Document:

ex10_1.htm

Franklin Credit Holding Corporation 8-K

Exhibit 10.1

 

 

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PLAN SUPPORT AGREEMENT

 

This Plan Statement Support Agreement, dated as of May 18, 2012 (this “Agreement”), is entered into by and among The Huntington National Bank, Huntington Finance LLC (collectively, the “Holders”) and Franklin Credit Holding Corporation (“FCHC,” and together with the Holders, the “Parties”).  All capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in Prepackaged Plan of Reorganization of Franklin Credit Holding Corporation (as amended, supplemented or modified the “Plan”).

 

RECITALS

 

WHEREAS:

 

A. The Holders collectively hold and own the claims against FCHC arising in connection with the Licensing Debt;

 

B. FCHC has determined, and the Holders concur, that it is in the best interests of FCHC’s creditors that the Plan be confirmed expeditiously to minimize expense and increase the likelihood of a successful reorganization of FCHC;

 

C. The Parties have negotiated and agreed upon the principal terms of a consensual proposed restructuring of FCHC through a prepackaged plan of reorganization in substantially the form of the Plan annexed hereto as Exhibit A;

 

D. Pursuant to the terms of this Agreement, the Holders have agreed to support and, vote to accept (subject to the terms and conditions of this Agreement and the receipt of definitive documentation reasonably acceptable to the Holders), to the extent legally permissible, confirmation of the Plan pursuant to section 1129 of Title 11 of the United States Code, 11 U.S.C. §§ 101-1530 (as amended, the “Bankruptcy Code”); and

 

E. In expressing such support and commitment, the Parties do not desire and do not intend in any way to derogate from or diminish the solicitation requirements of applicable securities and bankruptcy law, or the fiduciary duties of FCHC or any other Party having such duties.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

 

1. Incorporation of Recitals.  The recitals and prefatory phrases and paragraphs set forth above are hereby incorporated in full, and made a part of, this Agreement.

 

2. FCHC’s Support.  FCHC believes that prompt consummation of the Plan will best facilitate FCHC’s financial restructuring and is in the best interests of FCHC’s creditors, shareholders, and other parties in interest.  Accordingly, FCHC hereby expresses its intention to seek approval of the Plan.  Without limiting the foregoing, for so long as this 

 

  

  

  

 

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Agreement remains in effect, and subject to the Holders fulfilling their obligations as contemplated herein, FCHC agrees:

 

 

a. to use its best efforts to file its voluntary petition to commence a chapter 11 case (“Chapter 11 Case”) in the United States Bankruptcy Court for the District of New Jersey  (the “Bankruptcy Court”) on or before June 5, 2012;

 

b. to take such actions as may be necessary or appropriate to obtain confirmation of the Plan;

 

c. not to pursue, propose or support, or encourage the pursuit, proposal or support of, any plan of reorganization for FCHC that is inconsistent with the Plan; and

 

d. to otherwise use its best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by the Plan at the earliest practicable date but not later than August 7, 2012;

 

in all events expressly subject to the exercise (after consultation with outside legal counsel and with prior notice to counsel to the Holders) by FCHC of its fiduciary duties, as reasonably determined by FCHC’s board of directors.

 

3. Agreement to Support the Plan.  For so long as this Agreement remains in effect, and subject to the Parties hereto fulfilling their respective obligations as provided herein, each of the Holders agrees to

 

a. support confirmation and consummation of the Plan;

 

b. timely vote in favor of the Plan any and all claims (as defined by section 101(5) of the Bankruptcy Code) owned by such Holders or for which it is a nominee, agent, investment manager, or advisor for beneficial holders thereof;

 

c. not pursue, propose, support, or encourage the pursuit, proposal or support of, any chapter 11 plan or other restructuring or reorganization for, or the liquidation of, FCHC (directly or indirectly) that is inconsistent with the Plan;

 

d. not, nor encourage any other person or entity to, delay, impede, appeal or take any other negative action, directly or indirectly, to interfere with, the acceptance or implementation of the Plan;

 

e. not commence any proceeding or prosecute, join in, or otherwise support any objection to, oppose, or object to the Plan; and

 

f. not take any other action, including but not limited to initiating any legal proceedings or enforcing rights under any contract, agreement, or understanding against FCHC prior to June 6, 2012.

 

  

  

  

 

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4. Acknowledgment.

 

a. This Agreement is not and shall not be deemed to be a solicitation for consent to the Plan in contravention of section 1125(b) of the Bankruptcy Code.  Notwithstanding anything to the contrary contained herein, any obligation of the Holders that is set forth in Section 3 herein is expressly conditioned on the receipt of definitive documentation reasonably acceptable to the Parties.

 

b. Each Party acknowledges that no securities of FCHC are being offered or sold hereby and that this Agreement neither constitutes an offer to sell nor a solicitation to buy any securities of FCHC.

 

5. Limitations on Transfer of Holders’ Claims.  Each Holder shall not (i) sell, transfer, assign, pledge, grant a participation interest in or otherwise dispose of, directly or indirectly, its right, title or interest in respect of any of Holder’s claims against FCHC, in whole or in part, or any interest therein, or (ii) grant any proxies, deposit any of the Holder’s claims against FCHC into a voting trust, or enter into a voting agreement with respect to any of such claims (collectively, the “Transfer”), unless, as a condition precedent to such Transfer, the transferees becomes a signatory to this Agreement.  No Holder may create an affiliate or subsidiary for the sole purpose of acquiring any of the Holder’s claims against FCHC without first causing such subsidiary or affiliate to become a party hereto.  Any Transfer made in violation of this Section 5 shall be deemed null and void and of no force or effect.

 

6. Further Acquisition of Claims against FCHC.  This Agreement shall in no way be construed to preclude any Holder from acquiring additional claims against FCHC.  Any such additional claims so acquired shall be automatically subject to the terms of this Agreement and such acquiring Holder shall promptly inform counsel to FCHC of the acquisition of such additional claims.

 

7. Condition to Each Party’s Obligations.  Each Party’s obligations under this Agreement are subject to the prior execution of this Agreement by the following entities:

 

a. FCHC; and

 

b. each Holder.

 

In no event shall this Agreement be effective with respect to any Party until the conditions set forth in this Section 7 are satisfied.

 

8. Termination Events.  This Agreement may terminate upon the occurrence of any of the following events (each, a “Termination Event”):

 

a. any of the Parties shall have breached any of its material obligations under this Agreement and such breach would excuse the non-breaching Party’s further performance hereunder;

 

b. solicitation of votes to accept the Plan shall not have been commenced by May 21, 2012;

 

  

  

  

 

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c. acceptance of the Plan by the Holders shall not have been received by June 4, 2012;

 

d. the Chapter 11 Case of FCHC shall have not been commenced by June 5, 2012 or shall have been dismissed or converted to a case under Chapter 7 of the Bankruptcy Code, or an interim or permanent trustee shall have been appointed in the Chapter 11 Case, or a responsible officer or examiner with powers beyond the duty to investigate and report (as set forth in sections 1106(a)(3) and (4) of the Bankruptcy Code) shall be appointed in the Chapter 11 Case;

 

e. any court (including the Bankruptcy Court) shall have declared, in an order that shall not have been stayed, modified, or vacated on appeal (a “Final Order”) this Agreement to be unenforceable;

 

f. entry of a Final Order by the Bankruptcy Court denying confirmation of the Plan;

 

g. if the combined hearing on confirmation of the Plan and approval of the related disclosure statement shall not have occurred by July 31, 2012;

 

h. if the effective date of the Plan shall not have occurred by August 7, 2012;

 

i. any material adverse change shall occur in the business, assets, financial condition, operations, liabilities (whether contractual, environmental or otherwise), or properties of FCHC and its subsidiaries, taken as a whole, since the end of the most recently ended fiscal month or in the facts and information as represented to date, other than the Chapter 11 Case; or

 

j. the board of directors of FCHC have determined in good faith, after consultation with outside legal counsel, that the taking of any action under this Agreement would be inconsistent with its fiduciary duties.

 

9. Termination of this Agreement.

 

a. Upon the occurrence of any of the Termination Events described in paragraphs 8(b) through (g) herein, this Agreement shall terminate automatically and without further notice or action by any Party.

 

b. Upon the occurrence of the Termination Event described in paragraph 8(i) herein, this Agreement shall terminate upon receipt of written notice by FCHC to the counsel for the Holders.

 

c. Upon the occurrence of any of the Termination Events described in paragraphs 8(a) and 8(h) herein, if FCHC is the breaching Party, this Agreement shall terminate upon FCHC’S receipt of written notice from the Holders, and a failure by FCHC to remedy such breach within three (3) business days; provided, however, that the right to terminate hereunder 

 

  

  

  

 

shall not preclude any non-breaching Party from seeking specific performance or any other remedy available under applicable law for breach of this Agreement.

 

d. Upon the occurrence of the Termination Event described in paragraph 8(a), if a Holder is the breaching Party, this Agreement shall terminate upon the breaching Holder’s receipt of written notice from FCHC, and a failure by such breaching Holder to remedy such breach within three (3) business days; provided, however, that the right to terminate hereunder shall not preclude any non-breaching Party from seeking specific performance or any other remedy available under applicable law for breach of this Agreement.

 

e. Specific Performance; Damages.  This Agreement is intended as a binding commitment enforceable in accordance with its terms.  Each Party acknowledges and agrees that the exact nature and extent of damages resulting from a breach of this Agreement are uncertain at the time of entering into this Agreement and that breach of this Agreement would result in damages that would be difficult to determine with certainty.  It is understood and agreed that money damages would not be a sufficient remedy for any breach of this Agreement and that the Parties shall each be entitled to specific performance and injunctive relief as remedies for any such breach, and further agree to waive, and to use their best efforts to cause each of their representatives to waive, any requirement for the securing or posting of any bond in connection with such remedy.  Such remedies shall not be deemed to be the exclusive remedies for the breach of this Agreement by any Party or its representatives.

 

10. Effect of Termination.  Upon termination of this Agreement, all obligations hereunder shall terminate and shall be of no further force and effect; provided, however, that any claim for breach of this Agreement shall survive termination and all rights and remedies with respect to such claims shall not be prejudiced in any way; provided, further, that the breach of this Agreement by one or more Parties shall not create any rights or remedies against any non-breaching Party unless such non-breaching Party has participated in or aided and abetted the breach by a breaching Party or Parties.

 

11. Representations and Warranties.   Each Party represents and warrants to each other Party, severally but not jointly, that the following statements are true, correct and complete as of the date hereof or as of the date of the execution of this Agreement:

 

a. Corporate Power and Authority.  It is duly organized, validly existing, and in good standing under the laws of the jurisdiction under which it is organized, and has all requisite corporate, partnership or other power and authority to enter into this Agreement and to carry out the transactions contemplated by, and to perform its respective obligations under, this Agreement.

 

b. Authorization.  The execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary corporate, partnership or other action on its part.

 

c. Binding Obligation.  This Agreement has been duly executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable in accordance with the terms hereof.

 

  

  

  

 

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d. No Conflicts.  The execution, delivery and performance by it (when such performance is due) of this Agreement does not and shall not (i) violate any provision of law, rule or regulation applicable to it or any of its subsidiaries or its certificate of incorporation or bylaws or other organizational documents or those of any of its subsidiaries or (ii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it or any of its subsidiaries is a party.

 

12. Amount of Claims.  Each Holder represents and warrants that, as of the date of this Agreement, it is the beneficial owner of, or the nominee, investment manager, or advisor for beneficial holders of, the claims arising in connection with the Licensing Debt.

 

13. Amendment or Waiver.  Except as otherwise specifically provided herein, this Agreement may not be modified, waived, amended or supplemented unless such modification, waiver, amendment or supplement is in writing and has been signed by each Party.  No waiver of any of the provisions of this Agreement shall be deemed or constitute a waiver of any other provision of this Agreement, whether or not similar, nor shall any waiver be deemed a continuing waiver (unless such waiver expressly provides otherwise).

 

14. Notices.  Any notice required or desired to be served, given or delivered under this Agreement shall be in writing, and shall be deemed to have been validly served, given or delivered if provided by personal delivery, or upon receipt of fax delivery, as follows:

 

a. if to FCHC, to Lisa S. Bonsall, Esq. and Scott Bernstein, Esq., McCarter & English, LLP, 100 Mulberry Street, Four Gateway Center, Newark, NJ 07102, fax: (973) 624-7070; and

 

b. if to the Holders, to Jack R. Pigman, Esq., Porter Wright Morris & Arthur LLP, 41 South High Street, Suites 2800 – 3200, Columbus, OH 43215-6194, fax:  (614) 227-2100.

 

15. Governing Law; Jurisdiction.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY CONFLICTS OF LAW PROVISION WHICH WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.  By its execution and delivery of this Agreement, each of the Parties hereto irrevocably and unconditionally agrees for itself that any legal action, suit or proceeding against it with respect to any matter under or arising out of or in connection with this Agreement or for recognition or enforcement of any judgment rendered in any such action, suit or proceeding, shall be brought in the federal or state courts located in the State of New Jersey, County of Essex.  By execution and delivery of this Agreement, each of the Parties hereto irrevocably accepts and submits itself to the exclusive jurisdiction of such court, generally and unconditionally, with respect to any such action, suit or proceeding, and waives any objection it may have to venue or the convenience of the forum.

 

16. Headings.  The headings of the sections, paragraphs and subsections of this Agreement are inserted for convenience only and shall not affect the interpretation hereof.

 

  

  

  

 

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17. Interpretation.  This Agreement is the product of negotiations of the Parties, and in the enforcement or interpretation hereof, is to be interpreted in a neutral manner, and any presumption with regard to interpretation for or against any Party by reason of that Party having drafted or caused to be drafted this Agreement, or any portion hereof, shall not be effective in regard to the interpretation hereof.

 

18. Successors and Assigns.  This Agreement is intended to bind and inure to the benefit of the Parties and their respective successors, assigns, heirs, transferees, executors, administrators and representatives.

 

19. No Third-Party Beneficiaries.  Unless expressly stated herein, this Agreement shall be solely for the benefit of the Parties hereto and no other person or entity shall be a third-party beneficiary hereof.

 

20. No Waiver of Participation and Reservation of Rights.  Except as expressly provided in this Agreement and in any amendment among the Parties, nothing herein is intended to, or does, in any manner waive, limit, impair or restrict the ability of each of the Parties to protect and preserve its rights, remedies and interests, including without limitation, its claims and causes of action, if any, against any of the other Parties (or their respective affiliates or subsidiaries) or its full participation in the Chapter 11 Case.  If the transactions contemplated by this Agreement or in the Plan are not consummated, or if this Agreement is terminated for any reason, the Parties fully reserve any and all of their rights.

 

21. No Admissions.  This Agreement shall in no event be construed as or be deemed to be evidence of an admission or concession on the part of any Party of any claim or fault or liability or damages whatsoever.  Each of the Parties denies any and all wrongdoing or liability of any kind and does not concede any infirmity in the claims or defenses which it has asserted or could assert.  No Party shall have, by reason of this Agreement, a fiduciary relationship in respect of any other Party or any person or entity, or FCHC, and nothing in this Agreement, expressed or implied, is intended to or shall be so construed as to impose upon any Party any obligations in respect of this Agreement except as expressly set forth herein.

 

22. Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement.  Delivery of an executed signature page of this Agreement by facsimile shall be effective as delivery of a manually executed signature page of this Agreement.

 

23. Representation by Counsel.  Each Party acknowledges that it has been represented by counsel in connection with this Agreement and the transactions contemplated herein.  Accordingly, any rule of law or any legal decision that would provide any Party with a defense to the enforcement of the terms of this Agreement against such Party based upon lack of legal counsel shall have no application and is expressly waived.

 

24. Entire Agreement.  This Agreement and the Annexes hereto constitute the entire agreement between the Parties and supersede all prior and contemporaneous agreements, representations, warranties and understandings of the Parties, whether oral, written or implied, as to the subject matter hereof.

 

  

  

  

 

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25. Several Not Joint.  The agreements, representations and obligations of the Parties under this Agreement are, in all respects, several and not joint.  Any breach of this Agreement by any Party shall not result in liability for any other non-breaching Party.

 

IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date first written above.

 

	  	  	
 
Franklin Credit Holding Corporation

	  	  	  
	  	  	
By:

	
/s/ Paul D. Colasono

	  	  	
Name:

	Paul D. Colasono
	  	  	
Title:

	CFO, EVP

 

	  	  	
 
 
The Huntington National Bank

	  	  	  
	  	  	
By:

	
/s/ Mark Taylor Bahlmann

	  	  	
Name:

	Mark Taylor Bahlmann
	  	  	
Title:

	Authorized Signer

 

	  	  	
 
 
 
Huntington Finance LLC

	  	  	  
	  	  	
By:

	
/s/ Richard Cheap

	  	  	
Name:

	Richard Cheap
	  	  	
Title:

	General Counselex10_2.htm

Franklin Credit Holdings Corporation 8-K

 

Exhibit 10.2

 

AMENDMENT NO. 5 TO

AMENDED AND RESTATED CREDIT AGREEMENT (LICENSING)

THIS AMENDMENT NO. 5 TO AMENDED AND RESTATED CREDIT AGREEMENT (LICENSING) (this "Amendment") is entered into as of June __, 2012 (the "Amendment Effective Date"), by and among FRANKLIN CREDIT MANAGEMENT CORPORATION, a Delaware Corporation ("FCMC"), and FRANKLIN CREDIT HOLDING CORPORATION, a Delaware corporation ("FCHC" and together with FCMC, each, a "Borrower" and collectively, the "Borrowers"), THE FINANCIAL INSTITUTIONS PARTY HERETO AS LENDERS (each, a "Lender" and collectively, the "Lenders"), THE HUNTINGTON NATIONAL BANK, a national banking association ("Huntington"), as administrative agent (in such capacity, together with its successors and assigns in such capacity, the "Administrative Agent") for the benefit of the Lenders and the Issuing Bank (as defined in the Credit Agreement (Licensing) referred to below).  This Amendment further amends and modifies a certain Amended and Restated Credit Agreement (Licensing) dated as of March 31, 2009, as amended, supplemented, restated or otherwise modified from time to time prior to the date hereof, including a certain Amendment No. 1 to Amended and Restated Credit Agreement (Licensing) dated March 26, 2010, a certain Amendment No. 2 to Amended and Restated Credit Agreement (Licensing) dated July 20, 2010, a certain Amendment No. 3 to Amended and Restated Credit Agreement (Licensing) dated September 22, 2010, and a certain Amendment No. 4 to Amended and Restated Credit Agreement (Licensing) dated May 23, 2011 (as so amended, the "Credit Agreement (Licensing)"), by and among Borrowers, the Lenders, the Administrative Agent and Issuing Bank.  Capitalized terms used in this Amendment and not otherwise defined herein shall have the meanings ascribed to such terms in the Credit Agreement (Licensing).

RECITALS:

A.           As of March 31, 2009, the Borrowers, the Lenders, the Administrative Agent and Issuing Bank executed the Credit Agreement (Licensing) setting forth the terms of certain extensions of credit to the Borrower;

B.           As of March 31, 2009, Borrowers executed and delivered to the Administrative Agent, inter alia, a Revolving Promissory Note (Licensing) in the original principal sum of $2,000,000, which maximum principal sum was thereafter reduced to $1,000,000;

C.           As of March 31, 2009, and at various other times, Borrowers executed and delivered to the Administrative Agent, inter alia, one or more Applications and Agreements for Letters of Credit in connection with Issuing Bank's issuance of Letters of Credit for the account of one or more of the Borrowers;

D.           Pursuant to a certain Amendment No. 3 to Amended and Restated Credit Agreement (Licensing) dated September 22, 2010, subject to acceptance of the terms of the Restructuring to be proposed by FCHC to the Administrative Agent, the Issuing Bank and the Lenders consented to, inter alia, the Restructuring;

E.           As of March 23, 2012, (i) FCHC publicly announced its intention to file a voluntary petition for relief under the Bankruptcy Code (the "FCHC Bankruptcy Filing"), and admitted its inability to pay its debts as such debts became due, each of which results in a Default under Section 8.01(f) of the Credit Agreement (Licensing), (ii) FCHC publicly announced that it would liquidate its assets, which upon the commencement of such liquidation will cause a Default of Section 7.04 of the Credit Agreement (Licensing), (iii) the FCHC Bankruptcy Filing and such announcements will constitute a Default under Section 7.14 of the Credit Agreement (Licensing), and (iv) the Pledge Defaults (defined 

 

  

 

  

 

below) will result in a Default under the Borrowers' agreements to perform or observe the terms of any Loan Document under Section 8.01(d) of the Credit Agreement (Licensing) (collectively, the "Acknowledged Defaults");

F.           FCHC has further notified the Administrative Agent that promptly after the Amendment Effective Date, it will file the FCHC Bankruptcy Filing, which when filed will cause an Event of Default under Section 8.01(g) of the Credit Agreement (Licensing) (the "Acknowledged Event of Default");

G.           An Event of Default has occurred under the Legacy Loans Credit Agreement by reason of the failure of the borrowers thereunder to pay in full the amounts due upon maturity on March 31, 2012, and the FCHC Bankruptcy Filing will further result in an Event of Default under the Legacy Loans Credit Agreement, each of which will constitute a "Default" under Section 5.1(a) of a certain Investment Property Security Agreement dated March 31, 2009 (the "Pledge Agreement") among FCMC, the Administrative Agent, and the Legacy Administrative Agent (collectively the "Pledge Defaults");

H.           In connection with the FCHC Bankruptcy Filing, the Borrowers have requested that the Administrative Agent, the Issuing Bank and the Lenders (i) extend the maturity of the Revolving Loan Commitment and the Letter of Credit Commitment, and (ii) waive the Acknowledged Defaults and the Acknowledged Event of Default and (iii) forbear, pursuant to the terms hereof, from exercising their rights and remedies resulting from the Pledge Defaults, and the Administrative Agent, the Lenders and the Issuing Bank, are willing to do so upon the terms and subject to the conditions contained herein; and

I.           Pursuant to Section 10.04, "Amendments," of the Credit Agreement (Licensing), the amendments requested by the Borrowers herein must be contained in a written agreement signed by each Borrower, the Administrative Agent and the Required Lenders.

 

 

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. The definition of "Termination Date" set forth in Section 1.01, "Certain Defined Terms," of the Credit Agreement (Licensing) is hereby amended to recite as follows:

"Termination Date" shall mean (i) in respect of the Revolving Loan and the Revolving Loan Commitment and the Letters of Credit and the Letter of Credit Commitment, March 31, 2013, or such earlier date on which this Agreement shall terminate in accordance with the provisions hereof or by operation of law, and (ii) in respect of the Draw Loan and the Draw Loan Commitment May 31, 2010, which Draw Loan and Draw Commitment have expired and are of no force and effect.

 

2. Sub-Clause (iii) of clause (b), "Revolving Loan Advances", of Section 2.01, "Advances", of the Credit Agreement (Licensing) is hereby amended to recite in its entirety as follows:

(iii)           The net proceeds of the Revolving Loan shall be used solely to (A) assure that all state licensing requirements of FCMC are met and (B) to pay Approved Expenses of FCMC.

 

  

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3. Section 2.08, "Purpose of Advances", of the Credit Agreement (Licensing) is hereby amended to recite in its entirety as follows:

Section 2.08   Purpose of Advances.  Letters of Credit and Revolving Loan Advances shall be used solely to (A) assure that all state licensing requirements of FCMC are met and (B) to pay Approved Expenses of FCMC.

4. Waiver.  The Administrative Agent and the Required Lenders hereby waive the Acknowledged Defaults and the Acknowledged Event of Default.

5. Forbearance.                      The Administrative Agent, the Lenders and the Issuing Bank agree in favor of FCMC that they shall refrain from taking any action to foreclose or recover the "Collateral" (as defined in the Pledge Agreement) or otherwise initiate collection proceedings against FCMC with respect to the Pledge Defaults from the date hereof through and including the earlier of (i) March 31, 2013, or (ii) the occurrence of an Event of Default under the Credit Agreement (Licensing) (other than resulting from an Acknowledged Default, the Acknowledged Event of Default or a Pledge Default) (the “Forbearance Period”).  FCMC acknowledges and agrees that, notwithstanding the foregoing, (a) each of the Administrative Agent, the Lenders and the Issuing Bank reserves the right to enforce each and every term of the Pledge Agreement (other than remedies resulting from a Pledge Default during the Forbearance Period), and is under no duty or obligation of any kind or any nature to grant FCMC any additional period of forbearance beyond the Forbearance Period; (b) each action of the Administrative Agent, the Lenders and the Issuing Bank in entering into this Agreement shall not be construed as a waiver or relinquishment of, or estoppel to assert, any of Administrative Agent's rights under the Pledge Agreement or applicable law; and (c) each action of the Administrative Agent, the Lenders and the Issuing Bank in entering into this Agreement is without prejudice to the right of the Administrative Agent, the Lenders and the Issuing Bank to pursue any and all remedies available to any of them upon expiration of the Forbearance Period or immediately upon the occurrence of an Event of Default under the Credit Agreement (Licensing) or a "Default" under the Pledge Agreement (other than a Pledge Default).

6. Conditions of Effectiveness.  This Amendment shall become effective as of the Amendment Effective Date, upon satisfaction of all of the following conditions precedent:

(a)           The Administrative Agent shall have received execution and delivery of, by all parties signatory hereto, originals, or completion as the case may be, to the satisfaction of the Administrative Agent and its counsel, of three duly executed originals of this Amendment;

(b)           The Administrative Agent shall have received satisfactory evidence that all corporate and other proceedings that are necessary in connection with this Amendment have been taken to the satisfaction of the Administrative Agent and its counsel, and the Administrative Agent and such counsel shall have received all such counterpart originals or certified copies of such documents as the Administrative Agent may request;

(c)            The Administrative Agent (for the benefit of the Lenders) shall have received a fee in respect of this Amendment in the amount of $10,000, which fee shall be earned in full as of the Amendment Effective Date and shall be non-refundable;

 

(d)           The Borrowers shall have paid all of the Administrative Agent's costs and expenses incurred up to the date of this Amendment; and

  

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(e)           The representations contained in the immediately following paragraph shall be true and accurate.

7. Representations and Warranties.  Each Borrower represents and warrants to the Administrative Agent and each Lender as follows: (a) after giving effect to this Amendment, each representation and warranty made by or on behalf of such Borrower in the Credit Agreement (Licensing) and in any other Loan Document 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 each Borrower of this Amendment and each other Loan Document have been duly authorized by all requisite corporate or organizational action on the part of such Borrower and will not violate any Requirement of Law applicable to such Borrower; (c) this Amendment has been duly executed and delivered by each Borrower, and each of this Amendment, the Credit Agreement (Licensing) and each other Loan Document as amended hereby constitutes the legal, valid and binding obligation of such Borrower, enforceable against such Borrower in accordance with the terms thereof; and (d) after giving effect to this Amendment, no event has occurred and is continuing, and no condition exists, which would constitute an Event of Default or a Default (other than a Pledge Default).

8. Ratification and Reaffirmation.  The Borrowers agree (i) that all the obligations, indebtedness and liabilities of the Borrowers to the Administrative Agent and the Lenders under the Credit Agreement (Licensing) are the valid and binding obligations of the Borrowers; (ii) that the obligations, indebtedness and liabilities of the Borrowers evidenced by each Note executed and delivered by the Borrowers 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 and security interests granted to the Administrative Agent with respect to the Obligations as security for all obligations and liabilities of the Borrowers under the Credit Agreement (Licensing), each Application and Agreement for Letter of Credit and the Revolving Loan Note are valid and binding and are hereby ratified and confirmed in all respects.

9. Reference to and Effect on the Loan Documents.  (a) Upon the effectiveness of this Amendment, each reference in the Credit Agreement (Licensing) to "Amended and Restated Credit Agreement," "Credit Agreement," "Agreement," the prefix "herein," "hereof," or words of similar import, and each reference in the Loan Documents to the Credit Agreement (Licensing), shall mean and be a reference to the Credit Agreement (Licensing) as amended hereby.  (b) Except to the extent amended or modified hereby, all of the representations, warranties, terms, covenants and conditions of the Credit Agreement (Licensing) and the other Loan 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 or any Lender's rights under, or of any other term or provisions of, the Credit Agreement (Licensing) or any other Loan Document, or of any term or provision of any other instrument referred to therein or herein or of any transaction or future action on the part of the Borrowers which would require the consent of the Lender.

10. Waiver and Release of All Claims and Defenses.  Each Borrower 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, the 

 

  

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Issuing Bank and the Lenders, and all of their successors, assigns, directors, officers, shareholders, agents, employees and attorneys, the Obligations or the Collateral, whether previously or now existing or arising out of or related to any transaction or dealings between the Administrative Agent, the Issuing Bank, any Lender and any Borrower or any of them, which any Borrower 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 any Borrower, and all of their 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.

11. 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 (Licensing) or any other Loan Document (other than the Acknowledged Defaults and the Acknowledged Event of Default).

12. 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.

13. 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.

14. Costs and Expenses.  Each Borrower agrees to pay on demand in accordance with the terms of the Credit Agreement (Licensing) 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.

15. 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.

16. 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.

 

  

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17. Patriot Act Notice.  The Administrative Agent hereby notifies each Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub.L.10756 (signed into law October 26, 2001)) (the "Act"), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of each Borrower and other information that will allow the Administrative Agent to identify each Borrower in accordance with the Act.

[Signature Page Follows.]

 

  

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

	  	  	
BORROWERS:

	  
	  	  	  	  
	  	  	
 
FRANKLIN CREDIT MANAGEMENT CORPORATION

	  
	  	  	  	  
	  	  	
By:

	/s/ Kevin P. Gildea	  
	  	  	
Name:

	Kevin P. Gildea	  
	  	  	
Title:

	EVP, Chief Legal Officer	  

 

	  	  	
 
FRANKLIN CREDIT MANAGEMENT CORPORATION

	  
	  	  	  	  
	  	  	
By:

	/s/ Kevin P. Gildea	  
	  	  	
Name:

	Kevin P. Gildea	  
	  	  	
Title:

	EVP, Chief Legal Officer	  

	 	 	ADMINISTRATIVE AGENT AND ISSUING BANK:	 
	 	 	 	 
	  	  	
 
 
THE HUNTINGTON NATIONAL BANK

	  
	  	  	  	  
	  	  	
By:

	/s/ David L. Abshier	  
	  	  	
Name:

	David L. Abshier	  
	  	  	
Title:

	Senior Vice President	  

	 	 	 
LENDER AND RISK PARTICIPANT:

	 
	 	 	 	 
	  	  	
 
 
 
HUNTINGTON FINANCE, LLC

	  
	  	  	  	  
	  	  	
By:

	/s/ Donald R. Kimble	  
	  	  	
Name:

	Donald R. Kimble	  
	 	 	 	President	 

 

 

Signature Page to  Amendment No. 5 to Amended and Restated Credit Agreement (Licensing)

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