Document:

FIRST AMENDMENT TO SECOND AMENDED AND

      RESTATED CREDIT AGREEMENT

       

      This FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of December 28, 2007 (the “First Amendment”), is executed by and among WESTELL TECHNOLOGIES, INC., a Delaware corporation (“Technologies”), WESTELL, INC., an Illinois corporation (“Westell”), TELTREND, LLC, a Delaware limited liability company and successor by merger to Teltrend, Inc. (“Teltrend”), CONFERENCE PLUS, INC., a Delaware corporation (“CPI,” and, together with Technologies, Westell and Teltrend, collectively, the “Companies”, and each, individually, a “Company”) Westell Technologies, Inc., as the representative for the Companies (the “Company Representative”), and LASALLE BANK NATIONAL ASSOCIATION, a national banking association (the “Bank”), whose address is 135 South La Salle Street, Chicago, Illinois 60603.

       

      R E C I T A L S:

       

      A.        The Companies and the Bank entered into that certain Second Amended And Restated Credit Agreement dated as of June 30, 2006 (the “Loan Agreement”), pursuant to which Loan Agreement the Bank has made a Revolving Loan to the Companies evidenced by that certain Revolving Note dated as of June 30, 2006, in the maximum principal amount of Forty Million and 00/100 Dollars ($40,000,000.00), executed by the Companies and made payable to the order of the Bank (the “Revolving Note”).

       

      B.        At the present time the Companies request, and the Bank is agreeable to an amendment to the Fixed Charge Coverage and Total Debt to EBITDA Ratio covenants for the fiscal quarters ending December 31, 2007 and March 31, 2007, pursuant to the terms and conditions hereinafter set forth.

       

      NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Companies and the Bank hereby agree as follows:

       

      A G R E E M E N T S:

       

      1.         RECITALS. The foregoing Recitals are hereby made a part of this First Amendment.

       

      2.         DEFINITIONS. Capitalized words and phrases used herein without definition shall have the respective meanings ascribed to such words and phrases in the Loan Agreement.

       

      

      	
                   
 	
                  3.
 	
                  AMENDMENTS TO THE LOAN AGREEMENT.
 

      

       

      3.1       Applicable Margin. The definition of “Applicable Margin” in Section 1.1 of the Loan Agreement is hereby amended by adding the following paragraph at the end thereof:

       

       “Notwithstanding anything to the contrary in the definition of “Applicable Margin”, for the Borrower’s fiscal quarters ending December 31, 2007 and March 

       

      
      

      

      

      31, 2008 the Applicable Margin shall be determined based on the Borrower’s Total Debt to Adjusted EBITDA Ratio for such fiscal quarters.”

       

      3.2       New Definitions. The following new definitions are hereby added to Section 1.1 of the Loan Agreement in the proper alphabetical order:

       

      “          “Adjusted EBITDA” means, for any period, Consolidated Net Income for such period plus, to the extent deducted in determining such Consolidated Net Income, Interest Expense, income tax expense, depreciation and amortization for such period, plus, severance for facility shutdowns, stay bonuses, the Keystone consulting fee, lease termination for facility shutdown, Inventory relocation, new employee expense, AT&T business loss and stock based compensation in an amount not to exceed $9,000,000 as of the Companies’ fiscal quarter end December 31, 2007 and $11,500,000 as of the Companies’ fiscal quarter end March 31, 2008. 

       

       “Adjusted Fixed Charge Coverage Ratio” means, for any Computation Period, the ratio of (a) the total of (i) Adjusted EBITDA for such period minus (ii) the sum of (A) income taxes paid in cash by the Loan Parties for such period plus (B) all unfinanced Capital Expenditures for such period plus (c) cash dividends issued by the Companies and their respective Subsidiaries for such period plus (d) other cash distributions utilized to repurchase stock of the Companies and their respective Subsidiaries for such period to (b) the sum of (i) cash Interest Expense for such period plus (ii) required payments of principal of Funded Debt
      (excluding the Revolving Loans if no equivalent reduction in the Revolving Commitment is made) for such period.

       

       “Total Debt to Adjusted EBITDA Ratio” means, as of the last day of any Fiscal Quarter, the ratio of (a) Total Debt as of such day to (b) Adjusted EBITDA for the Computation Period ending on such day.”  

       

      3.3       Fixed Charge Coverage Ratio. Section 11.14.1 of the Loan Agreement is hereby amended in its entirety to read as follows:

       

       “11.14.1  Fixed Charge Coverage Ratio. Not permit the Fixed Charge Coverage Ratio as of the last day of any Computation Period (other than the Computation Periods ending December 31, 2007 and March 31, 2008) to be less than 1.50:1.00, and not permit the Adjusted Fixed Charge Coverage Ratio as of the last day of the Computation Periods ending December 31, 2007 and March 31, 2008 to be less than 1.50 to 1.00.”

       

      3.4       Total Debt to EBITDA Ratio. Section 11.14.3 of the Loan Agreement is hereby amended in its entirety to read as follows:

       

       “11.14.3  Total Debt to EBITDA Ratio. Not permit the Total Debt to EBITDA Ratio as of the last day of any Computation Period (other than the Computation Periods ending December 31, 2007 and March 31, 2008) to exceed 2.50:100, and not permit the Total Debt to Adjusted EBITDA as of the last day of 

       

      2

       

      
      

      

      

      the Computation Periods ending December 31, 2007 and March 31, 2008 to exceed 2.50 to 1.00.”

       

      4.         REPRESENTATIONS AND WARRANTIES. To induce the Bank to enter into this First Amendment, each Company hereby certifies, represents and warrants to the Bank that:

       

      4.1       Organization. Each Company is duly organized, existing and in good standing under the laws of the State of its organization with full and adequate power to carry on and conduct its business as presently conducted. Such Company is duly licensed or qualified in all foreign jurisdictions wherein the nature of its activities require such qualification or licensing. Its Articles of Incorporation and Bylaws, Articles of Organization and Operating Agreement, Borrowing Resolutions and Incumbency Certificate of such Company have not been changed or amended since the most recent date that certified copies thereof were delivered to the Bank. The exact legal name of each Company is as set forth in the preamble of this First Amendment, and such Company currently does not conduct, nor has it during the last five
      (5) years conducted, business under any other name or trade name. Such Company will not change its name, its organizational identification number, if it has one, its type of organization, its jurisdiction of organization or other legal structure.

       

      4.2       Authorization. Each Company is duly authorized to execute and deliver this First Amendment and is and will continue to be duly authorized to borrow monies under the Loan Agreement, as amended hereby, and to perform its obligations under the Loan Agreement, as amended hereby.

       

      4.3       No Conflicts. The execution and delivery of this First Amendment and the performance by such Company of its obligations under the Loan Agreement, as amended hereby, do not and will not conflict with any provision of law or of the Articles of Incorporation or Bylaws or Articles of Organization or Operating Agreement of such Company or of any agreement binding upon the Company.

       

      4.4       Validity and Binding Effect. The Loan Agreement, as amended hereby, is a legal, valid and binding obligation of such Company, enforceable against such Company in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors’ rights or by general principles of equity limiting the availability of equitable remedies.

       

      4.5       Compliance with Loan Agreement. The representation and warranties set forth in Section 9 of the Loan Agreement, as amended hereby, are true and correct with the same effect as if such representations and warranties had been made on the date hereof, with the exception that all references to the financial statements shall mean the financial statements most recently delivered to the Bank and except for such changes as are specifically permitted under the Loan Agreement. In addition, the Companies have complied with and are in compliance with all of the covenants set forth in the Loan Agreement, as amended hereby, including, but not limited to, those set forth in Section 10 and Section 11 thereof.

       

      4.6       No Event of Default. As of the date hereof, no Event of Default under Section 12 of the Loan Agreement, as amended hereby, or event or condition which, with the 

       

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      giving of notice or the passage of time, or both, would constitute an Event of Default, has occurred or is continuing.

       

      5.         CONDITIONS PRECEDENT. This First Amendment shall become effective as of the date above first written after receipt by the Bank of the following:

       

      5.1       First Amendment. This First Amendment executed by the Companies the Bank.

       

      5.2       Amendment Fee. The Companies agrees to pay to the Bank and amendment fee in the amount of Thirty Thousand and 00/100 Dollars ($30,000.00), due and payable upon the execution and delivery of this First Amendment by the Companies to the Bank.

       

      5.3       Other Documents. Such other documents, certificates and/or opinions of counsel as the Bank may request.

       

      

      	
                   
 	
                  6.
 	
                  GENERAL.
 

      

       

      6.1       Governing Law; Severability. This First Amendment shall be construed in accordance with and governed by the laws of Illinois. Wherever possible each provision of the Loan Agreement and this First Amendment shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Loan Agreement and this First Amendment shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of the Loan Agreement and this First Amendment.

       

      6.2       Successors and Assigns. This First Amendment shall be binding upon the Companies, the Bank and their respective successors and assigns, and shall inure to the benefit of the Companies and the Bank and the successors and assigns of the Bank.

       

      6.3       Continuing Force and Effect of Loan Documents. Except as specifically modified or amended by the terms of this First Amendment, all other terms and provisions of the Loan Agreement and the other Loan Documents are incorporated by reference herein, and in all respects, shall continue in full force and effect. The Companies, by execution of this First Amendment, hereby reaffirm, assume and bind themselves to all of the obligations, duties, rights, covenants, terms and conditions that are contained in the Loan Agreement and the other Loan Documents. 

      6.4       References to Loan Agreement. Each reference in the Loan Agreement to “this Agreement”, “hereunder”, “hereof”, or words of like import, and each reference to the Loan Agreement in any and all instruments or documents delivered in connection therewith, shall be deemed to refer to the Loan Agreement, as amended hereby.

       

      6.5       Expenses. The Companies shall pay all costs and expenses in connection with the preparation of this First Amendment and other related loan documents, including, without limitation, reasonable attorneys’ fees and time charges of attorneys who may be employees of the Bank or any affiliate or parent of the Bank. The Companies shall pay any and all stamp and other taxes, UCC search fees, filing fees and other costs and expenses in connection with the execution and delivery of this First Amendment and the other instruments 

       

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      and documents to be delivered hereunder, and agrees to save the Bank harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such costs and expenses.

       

      6.6       Counterparts. This First Amendment may be executed in any number of counterparts, all of which shall constitute one and the same agreement.

       

      IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to Second Amended and Restated Credit Agreement as of the date first above written.

       

      [Signatures follow on the next page]

       

      5

       

      
      

      

      

      
      

      

      	
                   
 	
                  WESTELL TECHNOLOGIES, INC., as a
 

      

      

      	
                   
 	
                  Company and as the Company Representative
 

      

       

      

      	
                   
 	
                  By:
 	
                  /s/ Amy Forster
 

      

      

      	
                   
 	
                  Its:
 	
                  Chief Financial Officer
 

      

      

      	
                   
 	
                  Address:
 	
                  750 North Commons Drive
 

      

      

      	
                   
 	
                  Aurora, Illinois  60504
 

      

       

       

      

      	
                   
 	
                  WESTELL, INC., as a Company
 

      

       

      

      	
                   
 	
                  By:
 	
                  /s/ Amy Forster
 

      

      

      	
                   
 	
                  Its:
 	
                  Chief Financial Officer
 

      

      

      	
                   
 	
                  Address:
 	
                  750 North Commons Drive
 

      

      

      	
                   
 	
                  Aurora, Illinois  60504
 

      

       

       

      

      	
                   
 	
                  CONFERENCE PLUS, INC., as a Company
 

      

       

      

      	
                   
 	
                  By:
 	
                  /s/ Amy Forster
 

      

      

      	
                   
 	
                  Its:
 	
                  ______________________________
 

      

      

      	
                   
 	
                  Address:
 	
                  750 North Commons Drive
 

      

      

      	
                   
 	
                  Aurora, Illinois  60504
 

      

       

       

      

      	
                   
 	
                  TELTREND, LLC, as a Company
 

      

       

      

      	
                   
 	
                  By:
 	
                  /s/ Amy Forster
 

      

      

      	
                   
 	
                  Its:
 	
                  ______________________________
 

      

      

      	
                   
 	
                  Address:
 	
                  750 North Commons Drive
 

      

      

      	
                   
 	
                  Aurora, Illinois  60504
 

      

       

       

      

      	
                   
 	
                  LASALLE BANK NATIONAL ASSOCIATION,
 

      

      

      	
                   
 	
                  a national banking association
 

      

       

      

      	
                   
 	
                  By:
 	
                  /s/ Anne Eharoshe
 

      

      

      	
                   
 	
                  Name:
 	
                  Anne Eharoshe
 

      

      

      	
                   
 	
                  Title:
 	
                  Vice President
 

      

       

      Chicago Legal/Lindquist Duane/Westell/First Amendment

       

      6kl01002_ex10-1.htm

    
      

    

     

    Exhibit
10.1

    
 

    FORBEARANCE
      AGREEMENT
      AND

    AMENDMENT
      TO CREDIT
      AGREEMENTS

    

    THIS
      FORBEARANCE AGREEMENT AND
      AMENDMENT TO CREDIT AGREEMENTS (this “Agreement”) is
      entered into as of the 28th day of December, 2007, (the “Forbearance Effective
      Date”) by and among THE BORROWERS listed on Schedule
      1 hereto
      (each, a “Borrower” and
      collectively, the “Borrowers”), FRANKLIN
      CREDIT MANAGEMENT CORPORATION, a Delaware corporation, in its capacity as a
      borrower under the Franklin Warehousing Agreement and Franklin Term Loan
      Agreement (each as defined below),as account party for certain letters of
      credit, as Guarantor hereunder and as servicer (“FCMC” or “Guarantor”),
      and THE
      HUNTINGTON NATIONAL BANK (“Huntington”
or
“Lender”).

    

    RECITALS:

    

    WHEREAS,
      certain of the Borrowers, FCMC
      and Huntington (as successor-in-interest to Sky Bank) are parties to that
      certain Master Credit and Security Agreement, dated as of October 13, 2004,
      as
      the same has been amended, supplemented, restated or otherwise modified prior
      to
      the date of this Agreement (the “Franklin Master
      Agreement”), pursuant to which Huntington holds certain outstanding loans
      made to the applicable Borrowers (the “Franklin Master
      Term
      Loans”, which term shall be exclusive of loans evidenced by (i) a certain
      Flow 2006 F Corp. note in the original principal amount of $19,863,972.93,
      (ii)
      a certain FCMC 2006 M Corp. note in the original principal amount of
      $16,183,766.66, and (iii) a certain FCMC 2006 K Corp. note in the original
      principal amount of $14,433,383.90, together the “Static Loans”), which
      Franklin Master Term Loans are secured by, among other things, certain Mortgage
      Loans as provided in the Franklin Master Agreement and the other agreements
      entered into in connection therewith; and

    

    WHEREAS,
      FCMC and Huntington (as
      successor-in-interest to Sky Bank) are parties to that certain Flow Warehousing
      Credit and Security Agreement, dated as of August 11, 2006, as the same has
      been
      amended, supplemented, restated or otherwise modified prior to the date of
      this
      Agreement (the “Franklin Warehousing
      Agreement”), pursuant to which Huntington holds certain outstanding loans
      made to FCMC and in connection therewith has issued certain outstanding letters
      of credit for the account of FCMC (collectively, the “Franklin Warehousing
      Credits”), which loans and letters of credit are secured by, among other
      things, certain Mortgage Loans as provided in the Franklin Warehousing Agreement
      and the other agreements entered into in connection therewith; and

    

    WHEREAS,
      FCMC and Huntington (as
      successor-in-interest to Sky Bank) are parties to that certain Term Loan and
      Security Agreement, dated as of February 22, 1995, as the same has been amended,
      supplemented, restated or otherwise modified prior to the date of this Agreement
      (the “Franklin Term
      Loan Agreement”), pursuant to which Huntington holds certain outstanding
      loans made to FCMC (the “Franklin Revolving
      Loans”), which loans are secured by, among other things, certain Mortgage
      Loans as provided in the Franklin Term Loan Agreement and the other agreements
      entered into in connection therewith (the Franklin Master Agreement, the
      Franklin Warehousing Agreement and the Franklin Term Loan Agreement are
      collectively referred to as,

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     the
      “Credit
      Agreements,” and the Franklin Master Term Loans, the Franklin Warehousing
      Credits and the Franklin Revolving Loans are collectively referred to as the
      “Commercial
      Loans”); and

    

    WHEREAS,
      as of the date hereof certain
      of the Borrowers and FCMC are in default of the following provisions of the
      Credit Agreements as applicable:

    

    A.  Franklin
      Master Agreement:

     

    (i)
      certain of the Borrowers have failed to pay at maturity the following Commercial
      Loans: (1) Flow 2001 I Corp. in the original principal sum of $2,954,397.38
      dated 11/08/2001 (2) FCMC K Corp. in the original principal sum of $2,390,573.56
      dated 11/12/2004, (3) FCMC 2004 K Corp. in the original principal sum of
      $7,129,066.00 dated 11/19/2004, (4) FCMC 2001 C Corp. in the original principal
      sum of $607,606.49 dated 11/15/2001;

    

    
      	
               

            	
              (ii)
                FCMC has failed to deliver to Lender statements of income and cash
                flows
                and related balance sheet, each for the fiscal quarter ending September
                30, 2007, certified by the chief financial officer or other appropriate
                officer of FCMC; 

            

    

    

    
      	
               

            	
              (iii)
                FCMC and its Subsidiaries have failed to maintain a minimum net worth
                of
                not less than $10,000,000; and 

            

    

    

    (iv);
      FCMC and its Subsidiaries have
      failed to comply with the terms of indebtedness in excess of $100,000 owing
      to
      BOS (USA) Inc. pursuant to a certain Master Credit and Security Agreement dated
      March 24, 2006 among BOS (USA) Inc., Tribeca Lending Corp. and certain other
      Subsidiaries signatory thereto, as amended, supplemented, restated or otherwise
      modified from time to time;

     

    (the
      defaults set forth in clauses (A)(i) through (iv) above shall be referred to
      as
      the “Franklin Master
      Acknowledged Defaults”.

     

    B.  Franklin
      Warehousing Agreement:

     

    (i)
      the Franklin Master Acknowledged
      Defaults are defaults under the FranklinWarehousing Agreement; and

     

    (ii)
      certain of the Borrowers may be in
      default of various other provisions of the FranklinWarehousing
      Agreement;

     

    (the
      defaults set forth in clauses (B) (i) and (ii) above shall be referred to as
      the
“Franklin Warehousing
      Acknowledged Defaults”.

     

    C.  Franklin
      Term Loan Agreement:

     

    (i)
      the Franklin Master Acknowledged
      Defaults are defaults under the Franklin Term LoanAgreement; and

     

     

    
      
        
        

      

      
        Page
          2 of
          46

        
          

        

      

      
        
        

      

    

     

     

    (ii)
      certain of the Borrowers may be in
      default of various other provisions of the FranklinTerm Loan
      Agreement

     

    (the
      defaults set forth in clauses (C) (i) and (ii) above shall be referred to as
      the
“Franklin Term Loan
      Acknowledged Defaults”, and together with the Franklin Master
      Acknowledged Defaults and the Franklin Warehousing Acknowledged Defaults ,
      the
“Acknowledged
      Defaults”); and

     

    WHEREAS,
      Guarantor and each Borrower
      have requested that Lender not exercise its rights to initiate proceedings
      to
      foreclose or otherwise realize upon the Collateral which secures the Obligations
      of Guarantor and Borrowers as a consequence of the Acknowledged Defaults, and
      Guarantor and each Borrower acknowledge that Lender is entitled to exercise
      all
      rights and remedies available to Lender under the Loan Documents;
      and

     

    WHEREAS,
      Guarantor and each Borrower
      acknowledge that Lender is granting the forbearance as provided in this
      Agreement in consideration and reliance upon the promises and agreements of
      Guarantor and each Borrower contained in this Agreement, and Guarantor and
      each
      Borrower  acknowledge and agree that all actions taken by Lender prior
      to the date hereof have been reasonable and appropriate under the circumstances;
      and

     

    WHEREAS,
      the Borrowers, FCMC, and
      Lender wish to make the Credit Agreements subject to the terms of this
      Agreement, on the terms and conditions set forth herein, in order to, among
      other things, (a) consolidate the Commercial Loans and convert the aggregate
      outstanding principal amounts thereof into (i) a term loan facility in the
      amount of $600,000,000 (“Tranche A”), (ii) a
      term loan facility in the amount of $341,204,494, divided into four (4)
      sub-tranches of $79,051,123.50 each and one sub-tranche of $25,000,000 (“Tranche B-1,” “Tranche
      B-2,” “Tranche B-3”,
“Tranche
      B-4” and
“Tranche B-5”
      and, collectively, “Tranche B”) and (iii)
      a term loan facility in the amount of $125,000,000 (“Tranche C”), (b)
      maintain and increase an existing revolving credit facility to FCMC in the
      amount of up to $5,000,000 and an existing letter of credit facility in an
      amount not to exceed $5,500,000 for Letters of Credit (together, “Tranche D”), (c) make
      each of Tranche A, Tranche B, Tranche C and Tranche D a full recourse obligation
      of each Borrower, and make each Borrower jointly and severally liable for the
      repayment of Tranche A, Tranche B, Tranche C and Tranche D, and (d) reaffirm
      all
      obligations, liabilities and Liens on substantially all assets of each Borrower
      and Guarantor, including without limitation all of the collateral which secures
      the Commercial Loans; and

     

    WHEREAS,
      in order to induce Lender to
      enter into this Agreement, Guarantor is willing to provide a guaranty agreement
      and to secure its obligations thereunder with a Lien on substantially all of
      its
      assets; and

     

    WHEREAS,
      in connection with the Credit
      Agreements and the Commercial Loans, certain of the Borrowers and Guarantor
      entered into promissory notes, security agreements, certificates, letter of
      credit reimbursement agreements, pledge agreements, control agreements, joinder
      agreements, counterpart signature pages, assignments, guaranties, banking
      services agreements, hedging agreements, cash management agreements, consent
      agreements, collateral agreements, amendments, modification agreements,
      instruments and financing statements and other loan documents (each of the
      foregoing, together with each Credit Agreement, this Agreement, the FCMC
      Guaranty and all other agreements executed in connection herewith or therewith,
      a “Loan
      Document” and collectively, the “Loan Documents”);
      and

     

     

     

    
      
        
        

      

      
        Page
          3 of
          46

        
          

        

      

      
        
        

      

    

     

     

    WHEREAS,
      as of December 28, 2007,
      certain Borrowers owe to Lender, without offset, recoupment or dispute, the
      outstanding principal balances of the Commercial Loans as are set forth on
Schedule 2 hereto
      (the “Commercial Loan
      Principal Balances”), together with interest, fees, expenses, and other
      charges pursuant to the Credit Agreements, and the Borrowers have requested
      Lender to forgive $300,000,000 of the Commercial Loan Principal Balances, and
      Lender has agreed to do so in reliance of the agreements of Guarantor and
      Borrowers in this Agreement; and

     

    WHEREAS,
      by reason of the Acknowledged
      Defaults, Lender has no obligation to make any additional advance on any Loan
      Document, and Lender is entitled to immediately exercise any right, power or
      remedy permitted thereto by law or any provision of the Loan Documents;
      and

     

    WHEREAS,
      FCMC and the Borrowers have
      requested that Lender forbear from exercising rights and remedies under the
      respective Loan Documents pursuant to the terms of this Agreement.

     

    NOW,
      THEREFORE, for good and valuable consideration, the receipt and sufficiency
      of
      which are hereby acknowledged, Guarantor and each Borrower acknowledge and
      agree
      that all of the recitals set forth above are true and correct and are
      incorporated into this Agreement by this reference, and the parties hereto,
      intending to be legally bound, hereby agree as follows:

    

    1.    Forbearance,
      Ratification
      and Reaffirmation, Forgiveness of Indebtedness.

    

    (a)           
      Absent a Forbearance Default, Lender, prior to May 15, 2009 (the “Forbearance Date”),
      agrees not to initiate collection proceedings or exercise its remedies under
      the
      Loan Documents in respect of any Commercial Loan against Guarantor, any Borrower
      or any Collateral or elect to have interest accrue under the respective Loan
      Documents at the stated rate applicable after default.  In addition,
      absent a Forbearance Default, Lender, prior to thirty (30) days after the
      Forbearance Effective Date, agrees not to initiate collection proceedings or
      exercise its remedies under the Loan Documents in respect of any Static Loan
      against Guarantor, any Borrower or any Collateral or elect to have interest
      accrue under the respective Loan Documents at the stated rate applicable after
      default.  Each Borrower and Guarantor acknowledges and agrees that,
      except as specifically set forth in this Agreement, Lender (i) reserves the
      right to enforce each and every term of any Loan Document; (ii) is under no
      duty
      or obligation of any kind or any nature to grant Guarantor or any Borrower
      any
      additional period of forbearance beyond the Forbearance Date; (iii) shall not
      be
      construed to waive, relinquish or estop Lender from asserting Lender’s rights
      under any Loan Document or applicable law; and (iv) shall be under no impediment
      to Lender’s right to pursue any and all remedies available to it on or after the
      Forbearance Date or immediately upon the occurrence of a Forbearance
      Default.

    

    (b)    Guarantor
      and
      each Borrower agree that (i) all Obligations under the Credit Agreements are
      the
      valid and binding obligations of Guarantor and each Borrower respectively and
      are enforceable in accordance with the terms thereof, except as modified by
      this
      Agreement; (ii) Obligations of each Borrower evidenced by each promissory note
      executed in connection with the Credit Agreements, including without limitation,
      each promissory note executed in connection with each Commercial Loan, executed
      and

     

     

     

    
      
        
        

      

      
        Page
          4 of
          46

        
          

        

      

      
        
        

      

    

     

     

    delivered
      by each Borrower are valid and binding without any present right of offset,
      claim, defense or recoupment of any kind and are hereby ratified and confirmed
      in all respects and that the outstanding principal balance of each Commercial
      Loan as of the date set forth in Schedule 2 hereto is set forth on Schedule
      2
      hereto; and (iii) the Liens and security interests granted to Lender with
      respect to each Mortgage Loan and other Collateral pledged as security for
      all
      Obligations of Guarantor and each Borrower under the Credit Agreements and
      the
      promissory notes executed in connection therewith are valid and binding and
      are
      enforceable in accordance with the terms thereof, except as modified by this
      Agreement and are hereby ratified and confirmed in all respects.

    

    (c)    As
      of the
      Forbearance Effective Date, provided that the Borrowers pay to Lender (i) all
      interest and other charges owing in respect of the Commercial Loan Principal
      Balances as of December 28, 2007, and the Commercial Loans and (ii) the
      Restructuring Fee, Lender hereby agrees to forgive and hold harmless Guarantor
      and the Borrowers a portion of the Commercial Loan Principal Balances totaling
      $300,000,000.

    

    2.    Certain
      Defined
      Terms.  All capitalized terms used herein and not otherwise
      defined herein shall have the meanings ascribed to such terms in the Franklin
      Master Agreement.  As used herein, the following terms shall have the
      following meanings (all terms defined in this Section 2 or in other provisions
      of this Agreement in the singular to have the same meanings when used in the
      plural and vice versa):

    

    “Accepted
      Servicing
      Practices” shall mean, with respect to any Mortgage Loan, accepted and
      prudent mortgage servicing practices (including collection procedures) generally
      acceptable to prudent mortgage lending institutions which service mortgage
      loans
      of the same type as such Mortgage Loans in the jurisdiction where the related
      mortgaged property is located and in a manner consistent with (i) the policies
      and practices in existence as of the Forbearance Effective Date for a period
      of
      60 days after such date and (ii) thereafter with the standards and procedures
      described in the policies delivered to Lender pursuant to Section 11(c) (or
      if
      FMC fails to deliver such standards and policies, with the standards and
      policies prescribed by Lender).

    

    “Advance”
or
“Advances”
shall
      mean
      one or more of the Tranche A Advances, the Tranche B Advances, the Tranche
      C
      Advances or the Tranche D Advances, or any combination thereof.

    

    “Affiliate”
shall
      mean, with respect to any Person, any other Person which, directly or
      indirectly, controls, is controlled by, or is under common control with, such
      Person. For purposes of this definition, “control” (together with the
      correlative meanings of “controlled by” and “under common control with”) means
      the possession, directly or indirectly, of the power (a) to vote 10% or more
      of
      the securities (on a fully diluted basis) having ordinary voting power for
      the
      directors or managing general partners (or their equivalent) of such Person,
      or
      (b) to direct or cause the direction of the management or policies of such
      Person, whether through the ownership of voting securities, by contract, or
      otherwise.

    

    “Applicable
      Collections
      Amount” shall have the meaning assigned thereto in Section
      5(d).

     

     

     

    
      
        
        

      

      
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    “Applicable
      Margin”
shall mean, with respect to each Advance listed below, the percentage
      set forth
      below opposite such Advance:

     

    Tranche
      A Advance.......................               2.25%

    Tranche
      B Advance........................                       2.75%

    Tranche
      D Advance........................               2.50%

     

    “Application
      and Agreement
      for Letter of Credit” shall mean an application and agreement for standby
      letter of credit by, between and among Guarantor or any Borrowers, on the one
      hand, and Lender, on the other hand, in a form provided by Lender, either as
      originally executed or as it may from time to time be supplemented, modified,
      amended, renewed or extended.

    

    “Approved
      Expenses”
shall mean those expenses of Guarantor and its Subsidiaries as shall
      be approved
      by Lender in its sole discretion, and which shall include the expenses of
      Guarantor its Subsidiaries in the ordinary course of business of up to
      $2,500,000 per month for the first two months after the Forbearance Effective
      Date, including without limitation, all fees and expenses as described in
      Section 40 of this Agreement (other than any such amounts paid in January 2008
      and February 2008), out-of-pocket collection advances, expenses related to
      the
      maintenance of REO Properties, all fees and charges in respect of Letters of
      Credit and banking services provided for the account of Guarantor and any
      Borrower and costs of any litigation to require sellers of Mortgage Loans
      pledged to Lender to repurchase such loans because of fraud, misrepresentation
      or breach of warranty, in each case at the discretion of Lender.

    

    “Bankruptcy
      Code”
shall mean Title 11 of the United States Code (11 U.S.C. Section 101
      et seq.),
      as amended by the Bankruptcy Reform Act and as further amended from time to
      time, or any successor statute.

    

    “Bankruptcy
      Reform
      Act” shall mean the Bankruptcy Abuse Prevention and Consumer Protection
      Act of 2005, effective as of October 17, 2005.

    

    “Business
      Day” or
“business
      day”
shall mean any day other than a Saturday, Sunday or other day on which
      commercial banks are required or authorized to close under the laws of the
      State
      of Ohio, and if such day relates to a determination of LIBOR, means any such
      day
      on which dealings in U. S. dollar deposits are conducted by and between banks
      in
      the London interbank eurodollar market.

    

    “Capital
      Stock” shall
      mean any and all shares, interests, participations or other equivalents (however
      designated) of capital stock of a corporation, any other equity interests in
      an
      entity however designated, any membership interests in a limited liability
      company, any and all similar ownership interests in a Person, in each case
      whether certificated or uncertificated, and any and all warrants or options
      to
      purchase any of the foregoing.

    

    “Change
      of Control”
shall mean, (a) with respect to FCMC, the replacement of a majority
      of the board
      of directors of FCMC from the directors who constituted the board of directors
      on the date of this Agreement for any reason other than death or disability,
      and
      such replacement shall not have been approved by such board of directors of
      FCMC, as constituted on the date of this Agreement (or as changed over time
      with
      the approval of the then existing board of directors of FCMC); or (b) with
      respect to FCMC, a Person or Persons acting in concert, as a result of a
      tender

     

     

     

    
      
        
        

      

      
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    or
      exchange offer, open market purchases, privately negotiated purchases, exercise
      of the stock pledge or otherwise, shall have become the beneficial owner (within
      the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended)
      of equity securities of FCMC representing more than 20% of the combined voting
      power of the outstanding securities of FCMC, ordinarily having the right to
      vote
      in the election of directors from the beneficial owners as of the date of this
      Agreement; or (c) with respect to any Borrower, the failure of FCMC to own,
      directly or indirectly and free and clear of any adverse claims (other than
      Liens securing the Obligations), 100% of the issued and outstanding Capital
      Stock of such Borrower.

    

    “Collateral”
shall
      have the meaning assigned to such term in a certain Security Agreement dated
      November 15, 2007, as well as in the Credit Agreements, executed and delivered
      to Lender by Guarantor and the Borrowers and shall include without limitation
      all monies owing to Guarantor or any Borrower from taxing
      authorities.

    

    “Collections”
shall
      mean, without duplication, all collections, distributions, dividends, payments
      and other proceeds in respect of principal, interest, net liquidation proceeds
      or insurance proceeds, or Interest Rate Hedge Agreements from whatever source,
      received by or for the account of Guarantor, any Borrower, or Lender on or
      in
      respect of any Mortgage Loan(s) or otherwise constituting part of the
      Collateral, including without limitation (i) the net cash proceeds received
      by any Borrower or any of its Affiliates, together with any non-offered
      securities issued, in connection with the securitization or sale of any Mortgage
      Loan, and (ii) the related proceeds of any liquidation, collection, sale,
      receipt, appropriation or realization upon the Collateral, net of
      (iii) cash reserves for Escrow Deposits and Approved Expenses.

    

    “Commitments”
shall
      mean, collectively, the Tranche A Commitments, the Tranche B Commitments, the
      Tranche C Commitments and the Tranche D Commitments.

    

    “Escrow
      Deposits”
shall mean, with respect to any Mortgage Loan, the amounts constituting
      ground
      rents, taxes, assessments, water rates, sewer rents, municipal charges, mortgage
      insurance premiums, fire and hazard insurance premiums, condominium charges
      and
      any other payments actually received by the servicer or Lender, which are
      required to be escrowed by the related mortgagor with the related mortgagee
      pursuant to any mortgage or any other document.

    

    “FCMC
      Guaranty” shall
      mean the Guaranty dated as of date hereof and made by Guarantor in favor of
      Lender, as the same may be amended, supplemented or otherwise modified and
      in
      effect from time to time in accordance with the terms thereof.

    

    “Governmental
      Authority” shall mean any nation or government, any state or other
      political subdivision thereof, any entity exercising executive, legislative,
      judicial, regulatory or administrative functions of or pertaining to government
      and any court or arbitrator having jurisdiction over the Guarantor or any of
      the
      Borrowers, any of their Affiliates or any of their properties.

    

    “Indebtedness”
shall
      mean, for any Person: (a) obligations created, issued or incurred by such Person
      for borrowed money (whether by loan, the issuance and sale of debt securities
      or
      the sale of property to another Person subject to an understanding or agreement,
      contingent or

     

     

     

    
      
        
        

      

      
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    otherwise,
      to repurchase such property from such Person); (b) obligations of such Person
      to
      pay the deferred purchase or acquisition price of Property or services, other
      than trade accounts payable (other than for borrowed money) arising, and accrued
      expenses incurred, in the ordinary course of business; (c) indebtedness of
      others secured by a Lien on the property of such Person, whether or not the
      respective Indebtedness so secured has been assumed by such Person; (d)
      obligations (contingent or otherwise) of such Person in respect of letters
      of
      credit or similar instruments issued or accepted by banks and other financial
      institutions for account of such Person; (e) capital lease obligations of such
      Person; (f) obligations of such Person under repurchase agreements or like
      arrangements; (g) indebtedness of others guaranteed by such Person; (h) all
      obligations of such Person incurred in connection with the acquisition or
      carrying of fixed assets by such Person; (i) indebtedness of general
      partnerships of which such Person is a general partner; and (j) any other
      indebtedness of such Person evidenced by a note, bond, debenture or similar
      instrument.

    

    “Interest
      Period”
shall mean, with respect to any Advance, (i) initially, the period commencing
      on
      any funding date with respect to such Advance and ending on the calendar day
      prior to the Payment Date of the next succeeding month, and (ii) thereafter,
      each period commencing on the Payment Date of one month and ending on the
      calendar day prior to the Payment Date of the next succeeding month; provided, that if
      any
      Interest Period would otherwise expire on a day which is not a business day,
      such Interest Period shall be extended to the next succeeding business day;
      provided,
      however, that if such next succeeding business day occurs in the
      following calendar month, then such Interest Period shall expire on the
      immediately preceding business day, and provided further that
      interest shall continue to accrue on all amounts due and payable hereunder
      that
      remain unpaid on the applicable Termination Date until such time as such amounts
      are paid in full.

    

    “Interest
      Rate” shall
      mean, for each day in respect of (a) the Tranche A Advances, the Tranche B
      Advances or the Tranche D Advances, as applicable, a per annum rate equal to
      LIBOR for that day plus the relevant Applicable Margin, and (b) the Tranche
      C
      Advances, a rate of 10% per annum.

    

    “Interest
      Rate Hedge
      Agreement” shall mean an interest rate swap, cap or collar agreement or
      any other hedging arrangements providing for protection against fluctuations
      in
      interest rates or the exchange of nominal interest obligations, either generally
      or under specific contingencies.

    

    “Letter
      of Credit”
means any letter of credit issued by Lender for the account of Guarantor
      or any
      Borrower, either as originally issued or as the same may, from time to time,
      be
      amended or otherwise modified, extended or replaced.

    

    “Letter
      of Credit Facing
      Fee” shall mean, with respect to each issued and outstanding Letter of
      Credit, a facing fee payable to Lender, for its own account, at the rate of
      0.125% per annum multiplied by the average daily undrawn amount of such Letter
      of Credit during the period in respect of which such fee is paid.

    

    “Letter
      of Credit
      Exposure” shall mean, as of any date of determination, the aggregate
      undrawn stated amount of all outstanding Letters of Credit plus the aggregate
      of
      all amounts drawn under Letters of Credit for which Lender has not yet received
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    (whether from
      Guarantor, any Borrower or from the proceeds of Tranche D Advances or
      otherwise).

     

    “LIBOR”
shall
      mean, for each day during an
      Interest Period with respect to an Advance, the rate per annum obtained by dividing (1)
      the actual or
      estimated per annum rate, or the arithmetic mean of the per annum rates, of
      interest for deposits in U.S. dollars for one (1) month, as determined by Lender
      in its discretion based upon information which appears on page LIBOR01,
      captioned British Bankers Assoc. Interest Settlement Rates, of the Reuters
      America Network, a service of Reuters America Inc. (or such other page that
      may
      replace that page on that service for the purpose of displaying London interbank
      offered rates; or, if such service ceases to be available or ceases to be use
      by
      Lender, such other reasonably comparable money rate service as Lender may
      select) or upon information obtained from any other reasonable procedure, as
      of
      two banking days prior to the commencement of such Interest Period; by (2)
      an
      amount equal to one minus the stated maximum rate (expressed as a decimal),
      if
      any, of all reserve requirements (including, without limitation, any marginal,
      emergency, supplemental, special or other reserves) that is specified on each
      date LIBOR is determined by the Board of Governors of the Federal Reserve System
      (or any successor agency thereto) for determining the maximum reserve
      requirement with respect to eurocurrency funding (currently referred to as
      “Eurocurrency liabilities” in Regulation D of such Board) maintained by a member
      bank of such system, or any other regulations of any Governmental Authority
      having jurisdiction with respect thereto, all as conclusively determined by
      Lender.  As used herein, “banking day” shall mean any day other than a
      Saturday or a Sunday on which banks are open for business in Columbus, Ohio,
      and
      on which banks in London, England, settle payments.  Subject to any
      maximum or minimum interest rate limitation specified herein or by applicable
      law, LIBOR shall change automatically without notice to Guarantor or any
      Borrower immediately on the first day of each Interest Period, with any change
      thereto effective as of the opening of business on the day of any
      change.

    

    “LIBOR
      Advance” shall
      mean an Advance which bears an Interest Rate based on LIBOR.

    

    “Lien”
shall
      mean any
      mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance,
      lien (statutory or other), other charge or security interest, or any preference,
      priority or other agreement or preferential arrangement of any kind or nature
      whatsoever.

    

    “Mandatory
      Prepayment
      Event” shall mean:

    (a)           
      any sale, transfer or other disposition of any property of any Borrower (other
      than Tribeca Lending Corp. (“Tribeca”)) or Guarantor, including without
      limitation pursuant to any repurchase of Mortgage Loans; or

     

    (b)           
      any casualty or other insured damage to, or any taking under power of eminent
      domain or by condemnation or similar proceeding of, any property of any Borrower
      (other than Tribeca) or Guarantor; or

     

    (c)           
      the incurrence by any Borrower (other than Tribeca) or Guarantor of any
      Indebtedness for borrowed money other than Subordinated Indebtedness;
      or

     

    (d)           
      the receipt by any Borrower (other than Tribeca) or Guarantor of the proceeds
      of
      (i) any settlement or monetary judgment in respect of any claim, litigation
      or

     

     

    
      
        
        

      

      
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    other similar
      proceeding or (ii) any tax refund or other amount owing by any taxing authority
      or other Governmental Authority.

     

    “Material
      Adverse
      Effect” shall mean a material adverse effect on (a) the operations,
      business, properties, liabilities (actual or contingent), condition (financial
      or otherwise) or prospects of any Borrower or Guarantor, (b) the ability of
      any
      Borrower or Guarantor to perform in all material respects its Obligations under
      this Agreement or any obligations under any of the Loan Documents to which
      it is
      a party, (c) the validity or enforceability in all material respects of any
      of
      the Loan Documents, (d) the rights and remedies of Lender under any of the
      Loan
      Documents (including without limitation Lender’s ability to foreclose upon any
      Collateral or to exercise any of its other rights or remedies under any of
      the
      Loan Documents, whether as a secured party under the Uniform Commercial Code,
      in
      equity, at law or otherwise), (e) the timely payment of the principal of or
      interest on the Advances or other amounts payable in connection therewith or
      (f) the Collateral.

    

    “Minimum
      Tranche A Payment
      Amount” shall mean (i) with respect to any Payment Date other than the
      Tranche A Termination Date, $5,400,000, and (ii) with respect to the Tranche
      A
      Termination Date, the amount necessary to repay the aggregate outstanding unpaid
      principal balance of the Tranche A Advances in full.

    

    “Minimum
      Tranche B Payment
      Amount” shall mean (i) with respect to any Payment Date other than the
      Tranche B Termination Date, $750,000, which amount will be allocated first
      to
      Tranche B-1 Advances, second to Tranche B-2 Advances, third to Tranche B-3
      Advances, fourth to Tranche B-4 Advances, and fifth to Tranche B-5 Advances
      (each in inverse order of maturing payments) and (ii) with respect to the
      Tranche B Termination Date, the amount necessary to repay the aggregate
      outstanding unpaid principal balance of the Tranche B Advances in
      full.

    

    “Mortgage”
shall
      mean,
      with respect to any Mortgage Loan, the mortgage, deed of trust, security deed
      or
      other instrument which creates a Lien on the fee simple or a leasehold estate
      in
      the real property securing such Mortgage Loan.

    

    “Mortgage
      Loan” shall
      mean any mortgage loan in which any Borrower or Guarantor has an interest,
      whether or not any applicable custodian has been instructed to hold for Lender
      (pursuant to an applicable custodial agreement or otherwise in the case of
      any
      Mortgage Loan not held by Lender as custodian) and which mortgage loan includes,
      without limitation, (i) a mortgage note, the related Mortgage and all other
      mortgage loan documents and (ii) all right, title and interest of Guarantor
      or
      the applicable Borrower in and to the related mortgaged property.

    

    “Net
      Proceeds” shall
      mean, with respect to any Mandatory Prepayment Event, (a) the cash proceeds
      received in respect of such Mandatory Prepayment Event, including (i) any
      cash received in respect of any non-cash proceeds (including any cash payments
      received by way of deferred payment of principal pursuant to a note or
      installment receivable or purchase price adjustment receivable or otherwise,
      but
      only as and when received), (ii) in the case of a casualty or other insured
      damage to any property or asset of any Borrower or Guarantor, insurance
      proceeds, and (iii) in the case of a condemnation or similar event,
      condemnation awards and similar payments,  in each case net of
      (b) the sum of (i) all reasonable and customary fees and out-of-pocket
      expenses paid to third parties (other than Affiliates) in connection with such
      Mandatory Prepayment Event,

     

     

    
      
        
        

      

      
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    and
      (ii) in the case of a sale, transfer or other disposition of an asset or a
      casualty, a condemnation or similar proceeding, or the receipt of any tax
      refund, the amount of all payments required to be made as a result of such
      Mandatory Prepayment Event to repay Indebtedness (other than Advances) secured
      by such asset.

    

    “Net
      Worth” shall
      mean, with respect to any Person, the excess of the total assets of such Person
      over the total liabilities of such Person, as determined in accordance with
      GAAP.

    

    “Note”
shall
      mean each
      Tranche A Note, Tranche B-1 Note, Tranche B-2 Note, Tranche B-3 Note, Tranche
      B-4 Note, Tranche B-5 Note, Tranche C Note or Tranche D Note, as
      applicable.

    

    “Obligations”
shall
      mean all obligations, loans, advances indebtedness and liabilities of Guarantor
      and each Borrower to Lender, whether direct or indirect, joint or several,
      absolute or contingent, due or to become due, and whether now existing or
      hereafter incurred, which may arise under, out of or in connection with this
      Agreement, the Notes, any other Loan Document on account of principal, interest,
      reimbursement obligations, fees, indemnities, including without limitation,
      any
      interest, fee, cost and expense accrued or incurred after the filing of any
      petition under any bankruptcy or insolvency law, any cash management or treasury
      management agreements, any automated clearinghouse obligation, any obligation
      or
      liability under any Interest Rate Hedge Agreement, any amount owing pursuant
      to
      any service performed by Lender or any affiliate thereof for Guarantor or any
      Borrower and any amount due or owing Lender pursuant to any Credit Agreement
      or
      other Loan Document.

    

    “Payment
      Date” shall
      mean either (a) the fifth (5th) day
      of each calendar month or, if such day is not a business day, the next
      succeeding business day, or (b) in the case of the final Payment Date for the
      Tranche A Advances, the Tranche B Advances, the Tranche C Advances or the
      Tranche D Advances, the Tranche A Termination Date, the Tranche B Termination
      Date, the Tranche C Termination Date or the Tranche D Termination Date,
      respectively; provided, however, payments of interest accrued on the Advances
      shall commence on February 5, 2008.  If the due date of any payment
      due in respect to any Advance shall be a day that is not a business day, such
      due date shall be extended to the next succeeding business day; provided, however,
      that if such next succeeding business day occurs in the following calendar
      month, then such due date shall be the immediately preceding business
      day.

    

    “Person”
shall
      mean
      any individual, corporation, company, voluntary association, partnership, joint
      venture, limited liability company, trust, unincorporated association or
      government (or any agency, instrumentality or political subdivision
      thereof).

    

    “PIK
      Interest” shall
      have the meaning assigned thereto in Section 5(a)(ii).

    

    “Post-Default
      Rate”
shall mean, in respect of any principal of any Advance or any other
      amount under
      this Agreement, any Note or any other Loan Document that is not paid when due
      to
      Lender or any Affiliate thereof (whether at stated maturity, by acceleration
      or
      mandatory prepayment or otherwise), a rate per annum during the period from
      and
      including the due date to but excluding the date on which such amount is paid
      in
      full equal to the sum of (x) 5.00% per annum plus (y)(i) the
      related fixed or variable Interest Rate otherwise applicable to such
      Advance

     

     

     

    
      
        
        

      

      
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    or
      other
      amount or (ii) if no such Interest Rate is otherwise applicable, LIBOR plus the Applicable
      Margin in respect of Tranche A.

    

    “Prime
      Commercial
      Rate” shall mean the commercial lending rate of interest per annum as
      fixed from time to time by the management of Huntington and its successors,
      at
      its main office and designated as its “Prime Commercial Rate,” from time to time
      in effect, with each change in the such rate automatically and immediately
      changing the interest rate on all applicable Advances without notice to the
      Borrowers, subject to any maximum or minimum interest rate limitation specified
      by applicable law. Each Borrower hereby waives any right to claim that the
      Prime
      Commercial Rate is an interest rate other than that rate designated by
      Huntington as its “Prime Commercial Rate” on the grounds that: (i) such rate may
      or may not be published or otherwise made known to such Borrower or (ii)
      Huntington may make loans to certain borrowers at interest rates that are lower
      than its “Prime Commercial Rate.”

    

    “REO
      Property” shall
      mean any real property, the title to which is held by Guarantor, any Borrower
      or
      one of its Affiliates, together with all buildings, fixtures and improvements
      thereon and all other rights, benefits and proceeds arising from and in
      connection with such property.

    

    “Required
      Payments”
shall have the meaning assigned thereto in Section 5(d).

    

    “Restricted
      Payment”
means (i) any dividend or other distribution, direct or indirect, on
      account of
      any shares of any class of Capital Stock or similar ownership interest of FCMC
      now or hereafter outstanding, (ii) any redemption, retirement, sinking fund
      or
      similar payment, purchase or other acquisition for value, direct or indirect,
      of
      any shares of any class of Capital Stock or interest of FCMC now or hereafter
      outstanding, (iii) any payment made (other than any cashless exercise of stock
      options in the Guarantor) to redeem, purchase, repurchase or retire, or to
      obtain the surrender of, any outstanding warrants, options or other rights
      to
      acquire shares of any class of Capital Stock or ownership interest of any
      Borrower or FCMC now or hereafter outstanding, and (iv) any payment or
      prepayment of principal, premium, if any, or interest, fees or other charges
      on
      or with respect to, and any redemption, purchase, retirement, defeasance,
      sinking fund or similar payment and any claim to rescission with respect to,
      any
      Subordinated Indebtedness.

    

    “Restructuring
      Fee”
shall mean the sum of $12,000,000, payable in full at the Forbearance
      Effective
      Date.

    

    “Responsible
      Officer”
shall mean, as to any Person, the chief executive officer or, with respect
      to
      financial matters, the chief financial officer of such Person; provided, that in
      the
      event any such officer is unavailable at any time he or she is required to take
      any action hereunder, Responsible Officer shall mean any officer authorized
      to
      act on such officer’s behalf as demonstrated by a certificate of corporate
      resolution.

    

    “Security
      Agreement”
shall mean each Credit Agreement and the Security Agreement, dated as
      of
      November 15, 2007, and made by Guarantor and certain Borrowers in favor of
      Lender, as the same may be amended, supplemented or otherwise modified and
      in
      effect from time to time in accordance with the terms thereof.

     

     

    
      
        
        

      

      
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    “Subordinated
      Indebtedness” shall mean any Indebtedness incurred by Guarantor, a
      Borrower or any Subsidiary, the payment of which is subject to a debt
      subordination agreement or other subordination provisions in favor of Lender,
      to
      the written satisfaction of Lender and the terms (including, without limitation,
      with respect to amount, maturity, amortization, interest rate, premiums, fees,
      covenants, subordination terms, events of default and remedies) of which are
      reasonably acceptable to Lender.

    

    “Subsidiary”
shall
      mean, with respect to any Person, any corporation, limited liability company,
      partnership or other entity of which at least a majority of the securities
      or
      other ownership interests having by the terms thereof ordinary voting power
      to
      elect a majority of the board of directors or other persons performing similar
      functions of such corporation, partnership, limited liability company or other
      entity (irrespective of whether or not at the time securities or other ownership
      interests of any other class or classes of such corporation, partnership or
      other entity shall have or might have voting power by reason of the happening
      of
      any contingency) is at the time directly or indirectly owned or controlled
      by
      such Person or one or more Subsidiaries of such Person or by such Person and
      one
      or more Subsidiaries of such Person.

    

    “Termination
      Date”
shall mean, as applicable, the Tranche A Termination Date, the Tranche
      B
      Termination Date, the Tranche C Termination Date or the Tranche D Termination
      Date.

    

    “Tranche”
shall
      mean
      each of Tranche A, Tranche B-1, Tranche B-2, Tranche B-3, Tranche B-4, Tranche
      B-5, Tranche C and Tranche D.

    

    “Tranche
      A” shall have
      the meaning assigned to that term in the recitals of this
      Agreement.

    

    “Tranche
      A Advance”
and “Tranche A
      Advances” shall have the meanings assigned to those terms in Section
      3(a).

    

    “Tranche
      A Commitment”
shall mean the commitment of Lender to make a Tranche A Advance in the
      aggregate
      amount of $600,000,000.

    

    “Tranche
      A Note” shall
      mean the amended and restated promissory note provided for Lender’s Tranche A
      Advance and any promissory note delivered in substitution or exchange therefor,
      in each case as the same shall be modified, supplemented, amended or restated
      and in effect from time to time in accordance with the terms of this
      Agreement.

    

    “Tranche
      A Termination
      Date” shall mean the Forbearance Date or such earlier date on which this
      Agreement shall terminate in accordance with the provisions hereof or by
      operation of law.

    

    “Tranche
      B” shall have
      the meaning assigned to that term in the recitals of this
      Agreement.

    

    “Tranche
      B Advance”
and “Tranche B
      Advances” shall have the meanings assigned to those terms in Section
      3(b).

     

     

    
      
        
        

      

      
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    “Tranche
      B-1 Advance”,
“Tranche B-2
      Advance”, “Tranche B-3
      Advance”,
“Tranche B-4
      Advance” and “Tranche B-5
      Advance”,
      and the plural form of each such term, shall have the meanings assigned thereto
      in Section 3(b).

    

    “Tranche
      B Commitment”
shall mean the commitment of Lender to make a Tranche B Advance in the
      original
      aggregate amount of $341,204,494.

    

    “Tranche
      B Note” shall
      mean each of the amended and restated promissory notes provided for Lender’s
      Tranche B-1 Advance, Tranche B-2 Advance, Tranche B-3 Advance, Tranche B-4
      Advance and Tranche B-5 Advance and any promissory note delivered in
      substitution or exchange therefor, in each case as the same shall be modified,
      supplemented, amended or restated and in effect from time to time in accordance
      with the terms of this Agreement.

    

    “Tranche
      B Termination
      Date” shall mean the Forbearance Date or such earlier date on which this
      Agreement shall terminate in accordance with the provisions hereof or by
      operation of law.

    

    “Tranche
      C” shall have
      the meaning assigned to that term in the recitals of this
      Agreement.

    

    “Tranche
      C Advance”
and “Tranche C
      Advances” shall have the meanings assigned to those terms in Section
      3(c).

    

    “Tranche
      C Commitment”
shall mean the commitment of Lender to make a Tranche C Advance in the
      original
      aggregate amount of $125,000,000.

    

    “Tranche
      C Collections
      Amount” shall mean, with respect to any Payment Date and the portion of
      the Applicable Collections Amount for such Payment Date remaining after giving
      effect to the payments provided in clauses first through
tenth
      of Section
      5(d), (i) 90% of such remaining Applicable Collections Amount for so long as
      FCMC is continuing to service the Mortgage Loans pledged as Collateral, and
      (ii)
      otherwise 100% of such remaining Applicable Collections Amount if FCMC is no
      longer servicing such Mortgage Loans until all Tranche C Advances are paid
      in
      full.

    

    “Tranche
      C Note” shall
      mean the amended and restated promissory note provided for Lender’s Tranche C
      Advance and any promissory note delivered in substitution or exchange therefor,
      in each case as the same shall be modified, supplemented, amended or restated
      and in effect from time to time in accordance with the terms of this
      Agreement.

    

    “Tranche
      C Termination
      Date” shall mean the Forbearance Date or such earlier date on which this
      Agreement shall terminate in accordance with the provisions hereof or by
      operation of law.

    

    “Tranche
      D” shall have
      the meaning assigned to that term in the recitals of this
      Agreement.

    

    “Tranche
      D Advance”
and “Tranche D
      Advances” shall have the meanings assigned to those terms in Section
      3(d).

     

     

    
      
        
        

      

      
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    “Tranche
      D Commitment”
shall mean as to Lender, the commitment of Lender to fund Tranche D
      Advances up
      to $5,000,000 and issue Letters of Credit, the revolving portion of which shall
      not exceed $5,000,000.

    

    “Tranche
      D Note” shall
      mean the amended and restated promissory note provided for Lender’s Tranche D
      Advances and any promissory note delivered in substitution or exchange therefor,
      in each case as the same shall be modified, supplemented, amended or restated
      and in effect from time to time in accordance with the terms of this
      Agreement.

    

    “Tranche
      D Termination
      Date” shall mean the Forbearance Date or such earlier date on which this
      Agreement shall terminate in accordance with the provisions hereof or by
      operation of law.

    

    “Tribeca
      Advances”
shall means all “Advances” under a certain Forbearance Agreement and Amendment
      to Credit Agreements entered into as of the 28th day of December, 2007, by
      and
      among certain Subsidiaries of Tribeca Lending Corp. signatory thereto, Tribeca
      Lending Corp., a  New York corporation, and Lender, as amended,
      supplemented, restated or otherwise modified from time to time (the “Tribeca Forbearance
      Agreement”).

    

    “Uniform
      Commercial
      Code” shall mean the Uniform Commercial Code as in effect on the date
      hereof in the State of Ohio; provided, that if
      by
      reason of mandatory provisions of law, the perfection or the effect of
      perfection or non-perfection of the security interest in any Collateral is
      governed by the Uniform Commercial Code as in effect in a jurisdiction other
      than Ohio, “Uniform Commercial Code” shall mean the Uniform Commercial Code as
      in effect in such other jurisdiction for purposes of the provisions hereof
      relating to such perfection or effect of perfection or
      non-perfection.

    

    3.    Amended
      and Restated
      Advances.  Subject to the terms and conditions of this
      Agreement and in reliance on the representations, warranties and covenants
      of
      the Borrowers and Guarantor herein set forth, Lender hereby agrees to make
      the
      Advances described in this Section 3  and the Borrowers jointly and
      severally agree to repay such Advances as follows:

    

    (a)           
      Tranche A
      Advances.  Lender agrees, on the Forbearance Effective Date, to
      convert a portion of the outstanding principal amount of Lender’s Commercial
      Loans equal to Lender’s Tranche A Commitment into a term loan to the Borrowers
      (each amount so converted, a “Tranche A Advance” and, collectively, the “Tranche
      A Advances”).  Any portion of the Tranche A Advances that is
      subsequently repaid or prepaid may not be reborrowed.

    

    (b)           
      Tranche B
      Advances.  Lender agrees, on the Forbearance Effective Date, to
      convert a portion of the outstanding principal amount of Lender’s Commercial
      Loans equal to Lender’s Tranche B Commitment into four term loans to the
      Borrowers, each in an amount of $79,051,123.50 and one in an amount of
      $25,000,000 (each aggregate amount so converted, a “Tranche B Advance” and,
      collectively, the “Tranche B Advances”; and each such proportionate portion
      thereof a “Tranche B-1 Advance”, “Tranche B-2 Advance”, “Tranche B-3 Advance”,
“Tranche B-4 Advance” and “Tranche B-5 Advance” and, collectively, the “Tranche
      B-1 Advances”, “Tranche B-2 Advances”, “Tranche B-3

     

     

     

    
      
        
        

      

      
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    Advances”,
      “Tranche B-4 Advance” and “Tranche B-5 Advances”).  Any portion of the
      Tranche B Advances that is subsequently repaid or prepaid may not be
      reborrowed.

    

    (c)           
      Tranche C
      Advances.  Lender agrees, on the Forbearance Effective Date, to
      convert a portion of the outstanding principal amount of Lender’s Commercial
      Loans equal to Lender’s Tranche C Commitment into a term loan to the Borrowers
      (each amount so converted, a “Tranche C Advance” and, collectively, the “Tranche
      C Advances”).  Any portion of the Tranche C Advances that is
      subsequently repaid or prepaid may not be reborrowed.

    

    (d)           
      Tranche D
      Advances.

    

    (i)    
Subject
      to
      the terms and conditions of this Agreement and in reliance on the
      representations, warranties and covenants of the Borrowers and Guarantor herein
      set forth, Lender hereby agrees, subject to the limitations set forth below
      with
      respect to the maximum aggregate amount of Tranche D Advances permitted to
      be
      outstanding from time to time, to make loans to Guarantor or the
      Borrowers  and issue Letters of Credit for the account of Guarantor or
      any Borrower (each, a “Tranche D Advance” and collectively, the “Tranche D
      Advances”), from time to time on any business day during the period from and
      including the Forbearance Effective Date to but excluding the Tranche D
      Termination Date, in an aggregate amount not exceeding the Tranche D Commitment
      to be used in accordance with the terms of this Agreement.

    

    (ii)            
      Lender’s Tranche D Commitment shall expire on the Tranche D Termination Date and
      all Tranche D Advances and all other amounts owed hereunder with respect to
      the
      Tranche D Advances shall be paid in full no later than the Tranche D Termination
      Date.

    

    (iii)           
      Anything contained in this Agreement to the contrary notwithstanding, the
      Tranche D Advances and the Tranche D Commitments shall be subject to the
      limitation that in no event shall the sum of the aggregate outstanding principal
      amount of the Tranche D Advances plus the Letter of Credit Exposure at any
      time
      exceed the total Tranche D Commitments then in effect.

    

    (e)    Notes.

    

    (i)           
      Lender’s Tranche A Advance, Tranche B-1 Advance, Tranche B-2 Advance, Tranche
      B-3 Advance, Tranche B-4 Advance, Tranche B-5 Advance and Tranche C Advance
      each
      shall be evidenced by a promissory note of the Borrowers, substantially in
      the
      form of Exhibit A, Exhibit B-1, Exhibit B-2, Exhibit B-3, Exhibit B-4, Exhibit
      B-5, and Exhibit C, respectively, in each case dated the Forbearance Effective
      Date and payable to Lender or its assigns in a principal amount equal to
      Lender’s Advance under the applicable Tranche.  The revolving portion
      of Lender’s Tranche D Advances shall be evidenced by a promissory note of the
      Borrowers, substantially in the form of Exhibit D, dated the Forbearance
      Effective Date and payable to Lender or its assigns in a principal amount equal
      to 

     

     

     

    
      
        
        

      

      
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    Lender’s
      Tranche D Commitment.
 

    (ii)           
      The date, amount and Interest Rate applicable from time to time in respect
      of
      each Advance made by Lender to the Borrowers, and each payment made on account
      of the principal thereof or interest thereon, shall be recorded by Lender on
      its
      books and records. Any such recordation or notation shall be conclusive and
      binding on the Borrowers, absent manifest error; provided, that the
      failure of Lender to make any such recordation or notation shall not affect
      the
      obligations of any Borrower to make payment when due of any amount owing
      hereunder or under such Note in respect of the applicable Advance or
      Advances.

    

    4.    Inability
      to Determine
      Rates, Illegality.  Anything contained herein to the contrary
      notwithstanding, if, prior to or upon any determination of LIBOR:

    

    (a)           
      Lender determines, which determination shall be conclusive and binding upon
      the
      Borrowers, that quotations of interest rates for the relevant deposits referred
      to in the definition of “LIBOR” are not being provided in the relevant amounts
      or for the relevant maturities for purposes of determining rates of interest
      for
      LIBOR Advances as provided herein; or

     

    (b)           
      Lender determines, which determination shall be conclusive and binding upon
      the
      Borrowers, that LIBOR is not likely to adequately cover the cost to Lender
      of
      making or maintaining the relevant LIBOR Advances; or

     

    (c)           
      Lender notifies Guarantor that it has become unlawful for Lender to honor its
      obligations to make or maintain LIBOR Advances hereunder;

     

    then
      Lender shall give Guarantor notice thereof and, so long as such condition
      remains in effect, all Advances (other than Tranche C Advances) of Lender shall
      bear interest at a rate per annum equal to the Prime Commercial Rate, plus
      the
      Applicable Margin, minus two percent (2%) per annum.

    

    5.    Payments
      of Interest and
      Principal on the Advances.

    

    (a)           
      Interest on the
      Advances; PIK Interest.

     

    (i)
      The
      Borrowers shall pay to Lender interest on the aggregate outstanding principal
      amount of the Advances of each Tranche for the period from and including the
      respective dates of such Advances to but excluding the respective dates such
      Advances are paid in full, in each case at a rate per annum equal to the
      applicable Interest Rate.  Notwithstanding the foregoing, the
      Borrowers shall pay to Lender interest at the applicable Post-Default Rate
      (i)
      on the outstanding principal amount of any Advances during any period when
      any
      Forbearance Default has occurred and is continuing and (ii) on any interest
      or
      amount (other than principal of any Advance) payable by the Borrowers hereunder
      or under any applicable Note that shall not be paid in full when due, for the
      period from and including the due date thereof to but excluding the date the
      same is paid in full.  Accrued and unpaid interest on each Advance
      shall be payable monthly on each Payment Date and on

     

     

    
      
        
        

      

      
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    the
      Tranche A Termination Date, Tranche B Termination Date, Tranche C Termination
      Date, or Tranche D Termination Date, as applicable, except that interest payable
      at the applicable Post-Default Rate shall accrue daily and shall be payable
      promptly upon demand.

    

    (ii)  Anything
      contained in Section 5 (a)(i) to the contrary notwithstanding, Guarantor, on
      behalf of the Borrowers, has elected as of the Forbearance Effective Date and
      Lender has consented thereto, to pay the accrued and unpaid interest due in
      respect of the Tranche C Advances on any Payment Date by adding the amount
      thereof to the outstanding principal amount of the Tranche C Advances (any
      such
      interest in respect of the Tranche C Advances that is so added to the
      outstanding principal amount of the Tranche C Advances being “PIK
      Interest”).  At any time after Guarantor, on behalf of the
      Borrowers, has elected PIK Interest, upon request of Lender, Borrowers will
      execute and deliver to Lender an additional Tranche C Note for the amount of
      such PIK Interest or a replacement Tranche C Note in a face amount equal to
      the
      then outstanding principal sum, plus the amount of such PIK Interest; provided,
      however, the failure of Lender to request that the Borrowers execute, or the
      failure of the Borrowers to provide, any such additional Tranche C Note shall
      in
      no way affect the Borrowers obligation to pay any such PIK Interest at the
      time
      and in the manner of other Tranche C Advances.

    

    (b)           
      Scheduled Principal
      Payments in Respect of Tranche A Advances and Tranche B Advances,Principal
      Payments.  On each Payment Date in respect of the Tranche A
      Advances and the Tranche B Advances, the Borrowers shall pay to Lender, the
      Minimum Tranche A Payment Amount and the Minimum Tranche B Payment Amount,
      as
      applicable, for such Payment Date.  The Borrowers shall pay all
      remaining amounts of Tranche C Advances and Tranche D Advances as set forth
      in
      paragraphs (d) and (e) below and on the applicable Termination
      Date.

     

    (c)           
      Payment Date
      Reports.  No later than two business days prior to each Payment
      Date, Lender shall provide to Guarantor a report stating (i) the amount of
      interest due for the current Interest Period pursuant to Section 5(a),
      separately stated for the applicable Tranche A Advances, the Tranche B Advances,
      the Tranche C Advances and the Tranche D Advances, (ii) the Minimum Tranche
      A
      Payment Amount and the Minimum Tranche B Payment Amount for such Payment Date,
      and (iii) if such Payment Date occurs on a Termination Date, the aggregate
      outstanding principal amount of the Tranche A Advances, Tranche B Advances,
      Tranche C Advances and/or Tranche D Advances, as applicable; provided, that the
      failure of Lender to make any such report shall not affect the obligations
      of
      the Borrowers to make payment when due of any amount owing hereunder or under
      any Note in respect of the related Advances.

     

    (d)           
      Collateral
      Collection.  Without in any way limiting the obligations of the
      Borrowers to make the payments of principal and interest that are required
      to be
      made in respect of the Advances pursuant to Sections 5(a) and 5(b) (with respect
      to any Payment Date, the “Required Payments”),
      the Borrowers hereby authorize and direct Lender, on each Payment Date, to
      apply
      all Collections received from and after the immediately preceding Payment Date
      (or, in the case of the first Payment Date, from and after the

     

     

     

    
      
        
        

      

      
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    Forbearance
      Effective Date) to but excluding such Payment Date (the aggregate amount of
      such
      Collections being the “Applicable Collections
      Amount” in respect of such Payment Date) in the following order of
      priority:

     

    first,
      to the payment
      of interest on the Tranche A Advances as calculated for such Payment
      Date;

     

    second,
      to the
      payment of interest on the Tranche B Advances as calculated for such Payment
      Date;

     

    third,
      to the payment
      of interest on the Tranche D Advances as calculated for such Payment
      Date;

     

    fourth,
      to the
      payment of interest on the Tranche C Advances as calculated for such Payment
      Date, other than any such interest that is converted to PIK
      Interest;

     

    fifth,
      to pay any
      Letter of Credit Facing Fee or Letter of Credit Fee;

     

    sixth,
      to pay the
      Minimum Tranche A Payment Amount for such Payment Date;

     

    seventh,
      to pay the
      Minimum Tranche B Payment Amount for such Payment Date;

     

    eighth,
      to prepay the
      outstanding principal amount of the Tranche A Advances until the same are paid
      in full, with such prepayments being applied in the inverse order of maturity
      to
      the remaining Minimum Tranche A Payment Amounts;

     

    ninth,
      to prepay the
      outstanding principal amount of the Tranche B Advances until the same are paid
      in full, with such prepayments being applied in the order set forth in the
      definition of Minimum Tranche B Payment Amounts;

     

    tenth,
      to any unpaid
      amounts on the Static Loans;

     

    eleventh,
      on a pro rata basis to
      repay Tranche D Advances in full, Letter of Credit Exposure in full and any
      Obligations under any Interest Rate Hedge Agreement to Lender in
      full;

     

    twelfth,
      to the
      extent of the applicable Tranche C Collections Amount to pay the outstanding
      interest and principal amount of the Tranche C Advances until the same are
      paid
      in full, with such payments being applied first to any
      outstanding PIK Interest in respect of the Tranche C Advances and thereafter to the
      remaining principal amount thereof; and

     

    thirteenth,
      to pay
      any unpaid Tribeca Advances until paid in full and then to Guarantor for the
      benefit of the Borrowers.

     

    All
      Collections in respect of the Static Loans shall be applied pursuant to the
      terms of the Franklin Master Agreement.

     

     

    
      
        
        

      

      
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    (e)           
      Mandatory
      Prepayments.  Within two (2) business days after receipt of the
      Net Proceeds following any Mandatory Prepayment Event, the Borrowers shall
      prepay the Advances in an aggregate amount equal to the Net Proceeds of such
      Mandatory Prepayment Event, any such prepayment to be applied in the same manner
      as set forth in Section 5 (d).

    

    (f)           
      Computations.  Interest
      on the Advances shall be computed on the basis of a 360-day year for the actual
      days elapsed (including the first day but excluding the last day) occurring
      in
      the period for which payable.

    

    6.    Letters
      of
      Credit.

     

    (a)           
      Letters of
      Credit.  Subject to the terms and conditions of this Agreement
      and any applicable Application and Agreement for Letter of Credit, on any
      business day at least 30 business days prior to the Tranche D Termination Date,
      Lender, at its discretion may issue such Letters of Credit in such face amounts
      as Guarantor may request; provided that: (i)
      on
      the date of issuance of any Letter of Credit and after giving effect to the
      issuance thereof, the Letter of Credit Exposure will not exceed $5,500,000;
      and
      (ii) the expiry date of any Letter of Credit shall not be later than the date
      which is thirty (30) days prior to the Tranche D Termination Date, provided,
      however, Guarantor has provided the information necessary for Lender to complete
      the form of Letter of Credit, and the issuance of such Letter of Credit would
      not violate one or more policies of Lender.  On and after the
      Forbearance Effective Date, the Letters of Credit issued by Lender for the
      account of Guarantor or the Borrowers prior to the date of this Agreement and
      set forth on Schedule
      6 hereto shall be subject to the terms of this Agreement and deemed
      issued pursuant to the terms hereof.

     

    (b)           
      Payment of Letter
      of
      Credit.  In consideration for the issuance by Lender of the
      Letters of Credit, each of Guarantor and the Borrowers hereby authorize, empower
      and direct Lender to disburse directly to Lender, as a Tranche D Advance under
      this Agreement, an amount equal to the stated amount of each draft drawn under
      each Letter of Credit, plus all interest, costs, expenses and fees due to Lender
      pursuant to this Agreement or any other Loan Document.  Any such
      disbursement made on account of a Letter of Credit shall be deemed to be a
      Tranche D Advance, and Guarantor shall be deemed to have given to Lender a
      notice of borrowing with respect thereto.

     

    (c)           
      Acceleration of
      Undrawn Amounts.  Should Lender demand payment of the
      Obligations hereunder following a Forbearance Default prior to the Tranche
      D
      Termination Date, Lender, by written notice to Guarantor, may take one or more
      of the following actions: (i) declare any obligation of Lender to issue Letters
      of Credit hereunder terminated, whereupon any such obligations shall forthwith
      terminate without any other notice of any kind; or (ii) declare the outstanding
      Letter of Credit Exposure to be forthwith due and payable, without presentment,
      demand, protest or any other notice of any kind, all of which are hereby waived,
      and demand that Guarantor and the Borrowers pay to Lender for deposit in a
      segregated non interest-bearing cash collateral account, as security for the
      Obligations, an amount equal to the Letters of Credit Exposure then outstanding
      at the time such notice is given.  Unless otherwise required by law,
      upon the full and final payment of

     

     

     

    
      
        
        

      

      
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    the
      Obligations, Lender shall return to Guarantor, for the benefit of the Borrowers,
      any amounts remaining in said cash collateral account.

     

    (d)           
      Letter of Credit
      Fees.  The Borrowers shall pay to Lender: (a) a non-refundable
      fee equal to the Applicable Margin in respect of Tranche D Advances multiplied
      by the daily face amount of each Letter of Credit, less the amount of any draws
      on such Letter of Credit, payable in monthly installments in arrears, commencing
      on the issuance date and continuing for so long as such Letter of Credit remains
      outstanding; and (b) for the benefit of Lender (i) the Letter of Credit Facing
      Fee (ii) Lender’s standard charges for issuing letters of credit and for any
      amendments thereto, payable upon demand by Lender.

     

    7.    Conditions
      Precedent.  The obligations of Lender to make the Tranche A
      Advances, the Tranche B Advances, the Tranche C Advances and the initial Tranche
      D Advances are subject to the satisfaction, immediately prior to or concurrently
      with, the making of such Advances of the following conditions precedent, each
      of
      which shall be in form and substance satisfactory to Lender and its
      counsel:

    

    (1)           
      Lender shall have received this Agreement, executed and delivered by a duly
      authorized officer of each Borrower and Guarantor;

     

    (2)    Lender
      shall
      have received the following documents, each of which shall be satisfactory
      to
      Lender in form and substance:

     

        (i)  
      Lender’s Notes, duly completed, executed and delivered;

     

        (ii)  The
      FCMC Guaranty, duly executed and delivered by Guarantor;

     

        (iii)  The
      Security Agreement, duly executed and delivered by Guarantor and each Borrower
      and/or joinder by any Borrower not already a party to the Security
      Agreement;

     

        (iv)  Guarantor
      and each Borrower shall have released all claims against Lender and participants
      under any Credit Agreement (and if requested by any participant a separate
      release in form satisfactory to such participant); and

     

        (v)  Execution
      of the Tribeca Forbearance Agreement and any loan document related
      thereto.

     

    (3)           
      Lender shall have received an incumbency certificate of each Borrower and
      Guarantor and evidence of all corporate or other authority for each Borrower
      and
      Guarantor with respect to the execution, delivery and performance of the Loan
      Documents executed in connection with this Agreement;

     

    (4)           
      Lender shall have received one or more legal opinions of counsel to the
      Borrowers and Guarantor, in form satisfactory to Lender;

     

     

    
      
        
        

      

      
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    (5)           
      Any documents (including, without limitation, financing statements) required
      to
      be filed, registered or recorded in order to create a first priority Lien,
      in
      favor of Lender shall have been properly prepared;

     

    (6)           
      Lender shall have received the Restructuring Fee and all other fees and expenses
      required to be paid by the Borrowers on or prior to the Forbearance Effective
      Date;

     

    (7)           
      [Reserved];

     

    (8)           
      Lender shall have received an Amended and Restated Participation Agreement
      with
      M & I Marshall & Ilsley Bank and such bank’s consent to this
      Agreement;

     

    (9)           
      [Reserved];

     

    (10)           
      Lender, with the consent of its participant M & I Marshall & Ilsley
      Bank, shall have forgiven an aggregate principal amount of Original Commercial
      Loans equal to not less than $300,000,000;

     

    (11)           
      [Reserved];

     

    (12)           
      Lender shall have received such other documents as Lender or its counsel may
      reasonably request.

     

    8.    Amendments
      to Credit
      Agreements. Section 2.1 of the Franklin Master Agreement, entitled “The Commitment,”
      Section 2.1 of the Franklin Warehousing Agreement, entitled “The Commitment,” and
      Section 2(a) entitled “Agreement to Make
      the
      Loan” of the Franklin Term Loan Agreement are each hereby amended to
      delete any obligation of Lender to make any further “Subsidiary Loans” (as
      defined in the Franklin Master Agreement), “Advances” (as defined in the
      Franklin Warehousing Agreement) or “Loan” (as defined in the Franklin Term Loan
      Agreement) on and after the Forbearance Effective Date.  In addition
      Section 8.2 (c)(iv) of the Franklin Master Agreement is hereby amended to delete
      the second and third sentences of such section.

    

    9.    Representations
      and
      Warranties.  To induce Lender to enter into this Agreement,
      Guarantor and each Borrower represents and warrants to Lender as
      follows:

    

    (a)           
      Organization.  Each
      Borrower and Guarantor is a corporation duly organized, validly existing and
      in
      good standing under the laws of the state of its incorporation, except where
      the
      failure to be in good standing shall not cause a Material Adverse
      Effect.

    

    (b)    Authority.  Each
      Borrower and Guarantor has full corporate power and authority to execute,
      deliver and perform this Agreement and has taken all corporate action required
      by law, its articles of incorporation and bylaws to authorize the execution
      and
      delivery of this Agreement.

     

     

    
      
        
        

      

      
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    (c)           
      Consent and
      Approvals.  No consent or approval of any party is required in
      connection with the execution and delivery of this Agreement by any Borrower
      or
      Guarantor, and the execution and delivery of this Agreement does not (i)
      contravene or result in a breach or default under any certificate or articles
      of
      incorporation, code of regulations or bylaws or any other agreement or
      instrument to which any Borrower or Guarantor is a party or by which any of
      such
      Person’s respective properties are bound, or (ii) violate any law, rule,
      regulation, order, writ, judgment, injunction, decree, determination or award
      applicable to any Borrower or Guarantor.

    

    (d)           
      Completeness of
      Collateral.  The Collateral constitutes all of the assets and
      property, real and personal, tangible and intangible, owned by each Borrower
      and
      Guarantor or used or held for use in connection with the business of each such
      Person.

    

    (e)           
      Other
      Indebtedness.  Other than as set forth in Schedule
      9(e) hereto
      and in respect of Indebtedness owing to Lender, each Borrower and Guarantor
      is
      in full compliance with the terms of each lending agreement in respect of
      Indebtedness.

    

    (f)           
      Representations
      True
      and Correct.  All representations and warranties contained in
      this Agreement, including but not limited to the recitals herein, and in each
      Credit Agreement and each other Loan Document are true and correct as of the
      date of this Agreement, and all such representations and warranties shall
      survive the execution of this Agreement.  The Loan Documents represent
      unconditional, absolute and valid obligations against each Borrower and
      Guarantor and are enforceable in accordance with the terms
      thereof.  Neither any Borrower nor Guarantor has any claims or
      defenses against Lender, any Affiliate thereof, any participant in any
      Commercial Loan or any other person or entity which would or might affect (i)
      the enforceability of any provisions of any documents or (ii) the collectibility
      of sums advanced by Lender in connection with any Obligations subject to this
      Agreement.  Each Borrower and Guarantor understands and acknowledges
      that Lender is entering into this Agreement in reliance upon, and in partial
      consideration for, this acknowledgment and representation, and agree that such
      reliance is reasonable and appropriate.

    

    (g)           
      Representations
      and
      Warranties. Guarantor and each Borrower hereby represent and warrant to
      Lender that (i) other than the Acknowledged Defaults no present uncured defaults
      or breaches exist under any Loan Document; and (ii) after giving effect to
      this
      Agreement, no event or condition exists which but for the giving of notice
      or
      passage of time (or both) would constitute a Default or Event of Default under
      any Credit Agreement or any Loan Document;  and (iii) this Agreement
      has been duly executed and delivered by Guarantor and each Borrower, and this
      Agreement, each Credit Agreements as amended hereby and each other Loan Document
      constitutes the legal, valid and binding obligation of Guarantor and each
      Borrower, enforceable against Guarantor and such Borrower in accordance with
      the
      terms hereof or thereto.

    

    (h)           
      Financial
      Statement.  The consolidated balance sheet of Guarantor and its
      Subsidiaries as of June 30, 2007, and the related statements
      of  income and cashflows for such fiscal period, previously furnished
      to Lender, fairly present the financial condition of Guarantor and its
      Subsidiaries as of that date and the results of its operations for that
      fiscal

     

     

    
      
        
        

      

      
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    period.  Guarantor
      and its Subsidiaries had, on that 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 for
      Lender’s extensions of credit to Guarantor and its Subsidiaries.

    

    (i)           
      Solvency.  As
      of the date hereof and taking into account the forgiveness of Indebtedness
      set
      forth in Section 1(c) and immediately after giving effect to each Advance and
      the application of the proceeds thereof by the Borrowers, the fair value of
      the
      consolidated tangible assets of Guarantor is greater than the fair value of
      its
      consolidated liabilities (including, without limitation, contingent liabilities
      if and to the extent required to be recorded as a liability on the financial
      statements of Guarantor and the Borrowers in accordance with GAAP) and Guarantor
      and its consolidated Subsidiaries are and will be solvent, are and will be
      able
      to pay its debts as they mature and do not and will not have an unreasonably
      small capital to engage in the business in which they are engaged and propose
      to
      engage.  None of Guarantor or any Borrower intends to incur, or
      believes that it has incurred, debt beyond its ability to pay such debts as
      they
      mature.  None of Guarantor or any Borrower is contemplating the
      commencement of insolvency, bankruptcy, liquidation or consolidation proceedings
      or the appointment of a receiver, liquidator, conservator, trustee or similar
      official in respect of such Person or any of its assets.  None of
      Guarantor or Borrower is pledging or transferring any Assets with any intent
      to
      hinder, delay or defraud any of its creditors.

    

    10.    Financial
      Statements.  Guarantor and each Borrower shall deliver to
      Lender:

    

    (a)           
      (i) as soon as available and in any event within 45 days after the end of each
      of the first three quarterly fiscal periods of each fiscal year of Guarantor,
      the consolidated balance sheets of Guarantor and its consolidated Subsidiaries
      as at the end of such period and the related unaudited consolidated statements
      of income and retained earnings and of cash flows for Guarantor and its
      consolidated Subsidiaries for such period and the portion of the fiscal year
      through the end of such period, setting forth in each case in comparative form
      the figures for the previous year and accompanied by a certificate of the chief
      financial officer of Guarantor, which certificate shall state that said
      consolidated financial statements fairly present the consolidated financial
      condition and results of operations of Guarantor and its Subsidiaries in
      accordance with GAAP, consistently applied, as at the end of, and for, such
      period (subject to normal year-end audit adjustments), and (ii) as soon as
      available and in any event within 30 days after the end of each quarterly fiscal
      period a budget of cash expenditures for each prospective three (3) month
      period, including budget to actual variances for such period;

     

    (b)           
      as soon as available and in any event within 90 days after the end of each
      fiscal year of Guarantor, the audited, consolidated balance sheets of Guarantor
      and its consolidated Subsidiaries as at the end of such fiscal year and the
      related consolidated statements of income and retained earnings and of cash
      flows for Guarantor and its consolidated Subsidiaries for such year, setting
      forth in each case in comparative form the figures for the previous year,
      accompanied by a certificate of the chief financial officer of Guarantor, which
      certificate shall state that said consolidated financial statements
      fairly

     

     

     

    
      
        
        

      

      
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    present
      the consolidated financial condition and results of operations of Guarantor
      and
      its consolidated Subsidiaries at the end of, and for, such fiscal year in
      accordance with GAAP, consistently applied, and a certificate of such chief
      financial officer stating that, in making the examination necessary for his
      or
      her certification, such chief financial officer obtained no knowledge, except
      as
      specifically stated, of any Forbearance Default;

     

    (c)(i)
      as
      soon as available and in any event within 30 days after the end of each monthly
      fiscal period of each fiscal year of Guarantor, the consolidated balance sheets
      of Guarantor and its consolidated Subsidiaries as at the end of such period
      and
      the related unaudited consolidated statements of income and retained earnings
      and of cash flows for Guarantor and its consolidated Subsidiaries for such
      period and the portion of the fiscal year through the end of such period, (ii)
      as soon as available and in any event within 20 days after the end of each
      monthly fiscal period of each fiscal year of Guarantor, a thirteen (13)
      consecutive week cash flow statement, and (iii), setting forth in each case
      in
      comparative form the figures for the previous year, accompanied by a certificate
      of the chief financial officer of Guarantor, which certificate shall state
      that
      said consolidated financial statements fairly present the consolidated financial
      condition and results of operations of  uarantor and its Subsidiaries in
      accordance with GAAP, consistently applied, as at the end of, and for, such
      period (subject to normal year-end audit adjustments);

     

    (d)           
      from time to time such other information regarding the financial condition,
      operations, or business of Guarantor and each Borrower as Lender may
      request;

    

    (e)           
      Guarantor and each Borrower shall furnish to Lender, at the time Guarantor
      furnishes each set of financial statements pursuant to paragraphs (a),(b) and
      (c) above, a certificate of the chief financial officer of Guarantor to the
      effect that, to the best of such officer’s knowledge, Guarantor and the
      Borrowers, as applicable, during such fiscal period or year have observed or
      performed all of its covenants and other agreements, and satisfied every
      condition, contained in this Agreement and the other Loan Documents to be
      observed, performed or satisfied by it, and that such officer has obtained
      no
      knowledge of any Default, Event of Default or Forbearance Default except as
      specified in such certificate (and, if any Default, Event of Default or
      Forbearance Default has occurred and is continuing, describing the same in
      reasonable detail and describing the action Guarantor or such Borrower, as
      applicable, has taken or proposes to take with respect thereto);
      and

     

    (f)    notice
      of any
      event or notice from any Governmental Authority which is reasonably likely
      to
      have or result in a Material Adverse Effect.

     

    11.    Certain
      Post-Closing
      Deliverables.

    

    (a)  Within
      30 days after the
      Forbearance Effective Date, Guarantor and each Borrower will use their best
      efforts to cause each of the banks where any deposit account is maintained
      to
      enter into and deliver to Lender a fully executed control agreement in form
      satisfactory to Lender and the deposit account bank for each deposit account
      of
      Guarantor or any Borrower, and if Guarantor and each Borrower fail to so deliver
      such control

     

     

     

    
      
        
        

      

      
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    agreements
      within such time frame, each such Person shall close such deposit accounts
      and
      establish replacement accounts at Lender.

     

    (b)  Within
      30 days after the Forbearance Effective Date, Guarantor will deliver to Lender
      a
      proposed cash budget for the period commencing on the Forbearance Effective
      Date
      and ending March 31, 2008.

     

    (c)  Within
      60 days after the Forbearance Effective Date, Guarantor will deliver to Lender
      (i) a detailed written report describing Guarantor’s and the Borrowers’
servicing strategies in accordance with Accepted Servicing Practices, including
      specific identifiable compensation and incentives for each employee of Guarantor
      or Borrowers in or to be engaged in servicing, employment or other agreements,
      as applicable, and such other information with respect thereto as Lender may
      request, all in form and substance satisfactory to Lender, (ii) detailed written
      collection policies with respect to Mortgage Loans, all in form and substance
      satisfactory to Lender, (iii) any revisions to existing policies, practices,
      principles and servicing standards for the servicing of the Mortgage Loans
      and
      (iv) any agreements reasonably required by Lender with respect to back-up
      servicing.

     

    (d)  At
      all times after the date which is 45 days after the Forbearance Effective Date,
      Guarantor shall use its best efforts at all times to maintain in effect one
      or
      more Interest Rate Hedge Agreements with respect to the Advances, in an
      aggregate notional principal amount of not less than $600,000,000, which
      agreements shall have the effect of establishing a maximum interest rate to
      be
      agreed by Guarantor and Lender with respect to such notional principal amount,
      each such agreement to be in form and substance satisfactory to Lender and
      with
      a term to be agreed by Guarantor and Lender.

    

    (e)  Within
      90 days after the Forbearance Effective Date, each Borrower shall transfer
      all
      REO Properties to a designated Borrower or other Subsidiary satisfactory to
      Lender and shall provide to Lender a first and exclusive Lien on the stock
      of
      such Subsidiary, and a negative pledge on all of the assets of such Subsidiary;
      provided, however, to the extent any such transfer would require the payment
      of
      any material transfer tax or similar tax, such Borrower and Lender may make
      other arrangements satisfactory to Lender.

    

    (f)  No
      later than January 31, 2008, FCMC shall deliver to Lender its financial
      statements for the fiscal quarter and year-to-date period ending September
      30,
      2007.

    

    (g)  Within
      45 days after the Forbearance Effective Date, Guarantor shall have deposited
      with Lender a copy of each software program in which Guarantor has an interest
      and any data which are necessary to conduct all loan servicing activities of
      Guarantor, except to the extent Guarantor is prohibited by any effective license
      agreement from so depositing a copy.  Further if Guarantor is
      prohibited by any license agreement from so depositing a copy, within 45 days
      after the Forbearance Effective Date, Guarantor shall use its best efforts
      to
      secure a licensor consent to the pledge of such software in form satisfactory
      to
      Lender.

     

    
 

    
      
        
        

      

      
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    12.    Covenants.

    

    (a)           
      Maintenance of
      Liquidity.  Guarantor and each Borrower on a consolidated basis
      shall insure that, as of the end of each calendar month, they have cash
      equivalents pledged to Lender in an amount of not less than
      $5,000,000.

     

    (b)           
      Minimum Net
      Worth.  Guarantor and its Subsidiaries shall at all times
      maintain a consolidated Net Worth of at least $5,000,000, plus a percentage
      to
      be agreed upon between Lender and Guarantor of the proceeds of the issuance
      of
      Capital Stock or other securities issued after the Forbearance Effective
      Date.

     

    (c)           
      Servicing.  As
      of the Forbearance Effective Date, each Borrower and Lender hereby revocably
      appoint and reaffirm FCMC as servicer, and FCMC hereby reaffirms its acceptance
      of such appointment, to act for the benefit of the Borrowers and Lender as
      initial servicer of the Mortgage Loans and the REO Properties pledged to Lender;
      provided, however, Lender reserves the right to terminate FCMC’s servicing of
      the Mortgage Loans and REO Properties (i) upon prior written notice to FCMC
      during the occurrence and continuance of a Forbearance Default or (ii) if Lender
      provides prior written notice to FCMC, that Lender has determined, in its sole
      discretion, that FCMC is not serving the Loans in accordance with Accepted
      Servicing Practices.  FCMC shall service the Mortgage Loans and the
      REO Properties pledged to Lender pursuant to the terms of this Agreement, the
      Credit Agreements and in accordance with Accepted Servicing
      Practices.  Neither Guarantor nor any Borrower shall permit any Person
      other than the FCMC to service any Mortgage Loans or REO Properties (other
      than
      a sub-servicer satisfactory to Lender) in accordance with Accepted Servicing
      Practices, without the prior written consent of the Lender.

     

    (d)           
      Interest Coverage
      Ratios.  Until such time as all Tranche A Advances and Tranche
      B Advances are indefeasibly paid in full, Guarantor and each Subsidiary, on
      a
      consolidated basis, shall maintain for each monthly period (i) a ratio
      of  Adjusted EBITDA to Adjusted Interest Expense of not less than 1.25
      to 1.00, and (ii) a ratio of Adjusted EBITDA to Interest Expense of not less
      than 1.10 to 1.00, with each such ratio being determined as of the end of each
      monthly fiscal period for the monthly fiscal period then
      ended.  “AdjustedEBITDA”
shall
      mean
      for any period EBITDA, plus any non-cash
      expense or charge for loan loss reserve.  “EBITDA” shall mean
      for any period, the sum of the amounts for such period of (i) the consolidated
      net income (or loss) after taxes taken as a single accounting period, (ii)
      Interest Expense, (iii) all federal, state, and local income taxes of such
      Person (whether paid or deferred)and (iv) depreciation and amortization expense
      which were deducted in determining consolidated net income for such period,
      with
      each component determined in conformity with GAAP.  “Adjusted
      InterestExpense”
shall
      mean
      for any period Interest Expense, other than any such Interest Expense in respect
      of Tranche B Advances.  “InterestExpense”
shall
      mean
      for any period total interest expense (other than PIK Interest), whether paid
      or
      accrued or due and payable (including without limitation in respect of all
      Advances and any Subordinated Indebtedness), plus the interest component of
      capital lease obligations for such period, plus all bank fees (other than the
      Restructuring Fee), plus net costs under Interest Rate Hedge
      Agreements.

     

     

    
      
        
        

      

      
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    (e)           
      Fundamental
      Change.   Neither Guarantor nor any Borrower shall enter
      into any transaction of merger or consolidation or amalgamation (provided that
      any Borrower other than an obligor on the Static Loans, upon 10 days prior
      notice to Lender and upon such terms or conditions which Lender may reasonably
      require, may merge into another Borrower) or liquidate, wind up or dissolve
      itself (or suffer any liquidation, winding up or dissolution) or sell all or
      substantially all of its assets other than in connection with a sale of assets,
      the proceeds of which shall be used to repay in full all Advances, other amounts
      due under this Agreement and other amounts then due and payable hereunder.
      Neither Guarantor nor any Borrower shall enter into any material change in
      its
      capital structure or any change that Lender or third party firm of nationally
      recognized independent public accountants with national expertise determines
      could cause a consolidation of assets of FCMC with any other Person under FIN
      46, without the prior written consent of Lender, which consent will not be
      withheld unreasonably.

    

    (f)           
      Operating
      Expenses.  No Advance under this Agreement and no Collections
      shall be used by Guarantor and its Subsidiaries to pay any operating expenses
      of
      such Persons in excess of the amount of Approved Expenses.

    

    (g)           
      Conduct of
      Business.  Neither Guarantor nor any Borrower shall (i)
      originate or acquire any Mortgage Loans or other assets, (ii) perform due
      diligence, servicing, broker loans or participate in off-balance sheet joint
      ventures and special purpose vehicles (not involving the incurrence of any
      Indebtedness), in each instance without the prior written consent of Lender,
      which consent shall not be withheld unreasonably.  Guarantor and each
      Borrower shall limit its activities to such activities as are incident to and
      necessary or convenient to accomplish the following purposes: (i) to acquire,
      own, hold, pledge, finance or otherwise deal with only mortgage loans similar
      to
      the Mortgage Loans, and only real estate similar to the REO Properties, in
      each
      case, as are to be pledged to Lender pursuant to this Agreement and (ii) to
      sell, securitize or otherwise liquidate all or any portion of such assets in
      accordance with the provisions of this Agreement.

    

    (h)           
      Interest Rate Hedge
      Agreement. At all times after the date which is 45 days after the
      Forbearance Effective Date, the Borrowers and Guarantor shall at all times
      use
      their best efforts to maintain in effect one or more Interest Rate Hedge
      Agreements with respect to the Advances, in an aggregate notional principal
      amount of not less than $600,000,000, which Interest Rate Hedge Agreements
      shall
      have the effect of establishing a maximum interest rate to be agreed by Lender
      and Guarantor with respect to such notional principal amount, each such Interest
      Rate Hedge Agreement to be in form and substance satisfactory to the Lender
      and
      with a term to be agreed by Lender and Guarantor.

    

    (i)           
      Restricted
      Payments.  No Guarantor or Borrower shall make or declare any
      Restricted Payment; provided that any Borrower may make a Restricted Payment
      to
      Guarantor, without the prior written consent of Lender, which consent shall
      not
      be withheld unreasonably.

     

     

    
      
        
        

      

      
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    (j)           
      Limitation on
      Liens.  Neither the Company nor any Borrower shall, nor will it
      permit or allow others to, create, incur or permit to exist any Lien, security
      interest or claim on or to any of its Property, except for (i) Liens (not
      otherwise permitted hereunder) that are created in connection with the purchase
      of fixed assets and equipment necessary in the ordinary course of such
      Borrower’s business, subject to the provisions of the Loan Documents (ii) Liens
      on the Collateral created pursuant to any Loan Document.

    

    (k)           
      REO
      Properties.  Within 30 days after Lender’s request therefor at
      any time, Guarantor, the applicable Borrower or such other Subsidiary having
      any
      REO Property shall grant to Lender a first Lien Mortgage on such Person’s REO
      Properties to secure the Advances pursuant to Loan Documents and other closing
      documents as are satisfactory to Lender; provided, however, to the extent any
      such transfer would require the payment of any material transfer tax or similar
      tax, such Borrower and Lender may make other arrangements satisfactory to
      Lender.  In addition, at all times after the Forbearance Effective
      Date, upon any acquisition of each REO Property, each Borrower shall transfer
      all REO Properties to a designated Borrower or other Subsidiary satisfactory
      to
      Lender and shall provide to Lender a first and exclusive Lien on the stock
      of
      such Subsidiary, and a negative pledge on all of the assets of such Subsidiary;
      provided, however, to the extent any such transfer would require the payment
      of
      any material transfer tax or similar tax, such Borrower and Lender may make
      other arrangements satisfactory to Lender.

    

    (l)           
      Lock Box; Control
      Accounts.

    

    (i)           
      Guarantor and each Borrowers shall maintain its existing lock box with Lender
      (the “Lock
      Box”) or, at Lender’s discretion, blocked accounts (“Blocked Accounts”)
      at
      deposit banks satisfactory to Lender, and Guarantor and each Borrower shall
      (i)
      request in writing and otherwise take such reasonable steps to ensure that
      all
      obligors under each Mortgage Loan forward all payments in respect of the related
      Mortgage Loans directly to the Lock Box, (ii) irrevocably instruct the bank
      which maintains the Lock Box to transfer to the cash collection account at
      Lender, on each Business Day, cleared funds in respect of all cash, checks,
      drafts or other similar items of payment so received in the Lock Box and
      (iii) deposit promptly, and in any event no later than the first Business
      Day after the date of receipt thereof, any cash, checks, drafts or other similar
      items of payment relating to or constituting payments made in respect of any
      and
      all Collateral that are received directly by such Guarantor or Borrower
      (notwithstanding the requirements of clause (i) above) into one or more Blocked
      Accounts in such Borrower’s or Guarantor’s name and at Lender.

    

    (ii)           
      On or before the Forbearance Effective Date (or such later date as Lender shall
      consent to), each of Guarantor and Borrowers shall cause each of the banks
      where
      any deposit account is maintained to enter into tri-party blocked account
      agreements with Lender and the applicable Borrower, in form and substance
      acceptable to Lender. Neither Guarantor nor any Borrower shall accumulate or
      maintain cash in any deposit accounts or payroll accounts as of any date of
      determination in excess of checks outstanding against such accounts as of that
      date and amounts necessary to meet minimum balance requirements.

     

     

    
      
        
        

      

      
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    (iii)           
      The Lock Box, Blocked Accounts and any other deposit accounts shall be cash
      collateral accounts, with all cash, checks and other similar items of payment
      in
      such accounts securing payment of the Advances and all other Obligations, and
      in
      which each of Guarantor or Borrower shall have granted a Lien to Lender,
      pursuant to the Security Agreement or applicable Credit Agreement.

    

    (m)  Licenses.  Guarantor
      and the Borrowers shall maintain and comply in all material respects with all
      governmental licenses and authorizations to hold and service Mortgage Loans
      and
      REO Properties, and at Lender’s request at any time, Guarantor and the Borrowers
      shall provide to Lender an officer’s certificates signed by Responsible Officers
      of the Borrowers and the Guarantor certifying as to the truth and accuracy
      of
      the foregoing, which certificates shall specifically include a statement that
      FCMC and the Borrowers are in compliance with all material governmental licenses
      and authorizations.

    

    (n)  Transactions
      with
      Affiliates.  Neither Guarantor nor any Borrower shall enter
      into any transaction, including, without limitation, any purchase, sale, lease
      or exchange of property or the rendering of any service, with any Affiliate
      unless such transaction is (a) otherwise permitted under this
      Agreement,  or (b)(i) in the ordinary course of Guarantor’s or such
      Borrower’s business and (ii) upon fair and reasonable terms no less favorable to
      Guarantor or such Borrower than it would obtain in a comparable arm’s length
      transaction with a Person that is not an Affiliate, or make a payment that
      is
      not otherwise permitted by this Section.

    

    (o)  WMC
      Claim.   FCMC and the applicable Borrower agrees to
      diligently pursue all claims and demands against WMC Mortgage Corp. and its
      successors and assigns and agrees upon Lender’s request to collaterally assign
      any commercial tort claim pursuant to Loan Documents satisfactory to
      Lender.

    

    (p)  Limitation
      on
      Indebtedness.  Neither Guarantor nor any Borrower shall incur
      any liabilities for Indebtedness (other than the Advances, the Letters of
      Credit, Subordinated Indebtedness and intercompany Indebtedness between
      Guarantor and Tribeca) or otherwise other than for trade accounts payable (other
      than for borrowed money) arising, and accrued expenses incurred, in the ordinary
      course of business so long as such trade accounts payable are payable within
      90
      days of the date the respective goods are delivered or the respective services
      are rendered.  

    

    (q)  Limitation
      on Sale of
      Assets.  Neither Guarantor nor any Borrower shall convey, sell,
      lease, assign, transfer or otherwise dispose of (collectively, “Transfer”), all or
      any material portion of its property, business or assets (including, without
      limitation, receivables and leasehold interests) whether now owned or hereafter
      acquired or allow any Subsidiary to Transfer any material portion or all of
      its
      assets to any Person other than a “putback” to sellers of Mortgage Loans, the
      proceeds of which are used to repay Advances.

    

    (r)  Maintenance
      of Property;
      Insurance.  Guarantor and each Borrower shall keep all property
      useful and necessary in its business in good working order and
      condition.  FCMC shall maintain errors and omissions insurance and
      blanket bond coverage usually

     

     

    
      
        
        

      

      
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    maintained
      by entities engaged in the same or similar business similarly situated in such
      amounts as are in effect on the Forbearance Effective Date (as disclosed to
      Lender in writing) and shall not reduce such coverage without the written
      consent of Lender, and shall maintain such other insurance with financially
      sound and reputable insurance companies, and with respect to property and risks
      of a character usually maintained by entities engaged in the same or similar
      business similarly situated, against loss, damage and liability of the kinds
      and
      in the amounts customarily maintained by such entities.

    

    (s)  Collateral
      Determined to be
      Defective.  Upon discovery by Guarantor, any Borrower or Lender
      of any breach of any material representation or warranty by a seller of Mortgage
      Loans constituting Collateral, the party discovering such breach shall promptly
      give notice of such discovery to the others.

    

    13.    Periodic
      Due Diligence
      Review.  Guarantor and each Borrower acknowledges that Lender
      and each of Lender’s participants in any Advance has the right to perform
      continuing due diligence reviews with respect to the Collateral and the business
      of Guarantor and each Borrower, for purposes of verifying compliance with the
      representations, warranties and specifications made hereunder, or otherwise,
      and
      Guarantor and each Borrower agrees that upon reasonable (but no less than one
      (1) Business Day) prior notice to Guarantor (unless Forbearance Default shall
      have occurred, in which case prior notice shall not be required), Lender or
      its
      authorized representatives will be permitted during normal business hours to
      examine, inspect, make copies (including electronic copies) of, and make
      extracts of, the mortgage files, portfolio information, management databases,
      portfolio databases, internal management reports and any and all documents,
      records, agreements, instruments or information relating to any such information
      in the possession, or under the control, of Guarantor, such Borrower or any
      custodian. Guarantor and each Borrower also shall make available to Lender
      a
      knowledgeable financial or accounting officer for the purpose of answering
      questions respecting the mortgage files, any servicing files and any other
      document or information relating thereto and the Mortgage Loans, REO Properties
      and any other Collateral pledged hereunder. Without limiting the generality
      of
      the foregoing, Guarantor and each Borrower acknowledge that Lender, at its
      option, has the right, at any time to conduct a partial or complete due
      diligence review on some or all of the Collateral, including, without
      limitation, ordering new credit reports, new appraisals on any related mortgaged
      properties and otherwise re-generating the information used to originate any
      Mortgage Loan, any information or databases in Guarantor’s or any Borrower’s
      possession.  Guarantor and each Borrower agree to cooperate with
      Lender and any third party underwriter in connection with such underwriting,
      including, but not limited to, providing Lender and any third party underwriter
      with access to any and all documents, records, agreements, instruments or
      information relating to such assets in the possession, or under the control,
      of
      Guarantor or such Borrower. In addition, Lender has the right to perform
      continuing due diligence reviews of Guarantor, each Borrower and their
      respective Affiliates, Subsidiaries, directors, officers, employees and
      significant shareholders. Guarantor, each Borrower and Lender further agree
      that
      all out-of-pocket costs and expenses incurred by Lender in connection with
      Lender’s activities pursuant to this Section shall be paid for by Guarantor or
      such Borrower.

    

    14.    Joint
      and Several
      Liability.

     

    (a)           
      Each Borrower is accepting joint and several liability hereunder and
      under

     

     

     

    
      
        
        

      

      
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    the
      other
      Loan Documents in consideration of the financial accommodations to be provided
      by Lender under this Agreement, for the mutual benefit, directly and indirectly,
      of each Borrower and in consideration of the undertakings of each Borrower
      to
      accept joint and several liability for the Obligations.

     

    (b)           
      Each Borrower, jointly and severally, hereby irrevocably and unconditionally
      accepts, as a surety and as a co-debtor, joint and several liability with each
      other Borrower, with respect to the performance of this Agreement and the
      payment and performance of all of the Obligations (including, without
      limitation, any obligations arising under this Section), it being the intention
      of the parties hereto that all the Obligations shall be the joint and several
      obligations of each Borrower without preferences or distinction among
      them.

     

    (c)           
      If and to the extent that any Borrower shall fail to make any payment with
      respect to any Obligation as and when due or to perform any Obligation in
      accordance with the terms thereof, then, in each such event, the other Borrowers
      will make such payment with respect to, or perform, such Obligation, as
      applicable.

     

    (d)           
      The obligations of each Borrower under the provisions of this Section constitute
      the absolute and unconditional, full recourse obligations of each Borrower
      enforceable against each such Borrower to the full extent of its properties
      and
      assets, irrespective of the validity, regularity or enforceability of this
      Agreement or any other circumstances whatsoever.

     

    (e)           
      Except as otherwise expressly provided in this Agreement, each Borrower hereby
      waives notice of acceptance of its joint and several liability, notice of any
      Advances issued under or pursuant to this Agreement, notice of the occurrence
      of
      any Default, Event of Default, Forbearance Default or of any demand for any
      payment under this Agreement, notice of any action at any time taken or omitted
      by Lender under or in respect of any Obligation, any requirement of diligence
      or
      to mitigate damages and, generally, to the extent permitted by applicable law,
      all demands, notices and other formalities of every kind in connection with
      this
      Agreement (except as otherwise provided in this Agreement). Each Borrower hereby
      assents to, and waives notice of, any extension or postponement of the time
      for
      the payment of any Obligation, the acceptance of any payment of any Obligation,
      the acceptance of any partial payment thereon, any waiver, consent or other
      action or acquiescence by Lender at any time or times in respect of any default
      by any Borrower in the performance or satisfaction of any term, covenant,
      condition or provision of this Agreement, any and all other indulgences
      whatsoever by Lender in respect of any Obligation, and the taking, addition,
      substitution or release, in whole or in part, at any time or times, of any
      security for any Obligation or the addition, substitution or release, in whole
      or in part, of any Borrower or any part of the security for any Obligation.
      Without limiting the generality of the foregoing, each Borrower assents to
      any
      other action or delay in acting or failure to act on the part of Lender with
      respect to the failure by any Borrower to comply with any of its respective
      Obligations, including, without limitation, any failure strictly or diligently
      to assert any right or to pursue any remedy or to comply fully with applicable
      laws or regulations thereunder, which might, but for the provisions of this
      Section afford grounds for terminating, discharging or relieving any Borrower,
      in whole or

     

     

    
      
        
        

      

      
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    in
      part,
      from any of its obligations under this Section, it being the intention of each
      Borrower that, so long as any of the Obligations hereunder remain unsatisfied,
      the obligations of such Borrower under this Section shall not be discharged
      except by performance and then only to the extent of such performance. The
      obligations of each Borrower under this Section shall not be diminished or
      rendered unenforceable by any winding up, reorganization, arrangement,
      liquidation, reconstruction or similar proceeding with respect to any Borrowers.
      The joint and several liability of each Borrower hereunder shall continue in
      full force and effect notwithstanding any absorption, merger, amalgamation
      or
      any other change whatsoever in the name, constitution or place of formation
      of
      any other Borrower or Lender.

     

    (f)           
      Each Borrower represents and warrants to Lender that such Borrower is currently
      informed of the financial condition of each other Borrower and of all other
      circumstances which a diligent inquiry would reveal and which bear upon the
      risk
      of nonpayment of the Obligations. Each Borrower hereby covenants that such
      Borrower will continue to keep informed of each other Borrower’s financial
      condition, the financial condition of other guarantors, if any, and of all
      other
      circumstances which bear upon the risk of nonpayment or nonperformance of the
      Obligations.

     

    (g)           
      The provisions of this Section are made for the benefit of Lender and its
      respective successors and assigns, and may be enforced by it from time to time
      against any or all Borrowers as often as occasion therefor may arise and without
      requirement on the part of Lender, or any or their respective successors or
      assigns first to marshal any claims or to exercise any rights against any other
      Borrower or to exhaust any remedies available against any other Borrower or
      to
      resort to any other source or means of obtaining payment of any of the
      Obligations hereunder or to elect any other remedy. The provisions of this
      Section shall remain in effect until all of the Obligations shall have been
      paid
      in full or otherwise fully satisfied. If at any time, any payment, or any part
      thereof, made in respect of any of the Obligations, is rescinded or must
      otherwise be restored or returned by Lender upon any insolvency proceeding
      of
      any Borrower, or otherwise, the provisions of this Section will forthwith be
      reinstated in effect, as though such payment had not been made.

     

    (h)           
      Each Borrower hereby agrees that it will not enforce any of its rights of
      contribution or subrogation against any other Borrower with respect to any
      liability incurred by it hereunder or under any of the other Loan Documents,
      any
      payments made by it to Lender with respect to any Obligations or any collateral
      security therefor until such time as all of the Obligations have been paid
      in
      full in cash. Any claim which any Borrower may have against any other Borrower
      with respect to any payments to Lender hereunder or under any other Loan
      Documents are hereby expressly made subordinate and junior in right of payment,
      without limitation as to any increases in the Obligations arising hereunder
      or
      thereunder, to the prior payment in full in cash of the Obligations and, in
      the
      event of any insolvency proceeding relating to any Borrower, its debts or its
      assets, whether voluntary or involuntary, all such Obligations shall be paid
      in
      full in cash before any payment or distribution of any character, whether in
      cash, securities or other property, shall be made to any other
      Borrower.

     

    (i)           
      Each Borrower hereby agrees that, after the occurrence and during
      the

     

     

     

    
      
        
        

      

      
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    continuance
      of any Default, Event of Default or Forbearance Default, the payment of any
      amounts due with respect to the Indebtedness owing by any Borrower to any other
      Borrower is hereby subordinated to the prior payment in full in cash of the
      Obligations. Each Borrower hereby agrees that after the occurrence and during
      the continuance of any Default, Event of Default or Forbearance Default, such
      Borrower will not demand, sue for or otherwise attempt to collect any
      Indebtedness of any other Borrower owing to such Borrower until the Obligations
      shall have been paid in full in cash. If, notwithstanding the foregoing
      sentence, such Borrower shall collect, enforce or receive any amounts in respect
      of such Indebtedness, such amounts shall be collected, enforced and received
      by
      such Borrower as trustee Lender.

     

    15.    Cooperation
      of Borrower and
      Guarantor.

    

    (a)           
      Each Borrower and Guarantor agrees to take any and all actions of any kind
      or
      nature whatsoever, reasonably requested by Lender to prevent Lender from
      suffering any loss with respect to any Obligations owed to Lender or in respect
      of any Collateral or any impediment to any rights or remedies of Lender with
      respect to such Obligations, the Loan Documents or this Agreement (or the
      ability to exercise such any rights or remedies).

    

    (b)           
      Further
      Assurances.  Guarantor and each Borrower hereby agree to
      execute and deliver such additional documents, instruments and agreements
      reasonably requested by Lender as may be reasonably necessary or appropriate
      to
      effectuate the purposes of this Agreement.

    

    16.    The
      Credit Agreements and
      this Agreement.  Notwithstanding the amendment and restatement
      of the Commercial Loans by this Agreement, all amounts owing to Lender under
      the
      Credit Agreements whether on account of principal, interest or otherwise which
      remain outstanding as of the date hereof (after giving effect to the forgiveness
      of Indebtedness set forth in Section 1(c)) are evidenced by the Notes and shall
      constitute Obligations owing under this Agreement and the Credit
      Agreements.  This Agreement is not given in substitution for each
      Credit Agreement, and except to the extent of the forgiveness of Indebtedness
      set forth in Section 1(c), is not payment of any amounts due by any Borrower
      under any Credit Agreement, and is in no way intended to constitute a novation
      of any Credit Agreement or Commercial Loan.

    

    17.    Use
      of Cash
      Collateral.  Prior to the Forbearance Date, absent a
      Forbearance Default under this Agreement, Lender will permit a portion of
      Collections, in such amounts as determined by Lender in its good faith
      discretion from time to time, to be used by Guarantor and the Borrowers for
      Approved Expenses necessary to continue the operations of the same and in
      accordance with the terms of this Agreement.  Lender shall have no
      obligation to advance any sums pursuant to this Agreement at any time when
      a set
      of facts or circumstances exist, which, by themselves, upon the giving of
      notice, the lapse of time, or any one or more of the foregoing would constitute
      a Forbearance Default.

    

    18.    Sale
      of
      Collateral.  Upon the earlier of (i) the Forbearance Date or
      (ii) the occurrence of a Forbearance Default under this Agreement, Lender shall
      have the right to sell, lease or otherwise dispose of any Collateral in
      accordance with the terms of any Loan Document, and applicable
      law.  Each Borrower and Guarantor hereby consents and agrees to such
      sale, lease

     

     

     

    
      
        
        

      

      
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    or
      other
      disposition of any Collateral by Lender.  Each Borrower and Guarantor
      hereby waives, renounces and forever relinquishes all rights to notice prior
      to
      disposition of any Collateral required by any Loan Document, and all rights
      that
      may be waived under Article 9 of the Uniform Commercial Code, as enacted in
      any
      applicable state (and similar provisions of any applicable law of any other
      jurisdiction), whether such rights may be waived before or after default,
      including without limitation, those rights with respect to the compulsory
      disposition of collateral, the redemption of collateral, and the right to notice
      of any disposition of any Collateral.  Each Borrower and Guarantor
      further waives and forever relinquishes any and every right of redemption,
      including any statutory right of redemption, any equitable right of redemption,
      and any other right of redemption that may exist.  This paragraph and
      the irrevocable waivers contained herein shall survive the termination of this
      Agreement.

    

    19.    Terms
      and Conditions.
      Other than as expressly modified herein, all of the terms, conditions and
      covenants of the Credit Agreements and the other Loan Documents shall remain
      in
      full force and effect and are hereby ratified and confirmed in all respects,
      and
      this Agreement shall not constitute a novation.

    

    20.    Effect
      on the Loan
      Documents; Controlling Agreement.  Upon the effectiveness of
      this Agreement, each reference in such Credit Agreement,” “Agreement,” the
      prefix “herein,” “hereof,” or words of similar import, and each reference in the
      Loan Documents, shall mean and be a reference to a Credit Agreement as amended
      or supplemented  hereby.  Except to the extent amended or
      modified hereby, all of the representations, warranties, terms, covenants and
      conditions of the Credit Agreements and the other Loan Documents shall remain
      as
      written originally and in full force and effect in accordance with their
      respective terms and are hereby ratified and confirmed in all respects, and
      nothing herein shall affect, modify, limit or impair any of the rights and
      powers which Lender may have hereunder or thereunder; provided that, to
      the
      extent the terms of any Credit Agreement or any Loan Document are inconsistent
      with the terms of this Agreement or any Loan Documents executed in connection
      herewith, the terms of this Agreement or such Loan Document executed in
      connection herewith shall control.  The amendments and supplements set
      forth herein shall be limited precisely as provided for herein, and shall not
      be
      deemed to be a waiver of, amendment of, consent to or modification of any right
      of Lender under, or of any other term or provisions of any Credit Agreement
      or
      any other Loan Document, or of any term or provision of any other instrument
      referred to therein or herein or of any transaction or future action on the
      part
      of Guarantor or any Borrower which would require the consent of
      Bank.

    

    21.    Headings.  Section
      headings in this Agreement are included herein for convenience of reference
      only
      and will not constitute a part of this Agreement for any other
      purpose.

    

    22.    Default.  A
      “Forbearance
      Default” shall exist under this Agreement if any one or more of the
      following events shall have occurred, and with respect to any event, other
      than
      an event described in clause (j) or (k) below, Lender shall have provided notice
      to FCMC of the same:

     

     

    
      
        
        

      

      
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    (a)           
      the occurrence of (i) a failure, breach or default under Section 3, 5, 6, 10,
      11, or 12 of this Agreement, or (ii) an Event of Default (other than an
      Acknowledged Default) shall occur and be continuing under the Franklin Master
      Agreement; or

    

    (b)           
      any breach or default of any term, condition or covenant set forth in, or any
      event of default (other than an Acknowledged Default) under any Loan Document
      not referred to in clause (a) above now or hereafter executed and delivered
      by
      any Borrower or Guarantor to Lender shall occur after the date hereof and such
      failure to observe or perform shall continue unremedied for a period of five
      (5)
      days; or

    

    (c)           
      any breach or default in performance by Guarantor of any of the agreements,
      payments, terms, conditions, covenants, warranties or representations set forth
      in this Agreement or the FCMC Guaranty; or

    

    (d)           
      the occurrence of a “Forbearance Default” as defined under the Tribeca
      Forbearance Agreement.

    

    (e)           
      any Borrower shall fail to make a payment of any principal of or interest on
      any
      Advance or the Guarantor shall fail to make a payment of any amount required
      to
      be paid by it under the FCMC Guaranty, in each case prior to the close of
      business on the date on which such payment is due (whether at stated maturity,
      upon acceleration or at mandatory prepayment or otherwise); or

    

    (f)           
      any representation, warranty or certification made or deemed made in this
      Agreement or in any other Loan Document by the Guarantor or any Borrower or
      any
      certificate furnished to Lender pursuant to the provisions hereof or thereof,
      shall prove to have been false or misleading in any material respect as of
      the
      time made or furnished; or

    

    (g)           
      [Reserved].

    

    (h)           
      a final judgment or judgments for the payment of money in excess of, with
      respect to Guarantor or any Borrower, $1,000,000 in the aggregate (to the extent
      that it is, in the determination of Lender, uninsured and provided that any
      insurance or other credit posted in connection with an appeal shall not be
      deemed insurance for these purposes) shall be rendered against Guarantor or
      such
      Borrower by one or more courts, administrative tribunals or other bodies having
      jurisdiction over them and the same shall not be discharged (or provision shall
      not be made for such discharge) or bonded, or a stay of execution thereof shall
      not be procured, within 30 days from the date of entry thereof and such Borrower
      or the Guarantor shall not, within said period of 30 days, or such longer period
      during which execution of the same shall have been stayed or bonded, appeal
      therefrom and cause the execution thereof to be stayed during such appeal;
      or

    

    (i)           
      any Borrower or the Guarantor shall admit in writing its inability to pay its
      debts as such debts become due; or

     

     

    
      
        
        

      

      
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    (j)           
      any Borrower or the Guarantor or any of their respective Subsidiaries shall
      (i)
      apply for or consent to the appointment of, or the taking of possession by,
      a
      receiver, custodian, trustee, examiner or liquidator of itself or of all or
      a
      substantial part of its property, (ii) make a general assignment for the benefit
      of its creditors, (iii) commence a voluntary case under the Bankruptcy Code,
      (iv) file a petition seeking to take advantage of any other law relating to
      bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement
      or
      winding-up, or composition or readjustment of debts, (v) fail to controvert
      in a
      timely and appropriate manner, or acquiesce in writing to, any petition filed
      against it in an involuntary case under the Bankruptcy Code or (vi) take any
      corporate or other action for the purpose of effecting any of the foregoing;
      or

    

    (k)           
      a proceeding or case shall be commenced, without the application or consent
      of
      any Borrower or the Guarantor or any of their respective Subsidiaries, in any
      court of competent jurisdiction, seeking (i) its reorganization, liquidation,
      dissolution, arrangement or winding-up, or the composition or readjustment
      of
      its debts, (ii) the appointment of a receiver, custodian, trustee, examiner,
      liquidator or the like of Guarantor, any Borrower or any such Subsidiary or
      of
      all or any substantial part of its property, or (iii) similar relief in respect
      of any Borrower, the Guarantor or any such Subsidiary under any law relating
      to
      bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment
      of debts, and such proceeding or case shall continue undismissed, or an order,
      judgment or decree approving or ordering any of the foregoing shall be entered
      and continue unstayed and in effect, for a period of 60 or more days; or an
      order for relief against any Borrower, the Guarantor or any such Subsidiary
      shall be entered in an involuntary case under the Bankruptcy Code;
      or

    

    (l)           
      this Agreement, any Note or any other Loan Document shall for whatever reason
      (including an event of default thereunder) be terminated or any Lien on the
      Collateral created by any Loan Document or Guarantor’s or any Borrower’s
      obligations under this Agreement or the Guarantor’s obligations under the FCMC
      Guaranty shall cease to be in full force and effect, or the enforceability
      thereof shall be contested by any Borrower or Guarantor; or

    

    (m)           
      any Change of Control of any Borrower or the Guarantor shall have occurred;
      or

    

    (n)           
      any Borrower or the Guarantor shall grant, or suffer to exist, any Lien on
      any
      Collateral except the Liens contemplated by this Agreement; or the Liens
      contemplated hereby shall cease to be first priority perfected and enforceable
      Liens on the Collateral in favor of Lender or shall be Liens in favor of any
      Person other than Lender; or

    

    (o)           
      any Borrower, the Guarantor or any Subsidiary or Affiliate of such entity shall
      default under, or fail to perform as required under, or shall otherwise breach
      the terms of any material instrument, agreement or contract between such
      Borrower, the Guarantor or such other entity, on the one hand, and Lender or
      any
      of Lender’s or any

     

     

     

    
      
        
        

      

      
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    Lender’s
      Affiliates on the other, whether or not such default results in the acceleration
      or prepayment of any Indebtedness thereunder; or any Borrower, the Guarantor
      or
      any Subsidiary or Affiliate of such Person shall default under, or fail to
      perform in any material respect as requested under, the terms of any repurchase
      agreement, credit and security agreement or similar credit facility or agreement
      which provides for borrowed funds in an amount in excess of $1,000,000 which
      default or failure permits the acceleration or prepayment of any such
      Indebtedness thereunder; or

    

    (p)           
      any Material Adverse Effect occurs with respect to any Borrower, the Guarantor
      or any of their respective Subsidiaries or Affiliates, or the Collateral, in
      each case as determined by Lender in its good faith discretion, or the existence
      of any other condition that, in Lender’s good faith discretion, constitutes a
      material impairment of the ability of Guarantor or any Borrower’s ability to
      perform its obligations under this Agreement, any Note or any other Loan
      Document or the Guarantor’s ability to perform its obligations under the FCMC
      Guaranty.

    

    23.     
Remedies.

    

    (a)           
      Upon the occurrence of one or more Forbearance Defaults other than those
      referred to in Section 22(j) or (k), Lender may (i) immediately declare the
      principal amount of all Advances then outstanding to be immediately due and
      payable, together with all interest accrued thereon and all other amounts due
      under this Agreement, the Notes and any other Loan Document; provided, that upon
      the occurrence of a Forbearance Default referred to in Sections 22(j) or (k),
      such amounts shall immediately and automatically become due and payable without
      any  further action by any Person,  (ii) exercise, in
      addition to all other rights and remedies granted to it in this Agreement,
      the
      rights and remedies provided for under the Security Agreement, any Credit
      Agreement, and (iii) exercise, in addition to all other rights and remedies
      granted to it in this Agreement, the rights and remedies provided for under
      applicable law or equity.  Upon such declaration or such automatic
      acceleration, the unpaid balance of all Advances then outstanding and all other
      amounts due under this Agreement and the other Loan Documents shall become
      immediately due and payable, without presentment, demand, protest or other
      formalities of any kind, all of which are hereby expressly waived by Guarantor
      and each Borrower, and Lender may thereupon exercise any rights and remedies,
      hereunder and under the other Loan Documents including, but not limited to,
      the
      transfer of servicing or the liquidation of the Collateral on a servicing
      released basis.  To the extent permitted by applicable law, Guarantor
      and each Borrower waive all claims, damages and demands it may acquire against
      Lender arising out of the exercise by Lender of any of its rights hereunder
      or
      under any other Loan Documents, other than those claims, damages and demands
      arising from the gross negligence, bad faith or willful misconduct of Lender.
      Upon the occurrence of one or more Forbearance Defaults, Lender shall have
      the
      right to obtain physical possession of the servicing records and all other
      files
      of Guarantor or the Borrowers relating to the Collateral and all documents
      relating to the Collateral which are then or may thereafter come in to the
      possession of any Borrower, the Guarantor, any servicer, or any third party
      acting for any Borrower, the

     

     

    
      
        
        

      

      
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    Guarantor
      or any servicer, and each Borrower, the Guarantor and each servicer shall
      deliver to Lender such assignments and other documents as Lender shall
      request.  Lender shall be entitled to specific performance of all
      agreements of Guarantor, each Borrower and each servicer contained in this
      Agreement and any other Loan Document.

     

    (b)           
      If a Forbearance Default shall occur and be continuing, Lender may, at its
      option, enter into one or more Interest Rate Hedge Agreements covering all
      or a
      portion of the Mortgage Loans pledged under any Loan Document, and Guarantor
      and
      the Borrowers shall be responsible for all damages, judgments, costs and
      expenses (including, without limitation, reasonable attorneys’ fees and
      disbursements) of any kind which may be imposed on, incurred by or asserted
      against Lender relating to or arising out of such Interest Rate Hedge
      Agreements, including without limitation any losses resulting from such Interest
      Rate Hedge Agreements.

     

    (c)           
      Any money or property collected or otherwise received by Lender in connection
      with the exercise of its rights and remedies under this Agreement (including,
      without limitation, any money or property received in respect of a liquidation
      of any Collateral) shall be applied by Lender in the order of priority set
      forth
      in Section 5(d).

     

           
      24.   Waiver
      and Release of All
      Claims and Defenses; Communications.

    

    (a)           
      Guarantor and each Borrower, for itself and its respective successors and
      assigns, agents, employees, officers and directors, hereby forever waive,
      relinquish, discharge and release all defenses and Claims of every kind or
      nature, whether existing by virtue of state, federal, or local law, by agreement
      or otherwise, against (i) Lender, its successors, assigns, directors, officers,
      shareholders, agents, employees and attorneys, and (ii) all participants in
      any
      Commercial Loans or Advances, such participants’ successors, assigns, directors,
      officers, shareholders, agents, employees and attorneys, (iii) any obligation
      evidenced by any Credit Agreement, any promissory note, instrument or other
      Loan
      Document in connection therewith, and (iv) any Collateral, in each instance,
      which Guarantor or any Borrower, may have or may have made at any time up
      through and including the date of this Agreement, including without limitation,
      any affirmative defenses, counterclaims, setoffs, deductions or recoupments,
      by
      Guarantor or any Borrower.  “Claims” means all
      debts, demands, actions, causes of action, suits, dues, sums of money, accounts,
      bonds, warranties, covenants, contracts, controversies, promises, agreements
      or
      obligations of any kind, type or description, and any other claim or demand
      of
      any nature whatsoever, whether known or unknown, accrued or unaccrued, disputed
      or undisputed, liquidated of contingent, in contract, tort, at law or in equity,
      which Guarantor, each Borrower or any or them ever had, claimed to have, now
      has, or shall or may have.  The term Claims also includes all causes
      of action, liabilities and rights arising under or by virtue of any Credit
      Agreement, promissory note or other document or any transaction entered into
      in
      connection therewith.  Nothing contained in this Agreement prevents
      enforcement of this waiver and release.

    

    (b)           
      Each party to this Agreement
      acknowledges and agrees that one purpose of this Agreement is to facilitate
      the
      resolution of the Acknowledged Defaults and that,

     

     

    
      
        
        

      

      
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    consistent
      with such purpose, no part of
      any oral or written communications between or among any Borrower, Guarantor
      or
      Lender regarding the transactions contemplated in this Agreement, exclusive
      of
      this written Agreement itself (collectively, “Communications”),
      shall be utilized or deemed to be
      admissible as evidence in any litigation involving any party to this
      Agreement.  Communications shall be deemed to constitute “compromise
      negotiations,” and not to constitute evidence that is “discoverable,” as those
      phrases are used in the Federal Rules of Evidence and any applicable state
      rules
      of evidence, and no Communications shall be deemed to constitute evidence that
      is otherwise admissible for any other purpose.

    

    (c)           
      The release and communication
      provisions provided by paragraphs (a) and (b) of this Section, shall survive
      and
      continue in full force and effect notwithstanding the occurrence of a
      Forbearance Default under the terms of this Agreement or the termination of
      this
      Agreement.

    

    25.   Setoff.  In
      addition to any rights now or hereafter granted under applicable law or this
      Agreement and not by way of limitation of any such rights, upon the occurrence
      of any Forbearance Default, each of Lender and any participant in any Advance
      is
      hereby authorized by each Borrower and Guarantor, or any of them, at any time
      or
      from time to time, without notice to any Borrower, Guarantor, or any other
      person or entity, any such notice being hereby expressly waived, to setoff,
      appropriate and apply against any Obligation owing to Lender or such participant
      from any Borrower or Guarantor, in such order as Lender in its sole discretion
      shall determine, any and all deposits (general or special, including, but not
      limited to, indebtedness evidenced by certificates of deposit, whether matured
      or unmatured, but not including trust accounts), and any other Indebtedness
      at
      any time owing by Lender or any such participant to any Borrower or Guarantor,
      including, but not limited to, all claims of any nature or description arising
      out of or connected with any Credit Agreement, any Loan Document or this
      Agreement, regardless of whether or not Lender or such participant shall have
      made any demand under any such document or otherwise.

    

    26.   Indemnification.  In
      addition to any other obligations of indemnification, each Borrower and
      Guarantor hereby jointly and severally assumes responsibility and liability
      for,
      and hereby holds harmless and indemnifies Lender, its successors, assigns,
      directors, officers, shareholders, agents, employees and attorneys, any
      participants in any Commercial Loan or Advance, such participants’ successors,
      assigns, directors, officers, shareholders, agents, employees and attorneys
      (each an “Indemnified
      Party”) from and against, any and all, by way of example but without
      limitation, liabilities, demands, obligations, injuries, costs, damages (direct,
      indirect or consequential), awards, loss of interest, principal or any portion
      of the Obligations, charges, expenses, payments of money and reasonable
      attorneys’ fees, incurred or suffered, directly or indirectly, by an Indemnified
      Party or asserted against an Indemnified Party, by any person or entity
      whatsoever, including any Borrower and Guarantor or any of them, arising out
      of
      this Agreement, or any document executed in connection herewith, or the exercise
      of any right or remedy, including the realization, disposition or sale of any
      Collateral, or any portion thereof, or the exercise of any right in connection
      therewith, or any actions taken by an indemnified party in connection with
      this
      Agreement or the transactions contemplated by this Agreement, for

     

     

    
      
        
        

      

      
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    which
      an
      Indemnified Party may be liable, for any reason whatsoever except for such
      an
      Indemnified Party’s own acts of gross negligence or willful
      misconduct.  The
      indemnification provisions provided by this Section shall survive and continue
      in full force and effect notwithstanding the occurrence of a Forbearance Default
      under the terms of this Agreement or the termination of this
      Agreement.

    

    27.   Consent
      to Relief from
      Automatic Stay.  Each Borrower and Guarantor hereby agrees that
      if any such party, individually or jointly, shall (i) file with any bankruptcy
      court of competent jurisdiction or be the subject of any petition under Title
      11
      of the United States Code, as amended, (ii) be the subject of any order for
      relief issued under such Title 11 of the U.S. Code, as amended, (iii) file
      or be
      the subject of any petition seeking any reorganization, arrangement,
      composition, readjustment, liquidation, dissolution, or similar relief under
      any
      present or future federal or state act or law relating to bankruptcy,
      insolvency, or other relief for debtors, (iv) seek consent to or acquiesce
      in
      the appointment of any trustee, receiver, conservator, or liquidator, (v) be
      the
      subject of any order, judgment or decree entered by any court of competent
      jurisdiction approving a petition filed against any Borrower or Guarantor for
      any reorganization, arrangement, composition, readjustment, liquidation,
      dissolution, or similar relief under any present or future federal or state
      act
      or law relating to bankruptcy and insolvency, or relief for debtors, Lender
      shall thereupon be entitled to relief from any automatic stay imposed by Section
      362 of Title 11 of the United States Code, as amended, or from any other stay
      or
      suspension of remedies imposed in any other manner with respect to the exercise
      of the rights and remedies otherwise available to Lender under the terms of
      this
      Agreement and the Notes and the Loan Documents.  Each Borrower agrees
      that upon the occurrence of a Forbearance Default hereunder Lender shall be
      entitled to appointment of a receiver for any Collateral.

    

    28.   Notice.  All
      notices or demands hereunder to parties hereto shall be sufficient if made
      in
      writing and sent and confirmed by facsimile, or if sent by prepaid overnight
      courier addressed as applicable to Lender or Guarantor for itself and each
      Borrower at the address set forth below such party’s signature line to this
      Agreement, and such delivery will be deemed complete on the next business
      day.  Notice to Guarantor shall be deemed notice to each Borrower as
      well.

    

    29.   Amendments.  This
      Agreement may not be amended or modified except in a writing signed by Lender,
      Guarantor and each Borrower.

    

    30.   Successors
      and
      Assigns.  This Agreement shall be binding upon and shall inure
      to the benefit of each Borrower, Guarantor and Lender and their respective
      successors, and assigns; provided, however, that the foregoing shall not
      authorize any assignment by any Borrower or Guarantor of its rights or duties
      hereunder.  Lender does not undertake to give or to do or refrain from
      doing anything directly to or for the benefit of any person other than a
      Borrower and, with respect to any Borrower, other than as described
      herein.  Although third parties may incidentally benefit from this
      Agreement, there are no intended beneficiaries other than each Borrower,
      Guarantor and Lender.

     

     

    
      
        
        

      

      
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    31.   Indulgence;
      Modifications.  No delay or failure of Lender to exercise any
      right, power or privilege hereunder shall affect such right, power or privilege
      nor shall any single or partial exercise thereof preclude any further exercise
      thereof, nor the exercise of any other right, power or privilege.  The
      rights of Lender hereunder are cumulative and are not exclusive of any rights
      or
      remedies which Lender would otherwise have except as modified
      herein.  No amendment, modification, supplement, termination, consent
      or waiver of or to any provision of this Agreement, the Credit Agreements or
      the
      Loan Documents, nor any consent to any departure therefrom, shall in any event
      be effective unless the same shall be in writing and signed by or on behalf
      of
      Lender.

    

    32.   Waivers
      Voluntary.  The releases and waivers contained in this
      Agreement are freely, knowingly and voluntarily given by each party, without
      any
      duress or coercion, after each party has had opportunity to consult with its
      counsel and has carefully and completely read all of the terms and provisions
      of
      this Agreement.

    

    33.   Governing
      Law and
      Venue.  This Agreement is made in the State of Ohio and the
      validity of this Agreement, any documents incorporated herein or executed in
      connection herewith, and (notwithstanding anything to the contrary therein)
      the
      Credit Agreements and other Loan Documents, and the construction, interpretation
      and enforcement thereof, and the rights of the parties thereto shall be
      determined under, governed by, and construed in accordance with the internal
      laws of the State of Ohio, without regard to principles of conflicts of
      law.  The parties agree that all actions or proceedings arising in
      connection with this Agreement, any documents incorporated herein or executed
      in
      connection herewith, the Credit Agreements, and the other Loan Documents shall
      be tried and litigated only in the Federal District Court for the Southern
      District of Ohio or the state courts of Franklin County, Ohio.  The
      parties hereto waive any right each may have to assert the doctrine of forumnonconveniens
      or to
      object to venue to the extent any proceeding is brought in accordance with
      this
      Section.  Service of process, sufficient for personal jurisdiction in
      any action against any Borrower or Guarantor, may be made by registered or
      certified mail, return receipt requested, to the address set forth below such
      party’s signature to this Agreement.

    

    34.   Execution
      in
      Counterparts.  This Agreement may be executed in any number of
      counterparts and by different parties on separate counterparts, each of which
      counterparts, when so executed and delivered, shall be deemed to be an original
      and all of which counterparts, taken together, shall constitute but one and
      the
      same agreement.  This Agreement shall become effective upon the
      execution of a counterpart hereof by each of the parties hereto.

    

    35.   Severability.  Should
      any part, term or provision of this Agreement be by the courts decided to be
      illegal, unenforceable or in conflict with any law of the state of Ohio, federal
      law or any other applicable law, the validity and enforceability of the
      remaining portions or provisions of this Agreement shall not be affected
      thereby.

    

    36.   Construction;
      Conflict.  This Agreement shall be deemed to be drafted by all
      parties hereto and shall be construed without regard to any presumption or
      rule
      requiring that it be construed against the party initiating the drafting
      hereof.  In the event of any conflict or

     

     

     

    
      
        
        

      

      
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    discrepancy
      between the terms of this Agreement and any of the other Loan Documents, the
      terms of this Agreement shall supersede any such conflicting
      provision.  In addition, from and after the date of this Agreement,
      all affirmative, negative and reporting covenants contained in the Franklin
      Warehousing Agreement and the Franklin Term Loan Agreement shall be superseded
      by the covenants in this Agreement.

    

    37.   WAIVER
      OF A JURY
      TRIAL.  LENDER, EACH BORROWER AND GUARANTOR ACKNOWLEDGE AND
      AGREE THAT THERE MAY BE A CONSTITUTIONAL RIGHT TO A JURY TRIAL IN CONNECTION
      WITH ANY CLAIM, DISPUTE OR LAWSUIT ARISING BETWEEN OR AMONG THEM, BUT THAT
      SUCH
      RIGHT MAY BE WAIVED.  ACCORDINGLY, EACH PARTY, IN CONSIDERATION OF THE
      CONSIDERATION EXCHANGED IN THIS AGREEMENT, AGREES THAT NOTWITHSTANDING ANY
      CONSTITUTIONAL RIGHT, IN THIS COMMERCIAL MATTER EACH PARTY BELIEVES AND AGREES
      THAT IT SHALL BE IN ITS BEST INTEREST TO WAIVE SUCH RIGHT, AND, ACCORDINGLY,
      HEREBY WAIVES SUCH RIGHT TO A JURY TRIAL, AND FURTHER AGREES THAT THE BEST
      FORUM
      FOR HEARING ANY CLAIM, DISPUTE OR LAWSUIT, IF ANY, ARISING IN CONNECTION WITH
      THIS AGREEMENT, THE CREDIT AGREEMENTS, ANY LOAN DOCUMENT OR THE RELATIONSHIP
      AMONG LENDER, EACH BORROWER AND GUARANTOR SHALL BE A COURT OF COMPETENT
      JURISDICTION SITTING WITHOUT A JURY.

    

    38.   Integration.  This
      Agreement and the other Loan Documents are intended by the parties as the final
      expression of their agreement and therefor incorporate all negotiations of
      the
      parties hereto and are the entire agreement of the parties
      hereto.  Each Borrower and Guarantor each acknowledges that it is
      relying on no written or oral agreement, representation, inducement, warranty,
      or understanding of any kind made by Lender or any employee or agent of Lender,
      except for the agreements by Lender set forth herein or in the other Loan
      Documents.

    

    39.   Reversal
      of
      Payments.  If Lender receives any payments or proceeds of the
      any Collateral which are subsequently invalidated, declared to be fraudulent
      or
      preferential, set aside or required to be paid to a trustee,
      debtor-in-possession, receiver or any other party under any bankruptcy law,
      common law, equitable cause or otherwise, then, to such extent, the obligations
      or part thereof intended to be satisfied by such payments or proceeds shall
      be
      reserved and continue as if such payments or proceeds had not been received
      by
      Lender.

    

    40.   Expenses.  Each
      Borrower and Guarantor shall reimburse Lender and any participant in any
      Commercial Loan or Advance promptly upon demand for all costs and expenses,
      including without limitation, expenses of appraisers and other advisors with
      respect to any Collateral or the business of any Borrower, reasonable attorneys’
fees and expenses (including the fees of Lender’s inside counsel), expended or
      incurred by Lender in any arbitration, judicial reference, legal action or
      otherwise in connection with (i) the negotiation, preparation, amendment and
      enforcement of this Agreement and any Loan Document, including without
      limitation, during any workout, attempted workout, and/or in connection with
      the
      rendering of legal advice as to Lender’s rights, remedies and obligations under
      this Agreement or any Loan Document, whether or not any form of legal proceeding
      has commenced, (ii) collecting

     

     

    
      
        
        

      

      
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    any
      sum
      which becomes due Lender under this Agreement or any Loan Document, (iii) any
      proceeding for declaratory relief, any counterclaim to any proceeding, or any
      appeal, (iv) the protection, preservation or enforcement of any rights or
      remedies of Lender, any Collateral, whether or not any form of legal proceedings
      is commenced, or (v) any action necessary to defend, protect, assert, or
      preserve any of Lender’s rights or remedies as a result of or related to any
      case or proceeding under Chapter 11 of the United States Code, as amended,
      or
      any similar law of any jurisdiction.  All of such costs and expenses
      shall bear interest from the time of demand at the highest rate then in effect
      under this Agreement.

    

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

    

    [Remainder
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    IN
      WITNESS WHEREOF, Lender, each Borrower and Guarantor has executed this Agreement
      as of the date set forth above.

    

    EACH
      BORROWER LISTED ON 

    SCHEDULE
      1 ATTACHED
      HERETO:

     

    By:
/s/
      Alexander Gordon
      Jardin

    Name:
      Alexander Gordon Jardin

    Title:
      as
      Chief Executive Officer of, and on

    behalf
      of, each Borrower listed on Schedule
      1

    attached
      hereto.

     

    Address
      for Notices:

    101
      Hudson St., 25th
      Floor

    Jersey
      City, N.J.  07302

    Fax:
      201-604-4400

    Attention:  General
      Counsel

     

    With
      a
      copy to:

     

    Kramer
      Levin Naftalis & Frankel LLP

    1177
      Avenue of the Americas

    New
      York,
      New York 10036

    Fax:
      212-715-8346

    Attention:  J.
      Michael Mayerfeld

     

    FRANKLIN
      CREDIT MANAGEMENT CORPORATION

     

    By:
/s/
      Thomas J. Axon

    Name:
      Thomas J. Axon

    Title:
      President

     

    Address
      for
      Notices

     

    Same
      as
      above

     

     

    
      
        
        

      

      
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    THE
      HUNTINGTON NATIONAL BANK

     

     

    By:
/s/
      Alan D. Seitz

    Name:  Alan
      D. Seitz

    Title:  Senior
      Vice President

     

    Address
      for
      Notices:

    The
      Huntington National Bank

    41
      South
      High Street

    Columbus,
      Ohio  43215

    Attn:
      Special Assets

    Fax:  (614)
      480-3795

    

    With
      a copy to:

                            Porter
      Wright Morris & Arthur LLP

                            41
      South High Street

                           
      Columbus, Ohio  43215

                           
      Attn: Jack R. Pigman and Timothy E. Grady

                           
      Fax:  (614) 227-2100

    

     

     

     

     

    

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