exv10w5







 


Franklin Credit Management Corporation 10-12G


 


 


Exhibit 10.18Execution Copy




AMENDMENT NO. 4 TO

AMENDED AND RESTATED CREDIT AGREEMENT (LICENSING)




THIS AMENDMENT NO. 4 TO AMENDED AND RESTATED CREDIT AGREEMENT (LICENSING) (this “Amendment”)
is entered into as of May 23, 2011 (the “Amendment Effective Date”), by and among FRANKLIN CREDIT
MANAGEMENT CORPORATION, a Delaware Corporation, and FRANKLIN CREDIT HOLDING CORPORATION, a Delaware
corporation (each, a “Borrower” and collectively “Borrowers”), THE FINANCIAL INSTITUTIONS PARTY
HERETO AS LENDERS (each, a “Lender” and collectively, the “Lenders”) and THE HUNTINGTON NATIONAL
BANK, a national banking association (“Huntington”), as administrative agent for the Lenders (in
such capacity, together with its successors and assigns in such capacity, the “Administrative
Agent”). This Amendment further amends and modifies a certain Amended and Restated Credit
Agreement (Licensing) dated as of March 31, 2009 (as amended, supplemented, restated or otherwise
modified from time to time prior to the date hereof, the “Credit Agreement”) by and among
Borrowers, the Lenders, the Administrative Agent and Issuing Bank. Capitalized terms used in this
Amendment and not otherwise defined herein shall have the meanings ascribed to such terms in the
Credit Agreement.



RECITALS:




A. As of March 31, 2009, Borrowers, the Lenders, the Administrative Agent and Issuing Bank
executed the Credit Agreement setting forth the terms of certain extensions of credit to the
Borrower; and



B. As of March 31, 2009, Borrowers executed and delivered to the Administrative Agent, inter
alia, a Revolving Promissory Note (Licensing) in the original principal sum of Two Million Dollars
($2,000,000), which principal sum was thereafter reduced to One Million Dollars ($1,000,000); and



C. As of March 31, 2009, and at various other times, Borrowers executed and delivered to the
Administrative Agent, inter alia, one or more Applications and Agreements for Letter of Credit in
connection with Issuing Bank’s issuance of Letters of Credit for the account of one or more of the
Borrowers; and



D. As of May 31, 2010, the Draw Loan Commitment expired by its terms and Borrowers have no
right to obtain any Draw Loan Advances under the Credit Agreement;



E. As of March 28, 2011, the Administrative Agent, on behalf of the Lenders and the Issuing
Bank, waived the Borrowers’ failure to comply with Section 7.07(a) (Net Income Before Taxes)
through and including September 30, 2011; and



E. As of even date herewith, the Borrowers, the Lenders and the Administrative Agent, among
others, have entered into a certain Settlement Agreement (the “Settlement Agreement”), and, in
connection therewith, the Borrowers have requested that the
Administrative Agent and the Lenders (i) extend the maturity of the Revolving Loan Commitment
and the Letter of Credit Commitment and (ii) delete the certain financial covenant in Section
7.07(a) (Net Income Before Taxes) of the Credit Agreement, and the Administrative Agent, the
Lenders and the Issuing Bank, are willing to do so upon the terms and subject to the conditions
contained herein; and


 


 









 





F. Pursuant to Section 10.04, “Amendments,” of the Credit Agreement, the amendments
requested by the Borrowers and Holding herein must be contained in a written agreement signed by
each Borrower, the Administrative Agent and the Required Lenders.



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:



1. The definition of “Termination Date” set forth in Section 1.01, “Certain
Defined Terms,” of the Credit Agreement is hereby amended to recite as follows:



“Termination Date” shall mean (i) in respect of the Revolving Loan
and the Revolving Loan Commitment and the Letters of Credit and the Letter
of Credit Commitment, September 30, 2012, or such earlier date on which this
Agreement shall terminate in accordance with the provisions hereof or by
operation of law, and (ii) in respect of the Draw Loan and the Draw Loan
Commitment May 31, 2010, which Draw Loan and Draw Commitment have expired
and are of no force and effect.



2. Paragraph (a), “Net Income Before Taxes,” of Section 7.07, “Financial
Covenants,” of the Credit Agreement is hereby amended to recite as follows:



(a) [Intentionally Deleted].



3. Conditions of Effectiveness. This Amendment shall become effective as of the
Amendment Effective Date, upon satisfaction of all of the following conditions precedent:




(a) The Administrative Agent shall have received execution and delivery of, by all
parties signatory hereto, originals, or completion as the case may be, to the satisfaction
of the Administrative Agent and its counsel, of three duly executed originals of this
Amendment;




(b) Satisfactory evidence that all corporate and other proceedings that are necessary
in connection with this Amendment have been taken to the satisfaction of the Administrative
Agent and its counsel, and the Administrative Agent and such counsel shall have received
all such counterpart originals or certified copies of such documents as the Administrative
Agent may request;


 


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(c) The Administrative Agent (for the benefit of the Lenders) shall have received a fee
in respect of this Amendment in the amount of $18,750, which fee shall be earned in full as
of the Amendment Effective Date and shall be non-refundable; 




(d) The Borrowers shall have paid all of the Administrative Agent’s cost and expenses
incurred up to the date of this Amendment; and




(e) The representations contained in the immediately following paragraph shall be true
and accurate.



4. Representations and Warranties. Each Borrower represents and warrants to the
Administrative Agent and each Lender as follows: (a) after giving effect to this Amendment, each
representation and warranty made by or on behalf of such Borrower in the Credit Agreement and in
any other Loan Document is true and correct in all material 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 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
will not violate any Requirement of Law applicable to each Borrower; (c) this Amendment has been
duly executed and delivered by each Borrower, and each of this Amendment, the Credit Agreement and
each other Loan Document as amended hereby constitutes the legal, valid and binding obligation of
each Borrower, enforceable against such Borrower in accordance with the terms thereof; and (d) no
event has occurred and is continuing, and no condition exists, which would constitute an Event of
Default or a Default.



5. Ratification and Reaffirmation. Each Borrower agrees (i) that all the obligations,
indebtedness and liabilities of such Borrower to the Administrative Agent and the Lenders under the
Credit Agreement are the valid and binding obligations of such Borrower; (ii) that the obligations,
indebtedness and liabilities of such Borrower evidenced by each Note executed and delivered by such
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 the Administrative Agent with respect to the Obligations as security
for all obligations and liabilities of such Borrower under the Credit Agreement, each Application
and Agreement for Letter of Credit and the Revolving Loan Note are valid and binding and are hereby
ratified and confirmed in all respects.



6. Reference to and Effect on the Loan Documents. (a) Upon the effectiveness of this
Amendment, each reference in the Credit Agreement to “Amended and Restated Credit Agreement
(Licensing),” “Credit Agreement,” “Agreement,” the prefix “herein,” “hereof,” or words of similar
import, and each reference in the Loan Documents to the Credit Agreement, shall mean and be a
reference to the Credit Agreement as amended hereby. (b) Except to the extent amended or modified
hereby, all of the representations, warranties, terms, covenants and conditions of the Credit
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 the Administrative Agent may have hereunder or thereunder. Nothing in this
Amendment shall constitute a novation. The amendments set forth herein shall be limited precisely
as provided for herein, and shall not be deemed to be a waiver of, amendment of, consent to or
modification of any of the Administrative Agent’s or any Lender’s rights under, or of any other
term or provisions of, the Credit 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 any Borrower which would require the consent of the Lender.


 


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7. Waiver and Release of All Claims and Defenses. Each Borrower hereby forever
waives, relinquishes, discharges and releases all defenses and claims of every kind or nature,
whether existing by virtue of state, federal, or local law, by agreement or otherwise, against the
Administrative Agent and the Lenders, and all of their successors, assigns, directors, officers,
shareholders, agents, employees and attorneys, the Obligations or the Collateral, whether
previously or now existing or arising out of or related to any transaction or dealings between the
Administrative Agent, any Lender and any Borrower or any of them, which 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 any
Borrower, and all of their representatives, successors, assigns, agents, employees, officers,
directors and heirs. “Claims” includes 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 or contingent, in contract, tort, at law or in equity, any of them ever had, claimed to
have, now has, or shall or may have. Nothing contained in this Amendment prevents enforcement of
this release.



8. No Waiver. Nothing in this Amendment shall be construed to waive, modify, or cure
any default or Event of Default that exists or may exist under the Credit Agreement or any other
Loan Document.



9. 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.


 


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10. 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 the Administrative Agent of a facsimile copy of an executed signature page hereof will
constitute receipt by the Administrative Agent of an executed counterpart of this Amendment.



11. Costs and Expenses. Each Borrower agrees to pay on demand in accordance with the
terms of the Credit Agreement all costs and expenses of the Administrative Agent 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 the Administrative Agent’s counsel with respect thereto.



12. Governing Law. This Amendment and the rights and obligations of the parties
hereto shall be governed by, and construed and interpreted in accordance with, the laws of the
State of Ohio.



13. Headings. Section headings in this Amendment are included herein for convenience
of reference only and will not constitute a part of this Amendment for any other purpose.



14. Patriot Act Notice. The Administrative Agent hereby notifies 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 each Borrower, which information includes the name and address of each Borrower and
other information that will allow the Administrative Agent to identify each Borrower in accordance
with the Act.



[Signature Page Follows.]



 


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IN WITNESS WHEREOF, the Borrowers, the Administrative Agent, the Lenders and Issuing Bank have
hereunto set their hands as of the date first set forth above.



	 	 	 	 	 
	 	BORROWERS:



FRANKLIN CREDIT MANAGEMENT CORPORATION

 	 
	 	By:  	/s/ Thomas J. Axon
 	 
	 	 	Name:  	Thomas J. Axon 	 
	 	 	Title:  	President 	 
	 
	 	FRANKLIN CREDIT HOLDING CORPORATION

 	 
	 	By:  	/s/ Thomas J. Axon
 	 
	 	 	Name:  	Thomas J. Axon 	 
	 	 	Title:  	President 	 
	 
	 	ADMINISTRATIVE AGENT AND ISSUING BANK:



THE HUNTINGTON NATIONAL BANK

 	 
	 	By:  	/s/ David L. Abshier
 	 
	 	 	Name:  	David L. Abshier 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	LENDER AND RISK PARTICIPANT:



HUNTINGTON FINANCE, LLC

 	 
	 	By:  	/s/ Donald R. Kimble
 	 
	 	 	Name:  	Donald R. Kimble 	 
	 	 	Title:  	President 	 



Signature Page to Amendment No. 4 to Amended and Restated Credit Agreement (Licensing)