Franklin Credit Management
Corporation 10-K


Exhibit 10.30


 


AMENDMENT NO. 7 TO


AMENDED AND RESTATED CREDIT AGREEMENT
(LICENSING)


 


THIS AMENDMENT NO.
7 TO AMENDED AND RESTATED CREDIT AGREEMENT (LICENSING) (this “Amendment”) is entered into as of March 26, 2014
(the “Amendment Effective Date”), by and among FRANKLIN CREDIT MANAGEMENT CORPORATION, a Delaware Corporation
(the “Borrower”), THE FINANCIAL INSTITUTIONS PARTY HERETO AS LENDERS (each, a “Lender” and
collectively, the “Lenders”), The Huntington National Bank,
a national banking association (“Huntington”), as administrative agent
(in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent”) for
the benefit of the Lenders and the Issuing Bank (as defined in the Credit Agreement (Licensing) referred to below). 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 (as so amended, the “Credit Agreement
(Licensing)”), by and among the Original Borrowers (as defined below), the Lenders, the Administrative Agent and the
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 (Licensing).


 


RECITALS:


 


A.           As
of March 31, 2009, the Borrower and Franklin Credit Holding Corporation, a Delaware corporation (“FCHC” and
together with the Borrower, collectively, the “Original Borrowers”), the Lenders, the Administrative
Agent and the Issuing Bank executed the Credit Agreement (Licensing) setting forth the terms of certain extensions of credit to
the Original Borrowers;


 


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


 


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


 


D.           On June 4, 2012,
(i) FCHC filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for
the District of New Jersey (the “FCHC Bankruptcy Filing”);


 


E.           In connection
with the FCHC Bankruptcy Filing, each of the Administrative Agent and the Lenders consented to the treatment of their claims against
FCHC in FCHC’s Prepackaged Plan of Reorganization, with the result that FCHC is no longer obligated under the Loan Documents
executed in connection with the Credit Agreement (Licensing);


 


F.           Events of Default
have occurred and are continuing under the Legacy Loans Credit Agreement by reason of (i) the failure of the borrowers thereunder
to pay in full the amounts due upon maturity on March 31, 2012, and (ii) the FCHC Bankruptcy Filing, each of which constitute a
“Default” under Section 5.1(a) of a certain Investment Property Security Agreement dated March 31, 2009 (the “Pledge
Agreement”) among the Borrower, the Administrative Agent, and the Legacy Administrative Agent (collectively the “Pledge
Defaults”);


 






    	 



    	 



    



 


G.           The Borrower
has requested that the Administrative Agent, the Issuing Bank and the Lenders (i) extend the maturity of the Revolving Loan Commitment
and the Letter of Credit Commitment, (ii) continue to forbear, pursuant to the terms hereof, from exercising their rights and remedies
resulting from the Pledge Defaults, and (iii) modify certain other terms and conditions of the Credit Agreement (Licensing) 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


 


H.           Pursuant to Section
10.04, “Amendments,” of the Credit Agreement (Licensing), the amendments requested by the Borrower herein must
be contained in a written agreement signed by the 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.                 
Amendment of Existing Definition. The definition of “Termination Date”
set forth in Section 1.01, “Certain Defined Terms,” of the Credit Agreement (Licensing) 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, March 31, 2015, 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.                 
Forbearance. The
Administrative Agent, the Lenders and the Issuing Bank agree in favor of the Borrower that they shall refrain from taking any
action to foreclose or recover the “Collateral” (as defined in the Pledge Agreement) or otherwise initiate collection
proceedings against the Borrower with respect to the Pledge Defaults from the date hereof through and including the earlier of
(i) March 31, 2015, or (ii) the occurrence of an Event of Default under the Credit Agreement (Licensing) (other than a Default
or Event of Default that the Administrative Agent and the Lenders have waived in writing and a Pledge Default) (the “Forbearance
Period”). The Borrower acknowledges and agrees that, notwithstanding the foregoing, (a) each of the Administrative Agent,
the Lenders and the Issuing Bank reserves the right to enforce each and every term of the Pledge Agreement (other than remedies
resulting from a Pledge Default during the Forbearance Period), and is under no duty or obligation of any kind or any nature to
grant the Borrower any additional period of forbearance beyond the Forbearance Period; (b) each action of the Administrative
Agent, the Lenders and the Issuing Bank in entering into this Agreement shall not be construed as a waiver or relinquishment of,
or estoppel to assert, any of Administrative Agent’s rights under the Pledge Agreement or applicable law; and (c) each action
of the Administrative Agent, the Lenders and the Issuing Bank in entering into this Agreement is without prejudice to the right
of the Administrative Agent, the Lenders and the Issuing Bank to pursue any and all remedies available to any of them upon expiration
of the Forbearance Period or immediately upon the occurrence of an Event of Default under the Credit Agreement (Licensing) or
a “Default” under the Pledge Agreement (other than a Pledge Default).


 


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


 






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(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)           The
Administrative Agent shall have received 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;


 


(c)           The
Administrative Agent (for the benefit of the Lenders) shall have received a fee in respect of this Amendment in the amount of $10,000,
which fee shall be earned in full as of the Amendment Effective Date and shall be non-refundable;


  


(d)           The
Borrower shall have paid all of the Administrative Agent’s costs 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. The 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 the Borrower in the Credit Agreement (Licensing) 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 the Borrower of this
Amendment and each other Loan Document have been duly authorized by all requisite corporate or organizational action on the part
of the Borrower and will not violate any Requirement of Law applicable to the Borrower; (c) this Amendment has been duly executed
and delivered by the Borrower, and each of this Amendment, the Credit Agreement (Licensing) and each other Loan Document as amended
hereby constitutes the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with
the terms thereof; and (d) after giving effect to this Amendment, no event has occurred and is continuing, and no condition exists,
which would constitute an Event of Default or a Default (other than a Pledge Default). 


 


5.                 
Ratification and Reaffirmation. The Borrower agrees (i) that all the obligations,
indebtedness and liabilities of the Borrower to the Administrative Agent and the Lenders under the Credit Agreement (Licensing)
are the valid and binding obligations of the Borrower; (ii) that the obligations, indebtedness and liabilities of the Borrower
evidenced by each Note executed and delivered by the 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
the Borrower under the Credit Agreement (Licensing), 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.


 






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6.                 
Reference to and Effect on the Loan Documents. (a) Upon the effectiveness of
this Amendment, each reference in the Credit Agreement (Licensing) to “Amended and Restated Credit Agreement,” “Credit
Agreement,” “Agreement,” the prefix “herein,” “hereof,” or words of similar import, and
each reference in the Loan Documents to the Credit Agreement (Licensing), shall mean and be a reference to the Credit Agreement
(Licensing) 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 (Licensing) 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 (Licensing) 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 the Borrower which would require the consent of the Lender.


 


7.                 
Waiver and Release of All Claims and Defenses. The 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, the Issuing Bank 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, the Issuing Bank,
any Lender and the Borrower or any of them, which the 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 the 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 (Licensing) 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. The Borrower agrees to pay on demand in accordance with
the terms of the Credit Agreement (Licensing) 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 the 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 the Borrower, which information includes the name and address
of the Borrower and other information that will allow the Administrative Agent to identify the Borrower in accordance with the
Act.


  


[Signature
Page Follows.]


 




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


 


		BORROWER: 



FRANKLIN CREDIT MANAGEMENT CORPORATION 
	 	 	 
	 	By: 	/s/ Paul D. Colasono
	 	Name: 	Paul D. Colasono
	 	Title:	EVP, COO
	 	 	 
	 	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/ Mark Taylor Bahlmann
	 	Name:	Mark Taylor Bahlmann
	 	Title:	Vice President




 





 



Signature Page to Amendment No. 7 to
Amended and Restated Credit Agreement (Licensing)