Document:

Franklin Credit Management Corporation 10-12G

Exhibit 10.8 

AMENDED AND
RESTATED SECURITY AGREEMENT (LICENSING) 

     THIS AMENDED AND RESTATED SECURITY
AGREEMENT (LICENSING), dated as of
March 31, 2009 (this “Agreement”), is entered into by FRANKLIN
CREDIT MANAGEMENT CORPORATION, a
Delaware corporation (“FCMC”), in favor of The Huntington National Bank,
acting hereunder as contractual representative pursuant to the Credit Agreement
(as defined below) for Lenders (as defined below) (“Huntington”, acting
as such contractual representative and any successor or successors to Huntington
acting in such capacity, being referred to as “Administrative Agent”).

W i t n e s s e t h: 

     WHEREAS, FCMC and Franklin Credit
Holding Corporation (“Holding”) as borrowers, the financial institutions
party thereto as Lenders, and The Huntington National Bank as Administrative
Agent and Issuing Bank (Huntington, in its individual capacity and as Issuing
Bank, and such other financial institutions being hereafter referred to
collectively as “Lenders” and individually as "Lender”), have
entered into a certain Amended and Restated Credit Agreement (Licensing), dated
as of March 31, 2009 (as amended, supplemented, modified or restated from
time to time, the “Credit Agreement”), pursuant to which Huntington and
the other Lenders have agreed to make certain advances and other financial
accommodations to and for the benefit of FCMC and Holding, upon the terms and
subject to the conditions set forth in the Credit Agreement (Administrative
Agent and Lenders, together with affiliates of Lenders, being referred to
collectively as the “Secured Creditors” and individually as a “Secured
Creditor”); 

     WHEREAS, this Agreement shall amend and
restate one or more existing security agreements executed by FCMC in favor of
Huntington, in their entirety as of the date hereof on the terms and subject to
the conditions set forth herein, (ii) this Agreement shall not constitute a
novation of the obligations and liabilities existing under such existing
security agreements or evidence payment of all or any of such obligations and
liabilities secured thereby, and (iii) from and after the date hereof, such
existing security agreements shall be of no further force or effect, except to
secure the Secured Obligations (as defined below) incurred, the representations
and warranties made, and the actions and omissions performed or required to be
performed, thereunder prior to the date hereof; 

     WHEREAS, the Credit Agreement, security
agreement, term loan and security agreement, loan agreement, credit agreement,
forbearance agreement, mortgage or deed of trust, promissory note, security
agreement, certificate, letter of credit reimbursement agreement, pledge
agreement, control agreement, joinder agreement, counterpart signature page,
assignment, guaranty agreement, banking services agreement, hedging agreement,
cash management agreement, consent agreement, collateral agreement, amendment,
modification agreement, instrument and financing statements and other loan
documents (as any of the same may be amended, restated, supplemented, modified
or replaced from time to time) executed or delivered from time to time to any
Lender by FCMC, Holding, or Thomas J. Axon (“Axon”) as a guarantor, are
collectively referred to as the “Credit Documents”); 

     WHEREAS, pursuant to the respective
Credit Documents, Lenders have agreed subject to certain conditions precedent,
to make and/or maintain loans and other financial accommodations to FCMC and
Holding from time to time; and 

     WHEREAS, the Secured Creditors have
required as a condition, among others, of extending credit to any FCMC and
Holding or of renewing, extending, or forbearing from demanding immediate
payment of extensions of credit to FCMC and Holding, that FCMC enter into this
Agreement. 

     NOW THEREFORE, in consideration of the
promises, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, FCMC hereby agrees with the
Secured Creditors as follows: 

 

 

ARTICLE I
Defined Terms 

     Section 1.1
Definitions 

     (a) Terms used herein that are
defined in the UCC have the meanings given to them in the UCC, including the
following terms (which are capitalized herein): 

     “Account Debtor”,
“Accounts”, “Chattel Paper”, “Commercial Tort Claim”,
“Commodity Account”, “Commodity Intermediary”, “Deposit
Account”, “Documents”, “Entitlement Holder”, “Entitlement
Order”, “Equipment”, “Financial Asset”, “General
Intangibles”, “Instruments”, “Inventory”, “Investment
Property”, “Letter-of-Credit Right”, “Proceeds”,
“Securities Account”, “Securities Intermediary”, “Security,
“Security Entitlement”. 

     (b) The following terms shall have
the following meanings: 

     “Additional Pledged Collateral”
means all shares of, partnership interests in (whether limited or general),
trust certificates of, and limited liability company interests in, all
securities convertible into, and warrants, options and other rights to purchase
or otherwise acquire, stock of or interests in, either (i) any Person that,
after the date of this Agreement, as a result of any occurrence, becomes a
direct Subsidiary of FCMC or (ii) any issuer of Pledged Stock, any
Partnership or any LLC that is acquired by FCMC after the date hereof; all
certificates or other instruments representing any of the foregoing; all
Security Entitlements of FCMC in respect of any of the foregoing; all additional
indebtedness from time to time owed to FCMC by any obligor on the Pledged Notes
and the instruments evidencing such indebtedness; and all interest, cash,
instruments and other property or Proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any of the
foregoing. Additional Pledged Collateral may be General Intangibles or
Investment Property. 

     “Agreement” means this
Agreement. 

     “Approved Deposit Account” means
any present or future Deposit Account of FCMC that (i) is maintained with
Huntington (or any affiliate thereof) or (ii) is subject to an effective
Deposit Account Control Agreement in favor of the Administrative Agent and
maintained with a Deposit Account Bank. “Approved Deposit Account”
includes all monies on deposit in a Deposit Account and all certificates and
instruments, if any, representing or evidencing such Deposit Account. 

     “Approved Securities
Intermediary” means a Securities Intermediary or Commodity Intermediary
acceptable to the Administrative Agent and with respect to which FCMC has
delivered to Administrative Agent an executed Control Account Agreement. 

     “Banking Services” means each
and any of the following bank services provided to FCMC by any Lender or any of
its affiliates: (a) commercial credit cards, (b) stored value cards
and (c) treasury management services (including, without limitation, controlled
disbursement, automated clearinghouse transactions, return items, overdrafts and
interstate depository network services). 

     “Bankruptcy Code” means Title 11
of the United States Code (11 USC, § 101 et seq), as amended from
time to time, and any successor statute thereto, including (unless the context
requires otherwise) any rules or regulations promulgated thereunder. 

     “Capital Leases” means a lease
that is required to be capitalized for financial reporting purposes in
accordance with GAAP. 

     “Cash Collateral Account” means
any deposit account over which the Administrative Agent has sole dominion and
control, established by the Administrative Agent, in its sole discretion at the
Administrative Agent, and entitled “The Huntington National Bank, as Agent and
Secured Party for Franklin Credit 

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Management Corporation
(Blocked Account)” or such similar title as the Administrative Agent may approve
or require. 

     “Cash Equivalents” means
(i) marketable direct obligations issued or unconditionally guaranteed by
the United States of America or issued by any agency thereof and backed by the
full faith and credit of the United States, in each case maturing within one
(1) year from the date of acquisition thereof, (ii) marketable direct
obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within one (1) year from the date of acquisition thereof and, at the time
of acquisition, having the highest rating obtainable from either S&P or
Moody’s, and (iii) certificates of deposit or bankers’ acceptances maturing
within one (1) year from the date of acquisition thereof either
(A) issued by any bank organized under the laws of the United States or any
state thereof which bank has a rating of A or A2, or better, from S&P or
Moody’s, or (B) issued by any other bank insured by the Federal Deposit
Insurance Corporation, (“FDIC”) provided that such certificates of
deposit are less than or equal to, in the aggregate, the deposit insurance
coverage limit set by the FDIC for single ownership accounts. 

     “Collateral” has the meaning
specified in Section 2.1. 

     “Collection Account” means any
Approved Deposit Account or Control Account in which cash and Cash Equivalents
may from time to time be on deposit or held therein as provided in this
Agreement. 

     “Contingent Obligations” means
any agreement, undertaking or arrangement by which FCMC assumes, guaranties,
endorses, agrees to provide funding, or otherwise becomes or is contingently
liable upon the obligation or liability of any other Person. 

     “Control Account” means a
Securities Account or Commodity Account that is subject of an effective Control
Account Agreement and that is maintained by FCMC with an Approved Securities
Intermediary. “Control Account” includes all Financial Assets held in a
Securities Account or a Commodity Account and all certificates and instruments,
if any, representing or evidencing the Financial Assets contained therein.

     “Control Account Agreement”
means an agreement, in form and substance acceptable to the Administrative
Agent, executed by FCMC, the Administrative Agent and the relevant Approved
Securities Intermediary. 

     “Copyright Licenses” means any
written agreement naming FCMC as licensor or licensee granting any right under
any Copyright, including the grant of any right to copy, publicly perform,
create derivative works, manufacture, distribute, exploit or sell materials
derived from any Copyright. 

     “Copyrights” means (a) all
copyrights arising under the laws of the United States, any other country or any
political subdivision thereof, whether registered or unregistered and whether
published or unpublished, all registrations and recordings thereof and all
applications in connection therewith, including all registrations, recordings
and applications in the United States Copyright Office or in any foreign
counterparts thereof, and (b) the right to obtain all renewals thereof.

     “Credit Documents” has the
meaning specified above in the recitals. 

     “Deposit Account Bank” means a
financial institution selected or approved by the Administrative Agent and with
respect to which FCMC has delivered to the Administrative Agent an executed
Deposit Account Control Agreement. 

     “Deposit Account Control
Agreement” means an agreement, in form and substance acceptable to the
Administrative Agent, executed by FCMC, the Administrative Agent and the
relevant Deposit Account Bank. 

     “Event of Default” has the
meaning specified in the Credit Agreement. 

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     “Excluded Property” means
Equipment owned by FCMC that is, and continues to be, subject to a Permitted
Lien listed on Schedule 8 attached hereto, if the contract or other
agreement pursuant to which such Lien is granted contains an enforceable
prohibition on the creation of any Lien on such Equipment in favor of the
Administrative Agent; and (b) equity interests (whether Investment Property
or General Intangibles), if the organizational or operating documents pursuant
to which such equity interests are issued or governed contain an enforceable
prohibition on the creation of any Lien on such equity interests in favor of the
Administrative Agent; in each case, only to the extent, and for so long as, such
prohibition is not removed, terminated or rendered unenforceable or otherwise
deemed ineffective by applicable Law; provided, however, that
“Excluded Property” shall not include (i) the right to receive any
payment of money (including, without limitation, general intangibles for money
due or to become due); and (ii) any proceeds, products, offspring,
accessions, rents, profits, income, benefits, substitutions or replacements of
any of the foregoing. 

     “GAAP” means generally accepted
accounting principles set forth in the opinions and pronouncements of the
Accounting Principles Board, the American Institute of Certified Public
Accountants and the Financial Accounting Standards Board as in effect from time
to time in the United States consistently applied. 

     “Governmental Authority” means
any nation or government, any federal, state, local or other political
subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative authority or functions of or pertaining to
government, including any authority or other quasi-governmental entity
established to perform any of such functions. 

     “Indebtedness” means, at any
time, (i) all indebtedness, obligations or other liabilities (other than
accounts payable arising in the ordinary course of business payable on terms
customary in the trade) which in accordance with GAAP should be classified as
liabilities on the balance sheet of such Person, including without limitation,
(A) for borrowed money or evidenced by debt securities, debentures,
acceptances, notes or other similar instruments, and any accrued interest, fees
and charges relating thereto, (B) under profit payment agreements or in
respect of obligations to redeem, repurchase or exchange any securities or to
pay dividends in respect of any stock, (C) with respect to letters of credit,
bankers acceptances, interest rate swaps or other contracts, currency agreement
or other financial products, (D) to pay the deferred purchase price of
property or services, or (E) in respect of Capital Leases; (ii) all
indebtedness, obligations or other liabilities secured by a lien on any
property, whether or not such indebtedness, obligations or liabilities are
assumed by the owner of the same; and (iii) all Contingent Obligations.

     “Insolvency Proceeding” means
any proceeding commenced by or against any Person under any provision of the
Bankruptcy Code or under any other state or federal bankruptcy or insolvency
law, receivership, assignment for the benefit of creditors, formal or informal
moratorium, forbearance, composition, extension generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief. 

     “Intellectual Property” means,
collectively, all rights, priorities and privileges of FCMC relating to
intellectual property, whether arising under United States, multinational or
foreign laws or otherwise, including domain names, Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks, Trademark Licenses and trade
secrets, and all rights to sue at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and damages
therefrom. 

     “Intercompany Note” means any
promissory note evidencing loans made by FCMC to any of its Subsidiaries or
Holding. 

     “Joinder Agreement” means a
joinder agreement, in the form and substance acceptable to the Administrative
Agent, executed by the Administrative Agent and the relevant Subsidiary that
FCMC is required to cause to become a party hereto as a loan party. 

     “Law” means any law (including
common law), constitution, statute, treaty, convention, regulation, rule,
ordinance, order, injunction, writ, decree or award of any Governmental
Authority. 

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     “Lien” means any interest in an
asset securing an obligation owed to, or a claim by, any Person other than the
owner of the asset, whether such interest shall be based on the common law,
statute, or contract, whether such interest shall be recorded or perfected, and
whether such interest shall be contingent upon the occurrence of some future
event or events or the existence of some future circumstance or circumstances,
including the lien or security interest arising from any mortgage, deed of
trust, encumbrance, pledge, hypothecation, assignment (collateral or otherwise),
hypothec, deposit arrangement, security agreement, conditional sale, trust
receipt, lease, consignment, or bailment for security purposes, judgment, claim
encumbrance or statutory trust and also including reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases, and other title exceptions and encumbrances affecting real property.

     “LLC” means each limited
liability company in which FCMC has an interest, including those set forth on
Schedule 2. 

     “LLC Agreement” means each
operating agreement with respect to an LLC, as each agreement has heretofore
been, and may hereafter be, amended, restated, supplemented or otherwise
modified from time to time. 

     “Loan Documents” means the
Credit Documents, any agreements or documents evidencing or relating to the
provision of any Banking Services by any Lender for the benefit of FCMC, and any
other agreement, document, or arrangement (whether now existing or hereafter
arising) by and among a Lender (or its affiliate) and FCMC. 

     “Material Intellectual Property”
means Intellectual Property owned by or licensed to FCMC and material to FCMC’s
business. 

     “Partnership” means each
partnership or joint venture in which FCMC has an interest, including those set
forth on Schedule 2. 

     “Partnership Agreement” means
each partnership or joint venture agreement governing a Partnership, as each
such agreement has heretofore been, and may hereafter be, amended, restated,
supplemented or otherwise modified. 

     “Patents” means (a) all
letters patent of the United States, any other country or any political
subdivision thereof and all reissues and extensions thereof, (b) all
applications for letters patent of the United States or any other country and
all divisions, continuations and continuations-in-part thereof and (c) all
rights to obtain any reissues or extensions of the foregoing. 

     “Patent License” means all
agreements, whether written or oral, providing for the grant by or to FCMC of
any right to manufacture, use, import, sell or offer for sale any invention
covered in whole or in part by a Patent. 

     “Permitted Contests” means the
right of FCMC to contest or protest any Lien (other than any such Lien that
secures the Secured Obligations), taxes (other than payroll taxes or taxes that
are the subject of a United States federal tax lien), or rental payment,
provided that (i) a reserve with respect to such obligation is established
on FCMC’s books and records in such amount as is required under GAAP,
(ii) any such protest is instituted promptly and prosecuted diligently by
FCMC in good faith, and (iii) the Administrative Agent is satisfied in its
sole, good faith discretion, that, while any such protest is pending, there will
be no impairment of the enforceability, validity, or priority of any of the
Administrative Agent’s Liens. 

     “Permitted Liens” means
(i) any Liens held by the Administrative Agent or an affiliate of the
Administrative Agent, (ii) Liens for unpaid taxes that either are not yet
delinquent, or do not constitute an Event of Default hereunder and are the
subject of a Permitted Contest, (iii) Liens set forth on Schedule 8
to the extent of the Indebtedness referenced therein, (iv) the
interests of lessors under operating leases, (v) Liens securing 

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purchase money
Indebtedness or the interests of lessors under Capital Leases to the extent that
such Liens or interests secure Permitted Purchase Money Indebtedness,
(vi) Liens arising by operation of law in favor of warehousemen, landlords,
carriers, mechanics, materialmen, or laborers, incurred in the ordinary course
of FCMC’s business and not in connection with the borrowing of money, and which
Liens either (A) are for sums not yet delinquent, or (B) are the
subject of Permitted Contests, (vii) Liens arising from deposits made in
connection with obtaining worker’s compensation or other unemployment insurance,
(viii) Liens or deposits to secure performance of bids, tenders, or leases
incurred in the ordinary course of FCMC’s business and not in connection with
the borrowing of money, (ix) Liens granted as security for surety or appeal
bonds in connection with obtaining such bonds in the ordinary course of FCMC’s
business, and (x) Liens resulting from any judgment or award that is not an
Event of Default hereunder. 

     “Permitted Purchase Money
Indebtedness” means secured or unsecured purchase money Indebtedness
(including obligations under Capital Leases) incurred to finance the acquisition
of fixed assets or equipment, if such Indebtedness (i) has a scheduled
maturity and is not due on demand, (ii) does not exceed the purchase price
of the items being purchased, and (iii) is not secured by any property or
assets other than the item or items being purchased. 

     “Person” means any individual,
corporation, firm, enterprise, partnership, trust, incorporated or
unincorporated association, joint venture, joint stock company, limited
liability company or any other entity of any kind or any government or political
subdivision or any agency, department or instrumentality thereof. 

     “Pledged Collateral” means,
collectively, the Pledged Notes, the Pledged Stock, the Pledged Trust
Certificates, the Pledged Partnership Interests, the Pledged LLC Interests, any
other Investment Property of FCMC, all certificates or other instruments
representing any of the foregoing and all Security Entitlements of FCMC in
respect of any of the foregoing. Pledged Collateral may be General Intangibles
or Investment Property. 

     “Pledged LLC Interests” means
all right, title and interest of FCMC as a member of any LLC and all right,
title and interest of FCMC in, to and under any LLC Agreement to which it is a
party. 

     “Pledged Notes” means all right,
title and interest of FCMC in the Instruments evidencing all Indebtedness owed
to FCMC, including all Indebtedness described on Schedule 2, issued
by the obligors named therein. 

     “Pledged Partnership Interests”
means all right, title and interest of FCMC as a limited or general partner in
all Partnerships and all right, title and interest of FCMC in, to and under any
Partnership Agreements to which it is a party. 

     “Pledged Stock” means the shares
of capital stock owned by FCMC, including all shares of capital stock listed on
Schedule 2. 

     “Pledged Trust Certificates”
means trust certificates issued by or on behalf of a statutory trust and owned
or held by FCMC. 

     “Rate Management Transactions”
means any transaction (including an agreement with respect thereto) now existing
or hereafter entered into between or among FCMC, any Lender or any affiliate of
a Lender, or any of its subsidiaries or affiliates or their successors, which is
a rate swap, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, forward transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of these transactions) or
any combination thereof, whether linked to one or more interest rates, foreign
currencies, commodity prices, equity prices or other financial measures. 

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     “Secured Obligations” means
(a) any and all indebtedness, obligations, and liabilities now existing or
hereafter arising of FCMC or Holding to one or more Lender (or any affiliate) or
arising under or in connection with or evidenced by (i) the Credit
Documents, this Agreement, or any other Loan Document, (ii) any other
agreement relating to (A) letters of credit or pursuant to any letter of
credit agreement or application (if any), or pursuant to any agreement or
document relating to Banking Services, (B) any agreement in respect of any
Rate Management Transaction, (C) any agreement for any electronic transfers,
treasury management, cash management services and deposit and disbursement
account liability, and (D) any agreement of guaranty, surety or indemnity
issued by such Person, (b) any and all indebtedness, obligations, and
liabilities, now existing or hereafter arising, whether absolute or contingent
and however and whenever created, arising, evidenced or acquired, of FCMC or
Holding owed to any Lender (or any affiliate of a Lender), (and in each instance
in clauses (a) and (b) above, whether arising before or after the
filing of a petition in bankruptcy and including all interest accrued after any
such petition date), due or to become due, direct or indirect, absolute or
contingent, and howsoever evidenced, held or acquired, and (c) any and all
reasonable expenses and charges, legal or otherwise, suffered or incurred by a
Lender or any affiliate of a Lender in collecting or enforcing any such
indebtedness, obligation, and liability or in realizing on or protecting or
preserving any security therefor, including, without limitation, the Lien and
security interest granted by any Credit Document. 

     “Securities Act” means the
Securities Act of 1933, as amended. 

     “Subsidiary” of a Person means
any corporation, partnership, limited liability company or other entity in which
such Person directly or indirectly owns or controls the securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors, or appoint managers or other persons performing similar
functions. 

     “Trademark License” means any
agreement, whether written or oral, providing for the grant by or to FCMC of any
right to use any Trademark. 

     “Trademarks” means (a) all
trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos and other source
or business identifiers, and, in each case, all goodwill associated therewith,
whether now existing or hereafter adopted or acquired, all registrations and
recordings thereof and all applications in connection therewith, in each case
whether in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any other country or
any political subdivision thereof, or otherwise, and all common-law rights
related thereto, and (b) the right to obtain all renewals thereof. 

     “UCC” means the Uniform
Commercial Code as from time to time in effect in the State of Ohio;
provided, however, that, in the event that, by reason of mandatory
provisions of Law, any of the attachment, perfection or priority of the
Administrative Agent’s security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
Ohio, the term “UCC” shall mean the Uniform Commercial Code as in effect
in such other jurisdiction for purposes of the provisions hereof relating to
such attachment, perfection or priority and for purposes of definitions related
to such provisions. 

     “Vehicles” means all vehicles
covered by a certificate of title law of any state. 

     Section 1.2 Certain Other
Terms 

     (a) In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including” and the words “to” and “until” each
mean “to but excluding” and the word “through” means “to and including.” 

     (b) The terms “herein,” “hereof,”
“hereto” and “hereunder” and similar terms refer to this Agreement as a whole
and not to any particular Article, Section, subsection or clause in this
Agreement. 

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     (c) References herein to a
Schedule, Article, Section, subsection or clause refer to the appropriate
Schedule to, or Article, Section, subsection or clause in this Agreement. 

     (d) The meanings given to terms
defined herein shall be equally applicable to both the singular and plural forms
of such terms. 

     (e) Any reference in this
Agreement to a Loan Document shall include all appendices, exhibits and
schedules thereto, and, unless specifically stated otherwise all amendments,
restatements, supplements or other modifications thereto, and as the same may be
in effect at any time such reference becomes operative. 

     (f) Each of the terms “Lender”,
“Lenders”, “Secured Creditor”, and “Secured Creditors” includes its or their
respective successors or assigns. 

     (g) References in this Agreement
to any statute shall be to such statute as amended or modified and in effect
from time to time. 

ARTICLE II
Grant of Security
Interest 

     Section 2.1
Collateral 

     For the purposes of this Agreement, all
of the following property now owned or at any time hereafter acquired by FCMC or
in which FCMC now has or at any time in the future may acquire any right, title
or interests is collectively referred to as the “Collateral”: 

all
Accounts and all rights to payment, whether or not earned by performance,
including, without limitation, for property that has been or is to be sold,
leased, licensed, assigned or otherwise disposed of, for services rendered or to
be rendered, to a government, state, or governmental unit, or for or in
connection with any federal, state or local governmental relief, bailout or
other similar program or plan, whether or not arising under statute, rule or
regulation; all Chattel Paper; all Deposit Accounts; any amounts or refunds
received from or in connection with any taxing authority; all Documents; all
Equipment; all General Intangibles (including, without limitation, all
contractual rights arising under any purchase agreement or assignments relating
to mortgage loans); all Instruments; all Inventory; all Investment Property; all
Letter-of-Credit Rights; all Vehicles; the Commercial Tort Claims described on
Schedule 7 and on any supplement thereto received by the
Administrative Agent; all books and records pertaining to the other property
described in this Section 2.1; all other goods and personal property
of FCMC, whether tangible or intangible and wherever located; all property of
FCMC held by any Lender, including all property of every description, in the
possession or custody of or in transit to the Administrative Agent for any
purpose, including safekeeping, collection or pledge, for the account of FCMC or
as to which FCMC may have any right or power; and to the extent not otherwise
included, all Proceeds. 

     Section 2.2 Grant of
Security Interest in Collateral 

     FCMC, as collateral security for the
full, prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of the Secured Obligations, hereby
collaterally assigns, mortgages, pledges and hypothecates to Administrative
Agent (for the benefit of the Secured Creditors), and grants (whether under the
UCC or otherwise) to Administrative Agent (for the benefit of the Secured
Creditors), a lien on and security interest in, and a collateral assignment of,
all of its right, title and interest in, to and under the Collateral of FCMC;
provided, however, that the foregoing grant of security interest
shall not include a security interest in any Excluded Property; provided,
further, that, if and when any property shall cease 

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to be Excluded
Property, the Administrative Agent shall have, and at all times after the date
hereof deemed to have had, a security interest in such property. 

     Section 2.3 Cash Collateral
Accounts 

     The Administrative Agent may, in its
discretion, establish one or more Cash Collateral Accounts with Huntington, one
or more other Deposit Account Banks and one or more Approved Securities
Intermediaries as it in its sole discretion shall determine. Each such account
shall be in the name of the Administrative Agent (as Agent for the benefit of
the Secured Creditors) (but may also have words referring to each FCMC and such
account’s purpose). FCMC agrees that each such Cash Collateral Account shall be
under the sole dominion and control of the Administrative Agent, as Agent for
the benefit of the Secured Creditors. The Administrative Agent shall be the sole
Entitlement Holder with respect to each Securities Account constituting a Cash
Collateral Account and the only Persons authorized to give Entitlement Orders
with respect thereto. Neither FCMC nor any other Person claiming on behalf of
FCMC shall have any right to demand payment of any funds held in any Cash
Collateral Account at any time prior to the termination of all outstanding
letters of credit and the indefeasible payment in full of all Secured
Obligations. During the continuance of an Event of Default, the Administrative
Agent shall apply all funds on deposit in any Cash Collateral Account in
accordance with the terms and conditions of the Credit Agreement and otherwise
as the Administrative Agent may elect. 

ARTICLE III
Representations and
Warranties 

     To induce the Administrative Agent and
Lenders to enter into or maintain the Credit Documents, FCMC hereby represents
and warrants each of the following to each Secured Creditor: 

     Section 3.1 Title; No Other
Liens 

     Except for the Lien granted to the
Administrative Agent pursuant to this Agreement and the other Permitted Liens,
FCMC is the record and beneficial owner of the Pledged Collateral pledged by it
hereunder constituting Instruments or certificated securities, is the
Entitlement Holder of all such Pledged Collateral constituting Investment
Property held in a Securities Account and has rights in or the power to transfer
each other item of Collateral in which a Lien is granted by it hereunder, free
and clear of any Lien. 

     Section 3.2 Perfection and
Priority 

     The security interest granted pursuant
to this Agreement shall constitute a valid and continuing perfected security
interest in favor of the Administrative Agent in the Collateral for which
perfection is governed by the UCC or filing with the United States Copyright
Office upon (i) the completion of the filings and other actions specified on
Schedule 3 which, in the case of all filings and other documents
referred to on such schedule, have been delivered to the Administrative Agent in
completed and duly executed form), (ii) the delivery to the Administrative
Agent of all Collateral consisting of Instruments and certificated securities,
in each case properly endorsed for transfer to the Administrative Agent or in
blank, (iii) the execution of Control Account Agreements with respect to
Investment Property not in certificated form, (iv) the execution of Deposit
Account Control Agreements with respect to all Deposit Accounts and (v) all
appropriate filings having been made with the United States Copyright Office.
Such security interest shall be prior to all other Liens on the Collateral
except for Permitted Liens having priority over the Administrative Agent’s Lien
by operation of law or otherwise, as permitted under this Agreement or any other
Loan Documents. 

     Section 3.3 Name;
Jurisdiction of Organization; Chief Executive Office 

     Except as set forth on
Schedule 1, within the five-year period preceding the date hereof,
FCMC has not had, or operated in any jurisdiction, under any trade name,
fictitious name or other name other than its legal 

9

 

name, and FCMC’s
jurisdiction of organization, organizational identification number, if any, and
the location of FCMC’s chief executive office or sole place of business is
specified on Schedule 1. 

     Section 3.4 Inventory and
Equipment 

     FCMC’s Inventory and Equipment (other
than mobile goods and Inventory or Equipment in transit) are kept at the
locations listed on Schedule 4 as supplemented pursuant to the terms
hereof. 

     Section 3.5 Pledged
Collateral 

     (a) The Pledged Stock, Pledged
Partnership Interests, Pledged Trust Certificates, and Pledged LLC Interests
pledged hereunder by FCMC are listed on Schedule 2 and constitute
that percentage of the issued and outstanding equity of all classes of each
issuer thereof as set forth on Schedule 2. 

     (b) All of the Pledged Stock,
Pledged Partnership Interests, Pledged Trust Certificates, and Pledged LLC
Interests have been duly and validly issued and are fully paid and
nonassessable. 

     (c) Each of the Pledged Notes
constitutes the legal, valid and binding obligation of the obligor with respect
thereto, enforceable in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights generally, and
general equitable principles (whether considered in a proceeding in equity or at
law). 

     (d) Except for Pledged Collateral
and Additional Pledged Collateral not required to be delivered to the
Administrative Agent pursuant to Section 4.7, all Pledged Collateral
and, if applicable, any Additional Pledged Collateral, consisting of
certificated securities or Instruments has been delivered to the Administrative
Agent in accordance with Section 4.4(a). 

     (e) All Pledged Collateral held by
a Securities Intermediary in a Securities Account is in a Control Account.

     (f) Other than the Pledged
Partnership Interests and the Pledged LLC Interests that constitute General
Intangibles, there is no Pledged Collateral other than (i) that represented
by certificated securities or Instruments in the possession of the
Administrative Agent, or (ii) that consisting of Financial Assets currently
held in a Control Account. 

     Section 3.6 Accounts

     No amount in excess of $10,000 payable
to FCMC under or in connection with any Account is evidenced by any Instrument
or Chattel Paper that has not been delivered to the Administrative Agent,
properly endorsed for transfer, to the extent delivery is required by
Section 4.4. 

     Section 3.7 Intellectual
Property 

     (a) Schedule 5 lists
all Material Intellectual Property of FCMC, separately identifying that owned by
FCMC and that licensed to FCMC. The Material Intellectual Property set forth on
Schedule 5 for FCMC constitutes all of the intellectual property rights
necessary to conduct its business. 

     (b) All Material Intellectual
Property owned by FCMC is valid, subsisting, unexpired and enforceable, has not
been adjudged invalid and has not been abandoned and the use thereof in the
business of FCMC does not infringe the intellectual property rights of any other
Person. 

     (c) Except as set forth in
Schedule 5, none of the Material Intellectual Property owned by FCMC
is the subject of any licensing or franchise agreement pursuant to which FCMC is
the licensor or franchisor. 

10

 

     (d) No holding, decision or
judgment has been rendered by any Governmental Authority that would limit,
cancel or question the validity of, or FCMC’s rights in, any Material
Intellectual Property. 

     (e) Except as set forth in
Schedule 5, no action or proceeding seeking to limit, cancel or
question the validity of any Material Intellectual Property owned by FCMC or
FCMC’s ownership interest therein is pending or, to the knowledge of FCMC,
threatened. There are no claims, judgments or settlements to be paid by FCMC
relating to the Material Intellectual Property. 

     Section 3.8 Deposit
Accounts; Securities Accounts 

     The only Deposit Accounts or Securities
Accounts maintained by FCMC are those listed on Schedule 6 as
supplemented pursuant to the terms hereof, which sets forth such information
separately for FCMC. 

     Section 3.9 Commercial Tort
Claims 

     The only existing or potential
Commercial Tort Claims pending or threatened in writing of FCMC existing
(regardless of whether the amount, defendant or other material facts can be
determined and regardless of whether such Commercial Tort Claim has been
asserted, threatened or has otherwise been made known to the obligee thereof or
whether litigation has been commenced for such claims) are those listed on
Schedule 7 as supplemented pursuant to the terms hereof, which sets
forth such information separately for FCMC. 

ARTICLE IV
Covenants 

     FCMC agrees with Secured Creditors to
the following, as long as any Secured Obligation remains outstanding or any
Secured Creditor has any obligation to extend credit to FCMC under any Loan
Document, unless the Administrative Agent otherwise consents in writing: 

     Section 4.1
Generally 

     FCMC shall (a) except for the
security interest created by this Agreement, not create or suffer to exist any
Lien upon or with respect to any Collateral, except Permitted Liens,
(b) not use or permit any Collateral to be used unlawfully or in violation
of any provision of this Agreement, any other Loan Document, any applicable Law
or any policy of insurance covering the Collateral, (c) not sell, transfer
or assign (by operation of law or otherwise) any Collateral except as permitted
under the Loan Documents or otherwise within the ordinary course of its
business, (d) not enter into any agreement or undertaking restricting the
right or ability of FCMC or the Administrative Agent to sell, assign or transfer
any Collateral except as permitted under the Loan Documents and
(e) promptly notify the Administrative Agent of its entry into any
agreement or assumption of undertaking that restricts the ability to sell,
assign or transfer any Collateral. 

     Section 4.2 Maintenance of
Perfected Security Interest; Further Documentation 

     (a) FCMC shall maintain the
security interest created by this Agreement as a perfected security interest
having at least the priority described in Section 3.2 and shall
defend such security interest against the claims and demands of all Persons.

     (b) FCMC shall furnish to the
Administrative Agent from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Administrative Agent may reasonably request, all in
reasonable detail. 

     (c) At any time and from time to
time, upon the written request of the Administrative Agent, and at the sole
expense of FCMC, FCMC shall promptly and duly execute and deliver, and have
recorded, such further instruments, agreements, assignments, or other documents
and take such further action as the Administrative Agent may reasonably request
for the purpose of obtaining or preserving the full benefits of this 

11

 

Agreement and of the
rights and powers herein granted, including the filing of any financing or
continuation statement under the UCC (or other similar laws) in effect in any
jurisdiction with respect to the security interest created hereby and the
execution and delivery of Deposit Account Control Agreements and Control Account
Agreements. 

     Section 4.3 Changes in
Locations, Name, Etc. 

     (a) Except upon 15 days’
prior written notice to the Administrative Agent and delivery to the
Administrative Agent of (i) all additional documents reasonably requested
by the Administrative Agent to maintain the validity, perfection and priority of
the security interests provided for herein and (ii) if applicable, a
written supplement to Schedule 4 showing any additional location at
which Inventory or Equipment shall be kept, FCMC shall not do any of the
following: 

     (i) permit any Inventory or Equipment
to be kept at a location other than those listed on Schedule 4,
except for Inventory or Equipment in transit to and from such locations; 

     (ii) change its jurisdiction of
organization or the location of its chief executive office or sole place of
business from that referred to in Section 3.3; or 

     (iii) change its name, identity or
corporate structure to such an extent that any financing statement filed in
connection with this Agreement would become seriously misleading. 

     (b) FCMC shall keep and maintain
at its own cost and expense satisfactory and complete records of the Collateral,
including a record of all payments received and all credits granted with respect
to the Collateral and all other dealings with the Collateral. Except to the
extent any such Vehicle is Excluded Property, if requested by the Administrative
Agent, the security interest of the Administrative Agent shall be noted on the
certificate of title of each Vehicle. 

     Section 4.4 Pledged
Collateral 

     (a) FCMC shall (i) deliver to
the Administrative Agent all certificates and Instruments representing or
evidencing any Pledged Collateral (including Additional Pledged Collateral),
whether now existing or hereafter acquired, in suitable form for transfer by
delivery or, as applicable, accompanied by FCMC’s endorsement, where necessary,
or duly executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Administrative Agent, together, in respect of any
Additional Pledged Collateral, with a Pledge Amendment, duly executed by FCMC,
in substantially form substance acceptable to the Administrative Agent or such
other documentation acceptable to the Administrative Agent and
(ii) maintain all other Pledged Collateral constituting Investment Property
in a Control Account. FCMC authorizes the Administrative Agent to attach each
Pledge Amendment to this Agreement. From and after the occurrence and during the
continuance of an Event of Default, the Administrative Agent shall have the
right, at any time in its discretion and without notice to FCMC, to transfer to
or to register in its name or in the name of its nominees any Pledged
Collateral. The Administrative Agent shall have the right at any time to
exchange any certificate or instrument representing or evidencing any Pledged
Collateral for certificates or instruments of smaller or larger denominations.

     (b) Except as provided in
Article V, FCMC shall be entitled to receive all cash dividends paid
in respect of the Pledged Collateral (other than liquidating or similar
dividends) with respect to the Pledged Collateral. Any sums paid upon or in
respect of any Pledged Collateral upon the liquidation or dissolution of any
issuer of any Pledged Collateral, any distribution of capital made on or in
respect of any Pledged Collateral or any property distributed upon or with
respect to any Pledged Collateral pursuant to the recapitalization or
reclassification of the capital of any issuer of Pledged Collateral or pursuant
to the reorganization thereof shall, 

12

 

unless otherwise
subject to a perfected security interest in favor of the Administrative Agent,
be delivered to the Administrative Agent to be held by it hereunder as
additional collateral security for the Secured Obligations. If any sum of money
or property so paid or distributed in respect of any Pledged Collateral shall be
received by FCMC, FCMC shall, until such money or property is paid or delivered
to the Administrative Agent, hold such money or property in trust for the
Administrative Agent, segregated from other funds of FCMC, as additional
security for the Secured Obligations. 

     (c) Except as provided in
Article V, FCMC shall be entitled to exercise all voting, consent
and corporate rights with respect to the Pledged Collateral; provided,
however, that no vote shall be cast, consent given or right exercised or
other action taken by FCMC that would impair the Collateral, be inconsistent
with or result in any violation of any provision of this Agreement or any other
Loan Document or, without prior notice to the Administrative Agent, enable or
permit any issuer of Pledged Collateral to issue any stock or other equity
securities of any nature or to issue any other securities convertible into or
granting the right to purchase or exchange for any stock or other equity
securities of any nature of any issuer of Pledged Collateral. 

     (d) FCMC shall not grant control
over any Investment Property to any Person other than the Administrative Agent.

     (e) In the case of FCMC as an
issuer of Pledged Collateral, FCMC agrees to be bound by the terms of this
Agreement relating to the Pledged Collateral issued by it and shall comply with
such terms insofar as such terms are applicable to it. In the case of FCMC as a
partner in a Partnership, FCMC hereby consents to the extent required by the
applicable Partnership Agreement to the pledge by each other applicable Person,
pursuant to the terms hereof, of the Pledged Partnership Interests in such
Partnership and to the transfer of such Pledged Partnership Interests to the
Administrative Agent or its nominee and to the substitution of the
Administrative Agent or its nominee as a substituted partner in such Partnership
with all the rights, powers and duties of a general partner or a limited
partner, as the case may be. In the case of FCMC as a member of an LLC, FCMC
hereby consents to the extent required by the applicable LLC Agreement to the
pledge by any other applicable Person, pursuant to the terms hereof, of the
Pledged LLC Interests in such LLC and to the transfer of such Pledged LLC
Interests to the Administrative Agent or its nominee and to the substitution of
the Administrative Agent or its nominee as a substituted member of the LLC with
all the rights, powers and duties of a member of the LLC in question. 

     (f) FCMC shall not agree to any
amendment of an LLC Agreement or Partnership Agreement that in any way adversely
affects the perfection of the security interest of the Administrative Agent in
the Pledged Partnership Interests or Pledged LLC Interests pledged by FCMC
hereunder, including any amendment electing to treat the membership interest or
partnership interest of FCMC as a security under Article 8 of the UCC.

     Section 4.5 Control
Accounts; Approved Deposit Accounts 

     (a) FCMC shall (i) deposit in
an Approved Deposit Account all cash received by FCMC, (ii) not establish
or maintain any Securities Account that is not a Control Account and
(iii) not establish or maintain any Deposit Account other than with a
Deposit Account Bank, the Administrative Agent or an affiliate of the
Administrative Agent. 

     (b) FCMC shall instruct each
Account Debtor or other Person obligated to make a payment to FCMC under a
General Intangible to make payment, or to continue to make payment, as the case
may be, to an Approved Deposit Account and shall deposit in an Approved Deposit
Account all Proceeds of such Accounts and General Intangibles received by FCMC
from any other Person immediately upon receipt. 

     (c) In the event (i) FCMC or
any Approved Securities Intermediary or Deposit Account Bank shall, after the
date hereof, terminate an agreement with respect to the maintenance of a Control
Account or Approved Deposit Account for any reason, (ii) the Administrative
Agent shall demand such termination as a result of the failure of an Approved
Securities Intermediary or Deposit Account Bank to comply with the terms of the

13

 

applicable Control
Account Agreement or Deposit Account Control Agreement, or (iii) the
Administrative Agent determines in its sole good faith discretion that the
financial condition of an Approved Securities Intermediary or Deposit Account
Bank, as the case may be, has materially deteriorated, FCMC agrees to notify all
of its obligors that were making payments to such terminated Control Account or
Approved Deposit Account, as the case may be, to make all future payments to
another Control Account or Approved Deposit Account, as the case may be. 

     (d) The Administrative Agent
agrees that it shall not provide any instruction with respect to any Approved
Deposit Account or Control Account unless an Event of Default has occurred and
is continuing. 

     Section 4.6 Accounts

     (a) FCMC shall not, other than in
the ordinary course of business consistent with its past practice,
(i) grant any extension of the time of payment of any Account,
(ii) compromise or settle any Account for less than the full amount
thereof, (iii) release, wholly or partially, any Person liable for the
payment of any Account, (iv) allow any credit or discount on any Account or
(v) amend, supplement or modify any Account in any manner that could adversely
affect the value thereof. 

     (b) The Administrative Agent shall
have the right to make test verifications of the Accounts in any manner and
through any medium that the Administrative Agent reasonably considers advisable,
and FCMC shall furnish all such assistance and information as the Administrative
Agent may reasonably require in connection therewith. At any time and from time
to time, upon the Administrative Agent’s request and at the expense of FCMC,
FCMC shall cause independent public accountants or others satisfactory to the
Administrative Agent to furnish to the Administrative Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Accounts. 

     Section 4.7 Delivery of
Instruments and Chattel Paper 

     If any amount in excess of $10,000
payable under or in connection with any Collateral owned by FCMC shall be or
become evidenced by an Instrument or Chattel Paper, FCMC shall immediately
deliver such Instrument or Chattel Paper to the Administrative Agent, duly
indorsed in a manner satisfactory to the Administrative Agent, or, if consented
to by the Administrative Agent, shall mark all such Instruments and Chattel
Paper with the following legend: “This writing and the obligations evidenced or
secured hereby are subject to the security interest of The Huntington National
Bank, as Agent.” 

     Section 4.8 Intellectual
Property 

     (a) FCMC (either itself or through
licensees) shall (i) continue to use each Trademark that is Material
Intellectual Property in order to maintain such Trademark in full force and
effect with respect to each class of goods for which such Trademark is currently
used, free from any claim of abandonment for non-use, (ii) maintain as in
the past the quality of products and services offered under such Trademark,
(iii) use such Trademark with the appropriate notice of registration and
all other notices and legends required by applicable Law, (iv) not adopt or
use any mark that is confusingly similar or a colorable imitation of such
Trademark unless the Administrative Agent shall obtain a perfected security
interest in such mark pursuant to this Agreement and (v) not (and not
permit any licensee or sublicensee thereof to) do any act or knowingly omit to
do any act whereby such Trademark may become invalidated or impaired in any way.

     (b) FCMC (either itself or through
licensees) shall not do any act, or omit to do any act, whereby any Patent that
is Material Intellectual Property may become forfeited, abandoned or dedicated
to the public. 

     (c) FCMC (either itself or through
licensees) (i) shall not (and shall not permit any licensee or sublicensee
thereof to) do any act or omit to do any act whereby any portion of the
Copyrights that is Material Intellectual Property may become invalidated or
otherwise impaired and (ii) shall not (either itself or through 

14

 

licensees) do any act
whereby any portion of the Copyrights that is Material Intellectual Property may
fall into the public domain. 

     (d) FCMC (either itself or through
licensees) shall not do any act, or omit to do any act, whereby any trade secret
that is Material Intellectual Property may become publicly available or
otherwise unprotectable. 

     (e) FCMC (either itself or through
licensees) shall not do any act that knowingly uses any Material Intellectual
Property to infringe the intellectual property rights of any other Person.

     (f) FCMC shall notify the
Administrative Agent immediately if it knows, or has reason to know, that any
application or registration relating to any Material Intellectual Property may
become forfeited, abandoned or dedicated to the public, or of any adverse
determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court or tribunal in
any country) regarding FCMC’s ownership of, right to use, interest in, or the
validity of, any Material Intellectual Property or FCMC’s right to register the
same or to own and maintain the same. 

     (g) Whenever FCMC, either by
itself or through any agent, licensee or designee, shall file an application for
the registration of any Intellectual Property with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office or
agency within or outside the United States, FCMC shall report such filing to the
Administrative Agent within five Business Days after the last day of the fiscal
quarter in which such filing occurs. Upon request of the Administrative Agent,
FCMC shall execute and deliver, and have recorded, all agreements, instruments,
documents and papers as the Administrative Agent may request to evidence the
Administrative Agent’s security interest in any Copyright, Patent or Trademark
and the goodwill and general intangibles of FCMC relating thereto or represented
thereby. 

     (h) FCMC shall take all reasonable
actions necessary or requested by the Administrative Agent, including in any
proceeding before the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency, to maintain and pursue
each application (and to obtain the relevant registration) and to maintain each
registration of any Copyright, Trademark or Patent that is Material Intellectual
Property, including filing of applications for renewal, affidavits of use,
affidavits of incontestability and opposition and interference and cancellation
proceedings. 

     (i) In the event that any Material
Intellectual Property is infringed upon or misappropriated or diluted by a third
party, FCMC shall notify the Administrative Agent promptly after FCMC learns
thereof. FCMC shall take appropriate action in response to such infringement,
misappropriation of dilution, including promptly bringing suit for infringement,
misappropriation or dilution and to recover all damages for such infringement,
misappropriation of dilution, and shall take such other actions as may be
appropriate in its reasonable judgment under the circumstances to protect such
Material Intellectual Property. 

     (j) Unless otherwise agreed to by
the Administrative Agent, FCMC shall execute and deliver to the Administrative
Agent for filing in (i) the United States Copyright Office a short-form
copyright security agreement in form and substance acceptable to the
Administrative Agent, (ii) in the United States Patent and Trademark Office
a short-form patent security agreement in form and substance acceptable to the
Administrative Agent and (iii) the United States Patent and Trademark
Office a short-form trademark security agreement in form and substance
acceptable to the Administrative Agent. 

     Section 4.9 Vehicles

     Upon the request of the Administrative
Agent, on or before the date of this Agreement and within the earlier of
(a) fifteen (15) days after the date of acquisition of any Vehicle
acquired after the date hereof or (b) ten (10) days after receipt of
the Administrative Agent’s request, FCMC shall execute a short-form motor
vehicle security agreement, in form and substance acceptable to the
Administrative Agent, specifically describing each 

15

 

Vehicle owned by FCMC.
In addition, upon the request of the Administrative Agent, within 30 days after
the date of such request and, with respect to any Vehicle acquired by FCMC
subsequent to the date of any such request, within 30 days after the date
of acquisition thereof, FCMC shall (i) file all applications for certificates of
title or ownership indicating the Administrative Agent’s first priority security
interest in the Vehicle covered by such certificate and any other necessary
documentation, in each office in each jurisdiction that the Administrative Agent
shall deem advisable to perfect its security interests in the Vehicles. 

     Section 4.10 Notice of
Commercial Tort Claims 

     FCMC agrees that, if it shall acquire
any interest in any Commercial Tort Claim (whether from another Person or
because such Commercial Tort Claim shall have come into existence),
(i) FCMC shall, immediately upon such acquisition, deliver to the
Administrative Agent, in each case in form and substance satisfactory to the
Administrative Agent, a notice of the existence and nature of such Commercial
Tort Claim and deliver a supplement to Schedule 7 containing a
specific description of such Commercial Tort Claim, certified by FCMC as true,
correct and complete, (ii) the provision of Section 2.1 shall
apply to such Commercial Tort Claim (and FCMC authorizes the Administrative
Agent to supplement such schedule with a description of such Commercial Tort
Claim if FCMC fails to deliver the supplement described in clause (i))
and (iii) FCMC shall execute and deliver to the Administrative Agent, in
each case in form and substance satisfactory to the Administrative Agent, any
certificate, agreement and other document, and take all other action, deemed by
the Administrative Agent to be reasonably necessary or appropriate for the
Administrative Agent to obtain a first-priority, perfected security interest in
all such Commercial Tort Claims. Any supplement to Schedule 7
delivered pursuant to this Section 4.10 shall become part of
Schedule 7 for all purposes hereunder other than, absent a written
consent of the Administrative Agent, for purpose of the representations and
warranties set forth in Section 3.9. 

ARTICLE V
Remedial Provisions

     Section 5.1 Code and Other
Remedies 

     During the continuance of an Event of
Default, the Administrative Agent may exercise, in addition to all other rights
and remedies granted to the Administrative Agent in this Agreement and in any
other instrument or agreement securing, evidencing or relating to the Secured
Obligations, all rights and remedies of a secured party under the UCC or any
other applicable Law. Without limiting the generality of the foregoing, the
Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by Law referred to below) to or upon FCMC or any other Person (all and
each of which demands, defenses, advertisements and notices are hereby waived),
may in such circumstances forthwith collect, receive, appropriate and realize
upon any Collateral, and may forthwith sell, lease, assign, give option or
options to purchase, or otherwise dispose of and deliver any Collateral (or
contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, at any exchange, broker’s board or office of the
Administrative Agent or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. The Administrative Agent
shall have the right upon any such public sale or sales, and, to the extent
permitted by Law, upon any such private sale or sales, to purchase the whole or
any part of the Collateral so sold, free of any right or equity of redemption in
FCMC, which right or equity is hereby waived and released. FCMC further agrees,
at the Administrative Agent’s request, to assemble the Collateral and make it
available to the Administrative Agent at places that the Administrative Agent
shall reasonably select, whether at FCMC’s premises or elsewhere. The
Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 5.1, after deducting all reasonable costs
and expenses of every kind incurred in connection therewith or incidental to the
care or safekeeping of any Collateral or in any way relating to the Collateral
or the rights of the Administrative Agent hereunder, including reasonable
attorneys’ fees and disbursements, to the payment in whole or in part of the
Secured Obligations, in such order as the Loan Documents shall prescribe (or if
no such order is prescribed therein, then in such order as the Administrative
Agent may elect), and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of Law, need
the Administrative Agent account for the surplus, if any, to FCMC. To the extent

16

 

permitted by
applicable Law, FCMC waives all claims, damages and demands it may acquire
against the Administrative Agent arising out of the exercise by them of any
rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by Law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition.

     Section 5.2 Accounts and
Payments in Respect of General Intangibles 

     (a) If required by the
Administrative Agent in writing at any time during the continuance of an Event
of Default, FCMC shall cause all payment of Accounts or payment in respect of
General Intangibles to be directed to a Cash Collateral Account, and if
collected by FCMC, each such payment shall be forthwith deposited by FCMC in the
exact form received, duly indorsed by FCMC to the Administrative Agent if
required, in a Cash Collateral Account. Until so turned over, each such payment
shall be held by FCMC in trust for the Administrative Agent, segregated from
other funds of FCMC. Each such deposit of Proceeds of Accounts and payments in
respect of General Intangibles shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the deposit.

     (b) At the Administrative Agent’s
request in writing, during the continuance of an Event of Default, FCMC shall
deliver to the Administrative Agent all original and other documents evidencing,
and relating to, the agreements and transactions that gave rise to the Accounts
or payments in respect of General Intangibles, including all original orders,
invoices and shipping receipts. 

     (c) The Administrative Agent may,
without notice, at any time during the continuance of an Event of Default, limit
or terminate the authority of FCMC to collect its Accounts or amounts due under
General Intangibles or any thereof. 

     (d) The Administrative Agent in
its own name or in the name of others may at any time during the continuance of
an Event of Default communicate with Account Debtors to verify with them to the
Administrative Agent’s satisfaction the existence, amount and terms of any
Account or amounts due under any General Intangible. 

     (e) Upon the request of the
Administrative Agent in writing at any time after the occurrence of an Event of
Default, FCMC shall notify Account Debtors that the Accounts or General
Intangibles have been collaterally assigned to the Administrative Agent and that
payments in respect thereof shall be made directly to the Administrative Agent
or to a Cash Collateral Account. In addition, the Administrative Agent may at
any time during the continuance of an Event of Default enforce FCMC’s rights
against such Account Debtors and obligors of General Intangibles. 

     (f) Anything herein to the
contrary notwithstanding, FCMC shall remain liable under each of the Accounts
and payments in respect of General Intangibles to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto. The
Administrative Agent shall not have any obligation or liability under any
agreement giving rise to an Account or a payment in respect of a General
Intangible by reason of or arising out of this Agreement or the receipt by the
Administrative Agent of any payment relating thereto, nor shall the
Administrative Agent be obligated in any manner to perform any obligation of
FCMC under or pursuant to any agreement giving rise to an Account or a payment
in respect of a General Intangible, to make any payment, to make any inquiry as
to the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party thereunder, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts that may have been assigned to it or to which it may be entitled
at any time or times. 

17

 

     Section 5.3 Pledged
Collateral 

     (a) During the continuance of an
Event of Default, upon notice by the Administrative Agent to FCMC, (i) the
Administrative Agent shall have the right to receive any Proceeds of the Pledged
Collateral and make application thereof to the Secured Obligations in the order
set forth in the Loan Documents (or if no such order is set forth therein, then
in such order as the Administrative Agent may elect) and (ii) the
Administrative Agent or its nominee may exercise (A) any voting, consent,
corporate and other right pertaining to the Pledged Collateral at any meeting of
shareholders, partners or members, as the case may be, of the relevant issuer or
issuers of Pledged Collateral or otherwise and (B) any right of conversion,
exchange and subscription and any other right, privilege or option pertaining to
the Pledged Collateral as if it were the absolute owner thereof (including the
right to exchange at its discretion any of the Pledged Collateral upon the
merger, consolidation, reorganization, recapitalization or other fundamental
change in the corporate structure of any issuer of Pledged Collateral, the right
to deposit and deliver any Pledged Collateral with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Administrative Agent may determine), all without liability
except to account for property actually received by it; provided, however, that
the Administrative Agent shall have no duty to FCMC to exercise any such right,
privilege or option and shall not be responsible for any failure to do so or
delay in so doing. 

     (b) In order to permit the
Administrative Agent to exercise the voting and other consensual rights that it
may be entitled to exercise pursuant hereto and to receive all dividends and
other distributions that it may be entitled to receive hereunder, (i) FCMC
shall, promptly execute and deliver (or cause to be executed and delivered) to
the Administrative Agent all such proxies, dividend payment orders and other
instruments as the Administrative Agent may from time to time reasonably request
and (ii) without limiting the effect of clause (i) above, FCMC hereby
grants to the Administrative Agent an irrevocable proxy to vote all or any part
of the Pledged Collateral and to exercise all other rights, powers, privileges
and remedies to which a holder of the Pledged Collateral would be entitled
(including giving or withholding written consents of shareholders, partners or
members, as the case may be, calling special meetings of shareholders, partners
or members, as the case may be, and voting at such meetings), which proxy shall
be effective, automatically and without the necessity of any action (including
any transfer of any Pledged Collateral on the record books of the issuer
thereof) by any other Person (including the issuer of such Pledged Collateral or
any officer or agent thereof) during the continuance of an Event of Default and
which proxy shall only terminate upon the payment in full of the Secured
Obligations. 

     (c) FCMC hereby expressly
authorizes and instructs each issuer of any Pledged Collateral pledged hereunder
by FCMC to (i) comply with any instruction received by it from the
Administrative Agent in writing that (A) states that an Event of Default
has occurred and is continuing and (B) is otherwise in accordance with the
terms of this Agreement, without any other or further instructions from FCMC,
and FCMC agrees that such issuer shall be fully protected in so complying and
(ii) unless otherwise expressly permitted hereby, pay any dividend or other
payment with respect to the Pledged Collateral directly to the Administrative
Agent. 

     Section 5.4 Proceeds to be
Turned Over To the Administrative Agent 

     Except as set forth in the Credit
Agreement, all Proceeds received by the Administrative Agent hereunder during
the continuance of an Event of Default shall be held by the Administrative Agent
in a Cash Collateral Account. All Proceeds while held by the Administrative
Agent in a Cash Collateral Account (or by FCMC in trust for the Administrative
Agent) shall continue to be held as collateral security for the Secured
Obligations and shall not constitute payment thereof until applied to the
payment of the Secured Obligations. 

     Section 5.5 Sale of Pledged
Collateral 

     (a) FCMC recognizes that the
Administrative Agent may be unable to effect a public sale of any Pledged
Collateral by reason of certain prohibitions contained in the Securities Act and
applicable state securities laws or otherwise or may determine that a public
sale is impracticable or not commercially reasonable and, accordingly, may
resort to one or more private sales thereof to a restricted group of purchasers
that shall be 

18

 

obliged to agree, among
other things, to acquire such securities for their own account for investment
and not with a view to the distribution or resale thereof. FCMC acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Administrative Agent shall be
under no obligation to delay a sale of any Pledged Collateral for the period of
time necessary to permit the issuer thereof to register such securities for
public sale under the Securities Act, or under applicable state securities laws,
even if such issuer would agree to do so. 

     (b) FCMC agrees to use its best
efforts to do or cause to be done all such other acts as may be necessary to
make such sale or sales of all or any portion of the Pledged Collateral pursuant
to this Section 5.5 valid and binding and in compliance with all
other applicable Law. FCMC further agrees that a breach of any covenant
contained in this Section 5.5 will cause irreparable injury to the
Administrative Agent, that the Administrative Agent has no adequate remedy at
law in respect of such breach and, as a consequence, that each and every
covenant contained in this Section 5.5 shall be specifically
enforceable against FCMC, and FCMC hereby waives and agrees not to assert any
defense against an action for specific performance of such covenants except for
a defense that no Event of Default has occurred under any Loan Document. 

     Section 5.6
Deficiency 

     FCMC shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay the Secured Obligations and the reasonable fees and
disbursements of any attorney employed by the Administrative Agent to collect
such deficiency. 

ARTICLE VI
The Administrative
Agent 

     Section 6.1 The
Administrative Agent’s Appointment as Attorney-in-Fact 

     (a) FCMC hereby irrevocably
constitutes and appoints the Administrative Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of FCMC and in the name of FCMC or in its own name, for the purpose of
carrying out the terms of this Agreement, to take any appropriate action and to
execute any document or instrument that may be necessary or desirable to
accomplish the purposes of this Agreement, and, without limiting the generality
of the foregoing, FCMC hereby gives the Administrative Agent the power and
right, on behalf of FCMC, without notice to or assent by FCMC, to do any of the
following: 

     (i) in the name of FCMC or its own
name, or otherwise, take possession of and indorse and collect any check, draft,
note, acceptance or other instrument for the payment of moneys due under any
Account or General Intangible or with respect to any other Collateral and file
any claim or take any other action or proceeding in any court of law or equity
or otherwise deemed appropriate by the Administrative Agent for the purpose of
collecting any such moneys due under any Account or General Intangible or with
respect to any other Collateral whenever payable; 

     (ii) in the case of any Intellectual
Property, execute and deliver, and have recorded, any agreement, instrument,
document or paper as the Administrative Agent may request to evidence the
Administrative Agent’s security interest in such Intellectual Property and the
goodwill and General Intangibles of FCMC relating thereto or represented
thereby; 

     (iii) pay or discharge taxes and Liens
levied or placed on or threatened against the Collateral, effect any repair or
pay or discharge any insurance called for by the terms of this Agreement
(including all or any part of the premiums therefore and the costs thereof);

     (iv) execute, in connection with any
sale provided for in Section 5.1 or Section 5.5, any
endorsement, assignment or other instrument of conveyance or transfer with
respect to the Collateral; or 

19

 

     (v) (A) direct any party liable
for any payment under any Collateral to make payment of any moneys due or to
become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct, (B) ask or demand for, collect, and
receive payment of and receipt for, any moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any Collateral,
(C) sign and indorse any invoice, freight or express bill, bill of lading,
storage or warehouse receipt, draft against debtors, assignment, verification,
notice and other document in connection with any Collateral, (D) commence and
prosecute any suit, action or proceeding at law or in equity in any court of
competent jurisdiction to collect any Collateral and to enforce any other right
in respect of any Collateral, (E) defend any suit, action or proceeding
brought against FCMC with respect to any Collateral, (F) settle, compromise
or adjust any such suit, action or proceeding and, in connection therewith, give
such discharges or releases as the Administrative Agent may deem appropriate,
(G) assign any Copyright, Patent or Trademark (along with the goodwill of
the business to which any such Trademark pertains) throughout the world for such
term or terms, on such conditions, and in such manner as the Administrative
Agent shall in its sole discretion determine, including the execution and filing
of any document necessary to effectuate or record such assignment and
(H) generally, sell, transfer, pledge and make any agreement with respect
to or otherwise deal with any Collateral as fully and completely as though the
Administrative Agent was the absolute owner thereof for all purposes, and do, at
the Administrative Agent’s option and FCMC’s expense, at any time, or from time
to time, all acts and things that the Administrative Agent deems necessary to
protect, preserve or realize upon the Collateral and the Administrative Agent’s
security interests therein and to effect the intent of this Agreement, all as
fully and effectively as FCMC might do. 

     (b) If FCMC fails to perform or
comply with any of its agreements contained herein, the Administrative Agent, at
its option, but without any obligation so to do, may perform or comply, or
otherwise cause performance or compliance, with such agreement. 

     (c) The expenses of the
Administrative Agent incurred in connection with actions undertaken as provided
in this Section 6.1, together with interest thereon at a rate per
annum equal to the highest rate per annum at which interest would then be
payable on any past due amount under any Credit Document from the date of
payment by the Administrative Agent to the date reimbursed by FCMC, shall be
payable by FCMC to the Administrative Agent on demand. 

     (d) FCMC hereby ratifies all that
said attorneys shall lawfully do or cause to be done by virtue hereof. All
powers, authorizations and agencies contained in this Agreement are coupled with
an interest and are irrevocable until this Agreement is terminated and the
security interests created hereby are released. 

     Section 6.2 Duty of the
Administrative Agent 

     The Administrative Agent’s sole duty
with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession shall be to deal with it in the same manner as the
Administrative Agent deals with similar property for its own account. Neither
the Administrative Agent, nor any of its respective officers, directors,
employees or agents shall be liable for failure to demand, collect or realize
upon any Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
FCMC or any other Person or to take any other action whatsoever with regard to
any Collateral. The powers conferred on the Administrative Agent hereunder are
solely to protect the Administrative Agent’s interest in the Collateral and
shall not impose any duty upon the Administrative Agent to exercise any such
powers. The Administrative Agent shall be accountable only for amounts that the
Administrative Agent actually receives as a result of the exercise of such
powers, and neither the Administrative Agent nor any of the Administrative
Agent’s officers, directors, employees or agents shall be responsible to FCMC
for any act or failure to act hereunder, except for the Administrative Agent’s
gross negligence or willful misconduct. 

20

 

     Section 6.3 Financing
Statements 

     FCMC hereby authorizes the
Administrative Agent to file, and if requested will deliver to the
Administrative Agent, all financing statements and other documents and take such
other actions as may from time to time be requested by the Administrative Agent
in order to maintain a first perfected security interest in and, if applicable,
control of, the Collateral. Any financing statement filed by the Administrative
Agent may be filed in any filing office in any UCC jurisdiction and may
(i) indicate the Collateral (1) as all assets of FCMC or words of
similar effect, regardless of whether any particular asset comprised in the
Collateral falls within the scope of Article 9 of the UCC or such
jurisdiction, or (2) by any other description which reasonably approximates
the description contained in this Agreement, and (ii) contain any other
information required by part 5 of Article 9 of the UCC for the sufficiency
or filing office acceptance of any financing statement or amendment, including
(A) the type of organization and any organization identification number
issued to FCMC and (B) in the case of a financing statement filed as a
fixture filing or indicating Collateral as as-extracted collateral or timber to
be cut, a sufficient description of real property to which the Collateral
relates. FCMC also agrees to furnish any such information to the Administrative
Agent promptly upon request. FCMC also ratifies its authorization for the
Administrative Agent to have filed in any UCC jurisdiction any initial financing
statements or amendments thereto if filed prior to the date hereof. 

ARTICLE VII
Miscellaneous 

     Section 7.1 Amendments in
Writing 

     None of the terms or provisions of this
Agreement may be waived, amended, restated, supplemented or otherwise modified
without the written consent of the Administrative Agent and FCMC. 

     Section 7.2 Notices

     All communications under this Agreement
shall be in writing and shall be sent by facsimile or by a nationally recognized
overnight delivery service (i) if to the Administrative Agent, at the
address set forth below the Administrative Agent’s signature to this Agreement,
or at such other address as may have been furnished in writing to FCMC, by the
Administrative Agent; and (ii) if to FCMC, at the address set forth below
FCMC’s signature to this Agreement, or at such other address as may have been
furnished in writing to the Administrative Agent by FCMC. Any notice so
addressed and sent by telecopier shall be deemed to be given when confirmed, and
any notice sent by nationally recognized overnight delivery service shall be
deemed to be given the next day after the same is delivered to such carrier.

     Section 7.3 No Waiver by
Course of Conduct; Cumulative Remedies 

     The Administrative Agent shall not by
any act (except by a written instrument pursuant to Section 7.1),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Event of Default. No failure to
exercise, nor any delay in exercising, on the part of the Administrative Agent,
any right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Administrative Agent of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy that the Administrative Agent would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by Law. 

21

 

     Section 7.4 Successors and
Assigns 

     This Agreement shall be binding upon
the successors and assigns of FCMC and shall inure to the benefit of the
Administrative Agent and its respective successors and assigns; provided,
however, FCMC may not assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent. 

     Section 7.5
Counterparts 

     This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Signature pages may be detached from multiple counterparts and
attached to a single counterpart so that all signature pages are attached to the
same document. Delivery of an executed counterpart by telecopy shall be
effective as delivery of a manually executed counterpart. 

     Section 7.6
Severability 

     Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. 

     Section 7.7
Section Headings 

     The Article and Section titles
contained in this Agreement are, and shall be, without substantive meaning or
content of any kind whatsoever and are not part of the agreement of the parties
hereto. 

     Section 7.8 Entire
Agreement 

     This Agreement together with the other
Loan Documents represents the entire agreement of the parties and supersedes all
prior agreements and understandings relating to the subject matter hereof.

     Section 7.9 Governing
Law 

     This Agreement and the rights and
obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the law of the State of Ohio, without regard to
its conflict of law principles. 

     Section 7.10 Additional Loan
Parties 

     FCMC hereby agrees and covenants that
it will cause its Subsidiaries that are not a signatory hereto on the date of
this Agreement to execute and deliver to the Administrative Agent a Joinder
Agreement in form and substance acceptable to the Administrative Agent and shall
thereafter for all purposes be a party hereto and have the same rights, benefits
and obligations as FCMC on the date of this Agreement. 

     Section 7.11
Reinstatement 

     FCMC further agrees that, if any
payment made by any other Person and applied to the Secured Obligations is at
any time annulled, avoided, set aside, rescinded, invalidated, declared to be
fraudulent or preferential or otherwise required to be refunded or repaid, or
the proceeds of Collateral are required to be returned by the Administrative
Agent or any Lender to FCMC, its estate, trustee, receiver or any other party,
including Holding, under any bankruptcy law, state or federal law, common law or
equitable cause, then, to the extent of such payment or repayment, any Lien or
other Collateral securing such liability shall be and remain in 

22

 

full force and effect,
as fully as if such payment had never been made or, if prior thereto the Lien
granted hereby or other Collateral securing such liability hereunder shall have
been released or terminated by virtue of such cancellation or surrender, such
Lien or other Collateral shall be reinstated in full force and effect, and such
prior cancellation or surrender shall not diminish, release, discharge, impair
or otherwise affect any Lien or other Collateral securing the obligations of
FCMC in respect of the amount of such payment. 

     Section 7.12 Agent

     In acting under or by virtue of this
Agreement, Administrative Agent shall be entitled to all the rights, authority,
privileges, and immunities provided in the Credit Agreement, all of which
provisions of said Credit Agreement are incorporated by reference herein with
the same force and effect as if set forth herein in their entirety. 

     Section 7.13 Amendment and
Restatement 

     This amendment and restatement is
limited as written and is not a consent to any other amendment, restatement or
waiver, whether or not similar and, except as expressly provided herein or in
any other Loan Document, all terms and conditions of each Loan Document remain
in full force and effect unless otherwise specifically amended hereby or any
other Loan Document. 

[Signature Page Follows] 

23

 

     In witness whereof, the undersigned has
caused this Amended and Restated Security Agreement (Licensing) to be duly
executed and delivered as of the date first above written. 

	 	 	 	 	 
	 	FRANKLIN CREDIT MANAGEM,ENT
      CORPORATION
 	 
	 	By:  	/s/
      Thomas J. Axon	 
	 	 	Name:  	Thomas J. Axon 	 
	 	 	Title:  	President 	 
	 

	 	 	 	 	 
	
       
	 	Address: 	 	Franklin Credit Management
	
       
	 	 	 	          Corporation
	
       
	 	 	 	101 Hudson St., 25th Floor
	
       
	 	 	 	Jersey City, New Jersey 07302
	
       
	 	 	 	Fax: 201-604-4400
	
       
	 	 	 	Attention: General Counsel

ACCEPTED AND
AGREED
as of the date first above written: 

THE HUNTINGTON
NATIONAL BANK,
as Administrative Agent 

	 	 	 	 	 
	
      By:  /s/ Alan D.
      Seitz
	 	 
	
       
	
       
Name:
      Alan D. Seitz 	 	 
	
       
	Title: Senior Vice President	 	 
	
       
	 	 	 	 
	
      Address:  
	2361 Morse Road	 	 
	
       
	 	NC3W67	 	 
	
       
	 	Columbus, Ohio 43229	 	 
	
       
	 	Attn: Special Assets	 	 
	
       
	 	Fax: (614) 480-3795	 	 

Signature Page to
Amended and Restated Security Agreement
(Licensing)          

 

 

Schedule 1 

State of
Incorporation; Principal Executive Office 

Name: FRANKLIN
CREDIT MANAGEMENT CORPORATION
Organizational ID. No:
2152904
Jurisdiction of Organization: Delaware Corporation
Chief Executive
Officer: Alexander Gordon Jardin
Address of Chief Executive Office: 101
Hudson Street, Jersey City, NJ 07302 

 

 

Schedule 2 

Pledged Collateral

	 	•	 	100% of issued and outstanding equity of Franklin Asset,
  LLC.

 

 

Schedule 3 

Filings 

Delaware Secretary
of State

 

 

Schedule 4 

Location of Inventory
and Equipment 

	 	•	 	101 Hudson Street, 25th and 37th Floors, Jersey
      City, NJ 07302

 

 

Schedule 5 

Intellectual Property

 

 

Schedule 6 

Deposit Accounts;
Securities Accounts

 

 

Schedule 7 

Commercial Tort
Claims

 

 

Schedule 8 

Permitted
LiensFranklin Credit Management Corporation 10-12G

Exhibit 10.9 

Execution Copy 

CONFIDENTIAL
TREATMENT REQUESTED 

INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS
OMITTED AND IS IDENTIFIED BY THREE ASTERISKS, AS FOLLOWS “***”, AN UNREDACTED
VERSION OF THIS DOCUMENT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION 

SECOND AMENDMENT TO
LOAN SERVICING AGREEMENT 

SECOND AMENDMENT, dated as of October 29, 2009 (this “ Second
Amendment”), to the Loan Servicing Agreement, dated as of May 28, 2008, as
amended by the First Amendment to Loan Servicing Agreement, dated as of
February 23, 2009 (such agreement, as so amended, the “Loan Servicing
Agreement”), by and among, on the one hand, Bosco Credit LLC (“Bosco”), as
owner, and Franklin Credit Management Corporation, as servicer (the “Servicer”).

WHEREAS, Bosco and the Servicer desire to amend the Loan Servicing
Agreement in accordance with the terms hereof. 

NOW
THEREFORE, in consideration of the premises and other good and valuable
consideration, the parties hereto hereby agree as follows: 

1. Definitions. Any capitalized term used herein and not
defined shall have the meaning assigned to it in the Loan Servicing Agreement,
as amended by this Second Amendment (the Loan Servicing Agreement as amended by
this Second Amendment being called the “Amended Loan Servicing Agreement”) or
the Loan Agreement, dated as of May 28, 2008 (the “Loan Agreement”), among
the Borrowers, the Lenders party thereto, the Administrative Agent, and First
City Servicing Corporation, as Surveillance Agent, as amended. 

2. Amendments. Effective on the Second Amendment
Effective Date (as defined below) and subject to the satisfaction of the
conditions precedent set forth in Section 3 below, the parties hereto agree
as follows: 

2.1
Exhibit D to the Loan Servicing Agreement is amended by deleting
Exhibit D in its entirety and replacing it with Exhibit D to this
Second Amendment. 

3. Conditions to Effectiveness. The effectiveness of this
Second Amendment is subject to the fulfillment, in a manner satisfactory to the
Administrative Agent, of each of the following conditions precedent (the date
such conditions are fulfilled or waived by the Administrative Agent is
hereinafter referred to as the “Second Amendment Effective Date”): 

(a) The representations and warranties of the Servicer and Bosco
set forth herein, in Section 6 of the Loan Servicing Agreement and in each other
Loan Document and certificate or other writing delivered to the Administrative
Agent pursuant hereto on or prior to the Second Amendment Effective Date shall
be correct in all material respects after giving effect to this Second Amendment
on and as of the Second Amendment Effective Date as though made on and as of
such date (except to the extent such representations and warranties expressly
relate to an earlier date), and following the execution of this Second
Amendment, no Default or Event of Default shall have occurred and be continuing
on the Second Amendment Effective Date or would result from this Second
Amendment becoming effective in accordance with its terms;

 

(b) Bosco and the Servicer shall have executed this Second
Amendment and shall have received a counterpart to this Second Amendment;

(c) Bosco and the Servicer shall have delivered such other
agreements, documents and instruments as Administrative Agent may otherwise
require, all of which shall be in form and substance satisfactory to
Administrative Agent and its legal counsel;

(d) Bosco shall have reimbursed Administrative Agent and
Servicer for all reasonable legal and other fees incurred by Administrative
Agent and Servicer in connection with the preparation of this Second Amendment;
and

(e) All proceedings taken in connection with the transactions
contemplated by this Second Amendment and all documents, instruments and other
legal matters incident thereto shall be satisfactory to Administrative Agent and
its counsel.

4. Representations and Warranties. Each of Bosco and the
Servicer represents and warrants as follows: 

(a) The execution, delivery and performance by each of Bosco and
the Servicer of this Second Amendment and the performance by each of Bosco and
the Servicer of the Amended Loan Servicing Agreement have been duly authorized
by all necessary action by each of Bosco and the Servicer, and each of Bosco and
the Servicer have all requisite power, authority and legal right to execute,
deliver and perform this Second Amendment and to perform the Amended Loan
Servicing Agreement.

(b) This Second Amendment and the Amended Loan Servicing
Agreement are the legal, valid and binding obligations of each of Bosco and the
Servicer, enforceable against each of Bosco and the Servicer in accordance with
the terms thereof, except as enforcement may be limited by equitable principles
(regardless of whether enforcement is sought in equity or at law) or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to
or limiting creditors’ rights generally.

(c) The representations and warranties contained in
Section 6 of the Amended Loan Servicing Agreement are correct after giving
effect to this Second Amendment on and as of the Second Amendment Effective Date
as though made on and as of the Second Amendment Effective Date (except to the
extent such representations and warranties expressly relate to an earlier
date.

(d) As of the date of this Second Amendment, it does not have,
and hereby waives, remises and releases any claims or causes of action of any
kind against the Administrative Agent, any Lender or any of their officers,
directors, employees, agents, attorneys, or representatives, or against any of
their respective predecessors, successors, or assigns relating in any way to any
event, circumstance, action, or omission relative to any of the Loan Documents
or any transaction contemplated thereby, from the beginning of time through the
date of this Second Amendment.

2

 

5. Reference to and Effect on Loan Documents. 

(a) Upon the effectiveness of this Second Amendment pursuant to
Section 3 hereof, on and after the Second Amendment Effective Date, each
reference to the Loan Servicing Agreement or the other Loan Documents shall mean
and be a reference to the Loan Servicing Agreement and the other Loan Documents,
respectively, as amended hereby.

(b) The execution, delivery and effectiveness of this Second
Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of the Administrative Agent or the Lenders nor
constitute a waiver of any provision of any of the Loan Documents, or any other
documents, instruments and agreements executed and/or delivered in connection
therewith.

6. Miscellaneous. 

(a)
Continued Effectiveness of the Loan Servicing Agreement. Except as
otherwise expressly provided herein, the Loan Servicing Agreement, as amended
hereby, and the other Loan Documents are, and shall continue to be, in full
force and effect and are hereby ratified and confirmed in all respects, except
that on and after the Second Amendment Effective Date all references in the
other Loan Documents to the “Loan Servicing Agreement”, “thereto”, “thereof”,
“thereunder” or words of like import referring to the Loan Servicing Agreement
shall mean the Amended Loan Servicing Agreement.

(b)
Counterparts. This Second Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
this Second Amendment by facsimile or electronic mail shall be equally as
effective as delivery of an original executed counterpart of this Second
Amendment.

(c)
Headings. Section headings herein are included for convenience of
reference only and shall not constitute a part of this Second Amendment for any
other purpose.

(d)
Costs and Expenses. Bosco agrees to pay on demand all reasonable fees,
costs and expenses (including reasonable legal fees and expenses) of the
Administrative Agent, Servicer and the Lenders in connection with the
preparation, execution and delivery of this Second Amendment.

(e)
Amendment as Loan Document. Bosco and the Servicer hereby acknowledge and
agree that this Second Amendment constitutes a “Loan Document” under the Loan
Agreement. Accordingly, it shall be an Event of Default under the Loan Agreement
if any representation or warranty made by Bosco or the Servicer under or in
connection with this Second Amendment shall have been untrue, false or
misleading in any material respect when made.

3

 

(f)
Governing Law. This Second Amendment shall be governed by the laws of the
State of New York.

(g)
Waiver of Jury Trial. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS SECOND AMENDMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS.

[Remainder of this
Page Intentionally Left Blank.] 

4

 

IN
WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be
executed and delivered as of the date first above written. 

	 	 	 	 	 
	 	FRANKLIN CREDIT MANAGEMENT
    CORPORATION
 	 
	 	By:  	/s/
      Kevin Gildea  	 
	 	 	Name:  	Kevin Gildea 	 
	 	 	Title:  	Chief Legal Officer 	 
	 

Signature Page to
Second
Amendment
to Loan
Servicing
Agreement 

 

	 	 	 	 	 
	 	BOSCO CREDIT LLC
 	 
	 	By:  	/s/
      Thomas Axon  	 
	 	 	Name:  	Thomas Axon 	 
	 	 	Title:  	Managing Member 	 
	 

Signature Page to
Second
Amendment
to Loan
Servicing
Agreement 

 

	 	 	 	 	 
	
      STATE OF NEW
      JERSEY
	 	)	 	 
	
       
	 	)	 	ss:
	
      COUNTY OF
      HUDSON
	 	)	 	 

On
the 28th day of
October, 2009 before me, a Notary Public in and for said State,
personally appeared Kevin Gildea, known to me to be Chief Legal
Officer of Franklin Credit Management Corporation the corporation
that executed the within instrument and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument. 

IN
WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day and
year in this certificate first above written. 

	 	 	 	 	 
	 	 	 
	 	/s/
      Donna M. Bonfiglio  	 
	 	Notary Public
 	 
	 	My Commission expires February 25,
      2011	 
	 

Signature Page to
Second
Amendment
to Loan
Servicing
Agreement 

 

	 	 	 	 	 
	
      STATE OF NEW
      JERSEY
	 	)	 	 
	
       
	 	)	 	ss:
	
      COUNTY OF
      HUDSON
	 	)	 	 

On
the 28th day of
October, 2009 before me, a Notary Public in and for said State,
personally appeared Thomas Axon, known to me to be Managing Member
of Bosco Credit LLC the corporation that executed the within instrument
and also known to me to be the person who executed it on behalf of said
corporation, and acknowledged to me that such corporation executed the within
instrument. 

IN
WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day and
year in this certificate first above written. 

	 	 	 	 	 
	 	 	 
	 	/s/
      Donna M. Bonfiglio  	 
	 	Notary Public
 	 
	 	My Commission expires February 25,
      2011	 
	 

Signature Page to
Second
Amendment
to Loan
Servicing
Agreement 

 

EXHIBIT D 

SERVICING FEE
SCHEDULE 

AMOUNT OF
SERVICING FEE. 

In return for services
rendered by Franklin Credit for the Owner, Franklin Credit will be compensated
with a monthly servicing fee for each month equal to the sum of (x) the
greater of $50,000 or the amounts determined pursuant to paragraphs I and II
below and (y) any amounts arising under paragraph III below. 

Servicing: 

	 	I.	 	For Mortgage Loans less than 180 days contractually past
      due, Servicing Fees:

	 	a)	 	Franklin Credit will be paid a monthly servicing fee at a Servicing
      Fee Rate equal to (x) the highest daily aggregate outstanding
      principal balance of such Mortgage Loans serviced by the Servicer for the
      previous month), times (y) ***, divided by (z) twelve. Each
      month the Servicer will retain or receive an amount equal to such
      servicing fee.
	 
	 	b)	 	Franklin Credit will be paid ***, of the amount of each
      principal payment indefeasibly collected, in each instance of the Mortgage
      Loans serviced by Servicer for the Owner pursuant to the Loan Servicing
      Agreement.

	 	II.	 	Other Fees

	 	A.	 	For Mortgage Loans less than 180 days contractually past due,
      Ancillary Fees paid by borrowers to be retained by Franklin Credit (income
      derived from Mortgage Loans):

	 	a.	 	Subordination fees
	 
	 	b.	 	Insufficient fund fees
	 
	 	c.	 	Late Payment Fees
	 
	 	d.	 	Prepayment Penalty Fees
	 
	 	e.	 	Release Fees
	 
	 	f.	 	Satisfaction fees
	 
	 	g.	 	All other incidental fees and charges received by Franklin
      Credit

	 	B.	 	For all Mortgage Loans, Loan Level
Charges:

	 	a)	 	Loan Set Up Fee: $*** per Mortgage Loan
	 
	 	b)	 	Deboarding Fee: $*** per Mortgage Loan (exclusive of out of
      pocket transfer related expenses)

	 	C.	 	For all Mortgage Loans 180 or more days contractually past due,
      Resolution Fees:

					
	 
	Recovery Collection	 	 	 	 
	(judgments and unsecured loans) 	 	*** of recovered amount per loan 	 	 

	 	III.	 	For all Mortgage Loans, Servicing Advances and Door Knock
      fees:

i

 

A. Servicing
Advances: Third party charges (e.g., force place insurance, credit reports,
title searches, tax searches, appraisal/ bpo, legal fees, reo maintenance,
taxes, insurance etc.) + Advances reimbursed to Franklin Credit. 

B. Face to Face
“Door Knock” field contact services: Upon request, at a fee to be negotiated
by the parties in good faith, and subject to the terms and conditions of a
separate written agreement mutually acceptable to the parties. 

With respect to
subparagraphs A and B, above, the Owner and Servicer agree and acknowledge that
Servicer will not or be required to perform any Face to Face “Door Knock” field
contact services or make any Servicing Advances that individually or in the
aggregate would result in a cost or expense to the Owner of more than $10,000
per month, without the prior written consent and approval of the Lenders.

DEFERRAL OF A
PORTION OF SERVICING FEE. 

To the extent the
amounts included in the Servicing Fee by virtue of paragraphs I and II above for
any month exceeds the greater of (x) $50,000 or (y) 10% of the total cash
collected on the Mortgage Loans for such month (the Monthly Cap”), payment of
the excess amount shall be deferred (without accruing interest during the period
of deferral). The cumulative amounts deferred, if any, shall be paid
(i) with the payment of the Servicing Fees for any month in which the
applicable Monthly Cap exceeds the Servicing Fees otherwise payable, up to the
amount of such excess, and (ii) to the extent not previously paid, on the date
on which any of the Notes under the Loan Agreement, is repaid, refinanced,
released, accelerated, or the amounts owing thereunder increased (other than by
accrual or capitalization of interest), provided, however, that if the deferred
Servicing Fees become payable by reason of acceleration of the Notes, the
Lenders’ right to payment under such Notes shall be prior in right of payment to
Servicer’s rights to such deferred Servicing Fees. Any Servicing Fees deferred
prior to the date of this Second Amendment shall be subject to payment in
accordance with the terms of this paragraph. 

ii

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