Franklin Credit Management Corporation 10-12G

Exhibit
10.5

 

December
31, 2008

 




 

Paul D.
Colasono

8 Marie
Drive

Huntington,
NY  11743




Dear Mr.
Colasono:




This letter sets forth proposals for
the amendment of your employment agreement with Franklin Credit Management
Corporation, effective as of March 28, 2005, in order to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986, as
amended.





	
       
      
	
      1.
	
      We
      hereby propose to amend your employment agreement by adding the following
      new sentence to the end of Section
5(b):








	
       
      
	
      "Any
      bonus pursuant to this Section 5(b) shall be paid no later than two and
      one-half (21⁄2) months from the last day of the tax year in which the bonus
      was earned."








	
       
      
	
      2.
	
      We
      hereby propose to amend your employment agreement by amending and
      restating Section 11(c)(3) in its entirety as
  follows:








	
       
      
	
       
	
      
      "(3)
      Employee is removed
      as CFO, or Executive Vice President of FCMC and such removal results in a
      material diminution of Employee's authority, duties or responsibilities.”









	
       
      
	
      3.
	
      We
      hereby propose to amend your employment agreement by adding the following
      new sentence to the end of Section
11(c):







“Notwithstanding
the foregoing, the occurrence of any of the events described in (1) through (3)
above shall not constitute “good reason” unless (i) Employee gives FCMC written
notice, within ninety (90) days after Employee has knowledge of the occurrence
of any of the events described in (1) through (3) above, that such circumstances
constitute good reason, (ii) FCMC thereafter fails to cure such circumstances
within thirty (30) days after receipt of such notice and (iii) the Employee
terminates employment no later than two (2) years following the occurrence of
such circumstance.”





	
       
      
	
      4.
	
      We
      hereby propose to amend your employment agreement by adding the following
      new sentences to the end of Section
12(b):




 

 

 

 




















 


 

“Such
payments under this Paragraph 12(b) shall only be made after Employee has
incurred a "separation from service" as defined under Section 409A of the
Internal Revenue Code of 1986, as amended (the
“Code”).  Notwithstanding the foregoing, any payment under this
Paragraph 12(b) shall be postponed to the date that is six months and one day
following the Employee's separation from service to the extent that such
postponement is necessary to prevent the imposition of the additional tax under
Section 409A(a)(B) of the Internal Revenue Code.”





If you
agree to the foregoing, please sign where indicated below and return the signed
copy to me.  Otherwise, the agreement will continue in full force and
effect, without amendment.

 

 

                                                                Sincerely,

 

 

                                                                FRANKLIN
CREDIT MANAGEMENT CORPORATION







                                                                /s/ Alexander Gordon
Jardin                     


                                                                Name:  Alexander Gordon
Jardin

                                                                Title:  CEO




AGREED
AND ACCEPTED










/s/ Paul D.
Colasono                                                      

Paul D.
Colasono




Date:
12/30/08