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                                                                   Exhibit 10.9


                              EMPLOYMENT AGREEMENT
                               JEFFREY R. JOHNSON

      This EMPLOYMENT AGREEMENT ("Agreement"), effective as of the 1st day of
October, 4 2004, by and between Franklin Credit Management Corporation ("FCMC"
or "Company") and Jeffrey R. Johnson ("Employee").

                                    RECITALS

A.    FCMC is a Corporation organized under the laws of the State of Delaware.

B.    FCMC desires to employ Employee, and Employee desires to accept employment
      from FCMC.

C.    The parties desire to record the arrangements made for such employment.

                                   AGREEMENT

      IT IS, THEREFORE, AGREED:

      1.    Definitions: For the purposes of this Agreement, the following
capitalized terms shall have the following meanings:

            a.    FCMC or Company shall mean Franklin Credit Management
Corporation and its current and future subsidiaries.

            b.    Employee shall mean Jeffrey R. Johnson.

            c.    Competitor shall mean any person, company, firm or corporation
which: (1) actually competes with the Company, its subsidiaries or affiliates in
the acquisition, origination, servicing and resolution of performing,
sub-performing, and nonperforming residential mortgage loan and residential real
estate; (2) is engaged in a business in which the Company, its subsidiaries or
affiliates are principally engaged; or (3) is engaged in a business which the
Company, its subsidiaries or affiliates have at the date of Employee's
termination of employment reasonably certain plans to principally engage within
twelve months of the Employee's termination (collectively, "Business of the
Company").

            d.    Executive Bonus Pool shall mean that bonus pool established
pursuant to Company policy, for each fiscal year, equal to ten (10%) percent of
the after tax consolidated net profits of the Company in excess of $500,000,
which percentage may be adjusted in the reasonable discretion of the Company's
Board of Directors. The after tax net earnings shall be determined by the
consolidated audited financial statements of the Company.
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            e.    Change in Control shall mean the occurrence of one or more of
the following events:

                  (1)   If (i) any "person"(as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing twenty percent (20%) or
more of the total voting power represented by the Company's then outstanding
voting securities who is not already such as of the date of this Agreement, and
(ii) Thomas J. Axon, members of Mr. Axon's family, and entities in which Mr.
Axon has an interest ("TJA") shall have beneficial ownership of less than twenty
percent (20%) or more of the total voting power represented by the Company's
then outstanding voting securities;

                  (2)   The consummation of a tender or exchange offer; one or
more contested elections related to the election of directors of the Company; a
reorganization, merger or consolidation, or the acquisition of assets of another
corporation, or any combination of the foregoing transactions (each, a "Business
Combination"), which results in a change in the composition of the Board, as a
result of which fewer than fifty percent (50%) of the directors are Incumbent
Directors.

                  (3)   Company's shares shall cease to be registered under
Section 12(b) or 12(g) under the Securities Exchange Act of 1934, as amended.;
or,

                  (4)   A sale or other disposition of all or substantially all
of the assets of the Company.

Notwithstanding the foregoing, the term "Change of Control" shall not be deemed
to have occurred if the Company files for bankruptcy protection, or if a
petition for involuntary relief is filed against the Company.

            f.    Incumbent Directors shall mean directors who either (A) are
directors of the Company as of the date hereof or (B) are elected, or nominated
for election, to the Board with the affirmative votes of at least a majority of
those directors, or if such determination is being made by a committee of the
Board of directors, a majority of the directors on such committee, whose
election or nomination was not in connection with any transaction described in
subsections (1) or (2) of Section 1(e) or in connection with an actual or
threatened proxy contest relating to the election of directors of the Company.

            g.    Board of Directors shall mean the Board of Directors of the
Company or any committee of the Board of Directors that is then charged with
making compensation decisions with respect to the Employee.

      2.    Employment/Term. Effective October 1, 2004, FCMC hereby employs
Employee as the Chief Executive Officer and the President of FCMC. FCMC shall
cause


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Employee to be elected as a director of the Company as soon as possible after
October 1, 2004. The term of employment shall be for the period of five (5)
years commencing October 1, 2004, unless terminated sooner pursuant to the
provision of Section 11 of this Agreement.

            a.    Place of Employment. During the term of employment, Employee
shall be based at the Company's principal executive offices, which shall be in
the New York City metropolitan area (including the surrounding area of New
Jersey), subject to reasonable travel required in the performance of Employee's
duties.

      3.    Duties and Authority. The responsibilities of Employee shall include
management, control, administration, and operation of the following aspects of
the business and affairs of the Company and its subsidiaries:

            a.    Employee's duties shall include those duties normally
customarily associated with position of CEO and President. Without limitation,
Employee shall be responsible for the general and active management of the
affairs of the Company, including but not limited to but not limited to: (i)
supervision and evaluation of the Company and its staff; (ii) developing,
implementing and reviewing strategic plans for each business segment; (iii)
developing operating budgets for each business segment; (iv) review and
oversight of regulatory issues and compliance; (v) oversight of information
technology including management information systems; (vi) responsibility for
management reporting and financial reporting packages.

            b.    Employee shall report directly to the Board of Directors. All
employees of the Company, other than the Chairman of the Board shall report
directly or indirectly to the Employee; and,

            c.    Employee shall submit to the Board of Directors from time to
time such recommendations and information concerning any phase of Company policy
or administration as may seem necessary to Employee to be in the best interests
of the Company.

      4.    Compensation. FCMC shall pay to Employee the following compensation:

            a.    Salary. Employee shall receive an initial annual salary of
$325,000, payable on a semimonthly basis, which annual salary may be adjusted
upward (but not downward) by the Board of Directors.

            b.    Bonuses. In addition to the salary set forth above, Employee
shall receive an annual bonus based on the net income after taxes of FCMC. The
annual bonus shall be determined as follows:

                  (1)   For each fiscal year of FCMC during which Employee is
employed by FCMC, Employee shall be entitled to a 25% participation in the
Executive Bonus Pool. With regard to the Company's fiscal year ending on
December 31, 2004, Employee shall be entitled to a bonus equal to 25% of the
Executive Bonus Pool,


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prorated to reflect Employee's three months of employment with the Company. The
parties agree that Employee's bonus from the Executive Bonus Pool for fiscal
year 2004 shall not be determined solely or primarily on the after-tax net
earnings of the Company for the fourth quarter of fiscal year 2004. Such bonus
for each fiscal year shall be paid to Employee within sixty (60) days of the
filing of the Company's year end financial statements with the Securities and
Exchange Commission.

                  (2)   In the event Employee's employment with the Company ends
on any date other than December 31 of a fiscal year, Employee's bonus from the
Executive Bonus Pool for such fiscal year shall be determined in a manner
consistent with the prior paragraph, subject however to prorating the number of
months (full and partial) he was employed during such fiscal year.

            c.    Stock. As additional compensation for services provided under
this agreement, Employee shall be granted 100,000 shares of restricted common
stock of the Company (the "Restricted Award") by November 30, 2004 (the "Grant
Date"). On the Grant Date, none of the Restricted Award shall be vested. The
Restricted Award shall vest on the following schedule:

     10,000 shares on January 1, 2005
      5,000 shares on each of April 1; July 1; October 1 2005; January 1, 2006;
      5,000 shares on each of April 1; July 1; October 1 2006; January 1, 2007;
      6,250 shares on each of April 1; July 1; October 1 2007; January 1, 2008;
      6,250 shares on each of April 1; July 1; October 1 2008; January 1, 2009.

                  (1)   Employee acknowledges that the shares subject to the
Restricted Award shall be restricted stock and subject to restrictions imposed
by Federal and/or State securities laws.

                  (2)   The Restricted Award is subject to forfeiture to the
extent that it has not become vested and nonforfeitable in accordance with the
vesting schedule set forth above. Except as provided in subsection (c)(3) of
this Section or Section 13, in the event that Employee's employment by the
Company terminates prior to any of the vesting dates set forth in this
subsection, any portion of the Restricted Award that has not become vested and
nonforfeitable on or prior to the date of such termination shall be forfeited.

                  (3)   In the event of a Change of Control, all restrictions,
including but not limited to completion of the vesting periods applicable to the
Restricted Award, will be deemed to have expired, and the entire Restricted
Award shall immediately become fully vested and nonforfeitable.

                  (4)   Employee will make an election under Section 83(b) of
the Internal Revenue Code of 1986, as amended, with regard to the shares subject
to the Restricted Award. FCMC shall reimburse Employee on a grossed up basis for
any taxes


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resulting from Employee having made such election at Employee's incremental tax
rate (covering Social Security, and all applicable state, local, and federal
taxes).

                  (5)   Employee shall have registration rights with respect to
the Restricted Award, including piggyback registration rights with respect to
underwritten public offerings of the Company (subject to a customary
underwriter's cutback), and two demand registration rights on Form S-3 or S-8 if
the Company is eligible for the use of such forms, subject to customary and
reasonable blackout periods; in each case to the extent Employee is not then
eligible to sell all of the vested shares subject to the Restricted Award within
a three month period under Rule 144, promulgated under the Securities Act of
1933, as amended. Additionally, Employee shall be subject to and entitled to
ordinary and customary arrangements relating to the registration process,
expenses and indemnification and contribution.

                  (6)   Purchase of Shares. Employee shall purchase and the
Company shall sell 20,000 shares of common stock of FCMC at per share equal to
the weighted average closing price of the Company's stock during the month of
September 2004.

                  (7)   Employee acknowledges that the stock to be purchased
shall not initially be registered and shall be subject to resale restrictions
based on federal and state securities laws.

      5.    Certain Benefits.

            a.    Vacation and other benefits. During each twelve-month period
that Employee is employed by FCMC, Employee shall be entitled to four weeks
(i.e., twenty days) of paid vacation plus regular personal days and holidays in
accordance with the policies of FCMC. Up to five (5) unused vacation days can be
accrued or aggregated from one twelve-month period to the next. In addition,
Employee shall be entitled to participate in all present and future benefit
plans and/or fringe benefits provided by FCMC to its other executive officers.

            b.    Car Allowance. Throughout the term of employment, Employee
shall receive a car allowance of $1,000 per month to cover purchase or lease
expense of vehicle, gas, maintenance, insurance and parking. Employee shall also
receive a paid parking space in the vicinity of the Company's offices.

            c.    Expense Reimbursements. Employee is authorized to incur
reasonable, ordinary and necessary expenses in carrying out his duties and
responsibilities under this Agreement, including, without limitation, expenses
for travel, business entertainment and similar items related to such duties and
responsibilities. The Company will reimburse Employee for all such expenses upon
presentation by Employee from time to time of appropriately itemized and
documented accounts of such expenditures, consistent with the Company's policy.


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            d.    Legal Reimbursement. The Company shall reimburse Employee for
his legal costs incurred in connection with this Agreement and related matters.

      6.    Moving Expenses.

            a.    The Company shall provide Employee temporary housing in the
New York City (NYC) metropolitan area for up to 90 days from date of employment.
FCMC will manage the process of finding suitable housing.

            b.    The Company shall reimburse Employee for two house hunting
trips to NYC for Nancy Johnson, utilizing cost-effective airfare and ground
transportation.

            c.    The Company shall reimburse Employee for bi-monthly trips to
Atlanta during the 90 day interim housing period, utilizing cost-effective
airfare and ground transportation.

            d.    The Company shall pay costs associated with renting an
apartment in NYC; including, but not limited broker fees, legal costs to review
a lease and similar items; but excluding rental payments, tenant improvements
and similar items.

            e.    The Company shall pay for the movement and temporary storage
(for up to 60 days) of the household goods of Employee and members of his
household.

            f.    The Company shall pay for the travel expenses to move Employee
and members of his household to NYC.

            g.    The Company shall reimburse Employee for reasonable other
moving expenses upon submission of an itemized list.

            h.    The Company shall reimburse Employee for costs associated with
the closing of the sale of the residence in Atlanta, GA. That includes broker
fees up to a commission of 4% and other reasonable costs to be submitted to the
Company. This assumes a house sale price of approximately $1,000,000.

            i.    The Company shall discuss with Employee actions to be taken if
the Atlanta residence does not sell within 90 days. For example, FCMC would
consider reimbursing Employee the monthly mortgage payments that will be due
while the house is in the sales process.

            j.    The Company shall pay Employee an amount necessary to gross up
the non-deductible relocation costs at Employee's incremental tax rate (covering
Social Security, and all applicable State, Local, and Federal Taxes).

      7.    Acknowledgments. FCMC is in the Business of the Company in both the
New York City metropolitan area and on a national basis. Employee acknowledges
that:

            a.    FCMC's services are highly specialized;


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            b.    FCMC has a proprietary interest in its methods and processes;
and,

            c.    Documents and other information regarding FCMC's methods,
pricing and costs are highly confidential and constitute trade secrets.

      8.    Trade secrets and confidential information. During the term of this
Agreement, Employee may have access to, and become familiar with, various trade
secrets and confidential information belonging to FCMC, its subsidiaries or
affiliates. Employee acknowledges that such confidential information and trade
secrets are owned and shall continue to be owned solely by FCMC, its
subsidiaries or affiliates. During the term of his employment and for thirty-six
(36) months (or for so long as a trade secret remains a trade secret under
applicable law) after such employment terminates for any reason, regardless of
whether termination is initiated by FCMC or Employee, Employee agrees not to
use, communicate, reveal or otherwise make available such information for any
purpose whatsoever, or to divulge such information to any person, partnership,
corporation or entity other than Employer or persons expressly designated by
Employer, unless Employee is compelled to disclose it by judicial process.

      9.    Restrictive covenants.

            a.    Full-time Employment. During the period of his employment,
Employee shall not, directly or indirectly, alone or as a member of any
partnership, or as an officer, director, shareholder, or employee of any
corporation, engage in or be concerned with any other paid employment, except as
otherwise authorized in writing by the Company. Notwithstanding the foregoing,
nothing herein shall preclude Employee from participating in charitable,
educational, religious and community affairs and organizations, from serving as
a member of the board of directors of a corporation (so long as such corporation
does not compete directly or indirectly with the Company and is not otherwise
involved in the purchase and/or sell of sub-prime loans), from managing personal
investments made by him, and leasing and managing any investment property
including his principal residence.

            b.    Non-competition. Employee agrees that:

                  (1)   During the period of Employee's employment by the
Company, Employee will not accept employment with, or act as a consultant,
contractor, advisor, or in any other capacity for, a Competitor, or enter into
competition with FCMC, its subsidiaries or affiliates, with regard to the
Business of Company either by himself or through any entity owned or managed in
whole or in part by Employee, and Employee shall not make any preparations to
compete with the Company with regard to the Business of Company.

                  (2)   During the term of this Agreement and for a period of
nine (9) months after termination of Employee's employment by the Company for
any reason, regardless of whether the termination is initiated by FCMC or
Employee, Employee shall not solicit or make, or cause to make, any offer of
employment to any employee of the


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Company, it subsidiaries or affiliates, for the purpose of inducing such
employee to terminate his or her employment with the Company, or its
subsidiaries or affiliates.

                  (3)   For a period of twelve (12) months after termination of
Employee's employment for any reason, regardless of whether the termination is
initiated by the Company or Employee, or for a period of time equal to the
length of Employee's employment with FCMC if such tenure is less than twelve
(12) months, Employee will not, directly or indirectly, solicit for the purchase
or sale of financial assets any person, company, firm, or corporation from whom
the Company purchased financial assets or to whom the Company sold assets
originated by the Company during the last twelve (12) months of Employee's
employment or during the period of Employee's employment with the Company if
such tenure is less than twelve (12) months. Employee agrees not to so solicit
such customers on behalf of himself or any other person, firm, company, or
corporation, if such solicitation is for the purchase or sale of the same or
similar types of financial assets purchased or sold by the Company.

            c.    The parties have attempted to limit Employee's right to
compete only to the extent necessary to protect FCMC from unfair competition.
The parties recognize, however, that reasonable people may differ in making such
a determination. Consequently, the parties hereby agree that, if the scope or
enforceability of the restrictive covenant is in any way disputed at any time, a
court or other trier of fact may modify and enforce the covenant to the extent
that it believes the covenant is reasonable under the circumstances existing at
that time.

            d.    Employee further acknowledges that each of the covenants set
forth in this Section is reasonable and necessary for the protection of the
Company's business interests, that irreparably injury will result to the Company
if Employee breaches any of the terms of said covenants, and that in the event
of Employee's actual or threatened breach of any such covenants, the Company
will have no adequate remedy at law.

      10.   Remedies. Employee acknowledges that: (1) compliance with Sections 8
and 9 herein is necessary to protect FCMC's business and good will; (2) a breach
of those Sections will irreparably and continually damage FCMC; and (3) an award
of money damages will not be adequate to remedy such harm. Consequently,
Employee agrees that, in the event he breaches or threatens to breach any of
these covenants, FCMC shall be entitled to both: (1) a preliminary or permanent
injunction in order to prevent the continuation of such harm; and (2) money
damages, insofar as they can be determined, including, without limitation, all
reasonable costs and attorneys' fees incurred by the FCMC in enforcing the
provisions of this Agreement if FCMC is successful in establishing Employee's
breach of these covenants. Nothing in this Agreement, however, shall prohibit
FCMC from also pursuing any other remedy.


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      11.   Termination.

            a.    Termination by Either Party. Either party may terminate
Employee's employment "without cause" by giving thirty (30) days prior written
notice to the other.

            b.    Termination by Company. Employee's employment may be
terminated by the Company "for cause" if he:

                  (1)   continually fails or refuses to perform one or more of
his material assigned duties to the Company;

                  (2)   continually fails or refuses to comply with one or more
policies of the Company;

                  (3)   breaches any of the material terms of this Agreement;
or,

                  (4)   commits any criminal, fraudulent or dishonest act
related to his employment (other than an arm's length dispute relating to the
erroneous reporting of an immaterial amount as an expense) relating to the
Company or any of its assets or opportunities;

Notwithstanding the forgoing, the Company shall not be entitled to terminate
Employee for cause under subsections (1), (2) or (3) of this subsection unless:
(i) Employee has been given written notice describing in reasonable detail the
alleged breaches and stating that such breaches are grounds for termination for
cause under this Section, and (ii) Employee fails to cure such breaches within
ten (10) days after receipt of such notice.

In the event that the Company terminates Employee for cause pursuant to the
provisions of this subsection and it is later determined by a court of competent
jurisdiction that such cause did not exist, Employee's termination shall be
deemed to be a termination by the Company without cause. In such event: (1)
Employee shall be entitled to receive Severance pursuant to the terms of this
Agreement as if the termination was made by the Company without cause, and (2)
the entire Restricted Award shall become fully vested and nonforfeitable.

            c.    Termination by Employee. Employee shall have the right to
terminate his employment for "good reason." For the purposes of this Agreement,
good reason shall be limited to the following:

                  (1)   The Company transfers the place of Employee's employment
in violation of Section 2 (a) of this Agreement;

                  (2)   The Company breaches any of the material terms of
Sections 2, 4, 5 or 6 of this Agreement or the Company knowingly misrepresented
or failed to disclose to Employee a material financial, regulatory or legal
matter of, or involving, the Company prior to the execution of this Agreement;


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                  (3)   Any material diminution by the Company of Employee's
duties or responsibilities, except in connection with the termination of
Employee's employment by the Company, as a result of permanent disability, or as
a result of Employee's death;

                  (4)   Employee is requested by the Company to either act or
fail to act in an unethical or illegal manner; or

                  (5)   Employee is removed as CEO, President or Director of the
Company.

Notwithstanding the forgoing, Employee shall not be entitled to terminate his
employment for good reason under subsection (4) of this subsection: (i) unless
Employee has given the Company reasonable written notice of the act, or failure
to act, which Employee contends is unethical or illegal, or (2) if the Company
has obtained an opinion of counsel opining that Employee has not been requested
to act or fail to act in an unethical or illegal manner.

            d.    Termination Due to Incapacity. In the event Employee is unable
to perform his material duties because of illness or disability for a continuous
period of 120 days, the Company may terminate this Agreement without further
notice.

            e.    Termination Due to Death. This Agreement shall terminate upon
the death of Employee, subject to the rights and obligations of each party
contained herein.

      12.   Severance.

            a.    Conditions under which Severance is Paid.

                  (1)   Termination for Cause. In the event the Company
terminates Employee's employment for cause, the Employee shall receive nothing
other than any accrued salary, payment for accrued but unused vacation time, and
reimbursement of expenses already incurred under Sections 5 and/or 6 hereof. Any
portion of the Restricted Award that has not become vested and nonforfeitable on
or prior to the date of such termination shall be forfeited.

                  (2)   Termination Without Cause. In the event the Company
terminates Employee's employment without cause, the Employee shall receive the
severance pay provided in subsection (b) of this Section in addition to any
accrued salary, accrued bonus, payment for accrued but unused vacation time, and
reimbursement of expenses already incurred under Sections 5 and/or 6 hereof. Any
portion of the Restricted Award that has not become vested and nonforfeitable on
or prior to the date of such termination shall be forfeited.

                  (3)   Termination by Employee. In the event Employee
terminates his employment without good reason, the Employee shall receive
nothing other than any accrued salary, accrued bonus, payment for accrued but
unused vacation


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time, and reimbursement of expenses already incurred under Sections 5 and/or 6
hereof. Any portion of the Restricted Award that has not become vested and
nonforfeitable on or prior to the date of such termination shall be forfeited.

                  (4)   Termination by Employee for Good Reason. In the event
Employee terminates his employment with good reason, Employee shall receive the
severance pay provided in subsection (b) of this Section in addition to any
accrued salary, accrued bonus, payment for accrued but unused vacation time, and
reimbursement of expenses already incurred under Section 5 and/or 6 hereof.

                  (5)   Termination following Change in Control. In the event
Employee's employment is terminated (either by the Company or by Employee)
following a Change in Control, Employee shall receive the severance pay provided
in subsection (b) of this Section. Notwithstanding the forgoing, this subsection
shall not apply to a termination of Employee for cause, following a Change in
Control.

                  (6)   Death or Disability. In the event of Employee's death or
disability under Section 11 above, Employee or his estate shall receive the
severance pay provided in subsection (b) of this Section in addition to any
accrued salary, accrued bonus, payment for accrued but unused vacation time and
reimbursement of expenses already incurred under Section 5 and/or 6 hereof. In
addition, in the event of Employee's death or disability under Section 11 above,
the entire Restricted Award shall immediately become fully vested and
nonforfeitable

            b.    Amount of Severance. To the extent severance is payable to
Employee pursuant to subsection (a) of this Section, Employee shall be entitled
to receive the severance payments provided for in subparts (1), (2) and (3) of
this subsection:

                  (1)   Vacation; Bonus. Employee shall be paid by the Company
in a lump sum in respect of all accrued and unused vacation within ten days
after termination of employment in an amount based on Employee's current base
salary.

                  (2)   Employee shall be paid a prorated bonus from the
Executive Bonus Pool as determined by, or consistent with, the method of
computation, and timing set forth in Section 4 hereof.

                  (3)   Additional Lump Sum Payment. Employee shall be entitled
to receive payment, in a lump sum, in the following amounts:

                        (i)   if the termination occurs prior to January 1, 2006
                              - $225,000;

                        (ii)  if the termination occurs on or after January 1,
                              2006 - $225,000 plus $13,542 for each month (or
                              partial month) of employment with the Company
                              after December 31, 2005. However, in no event
                              shall the amount paid pursuant to this subsection
                              exceed Employee's salary as of the date of such
                              termination


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                              plus an amount equal to the value of Employee's
                              total benefits for the prior twelve (12) month
                              period, as of the date of such termination.

            c.    Effect of Severance Payments. The severance payments set forth
in this Section are payments made as liquidated damages and not as a penalty. In
the event Employee's employment is terminated and Employee is not entitled to
severance in accordance with subsection (a) of this Section, Employee shall be
entitled to no further compensation or payments from the Company, except as set
forth above.

            d.    Cooperation. On termination of employment with the Company,
Employee shall provide the Company a written resignation from all positions with
the Company, its subsidiaries and affiliates, and any other documents that the
Company may need to effectuate severance of the relationship

      13.   Effect of Termination. Notwithstanding any other provision of this
Agreement (including but not limited to Section 12(a)(6), related to Death and
Incapacity, and Section 4(c)(3), related to Change in Control), in the event
Employee's employment is terminated pursuant to Section 11 of this Agreement by
Employee for good reason, then any unvested portion of the Restricted Award
under Section 4(c) shall immediately vest and become nonforfeitable.

      14.   Return of the Company Property. On termination of employment,
Employee shall return to the Company all keys, correspondence, contracts,
reports, price lists, manuals, forms, mailing lists, customer lists, advertising
materials, ledgers, supplies, equipment, checks, petty cash and all documents of
any form relating to the Business of the Company or its subsidiaries or
affiliates in his possession or control.

      15.   Notice. Any notice required to be given hereunder shall be in
writing sent by registered mail, return receipt requested, to FCMC at No. 6
Harrison Street, Fifth Floor, New York, New York 10016, Attention Thomas J.
Axon, and to Employee at the address contained in the personal records of the
Company or to such changed address as a party may designate by like notice to
the other party. The effective date of such notice shall be its mailing date.

      16.   Entire Agreement. This Agreement supersedes all agreements
previously made by the parties relating to its subject matter. There are no
other understandings or agreements between the parties.

      17.   No Violation or Default. Employee hereby represents and warrants
that the execution of this Agreement by him will not violate the provisions of
or constitute a default under any other agreement or arrangement to which
Employee is party or otherwise bound.

      18.   Indemnification. The Company shall indemnify Employee in Employee's
capacity as an officer and director, if and as applicably, under the terms and
conditions of the agreement in place between the Company and its other Officers
and Directors, which may be revised from time to time.


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      19.   Non-Waiver. No delay or failure by either party to exercise any
right under this Agreement, and no partial or single exercise under it, shall
constitute a waiver of that or any other right.

      20.   Headings. Headings in this Agreement are for convenience only and
shall not be used to interpret or construe its provisions.

      21.   Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of New York.

      22.   Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

      23.   Binding Effect. The provisions of this Agreement shall be binding
upon and inure to the benefits of each of the parties and their respective
successors and assigns.

      24.   Tax Gross Up. Employee shall receive any series of tax "gross up"
payments necessary in order to fully defray any and all federal, state, and
local taxes, from whatsoever jurisdictions, that Employee may recognize or incur
as a result of the payments, benefits, or other income items referenced in
Sections 4(c)(4) and 6(j), and to defray all such taxes on such payments
themselves, so as to equalize such taxes and avoid Employee having to be
out-of-pocket or otherwise bear such taxes himself. Both parties agree to
negotiate in good faith any changes to this Agreement as may be reasonably
necessary to avoid any of the compensation of the Employee being determined to
be deferred compensation and thereby subjecting any of the parties to excise
taxes or other penalties under the American Jobs Creation Act of 2004, and any
regulations promulgated thereunder.

      25.   Survival. All rights of either party hereunder that by their terms
are intended to survive termination of employment, (including without limitation
Employee's rights to severance compensation, continuing benefits,
indemnification, tax gross up, and for reimbursement for expenses validly
incurred prior to termination), shall survive the termination or non-renewal of
Employee's employment hereunder.


                                      -13-
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have signed this Agreement.
effective as of October 1, 2004.

                                     EMPLOYEE:




Date: _________________________      __________________________________________
                                     Jeffrey R. Johnson



                                     FCMC:
                                     Franklin Credit Management Corporation



Date: _________________________      By:    ____________________________________
                                     Name:  Thomas Axon
                                     Title: Chairman


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