Exhibit 10.101
SEPARATION AGREEMENT AND GENERAL RELEASE
THIS SEPARATION AGREEMENT AND GENERAL RELEASE (hereinafter referred to as either
“Release” or “Agreement”), entered into as of the 15th day of October 2009, by
and between William F. Sullivan (“Employee”), Franklin Credit Holding
Corporation (“Franklin Holding”), Franklin Credit Management Corporation
(“FCMC”), and Tribeca Lending Corp. (“Tribeca,” and together with Franklin
Holding and FCMC, the “Employer”);
WITNESSETH:
WHEREAS, the Employee has been employed as the Chief Operating Officer under an
employment agreement dated as of February 1, 2006, as amended by amendments
dated April 28, 2006, August 17, 2006, and December 31, 2008 (the “Employment
Agreement”);
WHEREAS, Employee and the Employer have agreed to terminate the employment
relationship between Employee and the Employer on an amicable basis; and
WHEREAS, the Employee and the Employer desire to settle fully and finally any
differences between them, to facilitate the Employee’s separation and allow for
an orderly transition by the Employer.
NOW, THEREFORE, in consideration of the mutual agreement and covenants contained
herein, the parties do hereby mutually agree as follows:

 

 

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1. Termination of Employment. Employee’s employment with Employer terminated on
October 15, 2009 (the “Termination Date”). As of the Termination Date, the
Employment Agreement and all existing employment agreements between Employee and
the Company, whether oral or written, are hereby terminated, except as otherwise
expressly stated herein. Except as otherwise expressly provided herein, the
parties agree that this Agreement supersedes the Employment Agreement (and any
existing employment agreement between the parties). Additionally, Employee
hereby resigns all positions as an officer or director of the Employer, its
subsidiaries and affiliates, effective immediately.
2. Payments and Other Benefits.
(a) Employee acknowledges that he has received all wages, benefits and all other
payments to which he was entitled by virtue of his employment with Employer
through the Termination Date.
(b) Separation Payment. Provided that Employee has not revoked this Release
pursuant to Paragraph 21 below, complies with all terms and conditions of this
Release, and cooperates with Employer in the orderly transition of his duties,
Employer shall pay Employee the gross sum of $91,666.60 less applicable
withholdings and deductions (the “Separation Payment”), which is equivalent to
five (5) months of his regular base salary at Employee’s final rate of pay
($220,000 per annum).
(c) The payments described in Subparagraph (b) of this Paragraph 2 are in lieu
of whatever the Employment Agreement provides and shall be paid in a lump sum on
Employer’s first pay date that is at least fourteen (14) days after Employer’s
receipt of an executed Release from Employee. Employee expressly agrees and
acknowledges that said

 

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payments are not otherwise due or owing to Employee under any agreement with
Employer or any policy of Employer.
(d) Benefits Continuation. Employee will receive under separate cover a notice
informing him of his eligibility to continue his coverage under any group health
insurance plan in which he is a participant as of the Termination Date, at his
own expense, for a period not to exceed 18 months, in accordance with the
provisions of the federal law known as the Consolidated Omnibus Budget
Reconciliation Act (“COBRA”). Employee’s rights under COBRA are not affected in
any way by this Release. In addition, provided that Employee has not revoked
this Release pursuant to Paragraph 21 below, complies with all terms and
conditions of this Release, cooperates with Employer in the orderly transition
of his duties, and provides (or has finished providing) the Transitional
Services set forth in the first sentence of Paragraph 2(f) below, on a
satisfactory basis; and provided further that Employee timely elects
continuation of his group health insurance coverage pursuant to COBRA, Employer
agrees to pay the employer and employee portions of such coverage (including the
reimbursement to Employee of a maximum of $1,500 towards covered expenses
subject to the deductible under the medical plan) until the later of (i) the
earlier of (x) the date the Employee finds other employment with health benefits
and (y) the twelve (12) month anniversary of the Termination Date, or (ii) the
date that is five (5) months following the Termination Date (the “Health Benefit
Continuation”).
(e) Employee agrees that other than as expressly stated in this Paragraph 2, he
will not seek anything further from Employer or the Released Parties (as defined
below), including any other payment. Employee agrees that except as expressly
set forth in this Release, all benefits, wages, bonuses, commissions,
compensation or other payments provided to Employee during his employment with
Employer shall cease as of the Termination Date and that Employee shall not
receive any payments from Employer other than as expressly set forth in this
Paragraph 2 of this Release.

 

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(f) Transitional Services.
(i) For a period not to exceed six (6) months from the Termination Date (the
“Transition Period”), the Employee shall provide the following transitional
services to the Employer, in a professional workmanlike manner consistent with
prevailing industry practices, solely as an independent contractor and not as an
agent of the Employer: (1) preparation and provision to Employer of a written
evaluation of the predictive models of mortgage prepayments, defaults, and task
prioritization being considered by FCMC as of the Termination Date;
(2) preparation and provision to Employer of a written review, containing
recommendations, concerning right party contact rates of FCMC with respect to
successful efforts in speaking with borrowers about the resolution of their
delinquencies; and (3) preparation and provision to Employer of written guidance
on the rating process for obtaining a rating by a nationally recognized
statistical rating agency of residential mortgage servicers (the “Transitional
Services”). In consideration for providing these Transitional Services and
provided that Employee has not revoked this Release pursuant to Paragraph 21
below, complies with all terms and conditions of this Release, and cooperates
with Employer in the orderly transition of his duties, Employee shall be paid
the sum of $7,638.89, on a semi-monthly basis, up to a maximum total of
$91,666.68, beginning on the Employer’s first pay date that is at least fourteen
(14) days after Employer’s receipt of an executed Release from Employee, with
such payments and Transitional Services subject to termination by the Employer,
in its sole and absolute discretion, or by Employee, if he finds other
employment (of which Employee will provide Employer prompt notice thereof), with
thirty (30) days prior written notice to the other party.

 

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(ii) The Company shall pay to Employee a one-time contingent Transitional
Services success fee of $15,000 for the successful completion during the
Transition Period of each of the following objectives (for a possible total of
$30,000 in contingent success fees), provided that Employee has performed
Transitional Services that have materially assisted the Employer with respect to
an objective and provided further that following the successful completion of an
objective FCMC declares pre-tax net income of more than $3 Million for the
fiscal quarter in which the objective is successfully completed or any quarter
ending thereafter up until the quarter ending September 30, 2010: (1) the
successful implementation and integration of a statistically accurate predictive
model of mortgage prepayments, defaults, and task prioritization; and (2) a
servicer rating of at least “average” or “fully acceptable” (or equivalent
rating) as a residential mortgage servicer or residential special servicer by a
nationally recognized statistical agency of residential mortgage servicers.
Provided that Employee has not revoked this Release pursuant to Paragraph 21
below, complies with all terms and conditions of this Release, and cooperates
with Employer in the orderly transition of his duties, Employer shall pay the
contingent success fee, if any, on the next business day following thirty
(30) days after satisfaction of the conditions to such contingent success
fee(s). Notwithstanding the foregoing, Employee acknowledges and agrees that
FCMC is not obligated to implement the Employee’s Transitional Services, and
that the failure to do so by the Employer will not entitle Employee to payment
of the contingent Transitional Services success fee(s).

 

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(g) Adequate Compensation. The Employee agrees and acknowledges that the
payments provided under this Paragraph 2 constitute fair and adequate
compensation for the promises and covenants of the Employee set forth in this
Agreement.
3. Indemnification. Employer shall continue to indemnify Employee in accordance
with the terms and conditions set forth in the Employer’s Certificate of
Incorporation and By-Laws (as such Certificate of Incorporation and By-Laws may
be amended from time to time) or under the terms and conditions made generally
available to its officers and directors from time to time for a period of six
(6) years from the Termination Date and in accordance with any contractual
indemnification rights of Employee as of the date hereof. Notwithstanding the
foregoing, the indemnification of Employee shall extend only to acts or
omissions of Employee during the period of time during which Employee was an
officer or director of the Employer, and only to the extent that such
indemnification is otherwise permissible under applicable law.
4. Employee’s Release And Waiver of Claims.
(a) “Released Parties” means Employer, its parents, subsidiaries, affiliates,
divisions, partners, predecessors, insurance carriers, and shareholders; its
current and former directors, officers, employees, attorneys, agents, and
contractors; its employee pension or welfare benefit plans; and current and
former trustees and administrators of these plans.
(b) Employee hereby releases the Released Parties from all claims and rights
that Employee has against any and all Released Parties, including, but not
limited to, those claims of which Employee is not aware, those not mentioned in
this Release, and all claims for attorney’s fees, costs, and interest. Employee
releases the Released Parties from all claims and rights resulting from anything
that has happened up to now. This Release does not apply to claims arising after
the date of this Release or any right to indemnification Employee would
otherwise have.

 

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(c) Employee specifically releases all claims and rights arising from or
relating to Employee’s employment or other relationship with the Released
Parties, including but not limited to any claims or rights Employee may have
under Section 12 of the Employment Agreement, Title VII of the Civil Rights Act
of 1964, as amended, and the Civil Rights Act of 1991, the Age Discrimination in
Employment Act, the Rehabilitation Act of 1973, the Older Workers Benefit
Protection Act, the Pregnancy Discrimination Act, the Americans with
Disabilities Act, the federal Family and Medical Leave Act, Section 1981 of the
Civil Rights Act of 1866, the Employee Retirement Income Security Act, the
federal Equal Pay Act, the Fair Labor Standards Act, the federal Worker
Adjustment and Retraining Notification Act, the New Jersey Law Against
Discrimination, the New Jersey Worker Adjustment and Retraining Notification
Act, the New Jersey Conscientious Employee Protection Act, the New Jersey Family
Leave Act, the New Jersey Equal Pay Act, the New Jersey Wage Payment Law, the
New Jersey Wage and Hour Law, New York State Human Rights Law, the New York City
Human Rights Act, the New York State Equal Pay Law, the New York State Labor
Law, the New York State Wage Payment Law, the New York State Wage and Hour Law,
the New York State Minimum Wage Act, any federal, state or local laws against
discrimination, harassment, retaliation, or laws protecting whistleblowers, or
any other federal, state, or local law or regulation or common law relating to
employment, wages, hours, or any other terms and conditions of employment and
termination of employment. Employee further releases the Released Parties from
any claim for wrongful discharge, retaliation, failure to promote, failure to
accommodate, breach of contract, breach of fiduciary duty, breach of the
covenant of good faith and fair dealing, promissory or

 

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equitable estoppel, unjust enrichment, whistle-blowing, negligent infliction of
emotional distress, negligence, intentional infliction of emotional distress,
fraud, misrepresentation, defamation, torts, violations of public policy of the
State of New Jersey or State of New York; any claims for wages or other
compensation, including, but not limited to salary, bonuses, accumulated sick
leave, stipends, vacation pay, employee benefits, deferred compensation, or any
other payments or distributions of any kind; and any other claims in any way
related to Employee’s employment or termination of his employment with Employer,
it being acknowledged that nothing in this paragraph shall affect Employee’s
entitlement to the amounts vested under any Employer 401(k) plan prior to the
date hereof.
(d) Employee represents and warrants that there are no pending or outstanding
administrative or judicial proceedings, charges, complaints, claims or actions
against Employer or any of the Released Parties to which Employee is a party or
which are maintained on behalf of Employee. Employee acknowledges that Employer
relies upon this representation and warranty in agreeing to enter into this
agreement.
5. Employer’s Release And Waiver of Claims. Employer releases Employee from any
and all claims related to, or arising out of, Employee’s performance of his job
duties, so long as Employee acted in good faith, in a manner Employee reasonably
thought to be in, or not opposed to, the best interests of the Employer and had
no reason to believe his conduct was unlawful or illegal. Employer’s release of
Employee shall be effective for all claims arising, in whole or part, out of any
transactions, events, or occurrences occurring prior to the date of this
Release.

 

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6. Non-Disparagement. Employee agrees that he shall not issue any communication
or make any statement, written or otherwise, that disparages, criticizes or
otherwise reflects adversely on or encourages any adverse action against the
Employer or the Released Parties. The Employer shall respond to employment
reference inquiries concerning Employee only by confirming job title, salary and
dates of service.
7. Cooperation. In partial consideration for the Separation Payment and the
Health Benefit Continuation set forth above in Section 2(b) and (d),
respectively, Employee will fully cooperate with Employer and its counsel as it
relates, in any way, to any action or proceeding which relates to Employer,
including without limitation, any regulatory action, litigation or dispute
arising out of alleged actions or inactions of the Employer of which the
Employee may have knowledge or information or which the Employer, in its sole
discretion, deems the cooperation of the Employee is needed. Full cooperation
shall include, without limitation, review of documents, attendance at meetings,
trial or administrative proceedings, depositions, and interviews without the
need of the subpoena process. Nothing in this Release shall be construed to
require Employee to act in an unlawful manner. To the extent that the Employer
requests Employee’s cooperation, the Employer shall reimburse Employee for
reasonable expenses consistent with the Employer’s travel and expense policy in
effect at the time.
8. Return of Property. Prior to Employer making the Separation Payment, Employee
shall deliver to Employer, (1) all materials belonging to Employer, including
Employer’s confidential information, documents, correspondence, plans, records,
notes, drawings, or papers and any copies thereof in Employee’s possession or
control, including in particular all notes or records Employee has relating to
Employer’s finances, made or compiled by or delivered to Employee; and (2) all
other property of the Employer, including all uniforms, identification and
dining cards, passwords, credit or charge cards, security cards, Employer
telephones, pagers, computer equipment (including diskettes and software), keys,
and any of Employer’s business equipment, files or manuals.

 

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9. Confidential Information.
(a) Employee acknowledges that he has had access to and possession of Employer’s
trade secrets, confidential business information and/or proprietary information
(“Confidential Information”) and may have access to Confidential Information in
connection with the performance of the Transitional Services. Employee shall not
disclose any Confidential Information to any third person unless required by law
for a period of six (6) years from the later of the date of this Agreement or
the date of disclosure. Employee further agrees that he shall not use any
Confidential Information for his personal benefit or for the benefit of any
other employer, client, or other person or entity.
(b) In providing the Transitional Services hereunder, the Employee will comply
with information safeguarding requirements of Title V of the Gramm-Leach-Bliley
Act, 15 U.S.C.§§ 6801-6810, as implemented by 16 CFR Part 314, and utilize
procedures reasonably calculated to insure compliance with the foregoing,
including, without limitation, maintaining appropriate safeguards designed to:
(i) insure the security and confidentiality of Non-Public Personal Information;
(ii) protect against anticipated threats or hazards to the security or integrity
of Non-Public Personal Information; and (iii) protect against unauthorized
access to or use of Non-Public Personal Information. (In this Agreement, the
term “Non-Public Personal Information” shall have the meaning ascribed to it in
the above-referenced law and regulation and shall include personally
identifiable information of the borrowers of the FCMC, such as name, address,
telephone number, e-mail address or Social Security number.) Upon completion of
the Transitional Services, the Employee shall immediately return to the Employer
any original and any copies of Confidential Information provided to Employee.

 

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10. Binding Effect. This Release is binding upon and shall inure to the benefit
of anyone who succeeds to the rights, interests or responsibilities of the
parties. Employee makes the releases contained in this Release for the benefit
of the Released Parties and all who succeed to their rights, interests, or
responsibilities.
11. Enforceability. If a court rules that any provision of this Release is not
enforceable in the manner set forth in this Release, that provision should be
enforceable to the maximum extent possible under applicable law and should be
reformed accordingly. If a court rules that any provision of this Release is
invalid or unenforceable, that ruling shall not affect the validity or
enforceability of the other portions of this Release, which shall continue in
full force and effect.
12. Entire Agreement. This Release is the entire agreement between Employee and
Employer. It supersedes the Employment Agreement and any existing oral or
written agreements with respect to Employee’s employment or termination of
employment with Employer, except for Section 8 (“Trade secrets and confidential
information”), Section 9(b) (“Non-competition”) and Section 9 (c) of the
Employment Agreement between Employee and FCMC, which Section 8, Section 9(b)
and Section 9(c) shall remain in full force and effect. No representations
regarding the Released Parties’ relationship with Employee, or any obligations
to Employee, have been made, or survive, except as set forth in this Release.
13. Amendment. This Release cannot be amended, except by a written document
signed by the party against whom enforcement of any such amendment is sought.

 

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14. Legal Counsel. Employee has had ample time to consult with an attorney
before signing this Release and acknowledges that he has been advised to consult
with an attorney before signing this Release.
15. Confidentiality of Agreement. Employee shall not directly or indirectly
disseminate the terms of this Agreement to any person or entity not a party to
this Agreement, except (a) by written agreement of the parties, (b) as required
by law, or (c) as otherwise provided in this paragraph. Without limiting the
generality of the foregoing, Employee specifically agrees that he shall not
disclose information regarding this Release to any current, former or future
employee of Employer or the Released Parties. This provision shall not be deemed
breached by disclosure by Employee to his attorneys and accountants for purposes
of obtaining legal and tax advice, provided such individuals agree to be bound
by the terms of this Paragraph 15.
16. Full Understanding. Employee has read this Release carefully, fully
understands the meaning of its terms, and is signing this Release knowingly and
voluntarily.
17. Governing Law. This Release shall be interpreted in accordance with the laws
of the State of New Jersey, without regard to its principles of conflicts of
law. This Release is deemed to be jointly prepared by the parties hereto, and
the language of all parts of this Release shall in all cases be construed as a
whole, according to its fair meaning, and not strictly for or against any party.
Any action relating to this Release shall be filed in the State of New Jersey.
18. Non-Waiver. In the event either party violates any provision of this
Agreement, the failure of the other party to enforce any of its rights at that
time shall not constitute a wavier by the other party to enforce any provision
of this Agreement at any time.

 

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19. No Assignment. Employee may not assign this Agreement or any rights under
this Agreement, except by will or by operation of the laws of intestate
succession. Notwithstanding the foregoing, in the event of the death of the
Employee, all amounts otherwise due to the Employee pursuant to the Agreement
shall be paid to the surviving spouse of the Employee or, if there is no
surviving spouse, the Employee’s estate.
20. Breach of Agreement; Remedies. If any party violates a provision of this
Agreement, the other party shall have the right to (a) injunctive or other
equitable relief prohibiting further violations of this Agreement, and (b) all
other legal and equitable relief available under the law.
21. Period for Consideration and Revocation. Employee shall have 21 days to
consider this Release. Employee may elect, at his option, to sign this Release
in a shorter period of time. The parties further agree that any changes to this
Release, whether material or immaterial, do not restart the running of the
21-day period. Employee may revoke this Release within 7 days of signing it. Any
revocation must be made by delivering written notice of revocation to Kevin
Gildea, Esq., Chief Legal Counsel, Franklin Credit Management Corporation, 101
Hudson Street, Jersey City, New Jersey 07302. To be effective, any revocation of
this Release must be in writing and received by Employer no later than the close
of business on the 7th day after Employee signs this Release. This Release shall
not become effective or enforceable until the expiration of 7 days after
Employee signs this Release. If Employee revokes his acceptance of this Release,
Employer shall not be required to provide any of the consideration described in
this Release.

 

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22. Agreement Does Not Establish Precedent. The parties agree that the terms of
this Agreement will not establish any precedent, nor will this Agreement be used
as a basis by the parties or anyone else to seek or justify similar terms in any
subsequent matter.
23. Attorneys’ Fees. If any action or proceeding is brought for the enforcement
of this Agreement, or because of an alleged dispute, breach, default, or
misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing party shall be entitled to reasonable attorneys’
fees and other costs incurred in that action or proceeding, in addition to any
other relief to which it or they may be entitled.
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            ACCEPTED AND AGREED TO:

WILLIAM F. SULLIVAN
      /s/ William F. Sullivan               Dated: October 15, 2009        
FRANKLIN CREDIT HOLDING CORPORATION
FRANKLIN CREDIT MANAGEMENT CORPORATION
TRIBECA LENDING CORP.
      By:   /s/ Kevin Gildea         Name:   Kevin Gildea        Title:   Chief
Legal Officer          Dated: October 15, 2009  

 

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