TERMINATION AGREEMENT
                       (Six Harrison Street--Fifth Floor)

      This Termination Agreement (this "AGREEMENT"), dated as of May 12, 2005,
is entered into by and among James Thomas Realty, a New York Limited Liability
Company ("LANDLORD"), RMTS, LLC a New York Limited Liability Company ("TENANT")
and Franklin Credit Management Corporation, a Delaware Corporation ("FCMC").

                                    RECITALS

      WHEREAS, LANDLORD, as landlord, and TENANT, as tenant, executed that
certain lease agreement identified on the attached Exhibit A, as amended (the
"LEASE") for premises consisting of the Fifth Floor of the building located at
Number Six Harrison Street, New York, New York (the "FIFTH FLOOR PREMISES").

      WHEREAS, TENANT, as sub-lessor and FCMC as sub-tenant, executed that
certain sublease agreement identified on the attached Exhibit A, as amended (the
"SUBLEASE") for premises consisting of a portion of the Fifth Floor of the
building located at Number Six Harrison Street, New York, New York.

      WHEREAS, LANDLORD, TENANT and FCMC desire to terminate the SUBLEASE prior
to the end of the term of such SUBLEASE.

                                    AGREEMENT

      NOW, THEREFORE, in order to settle and dispose of, fully and completely,
any and all claims, demands and cause or causes of action now existing or
hereafter arising out of, in connection with, or incidental to the termination
of the SUBLEASE or the FIFTH FLOOR PREMISES, and in consideration for the mutual
promises contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are mutually acknowledged, LANDLORD, TENANT and
FCMC agree, effective as of the date hereof, as follows:

      1. Recitals. The foregoing recitals are hereby incorporated herein by
reference and acknowledged as true and correct by the parties hereto.

      2. Termination. Provided that FCMC has complied with its obligations
contained in Section 3 below and the SUBLEASE, effective as of the TERMINATION
DATE (hereinafter defined), the SUBLEASE shall terminate. Except to the extent
inconsistent with the terms hereof, FCMC shall observe and perform each of the
covenants and provisions of the SUBLEASE to be performed by FCMC, including
without limited the payment of rent and additional rent accruing prior to the
TERMINATION DATE.
<PAGE>

      3. Termination Payment. In consideration for the termination of the
SUBLEASE, FCMC shall pay to LANDLORD the amount of $125,000.00 (the "TERMINATION
PAYMENT") payable as follows:

      a) The sum of $10,000.00 shall be paid to LANDLORD within ten (10) days of
execution of this Agreement.

      b) The balance of the TERMINATION PAYMENT shall be paid to LANDLORD on the
TERMINATION DATE.

      4. Vacation of Premises.

      a) Scheduled Surrender Date/Termination Date. Subject to extensions of the
SCHEDULED SURRENDER DATE as set forth in this Section, FCMC shall fully vacate
the FIFTH FLOOR PREMISES on or before August 31, 2005, (such date, as it may be
extended is hereinafter referred to as the "SCHEDULED SURRENDER DATE"; the date
on which FCMC actually vacates the FIFTH FLOOR PREMISES is hereinafter referred
to as the "TERMINATION DATE").

      b) Extension of Termination Date. FCMC may extend the SCHEDULED SURRENDER
DATE for all or any portion of the FIFTH FLOOR PREMISES in one month increments
up to and including November 30, 2005. FCMC shall give TENANT LANDLORD not less
than 30 days prior written notice of any extension of the SCHEDULED SURRENDER
DATE. The rent during the extension period shall be the rent as provided for
under the Sublease. In the event that only a portion of the FIFTH FLOOR PREMISES
is subject to the extension period, the rent shall be pro-rated accordingly.

      c) Termination. Notwithstanding any contrary term herein, the TERMINATION
DATE shall occur not later than November 30, 2005 regardless of whether or not
FCMC vacates the FIFTH FLOOR PREMISES. FCMC shall have no further rights with
respect to the use of the FIFTH FLOOR PREMISES from and after the TERMINATION
DATE.

      d) Condition on Surrender. FCMC shall surrender the FIFTH FLOOR PREMISES
(i) free of all occupants; (ii) in broom clean condition; and (iii) free of all
movable personality and equipment; and (iv) otherwise in its current "AS IS
condition."

      5. Holdover.

      a) In the event FCMC fails to comply with the terms of this Agreement,
LANDLORD shall have the right to retain any and all payments made by FCMC
pursuant to this Agreement and also shall have any and all other rights and
remedies available to LANDLORD under the SUBLEASE to recover the FIFTH FLOOR
PREMISES, at law and in equity, except to the extent inconsistent with the terms
of this Agreement.


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<PAGE>

      b) FCMC and anyone claiming under FCMC remaining in possession of the
FIFTH FLOOR PREMISES or any part thereof after the TERMINATION DATE shall be
deemed a tenant-at-sufferance only, at the daily rate of 150% of the rent and
additional rent due under the respective SUBLEASE immediately prior to the
Termination Date (the "FINAL RENT RATE") during the first month, 200% of the
Final Rent Rate during the second month and 250% of the Final Rent Rate
thereafter; provided that, notwithstanding any of the foregoing to the contrary,
but subject to the following sentence, FCMC shall remain liable for all damages,
including without limited all direct damages, incurred by LANDLORD as a result
of such holdover. Notwithstanding the foregoing, FCMC shall not be liable for
consequential damages incurred by LANDLORD based upon any holdover by FCMC after
the SCHEDULED SURRENDER DATE unless such holdover continues for ninety (90) or
more says after the SCHEDULED SURRENDER DATE. Nothing in this Section shall be
construed to permit such holding over.

      6. Releases.

      a) Except as to such rights or claims as may be created or otherwise
preserved by this Agreement, LANDLORD and FCMC each hereby releases, remises and
forever discharges the other and its respective officers, directors, employees,
agents, parents, subsidiaries and affiliates from all debts, demands, actions,
causes of action, suits, accounts, covenants, controversies, agreements,
promises, judgments, demands, contracts, agreements, damages, claims and
liabilities whatsoever, in law or equity, in arbitration or otherwise, whether
known or unknown, suspected or unsuspected, related to, arising out of,
connected with or incidental to the SUBLEASE or the FIFTH FLOOR PREMISES.
Nothing contained in this Section shall prevent LANDLORD or FCMC from enforcing
the terms of this Agreement.

      b) Except as to such rights or claims as may be created or otherwise
preserved by this Agreement, TENANT and FCMC each hereby releases, remises and
forever discharges the other and its respective officers, directors, employees,
agents, parents, subsidiaries and affiliates from all debts, demands, actions,
causes of action, suits, accounts, covenants, controversies, agreements,
promises, judgments, demands, contracts, agreements, damages, claims and
liabilities whatsoever, in law or equity, in arbitration or otherwise, whether
known or unknown, suspected or unsuspected, related to, arising out of,
connected with or incidental to the SUBLEASE or the FIFTH FLOOR PREMISES.
Nothing contained in this Section shall prevent TENANT or FCMC from enforcing
the terms of this Agreement.

      7. Notices. Any notice, request or demand ("NOTICE") permitted or required
to be given by the terms and provisions of this Agreement, or by any law or
governmental regulation, either by LANDLORD, TENANT or FCMC, shall be in writing
and delivered by hand (with evidence of receipt), addressed as follows:


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<PAGE>

      a) To FCMC at No. 6 Harrison Street, Sixth Floor, New York, New York
10016, Attention General Counsel.

      b) To LANDLORD at No. 6 Harrison Street, Fifth Floor, New York, New York
10016, Attention Thomas Axon.

      c) To TENANT at No. 6 Harrison Street, Fifth Floor, New York, New York
10016, Attention David P. Kalm.

      Any party hereto may designate a different address for Notices to such
party by serving Notice of such change in accordance with this section.

      8. Miscellaneous.

      a) This Agreement shall be deemed to have been executed and delivered
within the State of New York, and the rights and obligations of LANDLORD, TENANT
and FCMC hereunder shall be construed and enforced in accordance with, and
governed by, the laws of the State of New York s without regard to the laws
governing conflicts of laws.

      b) If any term of this Agreement or the application thereof to any person
or circumstances shall be invalid and unenforceable, the remaining provisions of
this Agreement, the application or such term to persons or circumstances other
than those as to which it is invalid or unenforceable, shall not be affected.

      c) This Agreement is binding upon and shall inure to the benefit of
LANDLORD, TENANT and FCMC, their respective agents, employees, representatives,
officers, directors, divisions, subsidiaries, affiliates, assigns, heirs,
successors-in-interest and shareholders.

      d) Each party has cooperated in the drafting and preparation of this
Agreement and, therefore, in any construction to be made of this Agreement, the
same shall not be construed against any party hereto.

      e) Any litigation relating to this Agreement shall be brought in the state
or federal courts in the State of New York and each party consents to personal
jurisdiction in such courts.

      f) In the event of litigation relating to this Agreement, the prevailing
party shall be entitled to reimbursement from the other party of its reasonable
attorneys' fees and costs.

      g) This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof and supersedes all prior and
contemporaneous oral and written agreements and discussions, and may not be
amended, waived, discharged or terminated except by a written instrument signed
by all the parties hereto.


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<PAGE>

      h) This Agreement may be executed in as many counterparts as may be
required, and it shall not be necessary that the signature of each party, or
that the signatures of all persons required to bind any party, appear on each
counterpart. It shall be sufficient that the signature of each party, or that
the signatures of the persons required to bind any party, appear on one or more
of such counterparts. All counterparts shall collectively constitute a single
agreement.

      IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
under seal by their respective duly authorized officers as of the date first set
forth above.


----------------------
Jeffrey R. Johnson
President and Chief Executive Officer
Franklin Credit Management Corporation


----------------------
David P. Kalm
Chief Executive Officer
RMTS, LLC

----------------------
Thomas J. Axon
President
James Thomas Realty, LLC


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