kl11029_ex10-1.htm


    
      

    

     

    Exhibit
      10.1

    
 

    LIMITED
      WAIVER

    


    This
      Limited Waiver is made and entered into as of November 15, 2007, between The
      Huntington National Bank, successor by merger to Sky Bank, Franklin Credit
      Management Corporation, a Delaware corporation (“Borrower”) and each subsidiary
      of the Borrower listed on the signature pages hereof.

     

    Reference
      is hereby made to (1) a certain Master Credit and Security Agreement dated
      as of
      October 13, 2004 (as amended, restated, modified or supplemented from time
      to
      time, the “Master Credit Agreement”) entered into between Sky
      Bank, now known as The Huntington National Bank (“Lender”) and
      Franklin Credit Management Corporation, a Delaware corporation
      (“Borrower”), certain subsidiaries of Borrower from time to
      time party to the Master Credit Agreement and (2) a certain Flow Warehousing
      Credit and Security Agreement dated as of August 11, 2006, entered into between
      Lender and Borrower (as amended, restated, modified or supplemented from time
      to
      time, the “Flow Credit Agreement). All
      capitalized terms not otherwise defined in this Limited Waiver shall have the
      meanings ascribed to such terms in the Master Credit Agreement or the Flow
      Credit Agreement, as specified.

     

    Borrower
      agrees that Lender has
      reasonably requested pursuant to Section 6.1(b)(i) of the Master Credit
      Agreement and Section 6.2(a) of the Flow Credit Agreement that Borrower provide,
      within 30 days and 45 days respectively after the end of each calendar quarter,
      statements of income and cash flows and related balance sheet, each for the
      fiscal quarter ending September 30, 2007, certified by the chief financial
      officer or other appropriate officer of the Borrower (the
“9/30/07Quarterly
      Financials”).  Borrower has advised Lender that it has failed
      to deliver to Lender the 9/30/07 Quarterly Financials as required, and Lender
      hereby provides notice to Borrower of such failure and that such failure
      constitutes an Event of Default under each of the Master Credit Agreement and
      the Flow Credit Agreement (the “Identified
      Defaults”).  Borrower hereby acknowledges the Identified
      Defaults and has requested that Lender waive the Identified Defaults through
      the
      earlier of (i) such time as Borrower files copies of the 9/30/07 Quarterly
      Financials with the Securities and Exchange Commission or (ii) December 31,
      2007, (the “Specified Waiver Date”).

    


    Borrower
      hereby agrees (i) not to
      request any further loans, advances or other extensions of credit pursuant
      to
      the Master Credit Agreement, the Flow Credit Agreement or any other loan
      document, letter of credit agreement, hedging agreement or banking services
      agreement (each of the foregoing a “Credit Extension”) through
      and including the Specified Waiver Date and (ii) contemporaneously herewith
      to
      enter into a Security Agreement, in form and substance satisfactory to Lender,
      pursuant to which Borrower will grant to Lender, to secure all present and
      future loans, liabilities and obligations of Borrower and each direct and
      indirect subsidiary thereof to Lender, a first priority lien in all property
      and
      assets of Borrower and each direct and indirect subsidiary (each of the
      foregoing, a “Condition of Waiver”).   Subject
      to the terms and conditions set forth herein, including without limitation
      Lender’s satisfaction with each Condition of Waiver and the execution of this
      Limited Waiver by each of Borrower and each Company Subsidiary (as defined
      in
      the Master Credit Agreement), Lender hereby waives the Identified Defaults
      through and including the Specified Waiver Date.

    


    Nothing
      in this Limited Waiver shall
      (i) cause a modification of the Master Credit Agreement, the Flow Credit
      Agreement, any other loan document agreement in connection with any extension
      of
      credit from Lender to Borrower, except as precisely set forth above, (ii)
      establish any custom, course of dealing or in any manner waive or modify any
      future default or Event of Default, (iii) entitle Borrower or any Company
      Subsidiary to any other waiver or any other or further notice or demand
      whatsoever, or (iv) in any way modify, change, impair, effect, diminish, or
      release Borrower's or any Company Subsidiary’s liability under or pursuant to
      the Master Credit Agreement, the Flow Credit Agreement or any other loan
      document or agreement.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    Borrower
      and each Company Subsidiary
      hereby agree to execute and deliver such additional documents, instruments
      and
      agreements reasonably requested by Lender as may be reasonably necessary or
      appropriate to effectuate the purposes of this Limited Waiver, the Master Credit
      Agreement, the Flow Credit Agreement or any other loan agreement or
      document.

    


    This
      Limited Waiver 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.

    


    This
      Limited Waiver may be executed in
      any number of counterparts and by different parties hereto in separate
      counterparts, each of which when so executed shall be deemed to be an original,
      and all of which taken together shall constitute one and the same
      instrument.

    


    Borrower
      and each Company Subsidiary,
      for itself and its respective successors and assigns, agents, employees,
      officers and directors, hereby forever waive, relinquish, discharge and release
      all defenses and Claims of every kind or nature, whether existing by virtue
      of
      state, federal, or local law, by agreement or otherwise, against Lender, its
      successors, assigns, directors, officers, shareholders, agents, employees and
      attorneys, the obligations evidenced by the Master Credit Agreement, the Flow
      Credit Agreement, each promissory note or instrument in connection
      therewith, each other loan document and the Collateral, whether
      previously or now existing or arising out of or related to any transaction
      or
      dealings between Lender and Borrower or Lender and any Company Subsidiary,
      which
      Borrower or any Company Subsidiary, may have or may have made at any time up
      through and including the date of this Limited Waiver, including without
      limitation, any affirmative defenses, counterclaims, setoffs, deductions or
      recoupments, by Borrower or any Company Subsidiary.  “Claims” means
      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, Borrower, each Company Subsidiary or any of them ever
      had,
      claimed to have, now has, or shall or may have.  Nothing contained in
      this Limited Waiver prevents enforcement of this waiver and
      release.

    


     IN
      WITNESS WHEREOF, this Limited Waiver has been executed as of the date first
      appearing above notwithstanding the date it is actually executed.

    


    


    [Signature
      page follows]

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    Lender:

    


    The
      Huntington National Bank

    


    By:
      /s/ Marty E.
      Adams             


    


    Its:  President

    


    


    Borrower:

    


    Franklin
      Credit Management Corporation

    


    


    By:
      /s/ Thomas Axon

    


    Name:
      Thomas Axon

    


    Title:  Chairman
      & President

    


    


    Each
      Company Subsidiary listed on Schedule A attached hereto:

    


    By:
      /s/ Thomas Axon

    


    Name:
      Thomas Axon

    


    Title:  Chairman
      & President,  as an authorized officer of, and on behalf of, each
      Company Subsidiary listed on Schedule A attached hereto

    


     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    SCHEDULE
      A

    COMPANY
      SUBSIDIARIES

    EXECUTING
      LIMITED WAIVER

    


    


    


    


    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    SCHEDULE
      A TO FRANKLIN LIMITED WAIVER

    


    COMPANY
      SUBSIDIARIES

    EXECUTING
      LIMITED WAIVER

    


    
      	
              FCMC
                2000 B CORP.

              FCMC
                2000 C CORP.

              FCMC
                2000 D CORP.

              FCMC
                2001 A CORP.

              FCMC
                2001 B CORP

              FCMC
                2001 C CORP.

              FCMC
                2001 D CORP.

              FCMC
                2001 E CORP.

              FCMC
                2001 F CORP.

              FCMC
                2002 A CORP.

              FCMC
                2002 B CORP.

              FCMC
                2002 C CORP.

              FCMC
                2002 D CORP.

              FCMC
                2002 E CORP.

              FCMC
                2002 F CORP.

              FCMC
                2002 G CORP.

              FCMC
                2002 H CORP.

              FCMC
                2003 A CORP.

              FCMC
                2003 B CORP.

              FCMC
                2003 C CORP.

              FCMC
                2003 D CORP.

              FCMC
                2003 E CORP.

              FCMC
                2003 F CORP.

              FCMC
                2003 G CORP.

              FCMC
                2003 H CORP.

              FCMC
                2003 I CORP.

              FCMC
                2003 J CORP.

              FCMC
                2003 K CORP.

              FCMC
                2004 A CORP

              FCMC
                2004 B CORP.

              FCMC
                2004 C CORP.

              FCMC
                2004 D CORP.

              FCMC
                2004 E CORP.

              FCMC
                2004 F CORP.

              FCMC
                2004 G CORP.

              FCMC
                2004 H CORP.

              FCMC
                2004 I CORP.

              FCMC
                2004 J CORP.

              FCMC
                2004 K CORP.

              FCMC
                2004 L CORP.

              FCMC
                2004 M CORP.

              FCMC
                2005 A CORP.

              FCMC
                2005 B CORP.

            	
              FCMC
                2005 C CORP.

              FCMC
                2005 D CORP.

              FCMC
                2005 E CORP.

              FCMC
                2005 F CORP.

              FCMC
                2005 G CORP.

              FCMC
                2005 H CORP.

              FCMC
                2005 I CORP.

              FCMC
                B-ONE 2004 A CORP.

              FCMC
                B-ONE 2004 B CORP.

              FCMC
                B-ONE 2004 C CORP.

              FCMC
                B-ONE 2004 D CORP.

              FCMC
                B-ONE 2004 E CORP.

              FCMC
                B-ONE 2004 F CORP.

              FLOW
                2000A CORP.

              FLOW
                2000B CORP.

              FLOW
                2000C CORP.

              FLOW
                2000D CORP.

              FLOW
                2000E CORP.

              FLOW
                2000F CORP.

              FLOW
                2001 A CORP.

              FLOW
                2001 B CORPORATION

              FLOW
                2001 C CORPORATION

              FLOW
                2001 D CORP

              FLOW
                2001 E CORPORATION

              FLOW
                2001 F CORPORATION

              FLOW
                2001 G CORPORATION

              FLOW
                2001 H CORP.

              FLOW
                2001 I CORP.

              FLOW
                2001 J CORP.

              FLOW
                2001 K CORP

              FLOW
                2001 L CORP.

              FLOW
                2002 A CORP.

              FLOW
                2002 B CORP.

              FLOW
                2002 C CORP.

              FLOW
                2002 D CORP.

              FLOW
                2002 E CORP.

              FLOW
                2002 F CORP.

              FLOW
                2002 G CORP.

              FLOW
                2002 H CORP.

              FLOW
                2002 I CORP.

              FLOW
                2002 J CORP.

              FLOW
                2002 K CORP.

              FLOW
                2002 L CORP.

               

            	
              FLOW
                2003 A CORP.

              FLOW
                2003 B CORP.

              FLOW
                2003 C CORP.

              FLOW
                2003 D CORP.

              FLOW
                2003 E CORP.

              FLOW
                2003 F CORP.

              FLOW
                2003 G CORP.

              FLOW
                2003 H CORP.

              FLOW
                2003 I CORP.

              FLOW
                2003 J CORP.

              FLOW
                2003 K CORP.

              FLOW
                2003 L CORP.

              FLOW
                2003 M CORP.

              FLOW
                2004 A CORP.

              FLOW
                2004 B CORP.

              FLOW
                2004 C CORP.

              FLOW
                2004 D CORP.

              FLOW
                2004 E CORP.

              FLOW
                2004 F CORP.

              FLOW
                2004 G CORP.

              FLOW
                2004 H CORP.

              FLOW
                2004 I CORP.

              FLOW
                2005 A CORP.

              FLOW
                2005 B CORP.

              FLOW
                2005 C CORP.

              FLOW
                2005 D CORP.

              FLOW
                2005 E CORP.

              FLOW
                2005 F CORP

              FLOW
                2005 G CORP

              FLOW
                2005 H CORP

              FLOW
                2005 I CORP

              FLOW
                2005 J CORP

              FLOW
                99-70 CORP.

              FLOW
                99-76 CORP.

              FLOW
                99-88 CORP.

              FLOW
                99-92 CORP.