Document:

kl01002_ex10-2.htm

    
      

    

    
       

      Exhibit
10.2

      
 

      THE
        HUNTINGTON NATIONAL BANK

      Amended
        and Restated Promissory Note

      (A
        Note)

      

      

      

      
        	
                $600,000,000.00

              	 	
                December
                  28, 2007 (the “Effective
                  Date”)

              

      

      

      RECITALS

      

      WHEREAS,
        each of the borrowers set forth on Schedule 1 attached
        to the Forbearance Agreement (as defined below) (individually a “Borrower”
and
        collectively, “Borrowers”) has
        executed and delivered that certain Forbearance Agreement and Amendment to
        Credit Agreements, dated as of the Effective Date, by and among Franklin
        Credit
        Management Corporation (“FCMC”), Borrowers,
        and The Huntington National Bank, successor by merger to Sky Bank (“Bank”), (the
“Forbearance
        Agreement”), and Borrowers and Bank desire to amend and restate the
        original notes as set forth on Schedule 2 to the
        Forbearance Agreement (the “Original Notes”);
        and

      

      WHEREAS,
        Borrowers and Bank intend that (i) this Amended and Restated Promissory Note
        (A
        Note) (this "Note") will
        not
        constitute a novation, (ii) this Note will amend and restate a portion of
        the
        indebtedness, obligations and liabilities under the Original Notes and (iii)
        from and after the Effective Date, the Original Notes shall be of no force
        or
        effect, except to evidence the incurrence of Borrowers’ obligations thereunder;
        and

      

      WHEREAS,
        Borrowers and Bank acknowledge and agree that this Note is the amended and
        restated promissory note intended to evidence the indebtedness in respect
        to the
        Tranche A Advance;

      

      NOW
        THEREFORE, in consideration of the premises set forth above, the terms and
        conditions contained herein, and other good and valuable consideration, the
        receipt and sufficiency of which are hereby acknowledged, Borrowers hereby
        jointly and severally agree as follows:

      

      PROMISE
        TO
        PAY

      

      FOR
        VALUE
        RECEIVED, each of Borrowers, jointly and severally, promises to pay to the
        order
        of Bank, at 10 East Main Street, Salineville, Ohio 43945, or such other address
        as Bank in writing shall provide to FCMC (as defined below), the sum of Six
        Hundred Million and 00/100 Dollars ($600,000,000.00) (the “Principal Sum”),
        together with interest as hereinafter provided and payable at the times and
        in
        the manner hereinafter provided.  All payments made with respect to
        this Note shall be made to Bank in immediately available funds.

       

      This
        Note
        is issued pursuant to, and/or is entitled to the benefits of the Forbearance
        Agreement; the Credit Agreements; and the Loan Documents.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      It
        is
        expressly understood and agreed by the parties hereto that this Note is not
        intended to constitute a novation of the obligations and liabilities of
        Borrowers under any Credit Agreement or the Original Notes and is not a payment
        of any amounts due from any Borrower.

      

      INTEREST

      

      (a)           
        Interest shall be calculated and will accrue on the unpaid balance of the
        Principal Sum at the applicable Interest Rates as provided in the Forbearance
        Agreement.

      

      (b)           
        The books and records of Bank, absent manifest error, shall constitute binding
        and conclusive evidence of the principal balance of the outstanding Principal
        Sum and other amounts outstanding hereunder, and the date and amount of each
        payment of principal and interest and applicable Interest Rates and other
        information with respect thereto.

      

      MANNER
        OF PAYMENT; PRINCIPAL
        BALANCE

      

      (a)           
        Beginning on the initial Payment Date and continuing on each Payment Date
        thereafter through and including the Tranche A Termination Date (as such
        terms
        are defined in the Forbearance Agreement) Borrower shall pay interest and
        the
        Principal Sum in the amounts, at the times and in the manner set forth in
        the
        Forbearance Agreement.

      

      (b)           
        In addition to any other amounts due and payable under this Note, Borrowers
        shall deliver to Bank any other amounts due and payable from time to time
        under
        the Forbearance Agreement in respect to the Tranche A Advances and Tranche
        A
        Note.

      

      (c)           
        Bank and each Borrower hereby agrees and confirms that the outstanding principal
        balances as of December 28, 2007, without giving effect to the forgiveness
        of
        debt set forth in Section 1(c) of the Forbearance Agreement, in respect to
        each
        of the Original Notes are as set forth on Schedule 2 to the
        Forbearance Agreement.

      

      SECURITY

      

      This
        Note
        is secured by the security interests, assignments, and mortgages granted
        or
        referenced in the Credit Agreements, the Forbearance Agreement, and the Loan
        Documents.

      

      DEFAULT

      

      If
        a
        Forbearance Default has occurred and is continuing, Borrowers shall be obligated
        to pay Bank interest on the outstanding Principal Sum at the Post-Default
        Rate
        (as defined in the Forbearance
        Agreement).  Additionally, upon the occurrence and continuation of a
        Forbearance Default, the unpaid balance of Principal Sum and all accrued
        interest may be declared to be due 

       

       

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

       

      and
        payable all in the manner, upon the conditions
        and with the effect provided in the Forbearance Agreement.

      

      GENERAL
        PROVISIONS

      

      Each
        Borrower is accepting joint and several liability hereunder in consideration
        of
        the financial accommodations to be provided by Bank under this Note, for
        the
        mutual benefit, directly and indirectly, of each Borrower and in consideration
        of the undertakings of each Borrower to accept joint and several liability
        for
        all indebtedness, obligations and liabilities evidenced by this
        Note.  Each Borrower, jointly and severally, hereby irrevocably and
        unconditionally accepts, as a surety and as a co-debtor, joint and several
        liability with each other Borrower, with respect to the payment and performance
        of all of the indebtedness, obligations and liabilities evidenced by this
        Note,
        it being the intention of the parties hereto that all of the indebtedness,
        obligations and liabilities evidenced by this Note shall be the joint and
        several obligations of each Borrower without preferences or distinction among
        them.  The obligations of each Borrower under this paragraph shall not
        be diminished or rendered unenforceable by any winding up, reorganization,
        arrangement, liquidation, reconstruction or similar proceeding with respect
        to
        any Borrower.  The joint and several liability of each Borrower
        hereunder shall continue in full force and effect notwithstanding any
        absorption, merger, amalgamation or any other change whatsoever in the name,
        constitution or place of formation of any other Borrower or Bank.  The
        provisions of this paragraph are made for the benefit of Bank and its respective
        successors and assigns, and may be enforced by it from time to time against
        any
        or all Borrowers as often as occasion therefore may arise and without
        requirement on the part of Bank (or its successors or assigns), first to
        marshal
        any of its claims or to exercise any of its rights against any other Borrower
        or
        to exhaust any remedies available to it against any other Borrower hereunder
        or
        to elect any other remedy.  The provisions of this paragraph shall
        remain in effect until all of the indebtedness, obligations and liabilities
        evidenced by this Note shall have been paid in full or otherwise fully
        satisfied.  If at any time, any payment, or any part thereof, made in
        respect to any indebtedness, obligations or liabilities evidenced by this
        Note,
        is rescinded or must otherwise be restored or returned by Bank for any reason,
        the provisions of this paragraph will forthwith be reinstated in effect,
        as
        though such payment had not been made.  The obligations of each
        Borrower under this paragraph constitute the absolute and unconditional,
        full
        recourse obligations of each Borrower enforceable against each such Borrower
        to
        the full extent of its properties and assets, irrespective of the validity,
        regularity or enforceability of this Note or any other circumstances
        whatsoever.  Each Borrower, and any indorser, surety, or guarantor,
        hereby jointly and severally waives notice of acceptance of its joint and
        several liability, presentment, notice of dishonor, protest, notice of protest,
        and diligence in bringing suit against any party hereto, waives the defenses
        of
        impairment of collateral for the obligation evidenced hereby, impairment
        of a
        person against whom Bank has any right of recourse, and any defenses of any
        accommodation maker and consent that without discharging any of them, the
        time
        of payment and any other provision of this Note may be extended or modified
        an
        unlimited number of times before or after maturity without notice to
        Borrowers.  Each Borrower jointly and severally agrees that it will
        pay the obligations evidenced hereby, irrespective of any action or lack
        of
        action on Bank’s part in connection with the acquisition, perfection,
        possession, enforcement, disposition,

       

       

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

       

      or
        modification of all the obligations evidenced hereby or any and all security
        therefore, and no omission or delay on Bank’s part in exercising any right
        against, or taking any action to collect from or pursue Bank’s remedies against
        any party hereto will release, discharge, or modify the duties of Borrowers,
        or
        any of them, to make payments hereunder.  Each Borrower agrees that
        Bank, without notice to or further consent from any Borrower, may release
        or
        modify any collateral, security, guaranty or other document now held or
        hereafter acquired, or substitute other collateral, security or other
        guaranties, and no such action will release, discharge or modify the duties
        of
        Borrowers, or any of them, hereunder.  Each Borrower waives any claim
        or other right which it might now have or hereafter acquire against any other
        person or entity that is primarily or contingently liable on the obligations
        that arise from the existence or performance of each Borrower’s obligations
        under this Note, including, without limitation, any right of subrogation,
        reimbursement, exoneration, contribution, indemnification, or any right to
        participate in any claim or remedy of Bank or any collateral security which
        Bank
        now has or hereafter acquires, whether such claim, remedy or right arises
        in
        equity, under contract or statute, at common law, or otherwise.

      

      No
        reference herein to the Credit Agreements, the Forbearance Agreement or the
        Loan
        Documents shall alter or impair the obligations of each Borrower, which is
        absolute and unconditional, to pay the principal of and interest on this
        Note at
        the place and at the respective times herein prescribed.  Each
        Borrower promises to pay all costs and expenses, including reasonable attorneys’
fees and disbursements incurred in the collection and enforcement of this
        Note
        or any appeal of a judgment rendered thereon.

      

      Capitalized
        terms used herein, but not defined herein, shall have the meanings subscribed
        to
        such terms as set forth in the Forbearance Agreement.

      

      The
        captions used herein are for references only and shall not be deemed a part
        of
        this Note.  If any of the terms or provisions of this Note shall be
        deemed unenforceable, the enforceability of the remaining terms and provisions
        shall not be affected.  This Note shall be governed by and construed
        in accordance with the law of the State of Ohio.

      

      

      

      [SIGNATURE
        PAGE FOLLOWS]

    

     

     

     

    
      

      
        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

      

      

      IN
        WITNESS WHEREOF, this Note is effective as of the date first appearing above
        notwithstanding the date it is actually executed.

      

      BORROWERS:

      

      Each
        Borrower listed on Schedule 1 attached
        hereto:

      

      By:
/s/
        Alexander Gordon
        Jardin

                         
        Name: Alexander Gordon Jardin

      Title:
        Chief Executive
        Officer,  as an authorized officer

                                  
of,
        and on behalf
        of, each such Borrower listed on

              
                Schedule
        1 attached
        hereto

      

      

      

      THE
        OBLIGATIONS OF THE BORROWERS UNDER THIS AMENDED AND RESTATED PROMISSORY NOTE
        ARE
        GUARANTEED BY FRANKLIN CREDIT MANAGEMENT CORPORATION PURSUANT TO A GUARANTY
        DATED DECEMBER 28, 2007 IN FAVOR OF THE HUNTINGTON NATIONAL BANK.

       

      
 

       

       

      5kl01002_ex10-3.htm

    
      

    

    Exhibit
10.3

     

     

    

    THE
      HUNTINGTON NATIONAL BANK

    Amended
      and Restated Promissory Note

    (B-[●]
      Note)

    

    

    
      	
              $[●]

            	 	
              December
                28, 2007 (the “Effective
                Date”)

            

    

    

    RECITALS

    

    WHEREAS,
      each of the borrowers set forth on Schedule 1 attached
      to the Forbearance Agreement (as defined below) (individually a “Borrower” and
      collectively, “Borrowers”) has
      executed and delivered that certain Forbearance Agreement and Amendment to
      Credit Agreements, dated as of the Effective Date, by and among Franklin Credit
      Management Corporation (“FCMC”), Borrowers,
      and The Huntington National Bank, successor by merger to Sky Bank (“Bank”), (the
“Forbearance
      Agreement”), and Borrowers and Bank desire to amend and restate the
      original notes as set forth on Schedule 2 to the
      Forbearance Agreement (the “Original Notes”);
      and

    

    WHEREAS,
      Borrowers and Bank intend that (i) this Amended and Restated Promissory Note
      (B-[●] Note)
      (this "Note")
      will not constitute a novation, (ii) this Note will amend and restate a portion
      of the indebtedness, obligations and liabilities under the Original Notes and
      (iii) from and after the Effective Date, the Original Notes shall be of no
      force
      or effect, except to evidence the incurrence of Borrowers’ obligations
      thereunder; and

    

    WHEREAS,
      Borrowers and Bank acknowledge and agree that this Note is the amended and
      restated promissory note intended to evidence the indebtedness in respect to
      the
      Tranche B-[●]
      Advance;

    

    NOW
      THEREFORE, in consideration of the premises set forth above, the terms and
      conditions contained herein, and other good and valuable consideration, the
      receipt and sufficiency of which are hereby acknowledged, Borrowers hereby
      jointly and severally agree as follows:

    

    PROMISE
      TO
      PAY

    

    FOR
      VALUE
      RECEIVED, each of Borrowers, jointly and severally, promises to pay to the
      order
      of Bank, at 10 East Main Street, Salineville, Ohio 43945, or such other address
      as Bank in writing shall provide to FCMC (as defined below), the sum of [●] Dollars
      ($[●]) (the
“Principal
      Sum”),
      together with interest as hereinafter provided and payable at the times and
      in
      the manner hereinafter provided.  All payments made with respect to
      this Note shall be made to Bank in immediately available funds.

    

    This
      Note
      is issued pursuant to, and/or is entitled to the benefits of the Forbearance
      Agreement; the Credit Agreements; and the Loan Documents.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    It
      is
      expressly understood and agreed by the parties hereto that this Note is not
      intended to constitute a novation of the obligations and liabilities of
      Borrowers under any Credit Agreement or the Original Notes and is not a payment
      of any amounts due from any Borrower.

    

    INTEREST

    

    (a)           
      Interest shall be calculated and will accrue on the unpaid balance of the
      Principal Sum at the applicable Interest Rates as provided in the Forbearance
      Agreement.

    

    (b)           
      The books and records of Bank, absent manifest error, shall constitute binding
      and conclusive evidence of the principal balance of the outstanding Principal
      Sum and other amounts outstanding hereunder, and the date and amount of each
      payment of principal and interest and applicable Interest Rates and other
      information with respect thereto.

    

    MANNER
      OF PAYMENT; PRINCIPAL
      BALANCE

    

    (a)           
      Beginning on the initial Payment Date and continuing on each Payment Date
      thereafter through and including the Tranche B Termination Date (as such terms
      are defined in the Forbearance Agreement) Borrower shall pay interest and the
      Principal Sum in the amounts, at the times and in the manner set forth in the
      Forbearance Agreement.

    

    (b)           
      In addition to any other amounts due and payable under this Note, Borrowers
      shall deliver to Bank any other amounts due and payable from time to time under
      the Forbearance Agreement in respect to the Tranche B Advances and Tranche
      B
      Notes.

    

    (c)           
      Bank and each Borrower hereby agrees and confirms that the outstanding principal
      balances as of December 28, 2007, without giving effect to the forgiveness
      of
      debt set forth in Section 1(c) of the Forbearance Agreement, in respect to
      each
      of the Original Notes are as set forth on Schedule 2 to the
      Forbearance Agreement.

    

    SECURITY

    

    This
      Note
      is secured by the security interests, assignments, and mortgages granted or
      referenced in the Credit Agreements, the Forbearance Agreement, and the Loan
      Documents.

    

    DEFAULT

    

    If
      a
      Forbearance Default has occurred and is continuing, Borrowers shall be obligated
      to pay Bank interest on the outstanding Principal Sum at the Post-Default Rate
      (as defined in the Forbearance Agreement).  Additionally, upon the
      occurrence and continuation of a Forbearance Default, the unpaid balance of
      Principal Sum and all accrued interest may be declared to be due and payable
      all
      in the manner, upon the conditions and with the effect provided in the
      Forbearance Agreement.

    

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    

    GENERAL
      PROVISIONS

    

    Each
      Borrower is accepting joint and several liability hereunder in consideration
      of
      the financial accommodations to be provided by Bank under this Note, for the
      mutual benefit, directly and indirectly, of each Borrower and in consideration
      of the undertakings of each Borrower to accept joint and several liability
      for
      all indebtedness, obligations and liabilities evidenced by this
      Note.  Each Borrower, jointly and severally, hereby irrevocably and
      unconditionally accepts, as a surety and as a co-debtor, joint and several
      liability with each other Borrower, with respect to the payment and performance
      of all of the indebtedness, obligations and liabilities evidenced by this Note,
      it being the intention of the parties hereto that all of the indebtedness,
      obligations and liabilities evidenced by this Note shall be the joint and
      several obligations of each Borrower without preferences or distinction among
      them.  The obligations of each Borrower under this paragraph shall not
      be diminished or rendered unenforceable by any winding up, reorganization,
      arrangement, liquidation, reconstruction or similar proceeding with respect
      to
      any Borrower.  The joint and several liability of each Borrower
      hereunder shall continue in full force and effect notwithstanding any
      absorption, merger, amalgamation or any other change whatsoever in the name,
      constitution or place of formation of any other Borrower or Bank.  The
      provisions of this paragraph are made for the benefit of Bank and its respective
      successors and assigns, and may be enforced by it from time to time against
      any
      or all Borrowers as often as occasion therefore may arise and without
      requirement on the part of Bank (or its successors or assigns), first to marshal
      any of its claims or to exercise any of its rights against any other Borrower
      or
      to exhaust any remedies available to it against any other Borrower hereunder
      or
      to elect any other remedy.  The provisions of this paragraph shall
      remain in effect until all of the indebtedness, obligations and liabilities
      evidenced by this Note shall have been paid in full or otherwise fully
      satisfied.  If at any time, any payment, or any part thereof, made in
      respect to any indebtedness, obligations or liabilities evidenced by this Note,
      is rescinded or must otherwise be restored or returned by Bank for any reason,
      the provisions of this paragraph will forthwith be reinstated in effect, as
      though such payment had not been made.  The obligations of each
      Borrower under this paragraph constitute the absolute and unconditional, full
      recourse obligations of each Borrower enforceable against each such Borrower
      to
      the full extent of its properties and assets, irrespective of the validity,
      regularity or enforceability of this Note or any other circumstances
      whatsoever.  Each Borrower, and any indorser, surety, or guarantor,
      hereby jointly and severally waives notice of acceptance of its joint and
      several liability, presentment, notice of dishonor, protest, notice of protest,
      and diligence in bringing suit against any party hereto, waives the defenses
      of
      impairment of collateral for the obligation evidenced hereby, impairment of
      a
      person against whom Bank has any right of recourse, and any defenses of any
      accommodation maker and consent that without discharging any of them, the time
      of payment and any other provision of this Note may be extended or modified
      an
      unlimited number of times before or after maturity without notice to
      Borrowers.  Each Borrower jointly and severally agrees that it will
      pay the obligations evidenced hereby, irrespective of any action or lack of
      action on Bank’s part in connection with the acquisition, perfection,
      possession, enforcement, disposition, or modification of all the obligations
      evidenced hereby or any and all security therefore, and no omission or delay
      on
      Bank’s part in exercising any right against, or taking any action to collect
      from or pursue Bank’s remedies against any party hereto will release, discharge,
      or modify the duties of Borrowers, or any of them, to make payments
      hereunder.  Each Borrower agrees that 

     

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

     

     

    Bank,
      without notice to or further consent from any Borrower, may release or modify
      any collateral, security, guaranty or other document now held or hereafter
      acquired, or substitute other collateral, security or other guaranties, and
      no
      such action will release, discharge or modify the duties of Borrowers, or any
      of
      them, hereunder.  Each Borrower waives any claim or other right which
      it might now have or hereafter acquire against any other person or entity that
      is primarily or contingently liable on the obligations that arise from the
      existence or performance of each Borrower’s obligations under this Note,
      including, without limitation, any right of subrogation, reimbursement,
      exoneration, contribution, indemnification, or any right to participate in
      any
      claim or remedy of Bank or any collateral security which Bank now has or
      hereafter acquires, whether such claim, remedy or right arises in equity, under
      contract or statute, at common law, or otherwise.

    

    No
      reference herein to the Credit Agreements, the Forbearance Agreement or the
      Loan
      Documents shall alter or impair the obligations of each Borrower, which is
      absolute and unconditional, to pay the principal of and interest on this Note
      at
      the place and at the respective times herein prescribed.  Each
      Borrower promises to pay all costs and expenses, including reasonable attorneys’
fees and disbursements incurred in the collection and enforcement of this Note
      or any appeal of a judgment rendered thereon.

    

    Capitalized
      terms used herein, but not defined herein, shall have the meanings subscribed
      to
      such terms as set forth in the Forbearance Agreement.

    

    The
      captions used herein are for references only and shall not be deemed a part
      of
      this Note.  If any of the terms or provisions of this Note shall be
      deemed unenforceable, the enforceability of the remaining terms and provisions
      shall not be affected.  This Note shall be governed by and construed
      in accordance with the law of the State of Ohio.

    

    

    

    

    

    [SIGNATURE
      PAGE FOLLOWS]

    

     

    
 

    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

    

    IN
      WITNESS WHEREOF, this Note is
      effective as of the date first appearing above notwithstanding the date it
      is
      actually executed.

    

    BORROWERS:

    

    Each
      Borrower listed on Schedule 1 attached
      hereto:

    

    By:
/s/
      Alexander Gordon
      Jardin                                                                           

    Name:
      Alexander Gordon
      Jardin

    Title:
      Chief Executive
      Officer,  as an authorized officer

                                   
      of, and on behalf of, each such Borrower listed on

                            Schedule
      1
      attached hereto

    

    

    

    

    THE
      OBLIGATIONS OF THE BORROWERS UNDER THIS AMENDED AND RESTATED PROMISSORY NOTE
      ARE
      GUARANTEED BY FRANKLIN CREDIT MANAGEMENT CORPORATION PURSUANT TO A GUARANTY
      DATED DECEMBER 28, 2007 IN FAVOR OF THE HUNTINGTON NATIONAL BANK.

     

     

     

     

     

    
5

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