**RATE
      CAP TRANSACTION AGREEMENT**





This
      Agreement is made as of August 29, 2006 (the "Trade Date"), by and among LASALLE
      BANK NATIONAL ASSOCIATION  (the
      "Floating Rate Payer") and FRANKLIN
      CREDIT MANAGEMENT CORPORATION  (the
      "Fixed Rate Payer").





WHEREAS,
      the Fixed Rate Payer desires to enter into an arrangement for the purpose of
      limiting its interest expense on certain existing floating rate liabilities;
      and





WHEREAS,
      the Floating Rate Payer desires to enter into such an arrangement with the
      Fixed
      Rate Payer;





NOW,
      THEREFORE, the parties hereto agree as follows:





1.  Payment
      of Fixed Amount .
      The
      Fixed Rate Payer agrees to pay to the Floating Rate Payer a Fixed Amount USD
      101,000.00 on or before August 31, 2006 (the "Fixed Rate Payer Payment Date"),
      in consideration of the Floating Rate Payer agreeing to make a payment to the
      Fixed Rate Payer for each Calculation Period (as defined below) during which
      the
      Floating Rate (as defined below) exceeds the Cap Rate (as defined
      below).





2.  Payment
      of Floating Amounts .
      The
      Floating Rate Payer agrees to make a payment of the Floating Amount (as defined
      below) on each Floating Rate Payer Payment Date (as defined below) in
      immediately available funds at such location as the Fixed Rate Payer shall
      direct. For each Floating Rate Payer Payment Date, the Floating Rate Payer
      shall
      deliver to the Fixed Rate Payer a notice containing a computation of the
      Floating Amount payable.





3.  Definitions .
      The
      definitions and provisions contained in the 2000 ISDA Definitions (as published
      by the International Swap Dealers Association, Inc.) are incorporated by
      reference into this Agreement. In the event of any inconsistency between those
      definitions and provisions and the provisions of this Agreement, the provisions
      of this Agreement shall govern.





(a)  "Business
      Day" shall mean a day on which banks are open in New York for the transaction
      of
      general commercial banking business and
      on
      which dealings may be carried on in the London interbank eurodollar
      market.




(b)  "Calculation
      Agent" shall mean the Floating Rate Payer.





(c)  "Calculation
      Period" shall mean each period from, and including, one Floating Rate Payer
      Payment Date to, but excluding, the next following Floating Rate Payer Payment
      Date, except that (i) the initial Calculation Period will commence on, and
      include, the Effective Date, and (ii) the final Calculation Period will end
      on,
      but exclude, the Termination Date.





(d)  "Cap
      Rate" shall mean 5.75%.





(e) "Designated
          Maturity" shall mean 1 Month





(f)  "USD"
      and
      the sign "$" mean lawful currency of the United States of America.





(g)  "Effective
      Date" shall mean August 31, 2006.





(h)  "Floating
      Amount" with respect to any Calculation Period shall mean an amount equal to
      (i)
      the amount by which the interest earned on the Notional Amount for the
      Calculation Period at the Floating Rate would exceed (ii) the amount of interest
      which would have been earned on the Notional Amount for the Calculation Period
      at the Cap Rate, all said calculations being based on a Floating Rate Day Count
      Fraction of Actual/360. (If the amount calculated in clause (i) shall be less
      than the amount calculated under clause (ii), the Floating Amount for said
      Calculation Period shall be zero).





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(i)  "Floating
      Rate" means (i) with respect to the initial Calculation Period, the rate
      determined for the Floating Rate Option two (2) London Banking Days prior to
      the
      Effective Date for value on the Effective Date; and (ii) with respect to any
      subsequent Calculation Period, the rate determined with respect to such period
      for the Floating Rate Option.





(j)  "Floating
      Rate Option" shall mean USD-LIBOR-BBA





(k)  "Floating
      Rate Payer Payment Date" shall mean the last day of each month, commencing
      on
      September 30, 2006 and ending on the Termination Date, subject to adjustment
      in
      accordance with the Modified Following Business Day Convention.





(l) "Notional
          Amount" shall mean USD 300,000,000.00 .




(m)  "Reset
      Date" shall mean each Floating Rate Payer Payment Date to, but not including,
      the Termination Date.





(n)  "Termination
      Date" shall mean August 31, 2007.





4.  Representations
      and Warranties - The Fixed Rate Payer .
      The
      Fixed Rate Payer hereby represents and warrants to the Floating Rate Payer
      that:





(a)  The
      Fixed
      Rate Payer is a corporation validly existing and in good standing under the
      laws
      of the jurisdiction of its organization and such jurisdiction is a State of
      the
      United States of America.





(b)  The
      Fixed
      Rate Payer has the corporate power and authority to own its property and assets
      and to carry on its business as currently conducted.





(c)  The
      Fixed
      Rate Payer has the corporate power to execute, deliver and perform this
      Agreement.





(d)  The
      execution, delivery and performance of this Agreement (i) have been duly
      authorized by all requisite corporate or organizational action on the part
      of
      the Fixed Rate Payer and (ii) will not (A) violate (1) any provision of law,
      (2)
      the constitutional documents of the Fixed Rate Payer, (3) any applicable order
      of any court or agency of government or (4) any indenture, agreement or
      other instrument to which the Fixed Rate Payer is a party or by which the Fixed
      Rate Payer or any of its property or assets is bound, (B) be in conflict with,
      result in a breach of or constitute (with due notice or lapse of time or both)
      a
      default under any indenture, agreement or other instrument to which the Fixed
      Rate Payer is a party or by which the Fixed Rate Payer or any of its property
      or
      assets is bound or (C) result in the creation or imposition of any lien, charge
      or encumbrance of any nature whatsoever upon any property or assets of the
      Fixed
      Rate Payer.





(e)  This
      Agreement has been duly executed and delivered by the Fixed Rate Payer and
      constitutes a legal, valid and binding obligation of the Fixed Rate Payer,
      enforceable in accordance with its terms (subject, as to enforcement of
      remedies, to applicable bankruptcy, reorganization, insolvency or similar laws
      from time to time in effect).





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(f)  No
      action, consent or approval of, or registration or filing with, or any other
      action by any governmental agency, bureau, commission or court has been required
      in connection with the execution, delivery and performance by the Fixed Rate
      Payer of this Agreement, or if so required, such registration or filing has
      been
      made, such consent or approval has been given or such other appropriate action
      has been taken.





5.  Representations
      and Warranties - The Floating Rate Payer .
      The
      Floating Rate Payer hereby represents and warrants to the Fixed Rate Payer
      that:





(a)  The
      Floating Rate Payer is a bank organized or formed under the laws of the United
      States of America.





(b)  The
      Floating Rate Payer has the corporate or organizational power and authority
      to
      own its property and assets and to carry on its business as currently
      conducted.





(c)  The
      Floating Rate Payer has the corporate or organizational power to execute,
      deliver and perform this Agreement.





(d)  The
      execution, delivery and performance of this Agreement (i) have been duly
      authorized by all requisite corporate or organizational action on the part
      of
      the Floating Rate Payer and (ii) will not (A) violate (1) any provision of
      law,
      (2) the constitutional documents of the Floating Rate Payer, (3) any applicable
      order of any court or agency of government or (4) any indenture, agreement
      or
      other instrument to which the Floating Rate Payer is a party or by which the
      Floating Rate Payer or any of its property or assets is bound, (B) be in
      conflict with, result in a breach of or constitute (with due notice or lapse
      of
      time or both) a default under any indenture, agreement or other instrument
      to
      which the Floating Rate Payer is a party or by which the Floating Rate Payer
      or
      any of its property or assets is bound or (C) result in the creation or
      imposition of any lien, charge or encumbrance of any nature whatsoever upon
      any
      property or assets of the Floating Rate Payer.





(e)  This
      Agreement has been duly executed and delivered by the Floating Rate Payer and
      constitutes a legal, valid and binding obligation of the Floating Rate Payer,
      enforceable in accordance with its terms (subject, as to enforcement of
      remedies, to applicable bankruptcy, reorganization, insolvency or similar laws
      from time to time in effect).





(f)  No
      action, consent or approval of, or registration or filing with, or any other
      action by any governmental agency, bureau, commission or court has been required
      in connection with the execution, delivery and performance by the Floating
      Rate
      Payer of this Agreement, or if so required, such registration or filing has
      been
      made, such consent or approval has been given or such other appropriate action
      has been taken.





6.  Assignment
      and Transfer .
      Neither
      party may assign or transfer its rights or obligations under this Agreement
      without the prior written consent of the other party and any purported
      assignment in violation of this Section shall be void; provided , however ,
      that
      the consent to transfer shall not be unreasonably withheld.





7.  Other
      Provisions Relating to the Fixed Amount .
      In no
      event shall the Fixed Amount (or any portion thereof) paid to the Floating
      Rate
      Payer pursuant to Section 1 hereof be refundable, provided that nothing
      contained herein shall be deemed to constitute a waiver by the Fixed Rate Payer
      of any of its rights to collect damages from, or to enforce other remedies
      against, the Floating Rate Payer in the event that the Floating Rate Payer
      fails
      to perform its obligations hereunder.





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8.  Amendments
      and Waivers .
      No
      amendment, modification or waiver with respect to this Agreement will be
      effective unless in writing and executed by each of the parties
      hereto.





9.  Notices .
      All
      notices, requests and other communications to either party hereunder shall
      be in
      writing and shall be given to such party at its address, telex or telecopier
      number set forth on the signature page hereof
      or
      such other address, telex or telecopier number as such party may hereafter
      specify for the purpose of notice to the other party.





10.  Termination .
      This
      Agreement shall terminate on the Termination Date, subject to any applicable
      requirement for payment as set forth in Section 2 hereof.





11.  Governing
      Law .
      THIS
      AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND SHALL BE GOVERNED BY THE
      LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
      LAW.




12 **.**  Authorization
      Documents **.** Upon
      the
      execution of this Agreement, the Fixed Rate Payer shall promptly deliver to
      the
      Floating Rate Payer, certified evidence of the authority, incumbency and
      specimen signature of each authorized person executing this Agreement on its
      behalf.





13.  Account
      Details:





Payments
      to the Floating Rate Payer:


LaSalle
      Bank National Association, ABA #0710-0050-5, A/C 2090102-9030, Attn: Derivative
      Operations





Payments
      to the Fixed Rate
      Payer:                   
Please Advise





14.  Set-off .
      Upon
      the occurrence of any default by the Fixed Rate Payer with respect to any
      indebtedness or other amounts payable by the Fixed Rate Payer to the Floating
      Rate Payer (irrespective of the currency, place of payment or booking office
      of
      the obligation) under any other agreements between the Fixed Rate Payer and
      the
      Floating Rate Payer or instrument(s) or undertaking(s) issued or executed by
      one
      party to, or in favor of, the other party, the Floating Rate Payer may at its
      option (but shall not be obligated to) reduce such amounts by its setoff of
      such
      amounts against any amount(s) payable (whether at such time or in the future
      or
      upon the occurrence of a contingency) by the Floating Rate Payer to the Fixed
      Rate Payer hereunder. For purposes hereof, if a payment obligation is
      unascertained, the Floating Rate Payer may in good faith estimate that
      obligation and setoff in respect of the estimate, subject to an accounting
      when
      the obligation is ascertained.





15.  Relationship
      Between the Parties. Each
      party represents to the other party that:





(a)  *Non-Reliance.* It is
      acting for its own account, and it has made its own independent decisions to
      enter into this Transaction and as to whether this Transaction is appropriate
      or
      proper for it based upon its own judgment and upon advice from such advisors
      as
      it has deemed necessary. It is not relying on any communication (written or
      oral) of the other party as investment advice or as a recommendation to enter
      into this Transaction; it being understood that information and explanation
      related to the terms and conditions of this Transaction shall not be considered
      investment advice or a recommendation to enter into this Transaction. No
      communication (written or oral) received from the other party shall be deemed
      to
      be an assurance or guarantee as to the expected results of this
      Transaction.


4


(b)  *Assessment
      and Understanding.* It is
      capable of assessing the merits of and understanding (on its own behalf or
      through independent professional advice), and understands and accepts the terms,
      conditions and risks of this Transaction. It is also capable of assuming, and
      assumes, the risks of this Transaction.





(c)  *Status
      of Parties.* The
      other
      party is not acting as a fiduciary or an advisor to it in respect of this
      Transaction.





16.  Waiver
      of Jury Trial. Each
      party irrevocably waives any and all right to trial by jury in any legal
      proceeding instituted in connection with this Agreement or this Transaction
      to
      the fullest extent permitted by law. As to any matter for which a jury trial
      cannot be waived, each party agrees not to assert any such matter as a cross
      claim or counterclaim in, nor move to consolidate the same with, any legal
      proceeding in which a jury trial is waived."





17. **** IMPORTANT
      INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT





To
      help
      the government fight the funding of terrorism and money laundering activities,
      Federal law requires all financial institutions to obtain, verify, and record
      information that identifies each entity or person that opens an
      account.





When
      you
      open an account, we will ask for the business’ full legal name, street address,
      and tax identification number and other information that will assist us in
      identifying the business. We may also ask for other identifying information
      such
      as your date of birth and a copy of your driver’s license.















[Signature
      Following Page]




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IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed by their respective authorized officers as of the day and year first
      above written.





**LASALLE
      BANK NATIONAL ASSOCIATION**








By:
            ________________________________
            By:
            ________________________________Name:
            
            Name:Title:
            
            Title:





Address:
            540
                West Madison AvenueSuite
                2132Chicago,
                IL 60661Attention:
            Treasury
                DocumentationFacsimile:
            312-992-5847Phone:
            312-992-5842





**FRANKLIN
      CREDIT MANAGEMENT CORPORATION**








By:
            ________________________________Name:Title:





Address:
            101
                Hudson StreetJersey
                City, NJ 07302Attention:
            Paul
                ColasonoFacsimile:
            201-604-4400Telephone:
            201-604-4402








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