Exhibit 10.3





Exhibit 10.3




FIRST AMENDMENT TO

LIMITED RECOURSE GUARANTY




THIS FIRST AMENDMENT TO LIMITED RECOURSE GUARANTY (this “Amendment”), dated as of September
22, 2010, is entered into by and between FRANKLIN CREDIT HOLDING CORPORATION, a Delaware
corporation (the “Guarantor”), and The Huntington National Bank, a national banking association,
acting hereunder as contractual representative pursuant to the Credit Agreement for Lenders
(“Huntington,” acting as such contractual representative and any successor or successors to
Huntington acting in such capacity, being referred to as the “Administrative Agent”). All
capitalized terms in this Amendment that are not otherwise defined herein shall have the meanings
ascribed to such terms in the Guaranty (as defined below).



RECITALS:




A. On or about March 31, 2009, the Guarantor entered into a certain Limited Recourse Guaranty
(the “Guaranty”) in favor of Administrative Agent, which was accepted and agreed to by
Administrative Agent on that same date; and



B. Pursuant to the terms and subject to the conditions of the Guaranty, the Guarantor
unconditionally and irrevocably guaranteed to the Administrative Agent, and its successors,
endorsees, transferees and assigns, the prompt and complete payment and performance by the
Borrowers of all Obligations when and as the same shall become due (whether at stated maturity, by
acceleration or otherwise); and



C. The Guarantor and the Administrative Agent have agreed that the Guaranty should be amended
and modified upon the terms and subject to the conditions contained herein.



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. Section 2, “Pledge Agreement,” of the Guaranty is hereby amended to recite in its
entirety as follows:



2. Pledge Agreement. As security for the performance of the
obligations of the Guarantor hereunder, the Guarantor has granted to the
Administrative Agent a security interest in specified equity interests in
100% of its equity interests in all direct and indirect subsidiaries (other
than Franklin Credit Management Corporation) of the Guarantor and all
dividends, distributions and other payments in respect of such equity
interests, (the “Pledged Collateral”), all as described in a certain
Pledge Agreement dated of even date herewith (as amended, modified, or
restated from time to time, the “Pledge Agreement”).


 


 









 





2. Conditions of Effectiveness. This Amendment shall become effective as of
September 22, 2010, upon satisfaction of all of the following conditions precedent:



(a) Administrative Agent shall have received execution and delivery of, by all
parties signatory thereto, originals, or completion as the case may be, to the
satisfaction of Administrative Agent and its counsel, containing such information requested by
Administrative Agent and its counsel and reflecting the absence of any material fact or
issues and in all respect satisfactory to the Administrative Agent, each of the following
document:



(i) Two duly executed originals of this Amendment;



(b) The representations contained in the immediately following paragraph shall be
true and accurate in all material respects.



3. Representations and Warranties. The Guarantor represents and warrants to
Administrative Agent as follows: (a) after giving effect to this Amendment, each representation and
warranty made by or on behalf of the Guarantor in the Guaranty and in any other document executed
in connection therewith 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 Guarantor of this Amendment and any other related document have been duly
authorized by all requisite corporate or organizational action on the part of the Guarantor and
will not violate any laws applicable to the Guarantor; (c) this Amendment has been duly executed
and delivered by the Guarantor, and each of this Amendment, the Guaranty, and any other related
document as amended hereby constitutes the legal, valid, and binding obligation of the Guarantor,
enforceable against the Guarantor 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.



4. Ratification and Reaffirmation. The Guarantor agrees (i) that all the obligations,
indebtedness, and liabilities of the Guarantor to the Administrative Agent under the Guaranty are
the valid and binding obligations of the Guarantor; (ii) that the Obligations of the Guarantor 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 (as defined in the
Credit Agreement) and security interests granted to the Administrative Agent are valid and binding
and are hereby ratified and confirmed in all respects.



5. Reference to and Effect on the Loan Documents. (a) Upon the effectiveness of this
Amendment, each reference in the Guaranty to “Limited Recourse Guaranty,” “Guaranty,” “Agreement,”
the prefix “herein,” “hereof,” or words of similar import, and each reference in any related
documents to the Guaranty, shall mean and be a reference to the Guaranty as amended hereby. (b)
Except to the extent amended or modified hereby, all of the representations, warranties, terms,
covenants, and conditions of the Guaranty and any related 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 rights under, or of any other term or provisions
of, the Guaranty or any other related document, or of any term or provision of any other document
referred to therein or herein or of any transaction or future action on the part of the Guarantor
that would require the consent of the Administrative Agent.


 


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6. Waiver and Release of All Claims and Defenses. The Guarantor 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, its successors, assigns, directors, officers, shareholders, agents, employees, and attorneys
(collectively, the “Released Parties”), the Obligations, or the Pledged Collateral, whether
previously or now existing or arising out of or related to any transaction or dealings between the
Administrative Agent and the Guarantor, which the Guarantor 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 Guarantor and all of its
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.



7. 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.



8. 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.



9. 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.



10. Costs and Expenses. The Guarantor 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.



11. Further Assurances. The Guarantor hereby agrees to execute and deliver such
additional documents, instruments, and agreements reasonably requested by the Administrative Agent
as may be reasonably necessary or appropriate to effectuate the purposes of this Amendment.



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.


 


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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.



[Signature Page Follows.]



 


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



	 	 	 	 	 
	 	GUARANTOR:



FRANKLIN CREDIT HOLDING CORPORATION

 	 
	 	By:  	/s/ Thomas J. Axon 	 
	 	Name: Thomas J. Axon 	 
	 	Title: President 	 
	 



	 	 	 	 	 
	 	ADMINISTRATIVE AGENT:



THE HUNTINGTON NATIONAL BANK, as Administrative Agent

 	 
	 	By:  	/s/
David L. Abshier 	 
	 	Name:  David L. Abshier	 	 
	 	Title:  Authorized Signer