Document:

<PAGE>
                                                                    Exhibit 10.2

                                   AGREEMENT

      THIS AGREEMENT (the "Agreement") is entered into as of December 30, 2004,
between Franklin Credit Management Corporation, a New York corporation (the
"Company" ), having its principal office at Six Harrison Street, New York, New
York 10013, and Sky Bank, an Ohio banking corporation (the "Bank"), having an
office at 110 East Main Street, Salineville, Ohio 43945.

      WHEREAS, the Company and the Bank are, inter alia, parties to the Master
Credit and Security Agreement dated October 13, 2004 (the "Master Agreement");
and

      WHEREAS, the Company and the Bank desire to amend and clarify Section 2.10
of the Master Agreement;

      NOW, THEREFORE, the parties hereto hereby agree as follows:

1.    Section 2.10 of the Master Agreement provides for the payment of a Success
Fee to Sky, generally equal to the lesser of fifty basis points (0.50%) of the
original amount of the Company Subsidiary Loan or fifty percent (50%) of the
remaining cashflows of the Pledged Mortgage Loans after the payoff of the
Company Subsidiary Loan. The Company represents that, in addition to any Success
Fees paid to the Bank prior to the date hereof, a minimum aggregate of
$2,952,830 in Success Fees will be payable in accordance with the Master
Agreement on account of Company Subsidiary Loans originated prior to December
31, 2003. See Schedules A.

2.    In addition, the Company represents that additional success fees equal to
fifty basis points (0.50%) of the original amount of loans to subsidiaries of
Tribeca Lending Corp. originated prior to December 31, 2003 ("Tribeca Success
Fees") are to be paid to the Bank. See Schedule B. The Tribeca Success Fees
shall be paid in equal monthly installments of $8,000 over a period of 23 months
beginning in January of 2005, with a final payment of $13,773 due in December
2006 for a total amount of $197,773.

3.    The Company and the Bank agree that no additional Success Fees shall be
payable on loans specified in Schedule C and Schedule D after the date of this
Agreement.

4.    The Company and the Bank agree to amend the Master Agreement as soon as
practicable under Section 11.6 thereof, to conform the Master Agreement with the
provisions of this Agreement.

5.    Capitalized terms not defined herein have the meaning prescribed by the
Master Agreement.
<PAGE>
6.    Schedules A, B, C and D are specifically incorporated by reference into
and made part of this Agreement.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first above written.

                                    COMPANY:

                                    FRANKLIN CREDIT MANAGEMENT CORPORATION

                                    By___________________________________

                                        Printed Name:
                                        Title:

                                    BANK:

                                    SKY BANK

                                    By___________________________________

                                        Jerry S. Sutherin
                                        Vice President

                                       2<PAGE>
                                                                    Exhibit 10.3

                    WAREHOUSING CREDIT AND SECURITY AGREEMENT

                                     between

                           TRIBECA LENDING CORPORATION

                                    Borrower

                                       and

                                    SKY BANK

                                     Lender
<PAGE>
                                 TABLE CONTENTS

<TABLE>
<CAPTION>
SECTION                                HEADING                              PAGE
<S>               <C>                                                       <C>
ARTICLE I         DEFINITIONS..............................................   1

      Section           Definitions........................................   1
      Section 1.        Other Definitional Provisions......................   1

ARTICLE II        THE CREDIT...............................................   5

      Section 2.1.      The Commitment.....................................   5
      Section 2.2.      Procedures for Obtaining Advances..................   5
      Section 2.2.      Note...............................................   6
      Section 2.4.      Interest and Transaction Fees......................   6
      Section 2.5.      Principal Payments.................................   7
      Section 2.6.      Expiration and/or Termination of Commitment........   7
      Section 2.7.      Method of Making Payment; Reduction in Commitment..   8
      Section 2.8.      Late Payments Fees.................................   9
      Section 2.9.      Net Payments.......................................   9
      Section 2.10.     Commitments Fees...................................   9
      Section 2.11.     Premiums and Points................................   9

ARTICLE III       COLLATERAL...............................................   9

      Section 3.1.      Assignment and Grants of Security..................   9
      Section 3.2.      Guaranties.........................................  10
      Section 3.3.      Delivery of Addition Collateral or Mandatory
                        Prepayment.........................................  10
      Section 3.4.      Right of Redemption form Pledge....................  10
      Section 3.5.      Collection and Servicing Rights....................  10
      Section 3.6.      Return of Collateral at End of Commitment..........  11

ARTICLE IV        CONDITIONS PRECEDENT.....................................  11

      Section 4.1.      Initial Advance....................................  11
      Section 4.2.      Each Advance.......................................  11

ARTICLE V         REPRESENTATIONS AND WARRANTIES...........................  13
</TABLE>
<PAGE>
<TABLE>
<S>               <C>                                                       <C>

      Section 5.1.      Organization Good Standing; Subsidiaries...........  13
      Section 5.2.      Authorization and Enforceability...................  13
      Section 5.3.      Approvals..........................................  14
      Section 5.4.      Financial Conditions...............................  14
      Section 5.5.      Litigation.........................................  14
      Section 5.6.      Compliance with Laws...............................  14
      Section 5.7.      Regulations U......................................  14
      Section 5.8.      Investment Company Act.............................  14
      Section 5.9.      Payment Taxes......................................  15
      Section 5.10.     Agreements.........................................  15
      Section 5.11.     Title Of Properties................................  15
      Section 5.12.     ERISA..............................................  15
      Section 5.13.     Eligibility........................................  15
      Section 5.14.     Special Presentations Concerning Collateral........  15

ARTICLE VI        AFFIRMATIVE CONVENANTS...................................  18

      Section 6.1.      Payment of Note....................................  18
      Section 6.2.      Financial Statements and Other Reports.............  18
      Section 6.3.      Maintenance of Existence; Conduct Business.........  19
      Section 6.4.      Compliance with Applicable Laws....................  20
      Section 6.5.      Inspection of Property and Books...................  20
      Section 6.6.      Notice.............................................  20
      Section 6.7.      Payment of Debt, Taxes, etc........................  20
      Section 6.8       Insurance..........................................  21
      Section 6.9.      Insured Closings...................................  21
      Section 6.10.     Purchased Loans....................................  21
      Section 6.11.     Other Loan Obligations.............................  21
      Section 6.12.     Use of Proceeds of Advances........................  21
      Section 6.13.     Special Affirmative Covenants Concerning
                        Collateral.........................................  21

ARTICLE VII       NEGATIVE CONVENANTS......................................  23

      Section 7.1.      Contingent Liabilities.............................  23
      Section 7.2.      Merger; Sale of Assets; Acquisitions; Change in
                        Control; Change of Senior Management...............  23
      Section 7.3.      Loss of Eligibility................................  23
      Section 7..4.     Special Negative Covenant Concerning Collateral....  23

ARTICLE VIII      DEFAULTS REMEDIES........................................  23

      Section 8.1.      Events of Default..................................  23
      Section 8.2       Remedies...........................................  25
      Section 8.3.      Application of Proceeds............................  27
      Section 8.4.      Bank Appointed Attorney-in-Fact....................  28
</TABLE>

                                      LIT
<PAGE>
<TABLE>
<S>               <C>                                                       <C>
      Section 8.5       Right of Set-off...................................  28
      Section 8.6.      Reasonable Assurances..............................  28

ARTICLE IX        REIMBURSEMENT OF EXPENSES; INDEMNITY.....................  28

      Section 9.1.      Cost of Enforcement................................  29
      Section 9.2.      Payments of Taxes..................................  29
      Section 9.3.      Indemnification....................................  29

ARTICLE X         DELIVERIES OF COLLATERAL DOCUMENTS.......................  29

ARTICLE IX        MISCELLANEOUS............................................  30

      Section 11.1.     Relationship of Parties............................  30
      Section 11.2.     Recourse...........................................  30
      Section 11.3.     Notices............................................  30
      Section 11.4.     Terms Binding Upon Successors; Survival............  31
      Section 11.5.     Assignment.........................................  31
      Section 11.6.     Amendments.........................................  31
      Section 11.7.     No Waiver; Remedies Cumulative.....................  31
      Section 11.8.     Invalidity.........................................  31
      Section 11.9.     Participants.......................................  31
      Section 11.10.    Integration........................................  32
      Section 11.11.    Additional Instruments, etc........................  32
      Section 11.12.    Governing Law......................................  32
      Section 11.13.    Company Information................................  32
      Section 11.14.    Counterparts.......................................  32

Exhibit A               Promissory Note

Exhibit B               Guaranty of Franklin Credit Management Corporation

Exhibit C               Advance Request Form

Exhibit D               Procedures and Documentation for Warehouse
                        Residential Mortgage Loans

Exhibit E               Bailee Letter

Exhibit F               Power of Attorney

Exhibit G               Underwriting Standards

Exhibit H               Officer's Certificate
</TABLE>

                                      LIT
<PAGE>
                   WAREHOUSING CREDIT AND SECURITY AGREEMENT

      THIS WAREHOUSING CREDIT AND SECURITY AGREEMENT (the "Agreement") is
entered into as of September 30, 2003, between Tribeca Lending Corporation, a
New York corporation (the "Company" or the "Borrower"), having its principal
office at Six Harrison Street, New York, New York 10013, and Sky Bank, an Ohio
banking corporation (the "Bank"), having an office at 110 East Main Street,
Salineville, Ohio 43945.

      WHEREAS, the Company has requested the Bank, and the Bank is willing, to
extend a revolving warehousing line of credit to the Company to finance the
making and the purchasing of residential mortgage loans, and the parties desire
to set forth herein the terms and conditions under which Advances under the
revolving warehousing line of credit shall be made and security provided for the
repayment thereof~

      Now, THEREFORE, the parties hereto hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

      Section 1.1. Defined Terms. Capitalized terms defined below or elsewhere
in THIS Agreement (including the Exhibits hereto) shall have the following
meanings:

      "Advance" means a disbursement by the Bank under the Commitment, including
readvances of funds previously advanced to the Company and repaid to the Bank.

      "Advance Request" has the meaning set forth in Section 2.2(a) hereof

      "Affiliate" has the meaning set forth in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act.

      "Agreement" means this Warehousing Credit and Security Agreement, either
as originally executed or as it may from time to time be supplemented, modified
or amended.

      "Bank" has the meaning set forth in the first paragraph of this Agreement.

      "Business Day" means any day excluding Saturday, Sunday and any day which
is a legal holiday for banks under the laws of the State of Ohio.

      "Collateral" has the meaning set forth in Section 3.1 hereof

      "Collateral Documents" has the meaning set forth in Section 2.2(b) hereof

      "Commitment" has the meaning set forth in Section 2.1(a) hereof.

      "Company" has the meaning set forth in the first paragraph of this
Agreement.

                                        1
<PAGE>
      "Conventional Mortgage Loan" means a Mortgage Loan other than a
FHA-insured or VA-guaranteed Mortgage Loan.

      "Custodian" means the organization which holds documents relating to
pooled Mortgage Loans on the Company's behalf

      "Debt" means, with respect to any Person, at any date (a) all indebtedness
or other obligations of such Person which, in accordance with GAAP, would be
included in determining total liabilities as shown on the liabilities side of a
balance sheet of such Person at such date; (b) all indebtedness or other
obligations of such Person for borrowed money or for the deferred purchase price
of property or services; (c) all indebtedness or other obligations of any other
Person for borrowed money or for the deferred purchase price of property or
services in respect of which such Person is liable, contingently or otherwise,
to pay or advance money or property as guarantor, endorser, or otherwise (except
as endorser of negotiable instruments for collection in the ordinary course of
business), or which such Person has agreed to purchase or otherwise acquire; and
(d) all indebtedness for borrowed money or for the deferred purchase price of
property or services secured by a Lien on any property owned or being purchased
by such Person (even though such Person has not assumed or otherwise become
liable for the payment of such indebtedness).

      "Default" means the occurrence of any event or existence of any condition
which, but for the giving of notice, the lapse of time, or both, would
constitute an Event of Default.

      "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time and any successor statute.

      "Event of Default" means any of the conditions or events set forth in
Section 8.1 hereof

      "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor statute.

      "FHA" means The Federal Housing Administration of the United States
Department of Housing and Urban Development and any successor thereto.

      "FHLMC" means The Federal Home Loan Mortgage Corporation and any successor
thereto.

      "Floating Rate" has the meaning set forth in Section 2.4(a) hereof

      "FNMA" means The Federal National Mortgage Association and any successor
thereto.

      "GAAF" means generally a accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, which are applicable to the circumstances as of the date of
determination.

      "GNMA" means Government National Mortgage Association or any successor
thereto.

                                       2
<PAGE>
      "HUD" means the United States Department of Housing and Urban Development
or any successor thereto.

      `Indemnified Liabilities "has the meaning set forth in Section 9.3 hereof

      "Index" has the meaning set forth in Section 2.4 (a) hereof

      "Insurer" means FHA, VA or a private mortgage insurer, as applicable.

      "Internal Revenue Code" means the Internal Revenue Code of 1986, or any
subsequent federal income tax law or laws, as any of the foregoing have been or
may from time to time be amended.

      "Investor" means a financially responsible institution (which is deemed
acceptable by the Bank in its s ole discretion) purchasing Mortgage Loans from
the Company pursuant to a Purchase Commitment.

      "Lien" means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest).

      "Margin Stock" has the meaning assigned to that term in Regulation U of
the Board of Governors of the Federal Reserve System as in effect from time to
time.

      "Mortgage" means either (1) a first-lien mortgage, deed of trust, security
deed or similar instrument on improved real property; or (2) a second-lien
mortgage, deed of trust, security deed or similar instrument on improved real
property insured under Title I of the National Housing Act, 12 U.S.C. 1701 et
seq.

      "Mortgage Loan" means any loan evidenced by a Mortgage Note. A Mortgage
Loan, unless otherwise expressly stated herein, means a Residential Mortgage
Loan.

      "Mortgage Loan Documents" means the Mortgage, Mortgage Note, credit and
closing packages, disclosures, and all other files, records and documents
necessary to establish the eligibility of the Mortgage Loans for mortgage
insurance or guarantee by an Insurer or for purchase by an Investor.

      "Mortgage Note" means a note secured by a Mortgage and evidencing a
Mortgage Loan.

      "Mortgage Note Amount" means the outstanding unpaid principal amount of a
Mortgage Note at the time such Mortgage Note is pledged to the Bank.

      "Multiemployer Plan" means a "multiemployer plan" as defined in Section
400l(a)(3) of ERISA which is maintained for employees of the Company or a
Subsidiary of the Company.

      "Note" has the meaning set forth in Section 2.3 hereof

      "Notices" has the meaning set forth in Section 11.3.

      "Officers' Certificate" means a certificate executed on behalf of the
Company by its vice

                                       3
<PAGE>
president, cashier or other appropriate officer.

      "Person" means and includes natural persons, corporations, limited
liability companies, partnerships, joint stock companies, joint ventures,
associations, companies, trusts, banks, trust land trusts, business trusts or
other organizations, whether or not legal entities, and companies, governmental
agencies and political subdivisions thereof.

      "Plans" has the meaning set forth in Section 5.12 hereof

      "Pledged Mortgages" has the meaning set forth in Section 3.1(a) hereof

      "Purchase Commitment" means a written commitment, in form and substance
reasonably satisfactory to the Bank, issued in favor of the Company by an
Investor pursuant to which that Investor commits to purchase one or more
Mortgage Loans, along with the related correspondent or whole loan purchase
agreement by and between the Company and the Investor, in form and substance
reasonably satisfactory to the Bank, governing the terms and conditions of any
such purchases.

      "Redemption Amount" has the meaning set forth in Section 3.3 hereof

      `Residential Mortgage Loan "means a Mortgage Loan secured by a Mortgage
covering improved real property containing one- to four-family residences.

      "Statement Date" has the meaning set forth in Section 4.1(a~(6) hereof

      "Subsidiary" means any corporation, association or other business entity
in which more than fifty percent (50%) of the total voting power or shares of
stock entitled to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by any
Person or one or more of the other Subsidiaries of that Person or a combination
thereof

      "VA" means the Department of Veterans Affairs and any successor thereto.

      "Wet Settlement" means a closing or settlement of a Residential Mortgage
Loan wherein the Bank is requested to make an advance to the Company based upon
delivery of the Collateral

      Documents to a third person as agent for or on behalf of the Bank, but
prior to examination of the Collateral Documents by the Bank.

      Section 1.2. Other Definitional Provisions. (a) Accounting terms not
otherwise defined herein shall have the meanings given them under GAAP.

      (b) Defined terms may be used in the singular or the plural, as the
context requires.

                                       4
<PAGE>
                                   ARTICLE II

                                   THE CREDIT

      Section 2.1. The Commitment. (a) Subject to the terms and conditions of
this Agreement and provided no Default has occurred and is continuing, the Bank
agrees, from time to time during the period from the date hereof to the
expiration date as provided in Section 2.6 hereof, to make Advances to, or on
behalf of, the Company, provided the total aggregate principal amount which is
outstanding at any one time of all such Advances shall not exceed Thirty Million
Dollars ($30,000,000.00) without written request by the Company and subsequent
approval by an officer of the Bank. The obligation of the Bank to make .Advances
hereunder up to such limits or the amount to which such limit may be reduced
pursuant to Section 2.7(b) hereof, is hereinafter referred to as the
"Commitment" Within the Commitment, the Company may borrow, repay and reborrow.

      (b) Advances shall be used by the Company solely for the purpose of
funding or financing the purchase or origination of Mortgage Loans and shall be
made at the request of the Company, in the manner hereinafter provided in
Section 2.2, against the pledge of such Mortgage Loans.

      (c) No Advance shall exceed one hundred percent (100%) of the lower of (i)
the Mortgage Note Amount or (ii) the committed purchase price set forth in the
Purchase Commitment for the related Pledged Mortgages.

      (d) No Advance shall be used by the Company for the purpose of
repurchasing Mortgage Loans that were sold by the Company to an Investor.

      Section 2.2. Procedures for Obtaining Advances. (a) The Company may obtain
an Advance hereunder, subject to the satisfaction of the conditions set forth in
Sections 4.1 and 4.2 hereof, upon compliance with the procedures set forth in
this Section 2.2. Requests for Advances shall be initiated by the Company by
delivering to the Bank a completed and signed request for an Advance (an
"Advance Request") on the then current form therefor approved by the Bank and
provided to the Company. The current form in use by the Bank is set forth in
Exhibit C hereto. The Bank shall have the right to revise or supplement approved
forms of Advance Request by giving prior written-notice thereof to the Company.

      (b) The procedures to be followed by the Company in making an Advance
Request for the origination of Mortgage Loans, and the documents relating to the
Collateral described in the Advance Request (the "Collateral Documents")
required to be delivered to the Bank, shall consist of those set forth in the
following described Exhibit D attached hereto and hereby made part hereof
entitled: Procedures and Documentation for Warehousing Residential Mortgage
Loans, as set forth in Exhibit D hereto. Unless the related Advance is no longer
outstanding, the Company shall require the remaining Collateral Documents, as
set forth in the aforementioned Exhibit D, to be furnished to the Bank within
three (3) Business Days after the date of the Wet Settlement.

      The Bank shall have the right, on not less than three (3) Business Days'
prior notice to the Company, to modify said Exhibit(s) to conform to current
legal requirements or Bank practices, and, as so modified, said Exhibit shall be
deemed part hereof.

      (c) Before funding any Advance, the Bank shall have twenty four (24) hours
to examine each Advance Request and the Collateral Documents to be delivered
prior to the Advance, as set forth in Exhibit D hereto, and may reject such of
them as do not meet the requirements of this Agreement.

                                       5
<PAGE>
      (d) To make an Advance, the Bank shall debit the Company's warehousing
credit line account for the amount of the Advance and, unless otherwise agreed
to by the Bank, the Bank shall deposit the proceeds of such Advance to the
Company's operating account no. 402620085 with the Bank.

      (e) All Advances under this Agreement shall constitute a single
indebtedness and all of the Collateral shall be security for the Note and for
the performance of all obligations of the Company to the Bank.

      Section 2.3. Note. The Company's obligation to pay the principal of, and
interest on, all Advances made by the Bank shall be evidenced by the promissory
note (the "Note ") of the Company dated as of the date hereof substantially in
the form of Exhibit A attached hereto. The term "Note" shall include all
extensions, renewals and modifications of the Note and all substitutions
therefor. All terms and provisions of the Note are incorporated herein.

      Section 2.4. Interest & Transaction Fees. (a) The unpaid amount of each
Advance shall bear interest, payable monthly, from the date of such Advance
until paid in full, at a floating rate of interest (the "Floating Rate ") from
time to time (computed on the basis of a 360-day year and applied to the actual
number of days elapsed in each interest calculation period) which is equal to
Index; provided, however, that the Floating Rate shall not be less than five
percent (5%) per annum. As used herein, the term "Index" shall mean the
independent index which is The Wall Street Journal Prime Rate. The Index is not
necessarily the lowest rate charged by the Bank on its loans. If the Index
becomes unavailable during the term of this Agreement, the Bank may designate a
substitute Index after written notice to the Company. The Floating Rate will be
adjusted as of the effective date of each change in the Index. Interest will be
billed monthly and will be due within ten (10) days of the issuance of the
relevant monthly billing statement.

      (b) The Company shall pay the Bank a transaction fee equal to Twenty-Five
Dollars ($25.00) for each Mortgage Loan financed by an Advance under the terms
of this Agreement which fee shall be billed monthly and will be due within ten
(10) days of the issuance of the relevant monthly billing statement.

      (c) The holder of the Note is hereby authorized to record the date and
amount of each payment of principal and interest, and applicable interest rates
and other information with respect thereto, on the schedules annexed to and
constituting a part of the Note and any such recordation shall constitute prima
facie evidence of the accuracy of the information so recorded; provided,
however, that the failure to make a notation or the inaccuracy of any notation
shall not limit or otherwise affect the obligations of the Company hereunder or
thereunder.

      Section 2.5. Principal Payments. (a) The outstanding principal amount of
each Advance shall be payable in frill upon the earliest to occur of (i) the
occurrence of any event described in Section 2.5(c) hereof with respect to such
Advance, or (ii) expiration or termination of the Commitment.

      (b) The Company shall have the right to prepay the outstanding Advances in
whole or in part, from time to time, without premium or penalty or advance
notice.

      (c) The Company shall be obligated to pay to the Bank, without the
necessity of prior demand or notice from the Bank, and the Company authorizes
the Bank to charge its account for, the amount of any

                                       6
<PAGE>
outstanding Advance against a specific Mortgage Loan that has been originated
with the intent to sell to an Investor, upon the occurrence of any of the
following events:

            (1) One hundred twenty (120) calendar days elapse from the date of
      the Advance;

            (2) Ten (10) Business Days elapse from the date the Collateral
      Documents relating to a Mortgage Loan against which an Advance was made,
      were required to be received by the Bank without the actual receipt
      thereof;

            (3) Thirty (30) calendar days elapse from the date a Collateral
      Document was delivered to the Company for correction or completion,
      without being returned to the Bank, or such Collateral Documents, upon
      examination by the Bank, are found not to be in compliance with the
      requirements of this Agreement or the related Purchase Commitment;

            (4) A nonmonetary default, as defined in the applicable Mortgage,
      occurs under the Mortgage Loan with respect to which such Advance was made
      and remains uncured for a period of thirty (30) calendar days;

            (5) Upon sale of the Mortgage Loan; and

            (6) Upon a determination that a Mortgage Loan is a fraudulent loan.

Upon making such payment to the Bank, the Company shall be deemed to have
redeemed such Mortgage Loan from pledge, and the Collateral Documents relating
thereto shall be promptly released by the Bank to the Company or to the
applicable Investor. The Bank agrees to take such other steps reasonably
requested by the Company in connection with such release.

      At the end of each month, ninety-eight percent (98%) of the amount which
the Company pays to the Bait under items (t) or (4) of this subsection (c) shall
come from, or shall be repaid from, the Company's Affiliate senior credit
facility with the Bank.

      Section 2.6. Expiration and/or Termination of Commitment. (a) Unless
terminated earlier as permitted hereunder, the Commitment shall expire of its
own term, and without the necessity of action by the Bank, three hundred
sixty-four (364) days following the date of execution of this Agreement.
Notwithstanding anything to the foregoing, for any Advance made by the Bank
prior to the termination date, the Company shall still have one hundred twenty
(120) days from the date of the Advance to pay the Bank the amount of any
outstanding Advance.

      (b) The Bank shall have the right, without cause, at any time to terminate
the Agreement on not less than sixty (60) days' prior written notice to the
Company.

      (c) The Bank shall have the right to terminate this Agreement and any line
of credit extended to the Company pursuant to the terms of this Agreement, upon
any adverse material change in the Company's financial condition as defined by
the Bank in its reasonable discretion during the term of this Agreement upon
written notice to the Company. Such an adverse change of financial condition
will include, but not be limited to the occurrence of any one or more of the
events listed in Section 6.6 hereto. For purposes of this Section 2.6(c), the
term "adverse material change" means Company's failure to comply with and
maintain during the term of this Agreement any of the Financial Requirements set
forth under Section 6.13

                                       7
<PAGE>
      (d) The Bank shall have the right from time to time and in its sole
discretion, to extend the term of this Agreement with prior written notice to
the Company. The length of any such extension shall also be determined in the
Bank's sole discretion. Such extension may be made subject to the renegotiation
of the terms hereunder and to any other such conditions as the Bank may deem
necessary. Under no circumstances shall such an extension by the Bank be
interpreted or construed as the Bank's forfeiture of any of its rights,
entitlements or interest created hereunder. The Company acknowledges and
understands that the Bank is under no obligation whatsoever to extend the term
of this Agreement beyond its expiration date as originally stated in this
Agreement.

      Section 2.7. Method of Making Payments; Reductions in Commitment. (a)
Except as otherwise specifically provided herein, all payments hereunder shall
be received by the Bank on the date when due and shall be made in lawful money
of the United States of America in immediately available funds at the office of
the Bank, at East Liverpool, Ohio, P.O. Box 5399, zip code 43920, or at such
other place as the Bank from lime to time shall designate. Whenever any payment
to be made hereunder or under the Note shall be stated to be due on a day which
is not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, the
interest thereon shall be payable at the applicable rate during such extension.
Funds received by the Bank after 4:00 p.m. (East Liverpool, Ohio, time) on a
Business Day shall be deemed to have been paid by the Company on the next
succeeding Business Day.

      (b) The Company shall have the right, at any time and from time to time,
effective as of the first day of any calendar month, to terminate in whole or
permanently reduce in part, without premium or penalty, the amount of the
Commitment in excess of the then outstanding principal amount of all Advances
hereunder. The Company shall give written notice to the Bank designating the
date of such termination or reduction not less than five (5) Business Days'
prior to the date such termination or reduction is to take effect, and the
amount of any partial reduction of the Commitment shall be in an aggregate
minimum amount of One Hundred Thousand Dollars ($100,000.00) or integral
multiples of One Hundred Thousand Dollars ($100,000.00) in excess of that
amount.

      Section 2.8. Late Payment Fees. In the event the Company fails to make any
payment (whether of principal, interest or any other sum) on the date such
payment is due and payable hereunder or under the Note, and such failure
continues for more than fifteen (15) days after notice from the Bank, the
Company shall pay to the Bank, upon demand therefor, a late payment fee equal to
five percent (5%) of the amount of such payment or One Thousand Dollars
($1,000.00), whichever is greater.

      Section 2.9. Net Payments. All payments with respect to any Advance shall
be made without offset or counterclaim and free from any present or future
taxes, levies, imports, duties or other similar charges of whatsoever nature
imposed by any government or any political subdivision or taxing authority
hereof, other than any taxes on or measured by the net income of the Bank.

      Section 2.10. Commitment Fees. At the time of the first Advance, the
Company shall pay the Bank a loan origination fee of Fifteen Thousand Dollars
($15,000.00). Annually thereafter the Company shall pay the Bank a commitment
fee computed as follows: Fifteen Thousand Dollars ($15,000.00) multiplied by a
fraction, the numerator of which is equal to the average monthly unborrowed
amount of the Commitment during the previous year, and the denominator of which
is equal to the Commitment. The commitment fee shall be payable by the Company
to the Bank within thirty (30) days of the anniversary date of this Agreement.
The Bank shall provide the Company with a statement, within fifteen (15) days of
the anniversary date of this Agreement, showing its computation of the average

                                       8
<PAGE>
daily unborrowed amount of the Commitment for the previous year. Unless the
Company contests the accuracy of the Bank's statement within ten (10) days of
receipt, the Bank may debit the Company's warehousing credit line account for
the amount of the commitment fee.

      Section 2.11. Premiums. Any and all premiums received by the Company on
Mortgage Loans with respect to which Advances are made shall be applied by the
Company to pay the Bank.

                                   ARTICLE III

                                   COLLATERAL

      Section 3.1. Assignments and Grant of Security Interest. As security for
the payment of the Note and for the performance of all of the Company's
obligations hereunder, the Company hereby grants to the Bank a security interest
in all rights and interest of the Company in and to the following described
property (collectively, the "Collateral"):

            (a) All Mortgage Loans, including all Mortgage Notes and Mortgages
      evidencing such Mortgage Loans and the related Mortgage Loan Documents,
      which from time to time are delivered, or caused to be delivered, to the
      Bank (including delivery to a third party on behalf of the Bank) pursuant
      hereto or in respect of which an Advance has been made by the Bank
      hereunder (the "Pledged Mortgages");

            (b) All mortgage insurance and all commitments issued by Insurers to
      insure or guarantee any Mortgage Loans included in the Pledged Mortgages;
      all Purchase Commitments held by the Company covering the Pledged
      Mortgages and all proceeds resulting from the sale thereof to Investors
      pursuant thereto; and all personal property, contract rights, collection
      and servicing rights and servicing fees and income, accounts and general
      intangibles of whatsoever kind relating to the Pledged Mortgages, said
      Insurer commitments and the Purchase Commitments, and all other documents
      or instruments delivered to the Bank in respect of the Pledged Mortgages,
      including, without limitation, the right to receive all insurance proceeds
      and condemnation awards which may be payable in respect of the premises
      encumbered by any Pledged Mortgage;

            (c) All right, title and interest of the Company in and to all
      files, surveys, certificates, correspondence, appraisals, computer
      programs, tapes, discs, cards, accounting records, information and data of
      the Company relating to the foregoing;

            (d) All property of the Company, in any form or capacity now or at
      any time hereafter in the possession or direct or indirect control of the
      Bank relating to the Pledged Mortgages (including possession by a parent
      company, affiliate or subsidiary of the Bank); and

            (e) All products and proceeds of any and all of the foregoing.

      In addition to the foregoing grant of a security interest to the Bank in
the Collateral, the Company hereby assigns and delivers to the Bank all of the
following: (i) the Company's right (but not any liabilities of the Company)
under all Purchase Commitments now held or hereafter acquired by the Company
covering Pledged Mortgages and all proceeds resulting from the sale of Pledged
Mortgages pursuant thereto; and (ii) all rights of the Company (but not any
liabilities of the Company) with respect to Investors to the extent related to
the Pledged Mortgages. Upon the request of the Bank, the Company shall execute
any further document or instrument reasonably requested by the Bank to further
evidence or effectuate the assignments set forth in this subparagraph.

                                       9
<PAGE>
      Section 3.2. Guaranties. Contemporaneously with the signing of this
Agreement, the Company shall cause to be delivered to the Bank the Guaranty of
the parent company of the Company, namely Franklin Credit Management
Corporation, in the form attached to this Agreement as Exhibit B.

      Section 3.3. Delivery of Additional Collateral or Mandatory Prepayment. In
the event that the Bank shall in good faith determine at any time that the value
of the Collateral then pledged hereunder (such value being determined at such
time as if then being pledged under Section 3.1(a) hereof) is less than the
aggregate amount of the Advances then outstanding hereunder, the Company shall
within fifteen (15) Business Days after receipt of written notice from the Bank:
(a) deliver to the Bank for pledge hereunder additional Mortgage Loans, Purchase
Commitments and other related Collateral satisfactory to the Bank (each valued
at that time in accordance with Section 2.1(c) hereof) and/or cash, in aggregate
amounts sufficient to cover the difference between the value of the Collateral
pledged and the aggregate amount of Advances outstanding hereunder; or (b) repay
the Advances in an amount sufficient to reduce the aggregate balance thereof
outstanding to or below the value of the Collateral pledged hereunder.

      Section 3.4. Right of Redemption from Pledge. Provided no Default or Event
of Default has occurred and is continuing, the Company may redeem a Mortgage
Loan from pledge, by either (i) paying, or causing an Investor to pay, to the
Bank for application to prepayment of the principal balance of the Note, an
amount (the "Redemption Amount") equal to the then collateral value (each valued
at that time in accordance with Section 2.1(c) hereof) of the Mortgage Loan to
be released, but not less than the amount of the Advance made with respect to
such Mortgage Loan; or (ii) delivering substitute Collateral which, in addition
to being acceptable to the Bank in its sole discretion, will when included with
the Collateral, result in a collateral value (as determined in accordance with
Section 2.1(c) hereof) of all Collateral held by the Bank which is at least
equal to the aggregate outstanding Advances.

      Section 3.5. Collection and Servicing Rights. So long as no Event of
Default shall have occurred, the Company shall be entitled to service, receive
and collect directly all sums payable to the Company in respect of the
Collateral, except amounts payable to the Company for the purchase by any
Investor under a Purchase Commitment of any Mortgage Loans which are funded in
whole or in part with the proceeds of any Advance, which amounts shall be paid
directly to the Bank. The Company shall direct each Investor to pay the amounts
payable for the purchase of such Mortgage Loans directly to the Bank. Following
the occurrence of any Event of Default, the Bank shall thereafter, upon written
notice to the Company, be entitled to service, receive and collect all stuns
payable to the Company in respect of the Collateral, and in such case: (a) the
Bank in its discretion may, in its own name or in the name of the Company or
otherwise, demand, sue for, collect or receive any money or property at any time
payable or receivable on account of or in exchange for any of the Collateral,
but shall be under no obligation to do so; (b) the Company shall, if the Bank
requests, forthwith pay to the Bank at its principal office or such other place
as the Bank may designate all amounts thereafter received by the Company upon or
in respect or any of the Collateral, advising the Bank as to the source of such
funds; and (c) all amounts so received and collected by the Bank shall be held
by it as part of the Collateral.

      Section 3.6. Return of Collateral at End of Commitment. If (i) the
Commitment shall have expired or been terminated, and (ii) no Advances, interest
or other amounts evidenced by the Note or due under this Agreement shall be
outstanding and unpaid, the Bank shall promptly deliver or release all
Collateral in its possession to the Company. The Bank shall also execute and
deliver such assignments and other instruments and documents reasonably
requested by the Company to vest title in the Collateral into the Company. The
receipt of the Company for any Collateral released or delivered to the Company
pursuant

                                       10
<PAGE>
to any provision of this Agreement shall be a complete and full acquittance for
the Collateral so returned, and the Bank shall hereafter be discharged from any
liability or responsibility therefor.

                                   ARTICLE IV

                              CONDITIONS PRECEDENT

      Section 4.1. Initial Advance. The obligation of the Bank to make the
initial Advance is subject to the satisfaction, on or before the date thereof of
the following conditions precedent:

(a)   The Bank shall have received the following, all of which must be
satisfactory in form and content to the Bank, in its reasonable discretion:

                  (t) The Note duly executed by the Company;

                  (2) Certified copies of the Company's articles of organization
            and bylaws, and certificate of good standing dated no less recently
            than one (I) month prior to the date of the initial Advance;

                  (3) An original resolution of the board of directors of the
            Company, certified as of the date of this Agreement by its
            secretary, authorizing the execution, delivery and performance of
            this Agreement and the Note, and all other instruments or documents
            to be delivered by the Company pursuant to this Agreement;

                  (4) A certificate of the Company's secretary as to the
            incumbency and authenticity of the signatures of the officers of the
            Company executing this Agreement and the Note and each Advance
            Request and all other instruments or documents to be delivered
            pursuant hereto (the Bank being entitled to rely thereon until a new
            such certificate has been furnished to the Bank);

                  (5) Original financial statements of the Company for the most
            recent fiscal year-end containing a balance sheet and related
            statements of income and retained earnings (the "Statement Date ")
            and changes in financial position for the period ended on the
            Statement Date, all prepared in accordance with GAAIP applied on a
            basis consistent with prior periods and reasonably acceptable to the
            Bank;

                  (6) Copies of the certificates, documents or other written
            instruments which evidence the Company's eligibility described in
            Section 5.13 hereof, all in form and substance satisfactory to the
            Bank;

                  (7) Copies of the Company's errors and omissions insurance
            policy or mortgage impairment insurance policy and blanket bond
            coverage policy, or certificates in lieu of policies, all in form
            and content satisfactory to the Bank, showing compliance by the
            Company as of the date of the initial Advance with the related
            provisions of Section 6.8 hereof~ and

                  (8) A Power of Attorney to indorse negotiable instruments in
            the form of Exhibit F.

                                       11
<PAGE>
      Section 4.2. Each Advance. The obligation of the Bank to make the initial
and each subsequent Advance is subject to the satisfaction, as of the date of
each such Advance, of the following additional conditions precedent:

            (a) The Company shall have delivered to the Bank the Advance
      Request, and Collateral Documents called for under, and shall have
      satisfied the procedures set forth in, Sections 2.2(a) through 2.2(b)
      hereof and the applicable Exhibits hereto described in those Sections. All
      items delivered to the Bank must be reasonably satisfactory to the Bank in
      form and content, and the Bank may reject such of them as do not meet the
      requirements of this Agreement or as provided in Section 2.2(c).

            (b) The Bank shall have received evidence satisfactory to it as to
      the due filing and recording in all appropriate offices of all financing
      statements and other instruments as may be necessary to perfect the
      security interest of the Bank in the Collateral under the Uniform
      Commercial Code of the State of New York or other applicable law.

            (c) The representations and warranties of the Company contained in
      Article V hereof shall be true and correct in all material respects as if
      made on and as of the date of each Advance unless the same relates to an
      earlier date.

            (d) The Company shall have performed all agreements to be performed
      by it hereunder, respectively, and after giving effect to the requested
      Advance, there shall exist no Default or Event of Default hereunder.

            (e) The Company shall not have (i) incurred any material
      liabilities, direct or contingent, other than in the ordinary course of
      its business that would render it to be noncompliant with the financial
      requirements set forth in section 6.2 herein, since the dates of the
      Company's most recent financial statements theretofore delivered to the
      Bank, or (ii) experienced any other material adverse change in its
      business or operations.

      Acceptance of the proceeds of the requested Advance by the Company shall
be deemed a representation by the Company that all conditions set forth in this
Section 4.2 shall have been satisfied as of the date of such Advance.

                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

      In order to induce the Bank to enter into this Agreement and make each
Advance, the Company hereby represents and warrants to the Bank, as of the date
of this Agreement and as of the date of each Advance Request and of each
Advance, that:

      Section 5.1. Organization; Good Standing; Subsidiaries. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New York, has the full legal power and authority to own its
property and to carry on its business as currently conducted and is duly
qualified as a foreign corporation to do business and is in good standing in
each jurisdiction in which the transaction of its business makes such
qualification necessary, except in jurisdictions, if any, where a failure to be
in good standing has no material adverse effect on the business, operations,
assets or

                                       12
<PAGE>
financial condition of the Company. The Company has no Subsidiaries.

      Section 5.2. Authorization and Enforceability. The Company has the power
and authority to execute, deliver and perform this Agreement, the Note and all
other documents contemplated hereby or thereby. The execution, delivery and
performance by the Company of this Agreement, the Note and all other documents
contemplated hereby or thereby and the making of the borrowing hereunder and
thereunder, have been duly and validly authorized by all necessary corporate
action on the part of the Company (none of which actions have been modified or
rescinded, and all of which actions are in full force and effect) and do not and
will not conflict with or violate any provision of law or of the articles of
organization or bylaws of the Company, conflict with or result in a breach of or
constitute a default or require any consent under, or result in the creation of
any Lien upon any property or assets of the Company (other than pursuant to this
Agreement), or result in or require the acceleration of any indebtedness of the
Company pursuant to any agreement, instrument or indenture to which the Company
is a party or by which the Company or its property may be bound or affected.
This Agreement, the Note and all other documents contemplated hereby or thereby
constitute legal, valid, and binding obligations of the Company enforceable in
accordance with their respective terms, except as limited by Bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
and by general principles of equity.

      Section 5.3. Approvals. The execution and delivery of this Agreement, the
Note and all other documents contemplated hereby or thereby and the performance
of the Company's obligations hereunder and thereunder do not require any
license, consent, approval or other action of any state or federal agency or
governmental or regulatory authority.

      Section 5.4. Financial Condition. The balance sheet of the Company as at
the Statement Date, and the related statements of income and cash flows for the
fiscal year ended on the Statement Date, heretofore furnished to the Bank,
fairly present the financial condition of the Company as at the Statement Date
and the results of its operations for the fiscal period ended on the Statement
Date. The Company had, on the Statement Date, no known liabilities, direct or
indirect, fixed or contingent, matured or unmatured, or liabilities for taxes,
long-term leases or unusual forward or long-term commitments not disclosed by,
or reserved against in, said balance sheet and related statements, except as
heretofore disclosed to the Bank in writing or otherwise reflected on the
Company's balance sheet, and except for the Bank's extension(s) of credit to the
Company Except for financial statements prepared for interim periods between the
fiscal year-end, all financial statements were prepared in accordance with GAAP
applied on a consistent basis throughout the periods involved. Since the
Statement D ate, there has been no material adverse change in the business,
operations, assets or financial condition of the Company, nor is the Company
aware of any state of facts which (with or without notice or lapse of time or
both) would or could result in any such material adverse change.

      Section 5.5. Litigation. There are no actions, claims, suits or
proceedings pending, or to the knowledge oft he Company, threatened against or
affecting the Company in any court or before any arbitrator or before any
government commission, board, bureau or other administrative agency which, if
adversely determined, may reasonably be expected to result in any material and
adverse change in the business, operations, assets, licenses, qualifications or
financial condition of the Company.

      Section 5.6. Licenses; Compliance with Laws. The Company has all permits,
licenses, authorizations and approvals with all governmental authorities or
agencies that are required in order to permit it to conduct its business as
presently conducted, and all such permits, licenses, authorizations and

                                       13
<PAGE>
approvals are in frill force and effect. The Company is not in violation of any
provision of any law, or of any judgment, award, rule, regulation, order,
decree, writ or injunction of any court or public regulatory body or authority
which might have a material adverse effect on the business, operations, assets
or financial condition, assets, licenses, qualifications or financial condition
of the Company.

      Section 5. 7. Regulation U. No part of the proceeds of any Advances made
hereunder will be used to purchase or carry any Margin Stock or to extend credit
to others for the purpose of purchasing or carrying any Margin Stock.

      Section 5.8. Investment Company Act. The Company is not an "investment
company," or a company controlled by an "investment company," within the m
earning oft he Investment Company Act of 1940, as amended.

      Section 5.9. Payment of Taxes. The Company has filed or caused to be filed
all federal, state, and local income, excise, property and other tax returns
with respect to the operations of the Company, which are required to be filed,
all such returns are true and correct in all material respects, and the Company
has paid or caused to be paid all taxes as shown on such returns or on any
assessment to the extent that such taxes have become due, except in cases where
the Company has disputed in good faith the amount of said taxes.

      Section 5.10. Agreements. The Company is not a party to any agreement,
instrument or indenture or subject to any restriction materially and adversely
affecting its business, operations, assets or financial condition, except as
disclosed in the financial statements described in Section 5.4 hereof The
Company is not in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any agreement,
instrument, or indenture which default could have a material adverse effect on
the business, operations, properties or financial condition of the Company. No
holder of any indebtedness of the Company has given notice of any asserted
default thereunder, and no liquidation or dissolution of the Company and no
receivership, insolvency, bankruptcy, reorganization or other similar
proceedings relative to the Company or any of its properties is pending, or to
the knowledge of the Company, threatened.

      Section 5.11. Title to Properties. The Company has good, valid, insurable
(in the case of real property) and marketable title to all material portions of
its properties and assets (whether real or personal, tangible or intangible)
reflected on the financial statements described in Section 5.4 hereof, except
for such properties and assets as have been disposed of since the date of such
financial statements as no longer used or useful in the conduct of its business
or as have been disposed of in the ordinary course of business, and all such
properties and assets are free and clear of all Liens except as disclosed in
such financial statements.

      Section 5.12. ERISA. All plans ("Plans") of a type described in Section
3(3) of ERISA in respect of which the Company is an "Employer," as defined in
Section 3(8) of ERISA, are in substantial compliance with ERISA, and none of
such Plans is insolvent or in reorganization, has an accumulated or waived
funding deficiency within the meaning of Section 412 of the Internal Revenue
Code, and the Company has not incurred any material liability (including any
material contingent liability) to or on account of any such Plan pursuant to
Sections 4062, 4063, 4064, 4201 or 4204 of ERISA; and no proceedings have been
instituted to terminate any such plan, and no condition exists which presents a
material risk to the Company of incurring a material liability to or on account
of any such Plan pursuant to any of the foregoing Sections of ERTSA. No Plan or
trust forming a part thereof has been terminated since September 1, 1974.

                                       14
<PAGE>
      Section 5.13. Eligibility. The Company has all state and local permits,
licenses, approvals, registrations and qualifications which it is required to
have, in order to make, purchase, sell or service the Mortgage Loans.

      Section 5.14. Special Representations Concerning Collateral. The Company
hereby represents and warrants to the Bank, as of the date of this Agreement and
as of the date of each Advance Request and of each Advance, that:

            (a) The Company owns the Collateral free and clear of any Lien,
      except for the security interest created by this Agreement, rights of
      Investors and Insurers of the Pledged Mortgages. No financing statement or
      other instrument similar in effect covering all or any part of the
      Collateral is on file in any recording office, except such as may have
      been filed in favor of Bank relating to this Agreement. The Company has no
      trade name.

            (b) This Agreement, together with the Bank's possession of the
      Mortgage Notes and a duly filed financing statement, creates a valid and
      perfected first priority security interest in the Mortgage Notes in favor
      of the Bank, securing the payment of the Note, and all filings and other
      actions necessary or desirable to perfect and protect such security
      interest have been duly taken or shall be taken at the time of the initial
      Advance hereunder.

            (c) No authorization, approval or other action by, and no notice to
      or filing with, any governmental authority or regulatory body is required
      (and has not been obtained, delivered or filed, as applicable) either (i)
      for the grant by the Company of the security interest granted hereby or
      for the execution, delivery or performance of this Agreement by the
      Company, or (ii) for the perfection of or the exercise by the Bank of its
      rights and remedies hereunder, other than the filing of a financing
      statement which has been duly executed by the Company and delivered to the
      Bank for filing.

            (d) The principal office of the Company for purposes of Section
      9-103 of the Uniform Commercial Code is located at the address set forth
      at the front of this Agreement.

            (e) Each Mortgage Loan conforms in all material respects to the
      requirements and the specifications set forth in the attached Exhibit G
      constituting the underwriting standards utilized by the Company.

            (f) The Mortgage Loan Documents have been duly executed by the
      mortgagor and create valid and legally binding obligations of the
      mortgagor, enforceable in accordance with their terms, except as may be
      limited by bankruptcy Or other similar laws affecting the enforcement of
      creditors' rights generally, and general principles of equity, and to the
      knowledge of the Company there are no rights of rescission, set-offs,
      counterclaims or other defenses with respect thereto. The full original
      principal amount of each Mortgage Loan (net of any discounts) has been
      fully advanced or disbursed to the mortgagor named therein. There is no
      requirement for future advances and except for Mortgage Loans insured
      under Section 203(k) of the National Housing Act, any and all requirements
      as to completion of any on-site or off-site improvements and as to
      disbursements of any escrow funds therefor have been satisfied. To
      Company's knowledge and except as disclosed to Bank, there is no material
      default, breach, violation or event of acceleration existing under the
      Mortgage or the related Mortgage Note, and no event has occurred which,
      with

                                       15
<PAGE>
      the passage of time or with notice and the expiration of any grace or cure
      period, would constitute a material default, breach, violation or event of
      acceleration, other than waivers in the ordinary course of servicing the
      Mortgage Loan which do not have a material adverse effect of the
      Collateral; and the Company has not waived any material default, breach,
      violation or event of acceleration. The terms of the Mortgage Loan have in
      no way been waived, impaired, changed or modified. To Company's knowledge
      and except as disclosed to Bank, all tax identifications and property
      descriptions are legally sufficient; tax segregation, where required, has
      been completed. All taxes, governmental assessments, insurance premiums,
      water, sewer and municipal charges, leasehold payments or ground rents
      which previously became due and have been paid, or an escrow of funds has
      been established in an amount sufficient to pay for every such item which
      remains unpaid.

            (g) Each of the Mortgage Loans has been originated, made and
      serviced in material compliance with all industry standards, applicable
      Investor and Insurer requirements and all applicable federal, state and
      local statutes, regulations and rules, including, without limitation, the
      Federal Truth-in-Lending Act of t 968, as amended, and Regulation Z
      thereunder, the Federal Fair Credit Reporting Act, the Federal Equal
      Credit Opportunity Act, the Federal Real Estate Settlement Procedures Act
      of 1974, as amended, and Regulation X thereunder, and all applicable
      usury, licensing, real property, consumer protection and other laws.

            (h) Each of the Mortgage Loans presently is covered by a policy of
      hazard insurance (and flood insurance and insurance against other
      insurable risks and hazards as required by the applicable Investor and the
      agreements applicable to such Mortgage Loans), in amounts not less than
      outstanding principal balance of the Mortgage Loans or such maximum lesser
      a mount as permitted by applicable law, all in a form usual and customary
      in the industry and which is in full force and effect, and all amounts
      required to have been paid under any such policy have been paid; and all
      taxes, assessments, ground rents or other applicable charges or fees due
      and payable as to each Mortgage Loan have been paid.

            (i) A title opinion or a valid and enforceable title policy
      currently in full force and effect has been issued for each Mortgage Loan
      which is a first mortgage lien as identified in Exhibit 0, and in the case
      of title insurance, in an amount not less than the original principal
      amount of such Mortgage Loan, and which title opinion opines or which
      title policy insures that the Mortgage relating thereto is either (i) a
      valid first lien on the property therein described and that the mortgaged
      property is free and clear of all encumbrances and liens having priority
      over the first lien of the Mortgage except for taxes not yet due and
      payable and minor title irregularities that do not have a material adverse
      effect on the use or marketability of the mortgaged property, and
      otherwise in compliance with the requirements of the applicable Investor;
      or (ii) if the Mortgage Loan is insured under Title I of the National
      Housing Act, a valid second lien on the property therein described and
      that the mortgaged property is free and clear of all encumbrances and
      liens (other than the first lien) having priority over the second lien of
      the Mortgage except for taxes not yet due and payable and minor title
      irregularities that do not have a material adverse effect on the use or
      marketability of the mortgaged property, and otherwise in compliance with
      the requirements of the applicable Investor. If the Mortgage Loan is a
      second lien that is not insured under Title I of the National Housing Act,
      Company shall have a title search performed to verify that the mortgaged
      property is free and clear of all encumbrances and liens (other than the
      first lien) having priority over the second lien of the Mortgage except
      for taxes not yet due and payable.

            (j) All escrow/custodial accounts have been established in
      accordance with the requirements of FHA, VA and the applicable Investor
      and Insurer and all other applicable laws and by the terms of the related
      Mortgages.

                                       16
<PAGE>
            (k) There are no accrued liabilities of the Company with respect to
      the Mortgage Loans.

            (l) To the Company's knowledge, the Company, all prior servicers
      and, if different, the originating mortgagee, have performed all
      obligations required of them to be performed under or pursuant to each of
      the Servicing Contracts and related requirements of the applicable
      Investor and Insurer and each other document or agreement relating to the
      Mortgage Loans by which the Company is bound, and no event has occurred
      and is continuing which, under the provisions of any such Servicing
      Contracts and related requirements of the applicable Investor or other
      document or agreement, but for the passage of time or in, giving of
      notice, or both, would constitute an event of default thereunder.

            (m) The books, records, accounts and reports of the Company with
      respect to the Mortgage Loans and Servicing Contracts have been prepared
      and maintained in accordance with all applicable Investor and Insurer
      requirements.

            (n) At least ninety-eight percent (98%) of the Mortgage Loans will
      be underwritten to Investor guidelines however, upon approval by the Bank
      which shall not be unreasonably withheld, Company shall be allowed to
      retain certain Mortgage Loans in its own portfolio.

                                   ARTICLE VI

                              AFFIRMATIVE COVENANTS

      The Company agrees that so long as the Commitment is outstanding or there
remain any obligations of the Company to be paid or performed under this
Agreement or under the Note, the Company shall:

      Section 6.1. Payment of Note. Punctually pay or cause to be paid the
principal and interest on and all other amounts due and payable hereunder and
under the Note in accordance with the terms hereof and thereof

      Section 6.2. Financial Statements and Other Reports. Deliver to the Bank:

            (a) Upon request by the Bank, as soon as available and in any event
      within thirty (30) days after each calendar quarter, statements of income
      and cash flows of the Company for the immediately preceding quarter, and
      related balance sheet as of the end of the immediately preceding quarter,
      all in reasonable detail and certified by the chief financial officer or
      other appropriate officer of the Company, subject, however, to year-end
      audit adjustments.

            (b) As soon as available and in any event within one hundred twenty
      (120) days after the close of each fiscal year: a statement of income and
      cash flows of the Company for such year, the related balance sheet as at
      the end of such year (setting forth in comparative form the corresponding
      figures for the preceding fiscal year), all in reasonable detail and
      accompanied by an opinion of an accounting firm reasonably satisfactory to
      the Bank, or other independent public accountants of recognized standing
      selected by the Company and acceptable to the Bank, as to said financial
      statements and a certificate signed by the chief financial officer or
      other appropriate officer of the Company stating that said financial
      statements

                                       17
<PAGE>
      fairly present the financial condition and results of operations of the
      Company as at the end of, and for, such year.

            (c) Together with each delivery of financial statements pursuant to
      Sections 6.2(a) and (b) hereof, an Officer's Certificate substantially in
      the form of Exhibit H stating that the signatory or signatories thereto
      have reviewed the terms of this Agreement and have made, or caused to be
      made under their supervision, a review in reasonable detail of the
      transactions and conditions of the Company during the accounting period
      covered by such financial statements and that such review has not
      disclosed the existence during or at the end of such accounting period,
      and that the signatory or signatories thereto do not have knowledge of the
      existence as of the date of the Officer's Certificate, of any Default or
      if any Default existed or exists, specifying the nature and period oft he
      existence thereof and what action the Company has taken, is taking and
      proposes to take with respect thereto.

            (d) Such other reports in respect of the Mortgage Loans pledged as
      collateral, in such detail and at such limes as the Bank in its reasonable
      discretion may request at any time or from time to time.

            (e) Copies of all audits, examinations and reports concerning the
      operations of the Company from any Investor, Insurer or licensing
      authority to the extent not subject to restrictions on disclosure.

            (f) From time to time, with reasonable promptness, such further
      information regarding the business, operations, properties or financial
      condition of the Company as the Bank may reasonably request.

      Except for financial statements prepared for interim periods between the
fiscal year end, all financial statements and reports furnished to the Bank
hereunder shall be prepared in accordance with GAAP, applied on a basis
consistent with that applied in preparing the financial statements as at, and
for the period ended, the Statement Date (except to the extent otherwise
required to conform to good accounting practice).

      Section 6.3. Maintenance of Existence; Conduct of Business. Preserve and
maintain its corporate existence in good standing and all of its rights,
privileges, licenses, qualifications and franchises necessary or desirable in
the normal conduct of its business, including, without limitation, its
eligibility as an approved lender and issuer as described under Section 5.13
hereof and make no material change in the nature or character of its business,
if such material change would result in Company being unable to fulfill or
complete its duties and obligations under this Agreement.

      Section 6.4. Compliance with Applicable Laws. Comply with the requirements
of all applicable laws, rules, regulations (including laws, rules and
regulations relating to predatory lending) and orders of any governmental
authority and prudent industry standards, a breach of which could materially
adversely affect its business, operations, assets, or financial condition or
which could materially adversely impair the ability of Company to perform its
obligation hereunder, except where contested in good faith and by appropriate
proceedings.

      Section 6.5. Inspection of Properties and Books. Permit authorized
representatives of the Bank, its parent company or affiliates, upon prior
written notice of not less than ten (10) Business Days to the Company, to
discuss the business, operations, assets and financial condition of the Company
and its

                                       18
<PAGE>
Subsidiaries with their officers and employees and to examine their books of
account and make copies or extracts thereof subject to applicable laws with
respect to confidentiality of customer records, all at such reasonable times as
the Bank may request. The Company will provide its accountants with a copy of
this Agreement promptly after the execution hereof and will instruct its
accountants to answer candidly and fully any and all questions that the officers
of the Bank or any authorized representatives of the Bank may address to them in
reference to the financial condition or affairs of the Company.

      Section 6.6. Notice. Give written notice to the Bank within fifteen (15)
days of the Company's actual knowledge of (a) any action, suit or proceeding
instituted against the Company in any federal or state court or before any
commission or other regulatory body (federal, state or local, domestic or
foreign) seeking damages of Fifty Thousand Dollars ($50,000.00) or more, or any
such proceedings threatened against the Company in a writing containing the
details thereof, (b) the filing, recording or assessment of any federal, state
or local tax lien against it, or any of its assets, (c) the occurrence of any
Default or Event of Default hereunder, (d) the actual or threatened suspension,
revocation or termination of the Company's eligibility, in any respect, as an
approved lender, and issuer as described under Section 5.13 hereof, (e) the
suspension, revocation or termination of any existing credit or Investor
relationship made to the Company to facilitate the sale and/or origination of
residential mortgages, (0 the transfer or loss of any Servicing Contract to
which the Company is a party, or which is held for the benefit of the Company,
and the reason for such transfer or loss, if known to the Company, (g) any
demand by any Investor or Insurer for either the repurchase of a Mortgage Loan
or indemnification, and (h) any other action, event or condition of any nature
which may lead to or result in a material adverse effect upon the business,
operations, assets, or financial condition of the Company or which, with or
without notice or lapse of time or both, would constitute a default under any
other material agreement, instrument or indenture to which the Company is a
party or to which the Company, its properties or assets may be subject.

      Section 6. 7. Payment of Debt, Taxes, etc. Pay and perform all obligations
of the Company promptly and in accordance with the terms thereof and pay and
discharge or cause to be paid and discharged promptly all taxes, assessments and
governmental charges or levies imposed upon the Company or upon its income,
receipts or properties before the same shall become past due, as well as all
lawful claims for labor, materials and supplies or otherwise which, if unpaid,
might become a Lien or charge upon such properties or any part thereof~
provided, however, that the Company shall not be required to pay taxes,
assessments or governmental charges or levies or claims for labor, materials or
supplies for which the Company shall have obtained an adequate bond or adequate
insurance or which are being contested in good faith and by proper proceedings
which are being reasonably and diligently pursued.

      Section 6.8. Insurance. Will maintain (a) errors and omissions insurance
or mortgage impairment insurance and blanket bond coverage, with such companies
and in such amounts as satisfy prevailing FNMA, GNMA or FHLMC requirements
applicable to a qualified mortgage originating institution, and (b) liability
insurance and fire and other hazard insurance on its properties, with
responsible insurance companies, in such amounts and against such risks as is
customarily carried by similar businesses operating in the same vicinity, and
(c) within thirty (30) days after notice from the Bank, will obtain such
additional insurance as the Bank shall reasonably require, all at the sole
expense of the Company. Copies of all such policies shall be furnished to the
Bank without charge upon request of the Bank.

      Section 6.9. Insured Closings. As applicable, will obtain and maintain in
effect at all times an insured closing letter from each title insurance company
from which mortgagee title insurance is procured, indemnifying and holding the
Company harmless from and against the failure of the agents and

                                       19
<PAGE>
approved title attorneys of such title insurance companies to comply with the
written closing instructions of the Company as to the Mortgage Loans pledged
hereunder and will provide the Bank with evidence of the same from lime to time
upon request. The Company agrees to indemnify and hold the Bank harmless from
and against any loss, including reasonable attorneys' fees and costs,
attributable to the failure of such title insurance company, agent or approved
attorney to comply with the disbursement or instruction letter or letters of the
Company or of the Bank relating to such Mortgage Loan.

      Section 6.10. Purchased Loans. The Company agrees to indemnify and hold
the Bank harmless from and against any loss, including reasonable attorneys'
fees and costs, attributable to the failure of any correspondent of the Company
to comply with the disbursement or instruction letter or letters of the Company
or of the Bank relating to Mortgage Loans purchased by the Company with Advances
hereunder.

      Section 6.11. Other Loan Obligations. Will perform in all material
respects all obligations under the terms of each loan agreement, note, mortgage,
security agreement or debt instrument by which the Company is bound or to which
any of its property is subject, and will promptly notify the Bank in writing of
the cancellation or reduction of any of its other mortgage warehousing lines of
credit or agreements with any other lender.

      Section 6.12. Use of Proceeds of Advances. Will use the proceeds of each
Advance solely for the purpose of financing the purchase or origination of
Mortgage Loans.

      Section 6.13. Financial Requirements. (a) Net Worth. Maintain at all times
a minimum consolidated tangible net worth equal to at least $2,500,000.00.

      (b) Indebtedness to Net Worth. Not permit the Company's total Indebtedness
at any time to exceed ninety-five percent (95%) of its total assets. (provided
that nothing in this paragraph shall permit the Company to incur Indebtedness
except as specifically permitted elsewhere in this Agreement).

      (c) Pretax Net Income. Maintain consolidated pretax net income to be at
least $300,000.00, as calculated over the prior four (4) quarters with not more
than one (1) quarter with a net loss during that time period.

      Section 6.14. Special Affirmative Covenants Concerning Collateral. (A) The
Company warrants and will defend the right, title and interest of the Bank in
and to the Pledged Mortgages against the claims and demands of all persons
whomsoever.

      (b) The Company shall service or cause to be serviced in all material
respects all Pledged Mortgages in accordance with the standard requirements of
the issuers of the respective Purchase Commitments covering the same and all
applicable governmental requirements, including without limitation taking all
actions necessary to enforce the obligations of the obligors under such Pledged
Mortgages. The Company shall hold all escrow funds collected in respect of
Pledged Mortgages in trust, without commingling the same with non-custodial
funds, and apply the same for the purposes for which such funds were collected.

      (e) The Company shall execute and deliver to the Bank such Uniform
Commercial Code financing statements with respect to the Collateral as the Bank
may reasonably request. The Company

                                       20
<PAGE>
shall also execute and deliver to the Bank such further instruments of sale,
pledge or assignment or transfer, and such powers of attorney, as reasonably
required by the Bank, and shall do and perform all matters and things necessary
or desirable to be done or observed, for the purpose of effectively creating,
maintaining and preserving the security and benefits intended to be afforded the
Bank under this Agreement. The Bank shall have all the rights and remedies of a
secured party under the Uniform Commercial Code of the State of Ohio, or any
other applicable law, in addition to all rights provided for herein.

      (d) The Company shall notify the Bank within seven (7) Business Days of
any default under, or of the termination of, or the rejection for purchase
under, any Purchase Commitment relating to any Pledged Mortgage.

      (e) The Company will promptly comply in all material respects with the
terms and conditions of all Purchase Commitments, and all extensions, renewals
and modifications or substitutions thereof or thereto. The Company will cause to
be delivered to the Investor the Pledged Mortgages to be sold under each
Purchase Commitment not later than the earlier of three (3) Business Days prior
to the expiration thereof or three (3) Business Days prior to the deadline for
acquisition of the Pledged Mortgage by the Investor thereunder.

      (f) The Company shall maintain, at its principal office or in a regional
office approved by the Bank, or in the office of a computer service bureau
engaged by the Company and approved by the Bank, and, upon request, shall make
available to the Bank the originals, or copies in any case where the original
has been delivered to the Bank, or to an Investor, of its Mortgage Notes and
Mortgages included in Mortgage Loans, Purchase Commitments, and all related
Pledged Mortgage documents and instruments, and all files, surveys,
certificates, correspondence, appraisals, computer programs, tapes, discs,
cards, accounting records and other information and data relating to the
Collateral.

                                   ARTICLE VII

                               NEGATIVE COVENANTS

      The Company agrees that so long as the Commitment is outstanding or there
remain any obligation of the Company to be paid or performed hereunder or under
the Note, the Company shall not, either directly or indirectly, without the
prior written consent of the Bank:

      Section 7.1. Contingent Liabilities. Assume, guarantee, endorse, or
otherwise become liable for the obligation of any Person except by endorsement
of negotiable instruments for deposit or collection in the ordinary course of
business.

      Section 7.2. Merger; Sale of Assets; Acquisitions; Change in Control;
Change of Senior Management. Except for the sale or purchase of loans in the
ordinary course of the business, liquidate, dissolve, consolidate or merge or
sell, transfer or otherwise dispose of, any substantial part of its assets, nor
acquire substantially all of the assets of another, nor permit a change in
ownership beneficially or of record of the voting stock of Company which results
in Franklin Credit Management Corporation having less than a majority ownership
interest in the voting stock of the Company.

                                       21
<PAGE>
      Section 7.3. Loss of Eligibility. Take, or fail to take, any action that
would cause the Company to lose all or any part of its status as an eligible
lender, as described under Section 5.13 hereof

      Section 7.4. Special Negative Covenants Concerning Collateral. Except for
actions taken in the ordinary course of servicing Mortgage Loans, the Company
shall not do any of the following:

            (a) Amend or modify, or waive any of the terms and conditions of, or
      settle or compromise any claim in respect of, any Mortgage Loan pledged
      hereunder.

            (b) Sell, assign, transfer or otherwise dispose of, or grant any
      option with respect to, or pledge or otherwise encumber (except pursuant
      to this Agreement) any of the Collateral or any interest therein.

            (c) Make any compromise, adjustment or settlement in respect of any
      of the Collateral or accept other than cash in payment or liquidation of
      the Collateral.

                                  ARTICLE VIII

                               DEFAULTS; REMEDIES

      Section 8.1. Events of Default. T he occurrence of any o ft he following
conditions or events shall be in event of default ("Event of Default"):

            (a) Failure to pay the principal of any Advance within thirty (30)
      days from when due, whether at stated maturity, by acceleration, or
      otherwise; or failure to pay any installment of interest on any Advance or
      any other amount due under this Agreement when due; or

            (b) Failure of the Company to pay, or any default in the payment of
      any principal or interest on, any other indebtedness or in the payment of
      any contingent obligation which are in the aggregate amount of Ten
      Thousand Dollars ($10,000.00); or breach or default with respect to any
      other material term of any other indebtedness or of any loan agreement,
      note, mortgage, security agreement, indenture or other agreement relating
      thereto, if the effect of such failure, default or breach is to cause, or
      to permit the holder or holders thereof (or a trustee on behalf of such
      holder or holders) to cause, indebtedness of the Company or its
      Subsidiaries in the aggregate amount of Ten Thousand Dollars ($10,000.00)
      or more to become or be declared due prior to its stated maturity; or

            (c) Failure of the Company to perform or comply with any term or
      condition applicable to it contained in Sections 6.1 through 6.13
      inclusive, or 7.1 through 7.5, inclusive, of this Agreement; or

            (d) Any of the Company's representations or warranties made herein
      or in any statement or certificate at any time given by the Company in
      writing pursuant hereto or in connection herewith shall be false in any
      material respect on the date as of which made; or

            (e) The Company shall default in the performance of or compliance
      with any term contained in this Agreement other than those referred to
      above in subsections 8.1(a), (c) or (d) and such default shall not have
      been remedied or waived within thirty (30) days after receipt of

                                       22
<PAGE>
      notice from the Bank of such default; or

            (f~ (1) A court having jurisdiction shall enter a decree or order
      for relief in respect of the Company in an involuntary case under any
      applicable bankruptcy, insolvency or other similar law now or hereafter in
      effect, which decree or order is not stayed; or (2) any other similar
      relief shall b e granted under any applicable federal or state law; or a
      decree or order o f a court having jurisdiction for the appointment of a
      receiver, liquidator, sequestrator, trustee, custodian or other officer
      having similar powers over the Company, or over all or a substantial part
      of its property, shall have been entered; or the involuntary appointment
      of an interim receiver, trustee or other custodian of the Company for all
      or a substantial part of its property; or the issuance of a warrant of
      attachment, execution or similar process against any substantial part of
      the property of the Company, and the continuance of any such events in
      this clause (2) for sixty (60) days unless dismissed, bonded off or
      discharged; or

            (g) The Company shall have an order for relief entered with respect
      to it or commence a voluntary case under any applicable bankruptcy,
      insolvency or other similar law now or hereafter in effect, or shall
      consent to the entry of an order for relief in an involuntary case, or to
      the conversion to an involuntary case, under any such law, or shall
      consent to the appointment of or taking possession by a receiver, trustee
      or other custodian for all or a substantial part of its property; the
      making by the Company of any assignment for the benefit of creditors; or
      the inability or failure of the Company, or the admission by the Company
      in writing of its inability to pay its debts as such debts become due; or

            (h) Any money judgment, writ or warrant o f attachment, or similar
      process involving in any case an amount in excess of Ten Thousand Dollars
      ($10,000.00) shall be entered or filed against the Company or any of its
      assets and shall remain undischarged, unvacated, unbonded or unstayed for
      a period of thirty (30) days or in any event later than five (5) days
      prior to the date of any proposed sale thereunder; or

            (i) Any order, judgment or decree shall be entered against the
      Company decreeing the dissolution, liquidation or split up of the Comp any
      and such order shall remain undischarged or unstayed for a period in
      excess of twenty (20) days; or

            (j) Any Plan maintained by the Company shall be terminated within
      the meaning of Title IV of ERISA or a trustee shall be appointed by an
      appropriate United States district court to administer any Plan, or the
      Pension Benefit Guaranty Corporation (or any successor thereto) shall
      institute proceedings to terminate any Plan or to appoint a trustee to
      administer any Plan if as of the date thereof the Company's liability
      (after giving effect to the tax consequences thereof) to the Pension
      Benefit Guaranty Corporation (or any successor thereto) for unfunded
      guaranteed vested benefits under the Plan exceeds the then current value
      of assets accumulated in such Plan by more than Ten Thousand Dollars
      ($10,000.00) (or in the case of a termination involving the Company as a
      "substantial employer" (as defined in Section 4001(a)(2) of ERISA) the
      withdrawing employer's proportionate share of such excess shall exceed
      such amount); or

            (k) The Company as employer under a Multiemployer Plan shall have
      made a complete or partial withdrawal from such Multiemployer Plan and the
      plan sponsor of such Multiemployer Plan shall have notified such
      withdrawing employer that such employer has incurred a withdrawal
      liability in annual amount exceeding Ten Thousand Dollars ($10,000.00);

                                       23
<PAGE>
            (1) The Company shall purport to disavow its obligations hereunder
      or shall contest the validity or enforceability hereof~ or the Bank's
      security interest in any portion of the Collateral shall become
      unenforceable or otherwise impaired; or

            (m) The Company or its parent company shall have been subject to an
      enforcement action by any federal regulatory agency which may reasonably
      be expected to result in any material and adverse change in the business,
      operations, assets, licenses, qualifications or financial condition of the
      Company.

      Section 8.2. Remedies. (a) Upon the occurrence of any Event of Default
described in Section 8.1(1)) or (g) the unpaid principal amount of and accrued
interest on the Note shall automatically become due and payable, without
presentment, demand or other requirements of any kind, all of which are hereby
expressly waived by the Company, and the obligation of the Bank to make Advances
shall thereupon terminate.

      (b) Upon the occurrence of any Event of Default (other than those
described in Section 8.1(f) or (g)), the Bank may, by written notice to the
Company declare all or any portion of the Advances to be due and payable
whereupon the same shall forthwith become due and payable, together with all
accrued interest thereon, and the obligation of the Bank to make Advances shall
thereupon terminate.

      (c) Upon the occurrence of any Event of Default, the Bank may also do
anyone or more or all of the following:

            (1) Foreclose upon or otherwise enforce its security interest in and
      Lien on all of the Collateral or on any portion thereof to secure all
      payments and performance of obligations owed by the Company under this
      Agreement.

            (2) Notify all obligors of Collateral or on any portion thereof that
      the Collateral has been assigned to the Bank and that all payments thereon
      are to be made directly to the Bank or such other party as may be
      designated by the Bank; settle, compromise, or release, in whole or in
      part, any amounts owing on the Collateral, any such obligor or Investor or
      any portion of the Collateral, on terms acceptable to the Bank; enforce
      payment and prosecute any action or proceeding with respect to any and all
      Collateral; and where any such Collateral is in default, foreclose on and
      enforce security interests in, such Collateral by any available judicial
      procedure or, if permitted by applicable law, without judicial process and
      sell property acquired as a result of any such foreclosure.

            (3) Act, or contract with a third party to act, as servicer of all
      or any item of Collateral requiring servicing and perform all obligations
      required in connection with Purchase Commitments, such third party's fees
      to be paid by the Company.

            (4) Exercise all rights and remedies of a secured creditor under the
      Uniform Commercial C ode of the State of Ohio or the state in which the
      Collateral is located, including but not limited to selling the collateral
      at public or private sale. The Bank shall give the Company not less than
      thirty (30) days' written notice of any such public sale or of the date
      after which private sale may be held. The Company agrees that thirty (30)
      days' notice shall be reasonable notice. At any such sale the Collateral
      may be sold as an entirety or in separate parts, as the Bank may
      determine. The Bank may, Without notice or publication, adjourn any public
      or private sale or cause the same to be adjourned from time to time by
      announcement at the time and place fixed

                                       24
<PAGE>
      for the sale, and such sale may be made at any time or place to which the
      same may be so adjourned. In case of any sale of all or any part of the
      Collateral on credit or for future delivery, the Collateral so sold may be
      retained by the Bank until the selling price is paid by the purchaser
      thereof, but the Bank shall not incur any liability in case of the failure
      of such purchaser to take up and pay for the Collateral so sold and, in
      case of any such failure, such Collateral may again be sold upon like
      notice. The Bank may, however, instead of exercising the power of sale
      herein conferred upon it, proceed by a suit or suits at law or in equity
      to collect all amounts due upon all or any portion of the Collateral or to
      foreclose the pledge and sell all or any portion of the Collateral under a
      judgment or decree of a court or courts of competent jurisdiction, or
      both.

            (5) Proceed against the Company on the Note.

            (6) Pursue any rights and/or remedies available at law or in equity
      against the Company.

      (d) The Bank shall incur no liability as a result of the sale of the
Collateral, or any part thereof, at any private sale conducted in a commercially
reasonable manner. The Company hereby waives any claims it may have against the
Bank arising by reason of the fact that the price at which the Collateral may
have been sold at such private sale was less than the price which might have
been obtained at a public sale or was less than the aggregate amount of the
outstanding Advances and the unpaid interest accrued thereon, even if the Bank
accepts the first offer received and does not offer the Collateral, or any part
thereof, to more than one offeree.

      (e) The Company waives any right to require the Bank to (1) proceed
against any Person, (2) proceed against or exhaust all or any of the Collateral
or pursue its rights and remedies as against the Collateral in any particular
order, or (3) pursue any other remedy in its power. The Bank shall not be
required to take any steps necessary to preserve any rights of the Company
against holders of mortgages prior in lien to the Lien of any Mortgage included
in the Collateral or to preserve rights against prior parties.

      (f) The Bank may, but shall not be obligated to, advance any sums or do
any act or thing necessary to uphold and enforce the Lien and priority of, or
the security intended to be afforded by, any Mortgage included in the
Collateral, including, without limitation, payment of delinquent taxes or
assessments and insurance premiums. All advances, charges, costs and expenses,
including reasonable attorneys' fees and disbursements, incurred or paid by the
Bank in exercising any right, power or remedy conferred by this Agreement, or in
the enforcement hereof, shall be paid by the Company, shall be secured by the
Collateral, and until paid, shall bear interest from the date of expenditure at
the rate of interest specified in the Note.

      (g) No failure on the part of the Bank to exercise, and no delay in
exercising, any right, power or remedy provided hereunder, at law or in equity
shall operate as a waiver thereof, nor shall any single or partial exercise by
the Bank of any right, power or remedy provided hereunder, at law or in equity
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The remedies herein provided are cumulative and are not
exclusive of any remedies provided at law or in equity.

      Section 8.3. Application of Proceeds. The proceeds of any sale or other
enforcement of the Bank's security interest in all or any part of the Collateral
shall be applied by the Bank:

                                       25
<PAGE>
            First, to the payment of the costs and expenses of such sale or
      enforcement, including reasonable compensation to the Bank's agents and
      counsel, and all expenses, liabilities and advances made or incurred by or
      on behalf of the Bank in connection therewith;

            Second, to the payment of any other amounts due under the Note or
      this Agreement (whether for principal or interest or otherwise) in such
      order and maimer as the Bank elects; and

            Finally, to the payment to the Company, or to its successors or
      assigns, or as a court of competent jurisdiction may direct, of any
      surplus then remaining from such proceeds. If the Proceeds of any such
      sale are insufficient to cover the costs and expenses of such sale, as
      aforesaid, and the payment in full o f the Note and all other amounts due
      hereunder, the Company shall remain liable for any deficiency.

      Section 8.4. Bank Appointed Attorney-in-Fact. The Bank is hereby appointed
the attorney-in-fact of the Company, with full power of substitution, upon the
occurrence and during the continuation of an Event of Default, for the purpose
of carrying out the provisions hereof and taking any action and executing any
instruments which the Bank may deem necessary or advisable to accomplish the
purposes hereof, which appointment as attorney-in-fact is irrevocable and
coupled with an interest. Without limiting the generality of the foregoing, the
Bank shall have the right and power upon the occurrence and during the
continuation of an Event of Default, to give notices of its security interest in
the Collateral to any Person, either in the name of the Company or in its own
name, to endorse all Mortgage Loans payable to the order of the Company, or to
receive, endorse and collect all checks made payable to the order of the Company
representing any payment on account of the principal of or interest on, or the
proceeds of sale of, any of the Mortgage Loans or and to give full discharge for
the same.

      Section 8.5. Right of Set-off If the Company shall default in the payment
of the Note, any interest accrued thereon, or any other sums which may become
payable hereunder when due, or in the performance of any of its other
obligations or liabilities under this Agreement, the Bank, shall have the right,
at any time and from time to time, without notice, to set-off and to appropriate
or apply any and all deposits of money or property or any other indebtedness at
any time held or owing by the Bank or a parent company, affiliate, or subsidiary
to or for the credit of the account of the Company against and on account of the
obligations and liabilities of the Company under the Note and this Agreement,
irrespective of whether or not the Bank shall have made any demand hereunder and
whether or not said obligations and liabilities shall have matured, provided,
however, that the aforesaid right of set-off shall not apply to any deposits of
escrow monies or other funds being held on behalf of the mortgagors under
Mortgage Loans or other third parties.

      Section 8.6. Reasonable Assurances. If, at any time during the term of the
Agreement, Bank has reason to believe that Company is not conducting its
business in accordance with, or otherwise is not satisfying in all material
respects: (i) all applicable statutes, regulations, rules, and notices of
federal, state, or local governmental agencies or instrumentalities, all
applicable requirements of Investors and Insurers and prudent industry standards
or (ii) all applicable requirements of Bank, as set forth in this Agreement,
then, B ark shall have the right to demand, pursuant to written notice from Bank
to Company specifying with particularity, the alleged act, error or omission in
question, reasonable assurances from Company that such a belief is in fact
unfounded, and any failure of Company to provide to Bank such reasonable
assurances in form and substance reasonably satisfactory to Bank, within the
time frame specified in such written notice shall itself constitute an Event of
Default hereunder. Company hereby authorizes Bank to take such actions as may be
necessary or appropriate to confirm the continued

                                       26
<PAGE>
eligibility of Company for Advances hereunder, including without limitation (i)
ordering credit reports and (ii) contacting mortgagors, licensing authorities
and Investors or Insurers.

                                   ARTICLE IX

                      REIMBURSEMENT OF EXPENSES; INDEMNITY

      The Company shall:

      Section 9.1. Cost of Enforcement. Pay all costs and expenses of the Bank,
including reasonable attorney's fees, in connection with the enforcement of this
Agreement, the Note, and other documents and instruments related hereto.

      Section 9.2. Payments of Taxes. P ay, and hold the Bank and any holder of
the Note harmless from and against, any, and all, present and future stamp,
documentary and other similar taxes with respect to the foregoing matters and
save the Bank and the holder or holders of the Note harmless from and against
any and all liabilities with respect to or resulting from any delay or omission
to pay such taxes.

      Section 9.3. Indemnification. Indemnify, pay and hold harmless the Bank
and any of its officers, directors, employees or agents and any subsequent
holder of the Note from and against any and all liabilities, obligations,
losses, damages, penalties, judgments, suits, costs, expenses and disbursements
of any kind whatsoever (the "Indemnified Liabilities") (excluding any such
Indemnified Liabilities resulting from failure by the Bank to perform any of its
obligations under this Agreement, the Note, or any other document referred to
herein as established in a suit between the Company and the Bank which may be
the same suit in which indemnification is being sought hereunder by the Bank and
any liabilities arising from the Bank's gross negligence or willful misconduct)
which may be imposed upon, incurred by or asserted against the Bank or such
holder in any way relating to or arising out of this Agreement, the Note, or any
other document referred to herein or any oft he transactions contemplated hereby
or thereby to the extent that any such Indemnified Liabilities result (directly
or indirectly) from (i) the inaccuracy or incompleteness of any representation
or warranty made by the Company in this Agreement or any schedule, statement,
Exhibit or certificate furnished by the company pursuant to this Agreement or
(ii) the failure by the Company to observe or perform any term or provision of
this Agreement or of any agreement executed in connection herewith, including
without limitation any claims made, or any actions, suits or proceedings
commenced or threatened, by or on behalf of any creditor (excluding the Bank and
the holder or holders of the Note), security holder, shareholder, mortgagor,
customer (including, without limitation, any person or entity having any
dealings of any kind with the Company), trustee, director, officer, employee
and/or agent of the Company acting in such capacity, the Company or any
governmental regulatory body or authority.

                                    ARTICLE X

                       DELIVERIES OF COLLATERAL DOCUMENTS

      The Bank exclusively shall deliver Pledged Mortgages to the Investor under
the Purchase Commitment with respect thereto for its examination and purchase,
against a bailee letter substantially in the form attached hereto as Exhibit E.
The Bank may deliver any document relating to the Collateral to the Company for
correction or completion against a properly executed trust receipt in the form
approved by the Bank with instructions to the Company to either return the
corrected document to the B ark within ten (10) calendar days after such
delivery or redeem the Mortgage Loan from pledge. In the case of

                                       27
<PAGE>
deliveries of Pledged Mortgages by the Bank, the Company shall deliver to the
Bank a letter, to accompany the delivery, confirming the security interest of
the Bank and designating the Bank as payee under any Purchase Commitment.

                                   ARTICLE XI

                                  MISCELLANEOUS

      Section 11.1. Relationship of Parties. The relationship between Bank and
the Company is limited to that of creditor/secured party, on the one hand, and
borrower, on the other hand. The provisions herein for compliance with financial
covenants and delivery of financial statements, are intended solely for the
benefit of Bank to protect its interests as lender in assuring performance of
the obligations hereunder, and nothing contained in this Agreement shall be
construed as permitting or obligating Bank to act as a financial or business
advisor or consultant to the Company, as permitting or obligating the Bank to
control the Company or to conduct the Company's operations, as creating any
joint venture, agency, fiduciary, trustee, or other relationship between the
parties other than as explicitly and specifically stated in this Agreement. The
Company acknowledges that it has had the opportunity to obtain the advice of
experienced counsel of its own choosing in connection with the negotiation and
execution of this Agreement and to obtain the advice of such counsel with
respect to all matters contained herein. The Company further acknowledges that
it is experienced with respect to financial and credit matters and has made its
own independent decision to execute and deliver this Agreement.

      Section 11.2. Recourse. The Company acknowledges and agrees that it is
fully liable for repayment of all Advances and all sums due hereunder or under
the Note and for performance of all obligations contained in this Agreement.

      Section 11.3. Notices. All notices, demands, consents, requests and other
communications required or, permitted to be given or made hereunder
(collectively, "Notices ") shall, except as otherwise expressly provided
hereunder, be in writing and shall be delivered in person or telegraphed or
mailed, first class, return receipt requested, postage prepaid, or by overnight
delivery service or by facsimile or other telecommunications device addressed to
the respective parties hereto at their respective addresses hereinafter set
forth or, as to any such party, at such other address as may be designated by it
in a Notice to the other. All Notices shall be conclusively deemed to have been
properly given or made when duly delivered, in person or by overnight delivery
service or by facsimile or other telecommunications device, or if mailed on the
third Business Day after being deposited in the mails or when delivered to the
telegraph company, addressed as follows:

if to the Company:

                                    if to the Bank:

with a copy to:

                                    with a copy to:
                                    Tribeca Lending Corporation
                                    Six Harrison Street
                                    New York, New York 10013

                                       28
<PAGE>
Attention:  Mr. Joseph Caiazzo      110 East Main Street
            President               Salineville, Ohio 43945
Facsimile No. 212.625.9830          Attention:  Mr. Jerry S. Sutherin Vice
                                                President
                                    Facsimile No. 330.679.0028
Tribeca Lending Corporation
Six Harrison Street                 Sky Financial Group, Inc.
New York, New York 10013            221 South Church Street
Attention:  General Counsel         Bowling Green, OH 43402
Facsimile No. 212.625.9830          Attention:  General Counsel
                                    Facsimile No. 419.254.6345
Sky Bank

      Section 11.4. Terms Binding Upon Successors; Survival. The terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. All
representations, warranties, covenants and agreements herein contained on the
part of the Company shall survive the making of any Advance and the execution of
the Note, and shall be effective so long as the Commitment is outstanding or
there remains any obligation of the Company hereunder or under the Note to be
paid or performed.

      Section 11.5. Assignment. This Agreement may not be assigned by the
Company without the written consent of Bank. This Agreement and the Note, along
with the Bank's security interest in any or all of the Collateral, may, at any
time, be transferred or assigned, in whole or in part, by the Bank, and any such
transferee or assignee thereof may enforce this Agreement, the Note and such
security interest.

      Section 11.6. Amendments. This Agreement may not be modified or amended or
waived unless such modification, waiver or amendment is in writing signed by the
parties.

      Section 11.7. No Waiver; Remedies Cumulative. No failure or delay on the
part of the Company or the Bank or any holder of the Note in exercising any
right, power or privilege hereunder and no course of dealing between the Company
and the Bank or the holder of the Note shall operate as a waiver thereof~ nor
shall any single or partial exercise of any right, power or privilege hereunder
or under the Note preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder. The rights and remedies herein
expressly provided are cumulative and not exclusive of any rights or remedies
which the Company or the Bank or the holder of the Note would otherwise have. No
notice to or demand on the Company in any case shall entitle the Company to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Bank or the holder of the Note to any
other or further action in any circumstances without notice or demand.

      Section 11.8. Invalidity. In case any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal,
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions hereof, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had not been
included.

      Section 11.9. Participations. The Bank may from time to time a ell or
otherwise grant participations in the Note, and the holder of any such
participation, if the participation agreement so provides, (i) shall, with
respect to its participation, be entitled to all of the rights of the Bank and
(ii) may exercise any and all rights of setoff or banker's lien with respect
thereto, in each case as fully as though the Company were directly indebted to
the holder of such participation in the amount of such participation; provided

                                       29
<PAGE>
however, that the Company shall not be required to send or deliver to any of the
participants other than the Bank any of the materials or notices required to be
sent or delivered by it under the terms of this Agreement, nor shall it have to
act except in compliance with the instructions of the Bank.

      Section 11.10. Integration. This Agreement, together with the Note, and
other documents executed pursuant to the terms hereof, constitute the entire
agreement between the parties hereto, with respect to the subject matter hereof

      Section 11.11. Additional Instruments, etc. The Company shall execute and
deliver such further instruments and shall do and perform all matters and things
necessary or expedient to be done or observed for the purpose of effectively
creating, maintaining and preserving the security and benefits intended to be
afforded by this Agreement.

      Section 11.12. Governing Law. This Agreement and the rights and
obligations of the parties hereunder and under the Note shall be construed in
accordance with and governed by the laws of the State of Ohio.

      Section 11.13. Company Information. The Company hereby authorizes the Bank
to provide any Affiliate of the Bank with information regarding the Company,
including copies of documents, financial statements, corporate records and
reports, obtained by the Bank from the Company or any other entity during the
course of the negotiation or administration of this Agreement.

      Section 11.14. Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterpart
signature pages, each of which when so executed and delivered shall be an
original, but all of which together constitute one and the same instrument.

                [This space has been left blank intentionally.]

                                       30
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

                                    COMPANY:  TRIBECA LENDING CORPORATION

                                    By _________________________________________

                                       Printed Name:
                                       Title:

                                    BANK:  SKY BANK

                                    By _________________________________________

                                       Printed Name:
                                       Title:

                                       31
<PAGE>
                                                                       EXHIBIT A

                                 PROMISSORY NOTE

$30,000,000.00                            Date: September 30, 2003

      FOR VALUE RECEIVED, the undersigned (herein called the "Company"), hereby
promises to pay to the order of Sky Bank (the "Bank" or, together with its
successors and assigns, the "Holder") at East Liverpool, Ohio address], or at
such other place as the Holder may designate from time to time, the principal
sum of Thirty Million Dollars ($30,000,000.00) or so much thereof as may be
outstanding from time to time at such times and in such amounts as set forth in
the Warehousing Credit and Security Agreement dated as of September 30, 2003,
between the Company and the Bank (the "Agreement"). The unpaid amount of each
Advance shall bear interest, from the date of such Advance until paid in full,
at a rate per annum equal to the Index (as hereinafter defined) of the Bank (the
"Floating Rate"); provided, however, that the Floating Rate shall not be less
than five percent (5%) per annum. All interest and transaction fees will be
deducted from the proceeds remitted from the Investor to the Bank on each
individual loan. In the event the total sum of the advance plus such fees and
interest exceeds the remittance amount received from the investor, the deficit
amount shall be deemed in arrears and will be payable to the Bank on the [___]
day of each month. All payments hereunder shall be made in lawful money of the
United States and in immediately available finds.

      As used herein, the term "Index" shall mean the independent index which is
The Wall Street Journal Prime Rate. The Index is not necessarily the lowest rate
charged by the Bank on its loans. If the Index becomes unavailable during the
term of this Note, the Bank may designate a substitute Index after notice to the
Company. The rate of interest hereunder shall be adjusted as of the effective
date of each change in the Index. Should any issue arise as to the Index in
effect on any date or for any period, a certificate as to the Index in effect on
such date or for such period, executed by the chief financial officer of the
Bank, shall be deemed conclusively to establish such Index.

      Interest shall be computed on the basis of a 360-day year and applied to
the actual number of days in each interest calculation period.

      If any payments required to be made by the Company hereunder becomes due
and payable on a Saturday, Sunday or holiday, the due date thereof shall be
extended to the next succeeding business day and interest hereon shall be
payable at the then applicable rate during such extension. The holder of this
Note is hereby authorized to record the date and amount of each payment of
principal and interest, and applicable interest rates and other information with
respect thereto, on the schedules annexed to and constituting a part of this
Note and any such recordation shall constitute prima facie evidence of the
accuracy of the information so recorded; provided, however, that the failure to
make a notation or the inaccuracy of any notation shall not limit or otherwise
affect the obligations of the Company hereunder.

      Payments shall be applied first to the interest due hereunder at the
applicable rate set forth above and the balance thereof shall be applied on
account of the principal of this Note.
<PAGE>
                                                                       EXHIBIT A

      This Note is the note referred to in the Agreement and is entitled to the
benefits thereof Capitalized terms used herein without definition shall have the
meanings given them in said Agreement.

      Upon failure of the Company to pay any payment due hereunder in frill when
due or upon the occurrence of an Event of Default, the entire unpaid principal
balance hereof plus accrued and unpaid interest thereon shall, at the option of
the Bank, mature and become immediately due and payable all in accordance with
the terms of the Agreement.

      This Note may be prepaid in whole or in part at any time without premium
or penalty.

      The Company hereby agrees to pay, in addition to all of the sums of money
due hereunder, all costs of collection and attorneys' fees, whether suit be
brought or not, and all other amounts due under the Agreement, if this Note is
not paid in frill when due, whether at the stated maturity or by acceleration.
No provision hereof may be waived or modified orally, but all such waivers, or
modifications shall be in writing.

      The Company hereby waives presentment for payment, demand, protest, notice
of protest and notice of dishonor.

      This Note shall be construed and enforced in accordance with the laws of
the State of Ohio, without reference to its principles of conflicts of law.

      IN WITNESS WHEREOF the Company has executed this Note on the day and year
first above written.

                                    TRIBECA LENDING CORPORATION

                                    By__________________________________________
                                    Printed Name:
                                    Title:
<PAGE>
                                                                       EXHIBIT A
<PAGE>
                                                                       EXHIBIT B

               GUARANTY OF FRANKLIN CREDIT MANAGEMENT CORPORATION

                  UNCONDITIONAL AND CONTINUING SECURED GUARANTY

This Unconditional and Continuing Secured Guaranty ("Guaranty") is executed in
this 30th day of September 30, 2003, by Franklin Credit Management Corporation,
a corporation organized and existing under the laws of the state of Delaware,
having an address of 6 Harrison Street, New York City. New York 10013
("Guarantor") in favor and for the benefit of SkyBank, an Ohio state chartered
bank, having an address of 110 East Main Street, Salineville, Ohio 43945
(hereinafter "Lender"). Guarantor unconditionally guarantees to Lender lie
prompt payment and performance of each and every obligation or liability of
Tribeca Lending Corporation ("Borrower") to Lender, now or at any time hereafter
arising, including payment of all principal, interest and others L55ii5 due,
whether by acceleration or otherwise, under that certain Warehouse Credit and
Security Agreement dated September 30, 2003, between Borrower and Lender
("Agreement"), together with alt late charges, disbursements, expenses and
deficiencies.

1, WARRANTIES. [a] Organization. Guarantor warrants that Guarantor is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its organization. [b] Power and Authority. Guarantor warrants
that Guarantor has the power and authority to incur she obligations of this
Guaranty, to execute, deliver and perform this Guaranty, and that Guarantor has
taken all requisite action to authorize the execution, delivery and performance
of Guarantor's obligations Larder this Guaranty. [c] Contracts. Guarantor
warrants that there are no provisions of any existing indenture, contract,
agreement to which Guarantor is a party, or of any law, administrative
regulation, court order, nr consent decree that would be contravened by the
execution, delivery, nr performance of this Guaranty. [d]Inducement to Lender:
Waivers. Guarantor [1] acknowledges that Leader would not have extended die
Indebtedness under the Agreement and will not continue to extend Indebtedness to
Borrower but for tins Guaranty; [2] warrants that Guarantor has given due
Guaranty to induce Lender to extend and to continue to extend Indebtedness to
Borrower; [3] agrees that Lender may rely on this Guaranty in extending future
Indebtedness to Borrower [4] warrants that Guarantor has received good and
valuable consideration for this Guaranty; [5] waiver acceptance of this
Guaranty; [6] warrants that Guarantor has not given this Guaranty in reliance
upon the existence of any security; [7] acknowledges receipt of notice of all
Indebtedness extended before this date; [8] waives notice of any Indebtedness
extended after this date; and [9] waives protest and arty other notice of
failure to pay the Indebtedness or to performs any agreement relating to any
Indebtedness or Security. As used herein, the terra "Security" means and
includes all guaranties of any Indebtedness, all interest in real or personal
property securing the payment of any Indebtedness or any guaranties of any
Indebtedness, and all of agreements. rights, or interests insuring or
guaranteeing payment of any Indebtedness. [e] No Reliance on Information from
Lender. Guarantor [1] warrants that Guarantor has not relied on any information
about any Borrower, the Security, or any guarantor of die Indebtedness provided
directly or indirectly by Lender; [2] warrants that Guarantor is familiar with
each Borrower, each Borrower's affairs, and the Security; [3] warrants that
Guarantor has had ample opportunity to investigate each Borrower, each
Borrower's affairs, die Security, and the effect that the Indebtedness will have
thereon; [4] warrants that Guarantor has been provided by Borrower all
information concerning each Borrower, each Borrower's affairs, and the Security
requested; [5] warrant that Guarantor has had adequate opportunity to seek and
evaluate professional advice concerning each Borrower, die Security, and this
Guaranty from advisors of Guarantor's choosing, including financial and legal
advice; and [6] agrees that Guarantor shall not rely on any information provided
by Lender about each Borrower or die Security, including any-other guarantor.
Guarantor shall continue to investigate and evaluate each Borrower and Use
Security independently throughout the term of this Guaranty, and Lender has no
obligation to provide Guarantor any information about clay Borrower or die
Security.

2. WAIVERS. With out notice to or consent of Guarantor, Lender may in or refrain
from doing anything affecting any Indebtedness or any Security including the
following: [a] granting or not granting any indulgences to anyone liable for
payment of the Indebtedness or any Security; [b] failing to get or to perfect
any Security; [c] failing to get an enforceable agreement to repay the
Indebtedness;[d] releasing any Security or anyone or any property from liability
for payment of the Indebtedness; [e] changing any agreement relating to the
Indebtedness or any Security; [f] extending die time for payment of the
Indebtedness; and [g] delaying the enforcement of nr failing to enforce any
rights to payment of the Indebtedness or rights against any Security.

GUARANTOR WAIVES ALL SURESHIP AND OTHER SIMILAR DEFENSES.

3. DEFECTS IN SECURITY. ETC. Guarantor's obligations under this Guaranty shall
not be affected by [a] any default in any document concerning any Indebtedness
or Security when accepted by Lender or arising any time thereafter [b] Use
unenforceability of or defect in any Security or document relating to any
Indebtedness; [c] any decline in the value of any Security; or [d] death,
incompetence, insolvency, dissolution, liquidation, or winding up of affairs of
any Borrower, Guarantor, or anyone liable for any Security or the start of
insolvency proceedings by or against any such person or entity.

4. UNCONDITIONAL OBLIGATION. In the event of a default under the Agreement, or
any other agreement between Borrower and Lender, Guarantor shall immediately pay
to Lender the outstanding principal balance and all interest, charges, expenses
and other amounts payable in connection with any Indebtedness, regardless of
whether or not Lender first pursues a Borrower or exhausts any of its rights or
remedies against any Borrower, any other guarantor, others, or the Security.
Guarantor shall not have any right of subrogation to Lender unless and until the
Indebtedness is paid in full. Guarantor shall make no claim against any Borrower
or any Borrowers estate in any way arising out of this Guaranty is a any
proceeding wader the U.S. Bankruptcy Code, waives any right to such a claim, and
shall repay all repayments of any Indebtedness that are recovered from Lender or
avoided in such a proceeding or under any other law. This Guaranty shall extend
and be applicable to alt renewals, amendments, extensions, consolidations,
modifications, increases and restriction of the Indebtedness and Guarantor's
liability under dais Guaranty shall not be affected or in any way reduced or
canceled by any such action, No subsequent guaranty to Lender by Guarantor shall
supersede or terminate this Guaranty, but shall be an additional guaranty unless
otherwise stated therein and, if Guarantor has given a previous guaranty to
Lender, this Guaranty shall be in addition to the previous guaranty.

5. SECURITY INTEREST. As security for the payment and performance of die
Indebtedness and die obligations of the Guarantor under this Guaranty, Guarantor
grants to Lender a security interest in the Collateral of Guarantor. As used
herein, the term Collateral means all personal property of Guarantor wherever
located, and whether now owned or hereafter acquired, including without
limitation: (i) Accounts, including health-care insurance receivables; (ii)
Chattel Paper; (iii) Inventory; (iv) Equipment; (v) instrument; (vi) Investment
Property; (vii) Documents, including patient lists, records and files; (viii)
Deposit Account; (ix) General Intangibles, including patient lists, records and
files; (x) Supporting Obligations; and (xii) to the extent net listed above as
original Collateral, proceeds and products of the foregoing, including but not
limited to, payments from insurance claims for the loss, damage or destruction
of any of the Collateral. Any term used in the Uniform Commercial Code, as
adopted in Ohio ("UCC") and not defined in this Agreement has the meaning given
to die term in the UCC, as tie same may be amended from time to time.

6. SUBORDINATION. Guarantor subordinates to and postpones in favor oft the
Indebtedness and Security [a] any present and future debts and obligations of
any Borrower to Guarantor, and [],] airy liens or security interests securing
payment of such debt and obligations. Guarantor nary receive payment from
Borrower on any debts or obligations owed to Guarantor by Borrower, provided
however, that, upon the occurrence of an event of difficult by Borrower tinder
die Agreement, Guarantor shall not ask for or receive any payment for all or any
part of any debts and obligations owed to Guarantor by any Borrower until die
Indebtedness has been paid its full; and, if Guarantor receives such a payment
Guarantor shall immediately deliver the payment to Lender for credit against die
theta outstanding balance of the Indebtedness, whether natured or unmatured

7. FINANCIAL STATEMENTS. Guarantor shall promptly furnish to Lender such other
information and statements concerning die business affairs and financial
condition of Guarantor as Lender nary reasonably request. Guarantor shall give
Leader access to all books, records, and financial data of Guarantor by or
through any of Lender's officers, agents, attorneys or accountants, at all
reasonable times and from time to time. Lender may examine, inspect and make
extracts from Guarantor's books and other records at all reasonable rinses and
from time to time. Guarantor represents and warrants dial all financial
<PAGE>
                                                                       EXHIBIT B

statements off Guarantor furnished Lender will present fairly tire financial
position of Guarantor as of the dates of die statements and will be prepared in
accordance with accounting principles applied on a basis consistently maintained
thought the period involved.

8. TERMINATION; REVOCATION. This Guaranty shall automatically terminate on the
date on which all of Use Indebtedness is repaid is a full. No revocation of this
Guaranty or any substitute guaranty by Guarantor shall be effective until all of
the Indebtedness has been repaid in full.

9. SUCCESSORS: GOVERNING LAW; ENFORCEABILITY This Guaranty shall be biding upon
not only Guarantor but also Guarantor's heirs, administrators, and personal
representatives and shall inure to the benefit of Lender and its successors and
assigns. This Guaranty shall be construed and interpreted in accordance with the
laws oft the State of Ohio. If any provision of this warranty or the application
thereof to anyone or any circumstance shall be adjudge invalid or unenforceable
to any extent, die application of the reminder of the provision to the party or
circumstances, Use application of the provision to other parties or
circumstances, and the application of the remainder of this Guaranty shall not
be affected thereby. Each s provision of this Guaranty shall be valid and
enforceable to the fullest extent permitted by law.

10. NO WAIVERS BY LENDER. No forbearance by Lender in exercising any right under
this Guaranty, any Indebtedness, or any Security shall operate as a waiver
thereof no forbearance in exercising any right under this Guaranty, any
Indebtedness, or any Security oh any one or more occasions shall operate as a
waiver of such right on other occasion; and no single or partial exercise of any
right under this Guaranty, any Indebtedness, or any Security shaft preclude any
other or further exercise thereof or the exercise of any other right, power, or
privilege. Lender's tights under this Guaranty are cumulative and not exclusive
of any rights or remedies that Lender may otherwise have.

11.ATTORNEYS' FEES AND EXPENSES Guarantor shall pay to Lender all costs and
expenses incurred by Lender in enforcing or protecting Lenders tights in
connection with any Indebtedness, Security or thus Guaranty and in collecting
payment on any Indebtedness or this Guaranty, whether or not any Borrower is in
default under any document executed in connector with the Indebtedness,
including, but not limited to, [a]attorneys' and paralegals' fees; [b} the fees
and expenses of my litigation, administrative, bankruptcy, insolvency,
receivership or any other similar proceeding; [c]court costs; [d] the expenses
of Lender, its employees, agents, and witnesses in preparing for litigation arid
for lodging, ravel, and attendance at pretrial hearings, depositions, and
trials; and [e] consulting fees and expenses incurred by Lender in connection
with any litigation.

12.NOTICES Any notices required or desired to be given under this Guaranty shall
be in writing, and shall be delivered by nationally recognized overnight
delivery services U.S. mail (postage prepaid) or hand delivery, if to Lender, to
Sky Bank, 110 East Main Street, Salirueville, Ohio 43945, Attn: Jerry S.
Sutherien, Vice President, and if to Guarantor to the address set forth in the
opening paragraph of this Guaranty, with a copy to: Tribeca Lending Corporation,
5 Harrison Street, New York City, New York 10013, Attn: General Counsel, or to
such other address as Lender or Guarantor my hereafter give written notice
thereof.

13, WALVER OF JURY TRIAL. EACH PARTY TO TI-11S AGREEMENT VOLUNTARILY,
IRREVOCABLY AND UNCONDITIONALLY WAIVES AJ1Y RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN
THEM ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS GUARANTY, THE
AGREEMENT, OR ANY OTHER AGREEMENT OR DOCUMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO. GUARANTOR ACKNOWLEDGES
AND AGREES THAT THIS WAIVER OF JURY TRIAL IS A MATERIAL INDUCEMENT TO LENDER
ENTERING INTO THIS AGREEMENT.

IN WITNESS WHEREOF, GUARANTOR EXECUTES AND DELIVERS TO LENDER THIS UNCONDITIONAL
AND CONTINUING GUARANTY AS OF SEPTEMBER 30, 2003.

                GUARANTOR: FRANKLIN CREDIT MANAGEMENT CORPORATION

Witnesses:

/s/ [ILLEGIBLE]                           /s/ Joseph Caiazzo
____________________________________      ______________________________________

[ILLEGIBLE]                               E.V.P. C.O.O
____________________________________      ______________________________________

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