Exhibit 10.11
INVESTMENT PROPERTY SECURITY AGREEMENT
     This Investment Property Security Agreement (this “Agreement”), is entered
into as of the 31st day of March, 2009. FRANKLIN CREDIT MANAGEMENT CORPORATION,
a corporation organized under the laws of the State of Delaware (hereinafter
called “Pledgor”), for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, hereby grants, pledges, and assigns to (a) THE
HUNTINGTON NATIONAL BANK, acting as contractual representative pursuant to the
Credit Agreement (Licensing) (as defined below) (“Huntington,” and acting as
such contractual representative and any successor or successors to Huntington
acting in such capacity, being referred to as “Administrative Agent”) and
(b) THE HUNTINGTON NATIONAL BANK, acting as contractual representative pursuant
to the Credit Agreement (Legacy) (as defined below) (“Huntington,” and acting as
such contractual representative and any successor or successors to Huntington
acting in such capacity, being referred to as “Administrative Agent”), for the
benefit of the Lenders (as defined below), a security interest in the following
account (the “Account”), whether Pledgor’s interest therein be now owned or
existing or hereafter arising or acquired, together with all substitutions,
replacements, exchanges, reissues and additions therefor or thereto:

      Account Number   Name and Address and Title   of “Intermediary”
Acct. No: 01892543486
  Name: The Huntington National Bank
Name: FMCC Money Market Account
  Address: 41 South High St.
 
                 Columbus, Ohio 43214
 
  Attention: Melanie Arthur

as it exists on the date hereof and as it may be constituted in the future, and
in

  •   any free credit balance or other money, now or hereafter credited to, or
owing from Intermediary to Pledgor in respect of, the Account;     •   any
money, securities (certificated or uncertificated), commodities contracts,
instruments, documents, general intangibles, financial assets or other
investment property arising in connection with, constituting a portion of, or
distributed from the Account, now or in the future;     •   all books and
records relating thereto;     •   all proceeds, cash or non-cash, of the sale,
exchange, redemption or exercise of any of the foregoing thereof, including, but
not limited to, any dividend, interest payment or other distribution of cash or
property in respect thereof; and     •   any rights incidental to the ownership
of any of the foregoing, such as voting, conversion and registration rights and
rights of recovery for violations of applicable securities laws

(all of the foregoing may be referred to herein as the “Collateral”) on the
following terms and subject to the following conditions:
Article 1. Other Credit Documents.

 

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

 

     Section 1.1. Credit Agreement. This Agreement is executed pursuant to, and
subject to the terms and conditions of, each Credit Agreement. “Credit
Agreement” means each of those certain (a) Amended and Restated Credit Agreement
(Licensing), dated as of March 31, 2009 (the “Credit Agreement (Licensing)”), by
and among Pledgor and Franklin Credit Holding Corporation (“Holding”) as
borrowers, the Administrative Agent, and the financial institutions party
thereto as Lenders (Huntington, in its individual capacity and as Issuing Bank,
and such other financial institutions being hereafter referred to collectively
as “Licensing Lenders” and individually as a “Licensing Lender”) together with
all amendments, modifications, supplements and restatements thereto from time to
time and (b) Amended and Restated Credit Agreement, dated as of March 31, 2009
(the “Credit Agreement (Legacy)”), by and among Franklin Credit Asset
Corporation, Tribeca Lending Corporation, the other borrowers party thereto (the
“Legacy Borrowers”), the Administrative Agent, and the financial institutions
party thereto as Lenders (Huntington, in its individual capacity, and such other
financial institutions being hereafter referred to collectively as “Legacy
Lenders” and individually as a “Legacy Lender”). “Lenders” means the Licensing
Lenders and the Legacy Lenders. Capitalized terms used in this Agreement but not
otherwise defined herein shall have the meanings ascribed to such terms in the
Credit Agreement (Licensing), unless otherwise designated.
Article 2. Security Interest.
     Section 2.1. Control Agreement and Capitalized Terms. Simultaneously with
the execution and delivery of this Agreement, Pledgor, Administrative Agent and
Intermediary have executed and delivered that certain Account Control Agreement
dated of even date herewith (the “Control Agreement”) for the purpose of
providing Administrative Agent with control of the Account and perfecting the
security interest and Lien granted by Pledgor to Administrative Agent herein.
     Section 2.2. Secured Obligations. The pledge, security interest, and
collateral assignment hereby granted is to secure the prompt and full payment
and complete performance of all Obligations to the Administrative Agent or any
Lender (i) of Pledgor and Holding arising under or in connection with the Credit
Agreement (Licensing), the promissory notes and all other Loan Documents (as
defined in the Credit Agreement (Licensing)) executed in connection with the
Credit Agreement (Licensing) and (ii) of Pledgor and the Legacy Borrowers
arising under or in connection with the Credit Agreement (Legacy), the
promissory notes and all other Loan Documents (as defined in the Credit
Agreement (Legacy)) executed in connection with the Credit Agreement (Legacy).
“Obligations” means, as to any Person, all loans, debts, principal, interest
(including any interest that, but for the commencement of an insolvency
proceeding, would have accrued), premiums, liabilities (including all amounts
charged to Pledgor’s account pursuant hereto), obligations (including
indemnification obligations), fees (including any fees provided for in any
Credit Agreement), charges, costs, expenses (including any fees or expenses
that, but for the commencement of an insolvency proceeding would have accrued),
lease payments, guaranties, covenants, and duties of any kind and description
owing such Person to the Administrative Agent or any Lender and irrespective of
whether for the payment of money, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, and
including all interest not paid when due and all expenses that any such Person
is required to pay or reimburse, all of the foregoing arising in connection with
any Credit Agreement, by law, or otherwise. The absence of any reference to this
Agreement in any documents, instruments or agreements evidencing or relating to
any Obligation secured hereby shall not limit or be construed to limit the scope
or applicability of this Agreement.
     Section 2.3. Blocked Account. Pledgor acknowledges and agrees that the
Account is designated as a “blocked account” under the Control Agreement, and
thus the Intermediary may not act upon any direction or instruction of Pledgor
with respect to any portion of the Collateral at any time.

-2-

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

 

     Section 2.4. Duty of Administrative Agent. If Administrative Agent takes
possession of any of the Collateral, the duty of Administrative Agent with
respect to the Collateral shall be solely to use reasonable care in the physical
custody thereof, and Administrative Agent shall not be under any obligation to
take any action with respect to any of the Collateral or to preserve rights
against prior parties. The powers conferred on Administrative Agent hereunder
are solely to protect its interest in the Collateral and do not impose any duty
upon it to exercise any such powers. Pledgor is not looking to Administrative
Agent to provide it with investment advice. Administrative Agent shall have no
duty to ascertain or take any action with respect to calls, conversions,
exchanges, maturities, tenders or other matters concerning any Collateral,
whether or not Administrative Agent has or is deemed to have knowledge of such
matters, or as to the taking of any necessary steps to preserve any rights
pertaining to any Collateral. Administrative Agent shall have no duty to
exercise reasonable care to preserve the value of any of the Collateral.
     Section 2.5. Subsequent Changes Affecting Collateral. Pledgor acknowledges
that it has made its own arrangements for keeping informed of changes or
potential changes affecting the Collateral and Pledgor agrees that
Administrative Agent has no responsibility to inform Pledgor of such matters or
to take any action with respect thereto even if any of the Collateral has been
registered in the name of Administrative Agent or its agent or nominee.
     Section 2.6. Return of Collateral. Except as otherwise provided herein or
as in any Loan Documents (as defined in the Credit Agreements), the security
interest granted to Administrative Agent hereunder shall not terminate and
Administrative Agent shall not be required to return the Collateral to Pledgor
or to terminate its security interest therein unless and until (a) the
Obligations have been fully paid or performed, (b) all of Pledgor’s obligations
hereunder have been fully and indefeasibly paid or performed, (c) the
obligations of all parties to the Loan Documents (as defined in the Credit
Agreements) have been discharged or released, and (d) Pledgor has reimbursed
Administrative Agent for any expenses of returning the Collateral and filing any
termination statements and other instruments as are required to be filed in
public offices under applicable laws.
     Section 2.7. Tax Reporting. All items of income, gain, expense and loss
recognized in the Account shall be reported to the Internal Revenue Service and
all state and local taxing authorities under the name and taxpayer
identification number of Pledgor.
     Section 2.8. Financing Statements. Pledgor hereby authorizes Administrative
Agent to file financing statements describing the Collateral, and any necessary
future amendments thereto, in any and all public offices in which Administrative
Agent deems such filing to be necessary or desirable.
Article 3. Representations and Warranties. Pledgor hereby represents and
warrants to Administrative Agent and Lenders as follows:
     Section 3.1. Enforceability. This Agreement and the Control Agreement have
been duly executed and delivered by Pledgor, constitute its valid and legally
binding obligations and are enforceable in accordance with their respective
terms against Pledgor.
     Section 3.2. No Conflict. The execution, delivery and performance of this
Agreement and the Control Agreement, the grant of the security interest in the
Collateral hereunder and the consummation of the transactions contemplated
hereby and thereby will not, with or without the giving of notice or the lapse
of time, (a) violate any material law applicable to Pledgor, (b) violate any
judgment, writ, injunction or order of

-3-

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

 

any court or governmental body or official applicable to Pledgor, (c) violate or
result in the breach of any material agreement to which Pledgor is a party or by
which any of its properties, including the Collateral, is bound; (d) conflict
with, or result in any breach of any of the provisions of, or constitute a
default under, or result in the creation or imposition of, any lien upon any of
the property of Pledgor pursuant to, the provisions of the Certificate of
Incorporation or bylaws of Pledgor; nor (e) violate any restriction on the
transfer of any of the Collateral.
     Section 3.3. No Consents. No consent, approval, license, permit or other
authorization of any third party (other than Intermediary) or any governmental
body or officer is required for the valid and lawful execution and delivery of
this Agreement and the Control Agreement, the creation and perfection of
Administrative Agent’s security interest in the Collateral, or the valid and
lawful exercise by Administrative Agent of remedies available to it under this
Agreement, the Control Agreement or applicable law, or of the voting and other
rights granted to it in this Agreement or the Control Agreement, except as may
be required for the offer or sale of those items of Collateral which are
securities under applicable securities laws.
     Section 3.4. Account. The securities entitlements credited to the Account
are valid and genuine and Pledgor has provided Administrative Agent with a
complete and accurate statement of the financial assets and the money credited
to the Account as of the date hereof.
     Section 3.5. Security Interest. Pledgor is the sole owner of the Collateral
free and clear of all liens, encumbrances, and adverse claims (other than those
created by this Agreement), has the unrestricted right to grant the security
interest provided for herein to Administrative Agent and has granted to
Administrative Agent a valid and perfected first priority security interest in
the Collateral free of all liens, encumbrances, transfer restrictions, and
adverse claims.
     Section 3.6. Information. None of the information, documents, or financial
statements which have been supplied by Pledgor or its officers, agents or
representatives to Administrative Agent or any of its representatives in
connection with the transactions contemplated by this Agreement or the Loan
Documents contains any untrue statement of material fact or omits to state any
material fact required to be stated hereby or thereby to make such statements
not misleading.
Article 4. Covenants. Pledgor hereby covenants and agrees with Administrative
Agent that Pledgor shall:
     Section 4.1. Defend Title. Defend its title to the Collateral and the
security interest of Administrative Agent therein against the claims of any
person claiming rights in the Collateral against or through Pledgor and maintain
and preserve such security interest so long as this Agreement shall remain in
effect.
     Section 4.2. No Transfer. Neither withdraw any money or property from the
Account; nor sell nor offer to sell nor otherwise transfer nor encumber or
convey any portion of the Collateral. This provision shall not prohibit Pledgor
from making trades within the Account, so long as all Investments in the Account
are cash or Cash Equivalents (as defined in the Credit Agreement (Licensing).
     Section 4.3. Control and Customer Agreements. Neither attempt to modify nor
attempt to terminate the Control Agreement or the customer agreement with
Intermediary under which the Account was established.

-4-

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

 

     Section 4.4. Further Assurances.
     (a) At Pledgor’s expense, do such further acts and execute and deliver such
additional conveyances, certificates, instruments, legal opinions, and other
assurances as Administrative Agent may at any time request or require to
protect, assure or enforce its interests, rights, and remedies under this
Agreement. Pledgor hereby authorizes Administrative Agent to file any UCC (as
defined below) financing statements or amendments thereto describing the
Collateral as Administrative Agent may from time to time desire.
     (b) Promptly deliver to Intermediary for credit to the Account any
certificate or instrument constituting or representing any of the Collateral it
may obtain possession from time to time, forthwith duly endorsed in blank
without restriction.
     (c) Promptly deliver to Intermediary any endorsements or instruments which
may be necessary or convenient to transfer any financial assets held by
Intermediary, which are registered in the name of, payable to the order of, or
specially endorsed to Pledgor, to Intermediary or its securities intermediary or
to one of their respective nominees.
     Section 4.5. Statements. Cause Intermediary to send to Administrative Agent
a complete and accurate copy of every statement, confirmation, notice, or other
communication concerning the Account that Intermediary sends to Pledgor. All
information furnished by Pledgor concerning the Collateral or otherwise in
connection with this Agreement, is or shall be at the time the same is
furnished, accurate, correct, and complete in all material respects.
     Section 4.6. Advice. Advise Administrative Agent promptly, completely,
accurately, in writing and in reasonable detail, (a) of any material encumbrance
upon or claim asserted against any of the Collateral; and (b) of the occurrence
of any event, other than changes in general market conditions adequately
reported in the general news media, that would have a material adverse effect
upon the aggregate value of the Collateral or upon the security interest of
Administrative Agent.
Article 5. Default.
     Section 5.1. Events of Default. The occurrence or existence of one or more
of the following events or conditions shall constitute an event of default (a
“Default”) under this Agreement.
     (a) If any set of facts or circumstances exists that, by itself, upon the
giving of notice, the lapse of time, or any one or more of the foregoing, would
constitute a “Default” or an “Event of Default” under any Credit Agreement; or
     (b) If Pledgor fails to perform any obligation or violates any covenant
contained in this Agreement or the Control Agreement other than those referred
to in paragraph (a) above, and such failure or violation continues unremedied
for a period of three (3) days after Administrative Agent requests Pledgor to
remedy such failure or violation;
     (c) If any representation or warranty made by Pledgor in this Agreement,
the Control Agreement or any information contained in any financial statement or
other document delivered to Administrative Agent by or on behalf of Pledgor
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein not misleading in light of the
circumstances in which they were made;

-5-

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

 

     (d) If Intermediary closes or terminates, or notifies Pledgor or
Administrative Agent of its intent to close or terminate, the Account; or
     (e) If Intermediary terminates, or notifies Pledgor or Administrative Agent
of its intent to terminate, the Control Agreement.
If any Default shall occur, Administrative Agent shall have, in addition to any
other remedies available to it under Section 5.2 below and under the law or any
agreement, the rights and remedies of a secured party under Article 9 of the
Uniform Commercial Code, as adopted in the State of Ohio (the “UCC”).
     Section 5.2. Remedies.
     (a) If a Default has occurred and is continuing, Administrative Agent may,
in its discretion: (i) to the extent applicable, cause the Account to be
reregistered in its sole name or transfer the Account to another broker/dealer
in its sole name; (ii) to the extent applicable, remove any Collateral from the
Account and register such Collateral in its name or in the name of its
broker/dealer, agent or nominee or any of their nominees; (iii) to the extent
applicable, exchange certificates representing any of the Collateral for
certificates of larger or smaller denominations, (iv) to the extent applicable,
exercise any voting, conversion, registration, purchase or other rights of a
holder of any of the Collateral and any reasonable expense of such exercise
shall be deemed to be an expense of preserving the value of such Collateral for
the purposes of Section 6.1 below; and (v) to the extent applicable, collect,
including by legal action, any notes, checks or other instruments for the
payment of money included in the Collateral and compromise or settle with any
obligor of such instruments.
     (b) If notice of the time and place of any public sale of the Collateral or
the time after which any private sale or other intended disposition is required
by the UCC, Pledgor acknowledges that five (5) days advance notice thereof will
be a reasonable notice. Administrative Agent shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given.
Administrative Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
     (c) If, under the Uniform Commercial Code, Administrative Agent may
purchase any part of the Collateral, it may in payment of any part of the
purchase price thereof, cancel any part of the Obligations in accordance with
(d) below.
     (d) Any cash held by Administrative Agent as Collateral and all cash
proceeds of any sale of, collection from, or other realization upon all or any
part of the Collateral shall be applied (after payment of any amounts payable to
Administrative Agent pursuant to Article 6 below) in whole or in part against
the Obligations in the following order of priority (unless Administrative Agent
under the Credit Agreement (Licensing) otherwise consents in writing):
     First, to the Obligations arising under the Credit Agreement (Licensing)
any and Loan Documents related thereto, in the order as determined by the
Administrative Agent under the Credit Agreement (Licensing), until such
Obligations are indefeasibly paid in full in cash;
     Second, to all other Obligations, in the order as determined by the
Administrative Agent under the Credit Agreement (Legacy), until such Obligations
are indefeasibly paid in full in cash; and

-6-

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

 

     Third, any surplus of such cash or cash proceeds held by Administrative
Agent and remaining after the indefeasible payment in full in cash of the
Obligations and all of Administrative Agent’s expenses hereunder shall be paid
over to Pledgor or to whomever may be lawfully entitled to receive such surplus.
     Section 5.3. Appointment of Administrative Agent as Agent. Pledgor hereby
irrevocably appoints and constitutes Administrative Agent, its successors and
assigns, and any officer or agent thereof, with full power of substitution, as
Pledgor’s true and lawful agent and attorney-in-fact with full irrevocable power
and authority in the place and stead of Pledgor and in the name of Pledgor or in
Administrative Agent’s own name, from time to time in Administrative Agent’s
discretion for the purpose of carrying out the provisions of this Agreement and
taking any action or executing any instrument that Administrative Agent
considers necessary or convenient for such purpose, including the power to
endorse and deliver checks, notes and other instruments for the payment of money
in the name of and on behalf of Pledgor, to endorse and deliver in the name of
and on behalf of Pledgor securities certificates and execute and deliver in the
name of and on behalf of Pledgor instructions to the issuers of uncertificated
securities, and to execute and file in the name of and on behalf of Pledgor
financing statements (which may be photocopies of this Agreement) and
continuations and amendments to financing agreements in the State of Ohio or
elsewhere and Forms 4, 5, 144 and Schedules 13D and 13G with the United States
Securities and Exchange Commission. This appointment and power of attorney is a
power coupled with an interest and is irrevocable and will not be affected by
the bankruptcy or insolvency proceeding of Pledgor or by the lapse of time. If
Pledgor fails to perform any act required by this Agreement, Administrative
Agent may perform such act in the name of and on behalf of Pledgor and at its
expense which shall be chargeable to Pledgor under Article 6 below. Pledgor
hereby consents and agrees that the issuers of, or obligors with respect to, the
Collateral or any registrar or transfer agent or trustee for any of the
Collateral shall be entitled to accept the provisions hereof as conclusive
evidence of the rights of Administrative Agent to effect any transfer pursuant
to this Agreement and the authority granted to Administrative Agent herein,
notwithstanding any other notice or direction to the contrary heretofore or
hereafter given by Pledgor, or any other person, to any of such issuers,
obligors, registrars, transfer agents, or trustees.
     Section 5.4. Impact of Regulations. Pledgor acknowledges that compliance
with the Securities Act of 1933 and the rules and regulations thereunder and any
relevant state securities laws and other applicable laws may impose limitations
on the right of Administrative Agent to sell or otherwise dispose of securities
included in the Collateral. For this reason, Pledgor hereby authorizes
Administrative Agent to sell any securities included in the Collateral in such
manner and to such persons as would, in the judgment of Administrative Agent,
help to ensure that the transfer of such securities will be given prompt and
effective approval by any relevant regulatory authorities and will not require
any of the securities to be registered or qualified under any applicable
securities laws. Pledgor understands that a sale under the foregoing
circumstances may yield a substantially lower price for such Collateral than
would otherwise be obtainable if the same were registered and sold in the open
market, and Pledgor shall not attempt to hold Administrative Agent responsible
for selling any of the Collateral at an inadequate price even if Administrative
Agent accepts the first offer received or if only one possible purchaser appears
or bids at any such sale. If Administrative Agent shall sell any securities
included in the Collateral at such sale, Administrative Agent shall have the
right to rely upon the advice and opinion of any qualified appraiser or
investment banker as to the commercially reasonable price obtainable on the sale
thereof but shall not be obligated to obtain such advice or opinion. Pledgor
hereby assigns to Administrative Agent any registration rights or similar rights
Pledgor may have from time to time with respect to any of the Collateral.
Article 6. Expenses.

-7-

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

 

     Section 6.1. Payment. Pledgor agrees that it will forthwith upon demand pay
to Administrative Agent:
     (a) the amount of any taxes which Administrative Agent may have been
required to pay by reason of holding the Collateral or to free any of the
Collateral from any lien encumbrance or adverse claim thereon, and
     (b) the amount of any and all out-of-pocket expenses, including the fees
and disbursements of counsel and of any brokers, investment brokers, appraisers
or other experts, that Administrative Agent may incur in connection with (i) the
administration or enforcement of this Agreement, including such expenses as are
incurred to preserve the value of the Collateral and the validity, perfection,
rank and value of Administrative Agent’s security interest therein, (ii) the
collection, sale, or other disposition of any of the Collateral, (iii) the
exercise by Administrative Agent of any of the rights conferred upon it
hereunder, or (iv) any action or proceeding to enforce its rights under this
Agreement or in pursuit of any non-judicial remedy hereunder, including the sale
of the Collateral.
Any such amount not paid on demand shall bear interest (computed on the basis of
the number of days elapsed over a year of three hundred sixty (360) days) at a
rate per annum equal to 15%.
     Section 6.2. Indemnity. Pledgor shall indemnify Administrative Agent and
its directors, officers, employees, agents, and attorneys against, and hold them
harmless from, any liability, cost, or expense, including the fees and
disbursements of their legal counsel, incurred by any of them under the
corporate or securities laws applicable to holding or selling any of the
Collateral, except for liability, cost, or expense arising out of the
recklessness or willful misconduct of the indemnified parties.
     Section 6.3. Discharge of Liens. At its option, Administrative Agent may
pay and discharge taxes, liens, security interests or other encumbrances on the
Collateral. Pledgor agrees to reimburse Administrative Agent under Section 6.1
above for any payment made or any expense incurred including reasonable
attorneys’ fees) by Administrative Agent pursuant to the foregoing
authorization.
Article 7. Miscellaneous.
     Section 7.1. This Agreement. This Agreement, the schedules and exhibits
hereto, and the agreements and instruments required to be executed and delivered
hereunder set forth the entire agreement of the parties with respect to the
subject matter hereof and supersede and discharge all prior agreements (written
or oral) and negotiations and all contemporaneous oral agreements concerning
such subject matter and negotiations. There are no oral conditions precedent to
the effectiveness of this Agreement
     Section 7.2. Non-Waiver. Neither the failure of nor any delay by any party
to this Agreement to enforce any right hereunder or to demand compliance with
its terms is a waiver of any right hereunder. No action taken pursuant to this
Agreement on one or more occasions is a waiver of my right hereunder or
constitutes a course of dealing that modifies this Agreement.
     Section 7.3. Waivers. No waiver of any right or remedy under this Agreement
shall be binding on any party unless it is in writing and is signed by the party
to be charged. No such waiver of any right or remedy under any term of this
Agreement shall in any event be deemed to apply to any subsequent default under
the same or any other term contained herein.

-8-

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

 

     Section 7.4. Administrative Agent. In acting under or by virtue of this
Agreement, Administrative Agent shall be entitled to all the rights, authority,
privileges, and immunities provided in any Credit Agreement, the provisions of
which are incorporated by reference herein with the same force and effect as if
set forth herein in their entirety.
     Section 7.5. Amendments. No amendment, modification, or termination of this
Agreement shall be binding on any party hereto unless it is in writing and is
signed by the party to be charged.
     Section 7.6. Severability. If any term of provision forth in this Agreement
shall be invalid or unenforceable, the remainder of this Agreement, or the
application of such terms or provisions to persons or circumstances, other than
those to which it is held invalid or unenforceable, shall be construed in all
respects as if such invalid or unenforceable term or provision were omitted.
     Section 7.7. Successors. The terms of this Agreement shall be binding upon
Pledgor, its successors and assigns, and shall inure to the benefit of
Administrative Agent, its successors and assigns, and any holder, owner, or
assignee of any rights in any of the Loan Documents (as defined in each Credit
Agreement) and will be enforceable by them as their interest may appear.
     Section 7.8. Third Parties. Nothing herein expressed or implied is intended
or shall be construed to give any person other than the parties hereto any
rights or remedies under this Agreement.
     Section 7.9. Joint Preparation. This Agreement shall be deemed to have been
prepared jointly by the parties hereto. Any ambiguity herein shall not be
interpreted against any party hereto and shall be interpreted as if each of the
parties hereto had prepared this Agreement.
     Section 7.10. Rules of Construction. In this Agreement, words in the
singular number include the plural, and in the plural include the singular,
words of the masculine gender include the feminine and the neuter, and when the
sense so indicates words of the neuter gender may refer to any gender and the
word “or” is disjunctive but not exclusive. The captions and section numbers
appearing in this Agreement are inserted only as a matter of convenience. They
do not define, limit, or describe the scope or intent of the provisions of this
Agreement.
     Section 7.11. Notices. Any notice, request, or other communication required
or permitted to be given under this Agreement shall be given in the manner set
forth in each Credit Agreement.
     Section 7.12. Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.
     Section 7.13. Legal Matters.
     (a) Choice of Law. The validity, terms, performance and enforcement of this
Agreement shall be governed by those laws of the State of Ohio which are
applicable to agreements which are negotiated, executed, delivered and performed
solely in the State of Ohio.
     (b) Jurisdiction, Venue, Service of Process. The State and Federal District
Courts located in Franklin County, State of Ohio shall have exclusive
jurisdiction and venue of any action or proceeding

-9-

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

 

arising out of or related to the negotiation, execution, delivery, performance,
breach or enforcement of this Agreement or any other agreement, document or
instrument negotiated, executed, delivered, entered into or performed in
connection with this Agreement or any of the transactions contemplated hereby or
thereby; any waiver, modification, amendment or termination hereof or thereof or
any action taken or omission made by Pledgor or Administrative Agent or any of
their respective directors, officers, employees, agents or attorneys in
connection with the payment, performance, exercise or enforcement of any right,
duty or obligation created or implied hereby or thereby or arising hereunder or
thereunder, regardless of whether any claim, counterclaim or defense in any such
action, suit or proceeding is characterized as arising out of fraud, negligence,
recklessness, intentional misconduct, a breach of contract or fiduciary duty, or
violation of a statute, law, ordinance, and or regulation. The parties hereto
hereby irrevocably consent to the personal jurisdiction of such courts, to such
venue and to the service of process in the manner provided for the giving of
notices in this Agreement. The parties hereto hereby waive all objections to
such jurisdiction and venue including those which might be based upon
inconvenience or the nature of the forum.
     (c) Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION (1) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, 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 AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, 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 AGREEMENT 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.
[Signatures on following page.]

-10-

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

 

     IN WITNESS WHEREOF, Pledgor has signed this Investment Property Security
Agreement as of the date first set forth above.

             
 
                PLEDGOR:    
 
                FRANKLIN CREDIT MANAGEMENT CORPORATION
 
           
 
  By:   /s/ Thomas J. Axon     
 
                Name: Thomas J. Axon         Its: President    

Accepted as of this 31st day of March, 2009.
ADMINISTRATIVE AGENT:
THE HUNTINGTON NATIONAL BANK

         
By:
  /s/ Alan D. Seitz     
 
 
 
    Name: Alan D. Seitz     Its: Senior Vice President    
 
        ADMINISTRATIVE AGENT:    
 
        THE HUNTINGTON NATIONAL BANK
 
       
By:
  /s/ Alan D. Seitz     
 
        Name: Alan D. Seitz     Its: Senior Vice President    

Signature Page to Investment Property Security Agreement