Document:

exv4w1

Exhibit 4.1

SUPPLEMENTAL INDENTURE FOR THE NOTES

PHI, INC.

AND

THE GUARANTORS NAMED HEREIN,

AND

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

as Trustee

 

SUPPLEMENTAL INDENTURE

Dated as of September 22, 2010

to

Indenture

Dated as of April 12, 2006

7.125% Senior Notes due 2013

 

 

     THIS SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated September 22, 2010, is
by and among PHI, Inc., a Louisiana corporation (the “Company”), the Guarantors listed on the
signature pages hereof, and The Bank of New York Mellon Trust Company, N.A., a national banking
association, (the “Trustee”).

     WHEREAS, the Trustee, the Company and the Guarantors have heretofore executed and delivered
that certain Indenture dated as of April 12, 2006 (as amended, supplemented or otherwise modified
from time to time, the “Indenture”), providing for the issuance of the Company’s 7.125% Senior
Notes due 2013 (the “Notes”);

     WHEREAS, on April 12, 2006, the Company issued $200,000,000 aggregate principal amount of
Notes, all of which Notes are currently outstanding;

     WHEREAS, Section 9.02 of the Indenture provides that, with the consent of Holders of at least
a majority aggregate principal amount of the Notes then outstanding, the Company, the Guarantors,
and the Trustee may enter into an indenture supplemental to the Indenture for the purpose of
amending or supplementing the Indenture or the Notes (subject to certain exceptions);

     WHEREAS, the Company desires and has requested the Trustee to join with it and the Guarantors
in entering into this Supplemental Indenture for the purpose of amending the Indenture and the
Notes in certain respects as permitted by Section 9.02 of the Indenture;

     WHEREAS, the Company has been soliciting consents to this Supplemental Indenture upon the
terms and subject to the conditions set forth in its Offer to Purchase and Consent Solicitation
Statement dated September 9, 2010 and the related letter of transmittal (which together, including
any amendments, modifications or supplements thereto, constitute the “Tender Offer”);

     WHEREAS, (1) the Company has received the consent of the Holders of at least a majority in
aggregate principal amount of the outstanding Notes (excluding any Notes owned by the Company or a
Subsidiary or a Related Person, as defined in the Indenture), all as certified by an Officers’
Certificate delivered to the Trustee simultaneously with the execution and delivery of this
Supplemental Indenture, (2) the Company has delivered to the Trustee simultaneously with the
execution and delivery of this Supplemental Indenture an Opinion of Counsel relating to this
Supplemental Indenture as contemplated by Section 9.06 of the Indenture and (3) the Company and the
Guarantors have satisfied all other conditions required under Article 9 of the Indenture to enable
the Company, the Guarantors and the Trustee to enter into this Supplemental Indenture.

     NOW, THEREFORE, in consideration of the above premises, each party hereby agrees, for the
benefit of the others and for the equal and ratable benefit of the Holders of the Notes, as
follows:

1.

DEFINITIONS

     1. Deletion of Definitions and Related References. Section 1.01 of Article 1 of the
Indenture is hereby amended to delete in their entirety all terms and their respective definitions
for which all references are eliminated in the Indenture as a result of the amendments set forth in
Article II of this Supplemental Indenture.

2.

AMENDMENTS TO INDENTURE AND NOTES

     1. Amendments to Articles 4, 5 and 6.

          1.The Indenture is hereby amended by deleting the following provisions of the Indenture and
all references thereto in their entirety:

Section 4.03 (Reports to Holders);

Section 4.05 (Stay, Extension and Usury Laws);

Section 4.09 (Conduct of Business);

Section 4.10 (Limitations on Additional Indebtedness);

 

 

Section 4.11 (Limitations on Restricted Payments);

Section 4.12 (Limitation on Dividends and Other Restrictions Affecting Restricted Subsidiaries);

Section 4.13 (Limitation on Liens);

Section 4.14 (Limitation on Transactions with Affiliates);

Section 4.15 (Limitation on Asset Sales);

Section 4.16 (Limitation on Designation of Unrestricted Subsidiaries);

Section 4.17 (Additional Note Guarantees);

Section 4.18 (Limitation on Layering Indebtedness);

Section 4.19 (Limitations on the Issuance or Sale of Equity Interests of Restricted Subsidiaries);

Section 4.20 (Limitation on Sale and Leaseback Transactions);

Section 5.01(a) (3) (Limitation on Mergers, Consolidation, Etc.); and

Section 6.01 (5) and (6) (Defaults and Remedies).

          2.Section 4.06 is revised to read in its entirety as follows: “Subject to Article 5 of this
Indenture, the Company shall do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence in accordance with its organizational documents (as
the same may be amended from time to time).”

     2. Amendments to Notes. The Notes are hereby deemed to be amended to delete all
provisions inconsistent with the amendments to the Indenture effected by this Supplemental
Indenture, including, without limitation, paragraph 8 and clauses (5) and (6) of paragraph 12
thereof.

3.

MISCELLANEOUS PROVISIONS

     1. Defined Terms. For all purposes of this Supplemental Indenture, except as
otherwise defined or unless the context requires, terms used in capitalized form in this
Supplemental Indenture and defined in the Indenture have the meanings specified in the Indenture.

     2. Indenture. Except as amended hereby, the Indenture and the Notes are in all
respects ratified and confirmed, and all the terms shall remain in full force and effect. This
Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of
Notes heretofore or hereafter authenticated and delivered under the Indenture shall be bound
hereby, and all terms and conditions of both shall be read together as though they constitute a
single instrument, except that in the case of conflict, the provisions of this Supplemental
Indenture shall control.

     3. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     4. Successors. All agreements of the Company and the Guarantors in this Supplemental
Indenture and the Notes shall bind their respective successors. All agreements of the Trustee in
this Supplemental Indenture shall bind its successors.

     5. Duplicate Originals. All parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them together shall
represent the same agreement. It is the express intent of the parties to be bound by the exchange
of signatures on this Supplemental Indenture via telecopy.

     6. Severability. In case any one or more of the provisions in this Supplemental
Indenture or in the Notes shall be held invalid, illegal or unenforceable, in any respect for any
reason, the validity, legality and enforceability of any such provision in every other respect and
of the remaining provisions shall not in any way be affected or impaired thereby, it being intended
that all of the provisions hereof shall be enforceable to the full extent permitted by law.

     7. Trustee Disclaimer. The Trustee accepts the amendments of the Indenture effected
by this Supplemental Indenture and agrees to execute the trust created by the Indenture as hereby
amended, but on the terms and conditions set forth in the Indenture, including the terms and
provisions defining and limiting the liabilities and responsibilities of the Trustee, which terms
and provisions shall in like manner define and limit its liabilities and responsibilities in the
performance of the trust created by the Indenture as hereby amended, and without limiting the

 

 

generality of the foregoing, the Trustee shall not be responsible in any manner whatsoever for
or with respect to any of the recitals or statements contained herein, all of which recitals or
statements are made solely by the Company and the Guarantors, and the Trustee makes no
representation with respect to any such matters. Additionally, the Trustee makes no
representations as to the validity or sufficiency of this Supplemental Indenture.

     8. Effectiveness. The provisions of this Supplemental Indenture shall be effective
only upon execution and delivery of this instrument by the parties hereto. Notwithstanding the
foregoing sentence, the provisions of this Supplemental Indenture shall become operative only upon
the purchase by the Company of at least a majority in principal amount of the outstanding Notes
pursuant to the Tender Offer, with the result that the amendments to the Indenture effected by this
Supplemental Indenture shall be deemed to be revoked retroactive to the date hereof if such
purchase shall not occur. The Company shall notify the Trustee promptly after the occurrence of
such purchase or promptly after the Company shall determine that such purchase will not occur.

     9. Endorsement and Change of Form of Notes. Any Notes authenticated and delivered
after the close of business on the date that this Supplemental Indenture becomes operative in
substitution for Notes then outstanding and all Notes presented or delivered to the Trustee on and
after that date for such purpose shall be stamped, imprinted or otherwise legended by the Company,
with a notation as follows:

“Effective as of September 23, 2010, certain restrictive covenants of the Company and certain
Events of Default have been eliminated or limited, as provided in the Supplemental Indenture, dated
as of September 22, 2010. Reference is hereby made to said Supplemental Indenture, copies of which
are on file with the Trustee, for a description of the amendments made therein.”

     10. Effects of Headings. The Section headings herein are for convenience only and
shall not affect the construction thereof.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed as of the day and year written above.

	 	 	 	 	 

	 	 	PHI, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Michael J. McCann
	 

	 	 	 	 
	 

	 	Name:
	 	Michael J. McCann
	 

	 	Title:
	 	Chief Financial Officer and Secretary
	 
	 	 	 	 
	 	 	GUARANTORS
	 
	 	 	 	 
	 	 	INTERNATIONAL HELICOPTER TRANSPORT, INC.
	 	 	PHI TECH SERVICES, INC.
	 	 	AIR EVAC SERVICES, INC.
	 	 	PHI AIR MEDICAL, INC.
	 	 	PETROLEUM HELICOPTERS INTERNATIONAL, INC.
	 	 	HELICOPTER MANAGEMENT, L.L.C.
	 	 	HELICOPTER LEASING L.L.C.
	 	 	HELEX, L.L.C.
	 	 	SKY LEASING, L.L.C.
	 	 	VERTILEASE, LLC
	 	 	LEASING SERVICE, LLC
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Michael J. McCann
	 

	 	 	 	 
	 

	 	Name:
	 	Michael J. McCann
	 

	 	Title:
	 	Vice President

 

 

	 	 	 	 	 

	 	 	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
	 	 	as Trustee
	 
	 	 	 	 
	 

	 	By:	 	/s/ Craig A. Kaye
	 

	 	 	 	 
	 

	 	Name:	 	Craig A. Kaye
	 

	 	 	 	 
	 

	 	Title:	 	Senior AssociateExhibit 10.1

Exhibit
10.1

Execution Copy

September 16, 2010

Franklin Credit Holding Corporation

Franklin Credit Management Corporation

101 Hudson Street, 25th Floor

Jersey City, New Jersey 07302

Attention: Thomas J. Axon, Chairman

Dear Tom:

We have discussed (1) a proposed sale of substantially all consumer loans (the “Loan Sale”)
presently owned by Franklin Mortgage Asset Trust 2009-A (“Seller”), an indirect subsidiary of The
Huntington National Bank (“Huntington”), to a company or trust controlled by Thomas J. Axon to be
established (“Purchaser”) pursuant to terms agreeable to Seller and Purchaser, (2) Huntington’s
consent to the sale, restructuring or spin off, which shall be subject to Huntington’s prior
approval (the “Restructuring”) by Franklin Credit Holding Corporation (“Holding”) of its ownership
interests in its servicer subsidiary, Franklin Credit Management Corporation (whether before or
after the Restructuring, “FCMC”), (3) Huntington’s efforts as Administrative Agent under the Legacy
Credit Agreement (as defined below) to obtain consent of the requisite lenders to release the
security interest in the capital stock in FCMC in exchange for certain payments described below, to
release FCMC from its obligations under a certain limited guaranty agreement, to release certain
mortgages in favor of Huntington as Administrative Agent on certain real estate owned by FCMC, and
the release of a limited amount of cash collateral (collectively, the “Collateral Release”), and
(4) the extension of maturity (“Extension”) of the Licensing Credit Agreement (as defined below) to
September 30, 2011. With respect to the Loan Sale, the Restructuring, the Collateral Release and
the Extension, Seller, Huntington, in its capacity as Administrative Agent and a Lender under each
of the Licensing Credit Agreement and the Legacy Credit Agreement, Holding, FCMC and Thomas J. Axon
(“Axon”) hereby agree to the terms and conditions of this letter agreement and the summary of terms
in Annex A and each exhibit and schedule attached hereto or thereto (together, this “Restructure
Agreement”). The agreements of the parties herein shall be subject to the consummation, no later
than September 22, 2010, of all of the actions and transactions, the terms of which are set forth
in Annex A, including but not limited to the Loan Sale, the payments of the amounts specified
herein in connection with release of the pledged stock in FCMC and the release of certain other
real property mortgaged to Huntington as Administrative Agent and the execution and delivery of
agreements, certificates, instruments, release documents and the other loan documents described
herein or otherwise contemplated by this Restructure Agreement, in all respects satisfactory to
Huntington and, as applicable, the requisite lenders. The failure of FCMC, Holding, Purchaser,
Axon or any affiliate thereof to consummate any of such actions and transactions on or before
September 22, 2010, shall permit Huntington and Seller, in their sole discretion, to terminate this
Restructure Agreement in whole or in part without any notice or cure.

 

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Huntington, Seller, FCMC, Holding and Axon agree that this Restructure Agreement is for their
confidential use only and will not be disclosed by any of them to any person other than their
accountants, attorneys, and other advisors, and then only in connection with the transactions
contemplated hereby and on a confidential basis, except that Huntington, Seller, FCMC, Holding and
Axon may make such public disclosures of the terms and conditions hereof as they are required by
law to make, in the opinion of their counsel.

This Restructure Agreement shall be governed by, and construed in accordance with, the laws of
the State of Ohio. Delivery of an executed counterpart of this Restructure Agreement by telecopier
or PDF shall be effective as delivery of a manually executed counterpart of this Restructure
Agreement.

Promptly after full execution and delivery of this Restructure Agreement by all parties, the
parties shall commence preparation of definitive documentation that provides for the transactions
described herein.

We hereby refer to the following existing agreements:

(1) a certain Amended and Restated Credit Agreement (Licensing) dated March 31, 2009, among The
Huntington National Bank, as Administrative Agent, The Huntington National Bank, and Huntington
Finance LLC, as lenders, and Franklin Credit Management Corporation and Franklin Credit Holding
Corporation, as borrowers (as amended prior to the date hereof, the “Licensing Credit Agreement”);
and

(2) a certain Amended and Restated Credit Agreement dated March 31, 2009, among The Huntington
National Bank, as Administrative Agent, The Huntington National Bank, Huntington Finance LLC, M&I
Marshall & Ilsley Bank and BOS (USA) Inc., as lenders, and Franklin Credit Asset Corporation,
Franklin Asset, LLC and multiple subsidiary borrowers, as borrowers (as amended prior to the date
hereof, the “Legacy Credit Agreement”).

The agreements of Huntington and Seller hereunder are made solely for the benefit of the
parties hereto and may not be relied upon or enforced by any other person. The terms and
conditions of this Restructure Agreement may be modified only in writing.

Each party hereto irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this
Restructure Agreement or the transactions contemplated hereby or the actions of Huntington or
Seller in the negotiation, performance or enforcement hereof.

Please evidence your acceptance of the provisions of this Restructure Agreement by signing a
copy of this Restructure Agreement and returning it to the undersigned at or before 5:00 p.m.
(eastern time) on September 16, 2010, the time at which this Restructure Agreement (if not so
accepted prior thereto) will expire.

 

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	 	 	THE HUNTINGTON NATIONAL BANK  
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David L. Abshier	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	David L. Abshier	 	 
	 

	 	Title:
	 	Authorized Signer	 	 
	 
	 	 	 	 	 	 
	 	 	FRANKLIN MORTGAGE ASSET TRUST 2009-A
	 	 	By:	 	The Huntington National Bank, not in its individual capacity, but solely as a Certificate Trustee
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James E. Schultz	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:
	 	Vice President	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 
	ACCEPTED AND AGREED this 16th day of September, 2010
	 
	 	 	 	 
	FRANKLIN CREDIT HOLDING CORPORATION
	 
	 	 	 	 
	By:

	 	/s/ Thomas J. Axon
 

	 	 
	 
	 	 	 	 
	Title:

	 	Thomas J. Axon, President	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	FRANKLIN CREDIT MANAGEMENT CORPORATION
	 
	 	 	 	 
	By:

	 	/s/ Thomas J. Axon	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Title:

	 	Thomas J. Axon, President	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	THOMAS J. AXON, ON BEHALF OF BOSCO CREDIT II, LLC
	 
	 	 	 	 
	/s/ Thomas J. Axon	 	 
	 	 	 
	Thomas J. Axon, on behalf of Bosco Credit II, LLC
	 
	 	 	 	 
	/s/ Thomas J. Axon	 	 
	 	 	 
	Thomas J. Axon, individually,	 	 
	as Guarantor of the TJA Secured Note defined below, owner of the Guarantor Collateral defined below
and an obligor under a Deferred Payment Agreement defined below.

cc: Kevin P. Gildea, Chief Legal Officer

 

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Annex A — Summary of Terms

	1.	 	Consummation of Sale. Seller and Purchaser shall enter into binding agreements
regarding the Loan Sale in form acceptable to Seller and Purchaser. Each of Seller and
Purchaser shall pay its own transaction costs.

	 
	2.	 	Change in Control and Cross Defaults under Servicing Agreement. In connection with a
certain Amended and Restated Servicing Agreement dated August 1, 2010 (the “Servicing
Agreement”), between Franklin Mortgage Asset Trust 2009-A, as Owner and FCMC, as Servicer,
Franklin Mortgage Asset Trust 2009-A will consent to the change in control of FCMC
resulting from the Restructuring and agree to eliminate any “cross-default” provisions in
the Servicing Agreement resulting from any default under the Legacy Credit Agreement.

	 
	3.	 	Release of Pledged Stock in FCMC; Release of Real Estate and Certain Cash Collateral.
Contemporaneously with the consummation of the Loan Sale, and after obtaining the written
agreement of the Required Lenders under the Legacy Credit Agreement, in exchange for (i)
the delivery to the Administrative Agent under the Legacy Credit Agreement of $4,000,000 in
cash at closing, (ii) the payment by FCMC to Seller of $643,671.20 (an amount equal to
servicing fees paid for August 2010 under the Servicing Agreement, which may be paid from
the proceeds received from the Stonecrest litigation, and if paid from other resources,
such amount shall be released to FCMC from the secured collateral account), (iii) the
execution and delivery of a waiver by FCMC of any servicing fees due for September 2010
under the Servicing Agreement in respect of the assets sold in the Loan Sale, and (iv) the
execution and delivery of the Deferred Payment Agreement (as defined below), Huntington
and the Required Lenders under the Legacy Credit Agreement shall consent to the release of
the pledge and security interests of the Administrative Agent in the 70% of the capital
stock in FCMC and all distributions made thereunder under the applicable loan documents
executed in connection with the Legacy Credit Agreement.

	 
	 	 	     In addition, subject to having obtained the written agreement of the Required Lenders
under the Legacy Credit Agreement, in exchange for the delivery of an additional $1,000,000
in cash paid at closing to the Administrative Agent under the Legacy Credit Agreement,
Huntington and the Required Lenders under the Legacy Credit Agreement shall consent to the
release of existing mortgages on property owned by FCMC commonly known as (i) Unit 6, 6
Harrison Street, New York, New York, and (ii) 350 Albany Street, New York, New York
(collectively, the “FCMC Real Estate”).

	 
	 	 	     In the event that FCMC is unable to make the $1,000,000 payment required for the
release of the FCMC Real Estate by closing of the Loan Sale and the Restructuring, FCMC
shall have the option to obtain the release of the FCMC Real Estate from such mortgages by
satisfying the following conditions in full: (1) FCMC shall execute and deliver in lieu of
such payment, the TJA Secured Note (as defined below), pursuant to which, inter alia,
$1,000,000 is paid in cash to the Administrative Agent under the Legacy Credit Agreement no
later than November 22, 2010, (2) the existing mortgages on the FCMC Real Estate shall
remain in place until such payment is made, and (3) Thomas J. Axon and affiliates shall have
executed and delivered the other guaranties and loan documents granting and perfecting liens on the Guarantor Collateral (as defined below), in all respects
satisfactory to such Administrative Agent.

 

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	4.	 	Consent of Required Lenders to Collateral Release, Legacy Amendment. The Required
Lenders (as defined under the Legacy Credit Agreement) shall have consented to (i) the
release of 70% of the capital stock in FCMC and all distributions payable with respect
thereto as collateral pursuant to the Legacy Credit Agreement, (ii) the sale or spin off of
FCMC in connection with the Restructuring in form satisfactory to Huntington, (iii) the
release of FCMC from a certain Limited Recourse Guaranty dated March 31, 2009, and (iv) the
release of the mortgages against the FCMC Real Estate pursuant to the terms hereof, in each
instance, pursuant to a Second Consent Agreement in form satisfactory to such Required
Lenders. In addition, such Required Lenders and the borrowers under the Legacy Credit
Agreement shall have executed and delivered to the Administrative Agent under the Legacy
Credit Agreement amendments to (i) the Legacy Credit Agreement, inter alia, consenting to a
change in control of FCMC, waiving any defaults resulting from the Restructuring and
amending the definition of “Collateral” and (ii) a certain Amended and Restated Pledge
Agreement dated March 31, 2009, amending certain restrictive covenants regarding FCMC, each
in form satisfactory to such Administrative Agent.

	 
	5.	 	TJA Secured Note. To the extent FCMC is unable to make the cash payment called for in
the second paragraph of Paragraph 3 above, FCMC shall execute and deliver to the
Administrative Agent under the Legacy Credit Agreement, a secured promissory note for
$1,000,000 (the “TJA Secured Note”), in form substantially similar to Exhibit 5 attached
hereto. The TJA Secured Note shall be due and payable in full to the Administrative Agent
under the Legacy Credit Agreement on November 19, 2010, and shall be in form satisfactory
to such Administrative Agent. The TJA Secured Note shall be guaranteed by a payment
guaranty from Thomas J. Axon, and such guaranty shall be secured by the “Guarantor
Collateral” as defined under the Licensing Credit Agreement and shall include the
following:

(i) an open end mortgage, assignment of rents and security agreement (“Mortgage”)
from James Thomas Realty LLC on certain commercial real property, commonly known as 6
Harrison Street, Unit 5, New York, New York, subject only to a lien in favor of the
Communication Workers of America securing Indebtedness not to exceed the principal
sum of $550,000; and

(ii) a first and exclusive lien and security interest on each of the following
promissory notes secured by Mortgages on certain real property:

(A) promissory note dated June 21, 1994, in the original principal amount of
$525,708.41 from 18 Harrison Street Development Associates held by Harrison
Street Realty Corp., secured by a first Mortgage on certain commercial real
property known as 18 Harrison Street, New York, New York, with an outstanding
principal balance of $1,014,098.92 as of the date hereof;

(B) promissory note dated March 25, 2009, in the original principal amount of
$1,005,820.10 from 18 Harrison Street Development Associates held by Harrison Street Realty Corp., secured by a second Mortgage on certain
commercial real property known as 18 Harrison Street, New York, New York with
an outstanding principal balance of $1,005,820.10 as of the date hereof; and

 

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(C) promissory noted dated March 25, 2009, in the original principal amount
of $1,315,382 secured by a first Mortgage on commercial real property known
as 185 Franklin Street, New York, New York, with an outstanding principal
balance of $1,315,382 as of the date hereof.

	 	 	All of the loan documents evidencing the Guarantor Collateral shall have been amended and
modified in form satisfactory to the Administrative Agent under the Legacy Credit Agreement,
and all payments made under any of the above promissory notes pledged to such Administrative
Agent shall be made directly to such Administrative Agent for application to the TJA Secured
Note.

	 
	6.	 	Deferred Payment Agreement. FCMC and Axon shall have executed and delivered to the
Administrative Agent for the Legacy Credit Agreement an agreement satisfactory to such
Administrative Agent (the “Deferred Payment Agreement”) pursuant to which upon each
Transaction (as defined below), FCMC and Axon are obligated to pay to such Administrative
Agent, for the benefit of the lenders under the Legacy Credit Agreement, a deferred payment
amount equal to (i) ten percent (10%) (each such payment, a “Deferred Payment”) of (ii) (A)
the Aggregate Value (as defined below) of such Transaction, minus (B) $4 million from such
Aggregate Value in respect of all Transactions. The Deferred Payment Agreement will
expire, and any obligation of FCMC and Axon to make Deferred Payments will cease, on March
20, 2019. “Transaction” means the occurrence of any monetizing transaction, dividend or
distribution (other than the Restructuring) involving FCMC (or any successor) and shall
include any merger, acquisition, consolidation, sale, sale of any substantial asset, stock
transfer, reorganization, recapitalization, equity or preferred stock issuance, joint
venture or other transaction or series or combination of related transactions in which Axon
or any other Equity Holder of FCMC receives a dividend, distribution or proceeds in
connection with such Transaction. “Aggregate Value” shall be defined more particularly in
the Deferred Payment Agreement and shall include the aggregate value of FCMC implicit in
each Transaction, based on the aggregate consideration directly or indirectly paid or
payable, in one or more dividends or distributions, whether in cash or stock, to FCMC and
any shareholder, partner and member, as well as any holder of options, warrants,
convertible securities, phantom equity and similar rights (each an “Equity Holder”) in
connection with or as a result of the Transaction (including retained assets and equity).
The Deferred Payment Agreement shall provide that any agreement, instrument, certificate or
other document evidencing the rights or interests of Axon bear a legend substantially as
follows:

THE EQUITY INTERESTS REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS OF A
DEFERRED PAYMENT AGREEMENT BY AND AMONG FCMC, THE HUNTINGTON NATIONAL BANK, AS
ADMINISTRATIVE AGENT AND THE OTHER PARTIES NAMED THEREIN, DATED AS OF SEPTEMBER 22,
2010, AS AMENDED FROM TIME TO TIME, A COPY OF WHICH AGREEMENT IS ON FILE AT THE
PRINCIPAL OFFICE OF FCMC. THE SALE, TRANSFER, ASSIGNMENT OR OTHER DISPOSITION OF THE EQUITY INTERESTS
IS SUBJECT TO THE TERMS OF SUCH AGREEMENT AND THE EQUITY INTERESTS ARE TRANSFERABLE
OR OTHERWISE DISPOSABLE ONLY UPON PROOF OF COMPLIANCE THEREWITH.

 

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	7.	 	Extension of Licensing Facility. The lender and the borrower under the Licensing
Credit Agreement shall have executed and delivered to the Administrative Agent under the
Licensing Credit Agreement an amendment to such credit agreement in form satisfactory to
such Administrative Agent, inter alia, consenting to a change in control of FCMC,
eliminating any “cross-default” provisions in the Licensing Credit Agreement resulting from
any default under the Legacy Credit Agreement, conforming the definition of “Collateral” to
permit the release of the FCMC Real Estate, removing any requirement to make distributions,
and extending the maturity of the letter of credit facility and the revolving facility
thereunder to September 30, 2011.

	 
	8.	 	Corporate Authority. By the close of business on September 16, 2010, an officer of
FCMC and Holding shall provide and certify that resolutions of their respective boards of
directors have been adopted which approve and ratify all of the actions contemplated in
this Restructure Agreement.

	 
	9.	 	EBITDA Payment. Upon the closing, in exchange for the payments to be made and the
delivery of the instruments and agreements required pursuant to Paragraphs 3, 4, 5 and 6
above, Huntington will agree that the “EBITDA Payment” described in the July Letter
Agreement (as defined below), shall no longer be in force or have any effect.

	 
	10.	 	Termination of Servicing Agreement for Loan Sale. FCMC agrees that by execution of
this Restructure Agreement FCMC shall be deemed in all respects to have been provided
proper, adequate and timely notice of the termination of the Servicing Agreement with
respect to the loans being sold pursuant to the Loan Sale, and that in addition to the
agreements regarding the refund and waiver of servicing fees contained in Paragraph 3
above, no servicing fees or other amounts with respect to such loans shall be due or
payable by Seller to FCMC with respect to any period of time from and after the closing of
the Loan Sale.

	 
	11.	 	Agreements under Letter Agreement. Reference is hereby made to a certain letter agreement
dated July 16, 2010, (the “July Letter Agreement”) between and among Franklin Credit Holding
Corporation, Franklin Credit Management Corporation, Thomas J. Axon, The Huntington National Bank
and Franklin Mortgage Asset Trust 2009-A. Except to the extent that paragraphs 9 and 10 hereof
amend or modify the July Letter Agreement, all of shall remain as written originally and in full
force and effect in accordance with their respective terms, and each of the parties hereto that are
parties to the July Letter Agreement hereby ratify and confirm all such the representations,
warranties, terms, covenants and conditions of the July Letter Agreement and the other agreements
and documents executed in connection therewith, and nothing herein shall affect, modify, limit or
impair any of the rights and powers which the parties thereto may have thereunder.

 

- 7 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}]]