Upon the request of Lender, within five (5) Business Days after the
acquisition of any REO Property by FCMC or any Subsidiary, FCMC shall, and shall
cause each such Subsidiary to execute and deliver to the Lender a mortgage, deed
of trust, assignment or other appropriate instrument evidencing a Lien in favor
of Lender upon any such REO Property, together with such title policies,
certified surveys, environmental reports, local counsel opinions and such other
property assurances, agreements, documents and instruments which Lender deems
necessary or desirable, and to be subject only to (i) Liens in favor of Lender
and (ii) such other Liens as Lender may reasonably approve, it being understood
that the granting of such additional security for the Obligations is a material
inducement to the execution and delivery of this Agreement by Lender.

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     6. RESERVED.
     7. Amendments to Section 5. Section 5, “Payments of Interest and Principal
on the Advances,” of the Forbearance Agreement is hereby amended to recite in
its entirety as follows:
          5. Payments of Interest and Principal on the Advances.
               (a) Interest on the Advances; PIK Interest.
               (i) The Borrowers shall pay to Lender interest on the aggregate
outstanding principal amount of the Advances of each Tranche for the period from
and including the respective dates of such Advances (except in the case of the
Tranche C Advance as to which it shall pay interest from the Tranche C Accrual
Date) to but excluding the respective dates such Advances are paid in full, in
each case at a rate per annum equal to the applicable Interest Rate.
Notwithstanding the foregoing, the Borrowers shall pay to Lender interest at the
applicable Post-Default Rate (i) on the outstanding principal amount of any
Advances during any period when any Forbearance Default has occurred and is
continuing and (ii) on any interest or amount (other than principal of any
Advance) payable by the Borrowers hereunder or under any applicable Note that
shall not be paid in full when due, for the period from and including the due
date thereof to but excluding the date the same is paid in full. Accrued and
unpaid interest on each Advance shall be payable monthly on each Payment Date
and on the Tranche A Termination Date, Tranche B Termination Date, Tranche C
Termination Date, or Tranche D Termination Date, as applicable, except that
interest payable at the applicable Post-Default Rate shall accrue daily and
shall be payable promptly upon demand.
               (ii) Anything contained in Section 5 (a)(i) to the contrary
notwithstanding, Guarantor, on behalf of the Borrowers, has elected as of the
Forbearance Effective Date and Lender has consented thereto, to pay the accrued
and unpaid interest due in respect of the Tranche C Advances from and after the
date that such interest begins to accrue on the Tranche C Accrual Date by adding
the amount thereof to the outstanding principal amount of the Tranche C Advances
(any such interest in respect of the Tranche C Advances that is so added to the
outstanding principal amount of the Tranche C Advances being “PIK Interest”).
Upon request of Lender, Borrowers will execute and deliver to Lender an
additional Tranche C Note for the amount of such PIK Interest or a replacement
Tranche C Note in a face amount equal to the then outstanding principal sum,
plus the amount of such PIK Interest; provided, however, the failure of Lender
to request that the Borrowers execute, or the failure of the Borrowers to
provide, any such additional Tranche C Note shall in no way affect the Borrowers
obligation to pay any such PIK Interest at the time and in the manner of other
Tranche C Advances.

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     (b) Scheduled Principal Payments in Respect of Tranche A Advances and
Tranche B Advances, Principal Payments. On each Payment Date in respect of the
Tranche A Advances and the Tranche B Advances, the Borrowers shall pay to
Lender, the Minimum Tranche A Payment Amount and the Minimum Tranche B Payment
Amount, as applicable, for such Payment Date. The Borrowers shall pay all
remaining amounts of Tranche C Advances and Tranche D Advances as set forth in
paragraphs (d) and (e) below and on the applicable Termination Date.
     (c) Payment Date Reports. No later than two business days prior to each
Payment Date, Lender shall provide to Guarantor a report stating (i) the amount
of interest due for the current Interest Period pursuant to Section 5(a),
separately stated for the applicable Tranche A Advances, the Tranche B Advances,
the Tranche C Advances, if applicable, and the Tranche D Advances, (ii) the
Minimum Tranche A Payment Amount and the Minimum Tranche B Payment Amount for
such Payment Date, and (iii) if such Payment Date occurs on a Termination Date,
the aggregate outstanding principal amount of the Tranche A Advances, Tranche B
Advances, Tranche C Advances and/or Tranche D Advances, as applicable; provided,
that the failure of Lender to make any such report shall not affect the
obligations of the Borrowers to make payment when due of any amount owing
hereunder or under any Note in respect of the related Advances.
     (d) Collateral Collection. Without in any way limiting the obligations of
the Borrowers to make the payments of principal and interest that are required
to be made in respect of the Advances pursuant to Sections 5(a) and 5(b) (with
respect to any Payment Date, the “Required Payments”), the Borrowers hereby
authorize and direct Lender, on each Payment Date, to apply all Collections
received from and after the immediately preceding Payment Date (or, in the case
of the first Payment Date, from and after the Forbearance Effective Date) to but
excluding such Payment Date (the aggregate amount of such Collections, minus any
Reserves established during such period, being the “Applicable Collections
Amount” in respect of such Payment Date) in the following order of priority:
first, to the payment of interest on the Tranche A Advances as calculated for
such Payment Date;
second, to the payment of interest on the Tranche B Advances as calculated for
such Payment Date;
third, to the payment of interest on the Tranche D Advances as calculated for
such Payment Date;
fourth, to the payment of amounts constituting additional periodic payments of
interest required under any Interest Rate Hedge Agreement to Lender in full;

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fifth, to pay any Letter of Credit Facing Fee or Letter of Credit Fee;
sixth, to pay the Minimum Tranche A Payment Amount for such Payment Date;
seventh, to pay the Minimum Tranche B Payment Amount for such Payment Date;
eighth, to prepay the outstanding principal amount of the Tranche A Advances
until the same are paid in full, with such prepayments being applied in the
inverse order of maturity to the remaining Minimum Tranche A Payment Amounts;
ninth, to prepay the outstanding principal amount of the Tranche B Advances
until the same are paid in full, with such prepayments being applied in the
order set forth in the definition of Minimum Tranche B Payment Amounts;
tenth, to any unpaid amounts on the Static Loans;
eleventh, on a pro rata basis to repay Tranche D Advances in full, Letter of
Credit Exposure in full and any Obligations (other than payments constituting
additional periodic payments of interest payable under item “fourth” above)
under any Interest Rate Hedge Agreement to Lender in full;
twelfth, to the payment of PIK Interest on the Tranche C Advances as calculated
for such Payment Date;
thirteenth, to the extent of the applicable Tranche C Collections Amount, to pay
the outstanding interest and principal amount of the Tranche C Advances until
the same are paid in full, with such payments being applied first to any
outstanding PIK Interest in respect of the Tranche C Advances and thereafter to
the remaining principal amount thereof; and
fourteenth, to pay any unpaid Tribeca Advances until paid in full and then to
Guarantor for the benefit of the Borrowers.
All Collections in respect of the Static Loans shall be applied pursuant to the
terms of the Franklin Master Agreement. Furthermore, notwithstanding the
foregoing applications of Collections, all Collections arising from the sale,
lease or other disposition of REO Property purchased or acquired with any
Tranche D Advance shall be used first to repay the principal of the revolving
credit portion of any such Tranche D Advance until the same is paid in full and
then applied pursuant to clauses first through fourteenth of this Section 5(d).

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     8. Amendments to Financial Reporting. Paragraph (c) of Section 10,
“Financial Statements,” of the Forbearance Agreement is hereby amended to recite
as follows:
     (c)(i) as soon as available and in any event within 30 days after the end
of each monthly fiscal period of each fiscal year of Guarantor, (A) the
consolidated balance sheets of Guarantor and its consolidated Subsidiaries as at
the end of such period and (B) the related unaudited consolidated statements of
income and retained earnings for Guarantor and its consolidated Subsidiaries for
such period and the portion of the fiscal year through the end of such period,
setting forth in each case in comparative form the figures for the previous
year, and (C) accompanied by a certificate of the chief financial officer of
Guarantor, which certificate shall state that said consolidated financial
statements fairly present the consolidated financial condition and results of
operations of Guarantor and its Subsidiaries in accordance with GAAP,
consistently applied, as at the end of, and for, such period (subject to normal
year-end audit adjustments) and shall contain a calculation of the financial
covenants contained in Section 12 (d);
     (ii) as soon as available and in any event within 20 days after the end of
each monthly fiscal period of each fiscal year, a thirteen (13) consecutive week
statement of Guarantor and its Subsidiaries projecting prospective cash receipts
and cash payments, disbursements and advances for the 13 week consecutive period
beginning on the first day after such month-end; and
     (iii) as soon as available and in any event within 20 days after the end of
each monthly fiscal period of each fiscal year of Guarantor, a schedule of REO
Properties in form satisfactory to Lender.
     9. Post-Closing Items. Section 11, “Certain Post-Closing Deliverables,” of
the Forbearance Agreement is hereby amended to recite in its entirety as
follows:
     11. Certain Post-Closing Deliverables.
     FCMC and the Borrowers shall comply with each requirement set forth on
Schedule 11 to Amendment No. 1 within the time period specified therein (or such
later date as Lender may agree in writing). Each Borrower and FCMC agree to
deliver to Lender, on a post-closing basis, the items described in Schedule 11
attached to Amendment No. 1, each in form and content satisfactory to Lender
(the “Post-Closing Items”). Each Borrower and FCMC agree to deliver the
Post-Closing Items to Lender no later than the time periods specified in
Schedule 11 (or such later date as Lender may agree in writing). The failure to
deliver any Post-Closing Item by the required date shall constitute a
Forbearance Default. Upon Lender’s demand therefor, each Borrower and FCMC will
indemnify, protect, defend and hold harmless Lender for and against all losses,
damages, and expenses incurred by Lender arising from or relating to FCMC’s or
any Borrower’s failure to deliver any Post-Closing Item in accordance with
Amendment No. 1.

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     10. Amendment to Financial Covenants. The first sentence of Paragraph (d),
“Interest Coverage Ratios,” of Section 12, “Covenants,” of the Forbearance
Agreement is hereby amended to recite as follows:
     (d) Interest Coverage Ratios. Until such time as all Tranche A Advances and
Tranche B Advances are indefeasibly paid in full, Guarantor and each Subsidiary,
on a consolidated basis, shall maintain for each quarterly period (i) a ratio of
Adjusted EBITDA to Adjusted Interest Expense of not less than 1.25 to 1.00, and
(ii) a ratio of Adjusted EBITDA to Interest Expense of not less than 1.05 to
1.00, with each such ratio being determined (A) beginning March 31, 2008, and
continuing as of the end of each quarter through and including September 30,
2008, as of the end of each such quarter for the period from January 1, 2008,
through the end of such quarter of determination (on a year-to-date basis), and
(B) beginning December 31, 2008, and continuing as of the end of each quarter
thereafter, for the most recently-ended twelve consecutive (12) month period
ending on such date.
     11. Waiver of Identified Forbearance Defaults. Lender hereby waives the
Identified Forbearance Defaults for the period through and including March 31,
2008.
     12. Consent to Certain Originations. Pursuant to the first sentence of
Section 12 (g) of the Forbearance Agreement, Lender hereby consents to FCMC,
Tribeca or any Borrower originating any Mortgage Loan in order to refinance any
existing Mortgage Loan in which FCMC or any Borrower has an interest which
Lender has approved for purchase and subsequent sale in the secondary market or
which Lender determines are qualified for purchase by Fannie Mae (formerly known
as the Federal National Mortgage Association) or Freddie Mac (formerly known as
the Federal Home Loan Mortgage Corporation), or any successor of either of the
foregoing; provided that the proceeds of any such refinancing or Mortgage Loan
are paid to Lender for application pursuant to Section 5 (d) of the Forbearance
Agreement.
     13. Replacement of Schedule 1. Schedule 1 to the Forbearance Agreement is
hereby amended and replaced with the Schedule 1 attached to this Amendment.
     14. Addition of Schedule 11. Schedule 11 to the Forbearance Agreement is
hereby attached to this Amendment as Schedule 11.
     15. 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, by all parties
signatory thereto, originals, or completion as the case may be, to the
satisfaction of Lender and its counsel, containing such information requested by
Lender and its counsel and reflecting the absence of any material fact or issues
and in all respect satisfactory to Lender, each of the following Loan Documents:

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  (i)   Three duly executed copies of this Amendment;     (ii)   Second Amended
and Restated Promissory Note (D Note) in the amount of $10,000,000;     (iii)  
Joinder to Security Agreement by Additional Subsidiaries;     (iv)   Resolutions
of the Additional Subsidiaries;     (v)   Concurrence of M & I;

     (b) Lender shall have received a fee in respect of this Amendment in the
amount of $10,000.00; and
     (c) The representations contained in the immediately following paragraph
shall be true and accurate.
     16. Representations and Warranties. Each Borrower and FCMC represent and
warrant to Lender as follows: except in respect of the Acknowledged Defaults,
(a) after giving effect to this Amendment, each representation and warranty made
by or on behalf of such Borrower and FCMC in the Forbearance Agreement and in
any other Loan Document is true and correct in all respects on and as of the
date hereof as though made on and as of such date, except to the extent that any
such representation or warranty expressly relates solely to a date prior hereto;
(b) the execution, delivery and performance by such Borrower and FCMC of this
Amendment and each other Loan Document have been duly authorized by all
requisite corporate or organizational action on the part of such Borrower and
FCMC and will not violate any Constituent Document (as defined below) of such
Borrower and FCMC; (c) this Amendment has been duly executed and delivered by
such Borrower and FCMC, and each of this Amendment, the Forbearance Agreement
and each other Loan Document as amended hereby constitutes the legal, valid and
binding obligation of such Borrower and FCMC, enforceable against such Borrower
and FCMC 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. “Constituent Document” means with respect to any entity, each of
(i) the articles or certificate of incorporation or organization or partnership
agreement (or equivalent organizational documents) of such entity, (ii) the
regulations, by-laws or operating agreement (or equivalent governing documents)
of such entity and (iii) any document setting forth the designation, amount or
relative rights, limitations and preferences of any class or series of capital
stock, warrants, options or other equity interests.
     17. Ratification and Reaffirmation. Each Borrower and FCMC agree (i) that
all the obligations, indebtedness and liabilities of such Borrower and FCMC to
Lender under the Forbearance Agreement are the valid and binding obligations of
such Borrower and FCMC respectively; (ii) that the obligations, indebtedness and
liabilities of such Borrower and FCMC evidenced by each Note executed and
delivered by the each Borrower are 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
Borrower and FCMC under the Forbearance Agreement and the Notes are valid and
binding and are hereby ratified and confirmed in all respects.

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     18. Reference to and Effect on the Loan Documents. (a) 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.
(b) 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 an 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 on the part of the
Borrower which would require the consent of Lender.
     19. Waiver and Release of All Claims and Defenses; Communications.
     (a) FCMC and each Borrower, 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 FCMC or any Borrower, 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 FCMC
or any Borrower. “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 FCMC, each Borrower or
any or them ever had, 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.
     (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 the Acknowledged Defaults and that, consistent with such purpose,
no part of any oral or written communications between or among any Borrower,
FCMC 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

- 12 -

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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.
     20. 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.
     21. 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.
     22. 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.
     23. Costs and Expenses. FCMC and each Borrower agree 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.
     24. Further Assurances. FCMC and each Borrower hereby agree 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.
     25. 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.

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     26. 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.
     27. Patriot Act Notice. Lender hereby notifies FCMC and each Borrower 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 FCMC and each Borrower, which information
includes the name and address of FCMC and each Borrower and other information
that will allow Lender to identify FCMC or any Borrower in accordance with the
Act.
[Signature Pages Follow.]

- 14 -

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          IN WITNESS WHEREOF, the Borrowers, FCMC and Lender have hereunto set
their hands as of the date first set forth above.
EACH BORROWER LISTED ON SCHEDULE 1
ATTACHED HERETO:
By: /s/ Alexander Gordon Jardin          
Name: Alexander Gordon Jardin
Title: as Chief Executive Officer of, and on
behalf of, each Borrower listed on Schedule
1 attached hereto.
Address for Notices:
101 Hudson St., 25th Floor
Jersey City, N.J. 07302
Fax: 201-604-4400
Attention: General Counsel
With a copy to:
Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036
Fax: 212-715-8346
Attention: J. Michael Mayerfeld
FRANKLIN CREDIT MANAGEMENT CORPORATION
By: /s/ Thomas J. Axon                    
Name: Thomas J. Axon
Title: President
Address for Notices
Same as above
Signature Page to Joinder and Amendment No. 1 to Forbearance Agreement

 

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THE HUNTINGTON NATIONAL BANK
By: /s/ Alan D. Seitz                    
Name: Alan D. Seitz
Title: Senior Vice President
Address for Notices:
The Huntington National Bank
41 South High Street
Columbus, Ohio 43215
Attn: Special Assets
Fax: (614) 480-3795
With a copy to:
Porter Wright Morris & Arthur LLP
41 South High Street
Columbus, Ohio 43215
Attn: Jack R. Pigman and Timothy E. Grady
Fax: (614) 227-2100
Signature Page to Joinder and Amendment No. 1 to Forbearance Agreement

 

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SCHEDULE 1
[See Attached]

 

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              SCHEDULE 1   Franklin Subsidiaries

FCMC 2000 B CORP.
FCMC 2000 C CORP.
FCMC 2000 D CORP.
FCMC 2001 A CORP.
FCMC 2001 B CORP
FCMC 2001 C CORP.
FCMC 2001 D CORP.
FCMC 2001 E CORP.
FCMC 2001 F CORP.
FCMC 2002 A CORP.
FCMC 2002 B CORP.
FCMC 2002 C CORP.
FCMC 2002 D CORP.
FCMC 2002 E CORP.
FCMC 2002 F CORP.
FCMC 2002 G CORP.
FCMC 2002 H CORP.
FCMC 2003 A CORP.
FCMC 2003 B CORP.
FCMC 2003 C CORP.
FCMC 2003 D CORP.
FCMC 2003 E CORP.
FCMC 2003 F CORP.
FCMC 2003 G CORP.
FCMC 2003 H CORP.
FCMC 2003 I CORP.
FCMC 2003 J CORP.
FCMC 2003 K CORP.
FCMC 2004 A CORP
FCMC 2004 B CORP.
FCMC 2004 C CORP.
FCMC 2004 D CORP.
FCMC 2004 E CORP.
FCMC 2004 F CORP.
FCMC 2004 G CORP.
FCMC 2004 H CORP.
FCMC 2004 I CORP.
FCMC 2004 J CORP.
FCMC 2004 K CORP.
FCMC 2004 L CORP.
FCMC 2004 M CORP.
FCMC 2005 A CORP.
FCMC 2005 B CORP.
FCMC 2005 C CORP.
FCMC 2005 D CORP.
FCMC 2005 E CORP.

1

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

 

              SCHEDULE 1   Franklin Subsidiaries

FCMC 2005 F CORP.
FCMC 2005 G CORP.
FCMC 2005 H CORP.
FCMC 2005 I CORP.
FCMC B-ONE 2004 A CORP.
FCMC B-ONE 2004 B CORP.
FCMC B-ONE 2004 C CORP.
FCMC B-ONE 2004 D CORP.
FCMC B-ONE 2004 E CORP.
FCMC B-ONE 2004 F CORP.
FLOW 2000A CORP.
FLOW 2000B CORP.
FLOW 2000C CORP.
FLOW 2000D CORP.
FLOW 2000E CORP.
FLOW 2000F CORP.
FLOW 2001 A CORP.
FLOW 2001 B CORPORATION
FLOW 2001 C CORPORATION
FLOW 2001 D CORP
FLOW 2001 E CORPORATION
FLOW 2001 F CORPORATION
FLOW 2001 G CORPORATION
FLOW 2001 H CORP.
FLOW 2001 I CORP.
FLOW 2001 J CORP.
FLOW 2001 K CORP
FLOW 2001 L CORP.
FLOW 2002 A CORP.
FLOW 2002 B CORP.
FLOW 2002 C CORP.
FLOW 2002 D CORP.
FLOW 2002 E CORP.
FLOW 2002 F CORP.
FLOW 2002 G CORP.
FLOW 2002 H CORP.
FLOW 2002 I CORP.
FLOW 2002 J CORP.
FLOW 2002 K CORP.
FLOW 2002 L CORP.
FLOW 2003 A CORP.
FLOW 2003 B CORP.
FLOW 2003 C CORP.
FLOW 2003 D CORP.
FLOW 2003 E CORP.
FLOW 2003 F CORP.

2

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              SCHEDULE 1   Franklin Subsidiaries

FLOW 2003 G CORP.
FLOW 2003 H CORP.
FLOW 2003 I CORP.
FLOW 2003 J CORP.
FLOW 2003 K CORP.
FLOW 2003 L CORP.
FLOW 2003 M CORP.
FLOW 2004 A CORP.
FLOW 2004 B CORP.
FLOW 2004 C CORP.
FLOW 2004 D CORP.
FLOW 2004 E CORP.
FLOW 2004 F CORP.
FLOW 2004 G CORP.
FLOW 2004 H CORP.
FLOW 2004 I CORP.
FLOW 2005 A CORP.
FLOW 2005 B CORP.
FLOW 2005 C CORP.
FLOW 2005 D CORP.
FLOW 2005 E CORP.
FLOW 2005 F CORP
FLOW 2005 G CORP
FLOW 2005 H CORP
FLOW 2005 I CORP
FLOW 2005 J CORP
FLOW 99-70 CORP.
FLOW 99-76 CORP.
FLOW 99-88 CORP.
FLOW 99-92 CORP.
CAL SECOND 49 CORPORATION
CAPE 77 CORP.
COAST 56 CORPORATION
COAST 62 CORPORATION
EMERGE 64 CORPORATION
JACKSON UNION 28 CORPORATION
MORGAN 85 CORP.
PANCAL 93 CORP.
PARK 86 CORP.
PARK 94 CORP.
SHELTON 46 CORPORATION
NEW HAVEN 40 CORPORATION
FIRSTGOLD 69 CORP.
ACCU 95 CORP.
ACCU 99 CORP.
ACREDIT 75 CORP.

3

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              SCHEDULE 1   Franklin Subsidiaries

ARK 38 CORPORATION
BEACH FUNDING CORP.
BRANFORD 55 CORPORATION
CAPT 47 CORPORATION
CENTURY 78 CORP.
COAST 74 CORP.
COAST 96 CORP.
DAPT 51 CORPORATION
EMGOLD 67 CORP.
EMOD 65 CORP.
EMSEC 66 CORP.
ERICSSON ASSOCIATES INC.
FIRSTCO 80 CORP.
FORT GRANITE 44 CORPORATION
FREE 73 CORP.
FREE 81 CORP.
GARFIELD 48 CORPORATION
GREEN 89 CORP.
GREENWICH FIRST CORPORATION
GREENWICH FUNDING CORPORATION
GREENWICH MANAGEMENT CORPORATION
HARRISON FINANCIAL CORPORATION
HOME FED 57 CORPORATION
IVY CITY 72 CORP.
JERSEY 45 CORPORATION
KEARNY 39 CORPORATION
KEARNY 61 CORPORATION
MADISON 54 CORPORATION
MASS FED 29 CORPORATION
MODGOLD 68 CORP.
NEW HAVEN 53 CORPORATION
NEW HAVEN 63 CORPORATION
NORTH FORK 41 CORPORATION
NY APT. 33 CORPORATION
PAN CAL 98 CORP.
PANCAL 82 CORP.
PARK 97 CORP.
PENN 100B CORP.
PENN 100 CORP.
POINT 91 CORP.
RAPID POINT 60 CORPORATION
ST. PETE 43 CORPORATION
TAMPA 79 CORP.
VANTAGE 90 CORP.
WELL 84 CORP.
WFB 83 CORP.

4

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              SCHEDULE 1   Franklin Subsidiaries

STATES 87 CORP.
FCMC 2005 J CORP.
FCMC 2005 K CORP.
FCMC 2005 L CORP.
FCMC 2005 M CORP.
FCMC 2005 N CORP.
FCMC 2005 O CORP.
FCMC 2005 P CORP.
FCMC 2005 Q CORP.
FCMC 2005 R CORP.
FCMC 2005 S CORP.
FCMC 2006 A CORP.
FCMC 2006 B CORP.
FCMC 2006 C CORP.
FCMC 2006 D CORP.
FCMC 2006 E CORP.
FCMC 2006 F CORP.
FCMC 2006 G CORP.
FCMC 2006 H CORP.
FCMC 2006 I CORP.
FCMC 2006 J CORP.
FCMC 2006 K CORP.
FCMC 2006 L CORP.
FCMC 2006 M CORP.
FCMC 2006 N CORP.
FCMC 2006 O CORP.
FCMC 2006 P CORP.
FCMC 2006 Q CORP.
FCMC 2006 R CORP.
FCMC 2006 S CORP.
FCMC 2006 T CORP.
FCMC 2006 U CORP.
FCMC 2006 V CORP.
FCMC 2006 W CORP.
FCMC 2006 X CORP.
FCMC 2006 Y CORP.
FCMC 2006 Z CORP.
FCMC 2007 A CORP.
FCMC 2007 B CORP.
FCMC 2007 C CORP.
FCMC 2007 D CORP.
FCMC 2007 E CORP.
FCMC 2007 F CORP.
FCMC 2007 G CORP.
FCMC 2007 H CORP.
FCMC 2007 H CORP.

5

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              SCHEDULE 1   Franklin Subsidiaries

FCMC 2007 I CORP.
FCMC 2007 J CORP.
FCMC 2007 K CORP.
FCMC 2007 L CORP.
FCMC 2007 M CORP.
FCMC 2007 N CORP
FCMC 2007 O CORP.
FCMC 2007 P CORP.
FCMC 2007 Q CORP.
FCMC 2007 R CORP.
FCMC 2007 S CORP.
FCMC 2007 T CORP.
FCMC 2007 U CORP
FCMC 2007 V CORP.
FCMC 2007 W CORP.
FCMC 2007 X CORP.
FCMC 2007 Y CORP.
FCMC 2007 Z CORP
FCMC 2007 AA CORP.
FCMC 2007 AB CORP.
FCMC 2007 AC CORP.
FLOW 2006 A CORP.
FLOW 2006 B CORP.
FLOW 2006 C CORP.
FLOW 2006 D CORP.
FLOW 2006 E CORP.
FLOW 2006 F CORP.
FLOW 2006 G CORP.
FLOW 2006 H CORP.
FLOW 2007 A CORP.
FLOW 2007 B CORP
FLOW 2007 C CORP.
FLOW 2007 D CORP.
RONTEX CORPORATION
SIX HARRISON CORPORATION
HARRISON FIRST CORPORATION
HARRISON FINANCIAL ASSOCIATES, INC.
HARRISON FUNDING CORPORATION
FCMC Corporate Refinance
FLOW PURCHASE 98 CORPORATION
TRIBECA LENDING CORP.
RONTEX 1617 CORPORATION
JUNIPER CORP.
NEWPORT 50 CORPORATION
FORT 100 CORPORATION

6

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              SCHEDULE 1   Franklin Subsidiaries

FORT 100 B CORPORATION
SIX HARRISON CORPORATION
HUDSON MANAGEMENT CORPORATION
TRIBECA FUNDING CORPORATION
EMGOLD 57 CORP.
ISLAND 52 CORPORATION
NEW HAVEN 58 CORPORATION
NORWICH 42 CORPORATION
FLOW 2007 E CORP.

7

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SCHEDULE 11

              2008 Date Due   Franklin Post-Closing Item
1.
  April 30   Original stock certificates for each direct and indirect Subsidiary
of FCMC with stock powers signed in blank. The following certificates and stock
powers are pending:
 
     
•  Emsec 66 Corp.
 
     
•   Fort 100 Corporation
 
     
•   Fort 100 B Corporation
 
     
•   Six Harrison Corp.
 
     
•   FCMC Corporate Refinance
 
     
•   Flow 2007 E Corp.
 
     
•   Century 78 Corp.
 
     
•   Flow 2000B Corp.
 
     
•   Flow 2000C Corp.
 
     
•   States 87 Corp.
 
     
•   Rontex Corporation
 
     
•   Harrison Financial Associates, Inc.
 
     
•   Hudson Management Corporation
 
     
•   Tribeca Funding Corporation
 
     
•   Tribeca LXIV Corp.
 
     
•   Tribeca LXV Corp.
 
     
•   Tribeca XVI 2004 Corp.
 
     
•   Tribeca LI 2005 Corp.
 
       
2.
  March 31   For each bank where any deposit account is maintained, a fully
executed control agreement for each deposit account of Guarantor or any
Borrower, and if Guarantor and each Borrower fail to so deliver such control
agreements within such time frame, each such Person shall close such deposit
accounts and establish replacement accounts at Lender. The following DACA is
pending:
 
       
 
     
a.    North Fork Bank
 
       
3.
  March 31   A thirteen (13) consecutive week statement of Guarantor and its
Subsidiaries projecting prospective cash receipts and cash payments,
disbursements and advances for the 13 week consecutive period beginning on the
first day after such month-end.
 
       
4.
  March 31   FCMC shall deliver to Lender its financial statements for the
fiscal quarter and year-to-date period ending September 30, 2007.

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              2008 Date Due   Franklin Post-Closing Item
5.
  April 30   Guarantor shall have deposited with Lender a copy of each software
program in which Guarantor has an interest and any data which are necessary to
conduct all loan servicing activities of Guarantor, except to the extent
Guarantor is prohibited by any effective license agreement from so depositing a
copy. Further if Guarantor is prohibited by any license agreement from so
depositing a copy, Guarantor shall use its best efforts to secure a licensor
consent to the pledge of such software in form satisfactory to Lender. Licensor
Consents to be obtained with:
 
       
 
     
•   MortgageFlex Systems, Inc.
 
     
•   Nobel Systems Corporation
 
       
6.
  April 30   Interest Rate Hedge Agreements with respect to the Advances, in an
aggregate notional principal amount of not less than $275,000,000.
 
       
7.
  June 30   Guarantor, the applicable Borrower or such other Subsidiary owning
or having control of any REO Property shall grant to Lender a first Lien
Mortgage on such Person’s REO Properties to secure the Advances pursuant to
mortgages, deeds of trust or other Loan Documents and other closing conditions
or documents as are satisfactory to Lender.