Document:

Exhibit 10.1 Amendment No. 1

    
      

    
 

    Exhibit
      10.1

    AMENDMENT
      NO. 1

    TO

    MASTER
      CREDIT AND SECURITY AGREEMENTS

    

    THIS
      AMENDMENT NO. 1, dated as of December 1, 2006 (this “Amendment”), between
      FRANKLIN CREDIT MANAGEMENT CORPORATION (“Franklin”) and TRIBECA LENDING
      CORPORATION (“Tribeca”, and together with Franklin, the “Company”) and SKY BANK
      (the “Bank”), to the Master Credit and Security Agreement, dated as of October
      13, 2004, as amended by the Amendment to the Master Credit and Security
      Agreement, dated as of October 5, 2006 (as so amended, the “Franklin Credit
      Agreement”), among Franklin, certain of its Subsidiaries and the Bank and the
      Master Credit and Security Agreement, February 28, 2006 (the “Tribeca Credit
      Agreement”; together with the Franklin Credit Agreement, the “Credit
      Agreements”, and each, a “Credit Agreement”), among Tribeca, certain of its
      Subsidiaries and the Bank; all capitalized terms used but not defined herein
      having the meaning ascribed to such terms in the applicable Credit
      Agreement.

    

    WHEREAS,
      the Bank originally granted loan facilities to the Company and certain Company
      Subsidiaries pursuant to the Credit Agreements to finance the origination,
      funding or purchase of Mortgage Loans; and

    

    WHEREAS,
      the Company has previously agreed to pay the Bank certain Success Fees as
      defined in (i) Section 2.10 of the Franklin Credit Agreement, as modified by
      that certain Agreement, dated as of December 30, 2004 (the “Success Fee
      Agreement”), to the Franklin Credit Agreement, between the Bank and the Company,
      (ii) in Section 2.10 of the Tribeca Lending Agreement, and (iii) in Section
      2.10
      of that certain Master Credit and Security Agreement, dated as of March 24,
      2006
      (the “BOS Credit Agreement”), among Tribeca, certain of its Subsidiaries and BOS
      (USA) Inc.; 

    

    NOW
      THEREFORE, in consideration of the agreements contained herein, the receipt
      and
      sufficiency of which is hereby acknowledged as of the date hereof, the Company
      and the Bank agree as follows:

    

    1.
      Elimination
      of Success Fees.
      In
      order to terminate the obligation of the Company, its subsidiaries and
      affiliates to pay Success Fees to the Bank as of and after the date hereof,
      including any and all Success Fee liability currently existing and due to Bank
      and that would have subsequently become due after December 1, 2006, under
      Section 2.10 of the Credit Agreements and the BOS Credit Agreement and any
      and
      all other existing agreements between the Bank and the Company and its
      subsidiaries or affiliates, including, but not limited to, the Success Fee
      Agreement, the following amendments are hereby made to the Credit Agreements,
      as
      provided below:

    

    (a)  
      Section
      2.10 of each of the Credit Agreements is hereby deleted in its
      entirety.

    

    (b)  
      Section
      2.5(a)(First)(i)(B)
      and (C) of the Franklin Credit Agreement are hereby deleted and replaced with
      the following:

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    “(B) any
      accrued and unpaid interest due on all Company Subsidiary Loans related to
      such
      Mortgage Pool;

    

    “(C) as
      consideration for the termination of the obligation of the Company and its
      affiliates to pay Success Fees to the Bank under all agreements between the
      Company or its affiliates and the Bank in existence on the date hereof, an
      amount which, when added to all other amounts paid to the Bank from time to
      time
      under this Section 2.5(a)(i)(C) on or after December 1, 2006, shall equal
      $4,500,000.00 in the aggregate; and

    

    “(D) the
      required Principal Payment for such Mortgage Pool;”

    

    (c)  
      In
      the
      introduction to Section 2.5(a)(First)(ii)
      of
      the Franklin Credit Agreement, the words “through (C)” are hereby replaced with
      the words “through (D)”.

    

    (d)  
      In
      Section 2.5(a)(First)(ii)(B)
      of the Franklin Credit Agreement, the words “and Success Fees” are hereby
      deleted.

    

    (e)  
      In
      Section 2.5(a)(Second)(i)
      of
      the Franklin Credit Agreement, the words “and Success Fees” are
      hereby deleted.

    

    (f)  
      In
      Section 2.5(b) of the Franklin Credit Agreement, the words “(but subject to the
      Success Fee)” are hereby deleted.

    

    (g)  
      Section
      2.5(a)(i)(B) and (C) of the Tribeca Credit Agreement are hereby deleted and
      replaced with the following:

    

    “(B) any
      accrued and unpaid interest due on the Related Loan for such Mortgage Pool;
      and

    

    “(C) any
      required Principal Payment due on the Related Loan for such Mortgage
      Pool;”

    

    (h) 
      In
      Section 2.5(a)(v) of the Tribeca Credit Agreement, the words “and Success Fees”
are hereby deleted.

    

    (i)  
      In
      Section 2.5(c) of the Tribeca Credit Agreement, the words “(but subject to the
      Success Fee)” are hereby deleted.

    

    (j)  
      All
      other
      references to Success Fees in the Credit Agreements, if any, shall be
      ignored.

    

    2.
      Applicability.
      This
      Amendment shall apply to obligations of the Company and the Company Subsidiaries
      arising as of and after the date hereof under all Company Subsidiary Loans
      now
      existing or hereafter arising under the Credit Agreements and any Success Fees
      otherwise
      due to the Bank or any successor thereto by operation of the BOS Credit
      Agreement. The Bank agrees that after the date hereof, all payments of Success
      Fees under the BOS Credit Agreement that otherwise would be payable to the
      Bank
      shall instead be payable to Tribeca, and shall take all actions necessary to
      cause such amounts to be paid over to Tribeca.

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    3.
      Supersession.
      This
      Amendment supersedes the Success Fee Agreement and all other agreements or
      understandings, written or unwritten, relating to success fees in connection
      with all financing arrangements between the Bank and the Company and its
      subsidiaries and affiliates, which therefore shall be terminated as of the
      date
      hereof and shall have no further force and effect.

    

    4.
      Effectiveness.
      This
      Amendment shall be effective as of the date first set forth above.

    

    5.
      Miscellaneous.
      Other
      than as modified above, all of the terms, provisions and covenants of the Credit
      Agreements remain in full force and effect and are hereby ratified and
      affirmed.

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
      executed and delivered by their duly authorized officers as of the date first
      set forth above.

    

    SKY
      BANK

    

    

    By:
      /s/
      Jerry S.
      Sutherin                          

    Name:
      Jerry S. Sutherin

    Title:
      Senior Vice President, Specialty Lending Group

    

    

    FRANKLIN
      CREDIT MANAGEMENT CORPORATION,

    
      	 	
              on
                behalf of itself and the Company Subsidiaries that have
                

            

    

    
      	 	
              become
                parties to the Franklin Credit
                Agreement

            

    

    

    By:
      /s/
      Paul D. Colasono        
12/12/06           

    Name:
      Paul D. Colasono

    Title:
      CFO

    

    TRIBECA
      LENDING CORPORATION,

    
      	 	
              on
                behalf of itself and the Company Subsidiaries that have
                

            

    

    
      	 	
              become
                parties to the Tribeca Credit
                Agreement

            

    

    

    By:
      /s/
      Paul D. Colasono      
12/12/06           

    Name:
      Paul D. Colasono

    Title:
      CFOExhibit 10.2 Letter

    
      

    

    [SKY
      BANK
      LOGO]                                                                            
        Exhibit
      10.2

     

    Paul
      Colasono

    Chief
      Financial Officer

    Franklin
      Credit Management Corporation

    101
      Hudson Street

    Jersey
      City, NJ 07302

     

    RE:
      Rate
      Modifications                                                                                December
      12, 2006

     

    Paul,

     

    As
      a
      follow up to our recent conversations regarding certain terms of the various
      outstanding loan facilities by and between Sky Bank, Tribeca Lending Corporation
      (Tribeca) and Franklin Credit Management Corporation (FCMC) I would like to
      reiterate the details of our agreements. Specifically, the interest charged
      effective as of November 15, 2006, by Sky Bank for all 2nd
      mortgages purchased under the Master Credit and Security Agreement among Sky
      Bank, FCMC and certain of its Subsidiaries dated as of October 13, 2004 and
      as
      amended by the Amendment to the Master Credit and Security Agreement, dated
      as
      of October 5, 2006 (as so amended, the “Franklin Credit Agreement”), as well as
      all loans originated under the Master Credit and Security Agreement dated as
      of
      February 28, 2006 among Tribeca, certain of its Subsidiaries and Sky Bank (the
      “Tribeca Credit Agreement”), is now subject to the following interest
      matrix:

     

    
      	
              Base
                Rate Index

            	
              Sky
                Bank Margin

            	
              “All-in”
                Rate Range

            
	
              <226

            	
              300

            	
              300-525

            
	
              226-450

            	
              260

            	
              486-710

            
	
              >450

            	
              235

            	
              686+

            

    

    

    Interest
      on the above loans by Sky Bank is computed as provided in the respective loan
      documents and shall be paid according to the Federal Home Loan Bank of
      Cincinnati (“FHLBC”) 30-day advance rate (“Base Rate Index”), adjusted on the
      last day of each month. The interest matrix above shows the relationship between
      the Base Rate Index, the actual interest rate that will be earned by Sky Bank
      (the “All-in” Rate Range), and the spread above the Base Rate Index used to
      calculate the “All-in” Rate Range (“Sky Bank Margin”). The table numbers
      represent basis points. For example, a FHLBC Index of 250 basis points will
      result in a Margin of 260 basis points and an Interest Rate earned of 510 basis
      points (5.10%).

     

    Furthermore,
      in addition to the rate reductions described above, Sky Bank has agreed to
      lower
      the interest rate charged for all 1st
      mortgages purchased under the Franklin Credit Agreement according to the
      following matrix, effective as of November 15, 2006:

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
              Base
                Rate Index

            	
              Sky
                Bank Margin

            	
              “All-in”
                Rate Range

            
	
              <226

            	
              300

            	
              300-525

            
	
              226-450

            	
              225

            	
              451-675

            
	
              >450

            	
              200

            	
              651+

            

    

    

    Again,
      interest on the above loans by Sky Bank is computed as provided in the
      respective loan documents and shall be paid according to the Federal Home Loan
      Bank of Cincinnati (“FHLBC”) 30-day advance rate (“Base Rate Index”), adjusted
      on the last day of each month. The interest matrix above shows the relationship
      between the Base Rate Index, the actual interest rate that will be earned by
      Sky
      Bank (the “All-in” Rate Range), and the spread above the Base Rate Index used to
      calculate the “All-in” Rate Range (“Sky Bank Margin”). The table numbers
      represent basis points. For example, a FHLBC Index of 250 basis points will
      result in a Margin of 225 basis points and an Interest Rate earned of 475 basis
      points (4.75%).

     

    We
      agree
      that all other terms of the various debt facilities by and between Sky Bank
      and
      FCMC/Tribeca shall remain unchanged.

     

    As
      always, please feel free to contact me with questions.

     

    Regards,

     

    /s/
      Jerry S.
      Sutherin                        

    Jerry
      S.
      Sutherin

    Senior
      Vice President

    Sky
      Bank,
      Specialty Lending Group

    110
      East
      Main Street

    Salineville,
      OH 43945

    330-679-3859

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