**EMPLOYMENT      AGREEMENT**

**WILLIAM      F. SULLIVAN**

|   | a. | FCMC                is a Corporation organized under the laws of the State of                Delaware. |
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|   | b. | FCMC                desires to employ Employee, and Employee desires to accept employment                from                FCMC. |
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|   | c. | The                parties desire to record the arrangements made for such employment. |
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|   | a. | FCMC                or                Company                shall mean Franklin Credit Management                Corporation. |
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|   | b. | Employee                shall mean William F. Sullivan. |
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|   | c. | Competitor                shall mean any person, company, firm or corporation which: (1) actually                competes with the Company, its subsidiaries or affiliates; (2) is                engaged                in a business in which the Company, its subsidiaries or affiliates                are                also 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 enter within twelve months                of the                Employee’s termination. |
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|   | 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. |
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|   | a. | Employee                shall have the duties and responsibilities as the General Counsel                of the                Company, including but not limited to the                following: |
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|   | i. | Managing                the Company’s compliance with all State and Federal regulations and                licensing requirements: |
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|   | ii. | Management                of the Company’s litigation and other legal matters; and, |
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|   | iii. | Management                of the legal department of the                Company. |
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|   | b. | Employee                shall report directly to the Chief Executive Officer of the Company. |
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|   | a. | Salary.                Employee shall receive an annual salary of $250,000, payable on a                semimonthly basis. Not less than annually, the Company shall review                Employee’s base compensation. |
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|   | b. | Bonuses.                In addition to the salary set forth above, Employee shall receive                the                following bonuses: |
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|   | i. | Employee                shall receive a signing bonus of Ten Thousand ($10,000) dollars on                execution of this Agreement. |
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|   | ii. | Employee                shall be entitled to receive an annual bonus based on his performance                and                the performance of the Company. The amount of such annual bonuses                shall be                subject to the reasonable discretion of the Board of Directors of                the                Company. |
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|   | c. | Stock.                As additional compensation for services provided under this agreement,                Employee will                receive a grant of 5,000 shares of common stock of the Company as                of the                date of issuance of such stock. On execution of this Agreement, the                Company shall immediately direct that 5,000 shares of common stock                be                issued to Employee. |
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|   | i. | Employee                acknowledges that the stock to be issued by the Company shall be                restricted stock and limitations shall apply to Employee’s ability to                trade such stock. |
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|   | d. | Car                Allowance.                Throughout the term of employment, Employee shall receive a car allowance                of $400 per month and a paid parking space in the vicinity of the                Company’s offices. |
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|   | a. | Employee                shall relocate to the New York City metropolitan area on or before                April                1, 2006. |
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|   | b. | The                Company shall reimburse Employee for the reasonable and actual expenses                associated with Employee and his immediate family’s relocation to the New                York City metropolitan area including but not limited to moving,                storage                and packing expenses, travel expenses and other similar                expenses. |
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|   | c. | The                Company shall provide Employee with lodging in the New York City                metropolitan area through the earlier of: (1) Employee’s relocation to the                New York City metropolitan area, or (2) April 1,                2006. |
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|   | d. | The                Company shall reimburse Employee for weekly trips to Boston during                the                period prior to Employee’s relocation to the New York City metropolitan                area, utilizing cost-effective airfare and ground                transportation. |
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|   | a. | FCMC’s                services are highly specialized; |
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|   | b. | FCMC                has a proprietary interest in its methods and processes;                and, |
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|   | c. | Documents                and other information regarding FCMC’s methods, pricing and costs are                highly confidential and constitute trade                secrets. |
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|   | 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. |
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|   | b. | Non-competition.                Employee agrees that: |
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|   | i. | During                both the period of Employee’s employment by the Company and the period in                which Employee is entitled to receive periodic severance payments                pursuant                to Paragraph 12(b)(ii) of this Agreement, regardless of whether the                termination was initiated by FCMC or Employee, 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, either by himself or through any entity                owned                or managed in whole or in part by the Employee, and Employee shall                not                make any preparations to compete with the                Company. |
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|   | ii. | During                the term of this Agreement and for a period of nine (9) months after                termination 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 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. |
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|   | iii. | 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 term                of                Employee's employment. 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. |
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|   | 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. |
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|   | d. | Employee                further acknowledges that: (1) in the event his employment with FCMC                terminates for any reason, regardless of whether the termination                is                initiated by FCMC or Employee, he will be able to earn a livelihood                without violating the foregoing restrictions; and (2) his ability                to earn                a livelihood without violating such restrictions is a material condition                of his employment with FCMC. |
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|   | a. | Termination                by Either Party.                Either party may terminate Employee’s employment “without cause” by giving                thirty (30) days' written notice to the other. |
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|   | b. | Termination                by Company.                Employee’s employment may be terminated by the Company “for cause” if he: |
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|   | (1) | fails                or refuses to perform each and all of his material assigned duties                to; |
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|   | (2) | to                comply with one or more policies of the Company; |
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|   | (3) | breaches                any of the material terms of this Agreement; or, |
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|   | (4) | commits                any criminal, fraudulent or dishonest act related to his employment; |
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|   | 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: |
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|   | i. | The                Company transfers the place of Employee’s employment in violation of                Paragraph 2 (a) of this Agreement; |
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|   | ii. | The                Company’s breaches any of the material terms of Paragraphs 3, 4, 5 or 6 of                this Agreement. |
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|   | 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. |
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|   | a. | Conditions                under which Severance is Paid.                In the event the Company terminates Employee’s employment without cause or                for Employee’s failure to perform assigned duties, the Employee shall                receive the severance pay provided in subparagraph (b) of this Paragraph.                Employee shall also be entitled to the severance provided for in                subparagraph (b) of this Paragraph if the Employee terminates his                employment for good reason. |
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|   | b. | Amount                of Severance.                To                the extent severance is payable to Employee pursuant to subparagraph                (a)                of this Agreement, Employee shall                be entitled to receive the severance payments provided for in subparts                (i)                and (ii) of this subparagraph: |
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|   | i. | Lump                Sum Payment.                Employee shall be entitle to receive payment 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. If such                termination occurs after the end of any calendar year and before                the                payment date of the bonus in respect of that year as provided in                Section                4(b), an amount equal to the bonus for such calendar year calculated                as                provided in Section 4(b) shall be paid to Employee on April 15 of                the year                of termination. |
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|   | ii. | Monthly                Payments.                Employee shall be entitled to receive                monthly payments equal to one twelfth of his then current base salary                for                the periods set forth below after such termination. In addition,                if                Employee is enrolled in and covered by a medical insurance plan offered                by                the Company on the date of termination of employment, Employee shall                be                entitled, at his election, to receive either (*x*)                continued health benefits for the periods set forth below, or                (*y*)                an amount equal to the medical insurance premiums paid by the Company                on                behalf of the Employee for the periods set forth                below. |
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|   | (1) | In                the event the termination occurs prior to February 1, 2007 - three                months. |
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|   | (2) | In                the event the termination occurs on or after February 1, 2007 - four                months. |
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|   | c. | Effect                of Severance Payments.                The severance payments set forth in this Paragraph 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 subparagraph (a) of this Paragraph, Employee shall                be                entitled to no further compensation or payments from the Company. |
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|   |                                                  |
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|   | Employee                                              |
|   |                                                  |
|   | Franklin                Credit Management Corporation |
|   |                                                  |
|   |                                                  |
|   |                                                  |
|   | By:                Thomas Axon                        |
|   | President                                             |

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